[CONFORMED COPY]



                      AMENDED AND RESTATED CREDIT AGREEMENT


                                   dated as of


                                January 17, 1997


                                      among


                               PERINI CORPORATION,


                             The BANKS Listed Herein


                                       and


                   MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
                                    as Agent


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


                        FLEET NATIONAL BANK, as Co-Agent





                      AMENDED AND RESTATED CREDIT AGREEMENT


                  AGREEMENT   dated  as  of  January  17,   1997  among   PERINI
CORPORATION  (with its  successors,  the  "Borrower"),  the BANKS  listed on the
signature  pages hereof and MORGAN  GUARANTY TRUST COMPANY OF NEW YORK, as Agent
(with its successors in such capacity, the "Agent"),  amending and restating the
Credit Agreement dated as of December 6, 1994 (as amended,  the "Original Credit
Agreement") among the Borrower,  the banks listed on the signature pages thereof
and the Agent and the Bridge Credit  Agreement dated as of February 26, 1996 (as
amended, the "Bridge Credit Agreement") among the Borrower,  the banks listed on
the signature pages thereof and the Agent.

                  WHEREAS,  the  parties to this  Agreement  are  parties to the
Original Credit Agreement and the Bridge Credit Agreement;

                  WHEREAS,  the Borrower  has  requested  amendments  to certain
provisions of the Original Credit  Agreement and the Bridge Credit  Agreement as
incorporated in this Agreement,  and the Banks and the Agent have agreed to such
amendments,  subject to the  satisfaction  of the terms and conditions set forth
herein,  which  amendments  shall  become  effective  only at such  time as this
Agreement becomes effective in accordance with Section 3.01;

                  WHEREAS,  the parties have agreed that upon the  effectiveness
of this Agreement,  any outstanding "Loans" made pursuant to the Original Credit
Agreement  by each  Bank (as  defined  herein)  shall be  consolidated  with any
outstanding  "Bridge Loans" made pursuant to the Bridge Credit Agreement by such
Bank and all such "Loans" and "Bridge  Loans,"  together  with all other "Loans"
made  pursuant  to  this  Agreement  by  such  Bank,  shall  constitute  "Loans"
hereunder,  shall be governed by the terms and  conditions of this Agreement and
shall be evidenced by an amended and restated  promissory  note of the Borrower,
substantially in the form of Exhibit A;

                  WHEREAS,  the parties have agreed that, upon the effectiveness
of this Agreement,  any  outstanding  "Letters of Credit" issued pursuant to the
Original Credit Agreement and any outstanding  "Bridge Letters of Credit" issued
pursuant to the Bridge Credit  Agreement,  together  with all other  "Letters of
Credit" issued pursuant to this Agreement,  shall constitute "Letters of Credit"
hereunder and shall be governed by the terms and  conditions of this  Agreement;
and

                  WHEREAS,  in  order  to set  forth  in one  document,  for the
convenience of the parties,  the text of the Original  Credit  Agreement and the
Bridge Credit








Agreement,  in each  case as  amended  by the  amendments  to be made  upon  the
effectiveness  hereof,  the  Original  Credit  Agreement  and the Bridge  Credit
Agreement  will,  upon  satisfaction of the conditions set forth in Section 3.01
hereof, be amended and restated to read in full as set forth herein;

                  NOW, THEREFORE, the parties hereto agree as follows:



                                    ARTICLE I

                                   DEFINITIONS

                  SECTION  1.01.  Definitions.  The  following  terms,  as  used
herein, have the following meanings:

                  "Administrative  Questionnaire"  means,  with  respect to each
Bank, the administrative questionnaire in the form submitted to such Bank by the
Agent and submitted to the Agent (with a copy to the Borrower) duly completed by
such Bank.

                  "Adjusted   Euro-Dollar  Rate"  means,  with  respect  to  any
Interest  Period,  a rate per  annum  equal to the  quotient  obtained  (rounded
upward,  if  necessary,  to the next  higher  1/100 of 1%) by  dividing  (i) the
applicable   Euro-Dollar  Rate  by  (ii)  1.00  minus  the  Euro-Dollar  Reserve
Percentage.

                  "Affected  Subsidiary"  has the  meaning  set forth in Section
9.05(b).

                  "Affiliate"  means, with respect to any Person,  (i) any other
Person that directly, or indirectly through one or more intermediaries, controls
such  Person  (a  "Controlling  Person")  or (ii)  any  other  Person  which  is
controlled  by or is under common  control with a  Controlling  Person.  As used
herein,  the term  "control"  of any Person  means the  possession,  directly or
indirectly,  of the power to vote 10% or more of any class of voting  securities
of such Person or to direct or cause the direction of the management or policies
of a Person, whether through the ownership of voting securities,  by contract or
otherwise.

                  "Agent" means Morgan Guaranty Trust Company of New York in its
capacity  as  agent  for  the  Banks  under  the  Financing  Documents,  and its
successors in such capacity.

                  "Applicable Base Rate Margin" means (i) in the case of Tranche
A Loans, 1.00% and (ii) in the case of Tranche B Loans, 2.00%.

                  "Applicable Euro-Dollar Margin" means 2.25%.

                                        2






                  "Applicable  Lending Office" means,  with respect to any Bank,
(i) in the case of its Base Rate Loans,  its Domestic Lending Office and (ii) in
the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office.

                  "Asset Sale  Letter"  means a letter from the  Borrower to the
Banks and the Agent  listing  certain  potential  asset sales and a minimum cash
price for each such asset sale,  which letter  shall have been  delivered to the
Banks  and the Agent not less than  five  Domestic  Business  Days  prior to the
Effective Date and shall be in form and substance satisfactory to each Bank.

                  "Assignee" has the meaning set forth in Section 9.06(c).

                  "Assignment and Assumption  Agreement" means an Assignment and
Assumption  Agreement  entered into by a Lender and an Assignee with the consent
of the Agent, substantially in the form of Exhibit L.

                  "Available LC Amount" means at any time an amount equal to the
lesser of (x)  $25,000,000  and (y) the  excess,  if any,  of (i) the  aggregate
amount  of the  Tranche  A  Commitments  over  (ii)  the  aggregate  outstanding
principal amount of the Tranche A Loans.

                  "Bank" means each bank listed on the  signature  pages hereof,
each  Assignee  which  becomes a Bank  pursuant  to Section  9.06(c),  and their
respective successors.

                  "Bankruptcy  Proceeding"  means, with respect to any Person, a
case or other proceeding  seeking  liquidation,  reorganization  or other relief
with  respect to such Person or its debts under any  bankruptcy,  insolvency  or
other  similar law now or  hereafter in effect or seeking the  appointment  of a
trustee,  receiver,  liquidator,  custodian  or other  similar  official of such
Person or any substantial part of its property.

                  "Base Rate" means,  for any day, a rate per annum equal to the
higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the
Federal Funds Rate for such day.

                  "Base Rate Loan"  means (i) a Tranche B Loan or (ii) a Tranche
A Loan which bears  interest  based on the Base Rate pursuant to the  applicable
Notice  of  Borrowing  or Notice  of  Interest  Rate  Election  pursuant  to the
provisions of Article VIII.

                  "Benefit  Arrangement"  means at any time an employee  benefit
plan  within  the  meaning  of  Section  3(3) of ERISA  which is not a Plan or a
Multiemployer

                                        3





Plan and which is  maintained or otherwise  contributed  to by any member of the
ERISA Group.

                  "Bonding Company" means Fidelity and Deposit Company of
Maryland.

                  "Borrower"   means   Perini   Corporation,   a   Massachusetts
corporation, and its successors.

                  "Borrower  Pledge  Agreement"  means the Amended and  Restated
Borrower Pledge  Agreement dated as of December 6, 1994 between the Borrower and
the Agent,  as amended  and  restated as of February  26,  1996,  as amended and
restated  as of the date hereof in  substantially  the form of Exhibit C, and as
the same may be amended,  modified,  supplemented and restated from time to time
as permitted herein and in accordance with the terms thereof.

                  "Borrower  Security  Agreement"  means the  Borrower  Security
Agreement  dated as of February 26, 1996 between the Borrower and the Agent,  as
amended and restated as of the date hereof in substantially  the form of Exhibit
B, and as the same may be amended, modified, supplemented and restated from time
to time as permitted herein and in accordance with the terms thereof.

                  "Borrower's 1995 Form 10-K" means the Borrower's annual report
on Form 10-K for the fiscal  year ended  December  31,  1995,  as filed with the
Securities and Exchange  Commission  pursuant to the Securities  Exchange Act of
1934.

                  "Borrowing"  means  a  borrowing  under  the  Original  Credit
Agreement,  the Bridge Credit  Agreement or this  Agreement  consisting of Loans
made to the  Borrower at the same time by one or more Banks on a single date and
for a single Interest Period.

                  "Bridge Credit  Agreement"  means the Bridge Credit  Agreement
dated as of  February  26,  1996  among the  Borrower,  the banks  listed on the
signature  pages thereof and Morgan  Guaranty  Trust Company of New York, as the
agent for such banks, as amended to the Effective Date.

                  "Bridge Note" has the meaning set forth in Section 2.03.

                  "Business   Plan"  means,  at  any  time,  the  most  recently
delivered of (i) the business  plan  delivered  pursuant to Section  3.01(q) and
(ii) the annual  projected  consolidated  balance sheets and income  statements,
operating  and  capital  expenditure  budgets  and cash flow  forecasts  for the
Borrower  and  its  Consolidated  Subsidiaries  delivered  pursuant  to  Section
5.01(i).

                                        4



                  "Cash  Management  Letter" means a letter from the Borrower to
the Banks and the Agent  describing the cash  management  system of the Borrower
and its Subsidiaries as of the Effective Date, as set forth on Schedule 3.01(p).

                  "Casualty"  has the  meaning  provided  for  such  term in any
Mortgage.

                  "CERCLA"  means  the  Comprehensive   Environmental  Response,
Compensation  and Liability  Act of 1980, as amended from time to time,  and any
rules or regulations promulgated thereunder.

                  "Class" refers to a determination  whether a Loan is a Tranche
A Loan or a Tranche B Loan (or whether a Borrowing is to be  comprised  of, or a
Commitment relates to the making of, Tranche A Loans or Tranche B Loans).

                  "Collateral" means all property,  real and personal,  tangible
and  intangible,  with respect to which Liens are created or are purported to be
created pursuant to the Collateral Documents.

                  "Collateral  Documents"  means the Borrower Pledge  Agreement,
the Borrower Security Agreement, the Subsidiary Pledge Agreement, the Subsidiary
Security  Agreement,  the  Mortgages  and all other  supplemental  or additional
security  agreements,  pledge agreements,  mortgages,  deeds of trust or similar
instruments Delivered pursuant hereto or thereto.

                  "Commitment"  means a  Tranche  A  Commitment  or a  Tranche B
Commitment and "Commitments"  means all or any combination of the foregoing,  as
the context may require.

                  "Commitment  Reduction Date" means the last Domestic  Business
Day occurring in each of December 1997, December 1998, March 1999, June 1999 and
September 1999.

                  "Condemnation" has the meaning provided for such term in any
Mortgage.

                  "Consolidated Adjusted Tangible Net Worth" means, at any date,
Consolidated  Tangible Net Worth, plus to the extent deducted in determining the
consolidated  net  income  (or  loss)  of  the  Borrower  and  its  Consolidated
Subsidiaries,  the aggregate  amount of non-cash  charges incurred in accordance
with GAAP  after the  Effective  Date in  connection  with any  Dispositions  or
write-downs of any Real Estate  Investments or of any other real property of the
Borrower or any  Subsidiary,  minus to the extent  included in  determining  the
consolidated  net  income  (or  loss)  of  the  Borrower  and  its  Consolidated
Subsidiaries, the aggregate amount of non-cash gains realized in accordance with
GAAP after the Effective Date in connection with




                                        5





Dispositions of any Real Estate Investments or of any other real property of the
Borrower or any Subsidiary, all determined as of such date.

                  "Consolidated Capital Expenditures" means, for any period, the
aggregate   amount  of  expenditures  by  the  Borrower  and  its   Consolidated
Subsidiaries for plant, property and equipment during such period (including any
such  expenditure  by way of  acquisition of a Person or by way of assumption of
indebtedness or other obligations of a Person, to the extent reflected as plant,
property  and  equipment),  but  excluding  any such  expenditures  made for the
replacement  or  restoration  of assets to the extent  financed by  condemnation
awards or proceeds of insurance  received  with respect to the loss or taking of
or  damage  to the  asset  or  assets  being  replaced  or  restored.  The  term
"Consolidated   Capital   Expenditures"   shall  not  include  any  Real  Estate
Investments.

                  "Consolidated  Subsidiary" of any Person means at any date any
Subsidiary  of such  Person  or other  entity  the  accounts  of which  would be
consolidated with those of such Person in its consolidated  financial statements
if such statements were prepared as of such date.

                  "Consolidated  Tangible  Net Worth"  means,  at any date,  the
consolidated   stockholders'   equity  of  the  Borrower  and  its  Consolidated
Subsidiaries  (including the Series B Preferred Stock,  whether or not otherwise
included in stockholders'  equity),  less their consolidated  Intangible Assets,
all  determined  as of such date.  For purposes of this  definition  "Intangible
Assets"  means  the  amount  (to  the  extent   reflected  in  determining  such
consolidated  stockholders'  equity) of (i) all write-ups  (other than write-ups
resulting from foreign currency  translations and write-ups of assets of a going
concern  business  made  within  twelve  months  after the  acquisition  of such
business)  subsequent to September 30, 1996 in the book value of any asset owned
by the  Borrower or a  Consolidated  Subsidiary  and (ii) all  unamortized  debt
discount and expense, capitalized real estate taxes (to the extent not permitted
to be capitalized in accordance with generally accepted accounting principles as
in effect on the date hereof),  goodwill,  patents,  trademarks,  service marks,
trade names,  copyrights,  organization or developmental (other than real estate
developmental) expenses and other intangible items.

                  "Construction   Business"   means  the  general   contracting,
construction  management,  engineering and design-build services business of the
Borrower and its Consolidated Subsidiaries.

                  "Credit Event" means the making of a Loan or the issuance of a
Letter of Credit or the extension of an Evergreen Letter of Credit.

                  "Debt" of any Person means at any date,  without  duplication,
(i) all obligations of such Person for borrowed  money,  (ii) all obligations of
such Person

                                                      


                                        6





evidenced by bonds,  debentures,  notes or other similar instruments,  (iii) all
obligations  of such Person to pay the  deferred  purchase  price of property or
services,  except  trade  accounts  payable  arising in the  ordinary  course of
business,  (iv) all non-  contingent  obligations of such Person as lessee which
are capitalized in accordance with generally accepted accounting principles, (v)
all  obligations  of such Person to  reimburse  issuers of letters of credit for
drawings  under such  letters of credit,  (vi) all Debt secured by a Lien on any
asset of such Person,  whether or not such Debt is otherwise  an  obligation  of
such Person,  and (vii) all Debt of others  Guaranteed by such Person;  provided
that  advances to the  Borrower or a  Subsidiary  by a joint  venture out of the
Borrower's  or such  Subsidiary's  share of the  undistributed  earnings of such
joint venture shall not constitute Debt.

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

                  "Derivatives  Obligations" of any Person means all obligations
of such Person in respect of any rate swap transaction, basis swap, forward rate
transaction,  commodity  swap,  commodity  option,  equity or equity index swap,
equity or equity index  option,  bond  option,  interest  rate  option,  foreign
exchange transaction,  cap transaction,  floor transaction,  collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar  transaction  (including  any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.

                  "Disposition"  means any sale,  lease,  assignment,  transfer,
Casualty, Condemnation, or other disposition.

                  "Domestic  Business  Day"  means  any day  except a  Saturday,
Sunday or other day on which  commercial banks in New York City or Massachusetts
are authorized by law to close.

                  "Domestic  Lending  Office" means, as to each Bank, its office
located  at its  address  set  forth  in its  Administrative  Questionnaire  (or
identified in its  Administrative  Questionnaire as its Domestic Lending Office)
or such  other  office  as such Bank may  hereafter  designate  as its  Domestic
Lending Office by notice to the Borrower and the Agent.

                  "Effective  Date"  means  the  date  this  Agreement   becomes
effective in accordance with Section 3.01.

                  "Environmental  Laws" means any and all federal  state,  local
and foreign statutes, laws, judicial decisions, regulations,  ordinances, rules,
judgments, orders, decrees, plans, injunctions,  permits,  concessions,  grants,
franchises, licenses,

                                                      


                                        7





agreements and other governmental restrictions relating to the environment,  the
effect  of the  environment  on human  health  or to  emissions,  discharges  or
releases of pollutants,  contaminants,  Hazardous  Substances or wastes into the
environment  including,  without limitation,  ambient air, surface water, ground
water,  or  land,  or  otherwise   relating  to  the  manufacture,   processing,
distribution,  use,  treatment,  storage,  disposal,  transport  or  handling of
pollutants,  contaminants,  Hazardous  Substances  or wastes or the  clean-up or
other remediation thereof.

                  "Environmental  Liabilities"  means any and all liabilities of
or  relating  to  the  Borrower  or  any  of  its  Subsidiaries  (including  any
liabilities  derived from an entity which is, in whole or in part, a predecessor
of the  Borrower  or  any of its  Subsidiaries),  whether  vested  or  unvested,
contingent or fixed, actual or potential, known or unknown, which arise under or
relate to matters covered by Environmental Laws.

                  "ERISA" means the Employee  Retirement  Income Security Act of
1974, as amended, or any successor statute.

                  "ERISA  Group"  means the  Borrower,  any  Subsidiary  and all
members of a  controlled  group of  corporations  and all  trades or  businesses
(whether or not  incorporated)  under common  control  which,  together with the
Borrower or any  Subsidiary,  are treated as a single employer under Section 414
of the Internal Revenue Code.

                  "Euro-Dollar  Business Day" means any Domestic Business Day on
which commercial banks are open for international  business  (including dealings
in dollar deposits) in London.

                  "Euro-Dollar  Lending  Office"  means,  as to each  Bank,  its
office,   branch  or  affiliate   located  at  its  address  set  forth  in  its
Administrative  Questionnaire (or identified in its Administrative Questionnaire
as its Euro-Dollar Lending Office) or such other office,  branch or affiliate of
such Bank as it may hereafter  designate as its  Euro-Dollar  Lending  Office by
notice to the Borrower and the Agent.

                  "Euro-Dollar Loan" means a Tranche A Loan which bears interest
based on the Adjusted  Euro-Dollar  Rate  pursuant to the  applicable  Notice of
Borrowing or Notice of Interest Rate Election.

                  "Euro-Dollar Rate" means, with respect to any Interest Period,
the average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the
respective  rates per annum at which  deposits in dollars are offered to each of
the Euro-Dollar  Reference Banks in the London interbank market at approximately
11:00 A.M.  (London time) two Euro-Dollar  Business Days before the first day of
such Interest Period in an amount approximately equal to the principal amount of
the

                                                      


                                        8





Euro-Dollar  Loan of such  Euro-Dollar  Reference  Bank to which  such  Interest
Period is to apply and for a period of time comparable to such Interest Period.

                  "Euro-Dollar  Reference  Banks"  means  the  principal  London
offices of Bank of America  National  Trust and Savings  Association  and Morgan
Guaranty Trust Company of New York.

                  "Euro-Dollar  Reserve  Percentage"  means  for  any  day  that
percentage  (expressed  as a  decimal)  which  is in  effect  on  such  day,  as
prescribed  by the Board of  Governors  of the  Federal  Reserve  System (or any
successor) for determining the maximum reserve  requirement for a member bank of
the Federal Reserve System in New York City with deposits exceeding five billion
dollars  in respect of  "Eurocurrency  liabilities"  (or in respect of any other
category  of  liabilities  which  includes  deposits by  reference  to which the
interest rate on  Euro-Dollar  Loans is determined or any category of extensions
of credit or other assets which includes loans by a non-United  States office of
any Bank to United States  residents).  The Adjusted  Euro-Dollar  Rate shall be
adjusted  automatically  on and as of the  effective  date of any  change in the
Euro-Dollar Reserve Percentage.

                  "Event of Default" has the meaning set forth in Section 6.01.

                  "Evergreen  Letter of  Credit"  has the  meaning  set forth in
Section 2.16(b).

                  "Exempt  Group"  means (i) any  employee  benefit  plan of the
Borrower or any  Subsidiary,  (ii) any entity or Person holding shares of common
stock of Borrower  organized,  appointed or  established  by the Borrower or any
Subsidiary  for or  pursuant  to the terms of any such  plan,  (iii) The  Perini
Memorial Foundation,  Inc., The Joseph Perini Memorial Foundation, or any of the
various trusts established under the wills of Lewis R. Perini, Senior, Joseph R.
Perini, Senior or Charles B.
Perini, Senior, or (iv) the Investor.

                  "Exercise  Price  Letter"  means  an  Exercise  Price  Letter,
completed and delivered by the Agent to the Borrower,  dated the Effective  Date
and countersigned by the Borrower, substantially in the form of Exhibit Q.

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

                                                      


                                        9





Day, and (ii) if no such rate is so published on such next  succeeding  Domestic
Business  Day,  the Federal  Funds Rate for such day shall be the  average  rate
quoted  to  Morgan  Guaranty  Trust  Company  of New  York on  such  day on such
transactions as determined by the Agent.

                  "Financial  Letter of Credit" means any Letter of Credit which
constitutes a financial  standby letter of credit within the meaning of Appendix
A to  Regulation H of the Board of Governors  of the Federal  Reserve  System or
other  applicable  capital  adequacy  guidelines  promulgated by bank regulatory
authorities  (including without  limitation  workmen's  compensation  letters of
credit).

                  "Financing  Documents"  means this Agreement,  the Notes,  the
Subsidiary  Guarantee Agreement,  the Collateral  Documents,  the Warrants,  the
Warrantholders  Rights Agreement,  the  Securityholders  Agreement and all other
supplemental or additional  agreements and instruments delivered pursuant hereto
or thereto.

                  "GAAP" means generally  accepted  accounting  principles as in
effect from time to time.

                  "Group  of  Loans"  means,  at any  time,  a  group  of  Loans
consisting  of (i) all Loans  which are Base Rate Loans at such time or (ii) all
Loans which are Euro- Dollar Loans having the same Interest Period at such time;
provided  that,  if a Loan of any  particular  Bank is converted to or made as a
Base Rate Loan pursuant to Section 8.02 or 8.04,  such Loan shall be included in
the same  Group or Groups of Loans from time to time as it would have been in if
it had not been so converted or made.

                  "Guarantee" by any Person means any obligation,  contingent or
otherwise,  of such Person directly or indirectly  guaranteeing  any Debt of any
other  Person  and,  without  limiting  the  generality  of the  foregoing,  any
obligation,  direct or indirect,  contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt (whether  arising by virtue of  partnership  arrangements,  by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay, or
to maintain  financial  statement  conditions or otherwise) or (ii) entered into
for the purpose of  assuring in any other  manner the holder of such Debt of the
payment  thereof or to protect such holder  against loss in respect  thereof (in
whole  or  in  part),  provided  that  the  term  Guarantee  shall  not  include
endorsements  for  collection  or  deposit  or bid  and  performance  bonds  and
guarantees in the ordinary course of business.  The term  "Guarantee"  used as a
verb has a corresponding meaning.

                  "Harrah's  LC" means the Letter of Credit dated  September 27,
1996,  letter of credit  no.  00103213,  issued by the LC Bank in the  amount of
$4,650,000 in favor of Harrah's Operating Co. Inc.

                                                      


                                       10






                  "Hazardous Substances" means any toxic,  radioactive,  caustic
or  otherwise  hazardous  substance,   including  petroleum,   its  derivatives,
by-products  and other  hydrocarbons,  or any substance  having any  constituent
elements displaying any of the foregoing characteristics.

                  "Indemnitee" has the meaning set forth in Section 9.03(b).

                  "Interest  Period"  means,  with  respect to each  Euro-Dollar
Borrowing,  the period  commencing on the date of such Borrowing as specified in
the  applicable  Notice of Borrowing or on the date  specified in the applicable
Notice of Interest Rate Election and ending one, two or three months thereafter,
as the Borrower may elect in such Notice of Borrowing or Notice of Interest Rate
Election, as the case may be; provided that:

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

                  (b) any  Interest  Period that begins on the last  Euro-Dollar
Business Day of a calendar  month (or on a day for which there is no numerically
corresponding  day in the  calendar  month at the end of such  Interest  Period)
shall,  subject to clause (c) below, end on the last Euro-Dollar Business Day of
a calendar month; and

                  (c) any  Interest  Period that would  otherwise  end after the
Termination Date shall end on the Termination Date.

                  "Internal  Revenue  Code" means the  Internal  Revenue Code of
1986, as amended, or any successor statute.

                  "Investment"  means any  investment in any Person,  whether by
means of share purchase, capital contribution,  loan, Guarantee, time deposit or
otherwise.

                  "Investor" means PB Capital Partners, L.P., a Delaware limited
partnership.

