EAGLE INDUSTRIES INC /DE/, 10-K, 1994-03-29

EAGLE INDUSTRIES INC /DE/
10-K, 1994-03-29
FABRICATED STRUCTURAL METAL PRODUCTS

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the year ended December 31, 1993 Commission file number: 0-20416

EAGLE INDUSTRIES, INC.
(Exact Name of Registrant as Specified in Its Charter)

<TABLE>
<S> <C>
DELAWARE 13-3384361
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
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TWO NORTH RIVERSIDE PLAZA
CHICAGO, ILLINOIS 60606
(Address of Principal Executive Office)

(312) 906-8700
(Registrant's telephone number, including area code)

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

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was inquired to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes X No

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. /X/

State the aggregate market value of the voting stock held by nonaffiliates
of the Registrant.
Not Applicable

Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date.

1,000 shares of Common Stock as of March 15, 1994

Documents Incorporated by Reference: None

The Registrant meets the conditions set forth in General Instruction
(J)(1)(a) and (b) of Form 10-K and is therefore filing
this form with the reduced disclosure format.

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EAGLE INDUSTRIES, INC.

TABLE OF CONTENTS

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PART I. PAGE
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<S> <C> <C>
Item 1. Business.................................................................... 3
Item 2. Properties.................................................................. 11
Item 3. Legal Proceedings........................................................... 13
Item 4. Submission of Matters to a Vote of Security Holders......................... 13
PART II.
Item 5. Market for the Registrant's Common Stock and Related Stockholder Matters.... 13
Item 6. Selected Financial Information.............................................. 13
Item 7. Management's Discussion and Analysis of Financial Condition and Results of
Operations.................................................................. 14
Item 8. Financial Statements and Supplementary Data................................. 26
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure.................................................................. 57
PART III.
Item 10. Directors and Executive Officers of the Registrant.......................... 58
Item 11. Executive Compensation...................................................... 59
Item 12. Security Ownership of Certain Beneficial Owners and Management.............. 59
Item 13. Certain Relationships and Related Transactions.............................. 59
PART IV.
Item 14. Exhibits, Financial Statements and Schedules, and Reports on Form 8-K....... 60
</TABLE>

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PART I

ITEM 1. BUSINESS

THE COMPANY

Eagle Industries, Inc. ("Eagle" or the "Company") is a Delaware
corporation, its principal executive offices are located at Two North Riverside
Plaza, Suite 1100, Chicago, Illinois 60606 and its telephone number is (312)
906-8700. Eagle has grown from revenues of approximately $250 million in 1987 to
$1.1 billion for the year ended December 31, 1993. This growth has been
generated primarily through acquisitions. Eagle is currently comprised of 16
businesses operating in five segments. These businesses generally are low and
medium technology industrial companies in niche markets. They primarily service
the residential and commercial construction, electric utility, chemical and
pharmaceutical, commercial aviation, automotive aftermarket, consumer yarn and
commercial refrigeration markets.

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<CAPTION>
COMPANY DESCRIPTION OF PRODUCT PRIMARY INDUSTRY(IES)
- ---------------------------------- --------------------------- ---------------------------
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BUILDING PRODUCTS GROUP
Hart & Cooley................... HVAC Accessories Residential and Commercial
Construction
Mansfield....................... Bathroom Fixtures & Residential Construction
Plumbing Fittings
DeVilbiss Air Power............. Light Duty Air Compressors Home Improvement
ELECTRICAL PRODUCTS GROUP
Elastimold...................... Underground Medium and High Electric Utility
Voltage Cable Accessories
Hendrix......................... Power Cables and Cable Electric Utility
Accessories
IEP............................. Interconnect, Control and Electrical/Electronic
Timing Devices; Airport
Lighting Transformers; and
Electrical Connectors
INDUSTRIAL PRODUCTS GROUP
Pfaudler........................ Glass-lined Industrial Chemical/Pharmaceutical
Vessels
Chemineer....................... Fluid Processing Agitators Chemical/Pharmaceutical
and Mixers
Burns Aerospace................. Commercial Aircraft Seating Commercial Aviation
AUTOMOTIVE PRODUCTS GROUP
Mighty.......................... Auto Parts Distribution Automobile Aftermarket
Parts House..................... Auto Parts Distribution Automobile Aftermarket
Denman Tire..................... Specialty Pneumatic Tires Aftermarket Tires
Clevaflex....................... Multiply, Flexible Tubing Automotive OEM
SPECIALTY PRODUCTS GROUP
Hill Refrigeration.............. Refrigerated Display Cases Commercial Refrigeration
Caron International............. Knitting Yarns and Craft Crafts and Consumer Yarns
Kits
Gerry Sportswear................ Rugged Outerwear and Ski Retail Apparel
Apparel
</TABLE>

From its inception, much of the Company's growth has come from
acquisitions. The Company's acquisition philosophy has been to acquire
"underperforming" manufacturing companies that have the potential to become
market leaders and low cost producers through the application of Eagle's cost
reduction and quality improvement strategies. Eagle generally has sought
companies that serve basic industrial niche

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markets. To enhance its position within these market niches, the Company has
pursued and completed over 21 "add-on" acquisitions to profitably expand product
lines and geographical scope. Eagle has also divested 16 businesses for total
proceeds of over $500 million. A substantial portion of these proceeds were used
to reduce debt levels.

HISTORY

In February 1987, Great American Management and Investment, Inc. ("GAMI")
consolidated its basic manufacturing businesses by capitalizing Eagle with Lapp
Insulator Company ("Lapp") and various businesses which were previously a part
of Clevepak Corporation ("Clevepak"). In April 1987, Eagle purchased The
Pfaudler Companies, Inc. ("Pfaudler") and in February of 1988, Eagle purchased
The DeVilbiss Company ("DeVilbiss"). In September 1989, Eagle purchased Amerace
Corporation ("Amerace"), and certain indirect subsidiaries of GAMI acquired The
Jepson Corporation ("Jepson"). In January 1991, GAMI, through its subsidiaries,
contributed Jepson to Eagle and concurrent with becoming a subsidiary of Eagle,
Jepson changed its name to Falcon Manufacturing, Inc. ("Falcon").

Effective as of September 25, 1992 GAMI, and its subsidiaries consummated a
restructuring (the "Restructuring"). Pursuant to the Restructuring, among other
things, (i) Eagle sold the net assets of Equality Specialties, Inc. ("Equality")
to GAMI for approximately $17 million; (ii) GAMI contributed, through certain
subsidiaries, all of the outstanding stock owned by it in North Riverside
Holdings, Inc. ("North Riverside") to Eagle; (iii) Eagle declared a stock
dividend to facilitate the Distribution, as defined below (the effect of which
was negated by a reverse stock split in December 1993); and (iv) Great American
Financial Group, Inc. (formerly Great American Industrial Group, Inc.) ("GAFG")
distributed all of the outstanding Eagle common stock owned by it to GAMI. For a
discussion of the accounting treatment of the foregoing transactions, see Note 1
and Note 12 to the Eagle Industries, Inc. and Subsidiaries Consolidated
Financial Statements ("Eagle Consolidated Financial Statements").

On September 25, 1992, the Board of Directors of GAMI authorized the
distribution of all of the outstanding shares of Eagle common stock, $.01 par
value per share (the "Eagle Common Stock"), to holders of GAMI common stock (the
"Distribution"). On October 29, 1992, the GAMI Board of Directors delayed the
consummation of and on October 13, 1993 decided not to complete the
Distribution.

BUSINESS

Eagle is currently comprised of 16 businesses operating in five business
segments. The five business segments are: the Building Products Group, the
Electrical Products Group, the Industrial Products Group, the Automotive
Products Group and the Specialty Products Group. These businesses generally are
low and medium technology, industrial companies in niche markets. They primarily
service the residential and commercial construction, electric utility,
commercial aviation, chemical and pharmaceutical, automotive aftermarket, craft
and consumer yarn and commercial refrigeration markets. See Note 16 to the Eagle
Consolidated Financial Statements for financial information regarding industry
segments and geographic data.

BUILDING PRODUCTS GROUP

The Building Products Group consists of three businesses which manufacture
and distribute building products primarily for the residential and commercial
construction and home improvement markets. Products manufactured by this group
include air distribution and handling equipment, bathroom plumbing fixtures and
light-duty air compressors.

The building products industry relies primarily on the residential and
commercial construction markets. The residential construction market is largely
dependent on housing starts and remodeling/do-it-yourself ("DIY") projects.
Housing starts and remodeling/DIY projects are generally a function of new
household formation, mortgage rates, inflation, unemployment and gross national
product growth. Since fiscal 1990, the decline in residential housing starts
resulted in excess manufacturing capacity and pricing pressures in this
industry. More recently, this trend has started to reverse as a result of lower
mortgage rates and improved consumer confidence. The Company believes that
future growth in revenue and earnings for companies

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operating in this industry is dependent upon the housing and construction
markets in North America, increased international business, quality and customer
service, and further market penetration with new products and within niches.

Air Distribution and Handling Equipment

Hart & Cooley is a manufacturer of residential and commercial air
distribution and air handling products in the North American market. Hart &
Cooley manufactures more than 6,000 items primarily for the residential and, to
a lesser extent, commercial heating ventilating and air conditioning ("HVAC")
markets, including metal grilles, registers and diffusers, metal and plastic
chimney vent systems, flexible ducts, terminal units and electric duct heaters.
Products are generally produced on a high-volume, low cost basis, however, the
standard product line is supplemented with custom-engineered products designed
to meet specific size or performance requirements.

Residential and commercial products are marketed to HVAC contractors
primarily through wholesale distributors. In order to provide high quality
service and convenience to HVAC contractors, the Company services its
distribution network through a direct field sales staff which is supported by a
customer service group located at Hart & Cooley's headquarters. These products
are marketed under the Hart & Cooley(R), Metlvent(R) and Ultravent(R) trade
names. Commercial/industrial registers, grilles, diffusers, terminal units,
louvers and electric duct heaters are marketed primarily to HVAC contractors
through manufacturers' representatives under the Tuttle & Bailey(R) trade name.
Key competitive considerations in the HVAC market are delivery time, quality and
proximity to distributors.

Bathroom Plumbing Fixtures

Mansfield is a manufacturer of ceramic, vitreous china and enameled steel
bathroom plumbing fixtures, including lavatories, toilet bowls and tanks and
brass and plastic fittings. These products are sold primarily to the residential
construction markets and, to a lesser extent, to commercial markets.

Mansfield competes primarily with regional manufacturers, and to a lesser
extent with national manufacturers. Management believes that there are
approximately eight other regional competitors. Mansfield's emphasis on quality
control and customer service has enabled it to charge slightly higher prices for
its products. As part of the Energy Policy Act of 1992, the manufacture of 3.5
gallon per flush toilets for residential use is prohibited after January 1,
1994. In the past three years, Mansfield has introduced four new models of
ceramic toilet bowls which use 1.6 gallons per flush, approximately 55% less
than the average water volume used per flush in existing toilet bowls, while
still preserving the simplicity of conventional plumbing fixtures.

Ceramic bathroom fixtures and brass and plastic fittings are marketed
through manufacturers' representatives to plumbing wholesalers and plumbing
fixture manufacturers, and to the retail hardware and DIY markets through
wholesalers, packagers, and mass merchants. The market is divided into:
manufacturers that distribute nationally, service all market segments and have
broad product lines; and regional manufacturers that distribute regionally, tend
to emphasize marketing at the wholesale level and have narrower product lines.

Air Products

DeVilbiss Air Power is a North American supplier of light-duty air
compressors for the commercial and consumer, building and construction markets.
DeVilbiss Air Power manufactures a broad line of portable and stationary air
compressors in the 3/4 to 6 horsepower range and also sells a variety of
accessories such as paint spray guns, air hoses, pneumatic tools and other
related items. DeVilbiss Air Power's products are primarily used for painting,
stapling and nailing applications for home improvement and building. DeVilbiss
Air Power was the first company to introduce oil-free technology to light-duty
air compressors, and since 1979 has been the primary supplier of Craftsman(R)
air compressors to Sears Roebuck & Company ("Sears"). Sales to Sears account for
a significant amount of the sales of the Building Products Group. Eagle
restructured DeVilbiss Air Power in 1989 by constructing a new manufacturing
facility in Jackson, Tennessee.

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In fiscal 1991, DeVilbiss Air Power acquired the Energair division
("Energair") of the Ingersoll-Rand Company, whose strong market position in the
home center and warehouse club outlets, has strengthened DeVilbiss Air Power's
position in the DIY and refurbishing markets under such trade names as Charge
Air Pro(R), Air America(R) and Pro Air II(R). DeVilbiss Air Power also
manufactures air compressors under private-label programs, which has further
expanded its customer and distribution base.

ELECTRICAL PRODUCTS GROUP

The Electrical Products Group consists of two broad groups of businesses,
those providing electrical power distribution products for the electric utility
market and those supplying electrical control products for electrical equipment
manufacturers. The principal products manufactured by these businesses include
medium voltage electric cable, underground cable accessories, and interconnect
and timing devices.

The electrical products industry is largely dependent on utility
transmission and distribution expenditures, new construction and spending levels
of those manufacturers who supply electrical equipment to the utility industry.
Spending for utility transmission equipment has been at historically low levels
for the last several years and has not yet begun to improve. This has resulted
in excess industry capacity and continued pricing pressures. Eagle believes that
future growth in revenue and earnings in this industry is largely dependent on
increased electric utility capital spending from the currently depressed levels
and further recovery of the residential and commercial construction markets in
North America.

Electrical Power Distribution Products

Major products manufactured by these businesses for the electrical power
distribution market include: Elastimold's pre-molded terminators, separable
connectors, cable joints and surge arrestors for underground power distribution
systems; and Hendrix's residential power distribution cables, aerial cable
systems and medium voltage accessory products.

Elastimold is a designer, manufacturer and marketer of underground medium
and high voltage cable accessories for the electric utility industry in North
America. The majority of Elastimold's products are used for power distribution
systems and are related to housing starts. Elastimold has established joint
ventures and partnerships in Europe and Asia to increase Elastimold's
distribution base.

These businesses market their products through a number of distribution
channels, including manufacturers' representatives, original equipment
manufacturers and authorized distributors, as well as through a direct sales
staff. Elastimold's electrical products are marketed directly to North American,
Canadian and European electric utilities through a direct sales staff,
manufacturers' representatives and authorized distributors. Elastimold also
maintains a world-wide presence through joint ventures in western Europe, Japan
and Taiwan. Hendrix markets its products primarily to electric utilities and
electrical equipment manufacturers through a network of manufacturers and
distributors.

Since the electrical power distribution products are used primarily in the
transmission and distribution of electricity, their operating performance
depends in part on the demand for residential and commercial construction.
Although not heavily dependent upon the construction of new power plants, these
companies' business prospects are closely tied to the electric utility industry.

Industrial Electrical Products

Eagle's Industrial Electrical Products Group consists of four businesses,
hereinafter referred to as IEP. These businesses provide products that serve a
wide variety of markets with a number of recognized names such as: Agastat(R)
timers and protective relays; Buchanan(R) electrical terminal blocks and
electronic connectors; Russellstoll(R) medium to high amperage electrical
connectors; pin and sleeve plug and receptacle connector devices for the
world-wide refrigerated container industry. In addition, these businesses
manufacture and distribute airfield transformers, connector kits and cable
assemblies. The product lines are sold through an extensive distributor network,
supplemented with direct sales to original equipment manufacturers and to end
users in the United States, Canada, the United Kingdom and Europe.

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Eagle has undertaken an extensive cost reduction program since acquiring
the IEP companies in 1989. As a major part of that plan, Eagle relocated one of
IEP's principal manufacturing facilities from New Jersey to Florida in the first
quarter of 1993 in order to improve productivity and quality control, enhance
manufacturing efficiencies and increase labor flexibility.

INDUSTRIAL PRODUCTS GROUP

The Industrial Products Group consists of three businesses that manufacture
and distribute products for the chemical/pharmaceutical, process industries and
commercial aviation markets. Products manufactured and distributed include
reactor and storage vessels, fluid mixing and agitation equipment and commercial
airline seating.

The chemical process industry is largely dependent on capital expenditures
by chemical and pharmaceutical producers. Domestically, capital spending over
the past few years has been less than anticipated by published industry
forecasts. However, the pharmaceutical segment of the chemical process industry
has shown continued growth. Both domestically and in Europe, Eagle's business is
focused on the pharmaceutical segment. Eagle's operations in Europe continue to
be negatively affected by the depressed economy in Germany.

The financial difficulties experienced by the domestic airline industry
have resulted in a reduction in capital spending for commercial aircraft and
associated equipment. However, Burns Aerospace ("Burns") derives approximately
65% of its aviation business from the foreign aviation market, which has not
been as adversely affected as the domestic industry. Eagle believes that future
revenue and earnings growth for the Industrial Products Group is largely
dependent on worldwide capital spending in the chemical and aviation industries.

Process Industries Products

Major products manufactured for the process industries markets include:
lined and coated reactor and storage vessels, heat exchangers, mixers and
evaporators, columns and accessories, and agitators and static mixers.

Pfaudler is a producer of glass-lined reactor and storage vessels, which
are custom-ordered and designed for use in the chemical and pharmaceutical
industries. Pfaudler's sales exceed those of its major competitor. Pfaudler's
products are manufactured in six facilities operating in the United States, the
United Kingdom, Germany, Mexico, Brazil and a joint venture interest in India.
This arrangement allows Pfaudler to respond quickly to market demands for both
sales and service. Replacement parts and service represent a significant portion
of revenues.

Pfaudler's products are available in a broad range of construction
materials, such as glass-lined steel fluoropolymers, exotic metals and alloys.
These vessels, together with accessories such as agitators and baffles, are
marketed under the trade name Glasteel(R). In pharmaceutical applications,
Glasteel(R) protects the color and purity of the products being processed.

Chemineer is a designer, manufacturer and distributor of agitators and
static mixers for fluid processing applications, which range from sophisticated
polymerization and fermentation processes to simple storage operations.
Chemineer's products include its line of HT Series turbine agitators, which use
rotary action to produce motion in a fluid; side-entering agitators; static
mixers, which are continuous mixing and processing devices with no moving parts;
and small portable agitators. Competition is based primarily on application
engineering and customer service. Replacement parts and service account for a
significant portion of revenues. Chemineer's products are used in the chemical,
pharmaceutical, paint, coatings, petrochemical, food processing and water
treatment industries.

Chemineer's products are marketed worldwide to a diverse customer base,
with products being sold primarily through manufacturers' representatives and
sales representative organizations. Chemineer also maintains direct sales
offices in Houston, Texas, the United Kingdom and the Netherlands. Chemineer
established a research and development facility to focus on the development of
new products and on applied

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research. Chemineer recently has introduced computer technology to perform
on-site customized application engineering.

Commercial Aviation Products

Burns manufactures and refurbishes commercial airline seating, including
passenger, observer and flight attendant seating. In addition, Burns
manufactures various spare parts, including seat cushions and covers for
aftermarket sale in the commercial aircraft markets.

Burns sells its Innovator(R), Airest(R) 5, Airest(R) 202 and Airest(R)
Commuter seating products primarily to the major air carriers in the United
States and Europe. Over the past four years, Burns has been able to successfully
diversify its customer base from a domestic regional orientation to an
international mix. Burns derives approximately 65% of its new seat revenues from
foreign carriers.

AUTOMOTIVE PRODUCTS GROUP

Eagle has three primary businesses which serve various sectors of the
automotive aftermarket: Mighty Distributing System of America ("Mighty"), The
Parts House ("Parts House") and Denman Tire ("Denman"). Major products produced
and/or distributed to the automotive markets include: automotive parts and
accessories and specialty pneumatic tires. Clevaflex manufactures and
distributes multi-ply flexible tubing for carburetor air ducts to original
equipment manufacturers in the automotive market.

Mighty and Parts House distribute automotive parts and accessories
principally throughout the United States. Mighty is an owner and operator of
automotive parts franchise operations and has over 150 franchises nationwide and
one distribution center that sell automotive parts in the aftermarket to
professional dealers and installers. Mighty also markets new territories and
re-markets existing territories to generate franchise fee revenues. Mighty
repackages and distributes Mighty private label auto parts to franchisees and
other company locations, and owns and operates nine locations directly. Parts
House, headquartered in Jacksonville, Florida, is a wholesale distributor of
nationally branded automotive parts and accessories serving primarily the
Southeast region of the United States and operates through three principal
distribution centers.

Denman manufactures and distributes over 1,000 different types of specialty
pneumatic tires, including tires for classic and racing automobiles, all-terrain
vehicles, motorcycles, light and medium duty trucks and farm, mining and other
industrial vehicles. Denman's products are marketed nationally under both the
Denman brand name and the private label names of certain Denman customers.
Denman distributes its tires primarily through five major wholesale
distributors, and services its customers through a direct sales force.
Substantially all of Denman's sales are to the replacement tire market.

Clevaflex manufactures and distributes multi-ply, flexible tubing for
carburetor air ducts used in automobile emission systems and other
automotive-engine compartment applications. Clevaflex has a direct sales force
which distributes its products to original equipment manufacturers in the
automotive markets. Approximately 80% of Clevaflex's sales are made directly to
domestic automobile manufacturers, including General Motors Corporation, Ford
Motor Company and Chrysler Corporation, with additional sales to certain foreign
automobile manufacturers for use in models produced in the United States.

SPECIALTY PRODUCTS GROUP

The Specialty Products Group consists of businesses which manufacture and
distribute commercial refrigeration equipment and consumer products. Businesses
within the group manufacture refrigerated display cases and hand knitting and
craft yarns. In addition, the group includes a designer and distributor of ski
and rugged outerwear. The Specialty Products Group is largely dependent on
trends in consumer spending and overall consumer confidence. The Company
believes that future growth in revenue and earnings for the Specialty Products
Group is dependent on consumer spending.

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Commercial Refrigeration Equipment

Hill Refrigeration ("Hill") manufactures commercial refrigeration
equipment, including refrigeration and non-refrigeration display cabinets,
condensing units and refrigeration systems, and related equipment for sale to
food retailers.

Principal products in this market include refrigerated display cases that
merchandise and protect perishables such as meat, deli products, frozen foods,
dairy products and produce. To enhance manufacturing efficiencies, cases are
configured to use common design parts and are produced in two basic lengths.
However, to meet specific needs of the customer, Hill offers many options and
special accessories. In addition, because energy efficiency is a significant
consideration in case purchases, Hill offers sophisticated controls and patented
features to reduce operating costs for its customers. Hill equipment is sold
through a direct sales force to leading supermarket chains, food wholesalers and
government commissaries. Smaller food chains are serviced through a network of
independent distributors who buy and re-sell equipment.

