CAMBREX CORP, 8-K, 1994-10-27

CAMBREX CORP
8-K, 1994-10-27
CHEMICALS & ALLIED PRODUCTS

Previous: NEIMAN MARCUS GROUP INC, 10-K, 1994-10-27

Next: HIGH YIELD INCOME FUND INC, PRE 14A, 1994-10-27

<PAGE> 1

SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20459

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of earliest event reported) October 12, 1994
----------------

CAMBREX CORPORATION
- - --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)

DELAWARE
- - --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation)

1-10638 22-2476135
----------------------- ---------------------------------
(Commission File Number) (IRS Employer Identification No.)

One Meadowlands Plaza, East Rutherford, New Jersey 07073
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (201) 804-3000
--------------

<PAGE> 2

CAMBREX CORPORATION

FORM 8-K

CURRENT REPORT

OCTOBER 12, 1994

ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS

On October 12, 1994, the Registrant, through wholly owned subsidiaries,
purchased Nobel's Pharma Chemistry Business (the "Business") from Akzo Nobel
(the "Seller") for approximately $130 million. The Business consists of Nobel
Chemicals A.B., in Karlskoga, Sweden, Profarmaco Nobel S.r.l. in Milan, Italy,
and sales companies in Germany, the U.K., and the U.S.. Sales of the group in
1993 were approximately $90 million and operating cash flow (EBITDA) was
approximately $18 million. Sales were 60% bulk active ingredients for
pharmaceutical products and 40% fine chemicals. The purchase price was
determined by arm's length negotiations between the Seller and the Registrant.
There is no material relationship between the Seller and the Registrant and, to
the best knowledge of the Registrant, there is no material relationship between
the Seller and any of the Registrant's affiliates, directors or officers or any
associates of any of its directors or officers.

The funds used by the Registrant for the acquisition were supplied from
borrowings under a new $225 million credit facility provided by a group of
banks with NBD Bank, N.A., as agent.

The Business was acquired by purchase of the stock of the Companies
noted above, with substantial indemnifications from the Seller. The Business
is involved in the manufacture and sales of pharmaceutical active ingredients
and intermediates, and specialty and fine chemicals. The Registrant intends to
continue such operations.

-2-
<PAGE> 3
ITEM 5. OTHER EVENTS

The Company entered into a new Loan Agreement (Credit Agreement) on
September 21, 1994 with NBD Bank, N.A., United Jersey Bank, National
Westminster Bank NJ, Wachovia Bank of Georgia, N.A., BHF-Bank, The First
National Bank of Boston, Chemical Bank New Jersey, N.A., and National City
Bank. This new Loan Agreement replaces the existing Revolving Credit and Term
Loan Agreement with NBD Bank, N.A., United Jersey Bank, and National
Westminster Bank NJ. The new Credit Agreement provides for a bridge loan in
the aggregate principal amount of $50,000,000, a term loan in the aggregate
principal amount of $75,000,000 and a revolving credit facility in the
aggregate principal amount of $100,000,000.

The new Credit Agreement permits the Company to choose between various
interest rate options and to specify the portion of the borrowing to be covered
by specific interest rate options. Under the Revolving Credit Agreement and
Bridge Loan, the interest rate options available to the Company are: (a) U.S.
prime rate plus the applicable margin (ranging from 0% to 3/4 of 1%) or (b)
LIBOR plus the applicable margin (ranging from 1/2 of 1% to 2%). The
applicable margin is adjusted based upon the Funded Indebtedness to Cash Flow
Ratio of Cambrex Corporation. The Term Loan will have the same options plus
1/2%. Additionally, the Company pays a commitment fee of between 1/5 of 1% to
3/8 of 1% on the unused portion of the Revolving Credit facilities.

On October 11, 1994, $32,200,000 from the new Loan Agreement was used
to satisfy the prior Credit Agreement.

-3-
<PAGE> 4
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.

(a) Financial statement of business acquired.

(b) Pro forma financial information.

It is impracticable for the Registrant presently to provide the
required audited historical financial statements for the acquired business
referred to in Item 2 of this Current Report and the required related pro forma
financial information. Such financial statements and information will be filed
in an amendment to this Current Report as soon as practicable.

The following exhibits are filed herewith:

<TABLE>
<CAPTION>
Location
(page no.
Exhibit Description in this report)
- - ------- ----------- --------------
<S> <C> <C>
4.4 A new Loan Agreement dated September 21, 1994 by
and among the Registrant, NBD Bank, N.A., United
Jersey Bank, National Westminster Bank NJ,
Wachovia Bank of Georgia, N.A., BHF-Bank,
The First National Bank of Boston, Chemical Bank
New Jersey, N.A., and National City Bank.

10.4 Stock Purchase Agreement dated as of September 15,
1994 between Akzo Nobel A.B., Akzo Nobel N.V. and
the Registrant, for the purchase of Nobel Chemicals A.B..

10.41 Stock Purchase Agreement dated as of September 15, 1994
between Akzo Nobel A.B., Akzo Nobel N.V. and the
Registrant, for the purchase of Profarmaco Nobel, S.r.l..

</TABLE>

-4-
<PAGE> 5

SIGNATURES

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

CAMBREX CORPORATION

By: /s/ Peter Tracey
-----------------------------
Peter Tracey
Vice President and
Chief Financial Officer

Dated: October 26, 1994

-5-
<PAGE> 6

EXHIBIT INDEX

10.4 Stock Purchase Agreement dated as of September 15,
1994 between Akzo Nobel A.B., Akzo Nobel N.V. and
the Registrant, for the purchase of Nobel Chemicals A.B..

10.41 Stock Purchase Agreement dated as of September 15, 1994
between Akzo Nobel A.B., Akzo Nobel N.V. and the
Registrant, for the purchase of Profarmaco Nobel, S.r.l..

</TABLE>

<PAGE> 1

THIS LOAN AGREEMENT, dated as of September 21, 1994 (this
"Agreement"), is by and among Cambrex Corporation, a Delaware corporation (the
"Company"), and the Banks set forth on the signature pages hereof
(collectively, the "Banks" and individually, a "Bank") and NBD Bank, N.A., a
national banking association, as agent for the Banks (in such capacity, the
"Agent").

INTRODUCTION
------------

The Company desires to obtain a term loan in the aggregate
principal amount of $50,000,000 (or the Equivalent thereof in any other
Permitted Currency), a term loan in the aggregate principal amount of
$75,000,000 (or the Equivalent thereof in any other Permitted Currency) and a
revolving credit facility, including letters of credit, in an aggregate
principal amount not to exceed $100,000,000 (or the Equivalent thereof in any
other Permitted Currency) in order to provide funds and other financial
accommodations for acquisitions and for its other corporate purposes and the
Banks are willing to make such term loans and to establish such a credit
facility in favor of the Company on the terms and conditions herein set forth.

In consideration of the premises and of the mutual agreements
herein contained, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS
-----------

1.1 Certain Definitions. As used herein the following
terms shall have the following respective meanings:

"Acquisition" shall mean the acquisition by the Company of the
share capital of Profarmaco Nobel S.R.L. and Nobel Chemicals International A.B.

"Advance" shall mean any Loan and any Letter of Credit Advance.

"Affiliate", when used with respect to any person, shall mean
any other person which, directly or indirectly, controls or is controlled by or
is under common control with such person. For purposes of this definition
"control" (including the correlative meanings of the terms "controlled by" and
"under common control with"), with respect to any person, shall mean
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person, whether through the
ownership of voting securities or by contract or otherwise.

"Applicable Lending Office" shall mean, with respect to any
Advance made by any Bank or with respect to such Bank's Commitment, the office
of such Bank or of any Affiliate of such Bank located at the address specified
as the applicable lending office for such Bank set forth next to the name of
such Bank in the signature pages hereof or any other office or Affiliate of
such Bank or of any Affiliate of such Bank hereafter selected and notified to
the Company and the Agent by such Bank.
<PAGE> 2
"Applicable Margin" shall mean, with respect to any Floating
Rate Loan, Eurocurrency Rate Loan, S/L/C fee and commitment fee, as the case
may be, the applicable percentage set forth in the applicable table below as
adjusted on the date on which the financial statements and compliance
certificate required pursuant to Section 5.1(d) are delivered to the Banks and
shall remain in effect until the next change to be effected pursuant to this
definition, provided, that, if any financial statements referred to above are
not delivered within the time period specified above, then, until the financial
statements are delivered, the ratio of Funded Indebtedness to Cash Flow as of
the end of the fiscal quarter that would have been covered thereby shall for
the purposes of this definition be deemed to be greater than 4.5 to 1.0:

APPLICABLE MARGIN FOR
---------------------
REVOLVING CREDIT ADVANCES AND TERM LOAN A
-----------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
Funded Floating Eurocur- S/L/C Fee Commit-
Indebtedness to Rate rency ment
Cash Flow Loan Rate Loan Fee

Less than 0.00% 0.50% 0.50% 0.20%
0.50:1.0

Greater than 0.00% 0.75% 0.50% 0.25%
or equal to
0.50:1.0 but
less than
1.0:1.0

Greater than or 0.00% 1.00% 0.75% 0.25%
equal to
1.0:1.0 but
less than
2.0:1.0

Greater than or 0.00% 1.25% 1.00% 0.25%
equal to
2.0:1.0 but
less than
3.0:1.0

Greater than or 0.25% 1.50% 1.25% 0.375%
equal to
3.0:1.0 but
less than
4.0:1.0
</TABLE>

-2-
<PAGE> 3
<TABLE>
<S> <C> <C> <C> <C>
Greater than or 0.50% 1.75% 1.50% 0.375%
equal to
4.0:1.0 but
less than
4.5:1.0

Greater than or 0.75% 2.00% 1.75% 0.375%
equal to
4.5: 1.0
</TABLE>

APPLICABLE MARGIN FOR
---------------------
TERM LOAN B
-----------

<TABLE>
<S> <C> <C>
Funded Indebtedness to Floating Rate Eurocurrency Rate
Cash Flow Loan Loan

Less than 0.50:1.0 0.50% 1.00%

Greater than or equal to 0.50% 1.25%
0.50:1.0 but less than
1.0:1.0

Greater than or equal to 0.50% 1.50%
1.0:1.0 but less than
2.0:1.0

Greater than or equal to 0.50% 1.75%
2.0:1.0 but less than
3.0:1.0

Greater than or equal to 0.75% 2.00%
3.0:1.0 but less than
4.0:1.0

Greater than or equal to 1.00% 2.25%
4.0:1.0 but less than
4.5:1.0

Greater than or equal to 1.25% 2.50%
4.5:1.0
</TABLE>

"Borrowing" shall mean the aggregation of Advances, including
each Letter of Credit Advance, of the Banks to be made to the Company, or
continuations and conversions of such Loans, made pursuant to Article II on a
single date and, in the case of any Loans, for a single Interest Period, which
Borrowings may be classified for purposes of this Agreement by

-3-
<PAGE> 4
reference to the type of Loans or the type of Advances comprising the related
Borrowing, e.g., a "Eurocurrency Rate Borrowing" is a Borrowing comprised of
Eurocurrency Rate Loans and a "Letter of Credit Borrowing" is an Advance
comprised of a single Letter of Credit.

"Borrowing Base" shall mean, as of any date, the sum of (a) an
amount equal to 85% of the value of Eligible Accounts Receivable, plus (b) an
amount equal to 30% of the value of Eligible Inventory, plus (c) an amount
equal to 50% of the difference of (i) 50% of Fixed Assets, minus (ii) the then
outstanding principal amount of the Term Loans.

"Business Day" shall mean a day other than a Saturday, Sunday
or other day on which the Agent or any Bank is not open to the public for
carrying on substantially all of its banking functions.

"Capital Lease" of any person shall mean any lease which, in
accordance with Generally Accepted Accounting Principles, is or should be
capitalized on the books of such person.

"Cash Flow" of any person shall mean, as of the end of any
fiscal quarter, net income of such person plus all income taxes of such person,
all interest paid or payable by such person on Indebtedness of such person
(including the portion of all obligations under Capital Leases constituting
interest), the amount of depreciation and amortization expense of such person
and the amount of deferred income tax expense of such person.

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

"Collateral Event" shall mean (a) any Trigger Event or (b) any
Default under Section 5.2(e).

"C/L/C" shall mean any commercial letter of credit issued by
the Agent hereunder.

"Commitments" shall mean the aggregate sum of the Revolving
Credit Commitments, the Term Loan A Commitments and the Term Loan B
Commitments.

"Consolidated" or "consolidated" shall mean, when used with
reference to any financial term in this Agreement, the aggregate for two or
more persons of the amounts signified by such term for all such persons
determined on a consolidated basis in accordance with Generally Accepted
Accounting Principles.

"Contingent Liabilities" of any person shall mean, as of any
date, all contingent obligations of such person or of others for which such
person is contingently liable, as obligor, guarantor or in any other capacity,
or in respect of which obligations such person assures a creditor against loss
or agrees to take any action to prevent any such loss (other than endorsements
of negotiable instruments for collection in the ordinary course of business),

-4-
<PAGE> 5
including without limitation all reimbursement obligations of such person in
respect of any letters of credit, surety bonds or similar obligations and all
obligations of such person to advance funds to, or to purchase assets, property
or services from, any other person in order to maintain the financial condition
of such other person.

"Cumulative Net Income" of any person shall mean, as of any
date, the net income (after deduction for income and other taxes of such person
determined by reference to income or profits of such person) for the period
commencing on the specified date through the end of the most recently completed
fiscal quarter of such person (but without reduction for any net loss incurred
for any completed fiscal year during such period), taken as one accounting
period, all as determined in accordance with Generally Accepted Accounting
Principles.

"Current Asset" and "Current Liabilities" of any person shall
mean, as of any date, all assets or liabilities, respectively, of such person
which, in accordance with Generally Accepted Accounting Principles, should be
classified as current assets or current liabilities, respectively, on a balance
sheet of such person.

"Default" shall mean any of the events or conditions described
in Section 6.1 which might become an Event of Default with notice or lapse of
time or both.

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

"Effective Date" shall mean October 11, 1994.

"Eligible Accounts Receivable" shall mean, as of any date,
those accounts receivable owned by the Company or any Guarantor which are
payable in Dollars and in which the Company has granted to the Agent, for the
benefit of the Banks, an enforceable, perfected security interest which is not
void or voidable pursuant to the Security Agreement, valued at the face amount
thereof less sales, excise or similar taxes outstanding and less returns,
discounts, credits and allowances of any nature at any time claimed in writing
or issued, owing or granted; but shall not include any such account receivable
(a) that is not a bona fide existing obligation created by the sale and actual
delivery of inventory, goods or other property or the furnishing of services or
other good and sufficient consideration to customers of the Company or any
Guarantor in the ordinary course of business, (b) that is more than 90 days
past the due date, (c) that is subject to any dispute, contra-account, defense,
offset or counterclaim or any Lien (except those in favor of the Agent under
the Security Agreement), or the inventory, goods, property, services or other
consideration of which such account receivable constitutes proceeds is subject
to any such Lien, but only to the extent of such dispute, contra-account,
defense, offset, counterclaim or Lien, (d) in respect of which the inventory,
goods, property, services or other consideration have been rejected or the
amount is in dispute, but only to the extent of such dispute, (e) that is due
from any Affiliate or Subsidiary of the Company or any Guarantor, including
without limitation those due from the Company or any Guarantor, (f) that is
payable by any person located outside the United States (which shall not be
deemed to include any territories of the United States), (g) that is payable by
the United States or any of its departments, agencies or

-5-
<PAGE> 6
instrumentalities or by any state or other governmental entity, (h) that is
payable by any person as to which 50% or more of the aggregate amount of such
accounts receivable payable by such person to the Company or any Guarantor do
not otherwise constitute Eligible Accounts Receivable, (i) that are payable by
any person that is the subject of any proceeding seeking to adjudicate it a
bankrupt or insolvent or seeking liquidation, winding up or reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief or
protection of debtors or seeking the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
property, or that is not generally paying its debts as they become due or has
admitted in writing its inability to pay its debts generally or has made a
general assignment for the benefit of creditors, (j) which is evidenced by a
promissory note or other instrument, or (k) that for any other reason is at any
time reasonably deemed by the Agent to be ineligible, and the Agent shall give
prior notice of, and the reason determined by the Agent in its sole reasonable
discretion for, any such determination of ineligibility under this clause to
the Company and each Bank.

"Eligible Inventory" shall mean, as of any date, that
inventory owned by the Company or any Guarantor that constitutes raw materials
or finished goods and in which the Company or any Guarantor has granted to the
Agent, for the benefit of the Banks, an enforceable, perfected security
interest which is not void or voidable pursuant to the Security Agreement but
shall not include any such inventory (a) that does not constitute raw materials
or finished goods readily salable or usable in the business of the Company or
any Guarantor, (b) that is located outside the United States (which shall not
be deemed to include any territories of the United States), (c) that is subject
to, or any accounts or other proceeds resulting from the sale or other
disposition thereof could be subject to, any Lien (except those in favor of the
Agent under the Security Agreement), including any sale on approval or sale or
return transaction or any consignment, (d) that is not in the possession of the
Company or any Guarantor, (e) that is held for lease or is the subject of any
lease, (f) that is subject to any trademark, trade name or licensing
arrangement, or any law, rules or regulation, that could limit or impair the
ability of the Agent to promptly exercise all rights of the Agent under the
Security Agreement, (g) if such inventory is located on premises not owned by
the Company or any Guarantor and the landlord or other owner of such premises
has not waived its distraint, lien and similar rights with respect to such
inventory and shall not have agreed to permit the Agent to enter such premises
pursuant to a waiver and agreement of such person in favor of and in form and
substance acceptable to Agent, (h) with respect to which any insurance proceeds
are not payable to the Agent as a loss payee or are payable to any loss payee
other than the Agent, the Company or any Guarantor or (i) that for any other
reason is at any time reasonably deemed by the Agent to be ineligible, and the
Agent shall give prior notice of, and the reason determined by the Agent in its
sole reasonable discretion for, any such determination of ineligibility under
this clause to the Company and each Bank.

"Environmental Certificate" shall mean an appropriately
completed environmental certificate in the form of Exhibit A attached hereto,
certified as true and correct as of such date by an executive officer of the
Company acceptable to the Agent.

-6-
<PAGE> 7
"Environmental Laws" at any date shall mean all provisions of
law, statute, ordinances, rules, regulations, judgments, writs, injunctions,
decrees, orders, awards and standards promulgated by the government of the
United States of America or any foreign government or by any state, province,
municipality or other political subdivision thereof or therein or by any court,
agency, instrumentality, regulatory authority or commission of any of the
foregoing concerning the protection of, or regulating the discharge of
substances into, the environment.

"Equivalent" of an amount of one currency (the "first
currency") denominated in another currency (the "second currency"), as of any
date of determination, shall mean the amount of the second currency which could
be purchased with the amount of the first currency at the spot or other
relevant rate of exchange quoted by the Agent at approximately 11:00 a.m.
Detroit time on such date.

"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations thereunder, and any
successor statute of similar import.

"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) which, together with the Company or any Subsidiary of the
Company, would be treated as a single employer under Section 414 of the Code.

"Eurocurrency Business Day" shall mean, with respect to any
Eurocurrency Rate Loan, a day which is both a Business Day and a day on which
dealings in Dollar deposits or the relevant Permitted Currency are carried out
in the relevant interbank market.

"Eurocurrency Interest Period" shall mean, with respect to any
Eurocurrency Rate Loan, the period commencing on the day such Eurocurrency Rate
Loan is made or converted to a Eurocurrency Rate Loan and ending on the date
one, two, three or six months thereafter, as the Company may elect under
Section 2.4 or 2.7, and each subsequent period commencing on the last day of
the immediately preceding Eurocurrency Interest Period and ending on the date
one, two, three or six months thereafter, as the Company may elect under
Section 2.4 or 2.7, provided, however, that (a) any Eurocurrency Interest
Period which commences on the last Eurocurrency Business Day of a calendar
month (or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Eurocurrency
Business Day of the appropriate subsequent calendar month, (b) each
Eurocurrency Interest Period which would otherwise end on a day which is not a
Eurocurrency Business Day shall end on the next succeeding Eurocurrency
Business Day or, if such next succeeding Eurocurrency Business Day falls in the
next succeeding calendar month, on the next preceding Eurocurrency Business
Day, and (c) no Eurocurrency Interest Period which would end after the Maturity
Date (or the Termination Date with respect to any Revolving Credit Loans) shall
be permitted.

"Eurocurrency Rate" shall mean, with respect to any
Eurocurrency Rate Loan and the related Eurocurrency Interest Period, the per
annum rate that is equal to the sum of:

-7-
<PAGE> 8
(a) the Applicable Margin, plus

(b) the rate per annum obtained by dividing (i) the per annum
rate of interest at which deposits in the Permitted Currency in which such
Eurocurrency Rate Loan is requested to be denominated for such Eurocurrency
Interest Period and in an aggregate amount comparable to the amount of such
Eurocurrency Rate Loan to be made by the Agent in its capacity as a Bank
hereunder are offered to the Agent by other prime banks in the applicable
interbank market, selected in the Agent's discretion, at approximately 11:00
a.m. London time on the second Eurocurrency Business Day prior to the first day
of such Eurocurrency Interest Period by (ii) an amount equal to one minus the
stated maximum rate (expressed as a decimal) of all reserve requirements
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves) that is specified on the first day of such Eurocurrency
Interest Period by the Board of Governors of the Federal Reserve System (or any
successor agency thereto) for determining the maximum reserve requirement with
respect to eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of such Board) maintained by a member bank of such
System;

all as conclusively determined by the Agent, such sum to be rounded up, if
necessary, to the nearest whole multiple of one one-hundredth of one percent
(1/100 of 1%).

"Eurocurrency Rate Loan" shall mean any Loan which bears
interest at the Eurocurrency Rate.

"Event of Default" shall mean any of the events or conditions
described in Section 6.1.

"Existing Loan Agreement" shall mean the loan agreement dated
as of March 27, 1992, as amended, among the Company, the banks named therein,
and NBD Bank, N.A., as agent.

"Federal Funds Rate" shall mean the per annum rate that is
equal to the per annum rate established and announced by the Agent from time to
time as the opening federal funds rate paid by the Agent in its regional
federal funds market for overnight borrowings from other banks; all as
conclusively determined by the Agent, such sum to be rounded up, if necessary,
to the nearest whole multiple of one one-hundredth of one percent (1/100 of
1%), which Federal Funds Rate shall change simultaneously with any change in
such announced rates.