                  "Investor Group" means the Investor, The Common Fund, Separate
Account P, RCBA, Richard C. Blum, Ronald Tutor, Tutor-Saliba Corp., and their
respective Affiliates.


                                                      


                                       11





                  "LC Bank" means  BayBank,  N.A., and its  successors,  or such
other Bank as the Borrower may designate  from time to time (with the consent of
such other Bank).

                  "LC Exposure"  means,  at any time and for any Bank, an amount
equal to such Bank's Tranche A Commitment  Percentage at such time multiplied by
the aggregate  amount of Letter of Credit  Liabilities in respect of all Letters
of Credit at such time.

                  "Letter  of  Credit"  has the  meaning  set  forth in  Section
2.16(a).

                  "Letter  of  Credit  Liabilities"  means,  at any  time and in
respect of any Letter of Credit, the sum, without duplication, of (i) the amount
available for drawing under such Letter of Credit plus (ii) the aggregate unpaid
amount of all  Reimbursement  Obligations  in respect of previous  drawings made
under such Letter of Credit.

                  "Lien" means,  with respect to any asset, any mortgage,  lien,
pledge, charge,  security interest or encumbrance of any kind, or any other type
of preferential arrangement that has the practical effect of creating a security
interest,  in respect of such asset.  For the  purposes of this  Agreement,  the
Borrower  or any  Subsidiary  shall be deemed to own subject to a Lien any asset
which it has  acquired  or holds  subject to the  interest of a vendor or lessor
under any  conditional  sale  agreement,  capital lease or other title retention
agreement relating to such asset.

                  "Loan" means a loan made by a Bank pursuant to Section 2.02 of
the Original Credit  Agreement,  Section 2.02 of the Bridge Credit  Agreement or
Section  2.02  hereof;  provided  that,  if any such loan or loans (or  portions
thereof)  are  combined or  subdivided  pursuant  to a Notice of  Interest  Rate
Election, the term "Loan" shall refer to the combined principal amount resulting
from such  combination or to each of the separate  principal  amounts  resulting
from such subdivision, as the case may be.

                  "Loan  Commitment"  means  for any Bank at any time an  amount
equal to the excess,  if any, of such Bank's  Commitment  at such time over such
Bank's LC Exposure at such time.

                  "Management  Agreement" means a management  agreement  between
the Borrower and  Tutor-Saliba  Corp.  entered into in accordance with the Stock
Purchase Agreement.

                  "Material  Plan"  means  at any  time a Plan or  Plans  having
aggregate Unfunded Liabilities in excess of $10,000,000.


                                                      


                                       12





                  "Material  Subsidiary" means at any time a Subsidiary which as
of such time meets the definition of a "significant  subsidiary" contained as of
the date hereof in Regulation S-X of the Securities and Exchange Commission.

                  "Modified  Parent  Company Debt" means at any date the Debt of
the  Borrower  (other  than  Debt  payable  to  any  Wholly-Owned   Consolidated
Subsidiary) determined on an unconsolidated basis as of such date.

                  "Mortgage  Amendments"  means the  amendments to the mortgages
and deeds of trust described in Part III of Schedule 4.03(c), each substantially
in the form of Exhibit K-1 or Exhibit K-2 hereto.

                  "Mortgage  Banks" means (i) Harris Trust and Savings  Bank, as
successor to Barclays Bank PLC, Boston Branch,  in its capacity as the issuer of
a letter of credit for the account of the Borrower in the initial  stated amount
of  $4,106,850,  the  maker  of a  commitment  to lend up to  $4,106,850  to the
Borrower pursuant to the Letter of Credit and  Reimbursement  Agreement dated as
of October 1, 1985 and the "Bank"  described  in the  mortgage  on the  property
described  as Item 12 in Part I of  Schedule  4.03(c)  hereto  which  secure the
obligations  of the  Borrower  under  such  Letter of Credit  and  Reimbursement
Agreement and (ii) Fleet Credit Corporation, as the lessor of computer equipment
and other personal  property to the Borrower and certain of its Subsidiaries and
joint  ventures  pursuant to the Master  Equipment  Lease No.  1100641700  dated
December 30, 1988 (including the Addendum  thereto dated December 30, 1988), and
the schedules executed thereunder prior to February 26, 1996.

                  "Mortgaged  Facilities" means the properties encumbered by the
Mortgages and described as Items 1, 2, 3, 4, 5, 6, 7, 10, 11 and 12 in Part I of
Schedule 4.03(c) hereto.

                  "Mortgages" means the mortgages or deeds of trust described in
Part III of Schedule  4.03(c),  as amended as of the date hereof by the Mortgage
Amendments, and as the same may be amended, modified,  supplemented and restated
from time to time as permitted  herein and in  accordance  with the terms hereof
and thereof, and "Mortgage" means any of the foregoing.

                  "Multiemployer  Plan"  means at any time an  employee  pension
benefit  plan  within the  meaning of Section  4001(a)(3)  of ERISA to which any
member of the ERISA  Group is then  making or  accruing  an  obligation  to make
contributions  or has within the preceding  five plan years made  contributions,
including for these purposes any Person which ceased to be a member of the ERISA
Group during such five year period.


                                                      


                                       13





                  "Net Income from Continuing Operations" means, for any period,
the consolidated  net income of the Borrower and its  Consolidated  Subsidiaries
for such period, but eliminating any extraordinary items of income or expense.

                  "Net Proceeds"  means,  with respect to any Disposition by the
Borrower or any Subsidiary of any asset,  property or business,  an amount equal
to the proceeds  received by the Borrower or any  Subsidiary in respect  thereof
(including  Insurance  Proceeds (as defined in any Mortgage) received in respect
of any  Casualty,  but only to the  extent  exceeding  the  aggregate  amount to
restore or replace the applicable Mortgaged Facility (or portion thereof subject
to such  Casualty),  and  including  all  Awards (as  defined  in any  Mortgage)
received   in  respect  of  any   Condemnation,   less   (without   duplication)
out-of-pocket  transaction costs, all senior mortgage debt required to be repaid
at the  time  of such  Disposition,  fees,  commissions  and  other  transaction
expenses  reasonably  incurred by the Borrower or such  Subsidiary in connection
with such Disposition and any taxes paid or payable (as estimated by a financial
officer of the Borrower in good faith) in respect thereof.

                  "Net  Working  Investment"  means,  at  any  date,  an  amount
calculated as follows:

                  (i) the  aggregate  amount of accounts  and notes  receivable,
unbilled work and investments in construction  joint ventures which are shown as
current assets,

                  minus

                  (ii) the aggregate amount of accounts  payable,  advances from
construction joint ventures, deferred contract revenue and accrued expenses,

in each case as shown on the consolidated balance sheet for the Borrower and its
Consolidated Subsidiaries determined as of such date; provided that for purposes
of calculating  any increase or decrease in Net Working  Investment to determine
Operating  Cash Flow,  Net Working  Investment  on the first day of the relevant
measurement  period  shall be deemed to be the  lesser  of  $45,000,000  and the
amount calculated as shown above.

                  "Notes" means promissory notes of the Borrower,  substantially
in the form of Exhibit A, evidencing the obligation of the Borrower to repay the
Loans, and "Note" means any one of such promissory notes issued hereunder.

                  "Notice of  Borrowing"  has the  meaning  set forth in Section
2.02.

                  "Notice of Interest  Rate  Election" has the meaning set forth
in Section 2.02(f).

                                                      


                                       14






                  "Obligor"  means  each  of the  Borrower  and  the  Subsidiary
Guarantors, and "Obligors" means all of the foregoing.

                  "Operating  Cash  Flow"  means,  for  any  period,  an  amount
calculated as follows:

                  (i)  the  consolidated   revenues  of  the  Borrower  and  its
Consolidated  Subsidiaries  less  the  consolidated  cost of  operations  of the
Borrower  and  its  Consolidated  Subsidiaries,  in  each  case  to  the  extent
attributable to the Construction Business for such period;

                  minus

                  (ii)  the  aggregate   consolidated  amount  of  all  general,
administrative  and  selling  expenses  of the  Borrower  and  its  Consolidated
Subsidiaries for such period;

                   minus (or plus)

                  (iii) any  increase (or  decrease)  in Net Working  Investment
         from the last day of such period relative to Net Working  Investment on
         the first day of such period.

                  "Original  Credit  Agreement"  means the  $125,000,000  Credit
Agreement  dated as of December  6, 1994 among the  Borrower,  the banks  listed
therein and Morgan  Guaranty Trust Company of New York, as agent for such banks,
as amended to the Effective Date.

                  "Original Note" has the meaning set forth in Section 2.03.

                  "Other  Asset"  means any asset,  property  or business of the
Borrower or any Subsidiary,  other than any Real Estate  Investment or any other
real  property,  if the  aggregate  amount of Net  Proceeds  in  respect  of any
Disposition thereof shall exceed $25,000.

                  "Other LC Bank"  means  each  Bank  listed  on  Schedule  1.01
attached hereto and its successors and assigns.

                  "Other   Letters  of  Credit"  means  the  letters  of  credit
described on Schedule 1.01 attached hereto.

                  "Other  Mortgage/Lease  Obligations"  means the obligations of
the  Borrower  to  any  Mortgage  Banks  under  the  documents,  agreements  and
instruments  described  in the  definition  of  Mortgage  Banks,  and all  other
supplemental or

                                                      


                                       15





additional  documents,   agreements  and  instruments  delivered  in  connection
therewith prior to February 26, 1996.

                  "Other  Reimbursement  Obligations"  means,  at any date,  the
obligations of the Borrower,  whether or not contingent at such time and whether
direct or as a guarantee, to reimburse any Other LC Banks for the amount paid or
payable by such Other LC Bank in respect of a drawing  under an Other  Letter of
Credit.

                  "Paramount Development Associates" means Paramount Development
Associates, Inc., a Massachusetts corporation.

                  "Parent"   means,   with  respect  to  any  Bank,  any  Person
controlling such Bank.

                  "Participant" has the meaning set forth in Section 9.06(b).

                  "PBGC" means the Pension Benefit  Guaranty  Corporation or any
entity succeeding to any or all of its functions under ERISA.

                  "Performance  Letter of Credit" means a Letter of Credit which
constitutes  a  performance  standby  letter of credit  within  the  meaning  of
Appendix A to  Regulation  H of the Board of  Governors  of the Federal  Reserve
system or other  applicable  capital  adequacy  guidelines  promulgated  by bank
regulatory  authorities,  it being  understood  that the Harrah's LC and similar
types of Letters of Credit are Performance Letters of Credit.

                  "Perini Building Company" means Perini Building Company, Inc.,
an Arizona corporation.

                  "Perini International" means Perini International Corporation,
a Massachusetts corporation.

                  "Perini   Land  and   Development"   means   Perini  Land  and
Development Company, Inc. a Massachusetts corporation.

                  "Permitted  Accounts"  means,  collectively,  (i) the deposit,
checking,  operating  and other bank  accounts  listed on  Schedule  4.15,  (ii)
payroll and petty cash accounts  opened in the ordinary  course of business with
imprest  balances not to exceed  $7,500 for each such  account,  (iii) all other
deposit,  checking,  operating  and other bank  accounts  established  after the
Effective Date with the prior written  consent of the Required  Banks,  (iv) the
Cash Collateral Account established  pursuant to the Borrower Security Agreement
and (v) the Cash  Collateral  Account  established  pursuant  to the  Subsidiary
Security Agreement.


                                                      


                                       16





                  "Permitted  Encumbrances"  means, with respect to any property
owned or leased by the Borrower or any of its Subsidiaries:

                  (a) Liens for taxes, assessments or other governmental charges
not yet due or which  are  being  contested  in good  faith  and by  appropriate
proceedings  if adequate  reserves  with respect  thereto are  maintained on the
books of the Borrower or such Subsidiary, as the case may be, in accordance with
GAAP;

                  (b)  carriers',  warehousemen's,   mechanics',  materialmen's,
repairmen's  or other like Liens  arising by  operation  of law in the  ordinary
course of business so long as (A) the underlying obligations are not overdue for
a period of more than 60 days or (B) such  Liens  are  being  contested  in good
faith and by appropriate  proceedings and adequate reserves with respect thereto
are maintained on the books of the Borrower or such Subsidiary,  as the case may
be, in accordance with GAAP;

                  (c) other  Liens or,  with  respect  to real  property,  title
defects (including matters which an accurate survey might disclose) which (x) do
not  secure  Debt;  and (y) do not  materially  detract  from the  value of such
property or materially impair the use thereof by the Borrower or such Subsidiary
in the operation of its business.

                  "Permitted  Liens"  means the Liens  permitted  to exist under
Section 5.11.

                  "Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.

                  "Plan"  means at any time an  employee  pension  benefit  plan
(other  than a  Multiemployer  Plan)  which is  covered  by Title IV of ERISA or
subject to the minimum  funding  standards  under  Section  412 of the  Internal
Revenue Code and either (i) is maintained,  or contributed  to, by any member of
the ERISA  Group for  employees  of any member of the ERISA Group or (ii) has at
any time within the preceding five years been maintained,  or contributed to, by
any Person  which was at such time a member of the ERISA Group for  employees of
any Person which was at such time a member of the ERISA Group.

                  "Pledged Securities" has the meaning set forth in Section 1 of
the Borrower Pledge Agreement and the Subsidiary Pledge Agreement.


                                                      


                                       17





                  "Prime Rate" means the rate of interest publicly  announced by
Morgan  Guaranty Trust Company of New York in New York City from time to time as
its Prime Rate.

                  "RCBA" means Richard C. Blum & Associates, L.P., a California
limited partnership.

                  "Real   Estate   Investment"   means   (i)  the   acquisition,
construction or improvement of any real property,  other than real property used
by the Borrower or a Consolidated  Subsidiary in the conduct of its Construction
Business  or (ii)  any  Investment  in any  Person  (including  Perini  Land and
Development or another Consolidated  Subsidiary,  but without duplication of any
Real Estate Investment made by such Person with the proceeds of such Investment)
engaged in real estate  investment  or  development  or whose  principal  assets
consist of real property.

                  "R. E. Dailey & Co." means R. E. Dailey & Co., a Michigan
corporation.

                  "Refunding   Borrowing"   means  a  Borrowing   which,   after
application  of  the  proceeds  thereof,  results  in no  net  increase  in  the
outstanding principal amount of Loans made by any Bank.

                  "Regulated Activity" means any generation, treatment, storage,
recycling, transportation or Release of any Hazardous Substance.

                  "Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as in effect from time to time.

                  "Reimbursement  Obligations" means at any date the obligations
of the Borrower  then  outstanding  under Section 2.16 to reimburse any Bank for
the amount paid by such Bank in respect of a drawing under a Letter of Credit.

                  "Release" means any discharge,  emission or release, including
a Release as defined in CERCLA at 42 U.S.C.  ss.  9601(22).  The term "Released"
has a corresponding meaning.

                  "Release of Claims"  means the  Release of Claims  dated as of
the Closing Date among the Borrower,  the Subsidiary  Guarantors,  the Banks and
the Agent, substantially in the form of Exhibit M.

                  "Required  Banks"  means at any time Banks having at least 60%
of the aggregate  amount of the Commitments  or, if the  Commitments  shall have
been  terminated,  holding Notes evidencing at least 60% of the aggregate unpaid
principal amount of the Loans.

                                                      


                                       18






                  "Restricted   Payment"   means  (i)  any   dividend  or  other
distribution  on any shares of the  Borrower's  capital stock (except  dividends
payable solely in shares of its capital stock) or (ii) any payment on account of
the purchase,  redemption,  retirement or  acquisition  of (a) any shares of the
Borrower's  capital  stock or (b) any option,  warrant or other right to acquire
shares of the Borrower's capital stock.

                  "Rincon  Agreements"  means  all  agreements,   documents  and
instruments  to which  the  Borrower,  Rincon  Center  Associates  or any  other
Subsidiary  of the Borrower or Rincon Center  Associates is a party  relating to
Rincon Center in San Francisco, California.

                  "Rincon  Swap" means the interest  rate  exchange  transaction
between Rincon Center  Associates,  a California limited  partnership,  as Fixed
Rate Payor, and Citicorp Real Estate, Inc., as Variable Rate Payor, as confirmed
by the Confirmation for Interest Rate Exchange Transaction date October 18, 1993
with Transaction Reference Number 931913.

                  "Securityholders    Agreement"   means   the   Securityholders
Agreement  dated  as of the  date  hereof  among  the  Borrower,  the  Series  B
Shareholders  named therein and the Banks,  substantially in the form of Exhibit
P.

                  "Separate Account P" means The Union Labor Life Insurance
Company Separate Account P.

                  "Series  B  Preferred  Stock"  means the  Series B  Cumulative
Convertible Preferred Stock of the Borrower.

                  "Stock  Purchase"  means the  purchase  by the  Investor,  The
Common Fund and Separate  Account P of an aggregate  150,150  shares of Series B
Preferred  Stock and all of the  other  transactions  contemplated  by the Stock
Purchase  Agreement,  including  the  exhibits  and  schedules  thereto,  to  be
consummated on or before the Effective Date.

                  "Stock Purchase  Agreement"  means the Stock Purchase and Sale
Agreement  dated as of July 24, 1996 among RCBA,  the Investor and the Borrower,
as amended by letter  agreements  dated  August 21,  1996,  September  16, 1996,
September  30,  1996 and  October 9, 1996 and by the Second  Amendment  to Stock
Purchase Agreement dated as of November 8, 1996.

                  "Subsidiary"  of any  Person  means any  corporation  or other
entity of which  securities or other ownership  interests having ordinary voting
power to elect a majority of the board of directors or other persons  performing
similar functions are at the time directly or indirectly owned by such Person.


                                                      


                                       19





                  "Subsidiary   Guarantee   Agreement"   means  the   Subsidiary
Guarantee  Agreement  dated as of December 6, 1994  between  the  Borrower,  the
Subsidiary Guarantors party thereto and the Agent, as amended by Amendment No. 1
dated as of February 26, 1996,  as amended and restated as of the date hereof in
substantially  the form of Exhibit D, and as the same may be amended,  modified,
supplemented  and  restated  from  time  to  time  as  permitted  herein  and in
accordance with the terms thereof.

                  "Subsidiary  Guarantor" means each of Perini Building Company,
Perini International, Perini Land and Development, R. E. Dailey & Co., Paramount
Development  Associates,   Perini  Environmental  Services,   Inc.,  a  Delaware
corporation,  Perini  Resorts,  Inc.,  a California  corporation  and each other
Subsidiary  of the Borrower  which becomes a party to the  Subsidiary  Guarantee
Agreement, and their respective successors.

                  "Subsidiary  Pledge  Agreement"  means the  Subsidiary  Pledge
Agreement  dated as of February 26, 1996 among the Subsidiary  Guarantors  party
thereto  and the  Agent,  as  amended  and  restated  as of the date  hereof  in
substantially  the form of Exhibit F, and as the same may be amended,  modified,
supplemented  and  restated  from  time  to  time  as  permitted  herein  and in
accordance with the terms thereof.

                  "Subsidiary  Security Agreement" means the Subsidiary Security
Agreement  dated as of December 6, 1994 among the  Subsidiary  Guarantors  party
thereto and the Agent,  as amended and  restated as of  February  26,  1996,  as
amended and restated as of the date hereof in substantially  the form of Exhibit
E, and as the same may be amended, modified, supplemented and restated from time
to time as permitted herein and in accordance with the terms thereof.

                  "Temporary  Cash   Investments"   means  investments  of  cash
balances in a Permitted Account in United States Government  securities or other
short-term money market  investments;  provided that after January 31, 1997, the
arrangements for any such investments must be satisfactory to the Required Banks
and the Agent, including for purposes of perfecting the security interest of the
Agent therein.

                  "Termination  Date" means the first  Domestic  Business Day of
January, 2000.

                  "The Common Fund" means The Common Fund for Non-Profit
Organizations for the account of its Equity Fund.

                  "Tranche A Commitment"  means,  with respect to each Bank, the
amount set forth opposite the name of such Bank on the signature pages hereof as
its  Tranche A  Commitment,  as such  amount  may be  reduced  from time to time
pursuant

                                                      


                                       20





to  Section  2.09 and  Section  2.10.  The  aggregate  amount  of the  Tranche A
Commitments of the Banks on the Effective Date is $110,000,000.

                  "Tranche A Commitment  Percentage" means, with respect to each
Bank  at any  time,  the  percentage  that  such  Bank's  Tranche  A  Commitment
constitutes of the aggregate amount of the Tranche A Commitments at such time.

                  "Tranche  A Loan"  means  a  "Tranche  A Loan"  made by a Bank
pursuant to Section 2.01(a) of the Original Credit Agreement or a Loan made by a
Bank pursuant to Section 2.01(b) of this Agreement.

                  "Tranche B Commitment"  means,  with respect to each Bank, the
amount set forth opposite the name of such Bank on the signature pages hereof as
its  Tranche B  Commitment,  as such  amount  may be  reduced  from time to time
pursuant to Section 2.09 and Section 2.10. The aggregate amount of the Tranche B
Commitments of the Banks on the Effective Date is $19,536,000.

                  "Tranche  B Loan"  means  a  "Tranche  B Loan"  made by a Bank
pursuant to Section  2.01(b) of the Original Credit  Agreement,  a "Bridge Loan"
made by a Bank pursuant to the Bridge Credit  Agreement or a Loan made by a Bank
pursuant to Section 2.01(c) of this Agreement.

                  "Unfunded  Liabilities" means, with respect to any Plan at any
time,  the  amount  (if any) by which (i) the value of all  benefit  liabilities
under such Plan,  determined on a plan  termination  basis using the assumptions
prescribed  by the PBGC for purposes of Section 4044 of ERISA,  exceeds (ii) the
fair market value of all Plan assets allocable to such  liabilities  under Title
IV of ERISA (excluding any accrued but unpaid contributions),  all determined as
of the then most  recent  valuation  date for such Plan,  but only to the extent
that such excess represents a potential liability of a member of the ERISA Group
to the PBGC or any other Person under Title IV of ERISA.

                  "Usage"  means,   at  any  date,  the  sum  of  the  aggregate
outstanding principal amount of the Loans at such date plus the aggregate amount
of Letter of Credit  Liabilities  at such date with  respect  to all  Letters of
Credit.

                  "Warrantholders  Rights  Agreement"  means the  Warrantholders
Rights  Agreement  dated as of the date hereof among the Borrower and the Banks,
substantially in the form of Exhibit O.

                  "Warrants" has the meaning set forth in Section 2.18.

                  "Wholly-Owned Consolidated Subsidiary" means any Consolidated
Subsidiary of the Borrower all of the shares of capital stock or other ownership

                                                      


                                       21





interests  of  which  (except  directors'  qualifying  shares)  are at the  time
directly or indirectly owned by the Borrower.

                  SECTION  1.02.  Accounting  Terms and  Determinations.  Unless
otherwise   specified  herein,   all  accounting  terms  used  herein  shall  be
interpreted,  all  accounting  determinations  hereunder  shall be made, and all
financial  statements  required to be delivered  hereunder  shall be prepared in
accordance  with  GAAP,  applied  on a  basis  consistent  (except  for  changes
concurred in by the Borrower's  independent  public  accountants)  with the most
recent  audited  consolidated  financial  statements  of the  Borrower  and  its
Consolidated Subsidiaries delivered to the Banks.

                  SECTION  1.03.  Types  of  Borrowings.  The  term  "Borrowing"
denotes  the  aggregation  of Loans of one or more  Banks  made to the  Borrower
pursuant  to Article II of the  Original  Credit  Agreement,  the Bridge  Credit
Agreement or this Agreement on the same date, all of which Loans are of the same
type (subject to Article VIII) and, except in the case of Base Rate Loans,  have
the same Interest Period or initial Interest  Period.  Borrowings are classified
for purposes of this  Agreement  by  reference to the Class of Loans  comprising
such  Borrowing  (e.g.,  a "Tranche A  Borrowing"  is a Borrowing  comprised  of
Tranche A Loans) or by  reference  to the pricing of the Loans  comprising  such
Borrowing  (e.g.,  a  "Euro-  Dollar  Borrowing"  is a  Borrowing  comprised  of
Euro-Dollar Loans).


                                   ARTICLE II

                                   THE CREDITS

                  SECTION 2.01.             The Loans.

                  (a)  Consolidation  of Loans and  Bridge  Loans.  Prior to the
Effective  Date,  each Bank has made  "Loans" to the  Borrower  pursuant  to the
Original  Credit  Agreement and "Bridge Loans"  (comprised of "Bridge  Revolving
Loans" and "Bridge Term Loans") to the  Borrower  pursuant to the Bridge  Credit
Agreement.  On the Effective Date, (i) the Borrower shall repay all "Bridge Term
Loans"  outstanding  under the Bridge  Credit  Agreement,  (ii) all  outstanding
"Loans" and "Bridge  Revolving  Loans" shall be deemed to be "Loans"  hereunder,
(iii) all "Tranche A Loans"  outstanding  under the Original Credit Agreement on
the Effective Date shall be deemed to be "Tranche A Loans"  hereunder,  (iv) all
"Bridge  Revolving Loans"  outstanding under the Bridge Credit Agreement and all
"Tranche  B Loans"  outstanding  under  the  Original  Credit  Agreement  on the
Effective  Date shall be deemed to be  "Tranche B Loans"  hereunder  and (v) all
"Euro-Dollar  Loans"  outstanding  under the  Original  Credit  Agreement  shall
continue as Euro-Dollar Loans hereunder,  with the Interest Period for each such
Euro-Dollar Loan unchanged.