In 1993, the Company closed Hill's Canadian facility and consolidated those
operations with its Trenton, New Jersey facility. In an effort to reduce
manufacturing costs and to simplify manufacturing processes, Hill initiated a
project to redesign its commercial refrigeration cases in 1993. This redesign
has led to a decision to restructure Hill's Trenton, New Jersey manufacturing
facility. Accordingly, in 1993, the Company reduced the book value of its
Trenton, New Jersey plant by approximately $20 million as it reviews relocation
options.

Consumer Products

Eagle has two businesses which serve various consumer markets: Gerry
Sportswear ("Gerry") and Caron International ("Caron"). Gerry designs and
markets ski and rugged outerwear. Caron is a manufacturer and distributor of
acrylic hand knitting and craft yarns and a producer of craft kits. The yarn
products include a broad line of acrylic fibers in a wide assortment of weights
and colors with varying textures. Craft kits are sold under the Wonder Art(R)
name and include latch hook, stamped goods, craft dolls and yarn kits. Caron
markets its yarn products and craft kits directly to major retailers through its
own sales force. Caron's customer base includes all major distribution channels,
including mass merchants, chain stores, fabric stores and craft and specialty
stores. As part of a cost reduction program which the Company undertook in 1993,
Caron closed its London, Kentucky manufacturing facility, consolidating the
London operation into its other locations.

COMPETITION

Eagle faces competition in each of the various product lines from numerous
firms within the United States and internationally. Businesses within the
Building Products Group, the Electrical Products Group, Automotive Products
Group and the Specialty Products Group compete primarily with several domestic
competitors in their various markets. Pfaudler competes primarily with one major
competitor on a world-wide basis. The other businesses within the Industrial
Products Group compete primarily with several domestic competitors in their
various markets. Eagle strives to position its businesses as market leaders,
desiring to achieve a position as one of the top three suppliers in each of the
individual markets which its businesses serve. Eagle's businesses compete with
other companies on the basis of price, service, product quality, availability
and delivery. Certain of Eagle's competitors are larger and have greater
financial resources than Eagle.

SEASONALITY, WORKING CAPITAL AND CYCLICALITY

Sales of certain of Eagle's products are subject to seasonal variation.
Seasonal factors historically have not had a significant affect on working
capital requirements as Eagle has been able to adjust its production to meet
these seasonal demands. Sales of products manufactured within the Building
Products Group are primarily dependent on residential and commercial
construction markets and home improvement. Sales of certain products
manufactured within the Electrical Products Group are also dependent on the
construction industry. Due to seasonal factors associated with the construction
industry, sales of these products are higher during the spring and summer
building seasons than at other times of the year. Most of the industries in
which the Company competes are particularly sensitive to changes in the economy.
The nation's most recent recession had an adverse impact on the Company's sales
and profitability. Future downturns in the economy would

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negatively affect the Company's operating results. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations."

RAW MATERIALS, SUPPLIERS AND CUSTOMERS

Eagle purchases raw materials, principally steel, aluminum, alloy metals,
clay and other supplies from numerous domestic and foreign suppliers. These raw
materials and other supplies are generally available. Eagle's businesses market
their products to numerous domestic and foreign customers. As previously
discussed, Sears accounts for a significant amount of sales in the Building
Products Group, however, this amount is not significant to Eagle's consolidated
net sales. See "Business" above.

RESEARCH AND DEVELOPMENT

Eagle and its subsidiaries invest in research and development of new
products. See Note 2 to the Eagle Consolidated Financial Statements for
information regarding research and development expenses.

PATENTS, TRADEMARKS, LICENSES AND FRANCHISES

There are several registered patents and trademarks used by businesses
within the Building Products Group, the Electrical Products Group, the
Industrial Products Group, the Automotive Products Group and the Specialty
Products Group, none of which are individually significant to the consolidated
operations of Eagle. Eagle's businesses do not materially rely on any single
patent, license or franchise.

BACKLOG

The following table indicates the approximate backlog for each of Eagle's
business groups as of the dates indicated. Approximately $44 million of the
backlog at December 31, 1993 is expected to be shipped in 1995 or after,
substantially all of which relates to Burns.

DECEMBER 31, DECEMBER 31,
1993 1992
------------ ------------
(RESTATED)
(IN MILLIONS)
<S> <C> <C>
Building Products Group.............................. $ 25.6 $ 11.5
Electrical Products Group............................ 24.7 21.9
Industrial Products Group............................ 140.1 132.5
Automotive Products Group............................ 2.9 3.3
Specialty Products Group............................. 36.4 34.1
------ ------
Total........................................... $229.7 $203.3
------ ------
------ ------
</TABLE>

OTHER MATTERS

ENVIRONMENTAL MATTERS

Eagle's subsidiaries, as manufacturing companies, are subject to various
environmental laws concerning, for example, emissions to the air, discharges
into water and the generation, handling, storage, transportation, treatment and
disposal of waste and other materials. In addition to costs associated with
regulatory compliance, companies such as those within Eagle, which in prior
years have disposed of hazardous material at various sites, may be liable under
various federal and state laws for the costs of the clean-up of such sites. It
is impossible to predict accurately Eagle's future expenditures for
environmental matters; however, Eagle anticipates that future environmental
requirements will become more stringent, which may result in increased
expenditures. It is Eagle's policy to take all reasonable measures to control
and eliminate pollution resulting from its operations. Eagle believes that as a
general matter its policies, practices and procedures in the areas of pollution
control, product safety, occupational health, medical services and safety and
loss prevention are adequate to prevent unreasonable risk of environmental and
other damage, and the resulting financial liability.

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Eagle believes, based on consultations with legal counsel and environmental
consultants and its own reviews of the nature and extent of potential
liabilities, that compliance with existing environmental protection laws,
including those requiring clean-up of hazardous waste, will not have a material
adverse effect on Eagle's financial position, results of operations or
competitive position. The Company believes that it has adequate reserves. The
amounts spent by Eagle on environmental expenditures were not material to
Eagle's results of operations and financial position in the year ended December
31, 1993, the five months ended December 31, 1992 or in fiscal 1992 or 1991. It
is impossible, however, to predict with certainty the level of expenditures with
respect to any such obligations, in part because a substantial portion of any
expenditure is a function of unsettled and evolving enforcement and regulatory
policies in states where Eagle conducts its business.

EMPLOYEES

Eagle's continuing operations employed approximately 9,400 employees as of
December 31, 1993. Approximately 3,800 employees are represented by 24 unions.
Collective bargaining is conducted on a subsidiary-by-subsidiary basis with
local unions belonging to various national and international unions. Management
believes that labor relations are satisfactory at all subsidiaries.

ITEM 2. PROPERTIES

Eagle believes its manufacturing, warehouse and office facilities are
adequate for its current and foreseeable requirements. Eagle's principal
facilities consist of the following:

11
<PAGE> 12

<TABLE>
<CAPTION>
APPROX
SQUARE TERMS OF
LOCATION PRINCIPAL USE FOOTAGE OCCUPANCY(A)
- --------------------------------------- --------------------------------- -------- -------------
<S> <C> <C> <C>
INDUSTRIAL PRODUCTS GROUP:
PROCESS INDUSTRIES PRODUCTS
Rochester, New York Office, Manufacturing 500,000 Owned
Schwetzingen, Germany Office, Manufacturing 400,000 Owned
Levin Fife, Scotland Office, Manufacturing 240,000 Owned
Dayton, Ohio Office, Manufacturing 145,000 Leased
Mexico City, Mexico Office, Manufacturing 110,000 Owned
Avondale, Pennsylvania Office, Manufacturing 100,000 Owned
Taubate, Brazil Office, Manufacturing 100,000 Owned
North Andover, Massachusetts Office, Manufacturing 30,000 Leased
Sao Jose Dos Campos, Brazil Office, Manufacturing 30,000 Leased
Derby, England Office, Manufacturing 20,000 Leased
Kearsley, England Office, Manufacturing 14,000 Owned
Stoline, Levin Fife, Scotland Office, Manufacturing 12,500 Leased
Bolton, England Office, Manufacturing 11,000 Owned
COMMERCIAL AVIATION PRODUCTS
Winston-Salem, North Carolina Office, Manufacturing 268,300 Owned
Inglewood, California Office, Manufacturing 86,000 Leased
AUTOMOTIVE PRODUCTS GROUP:
AUTOMOTIVE AFTERMARKET PRODUCTS
Lordstown, Ohio Warehouse 216,000 Leased
Warren, Ohio Office, Manufacturing 205,500 Owned
Jackson, Tennessee Warehouse 93,00 Owned
Monroe, Louisiana Office, Warehouse 43,200 Leased
Jackson, Mississippi Office, Warehouse 43,200 Leased
Jacksonville, Florida Office, Warehouse 40,000 Leased
New Orleans, Louisiana Office, Warehouse 25,300 Leased
Orlando, Florida Office, Warehouse 25,000 Leased
Miami, Florida Office, Warehouse 24,800 Leased
Cleveland, Ohio Office, Manufacturing 21,000 Owned
Norcross, Georgia Office 17,000 Owned
St. Petersburg, Florida Office, Warehouse 15,200 Leased
West Palm Beach, Florida Office, Warehouse 14,000 Leased
Tallahassee, Florida Office, Warehouse 12,000 Leased
Sarasota, Florida Office, Warehouse 10,000 Leased
SPECIALTY PRODUCTS GROUP:
CONSUMER PRODUCTS
Rochelle, Illinois Office, Manufacturing, Warehouse 476,000 Owned
Lafayette, Georgia Office, Manufacturing 150,600 Owned
Seattle, Washington Office, Warehouse 60,000 Owned
Dalton, Georgia Office, Manufacturing 42,500 Leased
Rochelle, Illinois Warehouse 12,000 Leased
COMMERCIAL REFRIGERATION EQUIPMENT
Trenton, New Jersey Office, Manufacturing, Warehouse 680,000 Owned
Chino, California Office, Warehouse 25,000 Leased
CORPORATE:
Chicago, Illinois Corporate Headquarters 10,000 Leased (b)
</TABLE>

- -------------------------
(a) Substantially all domestic properties owned by Eagle and its subsidiaries
are subject to mortgages granted to financial institutions under its credit
facilities. See Note 5 to the Eagle Consolidated Financial Statements for
additional information regarding indebtedness of Eagle and its subsidiaries.

(b) Eagle leases this property from affiliates of GAMI.

12
<PAGE> 13

ITEM 3. LEGAL PROCEEDINGS

Eagle and its subsidiaries are defendants in several lawsuits arising in
the ordinary course of business. Management does not believe, based on the
advice of counsel, that any of these lawsuits, individually or in the aggregate,
will have a material adverse effect on Eagle's financial position or results of
operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not Applicable

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

As a result of the Restructuring, Eagle became a wholly owned subsidiary of
GAMI, and as such, had one stockholder subsequent to September 25, 1992.
Pursuant to the Restructuring, Eagle declared a stock dividend, resulting in
11,077,261 shares of common stock issued and outstanding. In December, 1993,
Eagle declared a reverse stock split of 1/11,077 per share of common stock
resulting in the Company having 1,000 shares of common stock issued and
outstanding. At March 15, 1994, Eagle had 1,000 shares of common stock
authorized, issued and outstanding, all of which was held by GAMI.

Eagle paid a $30.0 million cash dividend to its corporate parent out of
earnings in February 1991. Eagle does not currently intend to pay dividends to
its stockholder. Eagle's dividend policy will be reviewed from time to time by
its Board of Directors in light of Eagle's earnings, financial position and
other factors deemed relevant by the Board of Directors. In addition, the amount
of cash dividends, if any, which may be paid on the Eagle Common Stock is
restricted by debt agreements. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources," "Certain Relationships and Related Transactions -- Disaffiliation
Agreement" and Note 5 to the Eagle Consolidated Financial Statements for a
discussion of restrictions on the ability of Eagle to pay dividends.

As discussed in Note 17 to the Eagle Consolidated Financial Statements, in
January 1994 the Company received $50 million from GAMI in the form of a capital
contribution.

ITEM 6. SELECTED FINANCIAL INFORMATION

The selected financial information presented below has been derived from
the audited Eagle Consolidated Financial Statements for the year ended December
31, 1993, the five months ended December 31, 1992 and for the fiscal years ended
July 31, 1989 through 1992 and should be read in conjunction with such financial
statements and the notes thereto. The five month period ended December 31, 1991
is unaudited and is

13
<PAGE> 14
presented only for comparative purposes. This information has been restated to
give retroactive effect to businesses accounted for as discontinued operations.

<TABLE>
<CAPTION>
FIVE MONTHS ENDED
YEAR ENDED DECEMBER 31, YEAR ENDED JULY 31,
DECEMBER 31, -------------------- ------------------------------------------
1993 1992 1991 1992 1991 1990 1989
------------ -------- -------- -------- -------- -------- ------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales................ $1,142.3 $ 458.2 $ 433.4 $1,098.8 $1,033.9 $ 992.0 $448.6
Loss from continuing
operations............. (68.1) (6.5) (4.8) (0.3) (2.9) (8.8) (1.5)
Net income (loss)........ (110.6) (11.4) 12.0 25.9 27.3 41.4 4.6
BALANCE SHEET DATA (AT
END OF PERIOD):
Total assets............. $1,102.2 $1,179.2 $1,277.1 $1,230.0 $1,269.5 $1,439.3 $571.2
Long-term debt........... 641.2 645.7 621.3 613.3 654.7 729.1 361.1
Total liabilities........ 1,010.1 970.4 1,031.4 1,004.5 1,035.7 1,230.1 522.2
Stockholder's equity..... 92.1 208.8 245.7 225.5 233.8 209.2 49.0
</TABLE>

- -------------------------
(A) Eagle adopted the new accounting standard "Employers' Accounting for
Postemployment Benefits" ("SFAS No. 112") effective December 31, 1993,
"Accounting for Income Taxes" ("SFAS No. 109") in the first quarter of
calendar 1993 and "Employers' Accounting for Postretirement Benefits Other
Than Pensions" ("SFAS No. 106") in the first quarter of fiscal 1992. Refer
to Notes 2, 6 and 7 to the Eagle Consolidated Financial Statements for
additional information regarding the adoption of these accounting
pronouncements.

(B) See Note 3 to the Eagle Consolidated Financial Statements for information
regarding acquisitions.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following should be read in conjunction with the Consolidated Financial
Statements included herein.

GENERAL

Effective December 16, 1992, Eagle changed its year end from July 31 to
December 31. Information for the year ended December 31, 1992 and for the five
months ended December 31, 1991 is unaudited and has been presented for
comparative purposes only.

As disclosed in Notes 2 and 7 to the Eagle Consolidated Financial
Statements, Eagle adopted the provisions of SFAS No. 109 effective January 1,
1993. By adopting this standard, Eagle reduced its net deferred tax assets by
$3.5 million and recorded a corresponding charge of $3.5 million.

As disclosed in Note 2 to the Eagle Consolidated Financial Statements,
Eagle adopted the provisions of SFAS No. 112 effective December 31, 1993. By
adopting this standard, Eagle increased its accrued expenses by $3.0 million and
recorded a corresponding pretax charge of $3.0 million.

As disclosed in Note 6 to the Eagle Consolidated Financial Statements,
Eagle adopted the provisions of SFAS No. 106 in the first quarter of fiscal
1992. By adopting this standard, Eagle recorded a cumulative adjustment of $24.2
million by reducing its then recorded postretirement benefits liability to the
discounted present value of expected future benefits attributed to employees'
service rendered prior to August 1, 1991, and recorded a corresponding $24.2
million non-cash pretax benefit.

In 1993, the Company redefined its industry segments to add an Automotive
Products Group and realign its Building Products and Specialty Products Groups.
Prior periods' results of operations have been restated to reflect the
reclassifications.

14
<PAGE> 15

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 1993 AS COMPARED TO YEAR ENDED DECEMBER 31, 1992

Net Sales

Following are net sales by business group:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
31, INCREASE/(DECREASE)
---------------------- ---------------------
1993 1992 AMOUNT PERCENTAGE
-------- -------- ------ ----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Building Products Group.......................... $ 372.3 $ 345.2 $ 27.1 7.9%
Electrical Products Group........................ 176.8 168.7 8.1 4.8
Industrial Products Group........................ 241.4 280.2 (38.8) (13.9)
Automotive Products Group........................ 164.2 139.8 24.4 17.5
Specialty Products Group......................... 187.6 189.7 (2.1) (1.1)
-------- -------- ------
Total....................................... $1,142.3 $1,123.6 $ 18.7 1.7%
-------- -------- ------ ----------
-------- -------- ------ ----------
</TABLE>

Excluding the effects of acquisitions, consolidated net sales for the year
ended December 31, 1993 were $16.3 or 1.5% higher than net sales for the year
ended December 31, 1992. This increase was primarily due to increased volume at
the Company's automotive parts distribution businesses, Denman, Hart & Cooley,
Mansfield and Hill partially offset by declines at Burns, Pfaudler and Caron.

Net sales of $372.3 million for the year ended December 31, 1993 for the
Building Products Group were $27.1 million or 7.9% higher than in the 1992
period. This increase was primarily due to increased volume at Mansfield and
increased volume and to a lesser extent improved pricing at Hart & Cooley. These
increases were primarily the result of improvement in the residential
construction market.

Net sales of $176.8 million for the year ended December 31, 1993 for the
Electrical Products Group were $8.1 million or 4.8% higher than in the 1992
period. Approximately $2.4 million of the increase was due to a product line
acquisition made by Elastimold. The remainder of the increase was primarily due
to increased volume and improved pricing at Hendrix and increased international
volume at Elastimold.

Net sales of $241.4 million for the year ended December 31, 1993 for the
Industrial Products Group were $38.8 million or 13.9% lower than in the 1992
period. This decrease was due to lower volume at Pfaudler due to a decline in
European sales and lower volume at Burns due to decreased expenditures in the
aviation industry and a large order in the 1992 period, which was not repeated
in 1993. These decreases were partially offset by an increase in volume at
Chemineer, which was partially offset by reduced pricing.

Net sales of $164.2 million for the year ended December 31, 1993 for the
Automotive Products Group were $24.4 million or 17.5% higher than in the 1992
period. This increase was primarily due to increased volume at Denman and as a
result of an increase in the customer base at the automotive parts distribution
businesses.

Net sales of $187.6 million for the year ended December 31, 1993 for the
Specialty Products Group were $2.1 million or 1.1% lower than in the 1992
period. This decrease was primarily due to a decrease in volume at Caron related
to the sale of its industrial yarn product line in 1992, which accounted for
$6.5 million of the decrease, as well as continued softness in consumer
discretionary spending. This decrease was partially offset by increased volume
at Hill, partially offset by reduced pricing.

Gross Earnings

Consolidated gross earnings of $224.5 million for the year ended December
31, 1993 were $2.2 million lower than in the 1992 period. This decrease was
primarily due to lower sales volume and to a lesser extent competitive pricing
in the Industrial Products Group, a write-down of inventory at Burns and a
decrease in volume at Caron. Consolidated gross margin of 19.7% in 1993 was down
from 20.2% in the comparable 1992 period.

15
<PAGE> 16

Operating Income

Following is operating income by business group:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, INCREASE/(DECREASE)
---------------------- ---------------------
1993 1992 AMOUNT PERCENTAGE
------ ------ ------ ----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Building Products Group........................... $ 47.5 $ 44.1 $ 3.4 7.7%
Electrical Products Group......................... 14.9 17.0 (2.1) (12.7)
Industrial Products Group......................... (2.9) 11.7 (14.6) (124.9)
Automotive Products Group......................... 6.2 3.6 2.6 72.5
Specialty Products Group.......................... (67.6) (0.9) (66.7) N/M
Corporate Expenses................................ (11.0) (12.7) 1.7 13.1
------ ------ ------
Operating Income (Loss)...................... $(12.9) $ 62.8 $(75.7) (120.5)%
------ ------ ------ ----------
------ ------ ------ ----------
</TABLE>

Consolidated operating loss for the year ended December 31, 1993 was $12.9
million compared to operating income of $62.8 million in 1992. This decrease was
primarily due to the recording of $71.8 million of restructuring charges in the
third and fourth quarter of 1993. Excluding these restructuring charges and $1.7
million of restructuring charges recorded in 1992, operating income decreased
$5.7 million or 8.8%. This decrease was primarily due to lower sales volume at
Pfaudler, Burns and Caron, and a write-down of certain inventory and receivables
at Burns of $6.7 million. The decline was partially offset by increased sales
volume at Denman and the Company's automotive parts distribution businesses and
an increase in price and volume at Hendrix and Hart & Cooley.

Several of the Company's businesses recorded restructuring charges totaling
$71.8 million in the third and fourth quarter of 1993. Elastimold recorded
charges of $0.6 million related to an early retirement program. IEP recorded
charges of $2.0 million for additional costs associated with the relocation of
one of its manufacturing facilities from New Jersey to Florida. Pfaudler
recorded charges of $2.0 million, principally for the downsizing of certain of
its foreign operations. Caron recorded charges of $6.2 million for the shut down
of its London, Kentucky facility. Hill recorded charges of $8.8 million for the
shut down of its Canadian facility. Hill also recorded charges of $52.2 million
for the write-down of certain assets including property, plant and equipment of
$19.4 million and goodwill of $25.8 million associated with its studies
regarding the reconfiguration and/or relocation of its Trenton, New Jersey
plant. See Note 8 to the Eagle Consolidated Financial Statements for a more
detailed description of the restructuring charges.

Operating income for the year ended December 31, 1993 for the Building
Products Group was $3.4 million or 7.7% higher than in 1992. This increase was
primarily due to improved pricing and increased volume at Hart & Cooley,
partially offset by decreases at Mansfield due to decreased pricing and higher
operating costs. Operating margin for the group was 12.8% for the years ended
December 31, 1993 and 1992.

Excluding the effects of restructuring charges, income for the year ended
December 31, 1993 for the Electrical Products Group was $0.4 million or 2.6%
higher than in 1992. Improved pricing at Hendrix and reduced manufacturing costs
at IEP were offset by declines at Elastimold caused by decreased earnings at its
European joint venture. Excluding the effects of restructuring charges,
operating margins were 9.9% and 10.0% for the years ended December 31, 1993 and
1992, respectively, due to the above mentioned factors.

Excluding restructuring charges of $2.0 million in 1993 and $1.7 million in
1992, the operating loss for the year ended December 31, 1993 for the Industrial
Products Group was $0.9 million compared to operating income of $13.4 million in
1992. The decrease was due primarily to decreased pricing at Chemineer, lower
volume and prices at Burns, the write-down of certain receivables and inventory
at Burns and lower volume at Pfaudler. Excluding the effects of restructuring
charges and the write-down of accounts receivables and inventory in 1993 and
restructuring charges in 1992, operating margins were 2.4% and 4.8% for the
years ended December 31, 1993 and 1992, respectively, due to the above mentioned
factors.