"Fixed Assets" shall mean, as of any date, those tangible
fixed assets of the Company and the Guarantors in which the Agent has been
granted a first-priority perfected security interest pursuant to the Security
Agreement, valued at their appraised value by appraisers acceptable to the
Agent in its sole discretion, which appraisals must be dated within 90 days of
the date of the occurrence of any Collateral Event (either before or after the
date of such occurrence); provided, that, no credit will be given in the
Borrowing Base with respect to any fixed asset until an acceptable appraisal of
such fixed asset is delivered to the Agent.

-8-
<PAGE> 9
"Fixed Charge Coverage Ratio" of any person shall mean, as of
the end of any fiscal quarter, the ratio of (a) net income of such person plus,
all income taxes of such person, all interest paid or payable by such person on
Indebtedness of such person, all rents and other payments paid or required to
be paid by such person under any operating lease in respect of which such
person is obligated as a lessee or user that is in excess of $1,000, provided
that if the aggregate of all operating leases of the Company and its
Subsidiaries with rental payments of $1,000 or less exceeds $20,000, such
excess shall be included in this calculation, to (b) interest paid or payable
by such person on Indebtedness of such person plus all rents and other payments
paid or required to be paid by such person under any operating lease in respect
of which such person is obligated as a lessee or user that is in excess of
$1,000, provided that if the aggregate of all operating leases of the Company
and its Subsidiaries with rental payments of $1,000 or less exceeds $20,000,
such excess shall be included in this calculation.

"Floating Rate" shall mean the per annum rate equal to the sum
of (a) the Applicable Margin, plus (b) the greater of (i) the Prime Rate in
effect from time to time, and (ii) the sum of three-quarters of one percent
(3/4 of 1%) per annum plus the Federal Funds Rate in effect from time to time;
which Floating Rate shall change automatically and simultaneously with any
change in such Prime Rate or Federal Funds Rate, as the case may be.

"Floating Rate Loan" shall mean any Loan which bears interest
at the Floating Rate.

"Foreign Subsidiary" shall mean any Subsidiary incorporated or
formed in any jurisdiction other than any State of the United States of
America.

"Funded Indebtedness" of any person shall mean, as of any
date, all interest-bearing Indebtedness (including all obligations under
Capital Leases) of such person; provided, however, that Funded Indebtedness
shall not include Subordinated Debt of such person, other than Subordinated
Debt described in Section 5.2(f)(vi) which shall be included in Funded
Indebtedness.

"Generally Accepted Accounting Principles" shall mean
generally accepted accounting principles applied on a basis consistent with
that reflected in the financial statements referred to in Section 4.6.

"Guaranties" shall mean the guaranties entered into by each of
the Guarantors for the benefit of the Agent and the Banks pursuant to this
Agreement, in substantially the form of Exhibit B hereto, as amended or
modified from time to time.

"Guarantor" shall mean each Subsidiary of the Company and
each person otherwise becoming a Subsidiary of the Company, or otherwise
entering into a Guaranty, from time to time, but shall not include any Foreign
Subsidiary of the Company, except as otherwise provided in Section 2.10.

-9-
<PAGE> 10
"Indebtedness" of any person shall mean, as of any date, (a)
all obligations of such person for borrowed money, (b) all obligations of such
person as lessee under any Capital Lease, (c) all obligations which are secured
by any Lien existing on any asset or property of such person whether or not the
obligation secured thereby shall have been assumed by such person, (d) the
unpaid purchase price for goods, property or services acquired by such person,
except for trade accounts payable arising in the ordinary course of business
that are not past due within customary payment terms, (e) all obligations of
such person to purchase goods, property or services where payment therefor is
required regardless of whether delivery of such goods or property or the
performance of such services is ever made or tendered (generally referred to as
"take or pay contracts"), (f) all liabilities of such person in respect of
Unfunded Benefit Liabilities under any Plan of such person or any ERISA
Affiliate, (g) all obligations of such person in respect of any interest rate
or currency swap, rate cap or other similar transaction (valued in an amount
equal to the highest termination payment, if any, that would be payable by such
person upon termination for any reason on the date of determination), and (h)
all obligations of others similar in character to those described in clauses
(a) through (g) of this definition for which such person is contingently
liable, as obligor, guarantor, surety or in any other capacity, or in respect
of which obligations such person assures a creditor against loss or agrees to
take any action to prevent any such loss (other than endorsements of negotiable
instruments for collection in the ordinary course of business), including
without limitation all reimbursement obligations of such person in respect of
letters of credit, surety bonds or similar obligations and all obligations of
such person to advance funds to, or to purchase assets, property or services
from, any other person in order to maintain the financial condition of such
other person.

"Interest Payment Date" shall mean (a) with respect to any
Eurocurrency Rate Loan, the last day of each Eurocurrency Interest Period with
respect to such Eurocurrency Rate Loan and, in the case of any Eurocurrency
Interest Period exceeding three months, those days that occur during such
Eurocurrency Interest Period at intervals of three months after the first day
of such Eurocurrency Interest Period, and (b) in all other cases, the last
Business Day of each March, June, September and December occurring after the
date hereof, commencing with the first such Business Day occurring after the
date of this Agreement.

"Letter of Credit" shall mean an S/L/C or C/L/C having a
stated expiry date or a date upon which the draft must be reimbursed not later
than twelve months after the date of issuance and not later than the fifth
Business Day before the Termination Date, issued by the Agent on behalf of the
Banks for the account of the Company under an application and related
documentation acceptable to the Agent requiring, among other things, immediate
reimbursement by the Company to the Agent in respect of all drafts or other
demand for payment honored thereunder and all expenses paid or incurred by the
Agent relative thereto.

"Letter of Credit Advance" shall mean any issuance of a Letter
of Credit under Section 2.4 made pursuant to Section 2.1 in which each Bank
acquires a pro rata risk participation (based on such Bank's Revolving Credit
Commitment).

-10-
<PAGE> 11
"Letter of Credit Documents" shall have the meaning ascribed
thereto in Section 3.3(b).

"Lien" shall mean any pledge, assignment, hypothecation,
mortgage, security interest, deposit arrangement, option, conditional sale or
title retaining contract, sale and leaseback transaction, financing statement
filing, lessor's or lessee's interest under any lease, subordination of any
claim or right, or any other type of lien, charge, encumbrance, preferential
arrangement or other claim or right.

"Loan" shall mean any Revolving Credit Loan, any Term Loan A,
any Term Loan B and any Swing Line Loan. Any such Loan or portion thereof may
also be denominated as a Floating Rate Loan or a Eurocurrency Rate Loan, and
such Floating Rate Loans and such Eurocurrency Rate Loans are referred to
herein as "types" of Loans.

"Maturity Date A" shall mean October 11, 1995.

"Maturity Date B" shall mean October 11, 2001.

"Multiemployer Plan" shall mean any "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA or Section 414(f) of the Code.

"Net Cash Proceeds" shall mean, in connection with any
issuance or sale of any equity securities or debt securities or instruments or
the incurrence of loans, the cash proceeds received from such issuance or
incurrence, net of investment banking fees, reasonable and documented
attorneys' fees, accounting fees, underwriting discounts and commissions and
other customary fees and other costs and expenses actually incurred in
connection therewith.

"Newco" shall mean the entity or entities to be formed to
which the assets acquired in the Acquisition will be transferred, which entity
or entities shall be direct Foreign Subsidiaries of the Company.

"Note" shall mean any Revolving Credit Note, any Term Note A,
any Term Note B or any Swing Line Note.

"Optional Currency" shall mean any currency which is freely
transferrable and convertible into Dollars and approved by the Banks.

"Original Dollar Amount" shall mean, with respect to any Loan,
the Equivalent in Dollars of the original principal amount of such Loan
specified in the related request therefor given by the Company pursuant to
Section 2.4(a), as such amount is reduced by payments of principal made in
respect of such Loan in Dollars (or the Dollar Equivalent thereof in the case
of a payment made in an Optional Currency) and (b) as such amount is adjusted
pursuant to Section 3.1(c).

-11-
<PAGE> 12
"Overdue Rate" shall mean (a) in respect of principal of
Floating Rate Loans, a rate per annum that is equal to the sum of three percent
(3%) per annum plus the Floating Rate, (b) in respect of principal of
Eurocurrency Rate Loans, a rate per annum that is equal to the sum of three
percent (3%) per annum plus the per annum rate in effect thereon until the end
of the then current Eurocurrency Interest Period for such Loan and, thereafter,
a rate per annum that is equal to the sum of three percent (3%) per annum plus
the Floating Rate, and (c) in respect of other amounts payable by the Company
hereunder (other than interest), a per annum rate that is equal to the sum of
three percent (3%) per annum plus the Floating Rate.

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

"Percentage of Total Commitments" shall mean, with respect to
each Bank, the percentage set forth next to the name of such Bank on the
signature pages hereof.

"Permitted Currency" shall mean Dollars and any Optional
Currency.

"Permitted Liens" shall mean Liens permitted by Section 5.2(g)
hereof.

"Person" or "person" shall include an individual, a
corporation, an association, a partnership, a trust or estate, a joint stock
company, an unincorporated organization, a joint venture, a trade or business
(whether or not incorporated), a government (foreign or domestic) and any
agency or political subdivision thereof, or any other entity.

"Plan" shall mean any pension plan (other than a Multiemployer
Plan) subject to Title IV of ERISA or to the minimum funding standards of
Section 412 of the Code which has been established or maintained by the
Company, any Subsidiary of the Company or any ERISA Affiliate, or by any other
person if the Company, any Subsidiary of the Company or any ERISA Affiliate
could have liability with respect to such pension plan.

"Pledge Agreement" shall mean the pledge agreement
substantially in the form attached hereto as Exhibit C, as amended or modified
from time to time, to be entered into by the Company for the benefit of the
Agent and the Banks on the Effective Date pursuant to Section 2.10.

"Prime Rate" shall mean the per annum rate announced by the
Agent from time to time as its "prime rate" (it being acknowledged that such
announced rate may not necessarily be the lowest rate charged by the Agent to
any of its customers), which Prime Rate shall change simultaneously with any
change in such announced rate.

"Prohibited Transaction" shall mean any transaction involving
any Plan which is proscribed by Section 406 of ERISA or Section 4975 of the
Code.

-12-
<PAGE> 13
"Reportable Event" shall mean a reportable event as described
in Section 4043(b) of ERISA including those events as to which the thirty (30)
day notice period is waived under Part 2615 of the regulations promulgated by
the PBGC under ERISA.

"Required Banks" shall mean Banks holding not less than
sixty-six and two-thirds percent of the aggregate principal amount of the
Advances then outstanding (or sixty-six and two-thirds percent of the
Commitments if no Advances are then outstanding).

"Revolving Credit Advance" shall mean any Revolving Credit
Loan, any Swing Line Loan and any Letter of Credit Advance.

"Revolving Credit Commitment" shall mean, with respect to each
Bank, the commitment of each such Bank to make Loans and to participate in
Letter of Credit Advances made through the Agent pursuant to Section 2.1, in
amounts not exceeding in the aggregate principal amount outstanding at any
time, the Dollar Equivalent of the respective commitment amounts for each such
Bank set forth next to the name of each such Bank in the signature pages
hereof, as such amounts may be reduced from time to time pursuant to Section
2.2 and after any adjustments for any Assignments and Acceptances pursuant to
Section 8.6.

"Revolving Credit Loan" shall mean any borrowing under Section
2.4 evidenced by the Revolving Credit Notes and made pursuant to Section
2.1(a).

"Revolving Credit Notes" shall mean the promissory notes of
the Company made payable to each Bank evidencing the Revolving Credit Loans, in
substantially the form annexed hereto as Exhibit D, as amended or modified from
time to time and together with any promissory note or notes issued in exchange
or replacement therefor, and "Revolving Credit Note" shall mean any one of such
Revolving Credit Notes.

"Security Agreement" shall mean the Security Agreement
substantially in the form attached hereto as Exhibit E, to be entered into by
the Company and the Guarantors in the event of the occurrence of a Collateral
Event, pursuant to Section 2.11.

"Security Documents" shall mean the Pledge Agreement, the
Subrogation and Contribution Agreement and the Guaranties and all other
agreements and documents delivered pursuant to this Agreement or otherwise
entered into by any person to secure the obligations of the Company under this
Agreement.

"S/L/C" shall mean any standby letter of credit issued by the
Agent hereunder.

"Subordinated Debt" of any person shall mean, as of any date,
that Indebtedness of such person for borrowed money which is expressly
subordinate and junior in right and priority of payment to the Loans and other
Indebtedness of such person to the Banks in manner and by agreement
satisfactory in form and substance to the Company, the Required Banks and the
Agent.

-13-
<PAGE> 14
"Subrogation and Contribution Agreement" shall mean the
Subrogation and Contribution Agreement entered into by each of the Guarantors
in the form attached hereto as Exhibit F.

"Subsidiary" of any person shall mean any other person
(whether now existing or hereafter organized or acquired) in which (other than
directors qualifying shares required by law) at least a majority of the
securities or other ownership interests of each class having ordinary voting
power or analogous right (other than securities or other ownership interests
which have such power or right only by reason of the happening of a
contingency), at the time as of which any determination is being made, are
owned, beneficially and of record, by such person or by one or more of the
other Subsidiaries of such person or by any combination thereof. Unless
otherwise specified, reference to "Subsidiary" shall mean a Subsidiary of the
Company.

"Supplementary Loan" shall mean each loan by any Bank to the
Company outside this Agreement as described in Section 2.1(e).

"Swing Line Facility" shall have the meaning specified in
Section 2.1(c).

"Swing Line Loan" shall mean any borrowing under Section 2.4
evidenced by a Swing Line Note, and made pursuant to Section 2.1(d).

"Swing Line Note" means a promissory note of the Company
payable to the order of the Agent, in substantially the form annexed hereto as
Exhibit G, as amended or modified from time to time and together with any
promissory note or notes issued in exchange or replacement therefor.

"Tangible Net Worth" of any person shall mean, as of any date,
(a) the amount of any capital stock, paid in capital and similar equity
accounts plus (or minus in the case of a deficit) the capital surplus and
retained earnings of such person and the amount of any foreign currency
translation adjustment account shown as a capital account of such person, less
(b) the net book value of all items of the following character which are
included in the assets of such person: (i) goodwill, including without
limitation, the excess of cost over book value of any asset, other than
goodwill attributable to the Acquisition, (ii) organization or experimental
expenses, (iii) unamortized debt discount and expense, (iv) patents,
trademarks, trade names and copyrights, (v) franchises, licenses and permits,
and (vi) other assets which are deemed intangible assets under Generally
Accepted Accounting Principles.

"Term Loan A" shall mean the single borrowing under Section
2.4 evidenced by the Term Notes A and made pursuant to Section 2.1(b).

"Term Loan A Commitment" shall mean, with respect to each
Bank, the commitment of such Bank to make a portion of Term Loan A in an amount
equal to the Term Loan A Commitment amount for such Bank set forth next to the
name of such Bank on the signature pages hereof.

-14-
<PAGE> 15
"Term Loan B" shall mean the single borrowing under Section
2.4 evidenced by the Term Notes B and made pursuant to Section 2.1(c).

"Term Loan B Commitment" shall mean, with respect to each
Bank, the commitment of such Bank to make a portion of Term Loan B in an amount
equal to the Term Loan B Commitment Amount for such Bank set forth next to the
name of such Bank on the signature pages hereof.

"Term Notes A" shall mean the promissory notes of the Company
made payable to each Bank evidencing the Term Loan A, in substantially the form
annexed hereto as Exhibit H, as amended or modified from time to time and
together with any promissory note or notes issued in exchange or replacement
therefor, and "Term Note A" shall mean any one of such Term Notes A.

"Term Notes B" shall mean the promissory notes of the Company
made payable to each Bank evidencing the Term Loan B, in substantially the form
annexed hereto as Exhibit I, as amended or modified from time to time and
together with any promissory note or notes issued in exchange or replacement
therefor, and "Term Note B" shall mean any one of such Term Notes B.

"Termination Date" shall mean the earlier to occur of (a)
October 11, 1997 or such later date to which the Termination Date is extended
pursuant to Section 2.4(e), or (b) the date on which the Revolving Credit
Commitment shall be terminated pursuant to Section 2.2 or 6.2.

"Total Commitment Amount" shall mean the amount set forth on
the last page of this Agreement.

"Trigger Event" shall mean any period in which the ratio of
Consolidated Funded Indebtedness of the Company and its Subsidiaries to
Consolidated Tangible Net Worth of the Company and its Subsidiaries is greater
than 2.25 to 1.0. For the purpose of calculating such ratio under this
definition, the effect on Consolidated Tangible Net Worth of the Company and
its Subsidiaries solely attributable to the losses of Newco shall be ignored
for the period from the Effective Date through June 30, 1995.

"Unfunded Benefit Liabilities" shall mean, with respect to any
Plan as of any date, the amount of the unfunded benefit liabilities determined
in accordance with Section 4001(a)(18) of ERISA.

1.2 Other Definitions; Rules of Construction. As used
herein, the terms "Agent", "Banks", "Company" and "this Agreement" shall have
the respective meanings ascribed thereto in the introductory paragraph of this
Agreement. Such terms, together with the other terms defined in Section 1.1,
shall include both the singular and the plural forms thereof and shall be
construed accordingly. All computations required hereunder and all financial
terms used herein shall be made or construed in accordance with Generally
Accepted Accounting Principles

-15-
<PAGE> 16
unless such principles are inconsistent with the express requirements of this
Agreement. Use of the terms "herein", "hereof", and "hereunder" shall be
deemed references to this Agreement in its entirety and not to the Section or
clause in which such term appears. References to "Sections" and "subsections"
shall be to Sections and subsections, respectively, of this Agreement unless
otherwise specifically provided.

ARTICLE II
THE COMMITMENTS AND THE ADVANCES
--------------------------------

2.1 Commitments of the Banks.
------------------------

(a) Revolving Credit Advances. Each Bank
agrees, for itself only, subject to the terms and conditions of this Agreement,
to make Revolving Credit Loans to the Company pursuant to Section 2.4 and
Section 3.3 and to participate in Letter of Credit Advances to the Company
pursuant to Section 2.4, from time to time from and including the Effective
Date to but excluding the Termination Date, not to exceed in aggregate
principal amount the amount of its Revolving Credit Commitment, provided that
the aggregate Letter of Credit Advances outstanding at any time may not exceed
15% of the aggregate amount of all Revolving Credit Commitments.

(b) Term Loan A. Each Bank further agrees, for
itself only, subject to the terms and conditions of this Agreement, to make a
portion of Term Loan A to the Company on or before the closing date of the
Acquisition in an amount equal to its Term Loan A Commitment.

(c) Term Loan B. Each Bank further agrees, for
itself only, subject to the terms and conditions of this Agreement, to make a
portion of Term Loan B to the Company consisting of (i) its pro rata share
based on its Term Loan B Commitment of a draw under Term Loan B on the
Effective Date in an aggregate amount equal to $17,000,000 for the purpose of
refinancing all indebtedness under the term loan outstanding under the Existing
Loan Agreement and (ii) its pro rata share based on its Term Loan B Commitment
of a draw on or before the closing date of the Acquisition, in an amount not to
exceed the remaining amount of its Term Loan B Commitment.

(d) Swing Line Loan. (i) The Company may
request the Agent to make, and the Agent may, in its sole discretion provided
that the requirements of Section 2.6 are complied with by the Company with
respect to such request, make, Swing Line Loans to the Company from time to
time on any Business Day (but limited to one such Advance per Business Day)
during the period from the Effective Date until the Termination Date in an
aggregate principal amount not to exceed at any date the lesser of (A)
$2,500,000 (the "Swing Line Facility") and (B) the aggregate of the unused
portions of the Revolving Credit Commitments of the Banks as of such date.
Each Bank's Revolving Credit Commitment shall be deemed utilized by an amount
equal to such Bank's pro rata share (based on such Bank's Revolving Credit
Commitment) of each Swing Line Loan for purposes of determining the amount of
Revolving

-16-
<PAGE> 17
Credit Advances required to be made by such Bank, but shall not be deemed
utilized for purposes of determining commitment fees under Section 2.3(a).
Within the limits of the Swing Line Facility, so long as the Agent, in its sole
discretion, elects to make Swing Line Loans, the Company may borrow and
reborrow under this Section 2.1(d)(i).

(ii) The Agent may at any time in its
sole and absolute discretion require that any Swing Line Loan be refunded by a
Revolving Credit Loan which is a Floating Rate Loan, and upon notice thereof by
the Agent to the Company and the Banks, the Company shall be deemed to have
requested a Revolving Credit Loan bearing interest at the Floating Rate in an
amount equal to the amount of any such Swing Line Loan, and such Revolving
Credit Loan shall be made to refund such Swing Line Loan. Each Bank shall be
absolutely and unconditionally obligated (except as set forth in Section
2.1(d)(i)) to fund its pro rata share (based on such Bank's Revolving Credit
Commitment) of such Revolving Credit Loan and such obligation shall not be
affected by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Bank or the Company
or any of its Subsidiaries may have against the Agent, the Company or any of
its Subsidiaries or anyone else for any reason whatsoever; (ii) the occurrence
or continuance of a Default or an Event of Default; (iii) any adverse change in
the condition (financial or otherwise) of the Company or any of its
Subsidiaries; (iv) any breach of this Agreement by the Company or any of its
Subsidiaries or any other Bank; or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing (including the
Company's failure to satisfy any conditions contained in Article II or any
other provision of this Agreement).