                                                      


                                       22





                  (b)  Tranche  A  Loans.   From  time  to  time  prior  to  the
Termination  Date, each Bank severally  agrees,  on the terms and conditions set
forth in this  Agreement,  to make  loans to the  Borrower  from time to time in
amounts such that the sum of (i) the aggregate principal amount of all Tranche A
Loans outstanding for such Bank plus (ii) the LC Exposure for such Bank does not
exceed,  in the  aggregate  at any time,  the  amount of such  Bank's  Tranche A
Commitment. Each Borrowing under this Section shall be in an aggregate principal
amount  of  $500,000  or any  larger  multiple  thereof  (except  that  any such
Borrowing may be in the aggregate  amount of the unused  Tranche A  Commitments)
and  shall  be made  from the  several  Banks  ratably  in  proportion  to their
respective Tranche A Commitments.  Within the foregoing limits, the Borrower may
borrow under this Section,  repay, or to the extent permitted by Section 2.10 or
Section  2.11,  prepay  Tranche A Loans and  reborrow  at any time  prior to the
Termination  Date under this  Section.  Each Tranche A Loan shall be a Base Rate
Loan or, subject to Article VIII, a Euro-Dollar Loan if specified as such in the
applicable Notice Of Borrowing.

                  (c)  Tranche  B  Loans.   From  time  to  time  prior  to  the
Termination  Date, each Bank severally  agrees,  on the terms and conditions set
forth in this  Agreement,  to make  loans to the  Borrower  from time to time in
amounts  such  that  the  aggregate  principal  amount  of all  Tranche  B Loans
outstanding  for such Bank does not exceed,  in the  aggregate at any time,  the
amount of such Bank's Tranche B Commitment.  Each  Borrowing  under this Section
shall be in an  aggregate  principal  amount of $500,000 or any larger  multiple
thereof  (except that any such  Borrowing may be in the aggregate  amount of the
unused Tranche B  Commitments)  and shall be made from the several Banks ratably
in proportion to their  respective  Tranche B Commitments.  Within the foregoing
limits,  the  Borrower may borrow under this  Section,  repay,  or to the extent
permitted by Section 2.10 or Section 2.11,  prepay  Tranche B Loans and reborrow
at any time prior to the  Termination  Date under this  Section.  Each Tranche B
Loan shall be a Base Rate Loan.

                  SECTION 2.02. Method of Borrowing; Method of Electing Interest
Rates.

                  (a) The  Borrower  shall  give the Agent  notice (a "Notice of
Borrowing")  not later than 11:30 A.M.  (New York City time) on the date of each
Base Rate  Borrowing  and at least three  Euro-Dollar  Business Days before each
Euro-Dollar Borrowing, specifying:

                  (i) the date of such  Borrowing,  which  shall  be a  Domestic
Business Day in the case of a Base Rate Borrowing or a Euro-Dollar  Business Day
in the case of a Euro-Dollar Borrowing;

                  (ii)     the aggregate amount of such Borrowing;


                                                      


                                       23





                  (iii) whether the Loans  comprising  such  Borrowing  shall be
Tranche A Loans or Tranche B Loans;

                  (iv)  whether the Tranche A Loans  comprising  such  Borrowing
shall be a Base Rate Loans or Euro-Dollar Loans; and

                  (v) in the case of a  Euro-Dollar  Borrowing,  the duration of
the  Interest  Period  applicable  thereto,  subject  to the  provisions  of the
definition of Interest Period.

                  (b) Upon  receipt of a Notice of  Borrowing,  the Agent  shall
promptly  notify each Bank of the  contents  thereof and of such Bank's  ratable
share of such  Borrowing  and such Notice of Borrowing  shall not  thereafter be
revocable by the Borrower.

                  (c) Not later than 1:30 P.M.  (New York City time) on the date
of each Borrowing, each Bank shall (except as provided in subsection (d) of this
Section) make available its ratable share of such Borrowing, in Federal or other
funds  immediately  available  in New York  City,  to the  Agent at its  address
referred to in Section 9.01.  Unless the Agent  determines  that any  applicable
condition  specified in Article III has not been satisfied,  the Agent will make
the funds so received  from the Banks  available  to the Borrower at the Agent's
aforesaid address.

                  (d) If any Bank makes a new Loan  hereunder  on a day on which
the Borrower is to repay all or any part of an outstanding  Loan from such Bank,
such Bank shall apply the  proceeds of its new Loan to make such  repayment  and
only an  amount  equal to the  difference  (if any)  between  the  amount  being
borrowed and the amount being repaid shall be made available by such Bank to the
Agent as provided in subsection (c) of this Section, or remitted by the Borrower
to the Agent as provided in Section 2.12, as the case may be.

                  (e) Unless the Agent  shall have  received  notice from a Bank
prior to the date of any  borrowing  (or, in the case of a Base Rate  Borrowing,
prior to noon (New York City time) on the date of such Borrowing) that such Bank
will not make  available to the Agent such Bank's share of such  Borrowing,  the
Agent may assume  that such Bank has made such share  available  to the Agent on
the date of such Borrowing in accordance  with  subsections  (c) and (d) of this
Section 2.02 and the 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 so made such share  available  to the Agent,  such Bank
and the Borrower  severally agree to repay to the 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 Agent, at (i) in the case of the Borrower,  a rate per annum equal
to the higher of the Federal Funds Rate and the

                                                      


                                       24





interest rate applicable  thereto  pursuant to Section 2.05 and (ii) in the case
of such Bank, the Federal Funds Rate. If such Bank shall repay to the Agent such
corresponding  amount,  such amount so repaid shall  constitute such Bank's Loan
included in such Borrowing for purposes of this Agreement.

                  (f) The Loans included in each  Borrowing  shall bear interest
initially at the type of rate specified by the Borrower in the applicable Notice
of Borrowing.  Thereafter, the Borrower may from time to time elect to change or
continue the type of interest rate borne by each Group of Loans (subject in each
case to the provisions of Article VIII), as follows:

                  (i) if such Loans are Base Rate Loans,  the Borrower may elect
to convert such Loans to Euro-Dollar  Loans as of any Euro-Dollar  Business Day;
and

                  (ii) if such Loans are  Euro-Dollar  Loans,  the  Borrower may
elect to convert  such Loans to Base Rate Loans or elect to continue  such Loans
as Euro-Dollar  Loans for an additional  Interest Period, in each case effective
on the last day of the then current Interest Period applicable to such Loans.

Each such  election  shall be made by delivering a notice (a "Notice of Interest
Rate Election") to the Agent at least three Euro-Dollar Business Days before the
conversion or continuation selected in such notice is to be effective.  A Notice
of Interest Rate  Election  may, if it so specifies,  apply to only a portion of
the aggregate principal amount of the relevant Group of Loans; provided that (i)
such portion is allocated ratably among the Loans comprising such Group and (ii)
the portion to which such Notice applies,  and the remaining portion to which it
does not apply, are each $500,000 or any larger multiple thereof.

                  (g)      Each Notice of Interest Rate Election shall specify:

                  (i) the  Group of Loans (or  portion  thereof)  to which  such
notice applies;

                  (ii) the date on which the conversion or continuation selected
in such notice is to be effective, which shall comply with the applicable clause
of subsection (f) above;

                  (iii) if the Loans  comprising such Group are to be converted,
the new type of Loans and, if such new Loans are Euro-Dollar Loans, the duration
of the initial Interest Period applicable thereto; and

                  (iv) if such Loans are to be  continued as  Euro-Dollar  Loans
for an additional  Interest  Period,  the duration of such  additional  Interest
Period.

                                                      


                                       25






Each  Interest  Period  specified in a Notice of Interest  Rate  Election  shall
comply with the provisions of the definition of Interest Period.

                  (h) Upon receipt of a Notice of Interest  Rate  Election  from
the Borrower  pursuant to subsection (a) above,  the Agent shall promptly notify
each Bank of the  contents  thereof  and such  notice  shall not  thereafter  be
revocable by the Borrower.  If the Borrower  fails to deliver a timely Notice of
Interest Rate  Election to the Agent for any Group of  Euro-Dollar  Loans,  such
Loans  shall  be  converted  into  Base  Rate  Loans on the last day of the then
current Interest Period applicable thereto.

                  SECTION 2.03.             Notes.

                  (a) In  connection  with  the  effectiveness  of the  Original
Credit Agreement,  the Borrower  delivered to the Agent, for the account of each
Bank,  duly  executed  "Notes"  substantially  in the form of  Exhibit  A to the
Original Credit Agreement  (collectively,  the "Original Notes") to evidence the
"Loans" of each Bank under the Original Credit  Agreement and in connection with
the effectiveness of the Bridge Credit Agreement,  the Borrower delivered to the
Agent, for the account of each Bank, duly executed "Bridge Notes"  substantially
in the form of  Exhibit A to the  Bridge  Credit  Agreement  (collectively,  the
"Bridge  Notes") to evidence  the  "Bridge  Loans" of each Bank under the Bridge
Credit  Agreement.  On or prior to the Effective  Date,  (i) the Borrower  shall
deliver  to the  Agent,  for the  account of each  Bank,  duly  executed  Notes,
substantially  in the form of Exhibit A hereto and (ii) each Bank shall  deliver
to the Agent, for  cancellation and delivery to the Borrower  promptly after the
Effective  Date,  its Original  Note and its Bridge Note (or in the case of loss
thereof,  a  written  agreement  of  indemnity  by such  Bank for  such  loss in
customary form and executed by such Bank).  On the Effective  Date,  each Bank's
Original  Note and  Bridge  Note  shall be  amended  and  restated  by such duly
executed  new Note,  and each  Bank's  Original  Note and  Bridge  Note shall be
canceled.  From and after the  Effective  Date,  the Loans of each Bank (whether
made under the Original Credit  Agreement,  the Bridge Credit  Agreement or this
Agreement) shall be evidenced by a single Note payable to the order of such Bank
for the account of its Applicable Lending Office.

                  (b) Each Bank may,  by notice to the  Borrower  and the Agent,
request that its Loans of a particular  Class or type be evidenced by a separate
Note in an amount equal to the aggregate  unpaid principal amount of such Loans.
Each such Note shall be in substantially the form of Exhibit A, with appropriate
modifications to reflect the fact that it evidences solely Loans of the relevant
Class or type. Each reference in this Agreement to the "Note" of such Bank shall
be deemed to refer to and include  any or all of such Notes,  as the context may
require.

                  (c) Upon  receipt  of each  Bank's  Note  pursuant  to Section
2.03(a) or Section 2.03(b), the Agent shall forward such Note to such Bank. Each
Bank shall

                                                      


                                       26





record the date,  amount and  maturity  of each Loan made by it and the date and
amount of each payment of principal  made by the Borrower with respect  thereto,
and may, if such Bank so elects in connection  with any transfer or  enforcement
of its  Note,  endorse  on the  schedule  forming  a  part  thereof  appropriate
notations to evidence the foregoing  information  with respect to each such Loan
then  outstanding;  provided  that  the  failure  of any  Bank to make  any such
recordation  or  endorsement  shall not affect the  obligations  of the Borrower
hereunder or under the Notes. Each Bank is hereby irrevocably  authorized by the
Borrower  so to endorse  its Note and to attach to and make a part of its Note a
continuation of any such schedule as and when required.

                  SECTION  2.04.  Maturity  of  Loans.  Unless  payable  earlier
pursuant  to Section  2.10 or Section  6.01,  each Loan  shall  mature,  and the
principal amount thereof shall be due and payable, on the Termination Date.

                  SECTION 2.05.             Interest Rates.

                  (a) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Base Rate Loan is made
until it becomes  due,  at a rate per annum  equal to the sum of the  Applicable
Base Rate Margin plus the Base Rate for such day. Such interest shall be payable
on the last  Domestic  Business Day of each month.  Any overdue  principal of or
interest on any Base Rate Loan shall bear interest,  payable on demand, for each
day  until  paid at a rate  per  annum  equal  to the sum of 2%  plus  the  rate
otherwise applicable to such Base Rate Loan for such day.

                  (b)  Each   Euro-Dollar   Loan  shall  bear  interest  on  the
outstanding  principal  amount  thereof,  for  the  Interest  Period  applicable
thereto,  at a rate per  annum  equal to the sum of the  Applicable  Euro-Dollar
Margin plus the applicable  Adjusted  Euro-Dollar  Rate.  Such interest shall be
payable for each Interest Period on the last day thereof.

                  (c) Any overdue  principal  of or interest on any  Euro-Dollar
Loan shall bear interest, payable on demand, for each day from and including the
date payment thereof was due to but excluding the date of actual  payment,  at a
rate per  annum  equal to the sum of 2% plus  the  higher  of (i) the sum of the
Applicable  Euro-Dollar Margin plus the Adjusted  Euro-Dollar Rate applicable to
such Loan and (ii) the Applicable  Euro-Dollar Margin plus the quotient obtained
(rounded upward,  if necessary,  to the next higher 1/100 of 1%) by dividing (x)
the average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the
respective  rates per annum at which one day (or,  if such  amount  due  remains
unpaid more than three Euro-Dollar  Business Days, then for such other period of
time not longer than three months as the Agent may elect) deposits in dollars in
an  amount  approximately  equal  to  such  overdue  payment  due to each of the
Euro-Dollar Reference Banks are offered

                                                      


                                                    27





to such  Euro-Dollar  Reference  Bank in the  London  interbank  market  for the
applicable period determined as provided above by (y) 1.00 minus the Euro-Dollar
Reserve  Percentage (or, if the circumstances  described in clause (a) or (b) of
Section  8.01 shall  exist,  at a rate per annum equal to the sum of 2% plus the
rate applicable to Base Rate Loans for such day).

                  (d) The Agent shall determine each interest rate applicable to
the Loans hereunder.  The Agent shall give prompt notice to the Borrower and the
Banks of each rate of  interest so  determined,  and its  determination  thereof
shall be conclusive in the absence of manifest error.

                  (e) Each  Euro-Dollar  Reference  Bank  agrees to use its best
efforts  to  furnish  quotations  to the Agent as  contemplated  hereby.  If any
Euro-Dollar Reference Bank does not furnish a timely quotation,  the Agent shall
determine the relevant interest rate on the basis of the quotation or quotations
furnished by the remaining  Euro-Dollar  Reference  Bank or Banks or, if none of
such  quotations is available on a timely basis,  the provisions of Section 8.01
shall apply.

                  SECTION 2.06.  Commitment  Fees. The Borrower shall pay to the
Agent,  for the account of each Bank, a commitment  fee at the rate of 0.60% per
annum on the daily average unused portion of such Bank's aggregate  Commitments.
Such  commitment  fees shall accrue from and including the Effective Date to but
excluding the  Termination  Date.  Such  commitment fees shall be payable on the
last day of each fiscal  quarter of the Borrower prior to the  Termination  Date
and on the Termination Date.

                  SECTION 2.07. Restructuring Fee. The Borrower shall pay to the
Agent,  for the account of each Bank, a restructuring  fee in an amount equal to
0.25% of such Bank's aggregate Commitments,  with one-half of such restructuring
fee payable on the Effective Date and one-half of such restructuring fee payable
on the second anniversary of the Effective Date.

                  SECTION 2.08.  Agency Fee. The Borrower shall pay to the Agent
as compensation  for its services  hereunder and under the Collateral  Documents
agency fees payable in the amounts and at the times  heretofore  agreed  between
the Borrower and the Agent.

                  SECTION   2.09.   Optional   Termination   or   Reduction   of
Commitments.  The Borrower may, upon three Domestic Business Days' notice to the
Agent, terminate at any time, or proportionately permanently reduce from time to
time by an  aggregate  amount of $100,000 or any larger  multiple  thereof,  the
unused portions of the  Commitments.  If the Commitments are terminated in their
entirety,  all accrued commitment fees shall be payable on the effective date of
such termination.

                                                      


                                       28






                  SECTION   2.10.   Mandatory   Termination   or   Reduction  of
Commitments.

                  (a) The Commitments  shall terminate on the Termination  Date,
and all Loans then  outstanding  and all Letter of Credit  Liabilities  (in each
case,  together with accrued interest  thereon) shall be due and payable on such
date.

                  (b) On each Commitment  Reduction Date, the Commitments of all
Banks shall be  permanently,  automatically  and ratably reduced by an aggregate
amount as set forth below:

 Commitment Reduction                                   Aggregate Amount of
 Date Occurring in                                    Reduction in Commitments

 December 1997                                                 $15,000,000
 December  1998                                                $15,000,000
 March 1999                                                    $ 2,500,000
 June 1999                                                     $ 5,000,000
 September 1999                                                $ 5,000,000

provided that if the Commitments shall be reduced at any time in accordance with
Section  2.09 or  2.10(c),  such  reductions  shall be applied to  decrease  the
amounts set forth above,  first to decrease the aggregate amount of reduction in
Commitments  required on the first  Commitment  Reduction Date, then to decrease
the  aggregate  amount  of  reduction  in  Commitments  required  on the  second
Commitment  Reduction  Date and  thereafter  to decrease  subsequent  amounts in
chronological order.

                  (c)      The Commitments of all Banks shall be permanently,
automatically and ratably reduced as follows:

                  (i) immediately upon receipt by the Borrower or any Subsidiary
at any time of any proceeds from any  Disposition of any Real Estate  Investment
or any  other  real  property  of the  Borrower  or  any  Subsidiary  (excluding
operating receipts from Real Estate  Investments),  by an amount equal to 50% of
the Net Proceeds  realized by the Borrower or any Subsidiary in respect thereof;
provided that no such  reduction  shall be required  unless and until,  and then
only to the extent that,  the aggregate  amount of Net Proceeds  realized by the
Borrower  and its  Subsidiaries  in respect of all  Dispositions  of Real Estate
Investments   and  other  real  property   after  the  Effective   Date  exceeds
$20,000,000; and

                  (ii)   immediately   upon  receipt  by  the  Borrower  or  any
Subsidiary of any proceeds from any  Disposition of any Other Assets  (excluding
(A) payments in the ordinary course on construction contracts, (B) operating

                                                      


                                       29





receipts from Real Estate Investments,  (C) liability insurance proceeds and (D)
income of not more than $100,000 earned from Temporary Cash  Investments  during
any fiscal year) by an amount  equal to 80% of the Net Proceeds  realized by the
Borrower or any Subsidiary in respect  thereof;  provided that no such reduction
shall be required unless and until the aggregate amount of Net Proceeds from all
Dispositions of Other Assets after the Effective Date and not previously applied
to reduce the  Commitments  pursuant  to this  clause (ii) shall equal or exceed
$125,000  or any  higher  integral  multiple  of  $125,000,  at  which  time the
Commitments shall be reduced by 80% of $125,000 (i.e.,  $100,000) or 80% of such
higher integral multiple of $125,000, as the case may be.

                  (d) On each day on which the Commitments are reduced  pursuant
to this Section 2.10,  the Borrower shall repay the principal  amount  (together
with  accrued  interest  thereon)  of each  Bank's  outstanding  Loans as may be
necessary  so that after such  repayment,  (i) the  aggregate  unpaid  principal
amount of each  Bank's  Tranche A Loans plus such  Bank's LC  Exposure  does not
exceed the amount of such Bank's  Tranche A Commitment  after  giving  effect to
such reduction and (ii) the aggregate  principal amount of such Bank's Tranche B
Loans  does not  exceed the amount of such  Bank's  Tranche B  Commitment  after
giving effect to such reduction.  In the event that the aggregate  amount of the
Tranche A Commitments is reduced to an amount less than the aggregate  amount of
Letter of Credit  Liabilities  at such time in respect of all Letters of Credit,
the Borrower hereby agrees that it shall forthwith, without any demand or taking
of any other  action by the  Required  Banks or the  Agent,  pay to the Agent an
amount in  immediately  available  funds equal to the  difference  to be held as
security  for the  Letter of Credit  Liabilities  for the  benefit  of all Banks
pursuant to arrangements satisfactory to the Agent and the Banks.

                  (e) Any  reduction  of the  Commitments  described  in Section
2.10(a),  2.10(b) or  2.10(c)  shall be  applied  first to reduce the  Tranche B
Commitments  of the Banks ratably in proportion  to their  respective  Tranche B
Commitments  and,  once the Tranche B Commitments  are reduced to zero,  then to
reduce the Tranche A  Commitments  of the Banks  ratably in  proportion to their
respective Tranche A Commitments.

                  SECTION 2.11.             Optional Prepayments.

                  (a) The Borrower  may, upon notice to the Agent not later than
11:30 A.M.  (New York City time) on any Domestic  Business  Day,  prepay on such
Domestic Business Day the Group of Base Rate Loans in whole at any time, or from
time to time in part in amounts  aggregating  $100,000  or any  larger  multiple
thereof,  by paying the  principal  amount to be prepaid  together  with accrued
interest thereon to the date of prepayment.  Each such optional prepayment shall
be applied to prepay  ratably  the Loans of the several  Banks  included in such
Borrowing.

                                                      


                                       30






                  (b) Subject to Section 2.13,  the Borrower may, upon notice to
the Agent not later  than 11:30  A.M.  (New York City  time) on any  Euro-Dollar
Business Day,  prepay on such  Euro-Dollar  Business Day the Loans  comprising a
Group of Euro-Dollar Loans in whole at any time, or from time to time in part in
amounts  aggregating  $100,000  or any larger  multiple  thereof,  by paying the
principal  amount to be prepaid  together with accrued  interest  thereon to the
date of  prepayment.  Each such optional  prepayment  shall be applied to prepay
ratably the Loans of the several Banks included in such Group.

                  (c) Upon  receipt of a notice of  prepayment  pursuant to this
Section,  the Agent shall promptly notify each Bank of the contents  thereof and
of such  Bank's  ratable  share of such  prepayment  and such  notice  shall not
thereafter be revocable by the Borrower.

                  SECTION 2.12.             General Provisions as to Payments.

                  (a) The Borrower  shall make each payment of principal of, and
interest on, the Loans and of fees hereunder, not later than 1:30 P.M. (New York
City time) on the date when due, in Federal or other funds immediately available
in New York City, to the Agent at its address  referred to in Section 9.01.  The
Agent  will  promptly  distribute  to each Bank its  ratable  share of each such
payment received by the Agent for the account of the Banks. Whenever any payment
of principal  of, or interest on, the Base Rate Loans or of fees shall be due on
a day which is not a Domestic  Business Day, the date for payment  thereof shall
be extended to the next succeeding  Domestic  Business Day. Whenever any payment
of  principal  of, or interest on, the  Euro-Dollar  Loans shall be due on a day
which is not a Euro-Dollar  Business Day, the date for payment  thereof shall be
extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case the date for payment
thereof shall be the next  preceding  Euro-Dollar  Business Day. If the date for
any payment of principal is extended by operation of law or otherwise,  interest
thereon shall be payable for such extended time.

                  (b)  Unless  the Agent  shall have  received  notice  from the
Borrower  prior to the date on which any  payment is due to the Banks  hereunder
that the Borrower will not make such payment in full,  the Agent may assume that
the  Borrower  has made such  payment  in full to the Agent on such date and the
Agent may, in reliance upon such  assumption,  cause to be  distributed  to each
Bank on such due date an amount  equal to the amount then due such Bank.  If and
to the extent that the Borrower  shall not have so made such payment,  each Bank
shall repay to the Agent  forthwith  on demand such amount  distributed  to such
Bank together with interest  thereon,  for each day from the date such amount is
distributed  to such Bank  until the date such Bank  repays  such  amount to the
Agent, at the Federal Funds Rate.


                                                      


                                       31





                  SECTION  2.13.  Funding  Losses.  If the  Borrower  makes  any
payment of principal  with respect to any  Euro-Dollar  Loan or any  Euro-Dollar
Loan is  converted to a Base Rate Loan  (pursuant  to Article II,  Section VI or
VIII or  otherwise)  on any day other than the last day of the  Interest  Period
applicable  thereto,  or the last day of an applicable  period fixed pursuant to
Section  2.05(c),  or if the Borrower fails to borrow or prepay any  Euro-Dollar
Loans after notice has been given to any Bank in accordance with Section 2.02(b)
or 2.11(c),  the Borrower shall  reimburse each Bank on demand for any resulting
loss or expense incurred by it (or by any existing or prospective Participant in
the  related  Loan),   including  (without  limitation)  any  loss  incurred  in
obtaining,  liquidating or employing deposits from third parties,  but excluding
loss of margin for the period after any such payment or conversion or failure to
borrow,  provided  that  such  Bank  shall  have  delivered  to the  Borrower  a
certificate as to the amount of such loss or expense, which certificate shall be
conclusive in the absence of manifest error.