16
<PAGE> 17

Operating income for the year ended December 31, 1993 for the Automotive
Products Group was $2.6 million or 72.5% higher than in 1992. This increase was
primarily due to increased sales volume at Denman and the automotive parts
distribution businesses. Operating margins were 3.8% and 2.6% for the years
ended December 31, 1993 and 1992, respectively, due to the above mentioned
factors.

Excluding restructuring charges, operating loss for the year ended December
31, 1993 for the Specialty Products Group was $0.4 million compared to an
operating loss of $0.9 million in 1992. The improvement was primarily due to
increased volume at Hill partially offset by decreased volume at Caron.
Excluding the effects of restructuring charges, operating margins were (0.2)%
and (0.5)% for the years ended December 31, 1993 and 1992, respectively, due to
the above mentioned factors.

Corporate expenses for the year ended December 31, 1993 were $1.7 million
or 13.1% lower than in the 1992 period. This decrease was primarily due to a one
time curtailment gain of $1.3 million associated with a pension plan.

Interest Expense

Net interest expense related to continuing operations was $67.1 million for
the year ended December 31, 1993 compared to $63.8 million for the comparable
1992 period. This increase is primarily attributable to a decrease in interest
income (see Note 12 to the Eagle Consolidated Financial Statements).

Loss From Continuing Operations (Before Income Taxes)

The loss from continuing operations before income taxes for the year ended
December 31, 1993 was $80.0 million. This was due to restructuring charges and
the write-down of certain accounts receivables and inventory totaling $78.5
million. In addition, as discussed in Liquidity and Capital Resources below, the
Refinancing is expected to generate annual savings of at least $20 million in
interest expense.

Income Tax Provision

The Company's tax benefit for continuing operations for the year ended
December 31, 1993 reflected the significant amount of non-deductible expenses
including the write-down of goodwill balances and goodwill amortization. See
Note 7 to the Eagle Consolidated Financial Statements for a further analysis of
the effective tax rate.

FIVE MONTHS ENDED DECEMBER 31, 1992 AS COMPARED TO FIVE MONTHS ENDED DECEMBER
31, 1991

Net Sales

Following are net sales by business group:

<TABLE>
<CAPTION>
FIVE MONTHS ENDED
DECEMBER 31, INCREASE/(DECREASE)
------------------ ---------------------
1992 1991 AMOUNT PERCENTAGE
------ ------ ------ ----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Building Products Group............................. $150.1 $128.7 $ 21.4 16.6%
Electrical Products Group........................... 66.2 62.2 4.0 6.4
Industrial Products Group........................... 100.5 100.7 (0.2) (0.2)
Automotive Products Group........................... 58.9 47.0 11.9 25.3
Specialty Products Group............................ 82.5 94.8 (12.3) (12.9)
------ ------ ------
Total............................................. $458.2 $433.4 $ 24.8 5.7%
------ ------ ------ ----------
------ ------ ------ ----------
</TABLE>

Excluding the effects of acquisitions, consolidated net sales for the five
months ended December 31, 1992 were $20.5 million or 4.7% higher than net sales
for the five months ended December 31, 1991. The increase was primarily due to
increased volume at Hart & Cooley, Mansfield, Elastimold, Denman and DeVilbiss
Air Power, partially offset by declines at Chemineer and Caron. Net sales
increased $4.3 million due to the effect

17
<PAGE> 18

of an acquisition within the Company's Automotive Products Group during the five
months ended December 31, 1991.

Net sales of $150.1 million for the Building Products Group were $21.4
million or 16.6% higher than net sales for the five months ended December 31,
1991. This was primarily due to increased volume attained by all businesses
within this group. Contributing to this increase were increased sales to
customers in Mexico by Mansfield of $1.7 million and increased sales to Sears by
DeVilbiss Air Power of $6.5 million.

Net sales of $66.2 million for the Electrical Products Group were $4.0
million or 6.4% higher than net sales for the five months ended December 31,
1991. This was primarily due to increased international volume at Elastimold.

Net sales of $100.5 million for the Industrial Products Group were $0.2
million or 0.2% lower than net sales for the five months ended December 31,
1991. This decrease was primarily due to a $3.7 million decline in sales at
Chemineer, partially offset by an increase of $3.0 million at Burns.

Net sales of $58.9 in the Automotive Products Group were $11.9 million or
25.3% higher than the net sales for five months ended December 31, 1991.
Approximately $4.3 million of the increase reflects the effect of an acquisition
within the Company's automotive parts distribution businesses. Sales also
increased at Denman and Eagle's automotive parts distribution businesses.

Net sales in the Specialty Products Group were $12.3 million or 12.9% lower
than the net sales for five months ended December 31, 1991. This decrease was
primarily due to declines at Caron and Gerry caused by continued softness in
consumer discretionary spending and, to a lesser extent, the sale of Caron's
industrial yarn product line.

Gross Earnings

Consolidated gross earnings of $90.2 million for the five months ended
December 31, 1992 were virtually unchanged from gross earnings of $89.8 million
for the five months ended December 31, 1991. The consolidated gross margin
declined to 19.7% for the five months ended December 31, 1992 from 20.7% for the
five months ended December 31, 1991 due primarily to competitive pricing
pressures and changes in product mix in many of Eagle's businesses. Many of the
Company's businesses reduced sales prices in order to remain competitive and/or
to gain market share. Partially offsetting these price discounts were cost
reduction programs, which included reduced staffing levels and other cost
containment measures.

Operating Income

Following is operating income by business group:

<TABLE>
<CAPTION>
FIVE MONTHS ENDED
DECEMBER 31, INCREASE/(DECREASE)
----------------- --------------------
1992 1991 AMOUNT PERCENTAGE
----- ----- ------ ----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Building Products Group................................. $18.6 $15.9 $ 2.7 17.4%
Electrical Products Group............................... 4.4 3.8 0.6 14.4
Industrial Products Group............................... 0.5 2.6 (2.1) (82.7)
Automotive Products Group............................... 0.5 1.1 (0.6) (44.8)
Specialty Products Group................................ 1.4 5.7 (4.3) (75.7)
Corporate Expenses...................................... (5.8) (4.7) (1.1) (22.3)
----- ----- -----
Operating Income................................... $19.6 $24.4 $(4.8) (19.7)%
----- ----- ----- -----
----- ----- ----- -----
</TABLE>

Consolidated operating income of $19.6 million for the five months ended
December 31, 1992 was $4.8 million, or 19.7% lower than operating income for the
five months ended December 31, 1991. Operating income declined primarily due to
unfavorable product mix and a restructuring charge of $1.7 million in certain
businesses in the Industrial Products Group and reduced sales volumes for
certain businesses in the Specialty Products Group. Consolidated operating
margin, before restructuring charges, was 4.6% for the five months

18
<PAGE> 19
ended December 31, 1992 as compared to 5.7% for the five months ended December
31, 1991. The decline is due to the above mentioned factors. Consolidated
selling and administrative expenses increased $4.5 million for the five months
ended December 31, 1992 compared to the five months ended December 31, 1991 as a
result of the higher sales levels, however, selling and administrative expenses
as a percentage of net sales remained at 14.3% during both periods.

Operating income for the Building Products Group of $18.6 million for the
five months ended December 31, 1992 was $2.7 million, or 17.4% higher than
operating income for the same period in 1991. This increase was due primarily to
increased sales volume at all of the businesses within this group. Operating
margin was essentially flat at 12.4% and 12.3% for the five months ended
December 31, 1992 and 1991, respectively.

Operating income for the Electrical Products Group of $4.4 million for the
five months ended December 31, 1992 was $0.6 million or 14.4% higher than
operating income for the same period in 1991. This increase was due primarily to
increased volume at Elastimold and cost reduction programs at certain units.
Operating margin was 6.6% and 6.1% for the five months ended December 31, 1992
and 1991, respectively, due to the above mentioned factors.

Operating income for the Industrial Products Group of $0.5 million for the
five months ended December 31, 1992 was $2.1 million lower than operating income
for the same period in 1991. This decrease was attributable to unfavorable
product mix at Burns and lower sales volume at Chemineer. Savings at Pfaudler
from cost reduction programs partially offset the decline, despite restructuring
charges of $1.7 million at Pfaudler and Burns. Operating margin, before
restructuring charges, was 2.1% and 2.6% for the five months ended December 31,
1992 and 1991, respectively, due to the reasons discussed above.

Operating income for the Automotive Products Group of $0.5 million for the
five months ended December 31, 1992, was $0.6 million lower than operating
income for the same period in 1991. The decline is primarily due to lower sales
volume at Clevaflex and increased operating expenses at Denman. Operating
margins were 1.3% and 2.9% for the five months ended December 31, 1992 and 1991,
respectively, due to the above mentioned factors.

Operating income for the Specialty Products Group of $1.4 million for the
five months ended December 31, 1992 was $4.3 million lower than operating income
for the same period in 1991. This decline was due primarily to decreases in
volume at Caron and Gerry, as well as lower absorption and costs associated with
a new product line at Hill. Operating margins were 1.7% and 6.0% for the five
months ended December 31, 1992 and 1991, respectively, due to the above
mentioned factors.

Corporate expenses for the five months ended December 31, 1992 increased
$1.1 million compared to the five months ended December 31, 1991. The increased
corporate expense was due to costs associated with the year end change and the
Restructuring consummated on September 25, 1992.

Interest Expense

Net interest expense related to continuing operations was $27.2 million for
the five months ended December 31, 1992 compared to $27.7 for the corresponding
period of 1991. This decrease is due primarily to the overall decline in
interest rates.

Loss from Continuing Operations (Before Income Taxes)

The loss from continuing operations before income taxes was $7.6 million
for the five months ended December 31, 1992 compared to a loss of $3.3 million
for the five months ended December 31, 1991. The loss reflected the general
economic environment in which Eagle was operating and the performance of certain
of its businesses. Eagle has taken actions throughout all of its businesses to
reduce operating expenses and manufacturing costs. The cost reduction efforts
did not offset the lower sales prices in many of these businesses.

19
<PAGE> 20

Income Tax Provision

Eagle's tax benefit for continuing operations for the five months ended
December 31, 1992 reflected the significant amount of nondeductible expenses,
including goodwill amortization and depreciation, which are included in the
current operating loss. See Note 7 to the Eagle Consolidated Financial
Statements for a further analysis of the effective tax rate.

FISCAL YEAR ENDED JULY 31, 1992 AS COMPARED TO FISCAL YEAR ENDED JULY 31, 1991

Net Sales

Following are net sales by business group:

<TABLE>
<CAPTION>
YEAR ENDED JULY 31, INCREASE/(DECREASE)
--------------------- ---------------------
1992 1991 AMOUNT PERCENTAGE
-------- -------- ------ ----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Building Products Group........................... $ 323.9 $ 258.3 $ 65.6 25.4%
Electrical Products Group......................... 164.7 182.2 (17.5) (9.6)
Industrial Products Group......................... 280.4 270.3 10.1 3.7
Automotive Products Group......................... 127.9 115.1 12.8 11.0
Specialty Products Group.......................... 201.9 208.0 (6.1) (2.9)
-------- -------- ------
Total........................................ $1,098.8 $1,033.9 $ 64.9 6.3%
-------- -------- ------ ----------
-------- -------- ------ ----------
</TABLE>

Despite the adverse impact of the recession on many of the Company's
businesses, consolidated net sales for fiscal 1992 were $64.9 million or 6.3%
higher than fiscal 1991. Net sales increased $27.8 million in fiscal 1992 due to
the full year impact of the fiscal 1991 acquisitions, which included Norris
(acquired September 1990) and Energair (acquired April 1991). Excluding the
effects of the Norris and Energair acquisitions, consolidated net sales
increased by $37.1 million in fiscal 1992 compared to fiscal 1991.

Net sales of $323.9 million for the Building Products Group increased $65.6
million in fiscal 1992 compared to fiscal 1991. The acquisition of Norris and
Energair contributed $27.8 million to the sales increase in fiscal 1992.
Excluding net sales of Norris and Energair, net sales improved by $37.8 million,
$5.9 million of the increase was attributable to Mansfield due primarily to
increased sales volume of vitreous china products, while DeVilbiss Air Power
contributed $23.7 million. Hart & Cooley's sales increased $8.2 million of which
$5.1 million was due to increased flexible duct system volume.

Net sales of $164.7 million for the Electrical Products Group declined
$17.5 million in fiscal 1992 compared to fiscal 1991. The recession had a
negative impact on this group, primarily during the first six months of fiscal
1992, as both electric utility capital spending levels and construction levels
were below fiscal 1991 levels. Additionally, $5.5 million of this decline
related to a division which was sold by Eagle in January 1991.

Net sales of $280.4 million for the Industrial Product Group increased
$10.1 million in fiscal 1992 compared to fiscal 1991. This increase was
attributable to an increase at Burns of $18.0 million, due to several large
contracts for commercial aircraft seating, partially offset by decreases at
Pfaudler and Chemineer of $6.2 million and $1.6 million, respectively. Capital
spending by the chemical processing industry in the United States and Europe,
which affects sales volumes of Pfaudler and Chemineer, continued to remain flat
compared to levels experienced in fiscal 1991. Shipments in the last half of
fiscal 1992 improved over fiscal 1991 levels.

Net sales of $127.9 million for the Automotive Products Group were $12.8
million higher in fiscal 1992 compared to fiscal 1991. This increase was
primarily due to increased sales at Eagle's automotive distribution businesses
of $13.3 million.

Net sales of $201.9 million for the Specialty Products Group were $6.1
million lower in fiscal 1992 compared to fiscal 1991. This decrease was
primarily due to lower sales at Caron and Gerry of $2.4 million and

20
<PAGE> 21

$1.9 million, respectively, due to softness in consumer discretionary spending
and decreases at Hill of $1.8 million.

Gross Earnings

Despite the adverse impact of the recession on many of the Company's
businesses, consolidated gross earnings of $226.2 million for fiscal 1992 were
$3.1 million higher than gross earnings of $223.1 million in fiscal 1991. Gross
earnings improved for businesses in the Building Products Group and Automotive
Products Group by $15.8 million and $3.6 million, respectively, primarily as a
result of increased sales volume resulting from improved market conditions and
acquisitions. Certain businesses within the Electrical Products Group,
Industrial Products Group and, to a lesser extent, the Specialty Products Group,
experienced price pressure. For these segments, gross earnings declined $6.2
million, $6.3 million and $3.9 million, respectively. Consolidated gross margin
was 20.6% for fiscal 1992 compared to 21.6% in fiscal 1991. The reduced level of
gross margin was due primarily to the above-mentioned factors.

Operating Income

Following is operating income by business group:

<TABLE>
<CAPTION>
YEAR ENDED JULY
31, INCREASE/(DECREASE)
------------------ --------------------
1992 1991 AMOUNT PERCENTAGE
------ ------ ------ ----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
Building Products Group................................. $ 41.4 $ 27.6 $13.8 50.0%
Electrical Products Group............................... 16.5 18.6 (2.1 ) (11.3)
Industrial Products Group............................... 14.2 23.9 (9.7 ) (40.4)
Automotive Products Group............................... 4.2 3.8 0.4 9.8
Specialty Products Group................................ 3.3 4.1 (0.8 ) (19.5)
Corporate Expenses...................................... (11.9) (12.3) 0.4 2.6
------ ------ ------
Total................................................. $ 67.7 $ 65.7 $ 2.0 3.0%
------ ------ ------ ----------
------ ------ ------ ----------
</TABLE>

Consolidated operating income for fiscal 1992 was $2.0 million or 3.0%
higher than operating income in fiscal 1991. Consolidated operating margin was
6.2% and 6.4% for fiscal 1992 and 1991, respectively, and declined primarily due
to reduced sales volumes and continued price declines experienced by certain
businesses within the Electrical Products Group and reduced sales volumes and
manufacturing inefficiencies for certain businesses within the Industrial
Products Group. These decreases were partially offset by increases in the
Building Products Group and the Specialty Products Group due to increases in
sales volume and more substantial improvements in operating margin.

Operating income for the Building Products Group increased $13.8 million
during fiscal 1992 compared to fiscal 1991. This increase was due primarily to
increased sales volume and effective cost reduction programs previously
implemented by the businesses within this group, as well as to the earnings
contribution of Norris and Energair, which contributed $2.4 million to operating
income in fiscal 1992. Operating margin was 12.8% and 10.7% for fiscal 1992 and
fiscal 1991, respectively, with the improvement being due to the above mentioned
factors.

Operating income for the Electrical Products Group declined $2.1 million
during fiscal 1992 compared to fiscal 1991. Operating margin was relatively flat
at 10.0% and 10.2% for fiscal 1992 and 1991, respectively. The decline in
operating income was due to the reduced sales volumes and price declines
experienced by certain businesses within this group during fiscal 1992.

Operating income for the Industrial Products Group declined $9.7 million
during fiscal 1992 compared to fiscal 1991 due primarily to the reduced sales
volumes at Pfaudler and to manufacturing inefficiencies at Burns which resulted
in higher labor costs. Operating margin was 5.1% and 8.8% for fiscal 1992 and
1991, respectively, and declined due to the above mentioned factors.

21
<PAGE> 22

Operating income for the Automotive Products Group increased $0.4 million
during fiscal 1992 compared to fiscal 1991, primarily due to increased volume at
the Company's automotive parts distribution businesses. Operating margin was
3.3% for both fiscal 1992 and fiscal 1991.

Operating income for the Specialty Products Group decreased by $0.8 million
during fiscal 1992 compared to fiscal 1991. This decrease was primarily due to
continued softness in consumer discretionary spending. In addition, operating
income in fiscal 1991 included increased costs at Hill, offset by improved
product mix and lower operating expenses at Caron. Operating margin was 1.6% and
2.0% in fiscal 1992 and 1991, respectively, due to the above mentioned factors.

Corporate expenses for fiscal 1992 declined $0.4 million compared to fiscal
1991. This decline reflected efforts to reduce administrative costs at all
levels.

Interest Expense

Net interest expense related to continuing operations was $64.9 million for
fiscal 1992 compared to $68.7 million in fiscal 1991. The decline in net
interest expense was due primarily to the reduction in indebtedness as proceeds
from fiscal 1991 business dispositions (totaling approximately $250.2 million
through January 1991) were applied to outstanding debt balances. Accordingly,
the average outstanding debt balance for fiscal 1992 was approximately $7.0
million less than for fiscal 1991. In addition, Eagle realized savings in fiscal
1992 interest expense due to the overall decline in interest rates from levels
seen in fiscal 1991.

Income From Continuing Operations (Before Income Taxes)

Income from continuing operations before income taxes was $2.8 million for
fiscal 1992 compared to a loss of $3.0 million for fiscal 1991. The improvement
is a result of actions taken by Eagle throughout all of its businesses to reduce
operating expenses and manufacturing costs, which included headcount reductions,
renegotiating vendor contracts and reducing general corporate and administrative
expenses to offset lower volume and sales prices in many of its businesses.

Income Tax Provision

Eagle's tax provision for continuing operations for fiscal 1992 reflected
the significant amount of nondeductible expenses, including goodwill
amortization and depreciation, which are included in the current operating loss.
See Note 7 to the Eagle Consolidated Financial Statements for a further analysis
of the effective tax rate.

DISCONTINUED OPERATIONS

In the third quarter of 1993, the Company classified Lapp Insulator Company
("Lapp"), Underground Technologies, Inc. ("Underground Technologies") and Power
Structures, Inc. ("Power Structures") as discontinued operations. The Company is
currently pursuing options for the sale of Lapp. The Company sold Power
Structures and certain assets of Underground Technologies in the fourth quarter
of 1993 for total proceeds of $3.5 million. The Company made a provision of
$24.0 million, net of applicable tax benefit of $8.2 million, for estimated
losses from operations and from the ultimate disposition of these businesses.
These charges are reflected as "Loss on disposal" in the Company's Consolidated
Financial Statements. Included in the provision for disposition was the
write-off of approximately $10 million of goodwill related to Lapp and
Underground Technologies. The $10 million goodwill represented all of the
goodwill assigned to these businesses.

In February, 1993, Eagle sold, through an indirect wholly owned subsidiary,
a 60% interest in Signet Armorlite, Inc. ("Signet") to Galileo Industrie
Ottiche, S.p.A. ("Galileo"). Signet manufactures and distributes ophthalmic
lenses used for eyeglasses and also distributes supplies used in ophthalmic lens
processing. The Company received cash proceeds of approximately $23 million from
the sale, which were used to reduce outstanding debt. The Company recorded a
pretax loss of $5.0 million with a corresponding tax

22
<PAGE> 23

benefit of $2.0 in December 1992. See Note 4 to the Eagle Consolidated Financial
Statements for a further discussion of the sale agreement and resulting
accounting treatment.

During fiscal 1992, Eagle and its subsidiaries completed the sale of its
process pump business, Pulsafeeder, Inc. and subsidiaries ("Pulsafeeder"), for
total cash and other consideration of $69.0 million, as a result of which a net
gain of approximately $10.6 million was recorded during the fourth quarter of
fiscal 1992. In addition, in conjunction with the Restructuring, Eagle sold the
net assets of Equality to GAMI for approximately $17.0 million. Eagle did not
record any gain on the sale of Equality.

During fiscal 1991, Eagle and its subsidiaries completed the sale of seven
business units for cash consideration of $250.2 million. A net gain of $35.8
million was recorded as a result of these dispositions.

Interest expense allocated to these discontinued businesses primarily
represented interest expense associated with debt assumed by the buyer or debt
related to the discontinued businesses that will no longer be incurred by Eagle
or its subsidiaries. In addition, certain interest expense related to Eagle and
its subsidiaries' revolving lines of credit has also been allocated to
discontinued operations based on the percentage of net assets sold to total
consolidated net assets plus indebtedness of Eagle. Interest expense related to
Eagle's subordinated notes has not been allocated to these discontinued
operations. Eagle believes the method used to allocate interest expense to
discontinued businesses is reasonable.

The provision for income taxes reflected for the operations of these
discontinued businesses in Eagle's Consolidated Statement of Income for the year
ended December 31, 1993, the five months ended December 31, 1992 and 1991 and
for fiscal 1992 and 1991, recognizes the tax effects related specifically to the
discontinued businesses.

An income tax benefit of $8.2 million was recorded in connection with the
ultimate disposition of companies recorded as discontinued operations in 1993.
The tax benefit recorded differs from that computed by utilizing the U.S.
federal tax rate due to certain non-deductible losses, principally the writedown
of goodwill. Income tax expense of $18.7 million and $37.6 million were provided
against the net gains on disposal of businesses in fiscal 1992 and 1991,
respectively. The tax recorded on the gains recorded in fiscal 1992 and 1991
differ from that computed by utilizing the U.S. federal tax rate due to state
taxes, certain non-deductible losses, the effect of net-of-tax accounting, the
effect of foreign tax credits and excess tax gain over the book gain
attributable to differences between the book and tax basis of assets related to
businesses sold.