(e) Supplementary Loans. Notwithstanding
anything to the contrary in this Agreement, each of the Agent, the Company and
the Banks acknowledges and agrees that each of the Banks shall independently
have the ability to make Supplementary Loans to the Company. With respect to
such Supplementary Loans: (i) the Supplementary Loans (A) shall be made
pursuant to agreements between the Company and each Bank making Supplementary
Loans, (B) shall bear interest and fees as provided in such agreements for the
sole account of the Bank making such Supplementary Loans, (C) shall not be
considered Advances under this Agreement and shall not be subject to terms and
provisions of this Agreement regarding Advances and (D) shall be considered
Indebtedness permitted under and subject to the limitation set forth in Section
5.2(f)(vii); (ii) the Company agrees to deliver immediate notice to the Agent
of the making of each Supplementary Loan and each payment thereon and (iii)
subject to the terms and conditions of this Agreement, the Revolving Credit
Advances outstanding under this Agreement shall be adjusted on the first
Business Day of each month based upon the Supplementary Loans and the Revolving
Credit Advances outstanding on the last Business Day of the preceding month
such that the ratio of each Bank's aggregate amount of Revolving Credit
Advances and Supplementary Loans to the sum of the total amount of Revolving
Credit Advances outstanding hereunder plus the total amount of the
Supplementary Loans is equal to each Bank's Percentage of Total Revolving
Credit Commitments and, for purposes of such adjustment, the Supplementary
Loans shall be deemed usage of the Revolving Credit Commitment of the Bank
making such Supplementary Loan in an amount equal to the aggregate outstanding
principal amount of Supplementary Loans made to the Company by such Bank;
provided, however, if at any time the

-17-
<PAGE> 18
aggregate outstanding principal amount of Supplementary Loans by the Banks
exceeds 10% of the Total Revolving Credit Commitment of all Banks, the Company
must request a Revolving Credit Loan, subject to the terms and conditions of
this Agreement, to refinance all outstanding Supplementary Loans. The total
amount of outstanding Revolving Credit Advances plus the total amount of
outstanding Supplementary Loans shall at no time exceed the Total Revolving
Credit Commitments.

2.2 Termination and Reduction of Commitments. (a) The
Company shall have the right to terminate in whole or reduce in part any or all
of the Commitments at any time and from time to time, provided that (i) the
Company shall give prior notice of such termination or reduction to the Agent
specifying the amount and effective date thereof, and to which Commitment such
termination or reduction is applicable, (ii) each partial reduction of any such
Commitment shall be in a minimum amount of $5,000,000 and in an integral
multiple of $1,000,000 and shall reduce the Commitments of all of the Banks
proportionately, (iii) no such termination or reduction shall be permitted with
respect to any portion of the Commitments as to which a request for an Advance
pursuant to Section 2.4 is then pending, and (iv) any such Commitment may not
be terminated if any Advances are then outstanding and may not be reduced below
the principal amount of Advances then outstanding under such Commitment. The
Commitments or any portion thereof terminated or reduced pursuant to this
Section 2.2, whether optional or mandatory, may not be reinstated.

(b) For purposes of this Agreement, a Letter of
Credit Advance (i) shall be deemed outstanding in an amount equal to the sum of
the maximum amount available to be drawn under the related Letter of Credit on
or after the date of determination and on or before the stated expiry date
thereof plus the amount of any draws under such Letter of Credit that have not
been reimbursed as provided in Section 3.3 and (ii) shall be deemed outstanding
at all times on and before such stated expiry date or such earlier date on
which all amounts available to be drawn under such Letter of Credit have been
fully drawn, and thereafter until all related reimbursement obligations have
been paid pursuant to Section 3.3. As provided in Section 3.3, upon each
payment made by the Agent in respect of any draft or other demand for payment
under any Letter of Credit, the amount of any Letter of Credit Advance
outstanding immediately prior to such payment shall be automatically reduced by
the amount of each Revolving Credit Loan deemed advanced in respect of the
related reimbursement obligation of the Company.

(c) In the event the Acquisition is not
consummated on or before December 15, 1994, (i) the Term Loan A Commitment of
each Bank shall automatically and immediately terminate, (ii) the aggregate
principal amount of Term Loan B Commitments of the Banks shall be permanently
reduced to $17,000,000 and the amortization of Term Loan B shall be adjusted
accordingly, and (iii) the aggregate principal amount of the Revolving Credit
Commitments of all of the Banks shall be permanently reduced to $45,000,000,
except to the extent otherwise permitted pursuant to Section 8.14; which
reductions shall reduce the Term Loan B Commitments and the Revolving Credit
Commitments of all of the Banks proportionately.

-18-
<PAGE> 19
2.3 Fees. (a) The Company agrees to pay to the Banks a
commitment fee on the daily average unused amount of the Revolving Credit
Commitments, for the period from the Effective Date to but excluding the
Termination Date, at a rate equal to the Applicable Margin. Accrued commitment
fees shall be payable quarterly in arrears on the last Business Day of each
March, June, September and December, commencing on the first such Business Day
occurring after the date of this Agreement and on the Termination Date. For
the purpose of calculating the commitment fee under this Section 2.3(a) only,
but not for the purpose of the Borrowing Base calculation pursuant to Section
2.12, the aggregate amount of S/L/Cs outstanding shall constitute usage of the
Revolving Credit Commitment while the aggregate amount of C/L/Cs outstanding
shall not constitute usage of the Revolving Credit Commitment. All Letters of
Credit shall constitute usage of the Borrowing Base pursuant to Section 2.12.

(b) In addition to the commitment fees payable
pursuant to Section 2.3(a), the Company agrees to pay to the Banks closing fees
on the Effective Date as set forth on Schedule 2.3(b).

(c) The Company agrees to pay (i) with respect to
S/L/Cs, (A) a fee to the Banks computed at the Applicable Margin of the maximum
amount available to be drawn from time to time under such S/L/C for the period
from and including the date of issuance of such S/L/C to and including the
stated expiry date of such S/L/C, which fee shall be paid annually in advance
at the time such S/L/C is issued, and (B) an additional fee to the Agent for
its own account computed at the rate of one-quarter of one percent (1/4 of 1%)
per annum of such maximum amount for such period, and (ii) with respect to
C/L/Cs, (A) a fee to the Banks computed at the rate of one-quarter of one
percent (1/4 of 1%) per annum, which fees shall be paid at each time as any
C/L/C is presented or drawn upon, in whole or in part, and shall be computed
upon the amount of such C/L/C which is presented or drawn upon, in whole or in
part, and if any C/L/C or portion thereof is not drawn upon, the Company shall
pay an expiry fee to the Banks in the amount of $50 per C/L/C and (B) an
additional fee to the Agent for its own account computed at the rate of
one-eighth of one percent (1/8 of 1%) per annum, which fee shall be computed on
the amount and paid on the date described in clause (ii)(A) above. Such fees
are nonrefundable and the Company shall not be entitled to any rebate of any
portion thereof if such Letter of Credit does not remain outstanding through
its stated expiry date or for any other reason. The Company further agrees to
pay to the Agent, on demand, such other customary administrative fees, charges
and expenses of the Agent in respect of the issuance, negotiation, acceptance,
amendment, transfer and payment of such Letter of Credit or otherwise payable
pursuant to the application and related documentation under which such Letter
of Credit is issued in accordance with a schedule of fees provided by the Agent
to the Company.

(d) In the event the Acquisition is not
consummated on or before December 15, 1994, the Company agrees to pay to the
Banks a breakage fee in the amount of fifteen one-hundredths of one percent
(15/100 of 1%) of the amount of the Term Loan A Commitment and the amount of
the Revolving Credit Commitment which is required to be terminated pursuant to
Section 2.2.

-19-
<PAGE> 20
(e) The Company agrees to pay to the Agent an
agency fee for its services as Agent under this Agreement in such amounts as
may from time to time be agreed upon by the Company and the Agent.

(f) The Company also agrees to pay to the Banks
an extension fee with respect to each extension of the Termination Date
pursuant to Section 2.4(e) in the amount of one-eighth of one percent (1/8 of
1%) on the amount of the Revolving Credit Commitment, which extension fee shall
be payable fifty percent (50%) upon the execution of the extension agreement
and the remaining fifty percent (50%) on the first anniversary of the execution
of such extension agreement.

2.4 Disbursement of Advances. (a)(i) Except with respect
to Swing Line Loans, the Company shall give the Agent notice of its request for
each Advance in substantially the form of Exhibit J hereto not later than 10:00
a.m. Detroit time (A) four Eurocurrency Business Days prior to the date such
Advance is requested to be made if such Advance is to be made as a Eurocurrency
Rate Borrowing, (B) five Business Days prior to the date any Letter of Credit
Advance is requested to be made, (C) on the Business Day such Advance is
requested to be made in all other cases, which notice shall specify whether a
Eurocurrency Rate Borrowing, a Floating Rate Borrowing, or a Letter of Credit
Advance is requested and, in the case of each requested Eurocurrency Rate
Borrowing, the Eurocurrency Interest Period to be initially applicable to such
Borrowing, and the Permitted Currency in which such Loan is requested to be
denominated and, in the case of each Letter of Credit Advance, such information
as may be necessary for the issuance thereof by the Agent. The Agent, not
later than 1:00 p.m. Detroit time the Business Day such notice of a Floating
Rate Borrowing (other than a Swing Line Loan) is given, and not later than the
Business Day next succeeding the day such notice is given in all other cases,
shall provide notice of such requested Advance to each Bank.

(ii) With respect to Swing Line Loans, the Company
shall give the Agent notice of its request for each Swing Line Loan in
substantially the form of Exhibit J hereto not later than 2:30 p.m. Detroit
time on the same Business Day any Swing Line Loan is requested to be made. The
Agent, not later than 11:00 a.m. Detroit time the Business Day next succeeding
the day such notice of a Swing Line Loan is given, shall provide notice of each
Swing Line Loan to each Bank in the event such Swing Line Loan is not paid in
full by the Company prior to the time such notice is given.

(iii) Subject to the terms and conditions of this
Agreement, the proceeds of each such requested Advance shall be made available
to the Company by depositing the proceeds thereof, in the case of any Advance
denominated in Dollars, in immediately available funds, in an account
maintained and designated by the Company at the principal office of the Agent
and, in all other cases, in an account maintained and designated by the Company
at a bank acceptable to the Agent in the principal financial center of the
country issuing the Permitted Currency in which such Loan is denominated or in
such other reasonable place specified by the Agent. Subject to the terms and
conditions of this Agreement, the Agent shall, on the date any Letter of Credit
Advance is requested to be made, issue the related Letter of Credit on behalf
of

-20-
<PAGE> 21
the Banks for the account of the Company. Notwithstanding anything herein to
the contrary, the Agent may decline to issue any requested Letter of Credit on
the basis that the beneficiary, the purpose of issuance or the terms or the
conditions of drawing are unacceptable to it in its discretion.

(b) Each Bank, on the date any Borrowing in the
form of a Loan (other than a Swing Line Loan) is required to be made, shall
make its pro rata share of such Borrowing available in immediately available,
freely transferable, cleared funds for disbursement to the Company pursuant to
the terms and conditions of this Agreement, in the case of any Borrowing
denominated in Dollars, at the principal office of the Agent and, in all other
cases, to the account of the Agent at its designated branch or correspondent
bank in the country issuing the Permitted Currency in which such Borrowing is
denominated or in such other reasonable place specified by the Agent. Unless
the Agent shall have received notice from any Bank prior to the date such
Borrowing is requested to be made under this Section 2.4 that such Bank will
not make available to the Agent such Bank's pro rata portion of such Borrowing,
the Agent may assume that such Bank has made such portion available to the
Agent on the date such Borrowing is requested to be made in accordance with
this Section 2.4. If and to the extent such Bank shall not have so made such
pro rata portion available to the Agent, the Agent may (but shall not be
obligated to) make such amount available to the Company, and such Bank and the
Company severally agree to pay to the Agent forthwith on demand such amount
together with interest thereon, for each day from the date such amount is made
available to the Company by the Agent until the date such amount is repaid to
the Agent, at (i) the rate per annum equal to the interest rate applicable to
such Borrowing during such period in the case of the Company and (ii) the rate
per annum equal to the Federal Funds Rate during such period in the case of any
Bank. If such Bank shall pay such amount to the Agent together with interest,
such amount so paid shall constitute a Loan by such Bank as a part of such
Borrowing for purposes of this Agreement. The failure of any Bank to make its
pro rata portion of any such Borrowing available to the Agent shall not relieve
any other Bank of its obligations to make available its pro rata portion of
such Borrowing on the date such Borrowing is requested to be made, but no Bank
shall be responsible for failure of any other Bank to make such pro rata
portion available to the Agent on the date of any such Borrowing.

(c) All Revolving Credit Loans made under this
Section 2.4 shall be evidenced by the Revolving Credit Notes and the Term
Loans made under this Section 2.4 shall be evidenced by the Term Notes, and
all such Loans shall be due and payable and bear interest as provided in
Article III. Each Bank is hereby authorized by the Company to record on the
schedule attached to the Notes, or in its books and records, the date, and
amount and type of each Loan and the duration of the related Eurocurrency
Interest Period (if applicable), the amount of each payment or prepayment of
principal thereon, and the other information provided for on such schedule,
which schedule or books and records, as the case may be, shall constitute prima
facie evidence of the information so recorded, provided, however, that failure
of any Bank to record, or any error in recording, any such information shall
not relieve the Company of its obligation to repay the outstanding principal
amount of the Loans, all accrued interest thereon and other amounts payable
with respect thereto in accordance with the terms of the Notes and this
Agreement. Subject to the terms and conditions of this Agreement, the Company
may borrow

-21-
<PAGE> 22
Revolving Credit Loans under this Section 2.4 and under Section 3.3, prepay
Revolving Credit Loans pursuant to Section 3.1 and reborrow Revolving Credit
Loans but not Term Loans under this Section 2.4.

(d) Nothing in this Agreement shall be construed
to require or authorize any Bank to issue any Letter of Credit, it being
recognized that the Agent has the sole obligation under this Agreement to issue
Letters of Credit on behalf of the Banks, and the Revolving Credit Commitment
of each Bank with respect to Letter of Credit Advances is expressly conditioned
upon the Agent's performance of such obligations. Upon such issuance by the
Agent, each Bank shall automatically acquire a pro rata risk participation
interest in such Letter of Credit Advance based on its respective Revolving
Credit Commitment. If the Agent shall honor a draft or other demand for
payment presented or made under any Letter of Credit, the Agent shall provide
notice thereof to each Bank on the date such draft or demand is honored unless
the Company shall have satisfied its reimbursement obligation under Section 3.3
by payment to the Agent on such date. Each Bank, on such date, shall make its
pro rata share of the amount paid by the Agent available in immediately
available funds at the principal office of the Agent for the account of the
Agent. If and to the extent such Bank shall not have made any required pro
rata portion available to the Agent, such Bank and the Company severally agree
to pay to the Agent forthwith on demand such amount together with interest
thereon, for each day from the date such amount was paid by the Agent until
such amount is so made available to the Agent at (i) the per annum rate equal
to the interest rate applicable during such period to the related Loan
disbursed under Section 3.3 in respect of the reimbursement obligation of the
Company in the case of the Company and (ii) the rate per annum equal to the
Federal Funds Rate during such period in the case of any Bank. If such Bank
shall pay such amount to the Agent together with such interest, such amount so
paid shall constitute a Revolving Credit Loan by such Bank as part of the
Revolving Credit Borrowing disbursed in respect of the reimbursement obligation
of the Company under Section 3.3 for purposes of this Agreement. The failure
of any Bank to make its pro rata portion of any such amount paid by the Agent
available to the Agent shall not relieve any other Bank of its obligation to
make available its pro rata portion of such amount, but no Bank shall be
responsible for failure of any other Bank to make such pro rata portion
available to the Agent.

(e) The Banks agree that the then existing
Termination Date shall automatically be extended for a period of two years
beyond the then existing Termination Date on the second anniversary of the
Effective Date (i.e., October 11, 1996) and on such date every two years
thereafter (i.e., October 11, 1998, October 11, 2000, etc.). As an example of
the foregoing, the Termination Date shall be extended on October 11, 1996 to
October 11, 1999 and the Termination Date shall be further extended on October
11, 1998 to October 11, 2001. Such extension shall be automatic unless either
(i) the Company delivers notice in writing to the Agent of its election not to
extend the Termination Date 150 days prior to the date such extension is to be
effective or (ii) the Banks fail to deliver notice of their agreement to extend
the Termination Date to the Company 120 days prior to the date such extension
is to be effective. Each of the Banks agrees to provide notice in writing to
the Agent of its agreement or refusal to extend such Termination Date 120 days
prior to the date such extension is to be effective; provided, however, that
the failure of any Bank to so communicate its agreement or refusal shall be
deemed to be

-22-
<PAGE> 23
such Bank's refusal to so extend the Termination Date. The determination to
extend or not to extend the Termination Date shall be given or withheld by each
Bank in its absolute and sole discretion and any such agreement or refusal once
given shall not be revocable by any Bank prior to the then applicable
Termination Date. No extension of the Termination Date shall in any event be
effective until the Agent shall have received agreements to so extend from each
of the Banks; provided, however, that if any Bank refuses to extend the
Termination Date, the Agent shall provide notice to the consenting Banks of
such refusal and each of the consenting Banks shall have five Business Days to
either revoke or confirm its decision to extend the Termination Date and, in
the event that any or all of the consenting Banks confirm their respective
decisions to extend (i) the Revolving Credit Commitment of each Bank shall
remain unchanged and the Total Commitment and the Percentage of Total
Commitments shall be modified accordingly or (ii) additional lenders shall be
added to the Agreement pursuant to Section 8.14, provided, that, each of the
consenting Banks shall have the right of first refusal to accept a pro rata
increase in any refusing Bank's Commitments before any additional lender is
added hereto.

2.5 Conditions for First Disbursement. The obligation of
the Banks to make the first Advance hereunder is subject to receipt by each
Bank and the Agent of the following documents and completion of the following
matters, in form and substance satisfactory to each Bank and the Agent:

(a) Charter Documents. Certificates of recent
date of the appropriate authority or official of the Company's and each
Guarantor's respective state of incorporation listing all charter documents of
the Company and each Guarantor, respectively, on file in that office and
certifying as to the good standing and corporate existence of the Company and
each Guarantor, respectively, together with copies of such charter documents of
the Company and each Guarantor, certified as of a recent date by such authority
or official and certified as true and correct as of the Effective Date by a
duly authorized officer of the Company;

(b) By-Laws and Corporate Authorizations. Copies
of the by-laws of the Company and each Guarantor together with all authorizing
resolutions and evidence of other corporate action taken by the Company and
each Guarantor to authorize the execution, delivery and performance by the
Company and each Guarantor of this Agreement, the Notes and the Security
Documents to which the Company and such Guarantor, respectively is a party and
the consummation by the Company and such Guarantor, respectively of the
transactions contemplated hereby, certified as true and correct as of the
Effective Date by a duly authorized officer of the Company and each Guarantor,
respectively;

(c) Incumbency Certificate. Certificates of
incumbency of the Company and each Guarantor containing, and attesting to the
genuineness of, the signatures of those officers authorized to act on behalf of
the Company and such Guarantor in connection with this Agreement, the Notes and
the Security Documents to which the Company or such Guarantor is a party and
the consummation by the Company and such Guarantor of the transactions
contemplated hereby, certified as true and correct as of the Effective Date by
a duly authorized officer of the Company and each Guarantor;

-23-
<PAGE> 24
(d) Notes. The Notes duly executed on behalf of
the Company for each Bank;

(e) Security Documents. The Pledge Agreement
duly executed by the Company, together with blank stock powers and all original
stock certificates, the Guaranties duly executed on behalf of each Guarantor,
granting to the Banks and the Agent the collateral and security intended to be
provided pursuant to Section 2.10, and the Subrogation and Contribution
Agreement duly executed on behalf of each Guarantor and the Security Agreement,
together with all financing statements, duly executed on behalf of the Company
and each Guarantor, subject to Section 2.11;

(f) Legal Opinions. The favorable written
opinion of counsel for the Company and each Guarantor, with respect to each of
the matters set forth in Article IV (other than Section 4.6, 4.7, 4.9, 4.10,
4.11, 4.12 and 4.13) and paragraph 6 of the Guaranties and as to such other
matters as the Banks and the Agent may reasonably request;

(g) Consents, Approvals, Etc. Copies of all
governmental and nongovernmental consents, approvals, authorizations,
declarations, registrations or filings, if any, required on the part of the
Company or any Guarantor in connection with the execution, delivery and
performance of this Agreement, the Notes, the Security Documents or the
transactions contemplated hereby or as a condition to the legality, validity or
enforceability of this Agreement, the Notes or any of the Security Documents,
certified as true and correct in full force and effect as of the Effective Date
by a duly authorized officer of the Company, or if none are required, a
certificate of such officer to that effect;

(h) Fees. The closing fees described in Section
2.3(b)(i);

(i) Environmental Certificate. An Environmental
Certificate dated no earlier than seven days prior to the Effective Date; and

(j) Lien Searches. Results of searches, in form
and scope and as of such dates as are satisfactory to the Agent, of UCC, tax,
judgment and all other liens which may have been filed against the Company or
any Guarantor.

2.6 Further Conditions for Disbursement. (a) The
obligation of the Banks to make any Advance (including the first Advance), or
any continuation or conversion under Section 2.7, is further subject to the
satisfaction of the following conditions precedent:

(i) The representations and warranties
contained in Article IV hereof and in the Security Documents shall be true and
correct on and as of the date such Advance is made (both before and after such
Advance is made) as if such representations and warranties were made on and as
of such date;

-24-
<PAGE> 25
(ii) No Event of Default and no Default
shall exist or shall have occurred and be continuing on the date such Advance
is made (whether before or after such Advance is made); and

(iii) In the case of any Letter of Credit
Advance, the Company shall have delivered to the Agent an application for the
related Letter of Credit and other related documentation requested by and
acceptable to the Agent appropriately completed and duly executed on behalf of
the Company.

The Company shall be deemed to have made a representation and warranty to the
Banks at the time of the making of, and the continuation or conversion of, each
Advance to the effects set forth in clauses (i) and (ii) of this Section
2.6(a). For purposes of this Section 2.6(a), the representations and
warranties contained in Section 4.6 hereof shall be deemed made with respect to
both the financial statements referred to therein and the most recent financial
statements delivered pursuant to Section 5.1(d)(ii) and (iii).

(b) The obligation of the Banks to make the Term
Loan A and the second draw of Term Loan B hereunder is further subject to
receipt by each Bank and the Agent of evidence satisfactory to the Banks that
the Acquisition has been consummated.