                  SECTION 2.14. Computation of Interest and Fees. Interest based
on the Prime Rate shall be  computed  on the basis of a year of 365 days (or 366
days in a leap year) and paid for the actual  number of days elapsed  (including
the first day but excluding  the last day).  All other  interest and  commitment
fees  shall  be  computed  on the  basis  of a year of 360 days and paid for the
actual  number of days elapsed  (including  the first day but excluding the last
day).

                  SECTION 2.15.             Maximum Interest Rate.

                  (a) Nothing  contained  in this  Agreement  or the Notes shall
require  the  Borrower  to pay  interest at a rate  exceeding  the maximum  rate
permitted  by  applicable  law.  Neither  this  Section 2.15 nor Section 9.08 is
intended  to limit the rate of  interest  payable for the account of any Bank to
the maximum rate permitted by the laws of the State of New York if a higher rate
is permitted with respect to such Bank by supervening provisions of U.S. federal
law.

                  (b) If the amount of  interest  payable for the account of any
Bank on any  interest  payment  date in  respect  of the  immediately  preceding
interest computation period, computed pursuant to Section 2.05, would exceed the
maximum  amount  permitted  by  applicable  law to be charged by such Bank,  the
amount of interest  payable for its account on such interest  payment date shall
be automatically reduced to such maximum permissible amount.

                  (c) If the amount of  interest  payable for the account of any
Bank in respect  of any  interest  computation  period is  reduced  pursuant  to
Section 2.15(b) and the amount of interest payable for its account in respect of
any subsequent interest  computation period,  computed pursuant to Section 2.05,
would be less than the maximum amount  permitted by applicable law to be charged
by such Bank, then the amount of interest  payable for its account in respect of
such subsequent interest

                                                      


                                                    32





computation period shall be automatically  increased to such maximum permissible
amount;  provided that at no time shall the aggregate  amount by which  interest
paid for the account of any Bank has been  increased  pursuant  to this  Section
2.15(c)  exceed the aggregate  amount by which interest paid for its account has
theretofore been reduced pursuant to Section 2.15(b).

                  SECTION 2.16.             Letters of Credit.

                  (a)  Prior to the  Effective  Date,  upon the  request  of the
Borrower,  the LC Bank has issued  "Letters of Credit"  pursuant to the Original
Credit  Agreement and "Bridge  Letters of Credit"  pursuant to the Bridge Credit
Agreement.  On the Effective  Date,  all of such "Letters of Credit" and "Bridge
Letters of Credit" shall be deemed to be Letters of Credit hereunder. Subject to
the terms and conditions  hereof,  the LC Bank agrees to issue letters of credit
hereunder from time to time before the Termination  Date upon the request of the
Borrower  (such  letters of credit  issued,  collectively  with the  "Letters of
Credit" issued pursuant to the Original Credit Agreement and the "Bridge Letters
of Credit"  issued  pursuant to the Bridge  Credit  Agreement,  the  "Letters of
Credit"); provided that, immediately after each such Letter of Credit is issued,
(i) the aggregate amount of the Letter of Credit  Liabilities for all Letters of
Credit shall not exceed the Available LC Amount and (ii) the aggregate amount of
the Letter of Credit Liabilities for all Performance Letters of Credit shall not
exceed the  greater of (x)  $5,000,000  and (y) the sum of  $3,000,000  plus the
amount of Letter of Credit  Liabilities (not to exceed $4,650,000) in respect of
the  Harrah's LC. Upon the date of issuance by the LC Bank of a Letter of Credit
in  accordance  with this  Section  2.16,  the LC Bank shall be deemed,  without
further  action by any party  hereto,  to have sold to each Bank,  and each Bank
shall be deemed,  without further action by any party hereto,  to have purchased
from the LC Bank,  a  participation  in such  Letter of Credit  and the  related
Letter  of  Credit  Liabilities  in  proportion  to  its  Tranche  A  Commitment
Percentage.

                  (b)  The  Borrower  shall  give  the LC Bank  at  least  three
Domestic  Business Days' prior notice  (effective  upon receipt)  specifying the
date each Letter of Credit is to be issued, and describing the proposed terms of
such  Letter  of  Credit  and the  nature  of the  transactions  proposed  to be
supported thereby. Upon receipt of such notice the LC Bank shall promptly notify
the Agent,  and the Agent  shall  promptly  notify  each Bank,  of the  contents
thereof and of the amount of such Bank's  participation  in such proposed Letter
of  Credit.  The  issuance  by the LC Bank of any  Letter  of Credit  shall,  in
addition to the conditions  precedent set forth in Article III (the satisfaction
of  which  the LC Bank  shall  have no duty to  ascertain),  be  subject  to the
conditions  precedent that such Letter of Credit shall be satisfactory to the LC
Bank and that  the  Borrower  shall  have  executed  and  delivered  such  other
instruments  and  agreements  relating  to such  Letter of Credit as the LC Bank
shall have reasonably requested. Each Letter of Credit shall have an expiry date
not later  than one year  after its date of  issue;  provided  that no Letter of
Credit shall have a term extending

                                                      


                                       33





beyond the Termination Date; and provided further that any such Letter of Credit
may include an evergreen or renewal option, pursuant to which the expiry date of
such  Letter  of  Credit  will  be  automatically   extended  unless  notice  of
non-renewal  is given by the LC Bank (provided that such Letter of Credit has an
absolute expiry date not later than the Termination  Date); and provided further
that the LC Bank shall deliver  notice of non-renewal at the time such notice is
required to be given unless requested not to by the Borrower, which request will
be  treated  in the same  manner as a request  for  issuance  of a new Letter of
Credit on the same terms (any such  Letter of Credit,  an  "Evergreen  Letter of
Credit").

                  (c) The Borrower shall pay to the Agent a letter of credit fee
at a rate  equal to  2.75%  per  annum on the  aggregate  amount  available  for
drawings  under each Letter of Credit issued from time to time,  any such fee to
be payable for the account of the Banks ratably in proportion to their Tranche A
Commitment Percentages.  Such fee shall be payable in arrears on the last day of
each  fiscal  quarter of the  Borrower  for so long as such  Letter of Credit is
outstanding  and on the date of termination  thereof.  The Borrower shall pay to
the LC Bank  additional  fees and  expenses  in the  amounts and at the times as
agreed between the Borrower and the LC Bank.

                  (d) Upon receipt from the  beneficiary of any Letter of Credit
of any demand for payment or other drawing  under such Letter of Credit,  the LC
Bank shall notify the Agent and the Agent shall promptly notify the Borrower and
each  other  Bank as to the  amount  to be paid as a result  of such  demand  or
drawing and the respective  payment date. The  responsibility  of the LC Bank to
the  Borrower  and each  Bank  shall  be only to  determine  that the  documents
(including each demand for payment or other drawing) delivered under each Letter
of  Credit  issued  by  it in  connection  with  such  presentment  shall  be in
conformity  in all  material  respects  with such Letter of Credit.  The LC Bank
shall endeavor to exercise the same care in the issuance and  administration  of
the  Letters of Credit as it does with  respect to letters of credit in which no
participations are granted, it being understood that in the absence of any gross
negligence or willful misconduct by the LC Bank, each Bank severally agrees that
it shall  be  unconditionally  and  irrevocably  liable  without  regard  to the
occurrence of any Event of Default or any condition  precedent  whatsoever,  pro
rata to the extent of such Bank's Tranche A Commitment Percentage,  to reimburse
the LC Bank on demand for the amount of each  payment  made by the LC Bank under
each  Letter of Credit  issued by the LC Bank to the extent  such  amount is not
reimbursed by the Borrower  pursuant to clause (e) below  together with interest
on such  amount  for each day from  the date of the LC  Bank's  demand  for such
payment  (or, if such  demand is made after  11:00 A.M.  (New York City time) on
such  date,  from  the next  succeeding  Domestic  Business  Day) to the date of
payment by such Bank of such amount at a rate of interest per annum equal to the
Federal Funds Rate for such day.


                                                      


                                       34





                  (e) The  Borrower  shall be  irrevocably  and  unconditionally
obligated forthwith to reimburse the LC Bank for any amounts paid by the LC Bank
upon any  drawing  under any  Letter of  Credit,  without  presentment,  demand,
protest or other formalities of any kind; provided that neither the Borrower nor
any Bank shall hereby be precluded  from asserting any claim for direct (but not
consequential)  damages suffered by the Borrower or such Bank to the extent, but
only to the extent,  caused by (i) the willful misconduct or gross negligence of
the LC Bank in  determining  whether a  request  presented  under any  Letter of
Credit  complied  with the terms of such  Letter  of Credit or (ii) such  Bank's
failure  to pay under any  Letter of Credit  after the  presentation  to it of a
request  strictly  complying  with the terms  and  conditions  of the  Letter of
Credit.  All  such  amounts  paid by the LC Bank  and  remaining  unpaid  by the
Borrower  shall bear interest,  payable on demand,  for each day until paid at a
rate per annum equal to the sum of 2% plus the rate applicable to Tranche A Base
Rate  Loans  for  such  day.  The LC Bank  will  pay to each  Bank,  ratably  in
accordance with its Tranche A Commitment  Percentage,  all amounts received from
the  Borrower  for  application  in  payment,  in  whole  or  in  part,  of  the
Reimbursement  Obligation  in respect  of any Letter of Credit,  but only to the
extent  such Bank has made  payment to the LC Bank in respect of such  Letter of
Credit pursuant to Section 2.16(d).

                  (f) If after the date hereof,  the adoption of any  applicable
law,  rule  or  regulation,  or  any  change  in any  applicable  law,  rule  or
regulation, 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 with any
request  or  directive  (whether  or not  having  the  force of law) of any such
authority,  central  bank or  comparable  agency  shall  impose,  modify or deem
applicable any tax, reserve,  special deposit or similar  requirement against or
with respect to or measured by  reference  to Letters of Credit  issued or to be
issued hereunder or participations  therein, and the result shall be to increase
the cost to any Bank of  issuing  or  maintaining  any  Letter  of Credit or any
participation  therein, or reduce any amount receivable by any Bank hereunder in
respect of any Letter of Credit (which  increase in cost, or reduction in amount
receivable,  shall be the result of such  Bank's  reasonable  allocation  of the
aggregate of such increases or reductions resulting from such event), then, upon
demand by such Bank (which demand shall not be  unreasonably  delayed,  provided
that a demand  within  six  months  of the  accrual  of such  increased  cost or
reduction in amount  receivable will not be deemed to be unreasonably  delayed),
the Borrower  agrees to pay to such Bank, from time to time as specified by such
Bank, such additional amounts as shall be sufficient to compensate such Bank for
such  increased  costs  or  reductions  in  amount  incurred  by  such  Bank.  A
certificate  of such  Bank  submitted  by such  Bank to the  Borrower  shall  be
conclusive as to the amount thereof in the absence of manifest error.

                  (g) The Borrower's  obligations  under this Section 2.16 shall
be absolute and  unconditional  under any and all circumstances and irrespective
of any setoff, counterclaim or defense to payment which the Borrower may have or
have had

                                                      


                                       35





against  the LC Bank,  any Bank or any  beneficiary  of a Letter of Credit.  The
Borrower  further agrees with the LC Bank and the Banks that the LC Bank and the
Banks shall not be responsible for, and the Borrower's  Reimbursement Obligation
in respect of any Letter of Credit shall not be affected by, among other things,
the validity or genuineness of documents or of any endorsements thereon, even if
such  documents  should  in fact  prove  to be in any or all  respects  invalid,
fraudulent or forged,  or any dispute between or among the Borrower,  any of its
Subsidiaries,  the  beneficiary  of  any  Letter  of  Credit  or  any  financing
institution  or other party to whom any Letter of Credit may be  transferred  or
any claims or defenses  whatsoever  of the  Borrower or any of its  Subsidiaries
against the beneficiary of any Letter of Credit or any such  transferee.  The LC
Bank  shall not be liable  for any  error,  omission,  interruption  or delay in
transmission,   dispatch  or   delivery  of  any  message  or  advice,   however
transmitted, in connection with any Letter of Credit issued, extended or renewed
by it. The  Borrower  agrees that any action  taken or omitted by the LC Bank or
any Bank  under or in  connection  with each  Letter of Credit  and the  related
drafts and documents, if done in good faith and without gross negligence,  shall
be binding upon the Borrower and shall not put the LC Bank or any Bank under any
liability to the Borrower.

                  (h) To the extent not inconsistent  with clause (g) above, the
LC Bank shall be entitled to rely, and shall be fully protected in relying upon,
any Letter of Credit, draft, writing, resolution,  notice, consent, certificate,
affidavit,  letter,  cablegram,  telegram,  telecopy, telex or teletype message,
statement,  order or other document believed by it to be genuine and correct and
to have been  signed,  sent or made by the  proper  Person or  Persons  and upon
advice  and  statements  of legal  counsel,  independent  accountants  and other
experts selected by the LC Bank. The LC Bank shall be fully justified in failing
or refusing to take any action under this  Agreement  unless it shall first have
received such advice or concurrence of the Required Banks as it reasonably deems
appropriate or it shall first be indemnified to its reasonable  satisfaction  by
the Banks  against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action.  Notwithstanding  any
other  provision of this Section  2.16,  the LC Bank shall in all cases be fully
protected  in acting,  or in  refraining  from acting,  under this  Agreement in
accordance with a request of the Required Banks, and such request and any action
taken or failure to act pursuant thereto shall be binding upon the Banks and all
future holders of participations in any Letters of Credit.

                  (i) The Borrower  hereby  indemnifies  and holds harmless each
Bank and the Agent from and  against  any and all claims  and  damages,  losses,
liabilities,  costs or expenses which such Bank or the Agent may incur (or which
may be  claimed  against  such Bank or the Agent by any  Person  whatsoever)  by
reason of or in  connection  with the  execution  and delivery or transfer of or
payment  or  failure  to pay under  any  Letter of  Credit,  including,  without
limitation,  any claims, damages, losses,  liabilities,  costs or expenses which
the LC Bank may incur by reason of or in

                                                      


                                       36





connection  with the  failure of any other  Bank to  fulfill or comply  with its
obligations to the LC Bank hereunder (but nothing herein  contained shall affect
any rights the Borrower may have against such  defaulting  Bank);  provided that
the Borrower  shall not be required to  indemnify  any Bank or the Agent for any
claims, damages, losses, liabilities,  costs or expenses to the extent, but only
to the extent,  caused by (i) the willful  misconduct or gross negligence of the
LC Bank in determining  whether a request  presented  under any Letter of Credit
complied  with the terms of such Letter of Credit or (ii) the LC Bank's  failure
to pay under any  Letter of  Credit  after the  presentation  to it of a request
strictly  complying  with the  terms and  conditions  of the  Letter of  Credit.
Nothing in this  Section  2.16(i) is  intended to limit the  obligations  of the
Borrower under any other provision of this Agreement.

                  (j) Each Bank shall,  ratably in accordance with its Tranche A
Commitment  Percentage,   indemnify  the  LC  Bank,  its  affiliates  and  their
respective  directors,  officers,  agents  and  employees  (to  the  extent  not
reimbursed  by the Borrower)  against any cost,  expense  (including  reasonable
counsel  fees and  disbursements),  claim,  demand,  action,  loss or  liability
(except  such as result  from such  indemnitees'  gross  negligence  or  willful
misconduct or the LC Bank's  failure to pay under any Letter of Credit after the
presentation to it of a request strictly complying with the terms and conditions
of the Letter of Credit) that such indemnitees may suffer or incur in connection
with this  Section  2.16 or any  action  taken or  omitted  by such  indemnitees
hereunder.

                  (k) In its  capacity as a Bank the LC Bank shall have the same
rights and obligations as any other Bank.

                  SECTION 2.17.             Taxes.

                  (a) For purposes of this Section, the following terms have the
following meanings:

                           "Taxes"  means any and all  present or future  taxes,
         duties,  levies,  imposts,  deductions,  charges or  withholdings  with
         respect to any payment by the  Borrower  pursuant to this  Agreement or
         under any Note, and all liabilities with respect thereto, excluding (i)
         in the case of each Bank and the Agent,  taxes  imposed on its  income,
         and franchise or similar taxes imposed on it, by a  jurisdiction  under
         the  laws of  which  such  Bank or the  Agent  (as the  case may be) is
         organized or in which its principal  executive office is located or, in
         the case of each  Bank,  in which  its  Applicable  Lending  Office  is
         located  and  (ii)  in  the  case  of  each  Bank,  any  United  States
         withholding  tax imposed on such  payments  but only to the extent that
         such Bank is subject to United States  withholding tax at the time such
         Bank first becomes a party to this Agreement.


                                                      


                                       37





                  "Other Taxes" means any present or future stamp or documentary
taxes and any other  excise or  property  taxes,  or similar  charges or levies,
which arise from any payment made  pursuant to this  Agreement or under any Note
or from the  execution  or  delivery  of, or  otherwise  with  respect  to, this
Agreement or any Note.

                  (b) Any and all payments by the Borrower to or for the account
of any Bank or the  Agent  hereunder  or under  any Note  shall be made  without
deduction for any Taxes or Other Taxes;  provided that, if the Borrower shall be
required by law to deduct any Taxes or Other Taxes from any such  payments,  (i)
the sum  payable  shall be  increased  as  necessary  so that  after  making all
required deductions  (including deductions applicable to additional sums payable
under this Section 2.17) such Bank or the 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,  (iii) the Borrower shall pay the
full amount  deducted to the relevant  taxation  authority or other authority in
accordance with applicable law and (iv) the Borrower shall furnish to the Agent,
at its address  referred to in Section 9.01, the original or a certified copy of
a receipt evidencing payment thereof.

                  (c) The Borrower  agrees to indemnify  each Bank and the Agent
for the full amount of Taxes or Other Taxes (including,  without limitation, any
Taxes or Other Taxes imposed or asserted by any  jurisdiction on amounts payable
under this Section 2.17) paid by such Bank or the Agent (as the case may be) and
any liability (including penalties,  interest and expenses) arising therefrom or
with respect thereto.  This  indemnification  shall be paid within 15 days after
such Bank or the Agent (as the case may be) makes demand therefor.

                  (d) Each  Bank  organized  under  the  laws of a  jurisdiction
outside the United States, on or prior to the date of its execution and delivery
of this Agreement in the case of each Bank listed on the signature  pages hereof
and on or prior to the date on which it becomes a Bank in the case of each other
Bank,  and from time to time  thereafter if requested in writing by the Borrower
(but only so long as such Bank remains  lawfully  able to do so),  shall provide
the Borrower and the Agent with Internal  Revenue  Service form 1001 or 4224, as
appropriate,  or any successor form prescribed by the Internal  Revenue Service,
certifying  that such Bank is entitled to benefits under an income tax treaty to
which the United  States is a party which  exempts  the Bank from United  States
withholding  tax or reduces the rate of withholding  tax on payments of interest
for the account of such Bank or certifying that the income  receivable  pursuant
to this  Agreement  is  effectively  connected  with the  conduct  of a trade or
business in the United  States.  If the form provided by a Bank at the time such
Bank first becomes a party to this Agreement  indicates a United States interest
withholding  tax rate in excess of zero,  withholding  tax at such rate shall be
considered excluded from "Taxes" as defined in subsection (a) of this Section.

                                                      


                                       38






                  (e) For any period with  respect to which a Bank has failed to
provide the Borrower or the Agent with the appropriate  form pursuant to Section
2.17(d)  (unless  such failure is due to a change in treaty,  law or  regulation
occurring  subsequent to the date on which such form  originally was required to
be provided),  such Bank shall not be entitled to indemnification  under Section
2.17(b) or (c) with respect to Taxes imposed by the United States; provided that
if a Bank,  which is  otherwise  exempt  from or  subject  to a reduced  rate of
withholding  tax,  becomes  subject to Taxes because of its failure to deliver a
form required  hereunder,  the Borrower shall take such steps as such Bank shall
reasonably request to assist such Bank to recover such Taxes.

                  (f) If the Borrower is required to pay  additional  amounts to
or for the account of any Bank  pursuant to this  Section  2.17,  then such Bank
will  change  the  jurisdiction  of its  Applicable  Lending  Office  if, in the
judgment  of such  Bank,  such  change  (i) will  eliminate  or reduce  any such
additional  payment  which  may  thereafter  accrue  and  (ii) is not  otherwise
disadvantageous to such Bank.

                  SECTION  2.18.  Warrants.  In  consideration  for  the  Banks'
agreements  to  amend  the  Original  Credit  Agreement  and the  Bridge  Credit
Agreement as set forth herein and in consideration  for the Banks' agreements to
make available the Loans and Letters of Credit  hereunder,  subject to the terms
and conditions set forth herein,  the Borrower on the Effective Date shall issue
to the Banks warrants  (collectively,  the "Warrants") initially exercisable for
420,000 shares of the Borrower's  common stock, par value $1.00 per share.  Each
of the Warrants shall be in substantially the form of Exhibit N, shall be issued
on the  Effective  Date to each of the Banks  ratably in  accordance  with their
respective aggregate  Commitments,  and shall be duly executed and registered in
the  name of each  Bank or such  other  name or names as such  Bank  shall  have
notified the Agent and the Borrower  not less than two  Domestic  Business  Days
before the Effective Date.


                                   ARTICLE III

                                   CONDITIONS

                  SECTION  3.01.  Effectiveness.  This  Agreement  shall  become
effective  on the date that each of the  following  conditions  shall  have been
satisfied (or waived in accordance with Section 9.05),  but only if each of such
conditions shall have been satisfied (or waived) on or before January 31, 1997:

                  (a)  receipt by the Agent of  counterparts  of this  Agreement
signed by each of the  parties  hereto (or, in the case of any party as to which
an executed  counterpart  shall not have been received,  receipt by the Agent in
form satisfactory to it of telegraphic, facsimile, telex or other written

                                                      


                                       39





confirmation  from  such  party of  execution  of a  counterpart  hereof by such
party);

                  (b)  receipt  by the  Agent  of duly  executed  Notes  for the
account of each Bank,  dated on or before the Effective  Date and complying with
the provisions of Section 2.03, and of  certificates  representing  the Warrants
for the account of each Bank,  all duly  executed and  registered  in accordance
with Section 2.18;

                  (c)  receipt by the Agent of  counterparts  of the  following,
each  dated  as of the date  hereof  and duly  executed  by each of the  parties
thereto:

                           (1)      the Borrower Pledge Agreement,

                           (2)      the Borrower Security Agreement,

                           (3)      the Subsidiary Security Agreement,

                           (4)      the Subsidiary Pledge Agreement,

                           (5)      the Subsidiary Guarantee Agreement,

                           (6)      the Release of Claims,

                           (7)      the Warrantholders Rights Agreement,

                           (8)      the Securityholders Agreement, and

                           (9)      the Exercise Price Letter;

                  (d)  receipt by the Agent of all  documents  and  certificates
required to be delivered  pursuant to any Financing  Document on or prior to the
Effective  Date  (including  appropriately  completed and duly executed  Uniform
Commercial Code financing statements);

                  (e)      receipt by the Agent of all Pledged Securities;

                  (f) receipt by the Agent of copies of file search reports from
the Uniform Commercial Code filing officer in each jurisdiction (i) in which any
Mortgaged  Facility  is located or (ii) which is  identified  in the  Perfection
Certificate  (as  defined  in the  Borrower  Security  Agreement  or  Subsidiary
Security  Agreement,  as the case may be),  setting forth the results of Uniform
Commercial  Code,  tax lien and judgment lien searches  conducted in the name of
the Borrower and each Subsidiary Guarantor, as the case may be;

                                                      


                                       40






                  (g) receipt by the Agent of evidence satisfactory to the Agent
that  arrangements  satisfactory  to it shall have been made for  recording  the
Mortgage Amendments;

                  (h)  receipt  by the  Agent of an  endorsement  to each  title
insurance  policy delivered to the Agent pursuant to the Bridge Credit Agreement
insuring that the coverage under such policy is unaffected by this Agreement and
the Mortgage Amendments;

                  (i) receipt by the Agent of evidence satisfactory to the Agent
of the insurance coverage required by Section 5.03;

                  (j) receipt by the Agent of evidence satisfactory to the Agent
that (i) prior to or simultaneously with the transactions hereunder contemplated
to take place on the Effective Date, the Investor,  The Common Fund and Separate
Account P shall purchase an aggregate 150,150 shares of Series B Preferred Stock
in accordance with the Stock Purchase  Agreement  (with the Investor  purchasing
not less than 85,150 of such shares),  (ii) on the Effective  Date, the Borrower
shall receive  aggregate  cash  proceeds from the Investor,  The Common Fund and
Separate  Account P of not less than  $30,030,000  in respect  thereof (with not
less than  $17,030,000 of such cash proceeds  received from the  Investor),  and
(iii) all  transactions  contemplated  by the  Stock  Purchase  Agreement  to be
consummated  on or before the  closing  date for such  purchase  will take place
prior to or simultaneously with the transactions  hereunder contemplated to take
place on the Effective Date;

                  (k)  receipt  by  the  Agent  of (i) an  opinion  of the  Vice
President,  Counsel and Corporate  Secretary of the Borrower and (ii) an opinion
of Goodwin,  Procter & Hoar LLP, special counsel for the Borrower,  covering the
matters set forth on  Exhibits G and H,  respectively,  or with such  changes as
shall be  acceptable  to the Agent and the  Required  Banks  and  covering  such
additional  matters  relating  to the  transactions  contemplated  hereby as the
Required Banks may reasonably request;