LIQUIDITY AND CAPITAL RESOURCES

Eagle has historically met its debt service, capital expenditure
requirements and operating needs through a combination of operating cash flow
and external financing.

Operating Cash Flow

Cash flow from continuing operating activities was $12.5 million for the
year ended December 31, 1993. The Company recorded a loss from continuing
operations of $68.1 million of which $71.8 million was related to restructuring
charges. An increase in accounts receivable, as well as the recording of income
tax benefits and expenditures due to the relocation of IEP's manufacturing
facility from New Jersey to Florida represented the primary uses of cash in
1993.

Credit Facilities

As further described in Note 5 to the Eagle Consolidated Financial
Statements, in July 1993, the Company completed a tender offer for $151 million
of its 13% Senior Subordinated Notes ("13% Notes"). The tender of the $151
million of the 13% Notes was funded through a concurrent sale of Senior Deferred
Coupon Notes due 2003 ("Notes"). The issue price of the Notes was $598.97 per
$1,000 principal amount at maturity, which represents a yield to July 15, 1998
of 10.5% per annum. The aggregate principal amount of Notes issued was $315
million. Cash interest will be payable on January 15 and July 15 of each year at
a rate of 10.5% per annum commencing on January 15, 1999 until maturity on July
15, 2003. The net proceeds, after deducting the tender premium, consent
payments, interest on the 13% Notes tendered and other fees and

23
<PAGE> 24
expenses, amounted to approximately $167 million. In connection with the tender
of the 13% Notes, the Company recognized an extraordinary charge of $8.4 million
net of applicable tax benefit of $5.8 million for call premiums and expenses.

In January 1994, the Company consummated a Refinancing (the "Refinancing"),
the proceeds of which were utilized to repay and redeem all of its subsidiaries
senior bank credit facilities, the remaining $149 million of its 13% Notes and
the 13.75% Senior Subordinated Notes ("13.75% Notes"). A portion of the proceeds
from the Refinancing were derived from a new senior bank credit facility
("Credit Facility") made available to Eagle Industrial Products Corporation,
("Eagle Industrial"), a newly formed wholly owned subsidiary of the Company
which owns all of the operating subsidiaries of the Company. The Company also
entered into an asset securitization program whereby it sold certain of its
accounts receivable for approximately $110 million. In addition, the Company
received a capital contribution from GAMI of $50 million in connection with the
Refinancing. The Refinancing of the Company's debt is expected to generate a
reduction of interest expense in excess of $20 million. In connection with the
Refinancing, the Company will record a pretax extraordinary charge of
approximately $26 million in the first quarter of 1994. See Note 17 to the Eagle
Consolidated Financial Statements for a further discussion of the Refinancing.

The Eagle Industrial Credit Facility consists of: (1) a $225 million term
loan due in quarterly installments increasing from $4.9 million per quarter
during 1994 to $15 million in 1999; (2) a $65 million term loan due in equal
quarterly installments aggregating $0.5 million per year in 1994 and 1995, $1
million per year in 1996 through 1999 and $60 million in 2000; and (3) a $135
million revolving Credit Facility (subject to borrowing base availability) that
expires in 1999, which may be extended through 2000. Borrowings under the Credit
Facility bear interest at alternative floating rate structures, at management's
option (4.9% at January 31, 1994), and are secured by substantially all domestic
property, plant, equipment, inventory and certain receivables of Eagle
Industrial and its subsidiaries. At January 31, 1994, $35 million and $290
million were outstanding under the revolving credit portion and term loan
portion of the Credit Facility, respectively. Additionally, the Credit Facility
provides for a letter of credit facility of up to $50 million. Borrowing
availability under the revolving portion of the Credit Facility is reduced by
the outstanding amount of letters of credit. At January 31, 1994, an additional
$28 million was available to borrow under the Credit Facility.

The Eagle Industrial Credit Facility contains various financial covenants,
the more restrictive requirements being: the maintenance of minimum levels of
net worth; limitations on incurring additional indebtedness; restrictions on the
payment of dividends or the making of loans to the Company; maintenance of
certain ratios of cash flow to interest expense and indebtedness; maintenance of
a minimum level of cash flow to fixed charges; and a prohibition on payments to
the Company for management services in excess of $3 million per year. The
Company has provided a guarantee as to the repayment of amounts outstanding
under this Credit Facility. Additionally, the Credit Facility requires that the
Zell interests (as defined) directly or indirectly maintain at least 30% of the
voting power to elect members of the board of directors of the Company and that
the Company directly own 100% of Eagle Industrial.

Prior to the Refinancing, the Company had four senior credit facilities
which were available to four subsidiary groups of the Company (the "Senior Bank
Credit Facilities"). A portion of the proceeds of the Refinancing were utilized
to fully repay the Senior Bank Credit Facilities in January 1994. The aggregate
amount available under the revolving portion of the Senior Bank Credit
Facilities (subject to borrowing base availability) amounted to $350.0 million
at December 31, 1993, of which $156.9 million was outstanding. Additionally, the
Senior Bank Credit Facilities at December 31, 1993 included $69.6 million in
outstanding term loans. Borrowings under the Senior Bank Credit Facilities bore
interest at alternative floating rate structures, at management's option (5.6%
and 6.1% at December 31, 1993 and 1992, respectively), and were secured by
substantially all domestic property, plant, equipment, inventory and receivables
of the Company's subsidiaries. Three of these senior credit facilities were
guaranteed by the Company. Additionally, these credit facilities provided for
letter of credit facilities within each credit facility. At December 31, 1993,
$33.5 million of letters of credit were issued and outstanding under the
aforementioned credit facilities.

24
<PAGE> 25

The Senior Bank Credit Facilities contained various financial covenants,
the more restrictive requirements being the maintenance of minimum levels of net
worth; limitations on the incurrence of additional indebtedness, as defined;
maintenance of certain ratios of profitability to interest expense; maintenance
of certain asset to liability ratios; requirements that the Zell interests (as
defined) directly or indirectly maintain at least 51% of the voting power to
elect members of the board of directors of certain subsidiary groups; and
maintenance of minimum levels of earnings to fixed charges, as defined.

Capital Expenditures

Capital expenditures were $27.7 million and $31.8 million for the years
ended December 31, 1993 and 1992, respectively. Expenditures during 1992
included the construction of a new facility for IEP. Capital expenditures were
$13.6 million for the five months ended December 31, 1992, $27.5 million in
fiscal 1992 and $26.3 million in fiscal 1991.

In addition to normal maintenance expenditures, Eagle also expects to incur
additional capital expenditures to develop new products and improve product
quality. Capital expenditures will be funded through operating cash flow and
through availability under the Credit Facility. Eagle had no material
commitments for capital expenditures at December 31, 1993. The Company expects
that its capital expenditures in 1994 will increase to approximately $45
million.

Acquisitions and Divestitures

Although the Company has historically made a number of acquisitions, it has
not made any material acquisitions since fiscal 1990. While certain preliminary
discussions are at varying stages at this time, Eagle currently does not have
any contract or arrangement with respect to a material acquisition.

Eagle has historically sold a number of businesses, realizing cash proceeds
of $25.9 million in 1993 and $17.0 million in the five months ended December 31,
1992. Proceeds were $67.4 million, $250.2 million and $162.5 million in fiscal
1992, 1991 and 1990, respectively. Eagle has considered, and in the future will
consider, proposals for the sale of some or all of its interests in its
businesses. However, it has, at this time, no agreements or arrangements for the
sale of any of its businesses.

Other Liquidity Considerations

Eagle is structured as a holding company and the operations of Eagle are
conducted principally through its subsidiaries. As a result of the Refinancing,
Eagle has no debt service requirements and no cash interest payments due until
January 1999. Eagle Industrial owns all the operating subsidiaries of the
Company. Eagle Industrial will rely almost exclusively on income and cash flow
from its operating subsidiaries to generate the funds necessary to meet its debt
service obligations as defined in "Credit Facilities" above. Claims of creditors
(including trade creditors), if any, of Eagle's subsidiaries, even though such
claims do not constitute indebtedness of Eagle, will have priority as to the
assets and earnings of such subsidiaries over claims of Eagle and the holders of
Eagle's indebtedness. In addition, the Credit Facility and agreements to which
Eagle or its subsidiaries are a party, restrict the ability of Eagle or its
subsidiaries to incur further indebtedness. See Note 5. Management believes that
cash flow from continuing operations along with availability under the Credit
Facility will be sufficient to pay interest on outstanding debt, meet current
debt maturities, pay income taxes and fund anticipated capital expenditures.

IMPACT OF INFLATION

Eagle believes that inflation has not had a significant impact on
operations during the period August 1, 1990 through December 31, 1993 in any of
the countries or industries in which Eagle competes. Inflationary increases to
operating income in Brazil and Mexico are substantially offset by translation
losses included in operating income. Brazilian and Mexican monetary assets, net
of monetary liabilities, are not material to Eagle.

25
<PAGE> 26

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Public Accountants.............................................. 27
Consolidated Balance Sheets........................................................... 28
Consolidated Statements of Income..................................................... 29
Consolidated Statements of Stockholder's Equity....................................... 30
Consolidated Statements of Cash Flows................................................. 31
Notes to Consolidated Financial Statements............................................ 33
Supplemental Financial Data (Unaudited)............................................... 57
</TABLE>

26
<PAGE> 27

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of Eagle Industries, Inc.:

We have audited the accompanying consolidated balance sheets of Eagle
Industries, Inc. (a Delaware corporation) and Subsidiaries as of December 31,
1993 and 1992, and the related consolidated statements of income, stockholder's
equity and cash flows for the year ended December 31, 1993, the five months
ended December 31, 1992 and each of the two years in the period ended July 31,
1992. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Eagle
Industries, Inc. and Subsidiaries as of December 31, 1993 and 1992, and the
results of their operations and their cash flows for the year ended December 31,
1993, the five months ended December 31, 1992 and each of the two years in the
period ended July 31, 1992, in conformity with generally accepted accounting
principles.

As explained in Note 2 and Note 7 to the consolidated financial statements,
effective January 1, 1993, the Company adopted the requirements of Statement of
Financial Accounting Standards No. 109, "Accounting For Income Taxes". As
explained in Note 2 to the consolidated financial statements, effective December
31, 1993, the Company adopted the requirements of Statement of Financial
Accounting Standards No. 112, "Employer's Accounting for Postemployment
Benefits". As explained in Note 7 to the consolidated financial statements,
effective August 1, 1991, the Company adopted the requirements of Statement of
Financial Accounting Standards No. 106, "Employer's Accounting for
Postretirement Benefits Other Than Pensions".

ARTHUR ANDERSEN & CO.

Chicago, Illinois
March 10, 1994

27
<PAGE> 28

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

DECEMBER 31, DECEMBER 31,
1993 1992
------------ ------------
(RESTATED)
(DOLLARS IN MILLIONS,
EXCEPT PER SHARE AMOUNTS)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents......................................... $ 15.1 $ 31.5
Accounts receivable, net.......................................... 167.2 151.8
Inventories, net.................................................. 187.2 193.3
Other current assets.............................................. 58.4 27.8
Net current assets of discontinued operations..................... 38.9 65.3
------------ ------------
Total current assets.............................................. 466.8 469.7

Property, plant and equipment, net.................................. 218.3 232.6
Goodwill............................................................ 328.3 362.7
Other assets........................................................ 88.8 92.6
Net long-term assets of discontinued operations..................... -- 21.6
------------ ------------
Total assets...................................................... $1,102.2 $1,179.2
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current portion long-term debt.................................... $ 18.5 $ 17.2
Accounts payable.................................................. 74.9 72.9
Accrued liabilities............................................... 109.2 94.9
------------ ------------
Total current liabilities......................................... 202.6 185.0

Senior subordinated notes........................................... 421.9 375.0
Other long-term debt................................................ 219.3 270.7
Accrued employee benefit obligations................................ 96.7 78.8
Other long-term liabilities......................................... 69.6 60.9
------------ ------------
Total liabilities................................................. 1,010.1 970.4
------------ ------------
Stockholder s equity:
Common stock, par value $.01 per share, 1,000 shares authorized,
issued and outstanding............................................ -- --
Additional paid-in capital.......................................... 138.7 138.7
Retained earnings (deficit)......................................... (37.0) 73.6
Cumulative translation adjustments.................................. (5.0) (3.5)
Pension liability adjustment........................................ (4.6) --
------------ ------------
Total stockholder's equity........................................ 92.1 208.8
------------ ------------
Total liabilities and stockholder's equity........................ $1,102.2 $1,179.2
------------ ------------
------------ ------------
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these statements.

28
<PAGE> 29

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
FIVE MONTHS ENDED
YEAR ENDED DECEMBER 31, YEAR ENDED JULY 31,
DECEMBER 31, ------------------ ---------------------
1993 1992 1991 1992 1991
------------ ------ ------ -------- --------
(RESTATED) (RESTATED)
(UNAUDITED)
(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Net sales.............................. $1,142.3 $458.2 $433.4 $1,098.8 $1,033.9
Cost of sales.......................... 917.8 368.0 343.6 872.6 810.8
------------ ------ ------ -------- --------
Gross earnings....................... 224.5 90.2 89.8 226.2 223.1
Selling and administrative expenses.... 158.6 65.8 61.3 149.4 150.7
Other income........................... (3.5) (1.2) (0.2) (1.1) (2.2)
Goodwill amortization.................. 10.5 4.3 4.3 10.2 8.9
Restructuring charges.................. 71.8 1.7 -- -- --
------------ ------ ------ -------- --------
Operating income (loss).............. (12.9) 19.6 24.4 67.7 65.7
------------ ------ ------ -------- --------
Interest expense....................... 68.3 28.3 30.5 71.3 76.6
Interest income........................ (1.2) (1.1) (2.8) (6.4) (7.9)
------------ ------ ------ -------- --------
Net interest expense................. 67.1 27.2 27.7 64.9 68.7
------------ ------ ------ -------- --------
Income (loss) from continuing
operations before income taxes....... (80.0) (7.6) (3.3) 2.8 (3.0)
Provision (benefit) for income taxes
from continuing operations........... (11.9) (1.1) 1.5 3.1 (0.1)
------------ ------ ------ -------- --------
Loss from continuing operations........ (68.1) (6.5) (4.8) (0.3) (2.9)
Discontinued Operations, net of taxes:
Operating loss....................... (4.6) (1.9) (0.1) (1.3) (5.6)
Gain (loss) on disposal.............. (24.0) (3.0) -- 10.6 35.8
------------ ------ ------ -------- --------
Income (loss) before extraordinary item
and cumulative effect of change in
accounting principles................ (96.7) (11.4) (4.9) 9.0 27.3
Extraordinary item:
Loss from early retirement of debt,
net of applicable income tax
benefit of $5.8................... (8.4) -- -- -- --
------------ ------ ------ -------- --------
Income (loss) before cumulative effect
of change in accounting principles... (105.1) (11.4) (4.9) 9.0 27.3
Cumulative effect of change in
accounting principles less income tax
provision (benefit) of $(1.0) in 1993
and $7.3 in December 1991 and fiscal
1992................................. (5.5) -- 16.9 16.9 --
------------ ------ ------ -------- --------
Net income (loss)...................... $ (110.6) $(11.4) $ 12.0 $ 25.9 $ 27.3
------------ ------ ------ -------- --------
------------ ------ ------ -------- --------
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these statements.

29
<PAGE> 30

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY

<TABLE>
<CAPTION>
ADDITIONAL RETAINED CUMULATIVE PENSION
COMMON PAID-IN EARNINGS TRANSLATION LIABILITY
STOCK CAPITAL (DEFICIT) ADJUSTMENTS ADJUSTMENT
------ ---------- -------- ----------- ----------
(IN MILLIONS)
(RESTATED)
<S> <C> <C> <C> <C> <C>
Balance at July 31, 1990.................... $ -- $144.8 $ 61.8 $ 2.6 $ --
Net income................................ -- -- 27.3 -- --
Cash dividend declared.................... -- -- (30.0) -- --
Return of capital by subsidiaries accounted
for as a pooling of interest.............. -- (5.6) -- -- --
Effect of the Company's parent acquiring
the interest of its minority
shareholder............................ -- 35.6 -- -- --
Translation adjustments and other......... -- -- -- (2.7) --
------ ---------- -------- ----------- ----------
Balance at July 31, 1991.................... -- 174.8 59.1 (0.1) --
Net income................................ -- -- 25.9 -- --
Restructuring transaction (Note 12)....... -- (37.7) -- -- --
Translation adjustments and other......... -- -- -- 3.5 --
------ ---------- -------- ----------- ----------
Balance at July 31, 1992.................... -- 137.1 85.0 3.4 --
Net loss.................................. -- -- (11.4) -- --
Translation adjustments and other......... -- 1.6 -- (6.9) --
------ ---------- -------- ----------- ----------
Balance at December 31, 1992................ -- 138.7 73.6 (3.5) --
Net loss.................................. -- -- (110.6) -- --
Pension liability adjustment.............. -- -- -- -- (4.6)
Translation adjustments and other......... -- -- -- (1.5) --
------ ---------- -------- ----------- ----------
Balance at December 31, 1993................ $ -- $138.7 $ (37.0) $(5.0) $ (4.6)
------ ---------- -------- ----------- ----------
------ ---------- -------- ----------- ----------
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these statements.

30
<PAGE> 31

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FIVE MONTHS
ENDED YEAR ENDED JULY
YEAR ENDED DECEMBER 31, 31,
DECEMBER 31, ---------------- -----------------
1993 1992 1991 1992 1991
------------ ------ ------ ------ -------
(RESTATED) (RESTATED)
(UNAUDITED)
(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Loss from continuing operations...................... $ (68.1) $ (6.5) $ (4.8) $ (0.3) $ (2.9)
Adjustments to reconcile loss from continuing
operations to net cash flow from operating
activities:
Depreciation....................................... 31.8 12.3 11.5 27.5 26.2
Amortization....................................... 17.9 7.8 7.0 17.9 15.8
Noncash postretirement benefits expense............ 1.1 0.7 1.1 2.2 7.1
Deferred income tax provision (benefit)............ (8.4) 2.3 1.4 (1.8) 7.9
Accretion of discount on subordinated debt......... 9.5 -- -- -- --
Restructuring charges.............................. 71.8 1.7 -- -- --
Cash effects of changes in (excluding the effects
of acquisitions or dispositions of businesses):
(Increase) decrease in accounts receivable....... (15.0) 14.6 1.0 (22.7) 0.9
(Increase) decrease in inventories............... 5.5 (3.9) (15.0) (4.8) 5.2
Decrease in other current assets................. 0.5 5.3 9.0 7.8 2.6
Increase (decrease) in accounts payable.......... 1.8 (12.3) (2.8) 16.5 (1.5)
Increase (decrease) in accrued income taxes...... (16.3) 4.8 0.6 5.1 7.1
Decrease in accrued liabilities and accrued
employee benefit obligations.................. (19.6) (21.6) (8.9) (14.4) (39.1)
------------ ------ ------ ------ -------
Net cash from continuing operating activities........ 12.5 5.2 0.1 33.0 29.3
Net cash used in discontinued operations............. (3.0) (21.0) (2.7) (15.4) (51.5)
------------ ------ ------ ------ -------
Net cash from (used in) operations:.................. 9.5 (15.8) (2.6) 17.6 (22.2)
------------ ------ ------ ------ -------
Cash Flows from Investing Activities:
Proceeds from sale of businesses..................... 25.9 17.0 -- 67.4 250.2
Purchases of businesses.............................. -- -- -- -- (20.7)
Capital expenditures................................. (27.7) (13.6) (9.3) (27.5) (26.3)
Other................................................ (1.2) (9.7) (7.9) (7.4) (14.6)
------------ ------ ------ ------ -------
Net cash from (used in) investing activities:........ (3.0) (6.3) (17.2) 32.5 188.6
------------ ------ ------ ------ -------
Cash Flows from Financing Activities:
Net payments on long-term debt....................... (1.3) (4.3) (0.5) (15.1) (32.5)
Net borrowings (repayments) on revolving credit
facilities......................................... (44.6) 35.4 17.0 (24.0) (27.6)
Proceeds from issuance of subordinated notes, net.... 184.0 -- -- -- --
Redemption of subordinated notes and debentures...... (161.0) -- -- -- --
Proceeds from new credit facility, net............... -- -- -- -- 181.3
Repayment of subsidiary credit facility.............. -- -- -- -- (317.0)
Net (payments to) advances from affiliates........... -- (13.5) 0.1 (14.1) 15.7
Cash dividend paid................................... -- -- -- -- (30.0)
Capital transactions of subsidiaries accounted for as
a pooling-of-interest.............................. -- -- -- -- (5.6)
------------ ------ ------ ------ -------
Net cash from (used in) financing activities:........ (22.9) 17.6 16.6 (53.2) (215.7)
------------ ------ ------ ------ -------
Change in Cash and Cash Equivalents.................... (16.4) (4.5) (3.2) (3.1) (49.3)
Cash and Cash Equivalents, Beginning of Period......... 31.5 36.0 39.1 39.1 88.4
------------ ------ ------ ------ -------
Cash and Cash Equivalents, End of Period............... $ 15.1 $ 31.5 $ 35.9 $ 36.0 $ 39.1
------------ ------ ------ ------ -------
------------ ------ ------ ------ -------
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these statements.

31
<PAGE> 32

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED)

<TABLE>
<CAPTION>
FIVE MONTHS
YEAR ENDED ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, JULY 31,
------------ --------------- ----------------
1993 1992 1991 1992 1991
------------ ----- ------ ------ ------
(RESTATED) (RESTATED)
(UNAUDITED)
(IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Net Cash Paid (Received) During the Period for
(Relating to Continuing and Discontinued
Operations):
Interest....................................... $ 62.2 $33.0 $ 37.4 $ 74.1 $ 88.0
Income taxes................................... (1.5) 15.6 (10.5) (6.8) 40.0
In Conjunction With the Purchase of Businesses,
Liabilities Were Assumed as Follows:
Fair value of assets acquired, excluding
cash........................................ $ -- $ -- $ -- $ -- $ 24.6
Cash paid or debt incurred for net assets and
capital stock............................... -- -- -- -- (20.7)
------ ----- ------ ------ ------
Liabilities assumed............................ $ -- $ -- $ -- $ -- $ 3.9
------ ----- ------ ------ ------
------ ----- ------ ------ ------
Noncash Investing and Financing Activities:
Acquisition accounting:
Adjustments increasing goodwill............. $ -- $ -- $ -- $ -- $(48.3)
Adjustments increasing accrued employee benefit
obligations and other long-term
liabilities................................. -- -- -- -- 12.7
Increase in stockholder's equity............... -- -- -- -- 35.6
------ ----- ------ ------ ------
$ -- $ -- $ -- $ -- $ --
------ ----- ------ ------ ------
------ ----- ------ ------ ------
Other equity transactions:
Adjustment decreasing additional paid-in
capital................................... $ -- $ -- $ -- $(37.7) $ --
Adjustment decreasing other long-term
assets.................................... -- -- -- 37.7 --
------ ----- ------ ------ ------
$ -- $ -- $ -- $ -- $ --
------ ----- ------ ------ ------
------ ----- ------ ------ ------
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these statements.