2.7 Subsequent Elections as to Borrowings. The Company
may elect (a) to continue a Eurocurrency Rate Borrowing of one type, or a
portion thereof, as a Eurocurrency Rate Borrowing or (b) may elect to convert a
Eurocurrency Rate Borrowing, or a portion thereof, to a Floating Rate Borrowing
or (c) elect to convert a Floating Rate Borrowing, or a portion thereof, to a
Eurocurrency Rate Borrowing, or (d) elect to convert a Borrowing denominated in
a Permitted Currency to a Borrowing denominated in another Permitted Currency,
in each case by giving notice thereof to the Agent in substantially the form of
Exhibit K hereto not later than 10:00 a.m. Detroit time four Eurocurrency
Business Days prior to the date any such continuation of or conversion to a
Eurocurrency Rate Borrowing is to be effective and not later than 10:00 a.m.
Detroit time one Business Day prior to the date such continuation or conversion
is to be effective in all other cases, provided that an outstanding
Eurocurrency Rate Borrowing may only be converted on the last day of the then
current Eurocurrency Interest Period with respect to such Borrowing, and
provided, further, if a continuation of a Borrowing as, or a conversion of a
Borrowing to, a Eurocurrency Rate Borrowing is requested, such notice shall
also specify the Eurocurrency Interest Period to be applicable thereto upon
such continuation or conversion. The Agent, not later than the Business Day
next succeeding the day such notice is given, shall provide notice of such
election to the Banks; and provided, further, that a Loan may not be converted
to a Swing Line Loan. If the Company shall not timely deliver such a notice
with respect to any outstanding Eurocurrency Rate Borrowing, the Company shall
be deemed to have elected to convert such Eurocurrency Rate Borrowing to a
Floating Rate Borrowing on the last day of the then current Eurocurrency
Interest Period with respect to such Borrowing.

-25-
<PAGE> 26
2.8 Limitation of Requests and Elections. (a)
Notwithstanding any other provision of this Agreement to the contrary, if, upon
receiving a request for a Eurocurrency Rate Borrowing pursuant to Section 2.4,
or a request for a continuation of a Eurocurrency Rate Borrowing as a
Eurocurrency Rate Borrowing, or a request for a conversion of a Floating Rate
Borrowing to a Eurocurrency Rate Borrowing pursuant to Section 2.7 or a request
for a conversion of a Borrowing denominated in a Permitted Currency to a
Borrowing denominated in another Permitted Currency, (i) in the case of any
Eurocurrency Rate Borrowing, deposits in the relevant Permitted Currency for
periods comparable to the Interest Period elected by the Company are not
available to any Bank in the relevant interbank market, or (ii) the applicable
interest rate will not adequately and fairly reflect the cost to any Bank of
making, funding or maintaining the related Eurocurrency Rate Borrowing or
(iii) by reason of national or international financial, political or economic
conditions or by reason of any applicable law, treaty, rule or regulation
(whether domestic or foreign) now or hereafter in effect, or the interpretation
or administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Bank with any
guideline, request or directive of such authority (whether or not having the
force of law), including without limitation exchange controls, it is
impracticable, unlawful or impossible for (A) any Bank to make or fund the
relevant Borrowing or to continue such Borrowing as a Borrowing of the then
existing type or to convert a Borrowing to such a Borrowing, or (B) the Company
to make or any Bank to receive any payment under this Agreement at the place
specified for payment hereunder or to freely convert any amount paid into
Dollars at market rates of exchange or to transfer any amount paid or so
converted to the address of its principal office specified in Section 8.2, then
the Company shall not be entitled, so long as such circumstances continue, to
request and the Banks shall not be obligated to make (so long as such
circumstances exist) a Eurocurrency Rate Borrowing pursuant to Section 2.4 or a
continuation of or conversion to a Eurocurrency Rate Borrowing pursuant to
Section 2.7. In the event that such circumstances no longer exist, the Banks
shall again consider requests for Eurocurrency Rate Borrowings pursuant to
Section 2.4, and requests for continuations of and conversions to Eurocurrency
Rate Borrowings pursuant to Section 2.7.

(b) Notwithstanding any other provision of this
Agreement to the contrary and in order to give effect to the provisions of
Section 3.1(b), the Company shall make requests for Eurocurrency Rate
Borrowings pursuant to Section 2.4, and requests for continuations of and
conversions to Eurocurrency Rate Borrowings pursuant to Section 2.7, such that,
on each date that any scheduled principal payment is due with respect to any
Term Loan pursuant to Section 3.1(a), either Floating Rate Loans, or
Eurocurrency Rate Loans having a Eurocurrency Interest Period ending on such
date, or any combination thereof, are outstanding on such date in an aggregate
outstanding principal amount not less than the amount of such principal
payment.

2.9 Minimum Amounts; Limitation on Number of Borrowings.
Except for (a) Advances and conversions thereof which exhaust the entire
remaining amount of the Commitments and (b) payments required pursuant Section
3.8, each Borrowing and each continuation or conversion pursuant to Section 2.7
and each prepayment thereof shall be in a minimum amount of, in the case of
Eurocurrency Rate Borrowings, $5,000,000 and in integral multiples of
$1,000,000, and in the case of Floating Rate Borrowings, $500,000 and in
integral

-26-
<PAGE> 27
multiples of $100,000, and each Letter of Credit Advance shall be in a minimum
amount of $100,000. No more than eight Eurocurrency Interest Periods shall be
permitted to exist at any one time with respect to all Borrowings outstanding
hereunder from time to time.

2.10 Security and Collateral. To secure the payment when
due of the Notes and all other obligations of the Company under this Agreement
to the Banks and the Agent, the Company shall execute and deliver, or cause to
be executed and delivered, to the Banks and the Agent Security Documents
granting the following:

(a) Guarantees of all Subsidiaries of the
Company, provided, that guarantees shall not be required from any Foreign
Subsidiary unless (i) such Foreign Subsidiary has assets in excess of
$5,000,000, tested on an on-going basis, and (ii) the provisions of Section 957
of the Code shall not have a material adverse effect on the Company in the
event a Guaranty is given; and

(b) Pledges of 66% of all outstanding capital
stock of each Foreign Subsidiary owned by the Company provided, however, that
after the occurrence of a Collateral Event, the Company shall, upon request of
the Required Banks, deliver to the Agent for the benefit of the Banks 100% of
the capital stock of each Foreign Subsidiary.

2.11 Deferred Pledge. The Company, the Banks and the
Agent acknowledge and agree that the Security Agreement and the financing
statements executed and delivered to the Agent pursuant to Section 2.5(e) shall
be held in escrow by the Agent until the occurrence of a Collateral Event.
Upon the occurrence of a Collateral Event, the Security Agreement and all
financing statements shall be automatically and immediately released from
escrow and security interest granted thereunder shall become automatically and
immediately effective in order to grant to the Agent for the benefit of the
Banks to secure all present and future indebtedness, obligations and
liabilities of the Company and each Guarantor pursuant to this Agreement, the
Notes and the Security Documents a perfected and enforceable first lien and
security interest in all present and future accounts, documents, instruments,
general intangibles, chattel paper, furniture, fixtures, machinery, equipment,
inventory and all other personal property and intangible assets of the Company
and the Guarantors, including but not limited to all patents, trademarks,
industrial designs, masks, trade names, copyrights, franchises, licenses and
permits and the goodwill associated therewith and all federal and state
applications and registrations therefor, together with any and all additional
Collateral (as defined in the Security Agreement) (as those terms are defined
in the Uniform Commercial Code existing in the State of Michigan) of the
Company and the Guarantors, whether now existing or hereafter arising. Upon
the occurrence of a Collateral Event, the Agent shall immediately file all
financing statements held in escrow by the Agent and the Company and the
Guarantors agree to execute any additional financing statements, each in form
and substance satisfactory to the Agent and the Required Banks, as may be
requested by the Agent and the Required Banks (the Security Agreement, together
with all such financing

-27-
<PAGE> 28
statements hereinafter collectively referred to as the "Additional Security
Documents"). Upon release from escrow of such Additional Security Documents,
all such Additional Security Documents shall be deemed "Security Documents" for
purposes of this Agreement. Upon the occurrence of a Trigger Event, the
Company agrees it shall furnish to the Banks and the Agent, not later than 30
calendar days after and as of the end of each month, a Borrowing Base
Certificate in the form attached hereto as Exhibit L describing in reasonable
detail the amount of Eligible Accounts Receivable, Eligible Inventory and Fixed
Assets as of the end of such month, certified as correct by the chief financial
officer of the Company, together with schedules of accounts receivable and
inventory of the Company and the Guarantors as of the end of such month
indicating the total of accounts receivable by type, by terms, and by age,
describing any returns, defenses, setoffs or pertinent information in
connection therewith, and indicating the types of inventory, months on hand,
amounts, locations and values of the type of inventory. The Company and the
Guarantors also agree to make any amendments which may be necessary to this
Agreement or any Security Document in connection with the execution and
delivery of the Additional Security Documents.

The Company and the Guarantors hereby irrevocably appoint the
Agent to act as, and the Agent shall have the right to act as, the Company's
lawful attorney-in-fact, with full power of substitution, in the name of the
Company and the Guarantors, or any of them, to execute the Additional Security
Documents and to take generally any action in connection with the Additional
Security Documents, including, without limitation, the filing of any financing
statements and other documents in order to perfect the security interests of
the Banks; provided, however, that the Agent shall not exercise its rights as
attorney-in-fact unless and until a Collateral Event occurs and the Company and
the Guarantors have failed to execute and deliver the Additional Security
Documents within 5 calendar days after demand by the Agent.

2.12 Borrowing Base. Upon the occurrence of a Trigger
Event, the aggregate outstanding amount of Revolving Credit Advances plus the
aggregate outstanding amount of Supplementary Loans shall not at any time
thereafter exceed the Borrowing Base. If such Revolving Credit Advances plus
such Supplementary Loans shall exceed the Borrowing Base, the Company shall
forthwith pay to the Banks an amount not less than the amount of such excess
for application to the outstanding principal amount of the Revolving Credit
Loans, provided that if any such prepayment would be in excess of the
outstanding amount of the Revolving Credit Loans, the Company shall deliver
cash collateral to the Agent to secure the outstanding Letters of Credit in the
amount of such excess which is greater than the outstanding Revolving Credit
Loans and the Company hereby grants to the Agent, for the benefit of the Banks,
a first priority lien and security interest in such collateral, and all such
cash collateral shall be under the sole and exclusive control of the Agent, for
the benefit of the Banks.

-28-
<PAGE> 29
ARTICLE III
PAYMENTS AND PREPAYMENTS OF ADVANCES
------------------------------------

3.1 Principal Payments.
------------------

(a) Unless earlier payment is required under this
Agreement (i) the Company shall pay to the Banks on the Termination Date the
entire outstanding principal amount of the Revolving Credit Loans, (ii) the
Company shall pay to the Banks the outstanding principal amount of the Term
Loan A on Maturity Date A and (iii) the Company shall pay to the Banks the
outstanding principal amount of the Term Loan B in twelve equal quarterly
installments in the amount of $1,000,000 followed by sixteen equal quarterly
installments in the amount of $3,937,500, payable on the last Business Day of
each March, June, September and December commencing on the first such Business
Day after the Effective Date, to and including the Maturity Date B, when the
entire outstanding principal amount of the Term Loan B shall be due and
payable. Notwithstanding any other term or provision of this Agreement, the
Company may request a Revolving Credit Loan for the purpose of repaying the
Term Loan A if, after the disbursement of a Revolving Credit Loan for such
purpose, the ratio of Funded Indebtedness to Cash Flow would be less than 3.0
to 1.0, as calculated in the manner set forth in Section 5.2(b).

(b) The Company may at any time and from time to
time prepay all or a portion of the Loans, without premium or penalty, provided
that (i) the Company may not prepay any portion of any Loan as to which an
election of or a conversion to a Eurocurrency Rate Loan is pending pursuant to
2.7, (ii) unless earlier payment is required under this Agreement, any
Eurocurrency Rate Loan may only be prepaid on the last day of the then current
Eurocurrency Interest Period with respect to such Loan, and (iii) such
prepayment shall only be permitted if the Company shall have given not less
than one days' notice thereof in the case of prepayment of any Floating Rate
Loan and ten days' notice thereof for all other Loans, in each case such notice
specifying the Loan or portion thereof to be so prepaid and shall have paid to
the Banks, together with such prepayment of principal, all accrued interest to
the date of payment on such Loan or portion thereof so prepaid and all amounts
owing to the Banks under Section 3.9 in connection with such prepayment. Upon
the giving of such notice, the aggregate principal amount of such Loan or
portion thereof so specified in such notice, together with such accrued
interest and other amounts, shall become due and payable on the specified
prepayment date.

(c) In addition to all other payments of the Term
Loans required hereunder, the Company shall prepay the Term Loan A by an amount
equal to 100% of the Net Cash Proceeds of any equity offering and/or debt
offering.

(d) All prepayments of the Term Loans, whether
optional or mandatory, shall first be applied to principal of Term Loan A
until paid in full, and thereafter, to Term Loan B, to be applied to scheduled
installments of Term Loan B in the inverse order of their maturities until paid
in full. No partial prepayment of either Term Loan shall reduce the amount or
defer the date of the scheduled installments of principal required to be paid
thereon.

-29-
<PAGE> 30
(e) If, pursuant to Section 2.7, a Borrowing, or
portion thereof, is continued or converted, such Borrowing or portion thereof
shall be repaid on the last day of the related Interest Period in the Permitted
Currency in which such Borrowing is then denominated and (i) in the case of any
conversion, the Agent shall readvance to the Company the Equivalent of the
Original Dollar Amount of the Borrowing or portion thereof as has been so
repaid by the Company in the Permitted Currency requested pursuant to Section
2.7, and (ii) in the case of any continuation, the Agent shall readvance to the
Company the same amount of such Permitted Currency as has been so repaid. For
purposes of effecting the repayment required by this Section 3.1(e), the Agent
shall apply the proceeds of such readvance toward the repayment of such
Borrowing or portion thereof on the last day of the related Interest Period.
In the case of any conversion, the Agent shall be deemed to have applied the
proceeds of such advance toward the purchase of the Permitted Currency to be
repaid and to have applied the proceeds of such purchase toward such repayment.
If after any such application there shall remain owing an amount of the
Permitted Currency due to the Agent, for the benefit of the Banks, or if an
excess of such Permitted Currency shall result, the Company shall pay to the
Banks, or the Banks shall pay to the Company, as the case may be, the amount of
such deficiency or such excess. In the case of any continuation, on the last
day of such Interest Period, the Original Dollar Amount of such Borrowing or
portion thereof shall be adjusted to the amount in Dollars resulting from the
conversion of the amount of such Permitted Currency so readvanced to Dollars
determined as of the second Business Day preceding such day. If, after such
adjustment of the Original Dollar Amount of such Borrowing or portion thereof,
the Original Dollar Amount of all Advances then outstanding under this
Agreement would exceed the aggregate amount of the Commitments of the Banks,
the Company shall repay to the Banks on the last day of such related Interest
Period an amount in the Permitted Currency in which such Borrowing is
denominated equal to the amount of such excess or in full if such excess
exceeds the amount of such Borrowing, together with all amounts owing to the
Banks under Section 3.9 in connection therewith.

3.2 Interest Payments. The Company shall pay interest to
the Banks on the unpaid principal amount of each Loan, for the period
commencing on the date such Loan is made until such Loan is paid in full, on
each Interest Payment Date and at maturity (whether at stated maturity, by
acceleration or otherwise), and thereafter on demand, at the following rates
per annum:

(a) During such periods that such Loan is a
Floating Rate Loan, the Floating Rate.

(b) During such periods that such Loan is a
Eurocurrency Rate Loan, the Eurocurrency Rate applicable to such Loan for each
related Eurocurrency Interest Period.

Notwithstanding the foregoing paragraphs (a) and (b), the Company shall pay
interest on demand at the Overdue Rate on the outstanding principal amount of
any Loan and any other amount payable by the Company hereunder (other than
interest) which is not paid in full when due (whether at stated maturity, by
acceleration or otherwise) for the period commencing on the due date thereof
until the same is paid in full.

-30-
<PAGE> 31
3.3 Letter of Credit Reimbursement Payments. (a) (i) The
Company agrees to pay to the Agent, on the day on which the Agent shall honor a
draft or other demand for payment presented or made under any Letter of Credit,
an amount equal to the amount paid by the Agent in respect of such draft or
other demand under such Letter of Credit and all expenses paid or incurred by
the Agent relative thereto. Unless the Company shall have made such payment to
the Banks on such day, upon each such payment by the Agent, the Agent shall be
deemed to have disbursed to the Company, and the Company shall be deemed to
have elected to satisfy its reimbursement obligation by, a Revolving Credit
Loan bearing interest at the Floating Rate for the account of the Banks in an
amount equal to the amount so paid by the Agent in respect of such draft or
other demand under such Letter of Credit. Such Revolving Credit Loan shall be
disbursed and, to the extent of the Revolving Credit Loan so disbursed, the
reimbursement obligation of the Company under this Section 3.3 shall be deemed
satisfied.

(ii) If for any reason (including without
limitation as a result of the occurrence of an Event of Default with respect to
the Company or any of its Subsidiaries pursuant to Section 6.1(h)), Floating
Rate Loans may not be made by the Banks as described in Section 3.3(a)(i), then
(A) the Company agrees that each reimbursement amount not paid pursuant to the
first sentence of Section 3.3(a)(i) shall bear interest, payable on demand by
the Agent, at the Overdue Rate, and (B) effective on the date each such
Floating Rate Loan would otherwise have been made, each Bank severally agrees
that it shall unconditionally and irrevocably, without regard to the occurrence
of any Default or Event of Default, in lieu of a deemed disbursement of
Revolving Credit Loans, to the extent of such Bank's Revolving Credit
Commitment, purchase a participating interest in each reimbursement amount.
Each Bank will immediately transfer to the Agent, in same day funds, the amount
of its participation. Each Bank shall share on a pro rata basis (calculated by
reference to the Revolving Credit Commitments) in any interest which accrues
thereon and in all repayments thereof. If and to the extent that any Bank
shall not have so made the amount of such participating interest available to
the Agent, such Bank and the Company agree to pay to the Agent forthwith on
demand such amount together with interest thereon, for each day from the date
of demand by the Agent until the date such amount is paid to the Agent, at (x)
in the case of the Company, the Overdue Rate and (y) in the case of such Bank,
the Federal Funds Rate.

(b) The reimbursement obligation of the Company
under this Section 3.3 shall be absolute, unconditional and irrevocable and
shall remain in full force and effect until all obligations of the Company to
the Banks hereunder shall have been satisfied, and such obligations of the
Company shall not be affected, modified or impaired upon the happening of any
event, including without limitation, any of the following, whether or not with
notice to, or the consent of, the Company:

(i) Any lack of validity or
enforceability of any Letter of Credit or any documentation relating to any
Letter of Credit or to any transaction related in any way to such Letter of
Credit (the "Letter of Credit Documents");

-31-
<PAGE> 32
(ii) Any amendment, modification, waiver,
consent, or any substitution, exchange or release of or failure to perfect any
interest in collateral or security, with respect to any of the Letter of Credit
Documents;

(iii) The existence of any claim, setoff,
defense or other right which the Company may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any persons or
entities for whom any such beneficiary or any such transferee may be acting),
the Agent or any Bank or any other person or entity, whether in connection with
any of the Letter of Credit Documents, the transactions contemplated herein or
therein or any unrelated transactions;

(iv) Any draft or other statement or
document presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;

(v) Payment by the Agent to the
beneficiary under any Letter of Credit against presentation of documents which
do not comply with the terms of the Letter of Credit, including failure of any
documents to bear any reference or adequate reference to such Letter of Credit;

(vi) Any failure, omission, delay or lack
on the part of the Agent or any Bank or any party to any of the Letter of
Credit Documents to enforce, assert or exercise any right, power or remedy
conferred upon the Agent, any Bank or any such party under this Agreement or
any of the Letter of Credit Documents, or any other acts or omissions on the
part of the Agent, any Bank or any such party; or

(vii) Any other event or circumstance that
would, in the absence of this clause, result in the release or discharge by
operation of law or otherwise of the Company from the performance or observance
of any obligation, covenant or agreement contained in this Section 3.3.

No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which the Company has or may have against the
beneficiary of any Letter of Credit shall be available hereunder to the Company
against the Agent or any Bank. Nothing in this Section 3.3 shall limit the
liability, if any, of the Company to the Banks pursuant to Section 8.5.

3.4 Payment Method. (a) All payments to be made by the
Company hereunder will be made to the Agent for the account of the Banks (i) in
the case of principal and interest on any Loan, in the Permitted Currency in
which such Loan is denominated, and (ii) in all other cases, in the otherwise
specified or relevant currency, and in all cases in immediately available,
freely transferable, cleared funds not later than 1:00 p.m. at the place for
payment on the date on which such payment shall be come due (x) in the case of
principal and interest on any Loan denominated in a Permitted Currency other
than Dollars, by credit to the account of the Agent at its designated branch or
correspondent bank in the country issuing the relevant Permitted

-32-
<PAGE> 33
Currency or in such other place specified by the Agent with respect to such
Loan pursuant to Section 2.4(b), and (y) in all other cases to the Agent at the
address of its principal office specified in Section 8.2. Payments received
after 1:00 p.m. at the place for payment shall be deemed to be payments made
prior to 1:00 p.m. at the place for payment on the next succeeding Business
Day. The Company hereby authorizes the Agent to charge its account with the
Agent in order to cause timely payment of amounts due hereunder to be made
(subject to sufficient funds being available in such account for that purpose).

(b) At the time of making each such payment, the
Company shall, subject to the other terms and conditions of this Agreement,
specify to the Agent that Loan or other obligation of the Company hereunder to
which such payment is to be applied. In the event that the Company fails to so
specify the relevant obligation or if an Event of Default or Default shall have
occurred and be continuing, the Agent may apply such payments as it may
determine in its sole discretion.

(c) On the day such payments are deemed received,
the Agent shall remit to the Banks their pro rata shares of such payments in
immediately available same day funds, (i) in the case of payments of principal
and interest on any Borrowing denominated in a Permitted Currency other than
Dollars, at an account maintained and designated by each Bank at a bank in the
principal financial center of the country issuing the Permitted Currency in
which such Borrowing is denominated or in such other reasonable place specified
by such Bank and (ii) in all other cases, to the Banks at their respective
address in the United States specified for notices pursuant to Section 8.2. In
the case of payments of principal and interest on any Borrowing, such pro rata
shares shall be determined with respect to each such Bank by the ratio which
the outstanding principal balance of its Loan included in such Borrowing bears
to the outstanding principal balance of the Loans of all the Banks included in
such Borrowing and in the case of fees paid pursuant to Section 2.3 and other
amounts payable hereunder (other than the Agent's fees payable pursuant to
Section 2.3(d) and amounts payable to any Bank under Section 2.4 or 3.7), such
pro rata shares shall be determined with respect to each such Bank by the ratio
which the Commitment of such Bank bears to the Commitments of all the Banks.