                  (l)  receipt  by the Agent of (i) an  opinion  of Davis Polk &
Wardwell, special New York counsel for the Agent, covering the matters set forth
on Exhibit I, or with such changes as shall be  acceptable  to the Agent and the
Required  Banks and (ii) an  opinion of each of:  (w)  Osborn  Maledon,  special
Arizona counsel for the Agent, (x) Greenberg,  Traurig, Hoffman, Lipoff, Rosen &
Quentel,  P.A.,  special  Florida  counsel  for the  Agent,  (y)  McLane,  Graf,
Raulerson & Middleton, special New Hampshire counsel to the Agent and (z) Miro &
Weiner,  P.C., special Michigan counsel to the Agent, in each case substantially
in the form of the  opinion  delivered  by such  counsel as a  condition  to the
occurrence of the "Bridge Effective Date" under the

                                                      


                                       41





Bridge  Credit  Agreement,  except that (I) each such  opinion will be dated the
Effective Date, (II) each reference  therein to the Original Credit Agreement or
the  Bridge  Credit  Agreement  shall be to this  Credit  Agreement,  (III) each
reference to any of any other  Financing  Documents  will include such Financing
Documents  as amended to and  including  the  Effective  Date and (IV) each such
opinion shall contain other  appropriate  changes  (including to cause each such
opinion to be current to the Effective Date) as shall be acceptable to the Agent
and the Required Banks and shall cover such additional  matters  relating to the
transactions contemplated hereby as the Required Banks may reasonably request;

                  (m) receipt by the Agent, on behalf of the Banks and on behalf
of itself in its  capacity as Agent,  of all  interest,  fees and other  amounts
(other than  principal,  subject to Section 3.01(t) below) due and payable under
the  Original  Credit  Agreement,  the  Bridge  Credit  Agreement  or  hereunder
(including  fees and expenses  payable  pursuant to Section 9.03  hereunder)  of
which the Borrower has received notice;

                  (n) each Bank's satisfaction in its sole good faith discretion
as to the absence of any material  adverse change in any aspect of the business,
operations,  properties,  prospects or condition (financial or otherwise) of the
Borrower  and its  Subsidiaries,  or any event or condition  that is  reasonably
likely to result in such a material adverse change;

                  (o) receipt by the Agent of a certificate  signed by the chief
financial  officer or treasurer of the Borrower to the effect that,  both before
and immediately  after the making of the Loans, the issuance of the Warrants and
the consummation of the Stock Purchase and the other  transactions  contemplated
to take place on the Closing  Date,  (i) no Default  shall have  occurred and be
continuing and (ii) the  representations  and warranties of the Borrower and any
Subsidiaries made in or pursuant to any Financing Documents are true;

                  (p) receipt by the Agent of a Cash Management  Letter, in form
and substance satisfactory to the Banks;

                  (q) receipt by each of the Banks,  at least two weeks prior to
the Effective Date, of (i) a business plan for the Borrower and its Subsidiaries
prepared by the Borrower and the Investor in accordance with GAAP, in a form and
containing such detail as may be reasonably  satisfactory to the Banks, (ii) any
other information it may reasonably request concerning the financial  condition,
results of  operations,  liabilities  (contingent  or otherwise,  including with
respect to  environmental  liabilities  and employee and retiree  benefits)  and
prospects of, and the financial reporting and accounting systems

                                                      


                                       42





and the management information systems of, the Borrower and satisfaction by each
Bank in its sole good faith discretion with all such information;

                  (r)  receipt by each of the Banks of copies of the  Management
Agreement  and  any  other  agreements  between  the  Borrower  or  any  of  its
Subsidiaries  and any  members of the  Investor  Group  (other  than  agreements
between the Borrower or any of its  Subsidiaries  and  Tutor-Saliba  Corp. which
shall  have  been  entered  into  in the  ordinary  course  of the  Construction
Business),  all of  which  shall be in form and  substance  satisfactory  to the
Banks;

                  (s) receipt by the Agent of all  documents  it may  reasonably
request relating to the existence of the Obligors,  the corporate  authority for
and the  validity of the  Financing  Documents  and any other  matters  relevant
hereto, all in form and substance satisfactory to the Agent;

                  (t) receipt by the Agent of evidence  satisfactory  to it that
prior to or simultaneously with the transactions  hereunder contemplated to take
place on the Effective Date, that all "Bridge Term Loans"  outstanding under the
Bridge Credit Agreement shall be repaid in full (with accrued interest  thereon)
on the Effective Date and that upon the effectiveness of this Agreement, (i) the
sum of the aggregate  outstanding  principal  amount of the Tranche A Loans plus
the aggregate  amount of all Letter of Credit  Liabilities  shall not exceed the
aggregate amount of the Tranche A Commitments and (ii) the aggregate outstanding
principal amount of the Tranche B Loans shall not exceed the aggregate amount of
the Tranche B Commitments;

                  (u)  receipt  by the Agent of each  Bank's  Original  Note and
Bridge Note (or any agreements of indemnity,  if applicable,  in accordance with
Section 2.03(a));

                  (v)  receipt  by the Agent  and the  Banks of the  Asset  Sale
Letter, in form and substance satisfactory to each Bank;

                  (w)  receipt  by the Agent  and the  Banks of the  information
described in Sections 5.01(e),  5.01(f), 5.01(g) and 5.01(h) for the most recent
date  prior  to the  Effective  Date  when  such  information  would  have  been
deliverable pursuant to such sections,  which information shall be provided in a
format that is acceptable to the Banks; and

                  (x) receipt by the Agent of evidence  satisfactory  to it that
all  approvals,  consents and other actions by or in respect of, or filings with
any governmental body, agency, official,  authority or any other Person required
in connection with the Stock Purchase or the transactions contemplated by the

                                                      


                                       43





Stock Purchase  Agreement or any Financing  Documents  shall have been obtained,
taken or made.

This  Agreement  shall not become  effective  or be binding on any party  hereto
unless all of the foregoing  conditions are satisfied not later than January 31,
1997.  Prior to the  effectiveness  of this  Agreement in  accordance  with this
Section 3.01, none of the terms and conditions of the Original Credit Agreement,
the  Bridge  Credit  Agreement  or any  Financing  Document  (as  defined in the
Original  Credit  Agreement or the Bridge  Credit  Agreement)  shall be amended,
waived  or  otherwise  modified  by this  Agreement  and all of such  terms  and
conditions  shall  remain in full force and effect and are hereby  ratified  and
confirmed in all respects.  The Agent shall promptly notify the Borrower and the
Banks of the Effective  Date, and such notice shall be conclusive and binding on
all parties hereto.

                  SECTION 3.02.  Credit  Events.  The  obligation of any Bank to
make a Loan on the  occasion  of any  Borrowing  and of the LC  Bank to  issue a
Letter of Credit (or to permit the  extension of an Evergreen  Letter of Credit)
on the  occasion  of a  request  therefor  by the  Borrower  is  subject  to the
satisfaction of the following conditions:

                  (a)  receipt  (i) by the  Agent of a Notice  of  Borrowing  as
required by Section  2.02,  in the case of a Borrowing or (ii) by the LC Bank of
notice as required by Section 2.16, in the case of a Letter of Credit;

                  (b) the fact that,  after giving  effect to such Credit Event,
the Usage shall not exceed the aggregate amount of the Commitments;

                  (c) the fact that,  immediately  after such Credit  Event,  no
Default shall have occurred and be continuing;

                  (d) the fact that the  representations  and warranties of each
Obligor contained in each Financing Document to which it is a party (except,  in
the case of a Refunding Borrowing,  the representation and warranty set forth in
Section  4.04(c) hereof as to any material  adverse change which has theretofore
been  disclosed in writing by the Borrower to the Banks) shall be true on and as
of the date of such Borrowing;

                  (e) the  ability of the  Borrower  to obtain  bonding  for new
construction  projects  shall  not be  less  than or  more  limited  than on the
Effective Date; and

                  (f) the payment by the  Borrower  of all  amounts  theretofore
payable pursuant to Section 9.03 within seven days of demand.


                                                      


                                       44





Each  Borrowing  shall be  deemed to be a  representation  and  warranty  by the
Borrower on the date of such Borrowing as to the facts specified in clauses (b),
(c), (d), (e) and (f) of this Section.


                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

                  The Borrower represents and warrants that:

                  SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly  incorporated,  validly existing and in good standing under the
laws  of   Massachusetts,   and  has  all  corporate  powers  and  all  material
governmental licenses, authorizations,  consents and approvals required to carry
on its business as now conducted.

                  SECTION 4.02.  Corporate and  Governmental  Authorization;  No
Contravention.  The execution,  delivery and  performance by each Obligor of the
Financing Documents to which it is a party are within its corporate powers, have
been duly authorized by all necessary corporate action,  require no action by or
in respect of, or filing with, any governmental  body, agency or official and do
not contravene,  or constitute a default under,  any provision of applicable law
or regulation or of the certificate of  incorporation or by-laws of such Obligor
or of any agreement,  judgment,  injunction,  order,  decree or other instrument
binding upon such Obligor or any of its  Subsidiaries  or result in the creation
or imposition of any Lien, except Liens created by the Collateral Documents,  on
any asset of such Obligor or any of its Subsidiaries.

                  SECTION 4.03. Binding Effect; Liens of Collateral Documents.

                  (a) Each of the Financing  Documents (other than the Notes and
the  Warrants) to which the Borrower is a party  constitutes a valid and binding
agreement  of the  Borrower and the Notes and the  Warrants,  when  executed and
delivered in accordance with this Agreement,  will constitute  valid and binding
obligations of the Borrower,  in each case  enforceable in accordance with their
respective  terms.  Each of the  Financing  Documents  to which  any  Subsidiary
Guarantor is a party,  when  executed  and  delivered  in  accordance  with this
Agreement,  will  constitute  valid and binding  agreements  of each  Subsidiary
Guarantor party thereto,  in each case enforceable  against each such Subsidiary
Guarantor in accordance with their respective terms.

                  (b) The  Borrower has  reserved  and will keep  available  for
issuance  upon  exercise of the  Warrants  the total  number of shares of common
stock of the

                                                      


                                       45





Borrower  that shall be  deliverable  upon exercise of all Warrants from time to
time  outstanding.  The  issuance  of the  Warrants  has been  duly and  validly
authorized  and the  shares  of  common  stock  issuable  upon  exercise  of the
Warrants, when issued and sold in accordance with the Warrants, will be duly and
validly issued, fully paid and nonassessable and free of preemptive rights.

                  (c) All real  property  in which  the  Borrower  or any of its
Subsidiaries  has an  interest,  directly  or  indirectly  (whether  through  an
interest in a joint venture or  partnership  or otherwise) as of the date hereof
is listed in Part I of Schedule 4.03(c) hereto. The list of personal property of
the  Borrower  and each of its  Subsidiaries  set  forth in Part II of  Schedule
4.03(c),  security interests in which are governed by Article 9 of the UCC as in
effect in the relevant jurisdictions,  is complete in all material respects. The
location, ownership status and lien information provided in Schedule 4.03(c) for
each item of real  property and each type of personal  property are complete and
correct.

                  (d) The Collateral  Documents create valid security  interests
in, and first mortgage Liens on, the Collateral purported to be covered thereby,
which  security  interests  and  mortgage  Liens are and will  remain  perfected
(except  in the  case of  inventory  located  at  construction  sites)  security
interests  and duly  recorded  mortgage  Liens,  prior to all other Liens except
Liens permitted by the Collateral Documents.

                  SECTION 4.04.             Financial Information.

                  (a) The  consolidated  balance  sheet of the  Borrower and its
Consolidated  Subsidiaries as of December 31, 1995 and the related  consolidated
statements  of income,  stockholders'  equity and cash flows for the fiscal year
then ended,  reported on by Arthur  Andersen LLP and set forth in the Borrower's
1995 Form 10-K, a copy of which has been delivered to each of the Banks,  fairly
present,  in conformity with GAAP, the  consolidated  financial  position of the
Borrower  and  its   Consolidated   Subsidiaries  as  of  such  date  and  their
consolidated results of operations and cash flows for such fiscal year.

                  (b) The unaudited  consolidated  balance sheet of the Borrower
and its  Consolidated  Subsidiaries  as of  September  30,  1996 and the related
unaudited consolidated statements of income, stockholders' equity and cash flows
for the nine months then ended, set forth in the Borrower's quarterly report for
the fiscal  quarter ended  September 30, 1996 as filed with the  Securities  and
Exchange  Commission on Form 10-Q, a copy of which has been delivered to each of
the Banks, fairly present, in conformity with GAAP applied on a basis consistent
with the financial statements referred to in subsection (a) of this Section, the
consolidated   financial   position  of  the  Borrower   and  its   Consolidated
Subsidiaries as of such date and their consolidated

                                                      


                                       46





results of  operations  and cash flows for such nine month  period  (subject  to
normal year-end adjustments).

                  (c) Since  June 30,  1996 there has been no  material  adverse
change in the business,  financial position,  results of operations or prospects
of the Borrower and its Consolidated Subsidiaries, considered as a whole.

                  SECTION   4.05.   Litigation.   Except  as  disclosed  in  the
Borrower's  1995 Form  10-K and the Form 10-Q  referred  to in  Section  4.04(b)
above,  there  is no  action,  suit or  proceeding  pending  against,  or to the
knowledge of the Borrower  threatened against or affecting,  the Borrower or any
of its  Subsidiaries  before any court or arbitrator or any  governmental  body,
agency or  official  in which there is a  reasonable  possibility  of an adverse
decision  which could  materially  adversely  affect the business,  consolidated
financial position or consolidated results of operations of the Borrower and its
Consolidated  Subsidiaries  or which  in any  manner  draws  into  question  the
validity of any Financing Document.

                  SECTION 4.06.  Compliance with ERISA. Each member of the ERISA
Group has fulfilled its obligations under the minimum funding standards of ERISA
and the Internal  Revenue Code with respect to each Plan and is in compliance in
all material respects with the presently applicable  provisions of ERISA and the
Internal  Revenue Code with  respect to each Plan.  No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal  Revenue  Code  in  respect  of any  Plan,  (ii)  failed  to  make  any
contribution or payment to any Plan or  Multiemployer  Plan or in respect of any
Benefit  Arrangement,  or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the posting of
a bond or other  security  under  ERISA or the  Internal  Revenue  Code or (iii)
incurred  any  liability to the PBGC or any other Person under Title IV of ERISA
other than a liability to the PBGC for premiums under Section 4007 of ERISA.

                  SECTION 4.07.             Environmental Matters.

                  (a) In the  ordinary  course  of its  business,  the  Borrower
conducts  periodic reviews of the effect of Environmental  Laws on the business,
operations  and properties of the Borrower and its  Subsidiaries  and compliance
therewith. The Borrower and its Subsidiaries also attempt, whenever possible, to
negotiate  specific  provisions  in contracts  for  construction  services  that
allocate to the  contracting  governmental  agency or private owner,  the entire
risk and responsibility for Hazardous  Substances  encountered during the course
of  construction.  On the basis of such  reviews  and  contract  provisions  and
procedures,  the Borrower has reasonably concluded that the costs and associated
liabilities  of  compliance  with  Environmental  Laws  are  unlikely  to have a
material adverse effect on the business, financial

                                                      


                                       47





condition,   results  of  operations  or  prospects  of  the  Borrower  and  its
Consolidated Subsidiaries, considered as a whole.

                  (b) Without limiting the foregoing, as of the Effective Date:

                  (i) no notice, notification,  demand, request for information,
         citation, summons, complaint or order has been issued, no complaint has
         been filed, no penalty has been assessed and no investigation or review
         is pending or, to the  knowledge  of the  Obligors,  threatened  by any
         governmental or other entity with respect to any (A) alleged  violation
         by the Borrower or any of its  Subsidiaries  of any  Environmental  Law
         involving any Mortgaged  Facility,  (B) alleged failure by the Borrower
         or  any  of  its  Subsidiaries  to  have  any   environmental   permit,
         certificate,  license, approval, registration or authorization required
         in  connection  with  the  conduct  of its  business  at any  Mortgaged
         Facility, (C) Regulated Activity conducted at any Mortgaged Facility or
         (D)  Release  of  Hazardous  Substances  at or in  connection  with any
         Mortgaged Facility;

                  (ii)  other  than   generation  of  Hazardous   Substances  in
compliance  with all applicable  Environmental  Laws, no Regulated  Activity has
occurred at or on any Mortgaged Facility;

                  (iii) no polychlorinated biphenyls, radioactive material, urea
formaldehyde,  lead,  asbestos,   asbestos-containing  material  or  underground
storage  tank  (active or  abandoned)  is or has been  present at any  Mortgaged
Facility;

                  (iv) no Hazardous  Substance has been Released (and no written
notification of such Release has been filed) or is present  (whether or not in a
reportable  or  threshold  planning  quantity)  at,  on or under  any  Mortgaged
Facility;

                  (v) no  Mortgaged  Facility is listed or, to the  knowledge of
the Obligors,  proposed for listing, on the National Priorities List promulgated
pursuant to CERCLA, on CERCLIS (as defined in CERCLA) or on any similar federal,
state or foreign list of sites requiring investigation or clean-up; and

                  (vi)  there  are no  Liens  under  Environmental  Laws  on any
Mortgaged  Facility,  no  government  actions  have been taken or are in process
which  could  subject  any  Mortgaged  Property  to such Liens and  neither  the
Borrower  nor any of its  Subsidiaries  would be required to place any notice or
restriction  relating  to  Hazardous  Substances  in any  deed to any  Mortgaged
Facility.


                                                      


                                       48





                  (c) No environmental investigation, study, audit, test, review
or other  analysis has been  conducted of which the Obligors  have  knowledge in
relation to any Mortgaged Facility which has not been delivered to the Banks.

                  SECTION 4.08. Taxes.  United States Federal income tax returns
of the Borrower and its  Subsidiaries  have been examined and closed through the
fiscal year ended  December 31, 1989.  The  Borrower and its  Subsidiaries  have
filed all United States  Federal  income tax returns and all other  material tax
returns  which  are  required  to be filed by them and have  paid all  taxes due
pursuant to such returns or pursuant to any assessment  received by the Borrower
or any  Subsidiary.  The  charges,  accruals  and  reserves  on the books of the
Borrower and its Subsidiaries in respect of taxes or other governmental  charges
are, in the opinion of the Borrower, adequate.

                  SECTION 4.09. Subsidiaries. All of the Borrower's Subsidiaries
and all joint  ventures  and  partnerships  in which the  Borrower or any of its
Subsidiaries  has an interest as of the date hereof are listed in Schedule  4.09
hereto and the state of incorporation or organization and the ownership interest
of each Subsidiary, joint venture and partnership specified therein are complete
and correct. Each of the Borrower's corporate Subsidiaries is a corporation duly
incorporated,  validly  existing  and in good  standing  under  the  laws of its
jurisdiction  of  incorporation,  and has all corporate  powers and all material
governmental licenses, authorizations,  consents and approvals required to carry
on its business as now conducted.

                  SECTION 4.10. Not an Investment  Company.  The Borrower is not
an  "investment  company"  within the meaning of the  Investment  Company Act of
1940, as amended.

                  SECTION  4.11.  No  Burdensome  Restrictions;  No  Derivatives
Obligations; Certain Existing Agreements.

                  (a) No contract, lease, agreement or other instrument to which
the  Borrower  or any of its  Subsidiaries  is a party  or by  which  any of its
property  is bound or  affected,  no charge,  corporate  restriction,  judgment,
decree or order and no provision of applicable  law or  governmental  regulation
has or is reasonably  expected to materially and adversely  affect the business,
operations  or  financial   condition  of  the  Borrower  and  its  Consolidated
Subsidiaries,  taken as a whole,  or the ability of the  Borrower to perform its
obligations under this Agreement.

                  (b) Neither the Borrower nor any of its  Subsidiaries is party
to any Derivatives Obligation except the Rincon Swap.


                                                      


                                       49





                  (c) All  agreements  to which the  Borrower or any  Subsidiary
Guarantor  is a  party  or by  which  it is  bound  (other  than  the  Financing
Documents) containing a negative pledge or limitations on its incurrence of Debt
or sale of assets are listed on Schedule 4.11 hereto.

                  SECTION 4.12.  Full  Disclosure.  All  information  heretofore
furnished  by the  Borrower  to the  Agent  or any Bank  for  purposes  of or in
connection  with this Agreement or any transaction  contemplated  hereby is, and
all such  information  hereafter  furnished  by the Borrower to the Agent or any
Bank will be, true and  accurate  in all  material  respects  (or in the case of
projections and similar  information based on reasonable  estimates) on the date
as of which such information is stated or certified.  The Borrower has disclosed
to the Banks in writing any and all facts which  materially and adversely affect
or may reasonably be expected to materially and adversely  affect (to the extent
the Borrower can now reasonably foresee), the business,  operations or financial
condition of the Borrower and its Consolidated  Subsidiaries,  taken as a whole,
or the ability of the Borrower to perform its obligations under this Agreement.

                  SECTION 4.13.  Ownership of Property;  Liens. The Borrower and
its Subsidiaries  have good and marketable title to and are in lawful possession
of, or have valid  leasehold  interests in, or have the right to use pursuant to
valid  and  enforceable  agreements  or  arrangements,  all of their  respective
properties and other assets (real or personal,  tangible,  intangible or mixed),
except  where the  failure  to have or  possess  the same with  respect  to such
properties or other assets could not, in the aggregate,  have a material adverse
effect on the business,  financial condition, results of operations or prospects
of the Borrower and its Consolidated  Subsidiaries,  considered as a whole. None
of such  properties  or other  assets is  subject to any Lien  except  Permitted
Liens.

                  SECTION 4.14. Representations and Warranties Incorporated from
Other Financing Documents. As of the Effective Date, each of the representations
and warranties made in this Agreement,  the Subsidiary Guarantee Agreement,  the
Collateral  Documents,  the Warrants and the Warrantholders  Rights Agreement by
any of the parties  thereto is true and correct in all  material  respects,  and
such  representations and warranties are hereby incorporated herein by reference
with the same effect as though set forth in their entirety herein,  as qualified
therein.

                  SECTION 4.15.  Bank Accounts and Cash Management  System.  All
deposit,  checking,  operating or other bank accounts maintained by the Borrower
or any Subsidiary  Guarantor  (other than payroll and petty cash accounts opened
in the ordinary  course of business  with imprest  balances not to exceed $7,500
for each such  account)  and,  for each such  account,  the name of the  account
party,  the name of the bank,  the account  number and the type of account,  are
listed on Schedule 4.15. The

                                                      


                                       50





Cash Management Letter provides a complete and accurate  description of the cash
management system of the Borrower and its Subsidiaries.

                  SECTION 4.16. Representations in Perfection Certificates.  All
of the information  set forth in each Perfection  Certificate (as defined in the
Borrower Security  Agreement or the Guarantor Security  Agreement)  delivered to
the  Agent  prior  to the  Effective  Date is  correct  and  complete  as of the
Effective Date.