32
<PAGE> 33

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993

(1) BASIS OF PRESENTATION

Eagle Industries, Inc. (the "Company" or "Eagle") commenced operations on
February 1, 1987, when GAMI transferred certain stock and net assets of Clevepak
Corporation and Lapp Insulator Company to the Company. On January 9, 1991, Great
American Management and Investment, Inc. ("GAMI"), through its subsidiaries,
contributed all of the outstanding capital stock of The Jepson Corporation
("Jepson"), an indirect wholly owned subsidiary of GAMI, to the Company. The
contribution of the capital stock of Jepson to the Company was accounted for as
an exchange between companies under common control and in a manner similar to
that utilized in pooling-of-interest accounting. The historical financial
statements of the Company have been restated to give effect to the September
1989 acquisition of Jepson by a subsidiary of GAMI, as if the acquisition of
Jepson had been consummated by Eagle.

Prior to the Restructuring, as hereinafter defined, Great American
Financial Group, Inc. (formerly Great American Industrial Group, Inc.) ("GAFG")
directly and indirectly owned 100% of the common stock of the Company and GAMI
owned 100% of the common stock of GAFG. Eagle is currently 100% owned by GAMI.

Effective as of September 25, 1992, GAMI and its subsidiaries consummated a
restructuring (the "Restructuring"). Pursuant to the Restructuring, among other
things, (i) Eagle sold the net assets of its business, Equality Specialties,
Inc. ("Equality") to GAMI for approximately $17 million; (ii) GAFG contributed
all of the outstanding stock owned by it in North Riverside Holdings, Inc.
("North Riverside") to Eagle; (iii) Eagle declared a stock dividend to
facilitate the distribution of Eagle's common stock (the effect of which was
negated by a reverse stock split in December 1993); and (iv) GAFG distributed
all of the outstanding Eagle common stock owned by it to GAMI.

Effective December 16, 1992, Eagle changed its year end from July 31 to
December 31.

(2) SIGNIFICANT ACCOUNTING POLICIES

BASIS OF CONSOLIDATION:

The accompanying Consolidated Financial Statements include the accounts of
the Company and its subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.

CASH AND CASH EQUIVALENTS:

For purposes of the Consolidated Statements of Cash Flows, all highly
liquid investment instruments with original maturities of three months or less
are considered to be cash equivalents.

INVENTORIES:

Inventories are stated at the lower of cost or market. Cost includes raw
materials, labor and manufacturing overhead. The last-in, first-out ("LIFO")
method of inventory valuation is used for 45.5% and 49.8% of inventory at
December 31, 1993 and 1992, respectively. The first-in first-out ("FIFO") method
of inventory valuation is used for the remaining inventory.

PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment is stated at cost. Cost is based on appraised
fair market values when allocating the purchase price for acquisitions. The
straight-line method is generally used to provide for depreciation over the
estimated useful lives of the assets. Property, plant and equipment held for
sale is written down to net realizable value and classified in other assets.

33
<PAGE> 34

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

GOODWILL:

Goodwill represents the purchase price associated with acquired businesses
in excess of the fair value of the net assets acquired. Goodwill is amortized on
a straight-line basis primarily over forty years. Accumulated amortization was
$43.4 million and $32.9 million at December 31, 1993 and 1992, respectively.

The Company assesses the recoverability of unamortized goodwill allocated
to each of its individual acquired businesses as follows: A) continuing
operations -- whenever current operating income is not sufficient to recover
current amortization of goodwill or when events and circumstances indicate that
future operating income and cash flow may be negatively affected, the
recoverability is evaluated based upon the estimated future operating income and
undiscounted cash flow of the related entity during the remaining period of
goodwill amortization, and; B) entities to be divested -- the carrying value of
the net assets of each entity, including the amount of goodwill assigned
thereto, is compared to the expected divestiture proceeds. If a loss is
indicated, it is recorded when known; gains are recorded when the divestiture
occurs.

FOREIGN CURRENCIES:

The effects of foreign currency translation adjustments are recorded as a
separate component of stockholder's equity. Translation adjustments of non-U.S.
subsidiaries with highly inflationary economies (Brazil and Mexico) are charged
to operations.

REVENUE RECOGNITION:

The Company recognizes revenues as products are shipped.

POSTEMPLOYMENT BENEFITS:

The Company adopted the provisions of "Employers' Accounting for
Postemployment Benefits" ("SFAS No. 112") effective December 31, 1993. By
adopting this standard, the Company increased its accrued expenses by $3.0
million and recorded a corresponding pretax charge of $3.0 million reflected as
a "Cumulative effect of change in accounting principle".

RESEARCH AND DEVELOPMENT:

Research, product development and engineering facilities are maintained at
various subsidiary locations. Research and development efforts center on
developing improved materials and designs for existing products and the creation
of new products and equipment. Research and development costs are expensed as
incurred. Research and development costs were $3.1 million for the year ended
December 31, 1993, $1.6 million for the five months ended December 31, 1992,
$3.4 million in fiscal 1992 and $3.5 million in fiscal 1991.

INCOME TAXES:

The Company is included in GAMI's consolidated U.S. federal income tax
return. Under the terms of a tax sharing arrangement with GAMI, the Company
computes and pays to GAMI its liability for U.S. federal income taxes as if the
Company filed a separate U.S. federal income tax return. The Company files
separate U.S. state and non-U.S. income tax returns.

The Company does not provide for U.S. income taxes on the undistributed
earnings of its non-U.S. subsidiaries. Management intends to indefinitely
reinvest non-U.S. subsidiaries' earnings. Undistributed earnings of non-U.S.
subsidiaries were $9.3 million at December 31, 1993. If these earnings were
distributed, foreign tax credits would substantially offset the related U.S.
income tax liability.

The Company adopted the provisions of Financial Accounting Standards No.
109, "Accounting for Income Taxes" ("SFAS. No. 109") effective January 1, 1993.
This new standard changes the Company's method of accounting for income taxes
from the deferred method required under APB No. 11 to the asset and

34
<PAGE> 35

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

liability method. If it is more likely than not that some portion or all of a
deferred tax asset will not be realized, a valuation allowance is recognized.
(See Note 7.)

INTEREST EXPENSE RELATED TO DISCONTINUED OPERATIONS:

Interest expense allocated to the discontinued businesses principally
represents interest expense related to debt assumed by the buyer or debt related
to the discontinued businesses that will no longer be incurred by the Company or
its subsidiaries. In addition, certain interest expense related to the Company
and its subsidiaries' revolving lines of credit has also been allocated to
discontinued operations based on the percentage of net assets sold or to be sold
to total consolidated net assets plus indebtedness of the Company. Interest
expense related to the Company's subordinated notes has not been allocated to
the discontinued businesses. The Company believes the method used to allocate
interest to discontinued businesses is reasonable.

(3) ACQUISITIONS

As described in Note 1, as part of the Restructuring GAMI contributed all
of the outstanding capital stock of North Riverside to Eagle. Substantially all
of North Riverside's operations are conducted through two automotive aftermarket
parts distributors. The contribution of North Riverside to the Company has been
accounted for in a manner similar to a pooling-of-interests under the provisions
of APB No. 16.

In April 1991, the Company, purchased all of the assets and assumed certain
liabilities of the Energair division ("Energair") for total cash consideration
of $8.4 million. Energair manufactures and distributes air compressors in the
United States.

In September 1990, the Company purchased all of the assets and assumed
certain liabilities of Norris Plumbing Products ("Norris") for total cash
consideration of $12.3 million. Norris manufactures and distributes ceramic and
enameled steel bathroom fixtures for use in the residential and commercial
construction industry.

The aforementioned acquisitions have been accounted for under the purchase
method of accounting in accordance with Accounting Principles Board Opinion No.
16 ("APB No. 16") and, accordingly, the assets acquired and liabilities assumed
have been recorded at their fair values as of their respective dates of
acquisition.

(4) DISCONTINUED OPERATIONS

In the third quarter of 1993, the Company reflected Lapp Insulator Company
("Lapp"), Underground Technologies, Inc. ("Underground Technologies") and Power
Structures, Inc. ("Power Structures") as discontinued operations. The Company is
currently pursuing options for the sale of Lapp. The Company sold Power
Structures and certain assets of Underground Technologies in the fourth quarter
of 1993 for total proceeds of $3.5 million. The Company made a provision of
$24.0 million, net of applicable tax benefit of $8.2 million, for estimated
losses from operations and from the ultimate disposition of these businesses.
Included in the provision for disposition was the write-off of approximately $10
million of goodwill related to Lapp and Underground Technologies.

In February, 1993, the Company sold a 60% interest in Signet Armorlite,
Inc. ("Signet") to Galileo Industrie Ottiche, S.p.A. ("Galileo"). Signet
manufactures and distributes ophthalmic lenses used for eyeglasses and also
distributes supplies used in ophthalmic lens processing. The Company received
cash proceeds of approximately $23 million, which were used to reduce
outstanding debt. Under the terms of the sale agreement, the Company has the
right to put (the "Put") its remaining 40% interest in Signet to Galileo on
February 26, 1998. Galileo has the right to acquire the remaining 40% interest
(the "Call") held by the Company any time prior to February 26, 1998. While the
Company retains a 40% interest; it has no obligation

35
<PAGE> 36

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

to fund future losses or make additional investments; it has a less than
majority board representation; it has given up substantially all of its rights
to future earnings or appreciation related to its 40% interest; and it intends
to exercise its Put in the event that Galileo does not exercise its Call. The
price under either the Put or Call is $14.9 million. The Company recorded a
pretax loss of $5.0 million with a corresponding tax benefit of $2.0 million in
December 1992. Under the terms of the sale agreement, Galileo also has the right
to put certain of Signet's plant and equipment (the "Real Estate Put") to the
Company from February 26, 1997 through February 26, 1998 for $10.0 million. No
gain or loss has been recognized with respect to the Real Estate Put.

As disclosed in Note 1, Eagle sold Equality to GAMI as part of the
Restructuring. The total consideration received by the Company was approximately
$17 million in cash. No gain or loss was recorded as a result of the sale of
Equality.

In May, 1992, the Company sold substantially all of the assets of
Pulsafeeder, Inc. and its wholly owned subsidiaries ("Pulsafeeder"). Total
consideration received by the Company was $69.0 million. The Company recorded a
pretax gain of $29.3 million with a corresponding tax provision of $18.7 million
during the fourth quarter of fiscal 1992.

During the first quarter of fiscal 1991, the Company, through a wholly
owned subsidiary, sold all of the issued and outstanding shares of capital stock
of DeVilbiss Health Care, Inc. and its subsidiaries ("DeVilbiss Health Care")
for total cash consideration of $84.5 million. The July 31, 1991 Consolidated
Financial Statements reflect a pretax gain of $44.7 million from the sale of
DeVilbiss Health Care with a corresponding tax provision of $15.8 million.

In addition, during fiscal 1991, the Company sold its Stimsonite, Air Maze
and Atlantic businesses for total cash consideration of $45.0 million, $8.3
million and $38.8 million, respectively. Since the consideration received for
these businesses approximated the fair value allocated to the net identifiable
assets of these businesses in purchase accounting, no net gain or loss was
recorded as a result of their sales. However, due to net-of-tax purchase
accounting, other income of $17.8 million with a corresponding tax provision of
$17.8 million has been recorded as a result of these divestitures. This income,
net of the related tax provision, has been included in net gain on disposal of
businesses in the Consolidated Statement of Income.

During the second quarter of fiscal 1991, the Company sold two of its
businesses, Hedstrom and Emerson. Certain net assets of Emerson were sold for
total cash consideration of $56.1 million. Since the consideration received for
Emerson approximated the fair value allocated to the net identifiable assets of
this division in purchase accounting, no net gain or loss was recorded as a
result of this divestiture. Certain net assets of Hedstrom were sold to New
Hedstrom Corp. ("Buyer"), an affiliate of GAI Partners Limited Partnership ("GAI
Partners"), which was organized to purchase, own and operate the business
constituted by such assets (the "Business"), for total consideration of $34.5
million. The $34.5 million of consideration received by the Company consisted of
a $32.5 million note receivable, which bears interest at 9.0% payable quarterly,
with principal payments due in varying installments through January 1998 (the
"Hedstrom Note"), and 9.0% cumulative preferred stock of Hedstrom Holdings,
Inc., which owns 100% of the stock of Buyer, having a redemption value of $2.0
million. Payment of interest on the Hedstrom Note may be deferred at the option
of GAI Partners until maturity, with interest accruing at 9.0% on any amount of
unpaid principal and interest. The Hedstrom Note is secured by a pledge of the
non-voting preferred stock GAI Partners holds in GAFG. In the event of default
on the GAFG non-voting preferred stock, GAMI has agreed to issue GAMI non-voting
preferred stock with similar rights and designations. Through January 1996, any
acceleration resulting from a default under the Hedstrom Note may, at the option
of GAI Partners, be satisfied solely by the transfer of the aforementioned
preferred stock (see Note 12) to the holder of such note. Since the
consideration received for the Business approximated the fair value allocated to
the net identifiable assets of Hedstrom in purchase accounting, no net gain or
loss was recorded as a result of this divestiture. In connection

36
<PAGE> 37

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

with the sales of Emerson and Hedstrom, while no net gain or loss was recognized
due to net-of-tax purchase accounting, other income of $3.8 million with a
corresponding tax provision of $3.8 million has been recorded as a result of
these divestitures. This income, net of the related tax provision, has been
included in net gain on disposal of businesses in the Consolidated Statement of
Income.

In fiscal 1991, the Company recorded an additional gain on disposal of $6.9
million relating to the fiscal 1990 divestiture of a business. There was no
corresponding tax provision related to this additional gain due to net-of-tax
accounting.

The following table summarizes key financial data related to the
discontinued operations of Lapp, Power Structures, Underground Technologies,
Signet, Pulsafeeder, Equality, DeVilbiss Health Care, Air Maze, Atlantic,
Emerson and Hedstrom.

FIVE YEAR ENDED
YEAR ENDED MONTHS ENDED JULY 31,
DECEMBER 31, DECEMBER 31, ----------------
1993 1992 1992 1991
------------- -------------- ------ ------
(RESTATED) (RESTATED)
(IN MILLIONS)
<S> <C> <C> <C> <C>
Net sales........................................ $79.9 $ 74.2 $219.7 $276.6
Operating income (loss).......................... (4.7) -- 8.0 6.8
Allocated interest expense....................... 2.1 2.3 7.3 13.3
Income tax provision (benefit) applicable to
discontinued businesses........................ (2.2) (0.4) 2.0 (0.9)
Loss from operations of discontinued businesses
net of applicable income taxes................. (4.6) (1.9) (1.3) (5.6)
</TABLE>

The net current assets of discontinued operations included in the
Consolidated Balance Sheet at December 31, 1993 amounted to $38.9 million, and
consisted primarily of receivables, inventories and property, plant and
equipment, net of accounts payable, accrued liabilities, debt and accrued
employee benefit obligations. These amounts have all been classified as current
based on the intent to dispose of them within one year. The net current assets
of discontinued operations at December 31, 1992 amounted to $65.3 million and
consisted primarily of receivables, goodwill and inventories net of accounts
payable and accrued liabilities. The net long-term assets of discontinued
operations at December 31, 1992 amounted to $21.6 million and consisted
primarily of property, plant and equipment and goodwill, net of debt and accrued
employee benefit obligations.

(5) DEBT

SENIOR SUBORDINATED NOTES:

Amounts outstanding at December 31, 1993 under the Company's Senior
Subordinated Notes are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1993 1992
------ ------
(IN MILLIONS)
<S> <C> <C>
Senior Deferred Coupon Notes................................. $197.9 $ --
13% Senior Subordinated Notes................................ 149.0 300.0
13.75% Notes................................................. 75.0 75.0
------ ------
$421.9 $375.0
------ ------
------ ------
</TABLE>

37
<PAGE> 38

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

Senior Deferred Coupon Notes:

The Company's $315 million principal amount of Senior Deferred Coupon Notes
(the "Notes") issued pursuant to an Indenture, dated July 1, 1993, (the
"Indenture") mature on July 15, 2003. The issue price of each Note was $598.97
per $1,000 principal amount at maturity, which represents a yield to July 15,
1998 of 10.5% per annum. Cash interest will not accrue on the Notes prior to
July 15, 1998. Cash interest will be payable on January 15 and July 15 of each
year at a rate of 10.5% per annum commencing January 15, 1999 until maturity.
The Notes are general unsecured obligations of the Company and rank pari pasu in
right of payment with all senior indebtedness of the Company. The Notes are
redeemable at the Company's option on or after July 15, 1998 at par value, plus
accrued interest. In addition, prior to July 15, 1996, up to 35% of the Notes
may be redeemed out of the proceeds of certain equity offerings at 110% of
accreted amount to July 15, 1994 and decreasing by 1% per annum each July 14
thereafter, until July 14, 1996. Upon a Change of Control (as defined below)
each holder of the Notes may require the Company to repurchase such holders'
Notes at 101% of the accreted amount plus accrued interest, if any.

A Change of Control is primarily defined to mean such time as any person or
group, [other than GAMI, Equity Holding Limited, Hellman & Friedman Capital
Partners and any affiliate thereof (the "Original Investors")], become the
beneficial owner of more than 40% of the voting power of stock of the Company
and such ownership level exceeds that of the Original Investors as a group.

The Notes contain restrictive covenants, the more significant requirements
being: a limitation on dividend payments and distributions on capital stock;
restrictions on distributions from subsidiaries; limitations on sales of assets
and subsidiary stock; and limitations on the creation of additional indebtedness
(excluding certain refinancings of indebtedness, certain amounts to finance
capital expenditures, indebtedness under bank credit agreements not to exceed
$440 million, and other indebtedness of $50 million) unless consolidated EBITDA
to Consolidated Net Interest Expense (as defined in the Indenture) is equal to
or exceeds 1.75 to 1 for periods through July 1995 and 2.00 to 1 for periods
after July 1995.

13% Senior Subordinated Notes:

The Company's $300 million 13% Senior Subordinated Notes ("13% Notes")
issued pursuant to an indenture dated October 1, 1988 (the "Eagle Indenture")
were due in October 1998. The 13% Notes became redeemable by the Company on
October 15, 1993 at 104% of the principal amount of these notes with the
redemption price reducing to 100% in 2% increments each October 15 thereafter.
The 13% Notes were subordinated to all existing Senior Debt of the Company.

In April 1993, the Company commenced a tender offer for $151 million
aggregate principal amount of the 13% Notes at a price as subsequently amended
of $1,049 per $1,000 principal amount. The Company also solicited consents, at a
price of $15 for each $1,000 principal amount of 13% Notes purchased, from
tendering holders for proposed amendments to the Eagle Indenture to allow the
Company and its subsidiaries to incur certain amounts of additional
indebtedness. The Company received sufficient consents to adopt the proposed
amendments to the Eagle Indenture and consummated the tender offer on July 12,
1993, concurrent with the offering of the Notes.

As further discussed in Note 17, Subsequent Events -- Refinancing, in
January 1994, the Company called for redemption on February 27, 1994, the
remaining $149 million of 13% Notes at 104% of their principal amount plus
accrued interest. Proceeds for the redemption were derived from the Refinancing.

13.75% Notes:

The $75 million 13.75% Senior Subordinated Notes ("13.75% Notes") issued
pursuant to an indenture dated March 15, 1988 were due in March 1998. The 13.75%
Notes were redeemable at 108.25% of the

38
<PAGE> 39

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

principal amount of these notes in March 1992 decreasing to 100% in 1.375%
increments each March 15 thereafter. As further described in Note 17, Subsequent
Events -- Refinancing, in January 1994, all of the 13.75% Notes were called for
redemption on March 15, 1994 at 105.5% of their principal amount plus accrued
interest. Proceeds for the redemption were derived from the Refinancing.

OTHER LONG-TERM DEBT:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1993 1992
------ ----------
(RESTATED)
(IN MILLIONS)
<S> <C> <C>
Senior Bank Credit Facilities.............................. $224.0 $268.5
Industrial Revenue Bonds and debentures, payable through
2004, interest rates ranging from 7.4% to 10.25%......... 4.1 9.1
Other, including capitalized lease obligations, mortgages
and subsidiary subordinated debt......................... 9.7 10.3
------ ----------
237.8 287.9
Less current portion....................................... (18.5) (17.2)
------ ----------
Long-term debt............................................. $219.3 $270.7
------ ----------
------ ----------
</TABLE>

Eagle Industrial Credit Facility:

As further described in Note 17, in January 1994 the Company consummated a
refinancing (the "Refinancing"), the proceeds of which were utilized to repay
and redeem of all of its subsidiaries senior bank credit facilities, its 13%
Notes and the 13.75% Notes. Thus, in January 1994 the Senior Bank Credit
Facilities (defined below) were fully repaid and the agreements terminated. A
portion of the proceeds to consummate the Refinancing were derived from a new
senior bank credit facility made available to Eagle Industrial Products
Corporation, ("Eagle Industrial") a newly formed wholly owned subsidiary of the
Company which owns all of the operating subsidiaries of the Company.

On January 31, 1994, Eagle Industrial entered into a new $425 million
senior credit facility with a group of banks (the "Credit Facility"). The Credit
Facility consists of: (1) a $225 million term loan due in quarterly installments
increasing from $4.9 million per quarter during 1994 to $15 million in 1999; (2)
a $65 million term loan due in equal quarterly installments aggregating $0.5
million per year in 1994 and 1995, $1 million per year in 1996 through 1999 and
$60 million in 2000; and (3) a $135 million revolving credit facility (subject
to borrowing base availability) that expires in 1999, which may be extended
through 2000. Borrowings under the Credit Facility bear interest at alternative
floating rate structures, at management's option (4.9% at January 31, 1994), and
are secured by substantially all domestic property, plant, equipment, inventory
and certain receivables of Eagle Industrial and its subsidiaries. The Credit
Facility requires an annual commitment fee of 0.5% on the average daily unused
amount of the revolving portion of the Credit Facility. At January 31, 1994, $35
million and $290 million were outstanding under the revolving credit portion and
term loan portion of the Credit Facility, respectively. Additionally, the Credit
Facility provides for a letter of credit facility of up to $50 million.
Borrowing availability under the revolving portion of the Credit Facility is
reduced by the outstanding amount of letters of credit. At January 31, 1994, an
additional $28.0 million was available to borrow under the Credit Facility.