(d) This Agreement arises in the context of an
international transaction, and the specification of payment in a specific
currency at a specific place pursuant to this Agreement is of the essence.
Such specified currency shall be the currency of account and payment under this
Agreement. The obligations of the Company hereunder shall not be discharged by
an amount paid in any other currency or at another place, whether pursuant to a
judgment or otherwise, to the extent that the amount so paid, on prompt
conversion into the applicable currency and transfer to the Banks under normal
banking procedure, does not yield the amount of such currency due under this
Agreement. In the event that any payment, whether pursuant to a judgment or
otherwise, upon conversion and transfer, does not result in payment of the
amount of such currency due under this Agreement, the Banks shall have an
independent cause of action against the Company for the currency deficit.

-33-
<PAGE> 34
(e) If for purposes of obtaining judgment in any
court it becomes necessary to convert any currency due hereunder into any other
currency, the Company will pay such additional amount, if any, as may be
necessary to ensure that the amount paid in respect of such judgment is the
amount in such other currency which when converted at the Agent's spot rate of
exchange prevailing on the date of payment would yield the same amount of the
currency due hereunder. Any amount due from the Company under this Section
3.4(e) will be due as a separate debt and shall not be affected by judgment
being obtained for any other sum due under or in respect of this Agreement.

3.5 No Setoff or Deduction. All payments of principal
and interest on the Loans and other amounts payable by the Company hereunder
shall be made by the Company without setoff or counterclaim, and free and clear
of, and without deduction or withholding for, or on account of, any present or
future taxes, levies, imposts, duties, fees, assessments, or other charges of
whatever nature, imposed by any governmental authority, or by any department,
agency or other political subdivision or taxing authority.

3.6 Payment on Non-Business Day; Payment Computations.
Except as otherwise provided in this Agreement to the contrary, whenever any
installment of principal of, or interest on, any Loan or any other amount due
hereunder becomes due and payable on a day which is not a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day and, in
the case of any installment of principal, interest shall be payable thereon at
the rate per annum determined in accordance with this Agreement during such
extension. Computations of interest and other amounts due under this Agreement
shall be made on the basis of a year of 360 days for the actual number of days
elapsed, including the first day but excluding the last day of the relevant
period.

3.7 Additional Costs. (a) In the event that any
applicable law, treaty, rule or regulation (whether domestic or foreign) now or
hereafter in effect and whether or not presently applicable to any Bank or the
Agent, or any interpretation or administration thereof by any governmental
authority charged with the interpretation or administration thereof, or
compliance by any Bank or the Agent with any guideline, request or directive of
any such authority (whether or not having the force of law), shall (i) affect
the basis of taxation of payments to any Bank or the Agent of any amounts
payable by the Company under this Agreement (other than taxes imposed on the
overall net income of the Bank or the Agent, by the jurisdiction, or by any
political subdivision or taxing authority of any such jurisdiction, in which
any Bank or the Agent, as the case may be, has its principal office), or (ii)
shall impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by any Bank or the Agent, or (iii) shall impose any other condition
with respect to this Agreement, the Commitments, the Notes or the Loans or any
Letter of Credit, and the result of any of the foregoing is to increase the
cost to any Bank or the Agent, as the case may be, of making, funding or
maintaining any Eurocurrency Rate Loan or any Letter of Credit or to reduce the
amount of any sum receivable by any Bank or the Agent, as the case may be,
thereon, then the Company shall pay to such Bank or the Agent, as the case may
be, from time to time, upon request by such Bank (with a copy of such request
to be provided to the Agent)

-34-
<PAGE> 35

or the Agent, additional amounts sufficient to compensate such Bank or the
Agent, as the case may be, for such increased cost or reduced sum receivable to
the extent, in the case of any Eurocurrency Rate Loan, such Bank or the Agent
is not compensated therefor in the computation of the interest rate applicable
to such Eurocurrency Rate Loan. A statement as to the amount of such increased
cost or reduced sum receivable, prepared in good faith and in reasonable detail
by such Bank or the Agent, as the case may be, and submitted by such Bank or
the Agent, as the case may be, to the Company, shall be conclusive and binding
for all purposes absent manifest error in computation.

(b) In the event that any applicable law, treaty,
rule or regulation (whether domestic or foreign) now or hereafter in effect and
whether or not presently applicable to any Bank or the Agent, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Bank or
the Agent with any guideline, request or directive of any such authority
(whether or not having the force of law), including any risk-based capital
guidelines, affects or would affect the amount of capital required or expected
to be maintained by such Bank or the Agent (or any corporation controlling such
Bank or the Agent) and such Bank or the Agent, as the case may be, determines
that the amount of such capital is increased by or based upon the existence of
such Bank's or the Agent's obligations hereunder and such increase has the
effect of reducing the rate of return on such Bank's or the Agent's (or such
controlling corporation's) capital as a consequence of such obligations
hereunder to a level below that which such Bank or the Agent (or such
controlling corporation) could have achieved but for such circumstances (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Bank or the Agent to be material, then the Company shall pay to
such Bank or the Agent, as the case may be, from time to time, upon request by
such Bank (with a copy of such request to be provided to the Agent) or the
Agent, additional amounts sufficient to compensate such Bank or the Agent (or
such controlling corporation) for any increase in the amount of capital and
reduced rate of return which such Bank or the Agent reasonably determines to be
allocable to the existence of such Bank's or the Agent's obligations hereunder.
A statement as to the amount of such compensation, prepared in good faith and
in reasonable detail by such Bank or the Agent, as the case may be, and
submitted by such Bank or the Agent to the Company, shall be conclusive and
binding for all purposes absent manifest error in computation.

3.8 Illegality and Impossibility. In the event that any
applicable law, treaty or other international agreement, rule or regulation
(whether domestic or foreign) now or hereafter in effect and whether or not
presently applicable to any Bank, or any interpretation or administration
thereof by any governmental authority charged with the interpretation or
administration thereof, or compliance by any Bank with any guideline, request
or directive of such authority (whether or not having the force of law),
including without limitation exchange controls, (a) shall make it unlawful or
impossible for any Bank to maintain any Eurocurrency Rate Loan under this
Agreement or (b) shall make it impracticable, unlawful or impossible for, or
shall in any way limit or impair the ability of, the Company to make or any
Bank to receive any payment under this Agreement at the place specified for
payment hereunder or to freely convert any amount paid into Dollars at market
rates of exchange or to transfer any amount paid

-35-
<PAGE> 36
or so converted to the address of its principal office specified in Section
8.2, the Company shall upon receipt of notice thereof from such Bank, repay in
full the then outstanding principal amount of each Eurocurrency Rate Loan so
affected, together with all accrued interest thereon to the date of payment and
all amounts owing to such Bank under Section 3.9, (i) on the last day of the
then current Interest Period applicable to such Eurocurrency Rate Loan if such
Bank may lawfully continue to maintain such Eurocurrency Rate Loan to such day,
or (ii) immediately if such Bank may not continue to maintain such Eurocurrency
Rate Loan to such day.

3.9 Indemnification. If the Company makes any payment of
principal with respect to any Eurocurrency Rate Loan on any other date than the
last day of a Eurocurrency Interest Period applicable thereto (whether pursuant
to Section 3.8, Section 6.2 or otherwise), or if the Company fails to borrow
any Eurocurrency Rate Loan after notice has been given to the Banks in
accordance with Section 2.4, or if the Company fails to make any payment of
principal or interest in respect of a Eurocurrency Rate Loan when due, the
Company shall reimburse each Bank on demand for any resulting loss or expense
incurred by each such Bank, including without limitation any loss incurred in
obtaining, liquidating or employing deposits from third parties, whether or not
such Bank shall have funded or committed to fund such Loan. A statement as to
the amount of such loss or expense, prepared in good faith and in reasonable
detail by such Bank and submitted by such Bank to the Company, shall be
conclusive and binding for all purposes absent manifest error in computation.
Calculation of all amounts payable to such Bank under this Section 3.9 shall be
made as though such Bank shall have actually funded or committed to fund the
relevant Eurocurrency Rate Loan through the purchase of an underlying deposit
in an amount equal to the amount of such Loan and having a maturity comparable
to the related Interest Period and, in the case of any Eurocurrency Rate Loan,
through the transfer of such deposit from an offshore office of such Bank to a
domestic office of such Bank in the United States of America; provided,
however, that such Bank may fund any Eurocurrency Rate Loan in any manner it
sees fit and the foregoing assumption shall be utilized only for the purpose of
calculation of amounts payable under this Section 3.9.

3.10 Substitution of Banks. (a) Each Bank agrees that, as
promptly as practicable after it becomes aware of the occurrence of an event or
the existence of a condition that (i) would cause it to incur any increased
costs or inability to perform its agreements under Section 2.8, 3.7 or 3.8, or
(ii) would require the Company to pay an increased amount under Section 2.8,
3.7 or 3.8, it will promptly notify the Agent, who shall notify the Company, of
such event or condition and, to the extent not inconsistent with such Bank's
internal policies, will use its reasonable efforts to make, fund or maintain
the affected Loans of such Bank through another lending office of such Bank if
as a result thereof the additional monies which would otherwise be required to
be paid or the reduction of amounts receivable by such Bank thereunder in
respect of such Loans would be materially reduced, or such inability to perform
would cease to exist, or the increased costs which would otherwise be required
to be paid in respect of such Loans pursuant to Section 2.8 or 3.7 would be
materially reduced or the taxes or other amounts otherwise payable under
Section 2.8 or 3.7 would be materially reduced, and if, as determined by such
Bank, in its sole discretion, the making, funding or maintaining of such Loans
through

-36-
<PAGE> 37
such other lending office would not otherwise materially adversely affect such
Loans or such Bank.

(b) In the event any Bank shall have delivered to
the Company a notice pursuant to Section 3.10(a) above, that a Eurocurrency
Rate Loan is no longer available from such Bank pursuant to Section 3.8 or that
any of the events designated in Section 3.10(a) above have occurred or shall
have failed to make its share of a Loan available in accordance with Section
2.4(b), the Company may (but subject in any such case to the payments required
by Sections 3.1(b) and 3.9), provided that there shall exist no Default, upon
at least five Business Days' prior written, facsimile or telex notice to such
Bank and the Agent, identify to the Agent a lending institution reasonably
acceptable to the Agent which will purchase the Commitment and the amount of
outstanding Loans from the Bank providing such notice and such Bank shall
thereupon assign its Commitment, any Loans owing to such Bank and the Notes
held by such Bank to such replacement lending institution pursuant to Section
8.6. Such notice shall specify an effective date for such assignment and at
the time thereof, the Company shall pay all accrued interest, commitment fees
and all other amounts (including without limitation all amounts payable under
Article III) owing hereunder to such Bank as at such effective date for such
assignment.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------

The Company represents and warrants that:

4.1 Corporate Existence and Power. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, and is duly qualified to do business, and is in
good standing, in all additional jurisdictions where such qualification is
necessary under applicable law. The Company has all requisite corporate power
to own or lease the properties used in its business and to carry on its
business as now being conducted and as proposed to be conducted, and to execute
and deliver this Agreement and the Notes to which it is a party and to engage
in the transactions contemplated by this Agreement.

4.2 Corporate Authority. The execution, delivery and
performance by the Company of this Agreement and the Notes have been duly
authorized by all necessary corporate action and are not in contravention of
any law, rule or regulation, or any judgment, decree, writ, injunction, order
or award of any arbitrator, court or governmental authority, or of the terms of
the Company's charter or by-laws, or of any contract or undertaking to which
the Company is a party or by which the Company or its property may be bound or
affected or result in the imposition of any Lien except for Permitted Liens.

4.3 Binding Effect. This Agreement is, and the Notes
when delivered hereunder will be, legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their respective
terms.

-37-
<PAGE> 38
4.4 Subsidiaries. Schedule 4.4 hereto correctly sets
forth the corporate name, jurisdiction of incorporation and ownership of each
Subsidiary of the Company. Each such Subsidiary and each corporation becoming
a Subsidiary of the Company after the date hereof is and will be a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and is and will be duly qualified to do business
in each additional jurisdiction where such qualification is or may be necessary
under applicable law. Each Subsidiary of the Company has and will have all
requisite corporate power to own or lease the properties used in its business
and to carry on its business as now being conducted and as proposed to be
conducted. All outstanding shares of capital stock of each class of each
Subsidiary of the Company have been and will be validly issued and are and will
be fully paid and nonassessable and, except as otherwise indicated in Schedule
4.4 hereto or disclosed in writing to the Agent and Banks from time to time,
are and will be owned, beneficially and of record, by the Company or another
Subsidiary of the Company free and clear of any Liens.

4.5 Litigation. Except as set forth in Schedule 4.5
hereto, there is no action, suit or proceeding pending or, to the best of the
Company's knowledge, threatened against or affecting the Company or any of its
Subsidiaries before or by any court, governmental authority or arbitrator,
which if adversely decided might result, either individually or collectively,
in any material adverse change in the business, properties, operations or
condition, financial or otherwise, of the Company or any of its Subsidiaries or
in any material adverse effect on the legality, validity or enforceability of
this Agreement, the Notes or any Security Document and, to the best of the
Company's knowledge, there is no basis for any such action, suit or proceeding.

4.6 Financial Condition. The consolidated balance sheet
of the Company and its Subsidiaries and the consolidated statements of income,
retained earnings and changes in financial position of the Company and its
Subsidiaries for the fiscal year ended December 31, 1993 and reported on by
Coopers & Lybrand, independent certified public accountants, copies of which
have been furnished to the Banks, fairly present, and the financial statements
of the Company and its Subsidiaries delivered pursuant to Section 5.1(d) will
fairly present, the consolidated financial position of the Company and its
Subsidiaries as at the respective dates thereof, and the consolidated results
of operations of the Company and its Subsidiaries for the respective periods
indicated, all in accordance with Generally Accepted Accounting Principles
consistently applied (subject, in the case of said interim statements, to
year-end audit adjustments). There has been no material adverse change in the
business, properties, operations or condition, financial or otherwise, of the
Company or any of its Subsidiaries since December 31, 1993. There is no
material Contingent Liability of the Company that is not reflected in such
financial statements or in the notes thereto.

4.7 Use of Advances. The Company will use the proceeds
of (a) the Revolving Credit Advances to refinance indebtedness outstanding
under the Existing Loan Agreement and for acquisitions and general corporate
purposes, (b) the Term Loan A for the Acquisition and (c) the Term Loan B to
refinance indebtedness outstanding under the Existing Loan Agreement and for
the Acquisition. Neither the Company nor any of its Subsidiaries extends or
maintains, in the ordinary course of business, credit for the purpose, whether
immediate, incidental, or ultimate,

-38-
<PAGE> 39
of buying or carrying margin stock (within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System), and no part of the proceeds
of any Advance will be used for the purpose, whether immediate, incidental, or
ultimate, of buying or carrying any such margin stock or maintaining or
extending credit to others for such purpose.

4.8 Consents, Etc. Except for such consents, approvals,
authorizations, declarations, registrations or filings delivered by the Company
pursuant to Section 2.5(g), if any, each of which is in full force and effect,
no consent, approval or authorization of or declaration, registration or filing
with any governmental authority or any nongovernmental person or entity,
including without limitation any creditor, lessor or stockholder of the Company
or any of its Subsidiaries, is required on the part of the Company in
connection with the execution, delivery and performance of this Agreement, the
Notes, the Security Documents or the transactions contemplated hereby or as a
condition to the legality, validity or enforceability of this Agreement, the
Notes or any of the Security Documents.

4.9 Taxes. The Company and its Subsidiaries have filed
all tax returns (federal, state and local) required to be filed and have paid
all taxes shown thereon to be due and required to be paid including interest
and penalties, or have established adequate financial reserves on their
respective books and records for payment thereof. Neither the Company nor any
of its Subsidiaries knows of any actual or proposed tax assessment or any basis
therefor, and no extension of time for the assessment of deficiencies in any
federal or state tax has been granted by the Company or any Subsidiary, except
to the extent that payment of any of the foregoing is then being contested in
good faith by appropriate legal proceedings and with respect to which adequate
financial reserves have been established on the books and records of the
Company or such Subsidiary.

4.10 Title to Properties. Except as otherwise disclosed
in the latest balance sheet delivered pursuant to Section 4.6 or 5.1(d) of this
Agreement, the Company or one or more of its Subsidiaries have good and
marketable fee simple title to all of the real property, and a valid and
indefeasible ownership interest in all of the other properties and assets
reflected in said balance sheet or subsequently acquired by the Company or any
Subsidiary. All of such properties and assets are free and clear of any Lien
except for Permitted Liens.

4.11 ERISA. The Company, its Subsidiaries, the ERISA
Affiliates and the Plans are in compliance in all material respects with those
provisions of ERISA and of the Code which are applicable with respect to any
Plan. No Prohibited Transaction and no Reportable Event has occurred with
respect to any Plan. None of the Company, any of its Subsidiaries or any of
the ERISA Affiliates is an employer with respect to any Multiemployer Plan.
The Company, its Subsidiaries and the ERISA Affiliates have met the minimum
funding requirements under ERISA and the Code with respect to each of the
respective Plans, if any, and have not incurred any liability to the PBGC or
any Plan. The execution, delivery and performance of this Agreement, the Notes
and the Security Documents do not constitute a Prohibited Transaction. There
is no material Unfunded Benefit Liability, determined in accordance with
Section 4001(a)(18) of ERISA, with respect to any Plan.

-39-
<PAGE> 40
4.12 Disclosure. No report or other information furnished
in writing or on behalf of the Company or any Guarantor to any Bank or the
Agent in connection with the negotiation or administration of this Agreement
contains any material misstatement of fact or omits to state any material fact
or any fact necessary to make the statements contained therein not misleading.
Neither this Agreement, the Notes, the Security Documents nor any other
document, certificate, or report or statement or other information furnished to
any Bank or the Agent by or on behalf of the Company in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact in order to make the statements
contained herein and therein not misleading. There is no fact known to the
Company which materially and adversely affects, or which in the future may (so
far as the Company can now foresee) materially and adversely affect, the
business, properties, operations or condition, financial or otherwise, of the
Company or any Subsidiary, which has not been set forth in this Agreement or in
the other documents, certificates, statements, reports and other information
furnished in writing to the Banks by or on behalf of the Company in connection
with the transactions contemplated hereby.

4.13 Environmental and Safety Matters. All
representations and warranties made by the Company in the Environmental
Certificate delivered pursuant to Section 2.5(i) and Section 5.1(d)(v) are true
and correct.

4.14 Intellectual Property. Set forth on Schedule 4.14(a)
is a complete and accurate list of all material patents, trademarks, trade
names, service marks and copyrights, and all applications therefor and licenses
thereof, of the Company and the Guarantors showing as of the Effective Date the
jurisdiction in which registered, the registration number and the date of
registration. The Company and the Guarantors own, or are licensed to use, all
trademarks, tradenames, service marks, copyrights, technology, know-how and
processes necessary for the conduct of its business as currently conducted (the
"Intellectual Property"). Except as set forth on Schedule 4.14(b), no claim
has been asserted and is pending by any person challenging or questioning the
use of any such Intellectual Property or the validity or effectiveness of any
such Intellectual Property, nor does the Company or any Guarantor know of any
valid basis for any such claim, the use of such Intellectual Property by the
Company and the Guarantors does not infringe on the rights of any Person, and,
to the knowledge of the Company, no Intellectual Property has been infringed,
misappropriated or diluted by any other Person.

ARTICLE V
COVENANTS
---------

5.1 Affirmative Covenants. The Company covenants and
agrees that, until payment in full of the principal of and accrued interest on
the Notes and the performance of all other obligations of the Company under
this Agreement, unless the Required Banks shall otherwise consent in writing,
it shall, and, except with respect to Section 5.1(d), shall cause each of its
Subsidiaries to:

-40-
<PAGE> 41
(a) Preservation of Corporate Existence, Etc. Do
or cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence and its qualification as a foreign
corporation in good standing in each jurisdiction in which such qualification
is necessary under applicable law and the rights, licenses, permits (including
those required under Environmental Laws), franchises, patents, copyrights,
trademarks and trade names material to the conduct of its businesses; and
defend all of the foregoing against all claims, actions, demands, suits or
proceedings at law or in equity or by or before any governmental
instrumentality or other agency or regulatory authority.

(b) Compliance with Laws, Etc. Comply in all
material respects with all applicable laws, rules, regulations and orders of
any governmental authority whether federal, state, local or foreign (including
without limitation ERISA, the Code and Environmental Laws), in effect from time
to time; and pay and discharge promptly when due all taxes, assessments and
governmental charges or levies imposed upon it or upon its income, revenues or
property, before the same shall become delinquent or in default, as well as all
lawful claims for labor, materials and supplies or otherwise, which, if unpaid,
might give rise to Liens upon such properties or any portion thereof, except to
the extent that payment of any of the foregoing is then being contested in good
faith by appropriate legal proceedings and with respect to which adequate
financial reserves have been established on the books and records of the
Company or such Subsidiary.

(c) Maintenance of Properties; Insurance.
Maintain, preserve and protect all property that is material to the conduct of
the business of the Company or any of its Subsidiaries and keep such property
in good repair, working order and condition and from time to time make, or
cause to be made all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business
carried on in connection therewith may be properly conducted at all times in
accordance with customary and prudent business practices for similar
businesses; and maintain in full force and effect insurance with responsible
and reputable insurance companies or associations in such amounts, on such
terms and covering such risks, including fire and other risks insured against
by extended coverage, as is usually carried by companies engaged in similar
businesses and owning similar properties similarly situated and maintain in
full force and effect public liability insurance, insurance against claims for
personal injury or death or property damage occurring in connection with any of
its activities or any of any properties owned, occupied or controlled by it, in
such amount as it shall reasonably deem necessary, and maintain such other
insurance as may be required by law or as may be reasonably requested by the
Required Banks for purposes of assuring compliance with this Section 5.1(c).