                                    ARTICLE V

                                    COVENANTS

                  The  Borrower  agrees  that,  so  long  as any  Bank  has  any
Commitment  hereunder or any amount payable under any Note remains unpaid or any
Letter  of Credit  remains  outstanding  or any  Reimbursement  Obligation  with
respect thereto remains unpaid:

                  SECTION 5.01.  Information.  The Borrower will deliver to each
of the Banks:

                  (a) as soon as available and in any event within 90 days after
         the  end  of  each  fiscal  year  of  the  Borrower,  consolidated  and
         consolidating  balance  sheets  of the  Borrower  and its  Consolidated
         Subsidiaries  as of  the  end of  such  fiscal  year  and  the  related
         consolidated  and  consolidating  statements  of income,  stockholders'
         equity and cash flows for such fiscal year,  setting forth in each case
         in  comparative  form the figures for the  previous  fiscal  year,  all
         reported  on in a manner  acceptable  to the  Securities  and  Exchange
         Commission  by  Arthur  Andersen  LLP  or  other   independent   public
         accountants of nationally recognized standing;


                  (b) (1) as soon as  available  and in any event within 45 days
after the end of each of the first  three  quarters  of each  fiscal year of the
Borrower,  a  consolidated  balance  sheet of the Borrower and its  Consolidated
Subsidiaries  as of  the  end of  such  quarter  and  the  related  consolidated
statement  of income and cash flows for such  quarter and for the portion of the
Borrower's  fiscal year ended at the end of such quarter,  setting forth in each
case in  comparative  form the  figures  for the  corresponding  quarter and the
corresponding  portion of the  Borrower's  previous  fiscal year,  all certified
(subject to normal year-end  adjustments) as to fairness of  presentation,  GAAP
and consistency by the chief financial  officer or the chief accounting  officer
of the Borrower;

                                                      


                                       51






                  (2) as soon as available and in any event within 45 days after
the end of each  quarter of each fiscal year of Perini Land and  Development,  a
cash flow statement for Perini Land and Development for such quarter in a format
consistent  with the  format  of the cash flow  statement  for  Perini  Land and
Development for the quarter ended December 31, 1995 and previously  delivered to
the Banks;

                  (c) simultaneously  with the delivery of each set of financial
statements referred to in clause (a) or (b) above:

                  (1) a certificate of the chief financial  officer or the chief
accounting  officer of the Borrower (x) setting forth in  reasonable  detail the
calculations  required to establish  whether the Borrower was in compliance with
the requirements of Sections 5.07 to 5.10, inclusive,  5.12, 5.14, 5.15 and 5.17
on the date of such financial statements and (y) stating whether there exists on
the date of such  certificate  any  Default  and, if any  Default  then  exists,
setting forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto; and

                  (2) a  report  prepared  by  management  of the  Borrower,  in
sufficient  detail  as may be  reasonably  acceptable  to  the  Required  Banks,
providing a description of and an explanation for any material variances between
such financial statements and the Business Plan;

                  (d) simultaneously  with the delivery of each set of financial
statements  referred  to in  clause  (a)  above,  a  statement  of the  firm  of
independent  public  accountants  which reported on such  statements (i) whether
anything has come to their attention to cause them to believe that there existed
on the date of such statements any Default and (ii) confirming the  calculations
set  forth  in the  officer's  certificate  delivered  simultaneously  therewith
pursuant to clause (c) above;

                  (e) as soon as available and in any event within 45 days after
the end of each quarter of each fiscal year of the Borrower,  a copy of the most
recent "retainage report", "new work potential report" and "new work acquisition
report"  (including a description  of new work and a comparison of such new work
to the new work  projected in the Business  Plan)  prepared by management of the
Borrower, substantially in the format for such information delivered pursuant to
Section 3.01(w);

                  (f) as soon as available and in any event within 45 days after
the end of each  quarter of each  fiscal  year of the  Borrower  (subject to the
proviso at the end of this Section  5.01(f)),  a schedule in  substantially  the
format for

                                                      


                                       52





such information delivered pursuant to Section 3.01(w), dated as of the last day
of such  quarter  (or  month,  as the case  may be)  listing  each  construction
contract which provides for aggregate total payments in excess of $2,500,000 and
with respect to which the Borrower or a Consolidated  Subsidiary of the Borrower
is a party or participates  through a joint venture, and setting forth as of the
date of such schedule for each such contract the Borrower's original estimate of
revenue  and  profit,  the  Borrower's  current  estimate of revenue and profit,
cumulative realized and estimated remaining revenue and profit, "cash ahead/cash
behind"  information,  the percentage of completion and  anticipated  completion
date of each such contract and a forecast by quarter of the remaining cash flows
for each such contract, certified as to consistency, accuracy and reasonableness
of estimates by the chief financial  officer or the chief accounting  officer of
the  Borrower;  provided  that if the  Borrower  shall  fail to comply  with its
obligations  under Section  5.01(g) or 5.01(h) due to extenuating  circumstances
for five Domestic Business Days after the due date thereof or such later date as
the Required  Banks may approve,  the Borrower  shall  thereafter be required to
provide the  information  described in this Section  5.01(f) on a monthly basis,
within twenty Domestic Business Days after the end of each month;

                  (g)  as  soon  as  available  and in any  event  within  three
Domestic  Business  Days after the end of each period of two calendar  weeks,  a
copy of the weekly and monthly cash flow  projections  which  management  of the
Borrower has customarily prepared every two weeks by project, by division and on
a consolidated  basis,  prepared in a manner and format easily comparable to the
financial  information  provided  under Section  5.01(f),  substantially  in the
format  for such  information  delivered  pursuant  to Section  3.01(w),  with a
variance  analysis  comparing the current  projections  to the most recent prior
projections;

                  (h) as soon as available  and in any event within two Domestic
Business Days after the last day of each calendar week, a weekly "flash report,"
substantially in the format for such information  delivered  pursuant to Section
3.01(w), providing information regarding:

                  (i) the  Borrower's  approximate  consolidated  aggregate cash
receipts  and cash  disbursements  for such week and for the most  recent  three
prior weeks;

                  (ii) the Borrower's  cash balances as of the close of business
on the last day of such week and as of the close of  business on the last day of
the most recent three prior weeks;


                                                      


                                       53





                  (iii) the aggregate  principal  amount of all  Borrowings  and
outstanding  Letters  of Credit as of the close of  business  on the last day of
such week and as of the  close of  business  on the last day of the most  recent
three prior weeks;

                  (iv)  the  estimated  amounts  of  outstanding   checks,   net
borrowings from joint ventures  (including a listing of the major net borrowings
by project) and overdue  obligations,  including held checks, as of the close of
business  on the last day of such  week and as of the close of  business  on the
last day of the most recent three prior weeks; and

                  (v) any  material  developments  of which the chief  financial
officer  of  the  Borrower  is  aware  relating  to,  or  any  changes  in,  any
construction  contracts,  including  any profit  write-downs  and/or any loss of
float in an  amount  which  exceeds  $100,000  for any  individual  construction
contract  and  "significant"  cash flow timing  variances  (relative to the most
recent  information  provided  pursuant to the Business Plan or Section 5.01(f))
that are not  expected to be reversed  within  ninety days of the date when such
timing variance is expected to occur (or has occurred),  with  "significant" for
purposes of this  Section  5.01(h)  meaning a cash flow  variance of $500,000 or
more for any individual construction contract;

                  (i) by March 31 of each  fiscal  year,  the  annual  projected
consolidated and consolidating  balance sheets and income statements,  operating
and capital expenditure budgets and cash flow forecasts, prepared on a quarterly
basis  and in  accordance  with  GAAP,  for the  Borrower  and its  Consolidated
Subsidiaries  for  the  next  succeeding  three  fiscal  years,  presented  on a
quarterly basis and in a format reasonably acceptable to the Required Banks, and
certified  by  the  chief  financial  officer  of  the  Borrower  as  containing
reasonable assumptions to the best of his knowledge;

                  (j)  forthwith   upon  the   occurrence  of  any  Default,   a
certificate of the chief financial  officer or the chief  accounting  officer of
the Borrower setting forth the details thereof and the action which the Borrower
is taking or proposes to take with respect thereto;

                  (k) prompt notice of the  occurrence of any "Special  Default"
as  defined  in  clause  (ii) of  Section  7(b) of the  "Certificate  of Vote of
Directors Establishing Series B Cumulative Convertible Preferred Stock of Perini
Corporation," or of any other  circumstance  causing the "Cash Dividend Rate" in
respect of the Series B Preferred Stock to increase from 7% or the "In-Kind

                                                      


                                       54





Dividend Rate" in respect of the Series B Preferred Stock to increase from 10%;

                  (l) promptly upon the mailing  thereof to the  shareholders of
the Borrower generally,  copies of all financial  statements,  reports and proxy
statements so mailed;

                  (m)  promptly   upon  the  filing   thereof,   copies  of  all
registration  statements  (other than the exhibits  thereto and any registration
statements  on Form S-8 or its  equivalent)  and  annual,  quarterly  or monthly
reports  which the Borrower  shall have filed with the  Securities  and Exchange
Commission;

                  (n) if and when any member of the ERISA  Group (i) gives or is
required  to give  notice to the PBGC of any  "reportable  event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might  constitute  grounds
for a termination  of such Plan under Title IV of ERISA,  or knows that the plan
administrator  of any Plan has given or is  required  to give notice of any such
reportable  event,  a copy of the  notice  of such  reportable  event  given  or
required to be given to the PBGC;  (ii)  receives  notice of complete or partial
withdrawal  liability  under Title IV of ERISA or notice that any  Multiemployer
Plan is in reorganization,  is insolvent or has been terminated,  a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent
to terminate,  impose  liability  (other than for premiums  under Section 407 of
ERISA) in respect  of, or appoint a trustee to  administer  any Plan,  a copy of
such notice;  (iv) applies for a waiver of the minimum  funding  standard  under
Section 412 of the Internal Revenue Code, a copy of such application;  (v) gives
notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of
such  notice and other  information  filed with the PBGC;  (vi) gives  notice of
withdrawal  from any Plan  pursuant  to  Section  4063 of ERISA,  a copy of such
notice;  or (vii)  fails  to make any  payment  or  contribution  to any Plan or
Multiemployer  Plan or in  respect  of any  Benefit  Arrangement  or  makes  any
amendment to any Plan or Benefit  Arrangement which has resulted or could result
in the  imposition  of a Lien or the  posting  of a bond or  other  security,  a
certificate of the chief financial  officer or the chief  accounting  officer of
the Borrower  setting forth details as to such  occurrence  and action,  if any,
which the  Borrower  or  applicable  member of the ERISA  Group is  required  or
proposes to take;

                  (o)  prompt  notice of the  receipt of any  complaint,  order,
citation,  notice or other written communication from any Person with respect to
(i)  the  existence  or  alleged  existence  of a  violation  of any  applicable
Environmental  Law at or on,  or of any  Environmental  Liability  arising  with
respect to, any Mortgaged  Facility,  (ii) any Release on any Mortgaged Facility
or any part  thereof  in a  quantity  that is  reportable  under any  applicable
Environmental

                                                      


                                       55





Law,  and

                  (iii)  any   pending   or   threatened   proceeding   for  the
termination,  suspension  or  non-renewal  of  any  permit  required  under  any
applicable Environmental Law with respect to any Mortgaged Facility;

                  (p) prompt notice of any change in the  Borrower's  ability to
obtain bonding for new construction  projects  (including  without  limitation a
reduction  in the amount of bonding  commitments  of any bonding  company to the
Borrower and any restrictions on use of such commitments);

                  (q) prompt notice of any decision by the Borrower,  any of its
Subsidiaries  or any joint  venture  partner  not to meet a capital  call by any
joint venture in which the Borrower or any such Subsidiary is participating;

                  (r) prompt notice of the Borrower or any Subsidiary  obtaining
or increasing an interest in a joint venture or partnership  which,  in the case
of any construction joint venture,  need not be given until reasonably  promptly
after a bid by such joint venture for a  construction  contract  shall have been
accepted; and

                  (s) from time to time such  additional  information  regarding
the financial  position or business of the Borrower and its  Subsidiaries as the
Agent, at the request of any Bank, may reasonably request.

                  SECTION  5.02.   Payment  of   Obligations;   No   Derivatives
Obligations.

                  (a) The Borrower will pay and  discharge,  and will cause each
Subsidiary to pay and discharge,  at or before  maturity,  all their  respective
material  obligations  and  liabilities,   including,  without  limitation,  tax
liabilities, except where the same may be contested in good faith by appropriate
proceedings,  and will maintain,  and will cause each Subsidiary to maintain, in
accordance with GAAP, appropriate reserves for the accrual of any of the same.

                  (b) The  Borrower  will  not,  nor will it  permit  any of its
Subsidiaries to, become a party to any Derivatives  Obligation except the Rincon
Swap.

                  SECTION 5.03. Maintenance of Property; Insurance. The Borrower
will keep,  and will cause each  Subsidiary  to keep,  all  property  useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted; will maintain, and will cause each Subsidiary to maintain (either
in the name of the Borrower or in such  Subsidiary's  own name) with financially
sound and reputable insurance  companies,  insurance on all their property in at
least such  amounts  and  against at least  such  risks as are  usually  insured
against in the same general area by companies of  established  repute engaged in
the same or a similar

                                                      


                                       56





business;  and will furnish to the Banks,  upon written  request from the Agent,
full information as to the insurance carried.

                  SECTION  5.04.   Conduct  of  Business  and   Maintenance   of
Existence.  The Borrower will continue, and will cause each Subsidiary Guarantor
to continue,  to engage in business of the same general type as now conducted by
the Borrower and its  Subsidiaries,  and will  preserve,  renew and keep in full
force and effect,  and will cause each Subsidiary  Guarantor to preserve,  renew
and keep in full force and effect their respective corporate existence and their
respective  rights,  privileges  and  franchises  necessary  or desirable in the
normal conduct of business.

                  SECTION 5.05.  Compliance with Laws. The Borrower will comply,
and  cause  each  Subsidiary  to  comply,  in all  material  respects  with  all
applicable   laws,   ordinances,   rules,   regulations,   and  requirements  of
governmental authorities (including, without limitation,  Environmental Laws and
ERISA and the rules and  regulations  thereunder)  except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings.

                  SECTION 5.06. Inspection of Property, Books and Records.

                  (a) The Borrower will keep, and will cause each  Subsidiary to
keep, proper books of record and account in which full, true and correct entries
in  conformity  with GAAP  shall be made of all  dealings  and  transactions  in
relation to its business and  activities;  and will permit,  and will cause each
Subsidiary  to  permit,  representatives  of any  Bank  at such  Bank's  expense
(subject to Section  9.03(a)(ii))  to visit and inspect any of their  respective
properties, to examine and make abstracts from any of their respective books and
records and to discuss  their  respective  affairs,  finances and accounts  with
their respective officers,  employees and independent public accountants, all at
such reasonable times and as often as may reasonably be desired.

                  (b) The Borrower shall hold a meeting for  representatives  of
the  Banks  at  least  once  each  fiscal  quarter,  at a time  and  place to be
determined  by the Agent  (after  consultation  with the Banks) on ten  Domestic
Business  Days' notice to the  Borrower  and the Banks,  for purposes of holding
such discussions with the chief executive  officer,  chief operating officer and
chief  financial  officer of the  Borrower  (each of whom shall attend each such
meeting) and such other of the Borrower's  officers,  employees and  independent
public  accountants  as the  Borrower  shall  designate  or as the  Agent  shall
designate at the reasonable request of any Bank.

                  SECTION 5.07. Minimum Working Capital Ratio. The Borrower will
not permit the ratio of (i) the consolidated  current assets (excluding cash and
cash equivalents) of the Borrower and its Consolidated  Subsidiaries at any time
to  (ii)  the  consolidated  current  liabilities  (excluding  Debt  under  this
Agreement) of the Borrower and its Consolidated  Subsidiaries at such time to be
less than 1:1.

                                                      


                                       57






                  SECTION 5.08.             Debt.

                  (a)  After the date  hereof,  the  Borrower  will not incur or
suffer to exist any Debt other than:

                  (i) Debt existing on September 30, 1996 and listed on Schedule
5.08 hereof;

                  (ii) Debt under this Agreement;

                  (iii) Debt owing to joint  ventures  in which the  Borrower is
participating;

                  (iv)  Debt  incurred  to  finance  insurance  premiums,  in an
aggregate principal amount not to exceed $3,000,000 at any time;

                  (v) Debt owed by the Borrower to a Subsidiary and evidenced by
an intercompany note pledged to the Agent under the Subsidiary Pledge Agreement;

                  (vi) Debt  incurred or assumed by the Borrower for the purpose
of financing  all or any part of the cost of  acquiring  any fixed assets of the
Borrower (including through capital leases),  provided that the aggregate amount
of all such Debt  incurred  or  assumed  by the  Borrower  and its  Consolidated
Subsidiaries  during any period of twelve consecutive  calendar months shall not
exceed an aggregate principal amount of $3,000,000; and

                  (vii) any refinancing,  extension, renewal or refunding of the
Debt  referred to in clauses (i) through (vi) above;  provided that (x) Modified
Parent  Company  Debt  shall  not at any time  exceed  $150,000,000  and (y) any
refinancing, extension, renewal or refunding of any such Debt shall not increase
the principal amount of such Debt.

                  (b) After the date hereof,  the  Borrower  will not permit any
Subsidiary to incur or suffer to exist any Debt other than

                  (i) Debt existing on September 30, 1996 and listed on Schedule
5.08 hereof;

                  (ii) Debt under the Subsidiary Guarantee Agreement;

                  (iii) Debt owing to joint ventures in which such Subsidiary is
participating;


                                                      


                                       58





                  (iv) Debt owing by a Subsidiary  to the Borrower and evidenced
by an  intercompany  note  pledged  to the  Agent  under the  Borrower  Security
Agreement; and

                  (v) Debt  incurred or assumed by a Subsidiary  for the purpose
of financing  all or any part of the cost of acquiring  any fixed assets of such
Subsidiary  (including  through  capital  leases),  provided  that the aggregate
amount of all such Debt incurred or assumed by the Borrower and its Consolidated
Subsidiaries  during any period of twelve consecutive  calendar months shall not
exceed an aggregate principal amount of $3,000,000; and

                  (vi) any refinancing,  extension,  renewal or refunding of the
Debt referred to in clauses (i) through (v) above;  provided that any extension,
renewal or refunding on any such Debt shall not increase the principal amount of
such Debt.

                  SECTION  5.09.  Minimum  Consolidated  Adjusted  Tangible  Net
Worth.  The Borrower will not permit  Consolidated  Adjusted  Tangible Net Worth
during any fiscal  quarter  set forth below to be less than the amount set forth
below opposite such fiscal quarter:

                                                 Minimum Consolidated
 Fiscal Quarter Ending                       Adjusted Tangible Net Worth

 December 31, 1996                                    $109,244,000
 March 31, 1997                                       $109,661,000
 June 30, 1997                                        $110,078,000
 September 30, 1997                                   $110,495,000
 December 31, 1997                                    $112,899,000
 March 31, 1998                                       $113,275,000
 June 30, 1998                                        $115,651,000
 September 30, 1998                                   $115,977,000
 December 31, 1998                                    $119,303,000
 March 31, 1999                                       $119,629,000
 June 30, 1999                                        $121,955,000
 September 30, 1999                                   $122,281,000
 December 31, 1999                                    $126,611,000

                  SECTION 5.10.  Minimum Operating Cash Flow. The Borrower shall
not permit  Operating Cash Flow for any period  specified  below to be less than
the amount set forth below opposite such period:


                                                      


                                       59





                                                              Minimum
                 Period                                  Operating Cash Flow 

January 1, 1997 through March 31, 1997                      ($20,000,000)
January 1, 1997 through June 30, 1997                       ($10,000,000)
January 1, 1997 through September 30, 1997                   $0
January 1, 1997 through December 31, 1997                    $10,000,000
Each four consecutive fiscal quarters
         ending March 31, 1998 and thereafter                $15,000,000

                  SECTION 5.11.  Negative  Pledge.  Neither the Borrower nor any
Consolidated  Subsidiary of the Borrower will create,  assume or suffer to exist
any  Lien  on  any  asset  (including,  without  limitation,  capital  stock  of
Subsidiaries) now owned or hereafter acquired by it, except:

                  (a)  Liens  existing  on  September  30,  1996  securing  Debt
outstanding on September 30, 1996 as described in Schedule 5.11;

                  (b) any Lien on any asset  securing  Debt  incurred or assumed
for the  purpose  of  financing  all or any part of the cost of  acquiring  such
asset,  provided  that such Lien  attaches  to such asset  concurrently  with or
within 90 days after the  acquisition  thereof and such Lien  secures  only such
Debt;

                  (c)  any  Lien  arising  out  of the  refinancing,  extension,
renewal or  refunding  of any Debt  secured by any Lien  permitted by any of the
foregoing clauses of this Section,  provided that such Debt is not increased and
is not secured by any additional assets;

                  (d) Permitted Encumbrances;

                  (e) Liens  granted to the  Bonding  Company to secure  amounts
owing by the  Borrower  or any of its  Subsidiaries  in  connection  with surety
bonds,  undertakings  and instruments of guarantee issued by the Bonding Company
on behalf of the Borrower or any of its  Subsidiaries  in the ordinary course of
their respective businesses; and

                  (f) Liens created by the Collateral Documents.

                  SECTION 5.12. Consolidations, Mergers and Sales of Assets.

                  (a) The  Borrower  will not,  and will not  permit  any of its
Subsidiaries to, consolidate or merge with or into any other Person,  other than
a Subsidiary into a Subsidiary Guarantor or into the Borrower.


                                                      


                                       60





                  (b) The  Borrower  will not,  and will not  permit  any of its
Subsidiaries to, sell, lease or otherwise dispose of any of its or their assets,
other than:

                  (i)  Sales  of  inventory  in the  ordinary  course  of  their
respective businesses;

                  (ii) Dispositions of Temporary Cash Investments;

                  (iii)  Dispositions  of other  assets if (x) each of the Banks
shall have given its prior  written  consent  thereto and (y) the  consideration
therefor shall consist of cash payable at closing in an amount at least equal to
the fair market value of such assets (as determined in good faith by a financial
officer of the Borrower or, if such value exceeds  $15,000,000,  by the board of
directors of the Borrower or a duly  constituted  committee  thereof);  provided
that the prior written consent of the Banks shall not be required for either (A)
a Disposition  of any asset having a fair market value less than $100,000 if the
aggregate  amount of the fair market value of all such  Dispositions  during any
fiscal year is less than $500,000 and the Borrower delivers to each of the Banks
prompt written notice of each such Disposition or (B) a Disposition of any asset
listed on the Asset Sale Letter if the consideration  therefor equals or exceeds
the amount set forth thereon;

                  (iv) operating  leases at market  rentals of  residential  and
commercial  space held by the Borrower or any of its  Subsidiaries in connection
with their real estate  investment and development  activities,  but only to the
extent  that  such  leases  are  entered  into in the  ordinary  course of their
respective businesses,  consistent with past practices as in effect prior to the
Effective Date; and

                  (v) operating  leases at market  rentals of portions of office
space  not then  utilized  by the  Borrower  or any of its  Subsidiaries  in the
Borrower's headquarters office building in Framingham, Massachusetts.

                  SECTION 5.13. Use of Proceeds.  The proceeds of the Loans made
under  this  Agreement  will be  used  by the  Borrower  for  general  corporate
purposes.  None of such proceeds will be used,  directly or indirectly,  for the
purpose,  whether immediate,  incidental or ultimate,  of purchasing or carrying
any "margin stock" within the meaning of Regulation U.

                  SECTION 5.14. Restricted Payments.  The Borrower will not, and
will not permit any Subsidiary to, directly or indirectly,  declare, order, pay,
make or set  apart  any  sum  for any  Restricted  Payment;  provided  that  the
foregoing shall not restrict or prohibit:

                                                      


                                       61






                  (a) cash  payments in the ordinary  course of business in full
or partial settlement of employee stock options or in full or partial settlement
of similar incentive  compensation  arrangements  providing  employees  options,
warrants or other rights to acquire  shares of the  Borrower's  capital stock to
employees, up to an aggregate amount not to exceed $100,000 during any period of
twelve consecutive calendar months;

                  (b) the  redemption,  for an  aggregate  redemption  price not
exceeding  $200,000,  of the "Rights" issued pursuant to the Shareholder  Rights
Agreement dated as of September 23, 1988, as amended to the Effective Date; and

                  (c) other  Restricted  Payments  (other  than any  purchase or
redemption of any shares of Series B Preferred  Stock) made after  September 30,
1998,  but only if and to the  extent  that,  before  and  after  giving  effect
thereto:  (i) no  Default  shall  have  occurred  and be  continuing;  (ii)  the
aggregate amount of the Commitments  shall be less than  $90,000,000;  (iii) the
aggregate  amount of all Restricted  Payments  during any fiscal  quarter,  when
added to the  aggregate  amount  of all  Restricted  Payments  during  the three
immediately  preceding fiscal quarters,  shall not exceed 50% of Net Income from
Continuing Operations for the four immediately  preceding fiscal quarters;  (iv)
Consolidated  Tangible  Net  Worth  shall  be  at  least  $60,000,000;  and  (v)
Consolidated  Adjusted  Tangible  Net Worth  during  each period set forth below
shall be at least: Minimum Consolidated Adjusted Period Tangible Net Worth

October 1, 1998 - December 30, 1998                           $161,977,000
December 31, 1998 - March 31, 1999                            $167,303,000
April 1, 1999 - June 30, 1999                                 $170,129,000
July 1, 1999 - September 30, 1999                             $172,955,000
Thereafter                                                    $175,781,000

and provided  further,  that neither the Borrower nor or any of its Subsidiaries
shall,  directly  or  indirectly,  at any time  purchase or redeem any shares of
Series B Preferred Stock until all of the obligations under this Agreement shall
be repaid in full and all Commitments hereunder terminated.

                  SECTION 5.15. Real Estate Investments.  The Borrower will not,
and will  not  permit  any  Consolidated  Subsidiary  to,  make any Real  Estate
Investment  if, after giving effect  thereto,  the aggregate  amount of all Real
Estate Investments (determined on a gross basis and not, for example, net of any
proceeds  received  in  respect  of any  Real  Estate  Investments)  made by the
Borrower or any of its

                                                      


                                       62





Consolidated  Subsidiaries  during any fiscal year set forth below shall  exceed
the amount set forth below opposite such fiscal year:

                                                     Maximum Amount of
                                                     Real Estate Investments
Fiscal Year Ending                                   During Fiscal Year

December 31, 1996                                    $12,000,000
December 31, 1997                                    $12,500,000
December 31, 1998                                    $8,600,000
December 31, 1999                                    $3,000,000

                  SECTION  5.16.  Purchase of Assets;  Investments.  Neither the
Borrower nor any  Consolidated  Subsidiary will acquire any assets other than in
the  ordinary  course of business.  Neither the  Borrower  nor any  Consolidated
Subsidiary will make or acquire any Investment in any Person other than:

                  (a) Real Estate Investments permitted by Section 5.15;

                  (b) Investments in Subsidiaries or joint ventures  principally
engaged in the Construction Business; and

                  (c) Temporary Cash Investments;

provided that no Real Estate  Investments  may be made pursuant to clause (b) or
(c) above.  Without limiting the generality of the foregoing,  the Borrower will
not, and will not permit any  Subsidiary  to,  acquire or create any  Subsidiary
without the consent of the Required Banks and  arrangements  satisfactory to the
Required Banks for (x) a pledge of the stock of such Subsidiary to the Agent for
the benefit of the Banks,  (y) a guaranty by such  Subsidiary of the obligations
of the  Borrower  hereunder  and (z) a grant  of a Lien  on the  assets  of such
Subsidiary to the Agent for the benefit of the Banks to secure such guaranty.