The Credit Facility contains various financial covenants, the more
restrictive requirements being: the maintenance of minimum levels of net worth;
limitations on incurring additional indebtedness; restrictions on the payment of
dividends or the making of loans to the Company; maintenance of certain ratios
of cash flow to

39
<PAGE> 40

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

interest expense and indebtedness; maintenance of a minimum level of cash flow
to fixed charges; and a prohibition on payments to the Company for management
services in excess of $3 million per year. The Company has provided a guarantee
as to the repayment of amounts outstanding under this credit facility.
Additionally, the Credit Facility requires that the Zell interests (as defined)
directly or indirectly maintain at least 30% of the voting power to elect
members of the board of directors of the Company and that the Company directly
own 100% of Eagle Industrial.

The proforma aggregate long-term debt maturities over the next five years
(including amounts that will be due under the Credit Facility and excluding
amounts repaid in connection with the Refinancing) are as follows: 1994 -- $23.2
million; 1995 -- $27.0 million; 1996 -- $36.8; 1997 -- $40.3 million and 1998 --
$51.3 million.

Senior Bank Credit Facilities:

The Company had four senior credit facilities which were available to four
subsidiary groups of the Company prior to the Refinancing (the "Senior Bank
Credit Facilities") (see Note 17). A portion of the proceeds of the Refinancing
were utilized to fully repay the Senior Bank Credit Facilities in January 1994.
The aggregate amount available under the revolving portion of the Senior Bank
Credit Facilities (subject to borrowing base availability) amounted to $350.0
million at December 31, 1993, of which $156.9 million was outstanding.
Additionally, the Senior Bank Credit Facilities at December 31, 1993 included
$69.6 million in outstanding term loans, which were due in quarterly
installments increasing from $3.9 million per quarter in 1994 to $7.5 million in
1997. Borrowings under the Senior Bank Credit Facilities bore interest at
alternative floating rate structures, at management's option (5.6% and 6.1% at
December 31, 1993 and 1992, respectively), and were secured by substantially all
domestic property, plant, equipment, inventory and receivables of the Company's
subsidiaries. Annual commitment fees ranging from 0.375% to 0.60% were payable
on the average daily unused amount of the revolving portion of these credit
agreements. Three of these senior credit facilities were guaranteed by the
Company. Additionally, these credit facilities provided for letter of credit
facilities within each credit facility. At December 31, 1993, $33.5 million of
letters of credit were issued and outstanding under the aforementioned credit
facilities.

The Senior Bank Credit Facilities contained various financial covenants,
the more restrictive requirements being: the maintenance of minimum levels of
net worth; limitations on the incurrence of additional indebtedness, as defined;
maintenance of certain ratios of profitability to interest expense; maintenance
of certain asset to liability ratios; requirements that the Zell interests (as
defined) directly or indirectly maintain at least 51% of the voting power to
elect members of the board of directors of certain subsidiary groups; and
maintenance of minimum levels of earnings to fixed charges, as defined. The
Company and its subsidiaries were in compliance with all covenants of their
respective debt agreements at December 31, 1993.

(6) EMPLOYEE RETIREMENT AND BENEFIT PLANS:

PENSION:

U.S. Plans:

Substantially all employees are covered by Company or union sponsored
defined benefit pension plans. Plans covering salaried and management employees
provide pension benefits that are based on the employee's years of service with
the Company and average compensation during the five years before retirement.
For other employees, pension benefits are provided based on a stated amount for
each year of service. The Company's funding policy for all plans is to make no
less than the minimum annual contributions required by applicable governmental
regulations.

40
<PAGE> 41

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

The following table sets forth the funded status for all U.S. defined
benefit pension plans and related amounts recognized in the Company's
Consolidated Financial Statements:

<TABLE>
<CAPTION>
DECEMBER 31, 1993 DECEMBER 31, 1992
------------------------------ ------------------------------
PLANS WHOSE PLANS WHOSE PLANS WHOSE PLANS WHOSE
ASSETS EXCEED ACCUMULATED ASSETS EXCEED ACCUMULATED
ACCUMULATED BENEFITS ACCUMULATED BENEFITS
BENEFITS EXCEED ASSETS BENEFITS EXCEED ASSETS
------------- ------------- ------------- -------------
(RESTATED)
<S> <C> <C> <C> <C>
Actuarial present value of:
Accumulated benefit obligation........... $29.7 $ 71.8 $37.3 $ 48.9
------ ------------- ------ -------------
------ ------------- ------ -------------
Vested benefits.......................... $28.2 $ 68.1 $35.1 $ 46.7
------ ------------- ------ -------------
------ ------------- ------ -------------
Projected benefit obligation............... $29.7 $ 73.4 $37.3 $ 51.0
Plan assets at fair value.................. 37.8 56.3 46.1 41.0
------ ------------- ------ -------------
Plan assets in excess of (less than)
projected benefit obligation............. 8.1 (17.1) 8.8 (10.0)
Net unrecognized (gain) loss............... (5.0) 7.0 (4.2) (1.0)
Net unrecognized prior service costs....... (1.6) 3.1 (1.1) 2.6
Unrecognized liability at August 1, 1987... -- 0.3 0.3 --
Additional minimum liability............... -- (10.1) -- (3.2)
Tax effect of recording pension liability
under APB No. 16......................... -- -- -- 0.1
------ ------------- ------ -------------
Pension asset (liability) recognized in
Consolidated Financial Statements........ $ 1.5 $ (16.8) $ 3.8 $ (11.5)
------ ------------- ------ -------------
------ ------------- ------ -------------
</TABLE>

Plan assets generally consist of common stocks and fixed income
instruments. The unrecognized liability at August 1, 1987 is being amortized on
a straight-line basis over 15 years.

In accordance with SFAS No. 87, the Company has recorded an additional
minimum pension liability for underfunded plans of $10.1 million and $3.2
million at December 31, 1993 and 1992, respectively, representing the excess of
unfunded accumulated benefit obligations over previously recorded pension cost
liabilities. A corresponding amount is recognized as an intangible asset except
to the extent that these additional liabilities exceed related unrecognized
prior service costs and net transition obligations, in which case the increase
in liabilities is charged directly to stockholder's equity. At December 1993,
the excess minimum pension liability resulted in a net charge to equity of $4.6
million.

Net periodic pension cost for defined benefit pension plans reporting under
the provisions of SFAS No. 87 included in the above table was:

<TABLE>
<CAPTION>
YEAR ENDED
YEAR ENDED FIVE MONTHS ENDED JULY 31,
DECEMBER 31, DECEMBER 31, --------------
1993 1992 1992 1991
------------ ------------------ ----- -----
(RESTATED) (RESTATED)
(IN MILLIONS)
<S> <C> <C> <C> <C>
Service cost...................................... $ 4.1 $ 1.5 $ 3.4 $ 3.6
Interest Cost..................................... 7.4 2.4 6.1 6.4
Actual return on assets........................... (9.2) (2.9) (5.2) (6.8)
Net amortization and deferral..................... 1.9 0.9 (0.3) 0.5
------ ------ ----- -----
Net periodic pension cost....................... $ 4.2 $ 1.9 $ 4.0 $ 3.7
------ ------ ----- -----
------ ------ ----- -----
</TABLE>

41
<PAGE> 42

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

The following assumptions were used in determining the actuarial present
value of the projected benefit obligation for the Company's U.S. defined benefit
plans: weighted-average discount rate of 7.5% for the year ended December 31,
1993 and 9.0% for the five months ended December 31, 1992; rate of increase in
future compensation levels of 4.0% for the year ended December 31, 1993 and 6.0%
for the five months ended December 31, 1992; and expected long-term rate of
return on assets of 9.0% for both periods.

The Company and its subsidiaries also have several defined contribution
plans for certain U.S. employees. Employer contributions to these plans were
$4.8 million in the year ended December 31, 1993, $1.2 million in the five
months ended December 31, 1992, $4.4 million in fiscal 1992 and $3.2 million in
fiscal 1991. Contributions to these plans by the Company are determined under a
variety of methods including those based on the number of years employed or a
percentage of the contribution made by the employee.

Non-U.S. Plan:

The following table sets forth amounts recognized in the Company's
Consolidated Financial Statements related to its non-U.S. unfunded pension plan:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1993 1992
------ ------
(IN MILLIONS)
<S> <C> <C>
Actuarial present value of:
Accumulated benefit obligation............................. $ 23.3 $ 21.6
------ ------
------ ------
Vested benefits............................................ $ 23.0 $ 21.4
------ ------
------ ------
Projected benefit obligation................................. $ 26.0 $ 24.3
Plan assets at fair value.................................... -- --
------ ------
Plan assets less than projected benefit obligation........... (26.0) (24.3)
Net unrecognized gain........................................ (0.7) (3.2)
------ ------
Pension liability recognized in Consolidated Financial
Statements................................................. $(26.7) $(27.5)
------ ------
------ ------
</TABLE>

Net periodic pension cost for this non-U.S. defined benefit pension plan
included in the above table was:

<TABLE>
<CAPTION>
YEAR ENDED
YEAR ENDED FIVE MONTHS ENDED JULY 31,
DECEMBER 31, DECEMBER 31, --------------
1993 1992 1992 1991
------------ ----------------- ----- -----
(IN MILLIONS)
<S> <C> <C> <C> <C>
Service cost...................................... $0.5 $ 0.2 $ 0.5 $ 0.4
Interest Cost..................................... 1.9 0.9 1.8 1.7
Net amortization and deferral..................... -- -- (0.1) (0.1)
----- ----- ----- -----
Net periodic pension cost......................... $2.4 $ 1.1 $ 2.2 $ 2.0
----- ----- ----- -----
----- ----- ----- -----
</TABLE>

The Company used the following assumptions in determining the actuarial
present value of the projected benefit obligation for this non-U.S. pension
plan: weighted average discount rate of 7.25% for the year ended December 31,
1993 and 8.25% for the five months ended December 31, 1992 and fiscal 1992, and
rate of increase in future compensation levels of 4.0 % for all periods
presented. Pension payments are paid by this subsidiary from funds generated by
operations.

OTHER POSTRETIREMENT BENEFITS:

The Company provides certain postretirement life and health-care benefits
to certain of its employees. For most business units providing these benefits,
employees retiring from the Company on or after attaining

42
<PAGE> 43

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

age 55 who have rendered at least 15 years of active service to the Company are
entitled to postretirement benefits coverage. Most of these plans are
non-contributory, while there are a few in which employees and retirees
contribute towards their coverage. The Company has not funded any of this
postretirement benefits liability. Contributions to the postretirement plans are
made by the Company as claims are incurred.

The Company adopted the provisions of SFAS No. 106 in the first quarter of
fiscal 1992 by adjusting its postretirement benefits liability recognized as of
August 1, 1991 to the discounted present value of expected future benefits
attributed to employees' service rendered prior to August 1, 1991. The
accumulated postretirement benefit obligation was determined using an assumed
discount rate of 7.5% for the year ended December 31, 1993, 9% for the five
months ended December 31, 1992 and 9.5% for fiscal 1992, and a health care cost
trend rate of 12% for the year ended December 31, 1993, with the assumption that
the health care cost trend rate would decrease ratably to 6.0% by the year 1997.
The health care cost trend rate was 13.0% for the five months ended December 31,
1992, with the assumption that the health care cost trend rate would decrease
gradually to 7.0% by the year 2000. The trend rate used for the year ended July
31, 1992 was 15% with the assumption that the rate would gradually decrease to
7.5% by the year 2000. The effect of a one percent increase in the health care
cost trend rate assumption would be to increase the accumulated postretirement
benefit obligation, the annual service cost and interest expense components by
approximately $3.2 million, $0.2 million and $0.4 million, respectively. In
adopting the provisions of SFAS No. 106, the Company evaluated the assumptions
used previously in estimating its postretirement benefits obligation under the
unfunded accrual method. Based on its experience and the results of this
evaluation, the Company revised certain of these previous assumptions when
adopting SFAS No. 106. Trend rates used in adopting SFAS No. 106 reflect the
Company's prior experience and expectation that future rates will trend
downward. Additionally, the August 1, 1991 valuation of the Company's
postretirement benefit obligation included the effects of announced future cost
sharing programs and benefit plan changes. In conjunction with the adoption of
SFAS No. 106, the Company recorded a reduction of its postretirement benefit
obligation of $24.2 million and recognized a corresponding $24.2 million pretax
benefit as a "Cumulative effect of change in accounting principle", with a
related tax provision of $7.3 million.

In the fourth quarter of 1993, the Company curtailed certain of its
postretirement benefits for its non-bargaining employees. In general, the
curtailment affects employees who retire after December 1994 with exception for
certain employees who meet certain age plus years of service requirements. The
curtailment resulted in a reduction of the postretirement benefit liability of
$4.2 million. The effect of the curtailment was offset by a charge in the fourth
quarter of 1993 of $4.2 million related to the Company s self-insurance costs.

43
<PAGE> 44

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

The following table sets forth postretirement benefits recognized in the
Company's Consolidated Financial Statements:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1993 1992
----- ----------
(RESTATED)
(IN MILLIONS)
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees.................................................. $54.0 $ 52.2
Other fully eligible participants......................... 6.7 7.1
Other active participants................................. 7.4 13.3
----- ----------
68.1 72.6
Unrecognized actuarial gain (loss)........................ (4.6) (3.3)
Unrecognized prior service cost........................... 0.3 (0.1)
----- ----------
Postretirement benefit liability recognized in Consolidated
Financial Statements...................................... $63.8 $ 69.2
----- ----------
----- ----------
</TABLE>

Net postretirement benefit cost included the following components:

FIVE YEAR ENDED
YEAR ENDED MONTHS ENDED JULY 31,
DECEMBER 31, DECEMBER 31, ------------
1993 1992 1992 1991
------------ ------------ ---- ----
(RESTATED) (RESTATED)
(IN MILLIONS)
<S> <C> <C> <C> <C>
Service cost............................................ $ 1.0 $0.4 $0.9 $2.4
Interest Cost........................................... 4.1 1.8 4.2 6.0
Amortization of unrecognized liability at August 1,
1987.................................................. -- -- -- 1.3
------ ----- ---- ----
Net postretirement benefit cost.................... 5.1 2.2 5.1 9.7
Effect of curtailment................................... (4.2) -- -- --
------ ----- ---- ----
Adjusted net postretirement benefit cost........... $ 0.9 $2.2 $5.1 $9.7
------ ----- ---- ----
------ ----- ---- ----
</TABLE>

(7) INCOME TAXES

The Company adopted the provisions of SFAS No. 109 effective January 1,
1993. The December 31, 1993 Consolidated Financial Statements reflect a decrease
in the net deferred tax assets of $3.5 million and a corresponding charge of
$3.5 million, reflected as a "Cumulative effect of change in accounting
principle". As part of the adoption of SFAS No. 109, various "gross" up
adjustments were made to the balance sheet in order to adjust amounts which were
originally recorded on a net of tax basis as part of purchase accounting. These
adjustments resulted in increases to net property, plant and equipment, accrued
liabilities, accrued employee benefit obligations and other long-term
liabilities of approximately $21.4 million, $1.9 million, $19.3 million and
$12.2 million, respectively. These increases were offset by a corresponding
increase to deferred taxes of approximately $12.0 million. As a result of the
adoption of SFAS No. 109, the Company's loss from continuing operations before
income taxes for the year ended December 31, 1993 was increased by approximately
$2.0 million due to increased depreciation expense.

44
<PAGE> 45

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

The Company's Consolidated Financial Statements reflect the following
deferred tax assets and liabilities (in millions):

<TABLE>
<CAPTION>
DECEMBER 31, JANUARY 1,
1993 1993
------------ ----------
<S> <C> <C>
Deferred tax assets:
Inventory and bad debt reserves....................... $ 7.9 $ 7.2
Accrued employee benefit obligations.................. 30.4 31.3
Net operating loss carryforwards...................... 6.2 6.4
Divestiture reserves.................................. 8.1 9.0
Restructuring reserves................................ 5.8 3.0
Environmental reserves................................ 7.2 4.0
Other................................................. 22.9 19.5
------ ----------
88.5 80.4
Valuation allowance................................... (1.2) (1.3)
------ ----------
$ 87.3 $ 79.1
------ ----------
------ ----------
Deferred tax liabilities:
Property, plant and equipment basis difference........ $ 35.0 $ 43.1
Other................................................. 8.9 7.4
------ ----------
$ 43.9 $ 50.5
------ ----------
------ ----------
</TABLE>

The U.S. and non-U.S. components of income from continuing operations
before income taxes and the components of the provision for income taxes is as
follows:

FIVE YEAR ENDED
YEAR ENDED MONTHS ENDED JULY 31,
DECEMBER 31, DECEMBER 31, ---------------
1993 1992 1992 1991
------------ ------------ ----- ------
(RESTATED) (RESTATED)
(IN MILLIONS)
<S> <C> <C> <C> <C>
Income (loss) from continuing operations before
income taxes:
U.S................................................ $(81.6) $ (7.8) $(0.1) $(10.2)
Non U.S............................................ 1.6 0.2 2.9 7.2
------------ ------ ----- ------
Total......................................... $(80.0) $ (7.6) $ 2.8 $ (3.0)
------------ ------ ----- ------
------------ ------ ----- ------
Provision (benefit) for income taxes:
Current:
U.S. Federal.................................... $ (9.4) $ (3.3) $ 0.8 $(13.1)
U.S. State...................................... 3.8 0.6 3.9 2.4
Non-U.S......................................... 2.1 (0.7) 0.2 2.7
------------ ------ ----- ------
$ (3.5) $ (3.4) $ 4.9 $ (8.0)
------------ ------ ----- ------
------------ ------ ----- ------
Deferred:
U.S. Federal.................................... $ (5.9) $ 1.2 $(0.9) $ 8.7
U.S. State...................................... (1.9) 0.2 (1.3) (0.6)
Non U.S......................................... (0.6) 0.9 0.4 (0.2)
------------ ------ ----- ------
(8.4) 2.3 (1.8) 7.9
------------ ------ ----- ------
Total......................................... $(11.9) $ (1.1) $ 3.1 $ (0.1)
------------ ------ ----- ------
------------ ------ ----- ------
</TABLE>

45
<PAGE> 46

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

Deferred tax provisions/(benefits) for the five months ended December 31,
1992 and for the fiscal years ended July 31, 1992 and 1991, resulted principally
from expenditures related to divestitures, non-cash accrued employee benefits
and depreciation.

Reconciliation of income taxes computed at the U.S. federal statutory rate
to the consolidated provision (benefit) for income taxes from continuing
operations:

FIVE YEAR ENDED
YEAR ENDED MONTHS ENDED JULY 31,
DECEMBER 31, DECEMBER 31, --------------
1993 1992 1992 1991
------------ ------------ ----- -----
(RESTATED) (RESTATED)
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
U.S. Federal statutory rate........................... 35.0% 34.0% 34.0% 34.0%
Income taxes at U.S. federal statutory rate........... $(28.0) $ (2.6) $ 1.0 $(1.0)
U.S. state income taxes, net of U.S. federal tax
benefit............................................. 1.3 0.4 1.8 1.2
Non-U.S. taxes provided at greater (less) than U.S.
federal statutory rate.............................. 1.0 0.2 (0.4) --
Nondeductible book depreciation and amortization...... 3.5 2.3 5.6 5.1
Effects of net-of-tax accounting...................... (1.3) (3.3) (4.9)
Write down of goodwill................................ 8.8 -- -- --
Other................................................. 1.5 (0.1) (1.6) (0.5)
------------ ------ ----- -----
Provision (benefit) for income taxes................ $(11.9) $ (1.1) $ 3.1 $(0.1)
------------ ------ ----- -----
------------ ------ ----- -----
Effective income tax rate........................... 14.8% 14.9% 109.5% 4.4%
------------ ------ ----- -----
------------ ------ ----- -----
</TABLE>

(8) RESTRUCTURING CHARGES

During 1993, the Company recorded restructuring charges of $71.8 million
related principally to the closure of Hill's Canadian manufacturing facility,
the write down of certain assets of Hill Refrigeration, the closure of Caron's
London, Kentucky manufacturing facility, the downsizing of certain of Pfaudler's
foreign operations and costs associated with the relocation of one of IEP's
manufacturing facilities.

In 1993, the Company decided to close Hill's Canadian manufacturing
facility. Accordingly, a charge of $8.8 million was recorded in the third
quarter of 1993 to reflect the write down of property, plant and equipment and
to accrue for related shut down expenses. The shut down was substantially
complete at December 31, 1993.

In addition, in late 1993, the Company performed an in-depth analysis of
Hill's products, competitive position, market share and manufacturing cost base.
A decision was made to reduce its manufacturing costs and simplify its
manufacturing processes for its commercial refrigeration cases which were being
redesigned. To implement this decision, a review of reconfiguration and/or
relocation options was initiated. A decision was made to relocate the
manufacturing of the redesigned cases. Accordingly, a review was made of the
fair market value of the Trenton manufacturing facility which resulted in a
write down of $19.4 million in the fourth quarter of 1993. Employee related
costs of $7.0 million associated with the relocation/reconfiguration decision
were also recorded in the fourth quarter of 1993. In evaluating the goodwill
related to Hill, a write-down of $25.8 million was made in the fourth quarter of
1993 in accordance with the Company's accounting policy for goodwill.

In the third quarter of 1993, the Company decided to consolidate Caron's
London, Kentucky manufacturing facility into Caron's other manufacturing
facilities. Accordingly, the Company provided $6.2 million of

46
<PAGE> 47

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

restructuring charges including $3.0 million for the write down of property,
plant and equipment and $3.2 million for shut down related expenses. The shut
down was substantially complete at December 31, 1993.

In the third quarter of 1993, the Company initiated a restructuring of its
work force in Pfaudler's German manufacturing unit. Costs for severance payments
in accordance with German legal requirements were accrued in the third quarter
of 1993. This severance program has been substantially completed in early 1994.

In conjunction with the relocation of one of IEP's manufacturing facilities
in the first quarter of 1993, costs were incurred which exceeded previously
established reserves. Accordingly, the Company recorded $2.0 million in charges
in the fourth quarter of 1993.