(d) Reporting Requirements. Furnish to the Banks
and the Agent the following:

(i) Promptly, (A) and in any event
within three calendar days after becoming aware of the occurrence of any Event
of Default or Default, (B) and in any event within 10 calendar days after
becoming aware of the occurrence of the commencement of any material litigation
against, by or affecting the Company or any of its Subsidiaries, and any

-41-
<PAGE> 42
material developments therein, or (C) and in any event within 10 calendar days
after becoming aware of entering into any material contract or undertaking that
is not entered into in the ordinary course of business or (D) and in any event
within 10 calendar days after becoming aware of any development in the business
or affairs of the Company or any of its Subsidiaries which has resulted in or
which is likely in the reasonable judgment of the Company, to result in a
material adverse change in the business, properties, operations or condition,
financial or otherwise of the Company or any of its Subsidiaries, a statement
of the chief financial officer of the Company setting forth details of such
Event of Default or such event or condition or such litigation and the action
which the Company or such Subsidiary, as the case may be, has taken and
proposes to take with respect thereto;

(ii) As soon as available and in any
event within 60 days after the end of each fiscal quarter of the Company, the
consolidated and consolidating balance sheet of the Company and its
Subsidiaries as of the end of such quarter, and the related consolidated and
consolidating statements of income and statement of changes in financial
position for the period commencing at the end of the previous fiscal year and
ending with the end of such quarter, setting forth in each case in comparative
form the corresponding figures for the corresponding date or period of the
preceding fiscal year, all in reasonable detail and duly certified (subject to
year-end audit adjustments) by the chief financial officer of the Company as
having been prepared in accordance with Generally Accepted Accounting
Principles, together with a certificate of the chief financial officer of the
Company stating (A) that no Event of Default or event or condition which, with
notice or lapse of time, or both, would constitute an Event of Default, has
occurred and is continuing or, if an Event of Default or such an event or
condition has occurred and is continuing, a statement setting forth the details
thereof and the action which the Company has taken and proposes to take with
respect thereto, and (B) that a computation (which computation shall accompany
such certificate and shall be in reasonable detail) showing compliance with
Section 5.2 (a), (b), (c), (d), (e), (f), (g), (l) and (o) and hereof is in
conformity with the terms of this Agreement;

(iii) As soon as available and in any
event within 120 days after the end of each fiscal year of the Company, a copy
of the consolidated balance sheet of the Company and its Subsidiaries as of the
end of such fiscal year and the related consolidated statements of income and
statement of changes in financial position of the Company and its Subsidiaries
for such fiscal year, with a customary audit report of Coopers & Lybrand, or
any of the six largest independent certified public accounting firms in the
United States, without qualifications unacceptable to the Required Banks,
together with a certificate or opinion of such accountants stating (A) that
they have reviewed this Agreement and stating further whether, in the course of
their review of such financial statements, they have become aware of any Event
of Default or any event or condition which, with notice or lapse of time, or
both, would constitute an Event of Default, and, if such an Event of Default or
such an event or condition then exists and is continuing, a statement setting
forth the nature and status thereof, and (B) that a computation by the Company
(which computation shall accompany such certificate and shall be in reasonable
detail) showing compliance with Section 5.2 (a), (b), (c), (d), (e), (f), (g),
(l) and (o) hereof is in conformity with the terms of this Agreement;

-42-
<PAGE> 43
(iv) Promptly after the sending or filing
thereof, copies of all reports, proxy statements and financial statements which
the Company or any of its Subsidiaries sends to or files with any of their
respective security holders or any securities exchange or the Securities and
Exchange Commission or any successor agency thereof;

(v) As soon as available and in any
event within 60 days after the end of each fiscal quarter, a summary indicating
updates on all environmental activities, remediation efforts and investigations
by governmental entities regarding environmental matters and such other
information regarding environmental matters as any Bank or the Agent may
reasonably request;

(vi) Upon the occurrence of a Trigger
Event as soon as available and in any event within 30 calendar days after the
end of each month, a report with respect to the Company and its Subsidiaries
setting forth a summary of accounts receivable and inventory as of the end of
such month indicating the total of accounts receivable by type, by terms and by
age, including a summary of accounts receivable as of the end of such month
indicating age in the aggregate and the 10 largest receivables of each of the
Company and its Subsidiaries, together with a detailed aging of all receivables
of any account debtor with any receivable over 60 days past due, describing any
returns, defenses, setoffs or pertinent information in connection therewith,
and indicating the types of inventory, months on hand, amounts, locations and
values of the types of inventory;

(vii) Promptly and in any event within 10
calendar days after receiving or becoming aware thereof, (A) a copy of any
notice of intent to terminate any Plan filed with the PBGC, (B) a statement of
the chief financial officer of the Company setting forth the details of the
occurrence of any Reportable Event with respect to any Plan, (C) a copy of any
notice that the Company, any of its Subsidiaries or any ERISA Affiliate may
receive from the PBGC relating to the intention of the PBGC to terminate any
Plan or to appoint a trustee to administer any Plan, or (D) a copy of any
notice of failure to make a required installment or other payment within the
meaning of Section 412(n) of the Code or Section 302(f) of ERISA with respect
to a Plan;

(viii) Within 30 calendar days after the
end of each fiscal year of the Company, a newly executed Environmental
Certificate; and

(ix) Promptly, such other information
respecting the business, properties, operations or condition, financial or
otherwise, of the Company or any of it Subsidiaries as any Bank or the Agent
may from time to time reasonably request.

(e) Accounting, Access to Records, Books, Etc.
Maintain a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
accordance with Generally Accepted Accounting Principles and to comply with the
requirements of this Agreement and, at any reasonable time and from time to
time, (i) permit any Bank or the Agent any agents or representatives thereof to
examine

-43-
<PAGE> 44
and make copies of and abstracts from the records and books of account of, and
visit the properties of, the Company and its Subsidiaries, and to discuss the
affairs, finances and accounts of the Company and its Subsidiaries with their
respective directors, officers, employees and independent auditors, and by this
provision the Company does hereby authorize such persons to discuss such
affairs, finances and accounts with any Bank or the Agent, and (ii) permit the
Agent or any of its agents or representatives to conduct a comprehensive field
audit of its books, records, properties and assets, including without
limitation all collateral subject to the Security Documents.

(f) Additional Security and Collateral. Promptly
cause each person becoming a Subsidiary of the Company from time to time to
execute and deliver to the Banks and the Agent, within 30 days after such
person becomes a Subsidiary, a Guaranty, together with other related documents
described in Section 2.5(a), (b) and (c) sufficient to grant to the Banks and
the Agent liens and security interests in all collateral of the type described
in Section 2.10 in the event of the occurrence of any event described in
Section 2.11. The Company shall notify the Banks and the Agent, within 10 days
after the occurrence thereof, of any person becoming a Subsidiary.

(g) Further Assurances. Will, and will cause
each Guarantor to, execute and deliver within 30 days after request therefor by
the Banks and the Agent, all further instruments and documents and take all
further action that may be necessary or desirable, or that the Agent may
request, in order to give effect to, and to aid in the exercise and enforcement
of the rights and remedies of the Banks under, this Agreement, the Notes and
the Security Documents.

5.2 Negative Covenants. Until payment in full of the
principal of and accrued interest on the Notes and the performance of all other
obligations of the Company under this Agreement, the Company agrees that,
unless the Required Banks shall otherwise consent in writing it shall not:

(a) Current Ratio. Permit or suffer the ratio of
Consolidated Current Assets of the Company and its Subsidiaries to Consolidated
Current Liabilities of the Company and its Subsidiaries to be less than 1.5 to
1.0 at any time.

(b) Funded Indebtedness to Cash Flow. Permit or
suffer the ratio of Consolidated Funded Indebtedness of the Company and its
Subsidiaries to Consolidated Cash Flow of the Company and its Subsidiaries to
be greater than (i) at any time during the period from and including the
Effective Date to and including the date which is the one year anniversary of
the Effective Date, 5.0 to 1.0 and (ii) at any time thereafter, 3.0 to 1.0;
calculated as of the end of each fiscal quarter for the four immediately
preceding fiscal quarters then ending; provided, that, during the first three
fiscal quarters after the Effective Date and for the first three fiscal
quarters after any equity offering, the calculation hereunder shall be
cumulative from the first day of each such period through the end of each
fiscal quarter and annualized.

-44-
<PAGE> 45
(c) Tangible Net Worth. Permit or suffer
Consolidated Tangible Net Worth of the Company and its Subsidiaries to be less
than the sum of (i) $75,000,000 plus (ii) an amount equal to 50% of Cumulative
Net Income (without reduction for a net loss) of the Company and its
Subsidiaries for each fiscal year of the Company ending after the Effective
Date plus (ii) an amount equal to (A) 100% of the Net Cash Proceeds of the
first equity offering after the Effective Date and (B) 85% of the Net Cash
Proceeds of any subsequent equity offering.

(d) Funded Indebtedness to Tangible Net Worth.
Permit or suffer the ratio of Consolidated Funded Indebtedness of the Company
and its Subsidiaries to Consolidated Tangible Net Worth of the Company and its
Subsidiaries to be greater than 2.50 to 1.0 at any time.

(e) Fixed Charge Coverage Ratio. Permit or
suffer the Fixed Charge Coverage Ratio to be less than 2.0 to 1.0 at any time
calculated as of the end of each fiscal quarter for the four immediately
preceding fiscal quarters of the Company then ending, until such time as the
ratio of Consolidated Funded Indebtedness of the Company and its Subsidiaries
to Consolidated Tangible Net Worth of the Company and its Subsidiaries is less
than 1.50 to 1.0 for any fiscal quarter, and, thereafter, 1.5 to 1.0.

(f) Indebtedness. Create, incur, assume or in
any manner become liable in respect of, or suffer to exist, or permit or suffer
any Subsidiary to create, incur, assume or in any manner become liable in
respect of, or suffer to exist, any Indebtedness other than:

(i) The Advances;

(ii) The Indebtedness described in
Schedule 5.2(f) hereto, having the same terms as those existing on the date of
this Agreement, but no extension, refinancing, replacement, amendment or
renewal thereof shall be permitted;

(iii) Indebtedness of any Subsidiary of
the Company owing to the Company or to any other Subsidiary of the Company;

(iv) Unsecured current Indebtedness
constituting obligations for the unpaid purchase price of goods, property or
services incurred in the ordinary course of business (A) to a seller of
inventory purchased for sale or lease in the ordinary course of business of the
Company or any of its Subsidiaries (B) to a seller of other property used in
the business of the Company or any of its Subsidiaries or (C) to a provider of
services to the Company or any of its Subsidiaries;

(v) Interest rate swaps or other
interest rate protection not exceeding 50% of outstanding Indebtedness in
aggregate principal amount at any one time outstanding;

-45-
<PAGE> 46
(vi) Subordinated Debt so long as 100% of
the proceeds are used for the purpose of repaying Term Loan B, in whole or in
part; and

(vii) Indebtedness in aggregate principal
amount at any one time outstanding other than (i) through (vi) above not
exceeding 20% of the Total Revolving Credit Commitment Amount.

(g) Liens. Create, incur or suffer to exist any
Lien on any of the assets, rights, revenues or property, real, personal or
mixed, tangible or intangible, whether now owned or hereafter acquired, of the
Company or any of its Subsidiaries, other than:

(i) Liens for taxes not delinquent or
for taxes being contested in good faith by appropriate proceedings and as to
which adequate financial reserves have been established on its books and
records;

(ii) Liens (other than any Lien imposed
by ERISA) created and maintained in the ordinary course of business which are
not material in the aggregate, and which would not have a material adverse
effect on the business or operations of the Company or any of its Subsidiaries
and which constitute (A) pledges or deposits under worker's compensation laws,
unemployment insurance laws or similar legislation, (B) good faith deposits in
connection with bids, tenders, contracts or leases to which the Company or any
of its Subsidiaries is a party for a purpose other than borrowing money or
obtaining credit, including rent security deposits, (C) liens imposed by law,
such as those of carriers, warehousemen and mechanics, if payment of the
obligation secured thereby is not yet due, (D) liens securing taxes,
assessments or other governmental charges or levies not yet subject to
penalties for nonpayment, and (E) pledges or deposits to secure public or
statutory obligations of the Company or any of its Subsidiaries, or surety,
customs or appeal bonds to which the Company or any of its Subsidiaries is a
party;

(iii) Liens affecting real property which
constitute minor survey exceptions or defects or irregularities in title, minor
encumbrances, easements or reservations of, or rights of others for, rights of
way, sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of such real property,
provided that all of the foregoing, in the aggregate, do not at any time
materially detract from the value of said properties or materially impair their
use in the operation of the businesses of the Company or any of its
Subsidiaries;

(iv) Liens created pursuant to the
Security Documents and Liens expressly permitted by the Security Documents;

(v) Each Lien described in Schedule
5.2(g) hereto may be suffered to exist upon the same terms as those existing on
the date hereof, but no extension, refinancing, replacement, amendment or
renewal thereof shall be permitted;

-46-
<PAGE> 47
(vi) Any Lien created to secure payment
of a portion of the purchase price of, or existing at the time of acquisition
of, any tangible fixed asset acquired by the Company or any of its Subsidiaries
may be created or suffered to exist upon such fixed asset if the outstanding
principal amount of the Indebtedness secured by such Lien does not at any time
exceed the purchase price paid by the Company or such Subsidiary for such fixed
asset, provided that such Lien does not encumber any other asset at any time
owned by the Company or such Subsidiary, and provided, further, that not more
than one such Lien shall encumber such fixed asset at any one time;

(vii) Liens in favor of the Company or any
of its Subsidiaries as security for Indebtedness permitted by Section
5.2(f)(iii); and

(viii) The interest or title of a lessor
under any lease otherwise permitted under this Agreement with respect to the
property subject to such lease to the extent performance of the obligations of
the Company or its Subsidiary thereunder are not delinquent.

(h) Merger; Acquisitions; Etc. Purchase or
otherwise acquire, or permit or suffer any Subsidiary to purchase or otherwise
acquire, whether in one or a series of transactions, all or a substantial
portion of the business assets, rights, revenues or property, real, personal or
mixed, tangible or intangible, of any person, or all or a substantial portion
of the capital stock of or other ownership interest in any other person; nor
merge or consolidate or amalgamate with any other person or take any other
action having a similar effect; provided, however, that this Section 5.2(h)
shall not prohibit any merger or acquisition if (i) the Company is the
surviving entity and the shareholders of the Company or the Company prior to
such acquisition or merger own in excess of 51% of the surviving entity; (ii)
the Company has provided the Agent with pro forma financial statements prior to
such acquisition or merger demonstrating compliance with Sections 5.2(a), (b),
(c), (d), (e), (f), (g), (l) and (o) and (iii) at any time during which the
ratio of the Consolidated Funded Indebtedness of the Company and its
Subsidiaries to the Consolidated Cash Flow of the Company and its Subsidiaries
calculated as of the end of the most recently ended fiscal quarter of the
Company for the four immediately preceding fiscal quarters then ending is
greater than 2.5 to 1.0, the aggregate purchase price or investment for all
such transactions does not exceed $20,000,000 in any fiscal year, provided,
that, this clause (iii) shall not apply to the Acquisition or any other
acquisition if the Company was in compliance with this clause (iii) at the time
such acquisition was consummated.

(i) Disposition of Assets; Etc. Sell, lease,
license, transfer, assign or otherwise dispose of all or a material portion of
its business, assets, rights, revenues or property, real, personal or mixed,
tangible or intangible, whether in one or a series of transactions, other than
inventory sold in the ordinary course of business upon customary credit terms
and sales of scrap or obsolete material or equipment, and shall not permit or
suffer any Subsidiary to do any of the foregoing; provided, however, that this
Section 5.2(i) shall not prohibit any such sale, lease, license, transfer,
assignment or other disposition if the aggregate book value (disregarding any
write-downs of such book value other than ordinary depreciation and
amortization) of all of the business, assets, rights, revenues and property
disposed of after the date of this Agreement

-47-
<PAGE> 48
shall be less than $2,000,000 in the aggregate in each fiscal year and if,
immediately after such transaction, no Default or Event of Default shall exist
or shall have occurred and be continuing.

(j) Nature of Business. Make or suffer any
substantial change in the nature of its chemical processing and refining
business or engage in any other businesses other than its chemical processing
and refining business.

(k) Dividends and Other Restricted Payments.
Make, pay, declare or authorize any dividend, payment or other distribution in
respect of any class of its capital stock or any dividend, payment or
distribution in connection with the redemption, purchase, retirement or other
acquisition, directly or indirectly, of any shares of its capital stock other
than such dividends, payments or other distributions to the extent payable
solely in shares of the capital stock of the Company, provided, however, that,
the Company may make, pay, declare or authorize dividends, payments and other
such distributions, if, both before and after any such dividend, payment or
other such distribution is made, no Default or Event of Default shall exist or
shall have occurred and be continuing or would be caused by such dividend,
payment or such other distribution. For purposes of this Section 5.2(k),
"capital stock" shall include capital stock and any securities exchangeable for
or convertible into capital stock and any warrants, rights or other options to
purchase or otherwise acquire capital stock or such securities.

(l) Investments, Loans and Advances. Purchase or
otherwise acquire any capital stock of or other ownership interest in, or debt
securities of or other evidences of Indebtedness of, any other person; nor make
any loan or advance of any of its funds or property or make any other extension
of credit to, or make any investment or acquire any interest whatsoever in, any
other person; nor incur any Contingent Liability; nor permit any Subsidiary to
do any of the foregoing; other than (i) extensions of trade credit made in the
ordinary course of business on customary credit terms and commission, travel
and similar advances made to officers and employees in the ordinary course of
business, (ii) commercial paper of any United States issuer having the highest
rating then given by Moody's Investors Service, Inc., or Standard & Poor's
Corporation, direct obligations of and obligations fully guaranteed by the
United States of America or any agency or instrumentality thereof, or
certificates of deposit of any commercial bank which is a member of the Federal
Reserve System having a rating of A1 or P1 or better by Standard & Poor's
Corporation or Moodys Investor Services, respectively, and which has capital,
surplus and undivided profit (as shown on its most recently published statement
of condition) aggregating not less than $100,000,000, provided, however, that
each of the foregoing investments has a maturity date not later than 180 days
after the acquisition thereof by the Company or any of its Subsidiaries, (iii)
acquisitions of stock pursuant to Section 5.2(h), (iv) loans permitted pursuant
to Section 5.2(f)(iii) and (v) those investments, loans, advances and other
transactions described in Schedule 5.2(l) hereto, having the same terms as
existing on the date of this Agreement, but no extension or renewal thereof
shall be permitted.

(m) Transactions with Affiliates. Enter into,
become a party to, or become liable in respect of, or permit or suffer any
Subsidiary to enter into, become a party to, or become liable in respect of,
any contract or undertaking with any Affiliate not included in the

-48-
<PAGE> 49
consolidated financial statements of the Company delivered to the Agent
pursuant to Section 5.1(d) except in the ordinary course of business and on
terms not less favorable to the Company or such Subsidiary than those which
could be obtained if such contract or undertaking were an arms length
transaction with a person other than an Affiliate.

(n) Sale and Leaseback Transactions. Become or
remain liable in any way, or permit or suffer any Subsidiary to become or
remain liable in any way, whether directly or by assignment or as a guarantor
or other contingent obligor, for the obligations of the lessee or user under
any lease or contract for the use of any real or personal property if such
property is owned on the date of this Agreement or thereafter acquired by the
Company or any of its Subsidiaries and has been or is to be sold or transferred
to any other person and was, is or will be used by the Company or any such
Subsidiary for substantially the same purpose as such property was used by the
Company or such Subsidiary prior to such sale or transfer.

(o) Contingent Liabilities. Create, incur,
assume, or in any manner become liable in respect of, or suffer to exist,
Contingent Liabilities in excess of $1,000,000 for the Company and the
Subsidiaries on a consolidated basis, except the Contingent Liabilities listed
on attached Schedule 5.2(o).

(p) Negative Pledge Limitation. Enter into any
agreement with any person other than the Banks pursuant hereto which prohibits
or limits the ability of the Company or any Subsidiary to create, incur, assume
or suffer to exist any Lien upon any of its assets, rights, revenues or
property, real, personal or mixed, tangible or intangible, whether now owned or
hereafter acquired.

(q) Inconsistent Agreements. Enter into any
agreement or permit or suffer any Subsidiary to enter into any agreement
containing any provision which would be violated or breached by this Agreement
or any of the transactions contemplated hereby or by performance by the Company
or any of its Subsidiaries or any Guarantor of its obligations in connection
therewith.