                  SECTION 5.17.             Capital Expenditures.

                  (a) The  Borrower  will not  permit  the  aggregate  amount of
Consolidated  Capital  Expenditures during any fiscal year,  commencing with the
fiscal year ending December 31, 1996, to exceed $3,000,000.

                  (b) All Consolidated  Capital  Expenditures by the Borrower or
any  Consolidated  Subsidiaries  shall be in  connection  with the  Construction
Business.


                                                      


                                       63





                  SECTION  5.18.  Transactions  with  Affiliates.   Neither  the
Borrower nor any Subsidiary will,  directly or indirectly,  enter into or permit
to exist any transaction  (including the Disposition of any asset or property or
the rendering of any service) with any member of the Investor Group or any other
Affiliate  of the  Borrower on terms that are less  favorable to the Borrower or
such  Subsidiary,  as the case may be, than those which might be obtained by the
Borrower at the time from a Person which is not an  Affiliate  of the  Borrower.
Neither the Borrower nor any Subsidiary  shall,  directly or indirectly,  pay or
become  obligated to pay any fees or other  amounts to or for the account of any
member of the Investor Group other than (i) dividends  payable in respect of the
Investor's  shares  of Series B  Preferred  Stock in  accordance  with the terms
thereof  as in effect  on the  Effective  Date,  (ii) the  amounts  set forth in
Section 10.3 of the Stock Purchase Agreement,  (iii) the participation fee equal
to 4% of the  amount  of  the  "Bridge  Term  Loans"  under  the  Bridge  Credit
Agreement,  payable in shares of common stock of the Borrower in accordance with
the letter  agreement  between the  Investor  and the  Borrower  entered into in
connection with the Investor's  purchase of a participation in such "Bridge Term
Loans" and (iv) fees payable to Tutor-Saliba  Corp. in accordance with the terms
and conditions of the Management Agreement.

                  SECTION 5.19. Amendments or Waivers. Without the prior written
consent of the Required  Banks,  neither the Borrower  nor any  Subsidiary  will
agree to any amendment or waiver to the Stock Purchase  Agreement,  the terms of
the Series B Preferred  Stock,  the Management  Agreement,  any other agreements
with any  members of the  Investor  Group  (other  than  agreements  between the
Borrower or any of its Subsidiaries and Tutor-Saliba Corp. which shall have been
entered into in the ordinary course of the Construction  Business) or any Rincon
Agreements or to any amendment or waiver of any material  provision of any other
material partnership or joint venture agreements.

                  SECTION 5.20.  Debt  Payments.  Other than any  refinancing or
refunding  of Debt  permitted  by Section  5.08,  neither the  Borrower  nor any
Subsidiary  will prepay,  redeem,  defease  (whether  actually or in substance),
purchase in any manner or make any payment in respect of principal,  interest or
premium in respect of any Debt (or deposit or set aside funds for the purpose of
any of the foregoing) other than regularly scheduled repayments of principal and
payments of interest  required in accordance  with the terms of the  instruments
governing such Debt to the extent set forth on Schedule 5.20.

                  SECTION  5.21.  Cash  Management  System.  Without  the  prior
written  consent of the Required  Banks,  the Borrower  will not modify the cash
management  system of the Borrower and its  Subsidiaries  from that described in
the Cash Management  Letter.  Neither the Borrower nor any Subsidiary  Guarantor
shall  maintain any deposit,  checking,  operating or other bank accounts  other
than the Permitted Accounts.

                                                      


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                  SECTION 5.22.             Further Assurances.

                  (a) The Borrower will, and will cause each of its Subsidiaries
to, at its sole cost and expense, do, execute,  acknowledge and deliver all such
further acts, deeds, conveyances, mortgages, assignments, notices of assignment,
transfers and assurances as the Agent shall from time to time request, which may
be necessary or desirable in the  reasonable  judgment of the Agent from time to
time to assure, perfect, convey, assign, transfer and confirm unto the Agent the
property and rights conveyed or assigned  pursuant to the Collateral  Documents,
or which the Borrower or such  Subsidiaries may be or may hereafter become bound
to convey or assign to the Agent or which may facilitate the  performance of the
terms of the Collateral Documents or the filing, registering or recording of the
Collateral Documents.

                  (b) All costs and  expenses in  connection  with the  security
interests and Liens created by the Collateral  Documents,  including  reasonable
legal  fees and other  reasonable  costs and  expenses  in  connection  with the
granting,  perfecting and maintenance of such security  interests and Liens, the
preparation,  execution,  delivery,  recordation  or filing of documents and any
other acts in connection with the grant of such security  interests and Liens as
the Agent may reasonably  request,  shall be paid by the Borrower  promptly when
due.


                                   ARTICLE VI

                                    DEFAULTS

                  SECTION  6.01.  Events  of  Default.  If  one or  more  of the
following events ("Events of Default") shall have occurred and be continuing:

                  (a) the Borrower  shall fail to pay when due any  principal of
any Loan,  any  Reimbursement  Obligation,  any fees or any other amount payable
hereunder;

                  (b) the  Borrower  shall fail to pay any  interest on any Loan
within five Domestic Business Days after the due date thereof;

                  (c) the  Borrower or any  Subsidiary  Guarantor  shall fail to
observe or perform any covenant  contained in Sections 5.07 to 5.22,  inclusive,
or in Section 3.01 of the Subsidiary Guarantee Agreement;

                  (d) any Obligor  shall fail to observe or perform any covenant
or agreement  contained in any Financing  Document  (other than those covered by
clauses (a),  (b) and (c) above) for 10 days after  written  notice  thereof has
been given to such Obligor by the Agent at the request of any Bank;

                                                      


                                       65






                  (e) any representation,  warranty,  certification or statement
made by any Obligor in any Financing  Document or in any certificate,  financial
statement or other document  delivered pursuant thereto shall prove to have been
incorrect in any material respect when made (or deemed made);

                  (f) the Borrower  shall fail to make any payment in respect of
any Debt (other than the Notes or Reimbursement  Obligations) when due or within
any applicable grace period;

                  (g) any  Subsidiary  shall fail to make any payment in respect
of any Debt the aggregate principal amount of which is $250,000 or more when due
or within any applicable grace period;

                  (h) any event or  condition  shall occur which  results in the
acceleration  of the maturity of any Debt of the Borrower or any  Subsidiary  or
enables (or,  with the giving of notice or lapse of time or both,  would enable)
the  holder  of such  Debt or any  Person  acting  on such  holder's  behalf  to
accelerate the maturity thereof;

                  (i) the Borrower or any Subsidiary  shall commence a voluntary
Bankruptcy  Proceeding or shall consent to any such relief or to the appointment
of or  taking  possession  by any such  official  in an  involuntary  Bankruptcy
Proceeding  commenced  against  it, or shall make a general  assignment  for the
benefit of  creditors,  or shall fail  generally to pay its debts as they become
due, or shall take any corporate action to authorize any of the foregoing;

                  (j) an involuntary  Bankruptcy  Proceeding  shall be commenced
against  the  Borrower  or  any  Subsidiary  and  such  involuntary   Bankruptcy
Proceeding shall remain  undismissed and unstayed for a period of 60 days; or an
order for relief shall be entered  against the Borrower or any Subsidiary  under
the federal bankruptcy laws as now or hereafter in effect;

                  (k) any member of the ERISA  Group  shall fail to pay when due
an amount or amounts  aggregating  in excess of  $5,000,000  which it shall have
become liable to pay to the PBGC or any other Person under Title IV of ERISA; or
notice of intent to  terminate a Material  Plan shall be filed under Title IV of
ERISA  by  any  member  of  the  ERISA  Group,  any  plan  administrator  or any
combination  of the foregoing;  or the PBGC shall  institute  proceedings  under
Title IV of ERISA to  terminate,  to impose  liability  (other than for premiums
under  Section  4007 of  ERISA)  in  respect  of,  or to cause a  trustee  to be
appointed to administer any Material Plan; or a condition  shall exist by reason
of which the PBGC would be  entitled  to obtain a decree  adjudicating  that any
Material Plan must be terminated; or there shall occur a

                                                      


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complete or partial withdrawal from, or a default, within the meaning of Section
4219(c)(5)  of ERISA,  with  respect to, one or more  Multiemployer  Plans which
could cause one or more  members of the ERISA  Group to incur a current  payment
obligation in excess of $5,000,000;

                  (l) a judgment  or order for the payment of money in excess of
$5,000,000  shall be rendered  against the Borrower or any  Subsidiary  and such
judgment or order shall continue unsatisfied, unstayed and unbonded for a period
of 10 days;

                  (m) any of the  following:  (i) any person or group or persons
(within the meaning of Section 13 or 14 of the Securities  Exchange Act of 1934,
as  amended)  (other  than the  Exempt  Group)  shall have  acquired  beneficial
ownership  (within the meaning of Rule 13d-3  promulgated  by the Securities and
Exchange  Commission under said Act) of 25% or more of the outstanding shares of
common stock of the Borrower;  (ii) the Borrower  shall cease to own 100% of the
capital stock of any Subsidiary Guarantor;  (iii) members of the Investor Group,
collectively, shall cease to own collectively at least 75,075 shares of Series B
Preferred  Stock or shall cease to be the  beneficial  owners of at least 20% of
the outstanding  shares of common stock of the Borrower or the beneficial owners
of shares  of  Series B  Preferred  Stock  convertible  into at least 20% of the
outstanding shares of common stock of the Borrower;  (iv) individuals designated
by members of the  Investor  Group to serve on the  executive  committee  of the
Board of Directors of the Borrower  shall cease to  constitute a majority of the
members of such executive  committee;  (v) the powers of the executive committee
of the Board of Directors of the Borrower  shall be  diminished  in any material
respect; or (vi) RCBA shall cease to be the general partner of the Investor; or

                  (n) any Financing Document shall cease to be in full force and
effect or shall be declared  null and void,  or the  validity or  enforceability
thereof  shall be contested by any Obligor,  or the Agent on behalf of the Banks
shall  at any  time  fail  to  have a  valid  and  perfected  Lien on all of the
Collateral  purported  to be subject to such Lien,  subject to no prior or equal
Lien except Liens permitted by the Collateral Documents, or any Obligor shall so
assert in writing;

then, and in every such event,  the Agent shall (i) if requested by Banks having
more than 50% in aggregate amount of the Commitments,  by notice to the Borrower
terminate  the  Commitments  and they  shall  thereupon  terminate,  and (ii) if
requested by Banks holding Notes evidencing more than 50% in aggregate principal
amount of the Loans, by notice to the Borrower  declare the Notes (together with
accrued  interest  thereon)  to  be,  and  the  Notes  shall  thereupon  become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are

                                                      


                                       67





hereby waived by the Obligors; provided that in the case of any of the Events of
Default  specified  in clause  (i) or (j) above  with  respect  to any  Obligor,
without  any notice to the  Borrower or any other act by the Agent or the Banks,
the Commitments  shall thereupon  terminate and the Notes (together with accrued
interest thereon) shall become immediately due and payable without  presentment,
demand,  protest or other notice of any kind,  all of which are hereby waived by
the Obligors.

                  SECTION  6.02.  Cash Cover.  The Borrower  hereby  agrees,  in
addition to the provisions of Section 6.01 hereof,  that upon the occurrence and
during the  continuance of any Event of Default,  it shall,  if requested by the
Agent upon  instructions  from Banks having more than 50% in aggregate amount of
the Commitments, pay (and, in the case of any of the Events of Default specified
in clause (i) or (j) above with respect to any Obligor,  forthwith,  without any
demand or the taking of any other action by the Agent or any Bank, it shall pay)
to the  Agent  an  amount  in  immediately  available  funds  equal  to the then
aggregate  Letter of Credit  Liabilities for all Letters of Credit to be held as
security  therefor  for  the  benefit  of all  Banks  pursuant  to  arrangements
satisfactory to the Agent and the Banks.

                  SECTION 6.03.  Notice of Default.  The Agent shall give notice
to the Borrower under Section 6.01(d)  promptly upon being requested to do so by
any Bank and shall thereupon notify all the Banks thereof.


                                   ARTICLE VII

                                    THE AGENT

                  SECTION  7.01.   Appointment  and  Authorization.   Each  Bank
irrevocably  appoints and  authorizes  the Agent to take such action as agent on
its behalf and to exercise  such powers  under the  Financing  Documents  as are
delegated to the Agent by the terms  thereof,  together  with all such powers as
are reasonably incidental thereto.

                  SECTION 7.02.  Agent and  Affiliates.  Morgan  Guaranty  Trust
Company of New York shall have the same  rights and powers  under the  Financing
Documents as any other Bank and may exercise or refrain from exercising the same
as though it were not the Agent,  and Morgan  Guaranty Trust Company of New York
and its affiliates may accept deposits from, lend money to, and generally engage
in any kind of business with the Borrower or any  Subsidiary or affiliate of the
Borrower as if it were not the Agent hereunder.


                                                      


                                       68





                  SECTION 7.03.  Action by Agent.  The  obligations of the Agent
under the Financing Documents are only those expressly set forth herein. Without
limiting the  generality  of the  foregoing,  the Agent shall not be required to
take any action with  respect to any Default,  except as  expressly  provided in
Article VI.

                  SECTION 7.04. Consultation with Experts. The Agent may consult
with legal  counsel  (who may be counsel  for an  Obligor),  independent  public
accountants  and other  experts  selected  by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in  accordance  with the
advice of such counsel,  accountants or experts;  provided that no Bank shall be
required to reimburse the Agent (to the extent not paid by the Borrower) for the
fees and expenses of any experts (other than any legal counsel and Ernst & Young
LLP) who shall not have been approved by the Required Banks.

                  SECTION 7.05. Liability of Agent. Neither the Agent nor any of
its  affiliates  nor any of their  respective  directors,  officers,  agents  or
employees  shall be liable for any action taken or not taken by it in connection
herewith (i) with the consent or at the request of the Required Banks or (ii) in
the absence of its own gross negligence or willful misconduct. Neither the Agent
nor any of its  affiliates  nor any of  their  respective  directors,  officers,
agents or  employees  shall be  responsible  for or have any duty to  ascertain,
inquire into or verify (i) any  statement,  warranty or  representation  made in
connection  with the Financing  Documents or any borrowing  hereunder;  (ii) the
performance or observance of any of the covenants or agreements of the Borrower;
(iii) the satisfaction of any condition specified in Article III, except receipt
of  items  required  to be  delivered  to  the  Agent;  or  (iv)  the  validity,
effectiveness  or genuineness of any Financing  Document or any other instrument
or writing  furnished  in  connection  herewith.  The Agent  shall not incur any
liability  by  acting  in  reliance  upon  any  notice,  consent,   certificate,
statement, or other writing (which may be a bank wire, telex or similar writing)
believed by it to be genuine or to be signed by the proper party or parties.

                  SECTION  7.06.  Indemnification.  Each Bank shall,  ratably in
accordance  with its Commitment,  indemnify the Agent,  its affiliates and their
respective directors,  officers,  agents,  advisors and employees (to the extent
not reimbursed by the Borrower) against any cost, expense (including  reasonable
counsel  fees and  disbursements),  claim,  demand,  action,  loss or  liability
(except  such as result  from such  indemnitees'  gross  negligence  or  willful
misconduct)  that such  indemnitees  may suffer or incur in connection with this
Agreement or any action  taken or omitted by such  indemnitees  hereunder.  Each
Bank agrees that the indemnity set forth in this Section 7.06 shall require each
Bank to pay (to the extent not reimbursed by the Borrower) the  reasonable  fees
and  disbursements  of counsel  retained  by the Agent in  connection  with this
Agreement and the  reasonable  fees and  disbursements  of Ernst & Young LLP and
other experts approved by the Required Banks retained by the Agent in connection
with this Agreement, but no Bank shall be required to indemnify any

                                                      


                                       69





advisor  retained by the Agent, and no Bank shall hereby indemnify the Agent for
any  indemnity  given by the Agent to any advisor  (other than an indemnity  for
reasonable  fees and  disbursements  in  accordance  with the  agreement  to pay
reasonable fees and disbursements set forth in this sentence),  unless such Bank
shall have separately given its express written consent to give such indemnity.

                  SECTION 7.07. Credit Decision.  Each Bank acknowledges that it
has,  independently  and without  reliance upon the Agent or any other Bank, and
based on such documents and information as it has deemed  appropriate,  made its
own credit  analysis and decision to enter into this  Agreement.  Each Bank also
acknowledges that it will,  independently and without reliance upon the Agent or
any other Bank,  and based on such  documents and  information  as it shall deem
appropriate at the time,  continue to make its own credit decisions in taking or
not taking any action under this Agreement.

                  SECTION  7.08.  Successor  Agent.  The Agent may resign at any
time by giving  notice  thereof  to the Banks  and the  Borrower.  Upon any such
resignation,  the  Required  Banks  shall have the right to appoint a  successor
Agent. If no successor Agent shall have been so appointed by the Required Banks,
and shall have  accepted  such  appointment,  within 30 days after the  retiring
Agent gives notice of resignation, then the retiring Agent may, on behalf of the
Banks,  appoint a successor Agent, which shall be a commercial bank organized or
licensed  under the laws of the United States of America or of any State thereof
and having a combined  capital  and surplus of at least  $150,000,000.  Upon the
acceptance of its  appointment  as Agent  hereunder by a successor  Agent,  such
successor Agent shall thereupon succeed to and become vested with all the rights
and duties of the retiring  Agent,  and the retiring  Agent shall be  discharged
from  its  duties  and  obligations   hereunder.   After  any  retiring  Agent's
resignation  hereunder as Agent,  the  provisions of this Article shall inure to
its  benefit as to any  actions  taken or omitted to be taken by it while it was
Agent.

                  SECTION 7.09.             Collateral Documents.

                  (a)  As to  any  matters  not  expressly  provided  for in the
Collateral  Documents  (including the timing and methods of realization upon the
Collateral),  and which do not  otherwise  require  the  signature  of all Banks
pursuant  to  Section  9.05,  the Agent  shall  act or  refrain  from  acting in
accordance with written  instructions from the Required Banks or, in the absence
of such instructions, in accordance with its discretion; provided that the Agent
shall not be obligated to take any action if the Agent believes that such action
is or may be  contrary to any  applicable  law or might cause the Agent to incur
any loss or liability for which it has not been indemnified to its satisfaction.


                                                      


                                       70





                  (b) The Agent  shall  not be  responsible  for the  existence,
genuineness or value of any of the  Collateral or for the validity,  perfection,
priority or enforceability  of the security  interests in any of the Collateral,
whether  impaired by  operation of law or by reason of any action or omission to
act on its part under the Collateral Documents.  The Agent shall have no duty to
ascertain or inquire as to the  performance or observance of any of the terms of
the Collateral Documents by any Obligor.


                                  ARTICLE VIII

                             CHANGE IN CIRCUMSTANCE

                  SECTION 8.01.  Basis for Determining  Interest Rate Inadequate
or  Unfair.  If on or prior to the  first  day of any  Interest  Period  for any
Euro-Dollar Loan:

                  (a) the Agent is advised by the Reference  Banks that deposits
in dollars (in the  applicable  amounts) are not being  offered to the Reference
Banks in the relevant market for such Interest Period, or

                  (b) Banks  having 50% or more of the  aggregate  amount of the
Commitments  advise the Agent that the Adjusted  Euro-Dollar Rate, as determined
by the Agent will not  adequately  and fairly  reflect the cost to such Banks of
funding their Euro-Dollar Loans for such Interest Period,

                  the Agent shall  forthwith give notice thereof to the Borrower
and the  Banks,  whereupon  until  the  Agent  notifies  the  Borrower  that the
circumstances   giving  rise  to  such  suspension  no  longer  exist,  (i)  the
obligations of the Banks to make Euro-Dollar Loans or to convert Base Rate Loans
into Euro-Dollars Loans shall be suspended and (ii) each outstanding Euro-Dollar
Loan  shall  be  converted  into a Base  Rate  Loan on the  last day of the then
current Interest Period  applicable  thereto.  Unless the Borrower  notifies the
Agent at least two  Domestic  Business  Days before the date of any  Euro-Dollar
Borrowing  for which a Notice of  Borrowing  has  previously  been given that it
elects not to borrow on such date,  such  Borrowing  shall  instead be made as a
Base Rate Borrowing.

                  SECTION  8.02.   Illegality.   If,  after  the  date  of  this
Agreement, the adoption of any applicable law, rule or regulation, or any change
in any applicable law, rule or regulation,  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 its  Euro-Dollar  Lending Office) with any request or
directive  (whether  or not  having  the  force of law) of any  such  authority,
central bank or comparable agency shall make it

                                                      


                                       71





unlawful or impossible for any Bank (or its Euro-Dollar Lending Office) to make,
maintain or fund its Euro-Dollar  Loans and such Bank shall so notify the Agent,
the Agent  shall  forthwith  give  notice  thereof  to the  other  Banks and the
Borrower, whereupon until such Bank notifies the Borrower and the Agent that the
circumstances  giving rise to such suspension no longer exist, the obligation of
such Bank to make  Euro-Dollar  Loans,  or to  convert  outstanding  Loans  into
Euro-Dollar  Loans,  shall be  suspended.  Before giving any notice to the Agent
pursuant to this  Section,  such Bank shall  designate  a different  Euro-Dollar
Lending  Office if such  designation  will avoid the need for giving such notice
and will not, in the judgment of such Bank, be otherwise disadvantageous to such
Bank. If such Bank shall determine that it may not lawfully continue to maintain
and fund any of its  outstanding  Euro-Dollar  Loans to  maturity  and  shall so
specify in such  notice,  each  Euro-Dollar  Loan of such Bank then  outstanding
shall be converted to a Base Rate Loan (and the Borrower shall contemporaneously
pay accrued interest on such Euro-Dollar Loan to the date of conversion)  either
(a) on the last day of the  then  current  Interest  Period  applicable  to such
Euro-Dollar  Loan if such Bank may  lawfully  continue to maintain and fund such
Loan to such day or (b) immediately if such Bank shall determine that it may not
lawfully continue to maintain and fund such Loan to such day.

                  SECTION 8.03.             Increased Cost and Reduced Return.

                  (a) If after the date hereof,  the adoption of any  applicable
law,  rule  or  regulation,  or  any  change  in any  applicable  law,  rule  or
regulation, 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 its
Applicable  Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency:

                  (i) shall subject any Bank (or its Applicable  Lending Office)
to any tax, duty or other charge with respect to its Euro-Dollar Loans, its Note
or its  obligation  to make  Euro-Dollar  Loans,  or shall  change  the basis of
taxation  of  payments  to any Bank (or its  Applicable  Lending  Office) of the
principal of or interest on its Euro-Dollar Loans or any other amounts due under
this  Agreement in respect of its  Euro-Dollar  Loans or its  obligation to make
Euro-  Dollar  Loans  (except  for changes in the rate of tax on the overall net
income of such Bank or its Applicable Lending Office imposed by the jurisdiction
in which such Bank's principal  executive office or Applicable Lending Office is
located); or

                  (ii)  shall  impose,  modify or deem  applicable  any  reserve
(including,  without  limitation,  any such requirement  imposed by the Board of
Governors  of the Federal  Reserve  System,  but  excluding  with respect to any
Euro-Dollar  Loan any such  requirement  included in an  applicable  Euro-Dollar
Reserve

                                                      


                                       72





Percentage),  special  deposit,  insurance  assessment  or  similar  requirement
against assets of,  deposits with or for the account of, or credit  extended by,
any Bank (or its Applicable  Lending Office) or shall impose on any Bank (or its
Applicable  Lending  Office) or on the United States market for  certificates of
deposit  or the  London  interbank  market  any other  condition  affecting  its
Euro-Dollar Loans, its Note or its obligation to make Euro-Dollar Loans;

and the result of any of the  foregoing is to increase the cost to such Bank (or
its Applicable Lending Office) of making or maintaining any Euro-Dollar Loan, or
to reduce  the amount of any sum  received  or  receivable  by such Bank (or its
Applicable  Lending  Office) under this Agreement or under its Note with respect
thereto,  by an amount deemed by such Bank to be material,  then, within 15 days
after demand by such Bank (with a copy to the Agent),  the Borrower shall pay to
such Bank such  additional  amount or amounts as will  compensate  such Bank for
such increased cost or reduction.