The cash and non-cash components of these charges are as follows (in
millions):

<TABLE>
<CAPTION>
CASH NON-CASH
CHARGES CHARGES TOTAL
------- -------- -----
<S> <C> <C> <C>
Hill, Canada
Property, plant and equipment write down......................... $ -- $ 3.2 $ 3.2
Shut down expenses............................................... 4.2 -- 4.2
Other asset write downs.......................................... -- 1.4 1.4
Hill, Trenton
Property, plant and equipment write down......................... -- 19.4 19.4
Goodwill write down.............................................. -- 25.8 25.8
Other costs...................................................... 7.0 -- 7.0
Caron, Kentucky
Property, plant and equipment write down......................... -- 3.0 3.0
Shut down expenses............................................... 3.2 -- 3.2
Pfaudler
Severance and related employee costs............................. 2.0 -- 2.0
IEP
Relocation costs................................................. 2.0 -- 2.0
Other.............................................................. 0.6 -- 0.6
------- -------- -----
$19.0 $ 52.8 $71.8
------- -------- -----
------- -------- -----
</TABLE>

47
<PAGE> 48

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

(9) BALANCE SHEET DETAIL

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1993 1992
------- ----------
(RESTATED)
(IN MILLIONS)
<S> <C> <C>
Allowance for doubtful accounts:......................................... $ 4.2 $ 4.1
------- ----------
------- ----------
Inventories:
Raw materials and supplies............................................. $ 57.3 $ 73.8
Work in process........................................................ 56.8 57.0
Finished goods......................................................... 73.1 62.5
------- ----------
Total............................................................. $ 187.2 $ 193.3
------- ----------
------- ----------
Excess of replacement cost over LIFO inventory cost.................... $ 5.3 $ 5.3
------- ----------
------- ----------
Other current assets:
Deferred taxes......................................................... $ 45.4 $ 13.8
Other.................................................................. 13.0 14.0
------- ----------
Total............................................................. $ 58.4 $ 27.8
------- ----------
------- ----------
Property, plant and equipment:
Land................................................................... $ 20.9 $ 21.4
Buildings.............................................................. 100.1 99.4
Machinery and equipment................................................ 223.1 203.0
Construction in progress............................................... 13.6 15.0
Less accumulated depreciation.......................................... (139.4) (106.2)
------- ----------
Total............................................................. $ 218.3 $ 232.6
------- ----------
------- ----------
Accrued liabilities:
Divestiture reserves................................................... $ 12.5 $ 3.2
Wages and benefits..................................................... 31.1 27.6
Customer advances...................................................... 9.1 10.7
Interest............................................................... 8.0 12.6
Other.................................................................. 48.5 40.8
------- ----------
Total............................................................. $ 109.2 $ 94.9
------- ----------
------- ----------
</TABLE>

(10) INCOME STATEMENT DETAIL

Repair and maintenance expense was $14.1 million in the year ended December
31, 1993, $6.6 million for the five months ended December 31, 1992, $19.3
million in fiscal 1992 and $16.0 million in fiscal 1991. Advertising expense was
$6.3 million in the year ended December 31, 1993, $3.5 million for the five
months ended December 31, 1992, $7.9 million in fiscal 1992 and $7.0 million in
fiscal 1991.

48
<PAGE> 49

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

(11) DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to estimate
that value:

Cash, cash equivalents and long-term investments

The carrying amount of cash and cash equivalents approximates fair value
because of the short maturity of those instruments. Long-term investments are
stated at the lower of cost or market.

Subordinated Notes

The fair value of the Company's Notes is based on the Call Price at January
31, 1994, for the 13% Notes and the 13.75% Notes and quoted market prices for
the Notes at December 31, 1993. The fair value was determined using quoted
market prices for all the subordinated notes at December 31, 1992.

Senior Bank Credit Facilities

The carrying amount approximates fair value as the rates are tied to the
prime rate and LIBOR which fluctuate based on current market conditions.

Other Debt

The carrying amount approximates fair value as rates approximate borrowing
rates currently available to the Company for similar loans.

The estimated fair values of the Company s financial instruments are as
follows:

<TABLE>
<CAPTION>
DECEMBER 31, 1993 DECEMBER 31, 1992
------------------ ------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- ------ -------- ------
(RESTATED)
<S> <C> <C> <C> <C>
Cash, cash equivalents and long-term investments........... $ 16.5 $ 16.5 $ 34.4 $ 34.4
Subordinated Notes......................................... 421.9 438.8 375.0 392.1
Senior Bank Credit Facilities.............................. 224.0 224.0 268.5 268.5
Other Debt................................................. 13.8 13.8 19.4 19.4
</TABLE>

(12) STOCKHOLDER'S EQUITY

PREFERRED STOCK:

The Company amended its Restated Certificate of Incorporation in December
1993 to eliminate the authority to issue preferred stock.

COMMON STOCK:

In connection with the Restructuring, and in order to facilitate the
distribution of Eagle's common stock in September 1992, the Company distributed,
as a stock dividend, approximately 11,077 shares of its common stock for each
share outstanding. As the GAMI Board of Directors decided not to complete the
Distribution, the Company declared a reverse stock split of 1/11,077 per share
of common stock in December 1993, resulting in the Company having 1,000 shares
of common stock issued and outstanding. The accompanying financial statements
and related footnotes have been restated to give retroactive effect to this
reverse stock split.

49
<PAGE> 50

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

ADDITIONAL PAID IN CAPITAL:

Restructuring

In connection with the sale of certain net assets of Hedstrom to an
affiliate of GAI Partners in January 1991, a portion of the consideration
received included the Hedstrom Note. Through January 16, 1996, any acceleration
resulting from a default under the Hedstrom Note may, at the option of GAI
Partners, be satisfied solely by the preferred stock GAI Partners holds in GAFG
(the "Class C Preferred Stock"). See Note 4.

The terms of the Class C Preferred Stock include, among other things, (i)
that the holder of the Class C Preferred Stock may on January 15 of 1999, 2000
and 2001, require GAFG to redeem any or all of the Class C Preferred Stock at a
redemption price equal to $1,000 per share plus a redemption premium equal to 8%
of the amount redeemed if redeemed in 1999, 11% if redeemed in 2000 and 13% if
redeemed in 2001, plus accrued but unpaid dividends through the date of
redemption, (ii) that upon liquidation of GAFG, the Class C Preferred Stock is
entitled to a liquidation preference of $1,000 per share, and (iii) in the event
of default on the GAFG non-voting preferred stock, GAMI has agreed to issue GAMI
non-voting preferred stock with similar rights and designations. See Note 4.

To relieve GAFG (to the extent Eagle or any of its subsidiaries acquires
such rights and is permitted to do so under the Eagle Indenture and one of the
Senior Bank Credit Facilities) of its obligation to redeem, or pay a liquidation
preference with respect to the Class C Preferred Stock, Eagle declared and paid
to GAFG, its sole shareholder at the time, a non-cash dividend consisting of the
benefits conferred by Eagle's execution of a Disaffiliation Agreement (the
"Disaffiliation Agreement"), effective as of September 25, 1992. Although the
dividend was paid by the execution of the Disaffiliation Agreement, the economic
benefit of the dividend will be received, if at all, only upon the satisfaction
of certain conditions including that no default under the Indenture exists or is
caused by the transfer of said benefits. Pursuant to the Disaffiliation
Agreement, among other things:

- Eagle agreed that if it or any of its subsidiaries becomes the owner of
any Class C Preferred Stock, it will transfer or cause to be transferred
(the "Transfer") such Class C Preferred Stock to GAFG without the payment
of any amount by GAFG, provided that certain conditions are satisfied
including that no default under the Indenture exists or is caused by the
Transfer;

- Eagle agreed that if the Transfer is made by one of its subsidiaries, it
will pay the transferor the redemption price or, if applicable, the
liquidation preference related to such Class C Preferred Stock, that the
transferor would have received from GAFG had the Transfer not been made,
such payment to be made at the time that GAFG would have been obligated
to pay such redemption price or liquidation preference;

- Eagle agreed to reimburse GAFG if GAFG pays any amount, to Eagle or its
subsidiaries (or any transferee of Eagle or its subsidiaries), for
redemption of, or as a liquidation preference in respect of, any Class C
Preferred Stock, provided that certain conditions are satisfied including
that no default under the Indenture exists or is caused by the
reimbursement; and

- To induce GAI Partners, as the owner of the Class C Preferred Stock, to
consent to the Restructuring and the Distribution, GAMI guaranteed GAFG's
obligation to pay the redemption price or the liquidation preference,
provided such guaranty will terminate if a default occurs and is
continuing under the Hedstrom Note or GAI Partners transfers ownership of
the Class C Preferred Stock to the holder of the Hedstrom Note.

50
<PAGE> 51

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

The Disaffiliation Agreement conferred no benefits on Eagle, but Eagle's
execution thereof is a condition of the Distribution.

To account for the reorganization and the above transactions, Eagle reduced
paid in capital at July 31, 1992 by the amount of the Hedstrom Note and related
accrued interest thereon, pursuant to the dividend of the benefits conferred on
GAFG through execution of the Disaffiliation Agreement.

Other Transactions

In January 1991, GAFG issued 35,650 shares of its non-voting preferred
stock having a redemption value of $1,000 per share to GAI Partners, in exchange
for the 20% of GAFG common stock held by GAI Partners. GAFG has accounted for
the exchange of the aforementioned securities as an acquisition of its minority
interest, in accordance with APB No. 16, and has "pushed down" this additional
purchase price to subsidiaries of GAFG, pursuant to Securities and Exchange
Commission regulations. The effect on the Consolidated Financial Statements, as
a result of this transaction, was an increase in both paid in capital and
goodwill of approximately $35.6 million.

In January 1991, prior to the contribution of the capital stock of Jepson
to the Company, Jepson returned $5.0 million of original contributed capital to
subsidiaries of GAMI.

In March 1991, prior to the contribution of the capital stock of North
Riverside to the Company, GAMI converted $0.6 million of contributed capital of
North Riverside to intercompany indebtedness.

PENSION LIABILITY ADJUSTMENT:

In December 1993, the Company recorded a charge to equity related to its
underfunded pension plans. See Note 6.

DIVIDENDS:

In February 1991, the Company paid a $30.0 million cash dividend to its
shareholders.

(13) RELATED PARTY TRANSACTIONS

The Company has in the past entered into agreements or arrangements with
affiliates of directors or officers relating to acquisition and divestiture
services, financing services, legal services and consulting arrangements which
are described below. In addition, the Company has entered into arrangements for
certain administrative services in which the amount involved did not exceed
$60,000 for any one agreement. The Company believes that the terms and resulting
costs of all related party transactions and agreements are no more or less
favorable than those which could have been obtained from non-affiliated parties.

The Company leases office space from an affiliate of GAMI. The Company
incurred expenses of $0.3 million in the year ended December 31, 1993, $0.2
million in the five months ended December 31, 1992 and $0.4 million in each of
fiscal 1992 and 1991 for this office space and related expenses. Affiliates of
GAMI provided management services to the Company for which the Company paid $0.5
million in fiscal 1991. Affiliates of GAMI provide general corporate computer
and printing services to the Company for which the Company paid these affiliates
$0.2 million in the year ended December 31, 1993, the five months ended December
31, 1992 and in each of fiscal 1992 and 1991. GAMI's internal audit department
provides certain audit services to the Company for which GAMI was paid $0.2
million in the year ended December 31, 1993, $0.1 million in the five months
ended December 31, 1992, $0.7 million in fiscal 1992 and $0.5 million in fiscal
1991.

An affiliate of GAMI was paid $1.1 million in fiscal 1991 for services
rendered in connection with the divestitures of certain business.

51
<PAGE> 52

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

The law firm of Rosenberg & Liebentritt P.C., of which a Company Director
and former Officer is a member, has rendered legal services to the Company. The
Company paid this law firm $0.6 million in the year ended December 31, 1993,
$0.3 million in the five months ended December 31, 1992, $1.0 million in fiscal
1992 and $1.5 million in fiscal 1991. The fees paid to Rosenberg & Liebentritt
P.C. in the year ended December 31, 1993 included: $0.3 million for services
related to divestiture activity, $0.1 million for services related to financing
agreements and $0.2 million for other general expenses.

The Company and North Riverside historically entered into revolving credit
facilities with GAMI. All amounts were repaid prior to December 31, 1992.

GAMI provided management and accounting services to North Riverside for
which North Riverside paid $0.1 million in each of fiscal 1992 and 1991.

Also see Notes 1, 3, 4 and 12 for other information regarding related party
transactions.

(14) COMMITMENTS AND CONTINGENCIES

The Company conducts manufacturing operations at various leased facilities
and also leases warehouses, office space, computers and office equipment. Most
of the realty leases contain renewal options and escalation clauses. Total rent
expense, including related real estate taxes, amounted to $13.4 million in the
year ended December 31, 1993, $5.7 in the five months ended December 31, 1992,
$12.1 million in fiscal 1992 and $11.6 million in fiscal 1991.

Future minimum lease payments required as of December 31, 1993 (in
millions):

<TABLE>
<CAPTION>
<S> <C>
1994......................................................... $ 6.5
1995......................................................... 5.6
1996......................................................... 4.5
1997......................................................... 3.5
1998 and thereafter.......................................... 5.5
-----
$25.6
-----
-----
</TABLE>

The Company and certain of its subsidiaries are involved in several
lawsuits arising in the ordinary course of business. However, it is the opinion
of the Company's management, based upon the advice of counsel, that these
lawsuits are either without merit, are covered by insurance, or are adequately
reserved for in the Consolidated Financial Statements, and that the ultimate
disposition of pending litigation will not be material in relation to the
Company's consolidated financial position.

(15) OTHER ACQUISITIONS/DIVESTITURES

Management continues to evaluate the acquisition of businesses that
complement the existing portfolio of companies. While certain negotiations are
at varying stages at this time, Eagle currently has no contract or arrangement
with respect to any material acquisition. Management also continuously monitors
and evaluates the businesses within the Company's portfolio. While certain
businesses may not necessarily meet certain of the Company's long-term
objectives, there currently are no definitive sales agreements or formal plans
to discontinue any businesses except Lapp as disclosed in Note 4.

(16) SEGMENT AND GEOGRAPHIC DATA

Eagle is organized into five business segments: the Building Products
Group, the Electrical Products Group, the Industrial Products Group, the
Automotive Products Group, and the Specialty Products Group. In

52
<PAGE> 53

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

1993, the Company redefined its industry segments to add an Automotive Products
Group and realign its Building Products and Specialty Products Groups. Segment
information for prior periods has been restated to reflect the
reclassifications.

The Building Products Group consists of three businesses which manufacture
and distribute building fixtures for the residential and commercial construction
and home improvement markets. Products manufactured by this group include air
distribution and handling equipment, bathroom plumbing fixtures and air
compressors.

The Electrical Products Group consists of two broad groups of businesses,
those providing electrical power distribution products for the electric utility
market and those supplying industrial electrical products for electrical
equipment manufacturers. The principal products manufactured by this group
include medium voltage electric cable, underground cable accessories, and
interconnect and timing devices.

The Industrial Products Group consists of three businesses which
manufacture and distribute products for the process industries and commercial
aviation markets. Products manufactured by this group include chemical and
pharmaceutical reactor vessels, fluid mixing and agitation equipment and
commercial airline seating.

The Automotive Products Group consists of four businesses which manufacture
and distribute products primarily to the automotive aftermarket. Major products
include automotive aftermarket parts and accessories.

53
<PAGE> 54

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

The Specialty Products Group consists of three businesses which manufacture
and distribute products to the consumer market and the commercial refrigeration
market. Major products include knitting yarns, skiwear and commercial
refrigeration equipment.

FIVE YEAR ENDED
YEAR ENDED MONTHS ENDED JULY 31,
DECEMBER 31, DECEMBER 31, --------------------
1993 1992 1992 1991
------------ ------------ -------- --------
(RESTATED) (RESTATED)
(IN MILLIONS)
<S> <C> <C> <C> <C>
Net sales:
Building Products Group........................ $ 372.3 $ 150.1 $ 323.9 $ 258.3
Electrical Products Group...................... 176.8 66.2 164.7 182.2
Industrial Products Group...................... 241.4 100.5 280.4 270.3
Automotive Products Group...................... 164.2 58.9 127.9 115.1
Specialty Products Group....................... 187.6 82.5 201.9 208.0
------------ ------------ -------- --------
$1,142.3 $ 458.2 $1,098.8 $1,033.9
------------ ------------ -------- --------
------------ ------------ -------- --------
Operating income:
Building Products Group........................ $ 47.5 $ 18.6 $ 41.4 $ 27.6
Electrical Products Group...................... 14.9 4.4 16.5 18.6
Industrial Products Group...................... (2.9) 0.5 14.2 23.9
Automotive Products Group...................... 6.2 0.5 4.2 3.8
Specialty Products Group....................... (67.6) 1.4 3.3 4.1
Corporate (expenses)........................... (11.0) (5.8) (11.9) (12.3)
------------ ------------ -------- --------
Operating income (loss)................... $ (12.9) $ 19.6 $ 67.7 $ 65.7
------------ ------------ -------- --------
------------ ------------ -------- --------
Depreciation and amortization:
Building Products Group........................ $ 12.1 $ 5.0 $ 10.9 $ 10.0
Electrical Products Group...................... 13.3 5.1 12.2 12.2
Industrial Products Group...................... 9.4 4.1 9.4 8.6
Automotive Products Group...................... 3.6 1.3 3.0 2.4
Specialty Products Group....................... 6.2 2.4 5.5 5.3
Corporate...................................... 5.1 2.2 4.4 3.5
------------ ------------ -------- --------
Total..................................... $ 49.7 $ 20.1 $ 45.4 $ 42.0
------------ ------------ -------- --------
------------ ------------ -------- --------
Capital expenditures:
Building Products Group........................ $ 10.1 $ 2.5 $ 8.6 $ 6.1
Electrical Products Group...................... 8.1 6.3 4.7 5.0
Industrial Products Group...................... 4.0 1.8 8.5 9.9
Automotive Products Group...................... 2.4 2.4 2.2 1.4
Specialty Products Group....................... 2.5 0.4 3.3 3.8
Corporate...................................... 0.6 0.2 0.2 0.1
------------ ------------ -------- --------
Total..................................... $ 27.7 $ 13.6 $ 27.5 $ 26.3
------------ ------------ -------- --------
------------ ------------ -------- --------
Identifiable assets:
Building Products Group........................ $ 203.7 $ 208.6 $ 213.0 $ 199.4
Electrical Products Group...................... 288.2 287.6 287.6 288.9
Industrial Products Group...................... 233.2 260.2 268.2 258.0
Automotive Products Group...................... 109.8 100.5 99.8 86.9
Specialty Products Group....................... 122.7 157.0 165.7 175.9
Net assets of discontinued operations.......... 38.9 86.9 112.1 133.1
------------ ------------ -------- --------
Total identifiable assets................. 996.5 1,100.8 1,146.4 1,142.2
Corporate...................................... 105.7 78.4 83.6 127.3
------------ ------------ -------- --------
Total assets.............................. $1,102.2 $1,179.2 $1,230.0 $1,269.5
------------ ------------ -------- --------
------------ ------------ -------- --------
</TABLE>

54
<PAGE> 55

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

Corporate depreciation and amortization is principally amortization of debt
issuance costs. Corporate assets are principally cash and cash equivalents, debt
issuance costs, taxes receivable from affiliate and in fiscal 1991, notes
receivable.

The following table shows certain financial information relating to the
Company's operations in various geographic areas:

Export sales from the United States to other geographic areas were $17.4
million in the year ended December 31, 1993, $8.0 million for the five months
ended December 31, 1992, $60.0 million in fiscal 1992 and $68.5 million in
fiscal 1991.

FIVE YEAR ENDED
YEAR ENDED MONTHS ENDED JULY 31,
DECEMBER 31, DECEMBER 31, --------------------
1993 1992 1992 1991
------------ ------------- -------- --------
(RESTATED)
(IN MILLIONS) (RESTATED)
<S> <C> <C> <C> <C>
Operating income:
United States and Canada...................... $ (2.5) $ 25.9 $ 76.3 $ 71.9
Europe........................................ 0.8 (0.5) 3.5 5.3
Central and South America..................... (0.2) -- (0.2) 0.8
Corporate (expenses).......................... (11.0) (5.8) (11.9) (12.3)
-------- --------- -------- --------
Operating income (loss).................... $ (12.9) $ 19.6 $ 67.7 $ 65.7
-------- --------- -------- --------
-------- --------- -------- --------
Identifiable assets:
United States and Canada...................... $ 887.3 $ 939.0 $ 943.0 $ 928.9
Europe........................................ 60.9 64.1 75.6 63.7
Central and South America..................... 9.4 10.8 15.7 16.5
Net assets of discontinued operations......... 38.9 86.9 112.1 133.1
-------- --------- -------- --------
Total identifiable assets.................. 996.5 1,100.8 1,146.4 1,142.2
Corporate..................................... 105.7 78.4 83.6 127.3
-------- --------- -------- --------
Total assets............................... $1,102.2 $ 1,179.2 $1,230.0 $1,269.5
-------- --------- -------- --------
-------- --------- -------- --------
</TABLE>

(17) SUBSEQUENT EVENTS -- REFINANCING

On January 31, 1994, Eagle completed a refinancing (the "Refinancing") of
substantially all of its outstanding debt except for its Senior Deferred Coupon
Notes. Through a newly formed subsidiary, Eagle Industrial, the Company entered
into the Credit Facility with a group of banks. The Company also entered into an
asset securitization program (the "Securitization") whereby it sold certain of
its accounts receivable for

55
<PAGE> 56

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1993

approximately $110 million. In addition, the Company received $50 million from
GAMI in the form of a capital contribution. Total proceeds from the Refinancing
were $485 million.

Proceeds from the Refinancing were used to retire the Senior Bank Credit
Facilities. In addition, proceeds will be used to retire the Company's 13.75%
Notes and the 13.0% Senior Subordinated Notes, both of which were called for
redemption on January 28, 1994. The call price for the 13.75% and 13.0% Senior
Subordinated Notes was $1,055 and $1,040 per $1,000 principal amount,
respectively. Eagle will record an extraordinary pretax charge of approximately
$26 million in the first quarter of 1994 in connection with the Refinancing.

In connection with the Securitization, the Company entered into a
receivables sale agreement whereby it will sell on a continuous basis, an
undivided interest in a pool of customer account receivables. Under the
agreement, which expires in June 1999, the maximum amount of proceeds which may
be accessed through this agreement is $145 million and is subject to change
based on the level of eligible receivables and restrictions on concentrations of
receivables.

56
<PAGE> 57

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

QUARTERLY FINANCIAL DATA

The following is a summary of the unaudited interim results of operations
for the years ended December 31, 1993 and 1992. Quarterly data has been restated
to reflect discontinued operations. Refer to Note 4 in the Company's
Consolidated Financial Statements.