ARTICLE VI
DEFAULT
-------

6.1 Events of Default. The occurrence of any one of the
following events or conditions shall be deemed an "Event of Default" hereunder
unless waived by the Required Banks pursuant to Section 8.1:

(a) Nonpayment. The Company shall fail to pay
when due any principal of the Notes, or any reimbursement obligation under
Section 3.3 (whether by deemed disbursement of a Revolving Credit Loan or
otherwise), or within 5 days after becoming due, any interest on the Notes, any
fees or any other amount payable hereunder;

-49-
<PAGE> 50
(b) Misrepresentation. Any representation or
warranty made by the Company or any Guarantor in Article IV hereof or in any
Security Document or any other certificate, report, financial statement or
other document furnished by or on behalf of the Company or any Guarantor in
connection with this Agreement, shall prove to have been incorrect in any
material respect when made or deemed made;

(c) Certain Covenants. The Company shall fail to
perform or observe any term, covenant or agreement contained in Article V
hereof;

(d) Other Defaults. The Company or any Guarantor
shall fail to perform or observe any other term, covenant or agreement
contained in this Agreement, and any such failure shall remain unremedied for
15 calendar days after notice thereof shall have been given to the Company or
such Guarantor, as the case may be, by the Agent;

(e) Other Indebtedness. The Company or any of
its Subsidiaries shall fail to pay any part of the principal of, the premium,
if any, or the interest on, or any other payment of money due under any of its
Indebtedness (other than Indebtedness hereunder), beyond any period of grace
provided with respect thereto, which individually or together with other such
Indebtedness as to which any such failure exists has an aggregate outstanding
principal amount in excess of $200,000; or if the Company or any of its
Subsidiaries fails to perform or observe any other term, covenant or agreement
contained in any agreement, document or instrument evidencing or securing any
such Indebtedness having such aggregate outstanding principal amount, or under
which any such Indebtedness was issued or created, beyond any period of grace,
if any, provided with respect thereto if the effect of such failure is either
(i) to cause, or permit the holders of such Indebtedness (or a trustee on
behalf of such holders) to cause, any payment in respect of such Indebtedness
to become due prior to its due date or (ii) to permit the holders of such
Indebtedness (or a trustee on behalf of such holders) to elect a majority of
the board of directors of the Company;

(f) Judgments. After the Effective Date, and
excluding the litigation on Schedule 4.5, one or more judgments or orders for
the payment of money in an aggregate amount of $1,000,000 in any fiscal year
shall be rendered against the Company or any of its Subsidiaries, or any other
judgment or order (whether or not for the payment of money) shall be rendered
against or shall affect the Company or any of its Subsidiaries which causes or
could cause a material adverse change in the business, properties, operations
or condition, financial or otherwise, of the Company or any of its Subsidiaries
or which does or could have a material adverse effect on the legality, validity
or enforceability of this Agreement, the Notes or any Security Document, and
either (i) such judgment or order shall have remained unsatisfied and the
Company or such Subsidiary shall not have taken action necessary to stay
enforcement thereof by reason of pending appeal or otherwise, prior to the
expiration of the applicable period of limitations for taking such action or,
if such action shall have been taken, a final order denying such stay shall
have been rendered, or (ii) enforcement proceedings shall have been commenced
by any creditor upon any such judgment or order;

-50-
<PAGE> 51
(g) ERISA. The occurrence of a Reportable Event
that results in or could result in liability of the Company, any Subsidiary of
the Company or any ERISA Affiliate to the PBGC or to any Plan and such
Reportable Event is not corrected within thirty (30) days after the occurrence
thereof; or the occurrence of any Reportable Event which could constitute
grounds for termination of any Plan by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer any Plan
and such Reportable Event is not corrected within thirty (30) days after the
occurrence thereof; or the filing by the Company, any Subsidiary of the Company
or any ERISA Affiliate of a notice of intent to terminate a Plan or the
institution of other proceedings to terminate a Plan; or the Company, any
Subsidiary of the Company or any ERISA Affiliate shall fail to pay when due any
liability to the PBGC or to a Plan; or the PBGC shall have instituted
proceedings to terminate, or to cause a trustee to be appointed to administer,
any Plan; or any person engages in a Prohibited Transaction with respect to any
Plan which results in or could result in liability of the Company, any
Subsidiary of the Company, any ERISA Affiliate to make a required installment
or other payment to any Plan within the meaning of Section 302(f) of ERISA or
Section 412(n) of the Code that results in or could result in liability of the
Company, any Subsidiary of the Company or any ERISA Affiliate to the PBGC or
any Plan; or the withdrawal of the Company, any of its Subsidiaries or any
ERISA Affiliate from a Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA; or the Company, any of its
Subsidiaries or any ERISA Affiliate becomes an employer with respect to any
Multiemployer Plan without the prior written consent of the Required Banks;

(h) Insolvency, Etc.. The Company or any of its
Subsidiaries shall be dissolved or liquidated (or any judgment, order or decree
therefor shall be entered), or shall generally not pay its debts as they become
due, or shall admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors, or shall
institute, or there shall be instituted against the Company or any of its
Subsidiaries, any proceeding or case seeking to adjudicate it as bankrupt or
insolvent or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief or protection of
debtors or seeking the entry of an order for relief, or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its assets, rights, revenues or property, and, if such
proceeding is instituted against the Company or such Subsidiary and is being
contested by the Company or such Subsidiary, as the case may be, in good faith
by appropriate proceedings, such proceeding shall remain undismissed or
unstayed for a period of 60 days; or the Company or such Subsidiary shall take
any action (corporate or other) to authorize or further any of the actions
described above in this subsection;

(i) Security Documents. Any event of default
described in any Security Document shall have occurred and be continuing, or
any material provision of any Security Document shall at any time for any
reason cease to be valid and binding and enforceable against any obligor
thereunder, or the validity, binding effect or enforceability thereof shall be
contested by any person, or any obligor, shall deny that it has any or further
liability or obligation thereunder, or any Security Document shall be
terminated, invalidated or set aside, or be declared

-51-
<PAGE> 52
ineffective or inoperative or in any way cease to give or provide to the Banks
and the Agent the benefits purported to be created thereby; or

(j) Control. Cyril C. Baldwin, Jr., James A.
Mack and Peter Tracey shall cease to hold the offices of Chief Executive
Officer, President and Chief Operating Officer, and Vice-President and Chief
Financial Officer, respectively, or other comparable positions; provided,
however, that if the employment of any such individuals ceases as a result of
death, disability, or voluntary retirement, it shall not be a default hereunder
if a replacement for such officer acceptable to the Agent and the Banks shall
have been appointed and taken office within 45 calendar days of such death,
disability or voluntary retirement.

6.2 Remedies.
--------

(a) Upon the occurrence and during the
continuance of any Event of Default, the Agent may, with the consent of the
Required Banks, and, upon being directed to do so by the Required Banks, shall
by notice to the Company (i) terminate the Commitments or (ii) declare the
outstanding principal of, and accrued interest on, the Notes, all unpaid
reimbursement obligations in respect of drawings under Letters of Credit and
all other amounts owing under this Agreement to be immediately due and payable,
or (iii) demand immediate delivery of cash collateral, and the Company agrees
to deliver such cash collateral upon demand, in an amount equal to the maximum
amount that may be available to be drawn at any time prior to the stated expiry
of all outstanding Letters of Credit, or any one or more of the foregoing,
whereupon the Commitments shall terminate forthwith and all such amounts,
including such cash collateral, shall become immediately due and payable, as
the case may be, provided that in the case of any event or condition described
in Section 6.1(h) with respect to the Company, the Commitments shall
automatically terminate forthwith and all such amounts, including such cash
collateral, shall automatically become immediately due and payable without
notice; in all cases without demand, presentment, protest, diligence, notice of
dishonor or other formality, all of which are hereby expressly waived. Such
cash collateral delivered in respect of outstanding Letters of Credit shall be
deposited in a special cash collateral account to be held by the Agent as
collateral security for the payment and performance of the Company's
obligations under this Agreement to the Banks and the Agent.

(b) The Agent may, with the consent of the
Required Banks, and, upon being directed to do so by the Required Banks, shall,
in addition to the remedies provided in Section 6.2(a), exercise and enforce
any and all other rights and remedies available to it or the Banks, whether
arising under this Agreement, the Notes or any Security Document or under
applicable law, in any manner deemed appropriate by the Agent, including suit
in equity, action at law, or other appropriate proceedings, whether for the
specific performance (to the extent permitted by law) of any covenant or
agreement contained in this Agreement or in the Notes or any Security Document
or in aid of the exercise of any power granted in this Agreement, the Notes or
any Security Document.

-52-
<PAGE> 53
(c) Upon the occurrence and during the
continuance of any Event of Default, each Bank may, subject to Section 7.10, at
any time and from time to time, without notice to the Company (any requirement
for such notice being expressly waived by the Company) set off and apply
against any and all of the obligations of the Company now or hereafter existing
under this Agreement, whether owing to such Bank or any other Bank or the
Agent, any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Bank
to or for the credit or the account of the Company and any property of the
Company from time to time in possession of such Bank, irrespective of whether
or not such Bank shall have made any demand hereunder and although such
obligations may be contingent and unmatured. The Company hereby grants to the
Banks and the Agent a lien on and security interest in all such deposits,
indebtedness and property as collateral security for the payment and
performance of the obligations of the Company under this Agreement. The rights
of such Bank under this Section 6.2(c) are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which such
Bank may have.

(d) In addition to other amounts payable pursuant
to this Agreement, the Company confirms that it shall further pay, together
with any payment of the Term Loans hereunder after the occurrence and during
the continuance of any Event of Default, all amounts required to be paid
pursuant to Section 3.9. The Company agrees that such amounts are a reasonable
pre-estimate of loss and not a penalty. Such amounts are payable as liquidated
damages for the loss of bargain and payment of such amount shall not in any way
reduce, affect or impair any other obligations of the Company under this
Agreement.

(e) All moneys received by the Agent on behalf of
the Banks from its exercise of remedies under this Agreement, the Notes, any
Security Document, any related documents or applicable law, shall be applied as
follows:

(i) First, to the payment of all
expenses incurred by the Agent in connection with the exercise of such rights
and remedies, including, without limitation, all costs and expenses of
collection, attorneys' fees, court costs and foreclosure expenses and all other
fees of the Agent;

(ii) Next, to the payment of the accrued
interest and principal balance then owing on the Notes and the reimbursement
and other obligations owing pursuant to the Letters of Credit, pro rata in
accordance with the amount thereof, and such amounts applied to any of the
Notes are to be allocated between interest and principal on each Note as
determined by the Bank holding such Note;

(iii) Next, to the payment of all other
amounts owed by the Company to any Bank or the Agent which are not under this
Agreement, including but not limited to Supplementary Loans prior to
refinancing under this Agreement pursuant to Section 2.1(e), but which are
secured by the Security Documents, pro rata in accordance with such amounts
owing; and

-53-
<PAGE> 54
(iv) Next, to the Company or such other
person as shall be legally entitled thereto.

ARTICLE VII
THE AGENT AND THE BANKS
-----------------------

7.1 Appointment and Authorization. Each Bank hereby
irrevocably appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement, the Notes and the
Security Documents as are delegated to the Agent by the terms hereof or
thereof, together with all such powers as are reasonably incidental thereto.
The provisions of this Article VII are solely for the benefit of the Agent and
the Banks, and the Company shall not have any rights as a third party
beneficiary of any of the provisions hereof. In performing its functions and
duties under this Agreement, the Agent shall act solely as agent of the Banks
and does not assume and shall not be deemed to have assumed any obligation
towards or relationship of agency or trust with or for the Company.

7.2 Agent and Affiliates. NBD Bank, N.A. in its capacity
as a Bank hereunder shall have the same rights and powers hereunder as any
other Bank and may exercise or refrain from exercising the same as though it
were not the Agent. NBD Bank, N.A. and its Affiliates (and any Bank) may
(without having to account therefor to any Bank) accept deposits from, lend
money to, and generally engage in any kind of banking, trust, financial
advisory or other business with the Company or any Subsidiary of the Company as
if it were not acting as Agent hereunder, and may accept fees and other
consideration therefor without having to account for the same to the Banks.

7.3 Scope of Agent's Duties. The Agent shall have no
duties or responsibilities except those expressly set forth herein, and shall
not, by reason of this Agreement, have a fiduciary relationship with any Bank,
beyond the agency created herein and subject to the terms herein, and no
implied covenants, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or shall otherwise exist against the Agent. As to
any matters not expressly provided for by this Agreement (including, without
limitation, collection and enforcement actioned under the Notes and the
Security Documents), the Agent shall not be required to exercise any discretion
or take any action, but the Agent shall take such action or omit to take any
action pursuant to the reasonably written instructions of the Required Banks
and may request instructions from the Required Banks. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, pursuant to
the written instructions of the Required Banks, which instructions and any
action or omission pursuant thereto shall be binding upon all of the Banks;
provided, however, that the Agent shall not be required to act or omit to act
if, in the judgment of the Agent, such action or omission may expose the Agent
to personal liability or is contrary to this Agreement, the Notes or the
Security Documents or applicable law.

7.4 Reliance by Agent. The Agent shall be entitled to
rely upon any certificate, notice, document or other communication (including
any cable, telegram, telex, facsimile transmission or oral communication)
believed by it to be genuine and correct and to have been

-54-
<PAGE> 55
sent or given by or on behalf of a proper person. The Agent may treat the
payee of any Note as the holder thereof. The Agent may employ agents
(including, without limitation, collateral agents) and may consult with legal
counsel (who may be counsel for the Company), independent public accounts and
other experts selected by it and shall not be liable to the Banks, except as to
money or property received by it or its authorized agents, for the negligence
or misconduct of any such agent selected by it with reasonable care or 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.

7.5 Default. The Agent shall not be deemed to have
knowledge of the occurrence of any Default or Event of Default, unless the
Agent has actual knowledge or has otherwise received written notice from a Bank
or the Company specifying such Default or Event of Default and stating that
such notice is a "Notice of Default". In the event that the Agent receives
such a notice, the Agent shall promptly give written notice thereto to the
Banks. As used herein, "actual knowledge" shall mean the actual knowledge of
the responsible loan officer of the Agent, obtained in administering the
Company's account.

7.6 Liability of Agent. Neither the Agent nor any of its
directors, officers, agents, or employees shall be liable to the Banks for any
action taken or not taken by it or them in connection herewith with the consent
or at the request of the Required Banks or in the absence of its or their own
gross negligence or willful misconduct. Neither the Agent nor any of its
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any recital, statement, warranty
or representation contained in this Agreement, any Note or any Security
Document, or in any certificate, report, financial statement or other document
furnished in connection with this Agreement, (ii) the performance or observance
of any of the covenants or agreements of the Company or any Guarantor, (iii)
the satisfaction of any condition specified in Article II hereof, of (iv) the
validity, effectiveness, legal enforceability, value or genuineness of this
Agreement, the Notes or the Security Documents or any collateral subject
thereto or any other instrument or document furnished in connection herewith.

7.7 Nonreliance on Agent and Other Banks. Each Bank
acknowledges and agrees that it has, independently and without reliance on the
Agent or any other Bank, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Company and decision to
enter into this Agreement and 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 analysis and
decision in taking or not taking action under this Agreement. The Agent shall
not be required to keep itself informed as to the performance or observance by
the Company or any Guarantor of this Agreement, the Notes or the Security
Documents or any other documents referred to or provided for herein or to
inspect the properties or books of the Company or any Guarantor and, except for
notices, reports and other documents and information expressly required to be
furnished to the Banks by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Bank with any information concerning the
affairs, financial

-55-
<PAGE> 56
condition or business of the Company or any of its Subsidiaries which may come
into the possession of the Agent or any of its Affiliates.

7.8 Indemnification. The Banks agree to indemnify the
Agent (to the extent not reimbursed by the Company, but without limiting any
obligation of the Company to make such reimbursement), ratably according to the
respective principal amounts of the Advances then outstanding made by each of
them (or if no Advances are at the time outstanding, ratably according to the
respective amounts of their Commitments), from and against any and all claims,
damages, losses, liabilities, costs or expenses of any kind or nature
whatsoever (including, without limitation, fees and disbursements of counsel)
which may be imposed on, incurred by, or asserted against the Agent in any way
relating to or arising out of this Agreement or the transactions contemplated
hereby or any action taken or omitted by the Agent under this Agreement,
provided, however, that no Bank shall be liable for any portion of such claims,
damages, losses, liabilities, costs or expenses resulting from the Agent's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Bank agrees to reimburse the Agent promptly upon demand for its ratable
share of any out-of-pocket expenses (including, without limitation, fees and
expenses of counsel) incurred by the Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, to the
extent that the Agent is not reimbursed for such expenses by the Company, but
without limiting the obligation of the Company to make such reimbursement.
Each Bank agrees to reimburse the Agent promptly upon demand for its ratable
share of any amounts owing to the Agent by the Banks pursuant to this Section.
If the indemnity furnished to the Agent under this Section shall, in the
judgment of the Agent, be insufficient or become impaired, the Agent may call
for additional indemnity from the Banks and cease, or not commence, to take any
action until such additional indemnity if furnished.

7.9 Resignation or Removal of Agent. The Agent may
resign as such at any time upon thirty days' prior written notice to the
Company and the Banks or may be removed for cause as such upon vote of the
Required Banks. In the event of any such resignation or removal, the Required
Banks shall, by an instrument in writing delivered to the Company and the
Agent, appoint a successor, with the consent of the Company, which shall be a
commercial bank organized under the laws of the United States or any State
thereof and having a combined capital and surplus of at least $500,000,000. If
a successor is not so appointed or does not accept such appointment before the
Agent's resignation or removal becomes effective, the resigning or removed
Agent may appoint a temporary successor to act until such appointment by the
Required Banks is made and accepted or if no such temporary successor is
appointed as provided above by the resigning or removed Agent, the Agent agrees
to continue to perform administrative duties hereunder for a fee to be agreed
upon at such time until such appointment by the Required Banks is made and
accepted. Any successor to the Agent shall execute and deliver to the Company
and the Banks an instrument accepting such appointment and thereupon such
successor Agent, without further act, deed, conveyance or transfer shall become
vested with all of the properties, rights, interests, powers, authorities and
obligations of its predecessor hereunder with like effect as if originally
named as Agent hereunder. Upon request of such successor Agent, the Company
and

-56-
<PAGE> 57
the resigning or removed Agent shall execute and deliver such instruments of
conveyance, assignment and further assurance and do such other things as may
reasonably be required for more fully and certainly vesting and confirming in
such successor Agent all such properties, rights, interests, powers,
authorities and obligations. The provisions of this Article VII shall
thereafter remain effective for such resigning or removed Agent with respect to
any actions taken or omitted to be taken by such Agent while acting as the
Agent hereunder.

7.10 Sharing of Payments. The Banks agree among
themselves that, in the event that any Bank shall obtain payment in respect of
any Advance or any other obligation owing to the Banks under this Agreement
through the exercise of a right of set-off, banker's lien, counterclaim or
otherwise in excess of its ratable share of payments received by all of the
Banks on account of the Advances and other obligations (or if no Advances are
outstanding, ratably according to the respective amounts of the Commitments),
such Bank shall promptly purchase from the other Banks participations in such
Advances and other obligations in such amounts, and make such other adjustments
from time to time, as shall be equitable to the end that all of the Banks share
such payment in accordance with such ratable shares. The Banks further agree
among themselves that if payment to a Bank obtained by such Bank through the
exercise of a right of set-off, banker's lien, counterclaim or otherwise as
aforesaid shall be rescinded or must otherwise be restored, each Bank which
shall have shared the benefit of such payment shall, by repurchase of
participations theretofore sold, return its share of that benefit to each Bank
whose payment shall have been rescinded or otherwise restored. The Company
agrees that any Bank so purchasing such a participation may, to the fullest
extent permitted by law, exercise all rights of payment, including set-off,
banker's lien or counterclaim, with respect to such participation as fully as
if such Bank were a holder of such Advance or other obligation in the amount of
such participation. The Banks further agree among themselves that, in the
event that amounts received by the Banks and the Agent hereunder are
insufficient to pay all such obligations or insufficient to pay all such
obligations when due, the fees and other amounts owing to the Agent in such
capacity shall be paid therefrom before payment of obligations owing to the
Banks under this Agreement. Except as otherwise expressly provided in this
Agreement, if any Bank or the Agent shall fail to remit to the Agent or any
other Bank an amount payable by such Bank or the Agent to the Agent or such
other Bank pursuant to this Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Agent or such
other Bank at a rate per annum equal to the rate at which borrowings are
available to the payee in its overnight federal funds market. It is further
understood and agreed among the Banks and the Agent that if the Agent shall
engage in any other transactions with the Company and shall have the benefit of
any collateral or security therefor which does not expressly secure the
obligations arising under this Agreement except by virtue of a so-called
dragnet clause or comparable provision, the Agent shall be entitled to apply
any proceeds of such collateral or security first in respect of the obligations
arising in connection with such other transaction before application to the
obligations arising under this Agreement.

-57-
<PAGE> 58
ARTICLE VIII
MISCELLANEOUS
-------------

8.1 Amendments, Etc. (a) No amendment, modification,
termination or waiver of any provision of this Agreement or any Security
Document nor any consent to any departure therefrom shall be effective unless
the same shall be in writing and signed by the Required Banks and, to the
extent any rights or duties of the Agent may be affected thereby, the Agent,
provided, however, that no such amendment, modification, termination, waiver or
consent shall, without the consent of the Agent and all of the Banks, (i)
authorize or permit the extension of time for, or any reduction of the amount
of, any payment of the principal of, or interest on, the Notes or any order or
manner in which such payments are applied or any Letter of Credit reimbursement
obligation, or any fees or other amount payable hereunder, other than
extensions pursuant to the terms of Section 2.4(e), (ii) amend or terminate the
respective Commitments of any Bank set forth on the signature pages hereof or
modify the provisions of this Section regarding the taking of any action under
this Section or the provisions of Section 7.10 or the definition of Required
Banks, (iii) provide for the discharge of any Guarantor, (iv) release any
collateral or amend or modify the description of liabilities or obligations
secured by any Security Document, (v) amend the definition of Borrowing Base or
amend any of the advance ratios thereunder, (vi) amend, modify or waive the
covenant set forth in Section 5.2(e), (vii) amend the definition of Collateral
Event or Trigger Event or waive the occurrence of any Collateral Event or
Trigger Event or any requirement as a result of the occurrence of any
Collateral Event or Trigger Event.

(b) Any such amendment, waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.

8.2 Notices. (a) Except as otherwise provided in
Section 8.2(c) hereof, all notices and other communications hereunder shall be
in writing and shall be delivered or sent to the Company at 1 Meadowlands
Plaza, East Rutherford, New Jersey 07073, Attention: Peter Tracey, Vice
President - Finance, Facsimile No. (201) 804-9852, and to the Agent and the
Banks at the respective addresses and numbers for notices set forth on the
signature pages hereof, or to such other address as may be designated by the
Company, the Agent or any Bank by notice to the other parties hereto. All
notices and other communications shall be deemed to have been given at the time
of actual delivery thereof to such address, or if sent by certified or
registered mail, postage prepaid, to such address, on the third day after the
date of mailing, or in the case of telex notice, upon receipt of the
appropriate answerback, or, in the case of facsimile notice, upon receipt of a
confirmation mechanically produced by the facsimile machine, provided, however,
that notices to the Agent shall not be effective until received.

(b) Notices by the Company to the Agent with
respect to terminations or reductions of the Commitments pursuant to Section
2.2 requests for Advances pursuant to Section 2.4, requests for continuations
or conversions of Loans pursuant to Section 2.7 and notices of prepayment
pursuant to Section 3.1 shall be irrevocable and binding on the Company.

-58-
<PAGE> 59
(c) Any notice to be given by the Company to the
Agent pursuant to Sections 2.4, 2.7 or 3.1 and any notice to be given by the
Agent or any Bank hereunder, may be given by telephone, and all such notices
given by the Company must be immediately confirmed in writing in the manner
provided in Section 8.2(a). Any such notice given by telephone shall be deemed
effective upon receipt thereof by the party to whom such notice is to be given.

8.3 No Waiver By Conduct; Remedies Cumulative. No course
of dealing on the part of the Agent or any Bank, nor any delay or failure on
the part of the Agent or any Bank in exercising any right, power or privilege
hereunder shall operate as a waiver of such right, power or privilege or
otherwise prejudice the Agent's or such Bank's rights and remedies hereunder;
nor shall any single or partial exercise thereof preclude any further exercise
thereof or the exercise of any other right, power or privilege. No right or
remedy conferred upon or reserved to the Agent or any Bank under this
Agreement, the Notes or any Security Document is intended to be exclusive of
any other right or remedy, and every right and remedy shall be cumulative and
in addition to every other right or remedy granted thereunder or now or
hereafter existing under any applicable law. Every right and remedy granted by
this Agreement, the Notes or any Security Document or by applicable law to the
Agent or any Bank may be exercised from time to time and as often as may be
deemed expedient by the Agent or any Bank and, unless contrary to the express
provisions of this Agreement, the Notes or any Security Document, irrespective
of the occurrence or continuance of any Default or Event of Default.