                  (b) If any Bank shall  have  determined  that,  after the date
hereof, the adoption of any applicable law, rule or regulation regarding capital
adequacy,  or any change in any such law, rule or  regulation,  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 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  capital  of such  Bank  (or its  Parent)  as a  consequence  of such  Bank's
obligations  hereunder  to a level  below that  which such Bank (or its  Parent)
could have achieved but for such adoption,  change, request or directive (taking
into  consideration  its policies with respect to capital adequacy) by an amount
deemed by such Bank to be material, then from time to time, within 15 days after
demand by such Bank (with a copy to the Agent),  the Borrower  shall pay to such
Bank such  additional  amount or  amounts as will  compensate  such Bank (or its
Parent) for such reduction.

                  (c) Each Bank will promptly  notify the Borrower and the Agent
of any event of which it has knowledge,  occurring after the date hereof,  which
will  entitle  such  Bank to  compensation  pursuant  to this  Section  and will
designate a different  Applicable  Lending Office if such designation will avoid
the need for,  or reduce the amount of, such  compensation  and will not, in the
reasonable  judgment of such Bank, be otherwise  disadvantageous to such Bank. A
certificate  of any Bank  claiming  compensation  under this Section and setting
forth the  additional  amount or  amounts  to be paid to it  hereunder  shall be
conclusive in the absence of manifest  error. In determining  such amount,  such
Bank may use any reasonable averaging and attribution methods.


                                                      


                                       73





                  SECTION 8.04.  Base Rate Loans  Substituted for Affected Euro-
Dollar Loans. If (i) the obligation of any Bank to make or maintain  Euro-Dollar
Loans has been suspended  pursuant to Section 8.02 or (ii) any Bank has demanded
compensation  under  Section  8.03(a) and the Borrower  shall,  by at least five
Euro-Dollar  Business  Days' prior notice to such Bank  through the Agent,  have
elected  that the  provisions  of this Section  shall apply to such Bank,  then,
unless and until such Bank notifies the Borrower that the  circumstances  giving
rise to such suspension or demand for compensation no longer exist:

                  (a) all Loans  which would  otherwise  be made by such Bank as
(or continued as or converted into)  Euro-Dollar  Loans shall be made instead as
Base  Rate   Loans  (on  which   interest   and   principal   shall  be  payable
contemporaneously with the related Euro-Dollar Loans of the other Banks), and

                  (b) after each of its  Euro-Dollar  Loans has been  repaid (or
converted to a Base Rate Loan),  all payments of principal which would otherwise
be applied to repay such  Euro-Dollar  Loans  shall be applied to repay its Base
Rate Loans instead.


                                   ARTICLE IX

                                  MISCELLANEOUS

                  SECTION  9.01.  Notices.  All  notices,   requests  and  other
communications to any party hereunder shall be in writing  (including bank wire,
telex,  facsimile  transmission  or similar  writing) and shall be given to such
party:  (x) in the case of the Borrower or the Agent, at its address or telex or
facsimile number set forth on the signature pages hereof, (y) in the case of any
Bank,   at  its  address  or  telex  or  facsimile   number  set  forth  in  its
Administrative Questionnaire or (z) in the case of any party, such other address
or telex or facsimile number as such party may hereafter specify for the purpose
by notice to the Agent and the  Borrower.  Each such  notice,  request  or other
communication  shall be  effective  (i) if given by telex,  when  such  telex is
transmitted  to the telex number  specified in this Section and the  appropriate
answerback  is  received,  (ii) if given by  facsimile  transmission,  when such
facsimile is transmitted to the facsimile  number  specified in this Section and
receipt of such  facsimile is  confirmed,  either  orally or in writing,  by the
party  receiving such  transmission,  (iii) if given by certified mail, 72 hours
after such  communication  is  deposited  in the mails with first class  postage
prepaid,  addressed  as  aforesaid  or (iv) if given by any  other  means,  when
delivered at the address specified in this Section; provided that notices to the
Agent under Article II shall not be effective until received.


                                                      


                                       74





                  SECTION 9.02. No Waivers.  No failure or delay by the Agent or
any Bank in  exercising  any  right,  power or  privilege  under  any  Financing
Document  shall  operate  as a waiver  thereof  nor shall any  single or partial
exercise  thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies therein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.

                  SECTION 9.03. Expenses; Documentary Taxes; Indemnification.

                  (a) The Borrower shall pay (i) all  out-of-pocket  expenses of
the Agent,  including fees and  disbursements  of special counsel for the Agent,
any firm of independent public accountants, financial advisors and other experts
retained  by the  Agent in  connection  with the  preparation  of the  Financing
Documents,  any waiver or consent under any Financing Document, any amendment of
any  Financing  Document  or any  Default or alleged  Default  or  otherwise  in
connection with this Agreement or any other Financing  Documents (provided that,
except in the case of fees and  disbursements  incurred in  connection  with the
preparation  of the  Financing  Documents,  any  waiver  or  consent  under  any
Financing  Document,  any amendment of any Financing  Document or any Default or
alleged Default, all of which shall be paid by the Borrower,  the Borrower shall
not be required  to pay the fees and  disbursements  of any firm of  independent
public  accounts,  financial  advisors and other  experts  retained by the Agent
(other than special counsel for the Agent,  whose fees and expenses shall not be
limited by this parenthetical) to the extent such fees and disbursements exceed,
in the  aggregate:  (i) $60,000  during the period from the Effective Date until
the first anniversary of the Effective Date or (ii) $50,000 during any period of
twelve consecutive  calendar months after the first anniversary of the Effective
Date);  and (ii) if an Event  of  Default  occurs,  all  out-of-pocket  expenses
incurred by the Agent and each Bank, including fees and disbursements of counsel
(including  allocated costs of internal  counsel and  disbursements  of internal
counsel),  in  connection  with  such  Event  of  Default  and  any  collection,
bankruptcy,  insolvency and other enforcement  proceedings  resulting therefrom.
The Borrower shall indemnify each Bank against any transfer  taxes,  documentary
taxes,  assessments or charges made by any  governmental  authority by reason of
the execution and delivery of any Financing Document.

                  (b) The Borrower  agrees to indemnify the Agent and each Bank,
their respective affiliates and the respective directors,  officers,  agents and
employees  of the  foregoing  (each an  "Indemnitee")  and hold each  Indemnitee
harmless from and against any and all liabilities,  losses,  damages,  costs and
expenses of any kind,  including,  without  limitation,  the reasonable fees and
disbursements  of counsel  (including  allocated  costs of internal  counsel and
disbursements of internal  counsel),  which may be incurred by any Indemnitee in
connection  with  any  investigative,   administrative  or  judicial  proceeding
(whether or not such Indemnitee  shall be designated a party thereto) brought or
threatened relating to or arising out of any

                                                      


                                       75





Financing Document or any actual or proposed use of proceeds of Loans hereunder;
provided that no Indemnitee shall have the right to be indemnified hereunder for
such Indemnitee's own gross negligence or willful  misconduct as determined by a
court of competent jurisdiction.

                  (c) The Borrower  agrees to indemnify each Indemnitee and hold
each  Indemnitee  harmless  from and  against any and all  liabilities,  losses,
damages, costs and expenses of any kind (including without limitation reasonable
expenses of  investigation by engineers,  environmental  consultants and similar
technical  personnel and reasonable fees and  disbursements of counsel including
allocated costs of internal counsel and  disbursements  of internal  counsel) of
any Indemnitee  arising out of, in respect of or in connection  with any and all
Environmental Liabilities. Without limiting the generality of the foregoing, the
Borrower  hereby  waives  all  rights for  contribution  or any other  rights of
recovery with respect to liabilities, losses, damages, costs or expenses arising
under or  related  to  Environmental  Laws  that it  might  have by  statute  or
otherwise against any Indemnitee.

                  SECTION 9.04. Sharing of Setoffs.  Each Bank agrees that if it
shall, by exercising any right of setoff or  counterclaim or otherwise,  receive
payment of a proportion of the aggregate  amount due with respect to any Loan or
Reimbursement  Obligation  owed to it  which  is  greater  than  the  proportion
received by any other Bank in respect of the  aggregate  amount due with respect
to any  Loan or  Reimbursement  Obligation  owed to such  other  Bank,  the Bank
receiving   such   proportionately   greater   payment   shall   purchase   such
participations  in the Loans  and  Reimbursement  Obligations  owed to the other
Banks, and such other  adjustments shall be made, as may be required so that all
such payments with respect to the Loans and  Reimbursement  Obligations  owed to
the Banks  shall be shared by the Banks pro rata;  provided  that (i) nothing in
this Section  shall impair the right of any Bank to exercise any right of setoff
or  counterclaim it may have and to apply the amount subject to such exercise to
the  payment  of  indebtedness  of the  Borrower  other  than  its  indebtedness
hereunder and (ii) nothing in any Financing  Documents shall require any Bank to
share any payments and distributions  received by such Bank if such payments and
distributions  were  made  in  respect  of any  obligations  (including  without
limitation Other Reimbursement Obligations and Other Mortgage/Lease Obligations)
not constituting Loans or Reimbursement Obligations. The Borrower agrees, to the
fullest extent it may effectively do so under applicable law, that any holder of
a participation in a Loan or Reimbursement  Obligation,  whether or not acquired
pursuant  to the  foregoing  arrangements,  may  exercise  rights  of  setoff or
counterclaim and other rights with respect to such  participation as fully as if
such holder of a  participation  were a direct  creditor of the  Borrower in the
amount of such participation.


                                                      


                                       76





                  SECTION  9.05.  Amendments  and Waivers.  (a) Any provision of
this  Agreement  or the Notes may be amended  or waived  if,  but only if,  such
amendment or waiver is in writing and is signed by the Borrower and the Required
Banks  (and,  if the  rights or duties of the Agent or the LC Bank are  affected
thereby, by the Agent or the LC Bank, as the case may be); provided that no such
amendment  or waiver  shall,  unless  signed by all the Banks,  (i)  increase or
decrease  the  Commitment  of any Bank  (except  for a ratable  decrease  in the
Commitments  of all  Banks),  (ii) amend  Section  2.10 or  5.12(b)(iii),  (iii)
subject any Bank to any additional  obligation,  (iv) reduce the principal of or
rate of interest on any Loan or any fees hereunder,  (v) postpone the date fixed
for any  payment of  principal  of or interest  on any Loan,  any  Reimbursement
Obligation  or  any  fees  hereunder  or for  termination  or  reduction  of any
Commitment,  (vi)  reinstate the  Commitments or cause the Notes to be no longer
immediately due and payable after the Commitments shall have been terminated and
the Notes shall have  become  immediately  due and  payable  pursuant to Section
6.01,  (vii) change the percentage of the Commitments or of the aggregate unpaid
principal  amount of the Notes,  or change the number of Banks,  which  shall be
required for the Banks or any of them to take any action under this Section 9.05
or any other provision of any Financing Documents, (viii) release any Subsidiary
Guarantor from the Subsidiary Guarantee Agreement, (ix) amend Section 9.04, 9.05
or 9.06 hereof or (x)  notwithstanding  any provision of any Collateral Document
to the contrary,  modify any definition of Collateral in any Financing  Document
or release  any item of  Collateral  from any Lien  provided  by any  Collateral
Document  except for the sale or other  disposition of such item by the Agent in
the  exercise  of its rights as provided  therein as in effect on the  Effective
Date (provided that unless an Event of Default has occurred and is continuing or
the Agent has  received  written  notice  from the  Borrower  or any Bank of the
existence of any Default,  the Agent may release any item of  Collateral  at the
request of the Borrower, without the consent of any Banks if (A) such release is
required  in  connection  with  any  Disposition  of such  Collateral,  (B) such
Collateral is listed on the Asset Sale Letter and the consideration  therefor is
cash in an amount at least  equal to the  minimum  cash price shown on the Asset
Sale Letter and (C) such  Disposition is in accordance with and permitted by the
terms hereof (including without limitation Sections 2.10(c) and 5.12(b)).

                  (b)  Without  limiting  the  effect of  Section  9.05(a),  the
Borrower  may,  at any time  prior to  commencement  of a  voluntary  Bankruptcy
Proceeding by Perini Land and  Development  or any Subsidiary of Perini Land and
Development (an "Affected  Subsidiary"),  request from the Banks a waiver of any
resulting Event of Default.  Such request shall be by written notice accompanied
by such relevant information as shall enable the Banks and the Agent to evaluate
such request.  Upon receipt of such request and such information,  the Banks and
the Agent will promptly  evaluate the potential  consequences of such Bankruptcy
Proceeding.  If, based on their  evaluation,  the  Required  Banks and the Agent
conclude  that  commencement  and  continuation  of  such  voluntary  Bankruptcy
Proceeding will not have an adverse impact

                                                      


                                       77





on the Banks'  interests,  the Banks shall  promptly  so notify the  Borrower in
writing.  Upon receipt of such  notification,  the Event of Default  which would
otherwise result from the commencement of such voluntary  Bankruptcy  Proceeding
by such Affected Subsidiary shall be deemed waived, provided that such voluntary
Bankruptcy  Proceeding has not been commenced prior to such  notification and is
commenced  within  30 days  after  such  notification.  If for any  reason  such
voluntary  Bankruptcy  Proceeding is not commenced with respect to such Affected
Subsidiary  during such 30-day  period,  the Borrower may thereafter at any time
again request from the Banks a waiver with respect to such  Affected  Subsidiary
or any other Affected Subsidiary pursuant to the foregoing procedures.

                  The effect of delivery  by the Banks of any such  notification
shall be  limited  as set  forth  above  and shall not be deemed a waiver of any
other  right,  remedy or event of default  under any  Financing  Documents.  The
Borrower will reimburse the Banks and the Agent for any  out-of-pocket  expenses
they may incur in connection  with  conducting any evaluation  referred to above
(including,  without  limitation,  fees and  expenses of counsel  and  financial
professionals) and will, at its own expense,  provide to the Banks and the Agent
such information as the Agent may request in order to facilitate such evaluation
(including,  without  limitation,   satisfactory  opinions  of  counsel  to  the
Borrower).

                  SECTION 9.06.             Successors and Assigns.

                  (a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their  respective  successors and
assigns,  except that the Borrower  may not assign or otherwise  transfer any of
its rights under this Agreement without the prior written consent of all Banks.

                  (b) Any  Bank  may at any  time  grant  to one  bank or  other
institution (a "Participant") a participating interest in its Commitment and its
Loans in the full amount of its Commitment.  In the event of any such grant by a
Bank of a participating interest to a Participant, whether or not upon notice to
the  Borrower  and  the  Agent,  such  Bank  shall  remain  responsible  for the
performance of its obligations  hereunder,  and the Borrower and the Agent shall
continue  to deal solely and  directly  with such Bank in  connection  with such
Bank's rights and obligations  under this Agreement.  Any agreement  pursuant to
which any Bank may grant such a  participating  interest shall provide that such
Bank shall retain the sole right and  responsibility  to enforce the obligations
of the Borrower hereunder  including,  without limitation,  the right to approve
any  amendment,  modification  or waiver  of any  provision  of this  Agreement;
provided that such  participation  agreement may provide that such Bank will not
agree to any  modification,  amendment or waiver of this Agreement  described in
clause  (i),  (ii)  or  (iii)  of  Section  9.05  without  the  consent  of  the
Participant.  An  assignment  or  other  transfer  which  is  not  permitted  by
subsection

                                                      


                                       78





(c) or (d) below shall be given  effect for purposes of this  Agreement  only to
the  extent  of  a  participating  interest  granted  in  accordance  with  this
subsection (b).

                  (c)  Any  Bank  may  assign  to one or more  banks,  financial
institutions  or  "accredited  investors"  (as  defined in  Regulation  D of the
Securities  Act  of  1933,  as  amended  as of  the  Effective  Date)  (each  an
"Assignee")  all or any part  (subject to the  proviso  below) of its rights and
obligations  under this  Agreement and the Notes and such Assignee  shall assume
such rights and obligations,  pursuant to an Assignment and Assumption Agreement
in  substantially  the form of Exhibit M,  executed  by such  Assignee  and such
transferor  Bank with the subscribed  consent of the Agent,  which consent shall
not be unreasonably withheld or delayed;  provided that (i) if an Assignee is an
affiliate of such  transferor  Bank or another  Bank,  no such consent  shall be
required,  (ii) unless the Assignee is an affiliate of such transferor Bank, the
Assignee is another Bank or the  assignment  shall be for all of the  transferor
Bank's rights and obligations under the Credit Agreement, the assignment must be
of at least an aggregate  $5,000,000 of the transferor  Bank's  Commitments  and
(iii) any assignment of part of any Bank's rights and obligations  shall include
equally  proportionate  parts of such Bank's  Tranche A Commitment and Tranche B
Commitment.  Upon execution and delivery of such  instrument and payment by such
Assignee to such transferor Bank of an amount equal to the purchase price agreed
between such  transferor  Bank and such Assignee,  such Assignee shall be a Bank
party to this Agreement and shall have all the rights and  obligations of a Bank
with a  Commitment  as set  forth  in such  instrument  of  assumption,  and the
transferor  Bank  shall  be  released  from  its  obligations   hereunder  to  a
corresponding  extent,  and no further  consent or action by any party  shall be
required.  Upon the  consummation of any assignment  pursuant to this subsection
(c), the  transferor  Bank,  the Agent and the Borrower  shall make  appropriate
arrangements  so that, if required or requested by the  Assignee,  a new Note is
issued to the Assignee.  In connection with any such assignment,  the transferor
Bank or the  Assignee,  as  agreed  between  them,  shall  pay to the  Agent  an
administrative fee for processing such assignment in the amount of $2,500.

                  (d) Any Bank may at any time  assign all or any portion of its
rights under this  Agreement  and its Note to a Federal  Reserve Bank (i.e.,  an
agency of the Federal  government  known as a "Federal  Reserve Bank").  No such
assignment shall release the transferor Bank from its obligations hereunder.

                  SECTION 9.07. Certain Collateral. Each of the Banks represents
to the Agent and each of the other  Banks that it in good  faith is not  relying
upon any  "margin  stock" (as  defined in  Regulation  U) as  collateral  in the
extension or maintenance of the credit provided for in this Agreement.


                                                      


                                       79





                  SECTION 9.08. Governing Law; Submission to Jurisdiction.  This
Agreement  and each Note shall be construed in  accordance  with and governed by
the  law  of  the  State  of  New  York.  The  Borrower  hereby  submits  to the
nonexclusive  jurisdiction  of the United States District Court for the Southern
District  of New York and of any New York State  court  sitting in New York City
for  purposes  of all  legal  proceedings  arising  out of or  relating  to this
Agreement or the  transactions  contemplated  hereby.  The Borrower  irrevocably
waives,  to the fullest extent  permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such  proceeding  brought in
such a court and any claim that any such proceeding  brought in such a court has
been brought in an inconvenient forum.

                  SECTION 9.09. Counterparts; Integration. This Agreement may be
signed in any number of counterparts,  each of which shall be an original,  with
the same  effect as if the  signatures  thereto  and  hereto  were upon the same
instrument.  This Agreement  constitutes the entire agreement and  understanding
among  the  parties  hereto  and  supersedes  any and all prior  agreements  and
understandings, oral or written, relating to the subject matter hereof.

                  SECTION 9.10.             WAIVER OF JURY TRIAL.  EACH OF THE
OBLIGORS, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL  BY  JURY IN ANY  LEGAL  PROCEEDING  ARISING  OUT OF OR  RELATING  TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

                  SECTION 9.11. Other Reimbursement  Obligations.  The execution
of  this  Agreement  and any  other  documents,  agreements  or  instruments  in
connection  herewith  does not  constitute  a waiver or amendment of any term or
condition of any documents,  agreements or  instruments  evidencing or otherwise
delivered in connection  with the Other  Reimbursement  Obligations or the Other
Mortgage/Lease  Obligations.  No Bank shall have any rights or obligations under
any such  documents,  agreements or instruments  unless party thereto and as set
forth therein.  Nothing in any Financing  Documents  requires any Bank to obtain
any  consent  from any other  Bank in taking  actions  permitted  to be taken in
accordance  with the  terms  and  conditions  of any  documents,  agreements  or
instruments  evidencing  or  otherwise  delivered in  connection  with the Other
Reimbursement  Obligations or Other Mortgage/Lease  Obligations to which it is a
party, or in omitting to take any such actions.

                  SECTION 9.12.  Consent to Subordinate  Mortgage.  Harris Trust
and Savings Bank hereby  consents to the execution,  delivery and recordation of
the Mortgage  Amendment  relating to the Mortgaged Facility described as Item 12
in Part I of Schedule 4.03(c).


                                                      


                                       80





                  SECTION  9.13.  Consent to  Execution  and Delivery of Certain
Financing Documents.  Each of the Banks consents to, and authorizes the Agent to
execute and deliver,  the Subsidiary  Guarantee  Agreement,  the Borrower Pledge
Agreement, the Borrower Security Agreement, the Subsidiary Pledge Agreement, the
Subsidiary Security Agreement and the Mortgage Amendments.


                  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.


                               PERINI CORPORATION


                               By:      /s/ John H. Schwarz
                                        Name:        John H. Schwarz
                                        Title:       Executice Vice President,
                                                     Finance & Administration


                               By:      /s/ Susan C. Mellace
                                        Name:        Susan C. Mellace
                                        Title:       Vice President & Treasurer

                              73 Mount Wayte Avenue
                              Framingham, MA 01701
                        Facsimile number: (508) 628-2960



                              MORGAN GUARANTY TRUST COMPANY
                              OF NEW YORK, as Agent


                              By:      /s/ D. Linda Scheuplein
                                       Name:        D. Linda Scheuplein
                                       Title:       Vice President




                                                      


                                       81





Tranche A              Tranche B
Commitments            Commitments   BANKS

$22,704,000            $4,032,230    MORGAN GUARANTY TRUST COMPANY
                                     OF NEW YORK


                                     By:      /s/ D. Linda Scheuplein
                                              Name:        D. Linda Scheuplein
                                              Title:       Vice President



$38,720,000            $6,876,672    FLEET NATIONAL BANK


                                     By:      /s/ Frederick W. Reinhardt
                                              Name:       Frederick W. Reinhardt
                                              Title:      Vice President



$16,016,000            $2,844,442    BANK OF AMERICA NATIONAL TRUST
                                     AND SAVINGS ASSOCIATION


                                     By:      /s/ Donald J. Chin
                                              Name:        Donald J. Chin
                                              Title:       Vice President



$10,560,000            $1,875,456    BAYBANK, N.A., as Bank and as LC Bank


                                     By:      /s/ David F. Eusden
                                              Name:        David F. Eusden
                                              Title:       Authorized Officer




                                               


                                       82





$8,800,000             $1,562,880    COMERICA BANK


                                     By:      /s/ Timothy K. McLaughlin
                                              Name:        Timothy K. McLaughlin
                                              Title:       Vice President



$8,800,000             $1,562,880    HARRIS TRUST & SAVINGS BANK


                                     By:      /s/ Michael C. Wood
                                              Name:        Michael C. Wood
                                              Title:       Vice President



$4,400,000             $781,440      STATE STREET BANK AND TRUST
                                     COMPANY


                                     By:      /s/ Kenneth J. Mooney
                                              Name:        Kenneth J. Mooney
                                              Title:       Vice President
- ------------           -----------
$110,000,000           $19,536,000       TOTAL COMMITMENTS




                                                      


                                       83





                          EACH OF THE  UNDERSIGNED  SUBSIDIARY
                          GUARANTORS CONSENTS TO THE AMENDMENT
                          AND   RESTATEMENT   OF  THE   CREDIT
                          AGREEMENT   AND  THE  BRIDGE  CREDIT
                          AGREEMENT AS SET FORTH HEREIN:

                          PERINI BUILDING COMPANY, INC.


                          By:      /s/ Barry R. Blake
                                   Name:        Barry R. Blake
                                   Title:       Vice President & Controller


                          By:      /s/ Susan C. Mellace
                                   Name:        Susan C. Mellace
                                   Title:       Vice President & Treasurer



                          PERINI INTERNATIONAL CORPORATION


                          By:      /s/ Richard E. Burnham
                                   Name:        Richard E. Burnham
                                   Title:       Secretary


                          By:      /s/ Barry R. Blake
                                   Name:        Barry R. Blake
                                   Title:       Assistant Treasurer




                                    


                                       84





                        PERINI LAND AND DEVELOPMENT
                        COMPANY, INC.


                        By:      /s/ John M. Bolis
                                 Name:        John M. Bolis
                                 Title:       Vice President


                        By:      /s/ Joanne Choate
                                 Name:        Joanne Choate
                                 Title:       Chief Accountant & Treasurer



                        R. E. DAILEY & CO.


                        By:      /s/ David B. Perini
                                 Name:        David B. Perini
                                 Title:       President


                        By:      /s/ Richard E. Burnham
                                 Name:        Richard E. Burnham
                                 Title:       Secretary



                        PARAMOUNT DEVELOPMENT
                        ASSOCIATES, INC.


                        By:      /s/ John M. Bolis
                                 Name:        John M. Bolis
                                 Title:       Vice President


                        By:      /s/ Joanne Choate
                                 Name:        Joanne Choate
                                 Title:       Chief Accountant & Treasurer




                                                      


                                       85