8.4 Reliance on and Survival of Various Provisions. All
terms, covenants, agreements, representations and warranties of the Company or
any Guarantor made herein or in any Security Document or in any certificate,
report, financial statement or other document furnished by or on behalf of the
Company or any Guarantor in connection with this Agreement shall be deemed to
be material and to have been relied upon by the Banks, notwithstanding any
investigation heretofore or hereafter made by any Bank or on such Bank's
behalf, and those covenants and agreements of the Company set forth in Section
3.7, 3.9 and 8.5 hereof shall survive the repayment in full of the Advances and
the termination of the Commitments.

8.5 Expenses; Indemnification. (a) The Company agrees
to pay, or reimburse the Agent for the payment of, on demand, (i) the
reasonable fees and expenses of counsel to the Agent, including without
limitation the fees and expenses of Dickinson, Wright, Moon, Van Dusen &
Freeman in connection with the preparation, execution, delivery and
administration of this Agreement, the Notes, the Security Documents and the
consummation of the transactions contemplated hereby, and in connection with
advising the Agent as to its rights and responsibilities with respect thereto,
and in connection with any amendments, waivers or consents in connection
therewith and the reasonable fees and expenses of counsel to the Banks, in an
amount not to exceed $2,000 for each Bank, in connection with the review and
negotiation of this Agreement, the Notes and the Security Documents, and (ii)
all stamp and other taxes and fees payable or determined to be payable in
connection with the execution, delivery, filing or recording of this Agreement,
Notes, the Security Documents and the consummation of the transactions
contemplated hereby, and any and all liabilities with respect to or resulting
from any delay in paying or omitting to pay such taxes or fees, and (iii) all
reasonable costs and expenses

-59-
<PAGE> 60
of the Agent and the Banks (including reasonable fees and expenses of counsel
and whether incurred through negotiations, legal proceedings or otherwise) in
connection with any Default or Event of Default or the enforcement of, or the
exercise or preservation of any rights under, this Agreement or the Notes or
any Security Document or in connection with any refinancing or restructuring of
the credit arrangements provided under this Agreement and (iv) all reasonable
costs and expenses of the Agent and the Banks (including reasonable fees and
expenses of counsel) in connection with any action or proceeding relating to a
court order, injunction or other process or decree restraining or seeking to
restrain the Agent from paying any amount under, or otherwise relating in any
way to, any Letter of Credit and any and all costs and expenses which any of
them may incur relative to any payment under any Letter of Credit.

(b) The Company hereby indemnifies and agrees to
hold harmless the Banks and the Agent, and their respective officers,
directors, employees and agents, harmless from and against any and all claims,
damages, losses, liabilities, costs or expenses of any kind or nature
whatsoever which the Banks or the Agent or any such person may incur or which
may be claimed against any of them by reason of or in connection with any
Letter of Credit, and neither any Bank nor the Agent or any of their respective
officers, directors, employees or agents shall be liable or responsible for:
(i) the use which may be made of any Letter of Credit or for any acts or
omissions of any beneficiary in connection therewith; (ii) the validity,
sufficiency or genuineness of documents or of any endorsement thereon, even if
such documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (iii) payment by the Agent to the
beneficiary under any Letter of Credit against presentation of documents which
do not comply with the terms of any Letter of Credit, including failure of any
documents to bear any reference or adequate reference to such Letter of Credit;
(iv) 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; or (v) any other event or circumstance whatsoever arising in
connection with any Letter of Credit; provided, however, that the Company shall
not be required to indemnify the Banks and the Agent and such other persons,
and the Banks shall be liable to the Company to the extent, but only to the
extent, of any direct, as opposed to consequential or incidental, damages
suffered by the Company which were caused by (A) the Agent's wrongful dishonor
of any Letter of Credit after the presentation to it by the beneficiary
thereunder of a draft or other demand for payment and other documentation
strictly complying with the terms and conditions of such Letter of Credit, or
(B) the Agent's payment by the Agent to the beneficiary under any Letter of
Credit against presentation of documents which do not comply with the terms of
the Letter of Credit to the extent, but only to the extent, that such payment
constitutes gross negligence or wilful misconduct of the Agent. It is
understood that in making any payment under a Letter of Credit the Agent will
rely on documents presented to it under such Letter of Credit as to any and all
matters set forth therein without further investigation and regardless of any
notice or information to the contrary, and such reliance and payment against
documents presented under a Letter of Credit substantially complying with the
terms thereof shall not be deemed gross negligence or wilful misconduct of the
Agent in connection with such payment. It is further acknowledged and agreed
that the Company may have rights against the beneficiary or others in
connection with any Letter of Credit with respect to which the Banks are
alleged to be liable and it shall be a precondition of the assertion of any
liability

-60-
<PAGE> 61
of the Banks under this Section that the Company shall first have exhausted all
remedies in respect of the alleged loss against such beneficiary and any other
parties obligated or liable in connection with such Letter of Credit and any
related transactions.

(c) The Company hereby indemnifies and agrees to
hold harmless the Banks and the Agent, and their respective officers,
directors, employees and agents, from and against any and all claims, damages,
losses, liabilities, costs or expenses of any kind or nature whatsoever
(including reasonable attorneys fees and disbursements incurred in connection
with any investigative, administrative or judicial proceeding whether or not
such person shall be designated as a party thereto) which the Banks or the
Agent or any such person may incur or which may be claimed against any of them
by reason of or in connection with entering into this Agreement or the
transactions contemplated hereby; provided, however, that the Company shall not
be required to indemnify any such Bank and the Agent or such other person, to
the extent, but only to the extent, that such claim, damage, loss, liability,
cost or expense is attributable to the gross negligence or willful misconduct
of such Bank or the Agent, as the case may be.

8.6 Successors and Assigns. (a) This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that the Company may not, without
the prior consent of the Banks, assign its rights or obligations hereunder or
under the Notes or any Security Document and the Banks shall not be obligated
to make any Advance hereunder to any entity other than the Company.

(b) Each Bank may, with the prior consent of the
Company (which shall not be unreasonably withheld), sell to any financial
institution or institutions, and such financial institution or institutions may
further sell, a participation interest (undivided or divided) in, the Advances
and such Bank's rights and benefits under this Agreement, the Notes and the
Security Documents, and to the extent of that participation interest such
participant or participants shall have the same rights and benefits against the
Company under Section 3.7, 3.9 and 6.2(c) as it or they would have had if such
participant or participants were the Bank making the Advances to the Company
hereunder, provided, however, that (i) such Bank's obligations under this
Agreement shall remain unmodified and fully effective and enforceable against
such Bank, (ii) such Bank shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Bank shall remain
the holder of its Notes for all purposes of this Agreement, (iv) the Company,
the Agent and the other Banks shall continue to deal solely and directly with
such Bank in connection with such Bank's rights and obligations under this
Agreement, and (v) such Bank shall not grant to its participant any rights to
consent or withhold consent to any action taken by such Bank or the Agent under
this Agreement other than action requiring the consent of all of the Banks
hereunder.

(c) The Agent from time to time in its sole
discretion may appoint agents for the purpose of servicing and administering
this Agreement and the transactions contemplated hereby and enforcing or
exercising any rights or remedies of the Agent provided under this Agreement,
the Notes, any Security Documents or otherwise. In furtherance of such agency,
the Agent may from time to time direct that the Company and the Guarantors
provide

-61-
<PAGE> 62
notices, reports and other documents contemplated by this Agreement (or
duplicates thereof) to such agent. The Company and each Guarantor hereby
consents to the appointment of such agent and agrees to provide all such
notices, reports and other documents and to otherwise deal with such agent
acting on behalf of the Agent in the same manner as would be required if
dealing with the Agent itself.

(d) Each Bank may, with the prior consent of the
Company (which shall not be unreasonably withheld) and the Agent, assign to one
or more banks or other entities all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment, the Advances owing to it and the Note or Notes held by it);
provided, however, that (i) each such assignment shall be of a uniform, and not
a varying, percentage of all rights and obligations, (ii) except in the case of
an assignment of all of a Bank's rights and obligations under this Agreement,
(A) the amount of the Commitment of the assigning Bank being assigned pursuant
to each such assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event be less than
$10,000,000, and in integral multiples of $1,000,000 thereafter, or such lesser
amount as the Company and the Agent may consent to and (B) after giving effect
to each such assignment, the amount of the remaining Commitment of the
assigning Bank shall in no event be less than $10,000,000; provided, that, the
Revolving Credit Commitment of the Agent shall in no event be less than the
lesser of (x) $25,000,000 or (y) an amount equal to 25% of the aggregate
Revolving Credit Commitments, (iii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance in the form of Exhibit M hereto (an
"Assignment and Acceptance"), together with any Note or Notes subject to such
assignment and a processing and recordation fee of $3,000, and (iv) any Bank
may without the consent of the Company or the Agent, and without paying any
fee, assign to any Affiliate of such Bank that is a bank or financial
institution all of its rights and obligations under this Agreement. Upon such
execution, delivery, acceptance and recording, from and after the effective
date specified in such Assignment and Acceptance, (x) the assignee thereunder
shall be a party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and Acceptance,
have the rights and obligations of a Bank hereunder and (y) the Bank assignor
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the remaining portion of
an assigning Bank's rights and obligations under this Agreement, such Bank
shall cease to be a party hereto).

(e) By executing and delivering an Assignment and
Acceptance, the Bank assignor thereunder and the assignee thereunder confirm to
and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Bank makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Bank makes no representation or
warranty and assumes no

-62-
<PAGE> 63
responsibility with respect to the financial condition of the Company or the
performance or observance by the Company of any of its obligations under this
Agreement or any other instrument or document furnished pursuant hereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the financial statements referred to in Section 4.6 and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the Agent, such
assigning Bank or any other Bank and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v) such
assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers and discretion under this Agreement as are
delegated to the Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vi) such assignee agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of this Agreement are required to be performed by it as a Bank.

(f) The Agent shall maintain at its address
designated on the signature pages hereof a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the recordation
of the names and addresses of the Banks and the Commitment of, and principal
amount of the Advances owing to, each Bank from time to time (the "Register").
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Company, the Agent and the Banks may treat each
person whose name is recorded in the Register as a Bank hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Company or any Bank at any reasonable time and from time to time upon
reasonable prior notice.

(g) Upon its receipt of an Assignment and
Acceptance executed by an assigning Bank and an assignee, together with any
Note or Notes subject to such assignment, the Agent shall, if such Assignment
and Acceptance has been completed, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register and (iii) give
prompt notice thereof to the Company. Within five Business Days after its
receipt of such notice, the Company, at the expense of the assigning Bank,
shall execute and deliver to the Agent in exchange for the surrendered Note or
Notes a new Note to the order of such assignee in an amount equal to the
Commitment assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Bank has retained a Commitment hereunder, a new Note to the order of
the assigning Bank in an amount equal to the Commitment retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes and
shall be dated the effective date of such Assignment and Acceptance.

(h) The Company shall not be liable for any costs
or expenses of any Bank in effectuating any participation or assignment under
this Section 8.6.

(i) The Banks may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 8.6, disclose to the assignee or

-63-
<PAGE> 64
participant or proposed assignee or participant any information relating to the
Company and its Subsidiaries required to be delivered by the Company pursuant
to Section 5.1(d).

(j) Notwithstanding any other provision set forth
in this Agreement, any Bank may at any time create a security interest in, or
assign, all or any portion of its rights under this Agreement (including,
without limitation, the Loans owing to it and the Note or Notes held by it) in
favor of any Federal Reserve Bank in accordance with Regulation A of the Board
of Governors of the Federal Reserve System; provided that such creation of a
security interest or assignment shall not release such Bank from its
obligations under this Agreement.

8.7 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.

8.8 Governing Law. This Agreement is a contract made
under, and shall be governed by and construed in accordance with, the law of
the State of Michigan in the same manner applicable to contracts made and to be
performed entirely within such State and without giving effect to choice of law
principles of such State. Nothing in this paragraph shall, however, infer that
any Bank, other than NBD Bank, N.A., is doing business in Michigan as a result
of its participation herein. The Company further agrees that any legal action
or proceeding with respect to this Agreement, the Notes or any Security
Document or the transactions contemplated hereby may be brought in any court of
the State of Michigan, or in any court of the United States of America sitting
in Michigan, and the Company hereby submits to and accepts generally and
unconditionally the jurisdiction of those courts with respect to its person and
property, and irrevocably appoints CT Corporation System, whose address in
Michigan is 615 Griswold Street, Detroit, Michigan 48226, as its agent for
service of process and irrevocably consents to the service of process in
connection with any such action or proceeding by personal delivery to such
agent or to the Company or by the mailing thereof by registered or certified
mail, postage prepaid to the Company at its address set forth in Section 8.2.
Nothing in this paragraph shall affect the right of the Banks and the Agent to
serve process in any other manner permitted by law or limit the right of the
Banks or the Agent to bring any such action or proceeding against the Company
or property in the courts of any other jurisdiction. The Company hereby
irrevocably waives any objection to the laying of venue of any such suit or
proceeding in the above described courts.

8.9 Table of Contents and Headings. The table of
contents and the headings of the various subdivisions hereof are for the
convenience of reference only and shall in no way modify any of the terms or
provisions hereof.

8.10 Construction of Certain Provisions. If any provision
of this Agreement refers to any action to be taken by any person, or which such
person is prohibited from taking, such provision shall be applicable whether
such action is taken directly or indirectly by such person, whether or not
expressly specified in such provision.

-64-
<PAGE> 65
8.11 Integration and Severability. This Agreement
embodies the entire agreement and understanding between the Company and the
Agent and the Banks, and supersedes all prior agreements and understandings,
relating to the subject matter hereof. In case any one or more of the
obligations of the Company under this Agreement, the Notes or any Security
Document shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining obligations of the
Company shall not in any way be affected or impaired thereby, and such
invalidity, illegality or unenforceability in one jurisdiction shall not affect
the validity, legality or enforceability of the obligations of the Company
under this Agreement, the Notes or any Security Document in any other
jurisdiction.

8.12 Independence of Covenants. All covenants hereunder
shall be given independent effect so that if a particular action or condition
is not permitted by any such covenant, the fact that it would be permitted by
an exception to, or would be otherwise within the limitations of, another
covenant shall not avoid the occurrence of a Default or an Event of Default or
any event or condition which with notice or lapse of time, or both, could
become such a Default or an Event of Default if such action is taken or such
condition exists.

8.13 Interest Rate Limitation. Notwithstanding any
provision of this Agreement, the Notes or any Security Document, in no event
shall the amount of interest paid or agreed to be paid by the Company exceed an
amount computed at the highest rate of interest permissible under applicable
law. If, from any circumstances whatsoever, fulfillment of any provision of
this Agreement, the Notes or any Security Document at the time performance of
such provision shall be due, shall involve exceeding the interest rate
limitation validly prescribed by law which a court of competent jurisdiction
may deem applicable hereto, then, ipso facto, the obligations to be fulfilled
shall be reduced to an amount computed at the highest rate of interest
permissible under applicable law, and if for any reason whatsoever the Bank
shall ever receive as interest an amount which would be deemed unlawful under
such applicable law such interest shall be automatically applied to the payment
of principal of the Advances outstanding hereunder (whether or not then due and
payable) and not to the payment of interest, or shall be refunded to the
Company if such principal and all other obligations of the Company to the Banks
have been paid in full.

8.14 Additional Banks. Additional lenders may also become
Banks hereunder and the aggregate amount of the Commitments hereunder shall
increase accordingly, with the prior written consent of the Company, the Banks
and the Agent, by executing an Assumption Agreement substantially in the form
of Exhibit N hereto provided that each of the Banks shall have the right of
first refusal to accept a pro rata increase in the amount of the increased
Commitments before any additional lender is added hereto. Upon any Bank being
added hereto, a new schedule will be distributed by the Agent to all Banks and
the Company showing the Commitment amount and the pro rata share of each Bank.

8.15 WAIVER OF JURY TRIAL. THE BANKS, THE AGENT AND THE
COMPANY, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH
COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER OF
THEM MAY HAVE TO A TRIAL BY JURY IN ANY

-65-
<PAGE> 66
LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY RELATED
INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF EITHER OF THEM. NEITHER THE BANK, THE AGENT NOR THE
COMPANY SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH
ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE
DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY THE BANKS, THE
AGENT OR THE COMPANY EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM. IT
IS INTENDED THAT THIS WAIVER SHALL APPLY TO ANY COUNTERCLAIMS, RIGHTS AND
DEFENSES IN CONNECTION THEREWITH.

8.16 Indebtedness Under Existing Loan Agreement. The
Loans and Advances made pursuant to Article II are in substitution for the
loans and advances made under the Existing Loan Agreement and the Notes
delivered to the Banks hereunder are delivered in exchange and in substitution
for the notes issued pursuant to the Existing Loan Agreement. The commitments
under the Existing Loan Agreement are superseded and replaced by the
Commitments hereunder. The initial Loans hereunder shall be used to pay all
Indebtedness owing under the notes issued pursuant to the Existing Loan
Agreement.

-66-
<PAGE> 67
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered on the 21st day of September, 1994.

CAMBREX CORPORATION

By /s/ PETER TRACY
--------------------------------

Its VP Finance
-----------------------------
Address for Notices:

611 Woodward Avenue NBD BANK, N.A., Individually as a
Detroit, Michigan 48226 Bank and as Agent

Attention: National Banking Division By /s/ ANNA R. HOFFMAN
Facsimile No.: (313) 225-1586 -------------------------------

Its Vice President
-----------------------------

Commitment Amount: $50,000,000
(comprised of a Term Loan A Commitment
of $11,111,111, a Term Loan B
Commitment of $16,666,667 and a Revolving
Credit Commitment of $22,222,222)

Percentage of Total
Commitments: 22.22222%

-67-
<PAGE> 68
6 Becker Farm Rd. UNITED JERSEY BANK
Roseland, New Jersey 07068

Attention: Mr. William S. Clement By /s/ WILLIAM S. CLEMENT
Facsimile No.: (201) 994-3702 --------------------------------

Its Vice President
-------------------------------
Commitment Amount: $40,000,000
(comprised of a Term Loan A Commitment
of $8,888,889, a Term Loan B
Commitment of $13,333,333 and a
Revolving Credit Commitment of $17,777,778)

Percentage of Total
Commitments: 17.77777%

Glenpointe Plaza NATIONAL WESTMINSTER BANK NJ
400 Frank W. Burr Plaza
Teaneck, New Jersey 07666

Attention: Ms. Elizabeth Neville By /s/ ELIZABETH L. NEVILLE
Facsimile No.: (201) 801-0990 --------------------------------

Its Vice President
-----------------------------

Commitment Amount: $30,000,000
(comprised of a Term Loan A Commitment
of $6,666,667, a Term Loan B
Commitment of $10,000,000 and a
Revolving Credit Commitment of $13,333,333)

Percentage of Total
Commitments: 13.33333%

-68-
<PAGE> 69
Address for Notices:

191 Peachtree Street WACHOVIA BANK OF GEORGIA, N.A.
Atlanta, Georgia 30303

Attention: Mr. Haywood Edmundson By
Facsimile No.: (404) 332-6898 --------------------------------

Its Senior Vice President
-------------------------------

Commitment Amount: $30,000,000
(comprised of a Term Loan A Commitment
of $6,666,667, a Term Loan B
Commitment of $10,000,000 and a Revolving
Credit Commitment of $13,333,333)

Percentage of Total
Commitments: 13.33333%

Address for Notices:

55 East 59th Street BHF-BANK
New York, New York 10022-1186

Attention: Ms. Linda Pace By
Facsimile No.: (212) 756-5911 --------------------------

Its VP
-----------------------
Commitment Amount: $25,000,000
(comprised of a Term Loan A Commitment By
of $5,555,556, a Term Loan B ----------------------
Commitment of $8,333,333 and a Revolving
Credit Commitment of $11,111,111) Its V.P.
------------------
Percentage of Total
Commitments: 11.11111%

-69-
<PAGE> 70
Address for Notices:

100 Federal Street THE FIRST NATIONAL BANK OF BOSTON
Mail Stop 01-21-01
Boston, Massachusetts 02106-2016

Attention: Mr. J. Peter Mitchell By /s/ J. PETER MITCHELL
Facsimile No.: (617) 434-6685 -------------------------

Its Director
------------------------
Commitment Amount: $20,000,000
(comprised of a Term Loan A Commitment
of $4,444,444, a Term Loan B
Commitment of $6,666,667 and a Revolving
Credit Commitment of $8,888,889)

Percentage of Total
Commitments: 8.888888%

Address for Notices:

East 36 Midland Avenue CHEMICAL BANK NEW JERSEY, N.A.
Paramus, New Jersey 07652

Attention: Mr. Barrett Bencivenga By /s/ B. BENCIVENGA
Facsimile No.: (201) 599-6863 --------------------------

Its Vice President
-------------------------
Commitment Amount: $20,000,000
(comprised of a Term Loan A Commitment
of $4,444,444, a Term Loan B
Commitment of $6,666,667 and a Revolving
Credit Commitment of $8,888,889)

Percentage of Total
Commitments: 8.888888%

-70-
<PAGE> 71
Address for Notices:

National City Center NATIONAL CITY BANK
Locater Number 21-02
1900 East Ninth Street
Cleveland, Ohio 44114 By /s/ DAVID A. BURNS
-------------------------

Attention: Mr. David Burns Its Assistant Vice President
Facsimile No.: (216) 575-9396 --------------------------

Commitment Amount: $10,000,000
(comprised of a Term Loan A Commitment
of $2,222,222, a Term Loan B
Commitment of $3,333,333 and a Revolving
Credit Commitment of $4,444,445)

Percentage of Total
Commitments: 4.444444%

Total Commitment of
all Banks: $225,000,000
(comprised of a Total Term Loan A
Commitment of $50,000,000, a Total
Term Loan B Commitment of $75,000,000
and a Total Revolving Credit
Commitment of $100,000,000)

The undersigned Guarantors consent
to the provisions of Section 2.11:

CASCHEM, INC.

By: /s/ PETER TRACEY
----------------------