<TABLE>
<CAPTION>
QUARTER ENDED QUARTER ENDED QUARTER ENDED QUARTER ENDED
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
--------------- --------------- --------------- ---------------
1993 1992 1993 1992 1993 1992 1993 1992
------ ------ ------ ------ ------ ------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales....................... $254.9 $271.0 $276.2 $282.6 $290.8 $285.3 $320.4 $284.7
Gross earnings.................. 50.9 52.7 57.8 59.4 57.8 60.0 58.0 54.6
Income (loss) from continuing
operations.................... (3.0) (2.1) 1.2 1.2 (9.1) 2.7 (57.2) (3.6)
Income (loss) before
extraordinary item and
cumulative effect of change in
accounting principle.......... (4.4) (2.5) (0.4) 10.9 (32.6) 2.5 (59.3) (8.4)
Net income (loss)............... (7.9) (2.5) (0.4) 10.9 (41.0) 2.5 (61.3) (8.4)
</TABLE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not Applicable.

57
<PAGE> 58

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

DIRECTORS OF EAGLE

The chart below sets forth the name of each director of Eagle as of March
15, 1994 and, for each, the year during which each director was first elected,
information relating to the director's principal occupation and business
experience during the last five years, and any other directorships held by the
director in publicly held companies, and certain other information.

<TABLE>
<CAPTION>
YEAR FIRST
ELECTED A
NAME DIRECTOR OTHER INFORMATION ABOUT DIRECTORS
- ---------------------- ---------- -----------------------------------------------------------
<S> <C> <C>
Sam A. Cottone........ 1993 See "EXECUTIVE OFFICERS OF EAGLE."

Rod Dammeyer.......... 1992 Mr. Dammeyer was named Chairman of the Board of Eagle in
March 1994. Mr. Dammeyer is President and Chief Executive
Officer of Itel Corporation ("Itel") and GAMI. Mr. Dammeyer
is Chairman of Anixter Bros., Inc., a subsidiary of Itel
engaged in the distribution of wiring system products. Mr.
Dammeyer is also a Director of Antec Corporation, Capture
Holdings Corp. ("Capture"), Itel, Lomas Financial
Corporation, Q-Tel, S.A. de C.V., Jacor Communications,
Inc., Revco D.S., Inc., GAMI, Santa Fe Energy Resources,
Inc., Servicios Financieros Quandrum, S.A., and The Vigoro
Corporation ("Vigoro"). Mr. Dammeyer is a Trustee of
several Van Kampen Merrit trusts and is 53 years old.

William K. Hall....... 1988 See "EXECUTIVE OFFICERS OF EAGLE."

Sheli Z. Rosenberg.... 1987 Mrs. Rosenberg is a member of the law firm of Rosenberg &
Liebentritt, P.C. Mrs. Rosenberg served as Vice President
and Assistant Secretary of Eagle from February 1987 until
September 1992. For more than five years prior to September
1992, Mrs. Rosenberg has also been Vice President, General
Counsel and Assistant Secretary and Director of GAMI,
Executive Vice President and Director of Equity Group
Investments, Inc. and Executive Vice President, Director
and General Counsel of Equity Financial and Management
Company. Mrs. Rosenberg is a Director of Capture, The Delta
Queen Steamboat Co., Itel, Consolidated Fibres Inc. and
Vigoro. Prior to October 4, 1991, Mrs. Rosenberg was Vice
President and a Director of Madison Management Group Inc.
See "Certain Relationships and Related Transactions --
Transactions with GAMI Affiliates -- Indemnity Agreements."
Mrs. Rosenberg is 52 years old.
</TABLE>

Eagle's Amended and Restated By-Laws (the "Eagle Bylaws") provide that the
number of directors shall not be less than one nor more than eleven, with the
precise number to be determined by resolution of the Board of Directors or the
stockholders from time to time. The Board of Directors has fixed the number of
directors at four. Each director is elected to serve until the next annual
meeting or until his successor is duly elected and qualified.

58
<PAGE> 59

EXECUTIVE OFFICERS OF EAGLE

The chart below sets forth the age and position of each executive officer
of Eagle at March 15, 1994:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------- --- ------------------------------------------------
<S> <C> <C>
William K. Hall........ 50 President and Chief Executive Officer
Gus J. Athas........... 57 Senior Vice President, General Counsel and
Secretary
Sam A. Cottone......... 53 Senior Vice President -- Finance, Chief
Financial Officer and Treasurer
Mark Koulogeorge....... 30 Vice President -- Corporate Development
</TABLE>

Mr. Hall has served as President of Eagle since August 1988, as a Director
of GAMI since March 1994, and as Chief Executive Officer of Eagle since July
1990. From August 1988 until September 1992, Mr. Hall also served as Chief
Operating Officer and Treasurer of Eagle. Mr. Hall is a Director of Huffy
Corporation, a manufacturer of bicycles and recreational products, and A.M.
Castle & Co., a metals distribution company.

Mr. Athas has served as Senior Vice President, General Counsel and
Secretary of the Company since May 1993. From September 1992 to May 1993, Mr.
Athas was Vice President, General Counsel and Secretary. From November 1987 to
September 1992, Mr. Athas served as Vice President, General Counsel and
Assistant Secretary.

Mr. Cottone has served as Senior Vice President -- Finance, Chief Financial
Officer and Treasurer of the Company since March 1994. From May 1993 to March
1994, Mr. Cottone served as Senior Vice President -- Finance and Chief Financial
Officer. For more than five years prior thereto, Mr. Cottone was a partner with
Arthur Andersen & Co.

Mr. Koulogeorge has served as Vice President -- Corporate Development since
September 1992. From October 1990 to September 1992, Mr. Koulogeorge served as
Director -- Corporate Development. From August 1989 until September 1990, Mr.
Koulogeorge was a mergers and acquisitions associate with Equity Group.

ITEM 11. EXECUTIVE COMPENSATION

Omitted pursuant to conditions set forth in General Instruction (J)(1)(a)
and (b) of Form 10-K.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Omitted pursuant to conditions set forth in General Instruction (J)(1)(a)
and (b) of Form 10-K.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

EAGLE/GAMI TAX AGREEMENT

Eagle and its U.S. subsidiaries are included with GAMI in its consolidated
U.S. federal income tax returns for the taxable periods during which, pursuant
to applicable U.S. federal income tax laws, they qualify as members of GAMI's
affiliated group (the "Affiliation Years"). GAMI has entered into tax sharing
agreements with Eagle and each of its U.S. subsidiaries. Collectively, these tax
sharing agreements (i) provide for the manner of determining the allocation and
payment of U.S. federal, state and foreign income tax liabilities and benefits
among members of each subsidiary group for the Affiliation Years, (ii) detail
the procedure for determining the allocation of payments by, or refunds to,
members of each subsidiary group as a result of adjustments to the U.S. federal
or state income tax liabilities of any or all members of such subsidiary group
with respect to any Affiliation Year and (iii) define the post-affiliation
obligations of GAMI and any member that becomes disaffiliated with any of the
subsidiary groups (a "Former Member") with respect to post-affiliation years in
which the tax liability of GAMI, such Former Member or subsidiaries of such
Former Member may be affected by the former affiliation. Under the tax sharing
agreements, each member is to benefit fully from any loss, deduction or credit
attributable to such member.

59
<PAGE> 60

DISAFFILIATION AGREEMENT

Prior to January 9, 1991, Ditri Associates, Inc., a Delaware corporation,
through its affiliate, GAI Partners Limited Partnership ("GAI Partners"), a
Connecticut limited partnership not affiliated with GAMI or Eagle, owned 20% of
the common equity of GAFG. On January 9, 1991, GAI Partners exchanged its 20%
common equity interest in GAFG for 35,650 shares of GAFG Class C Preferred Stock
(the "Class C Preferred Stock"), and Falcon Manufacturing, Inc. caused its
subsidiary, Hedstrom Corporation ("Hedstrom") to sell certain of Hedstrom's net
assets to New Hedstrom Corp. ("Buyer"), an affiliate of GAI Partners for total
consideration of $34.5 million. Such consideration consisted of a $32.5 million
promissory note made by GAI Partners, which bears interest at 9.0% payable
quarterly, with principal payments due in varying installments through January
1998 (the "Hedstrom Note"), and 9.0% cumulative preferred stock of Hedstrom
Holdings, Inc., which owns 100% of the stock of Buyer, having a redemption value
of $2.0 million. Payment of interest on the Hedstrom Note may be deferred at the
option of GAI Partners until maturity, with interest accruing at 9.0% on any
amount of unpaid principal and interest. To date, GAI Partners has exercised
this option and deferred payment of such interest.

The Hedstrom Note is held by a subsidiary of Eagle and is secured by a
pledge of the Class C Preferred Stock. The terms of the Class C Preferred Stock
provide, among other things, that (i) the holder of the Class C Preferred Stock
may on January 15 of 1999, 2000 and 2001, require GAFG to redeem any or all of
the Class C Preferred Stock at a redemption price equal to $1,000 per share plus
a redemption premium equal to 8% of the amount redeemed if redeemed in 1999, 11%
if redeemed in 2000 and 13% if redeemed in 2001, plus accrued but unpaid
dividends through the date of redemption, (ii) upon liquidation of GAFG, the
Class C Preferred Stock is entitled to a liquidation preference of $1,000 per
share, and (iii) in the event of default on the GAFG non-voting preferred stock,
GAMI has agreed to issue GAMI non-voting preferred stock with similar rights and
designations. GAI Partners is the current owner of all outstanding Class C
Preferred Stock. Through January 16, 1996, upon acceleration, the Hedstrom Note
may, at the option of GAI Partners, be satisfied by transferring ownership of
the Class C Preferred Stock to the holder of such note. In such event, the
holder of the Hedstrom Note would become the owner of the Class C Preferred
Stock.

In the event of a default on the Hedstrom Note, Eagle may indirectly become
the owner of the Class C Preferred Stock. In this event, Eagle's subsidiary
would have the rights of a holder of such Preferred Stock, including the right
to require GAFG to redeem it. To relieve GAFG of its obligation to redeem, or
pay a liquidation preference with respect to, the Class C Preferred Stock, Eagle
declared and paid to GAFG, its sole stockholder at the time, a non-cash dividend
consisting of the benefits conferred by Eagle's execution of a Disaffiliation
Agreement (the "Disaffiliation Agreement"), effective as of September 25, 1992.
Although the dividend was paid by the execution of the Disaffiliation Agreement,
the economic benefit of the dividend will be received, if at all, only upon the
satisfaction of certain conditions. Pursuant to the Disaffiliation Agreement,
among other things:

- Eagle agreed to reimburse GAFG if GAFG pays any amount to Eagle or its
subsidiaries (or any transferee of Eagle or its subsidiaries) for
redemption of, or as a liquidation preference in respect of, any Class C
Preferred Stock, provided that certain conditions are satisfied; and

- To induce GAI Partners, as the owner of the Class C Preferred Stock, to
consent to the Restructuring and the Distribution GAMI guaranteed GAFG's
obligation to pay the redemption price or the liquidation preference,
provided such guaranty will terminate if a default occurs and is
continuing under the Hedstrom Note or GAI Partners transfers ownership of
the Class C Preferred Stock to the holder of the Hedstrom Note.

60
<PAGE> 61

Eagle's execution of the Disaffiliation Agreement was a condition of the
Distribution and the granting of the indemnity discussed below.

INDEMNITY AGREEMENTS

In connection with the Restructuring, GAMI and Eagle entered into an
indemnity and hold harmless agreement pursuant to which GAMI agreed to indemnify
and hold Eagle and its subsidiaries harmless from and against any and all
claims, settlements, judgments or expenses (including reasonable attorneys'
fees) relating to, affecting or arising out of claims filed against Madison, an
unconsolidated affiliate of GAMI, in connection with its November 1991 petition
under Chapter 11 (subsequently converted to Chapter 7) of the Bankruptcy Code.
Eagle believes that any potential claim against Eagle arising out of the
bankruptcy proceeding will not have a material effect on Eagle's operating
results or financial condition, since (i) GAMI has indemnified Eagle as
discussed above and (ii) GAMI has represented to Eagle that it has substantial
meritorious defenses against actions brought by the trustee.

In addition, GAMI and Eagle entered into an agreement (the "Indemnity
Agreement") pursuant to which, among other things, GAMI agreed to indemnify
Eagle, its subsidiaries and their respective officers and directors against any
losses, liabilities, claims and damages arising out of or based upon any untrue
statement of a material fact contained in, or the failure to state a material
fact required to be stated in, the Information Statement which GAMI mailed on
October 16, 1992 relating to the Distribution, other than in Appendix A to such
Information Statement. Correspondingly, Eagle agreed to indemnify GAMI, its
subsidiaries and their respective officers and directors against any losses,
liabilities, claims and damages arising out of or based upon any untrue
statement of a material fact contained in, or the failure to state a material
fact required to be stated in Appendix A to such Information Statement. GAMI and
Eagle each agreed to provide the other party to the Indemnity Agreement access
to certain information in possession of the other party.

ONGOING TRANSACTIONS WITH GAMI AFFILIATES

Eagle has in the past entered into agreements or arrangements with
affiliates of directors or officers of Eagle relating to acquisition and
divestiture services, financing services, and consulting arrangements which are
described below. In addition, Eagle has entered into arrangements for certain
administrative services in which the amount involved did not exceed $60,000 for
any one agreement. Eagle may enter into similar agreements or arrangements from
time to time in the future. Eagle believes that the terms of the transactions
described below are no less favorable than those which could have been obtained
from non-affiliated parties.

LEASES WITH AFFILIATES

Eagle currently leases corporate office space at the rate of $28,000 per
month from an affiliate of GAMI. The Company incurred expenses of $0.3 million
in the year ended December 31, 1993.

MANAGEMENT SERVICES

Affiliates of GAMI provide general corporate computer and printing services
to Eagle for which Eagle paid $0.2 million in the year ended December 31, 1993.
Eagle will continue to utilize such services from time to time in the future.

INTERNAL AUDIT SERVICES

GAMI's internal audit department has provided Eagle with various audit
services in the past, including review of operational and financial controls and
assistance to outside auditors during Eagle's annual audit. These services have
been provided to Eagle and its subsidiaries during the year ended December 31,
1993 at a cost of $0.2 million. Eagle will continue to utilize such services
from time to time in the future.

LEGAL SERVICES

The law firm of Rosenberg & Liebentritt, P.C., of which Mrs. Rosenberg is a
member, has rendered legal services to Eagle and its subsidiaries. Eagle paid
this law firm $0.6 million in the year ended December 31, 1993.

61
<PAGE> 62

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES, AND REPORTS ON FORM 8-K

(A) Financial Statements and Schedules

<TABLE>
<CAPTION>
DESCRIPTION PAGE NO.
------------------------------------------------------------------------- --------
<S> <C>
Report of Independent Public Accountants................................. 27
Consolidated Balance Sheets.............................................. 28
Consolidated Statements of Income........................................ 29
Consolidated Statements of Stockholder's Equity.......................... 30
Consolidated Statements of Cash Flows.................................... 31
Notes to Consolidated Financial Statements............................... 33
Report of Independent Public Accountants on Supplemental Schedules....... 63
Schedule III -- Condensed Financial Information of Registrant............ 64
</TABLE>

All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions, or are inapplicable, or the information
called for therein is included elsewhere in the financial statements or the
notes thereto. Accordingly, such schedules have been omitted.

(B) Reports on Form 8-K

None

Exhibits required by Item 601 of Regulation S-K are listed in the Index to
Exhibits, which is incorporated herein by reference.

62
<PAGE> 63

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON SUPPLEMENTAL SCHEDULES

To the Board of Directors of Eagle Industries, Inc.

We have audited, in accordance with generally accepted auditing standards,
the consolidated financial statements of Eagle Industries, Inc. and Subsidiaries
included in this Annual Report on Form 10-K, and have issued our report thereon
dated March 10, 1994. Our report on the consolidated financial statements
includes an explanatory paragraph with respect to the adoption of Statements of
Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," No. 112, "Employer's Accounting
for Postemployment Benefits", and No. 109, "Accounting for Income Taxes", as
discussed in Note 2, Note 6 and Note 7 to the consolidated financial statements.
Our audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole. Supplemental Schedule III is
the responsibility of the Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic consolidated financial statements. This schedule has been subjected to
the auditing procedures applied in the audits of the basic consolidated
financial statements and, in our opinion, fairly states in all material respects
the consolidated financial data required to be set forth therein in relation to
the basic consolidated financial statements taken as a whole.

ARTHUR ANDERSEN & CO.

Chicago, Illinois
March 10, 1994

63
<PAGE> 64

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES

SCHEDULE III -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT
EAGLE INDUSTRIES, INC. (PARENT COMPANY)

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1993 1992
------ ------
(DOLLARS IN
MILLIONS)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.............................................. $ 0.2 $ 3.2
Other current assets, including tax receivable from affiliate.......... 18.5 0.6
------ ------
Total current assets................................................ 18.7 3.8
Property, net............................................................ 1.4 1.3
Investment in and advances to subsidiaries, net.......................... 429.3 513.0
Other noncurrent assets.................................................. 15.8 12.7
------ ------
Total assets........................................................ $465.2 $530.8
------ ------
------ ------
LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable and accrued expenses.................................... $ 11.0 $ 6.9
Senior subordinated notes................................................ 346.9 300.0
Other noncurrent liabilities, including deferred income taxes............ 15.2 15.1
------ ------
Total liabilities................................................... 373.1 322.0
------ ------
Stockholder's equity:
Common stock, par value $.01 per share (1,000 shares authorized, issued
and outstanding)....................................................... -- --
Paid-in-capital.......................................................... 138.7 138.7
Retained earnings........................................................ (37.0) 73.6
Cumulative translation adjustment........................................ (5.0) (3.5)
Pension liability adjustment............................................. (4.6) --
------ ------
Total stockholder's equity.......................................... 92.1 208.8
------ ------
Total liabilities and stockholder's equity.......................... $465.2 $530.8
------ ------
------ ------
</TABLE>

The accompanying notes to these financial statements
are an integral part of these statements.

64
<PAGE> 65

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES

SCHEDULE III -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT
EAGLE INDUSTRIES, INC. (PARENT COMPANY)

INCOME STATEMENTS

<TABLE>
<CAPTION>
FIVE YEAR ENDED
YEAR ENDED MONTHS ENDED JULY 31,
DECEMBER 31, DECEMBER 31, ----------------
1993 1992 1992 1991
------------ ------------ ------ ------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Revenues:
Net sales......................................... $ 6.0 $ 1.9 $ 6.1 $ 6.3
Interest income, including intercompany........... -- -- 8.9 15.3
Management fees, intercompany..................... 15.6 6.8 16.6 19.0
Noncompete fee.................................... -- -- -- 4.5
------------ ------------ ------ ------
21.6 8.7 31.6 45.1
------------ ------------ ------ ------
Expenses:
Cost of Sales..................................... 3.8 1.3 3.8 3.9
Interest.......................................... 43.7 17.1 43.3 46.4
General and administrative........................ 15.8 4.0 10.2 8.7
------------ ------------ ------ ------
63.3 22.4 57.3 59.0
------------ ------------ ------ ------
Loss from operations before income taxes and equity
in net income of subsidiaries..................... (41.7) (13.7) (25.7) (13.9)
Income tax benefit.................................. 14.2 4.5 9.5 4.5
Equity in net earnings (loss) of continuing
subsidiaries...................................... (44.3) 2.7 15.9 6.5
Equity in net loss from operations of discontinued
subsidiaries...................................... (4.6) (1.9) (1.3) (5.6)
Equity in net gain (loss) on disposal of business... (24.0) (3.0) 10.6 35.8
Loss from early retirement of debt, net of taxes.... (8.4) -- -- --
Cumulative effect of change in accounting principle,
net of taxes...................................... (1.8) -- 16.9 --
------------ ------------ ------ ------
Net income (loss).............................. $ (110.6) $(11.4) $ 25.9 $ 27.3
------------ ------------ ------ ------
------------ ------------ ------ ------
</TABLE>

The accompanying notes to these financial statements
are an integral part of these statements.

65
<PAGE> 66

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES

SCHEDULE III -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT
EAGLE INDUSTRIES, INC. (PARENT COMPANY)

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
FIVE YEAR ENDED
YEAR ENDED MONTHS ENDED JULY 31,
DECEMBER 31, DECEMBER 31, ----------------
1993 1992 1992 1991
------------ ------------- ------ ------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Operating activities:
Net income (loss)................................ $ (110.6) $ (11.4) $ 25.9 $ 27.3
Adjustments to reconcile net income (loss) to net
cash used by operating activities:
Depreciation and amortization................. 1.6 0.7 1.8 2.5
Accretion of discount on subordinated debt.... 9.2 -- -- --
Cumulative effect of change in accounting
principle................................... 1.8 -- (16.9) --
Extraordinary loss............................ 8.4 -- -- --
Equity in net (earnings) loss of
subsidiaries................................ 72.9 2.2 (25.2) (36.7)
Changes in accrued income taxes............... (13.6) (2.6) (2.1) (9.8)
Changes in other operating items.............. (3.6) 3.6 4.5 8.3
------------ ------------- ------ ------
Net cash (used in) provided by operations..... (33.9) (7.5) (12.0) (8.4)
------------ ------------- ------ ------
Investing activities:
Purchases of property, net....................... (0.4) (0.2) (0.2) (0.1)
Capital contributions to subsidiaries............ -- -- -- (46.0)
Dividends received from subsidiaries............. -- -- -- 50.9
Advances from subsidiaries, net.................. 3.8 8.7 79.0 30.6
------------ ------------- ------ ------
Net cash (used in) provided by investing
activities.................................. 3.4 8.5 78.8 35.4
------------ ------------- ------ ------
Financing activities:
Net proceeds from issuance of subordinated
notes......................................... 184.0 -- -- --
Redemption of subordinated notes................. (156.5) -- -- --
Net repayments of long-term debt................. -- -- -- (20.0)
Net repayments on long-term revolving credit
facility...................................... -- -- (57.0) --
Net (payment to) advances from affiliates........ -- -- (14.0) 14.4
Cash dividend paid............................... -- -- -- (30.0)
Capital transactions of subsidiary accounted for
under pooling of interest..................... -- -- -- (5.6)
------------ ------------- ------ ------
Net cash (used in) provided by financing
activities.................................. 27.5 -- (71.0) (41.2)
Change in cash and cash equivalents................ (3.0) 1.0 (4.2) (14.2)
Cash and cash equivalents at beginning of period... 3.2 2.2 6.4 20.6
------------ ------------- ------ ------
Cash and cash equivalents at end of period.... $ 0.2 $ 3.2 $ 2.2 $ 6.4
------------ ------------- ------ ------
------------ ------------- ------ ------
</TABLE>

The accompanying notes to these financial statements
are an integral part of these statements.

66
<PAGE> 67

EAGLE INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE III -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT
EAGLE INDUSTRIES, INC. (PARENT COMPANY)
NOTES TO FINANCIAL STATEMENTS

(1) BASIS OF PRESENTATION

In the parent company only financial statements for Eagle Industries, Inc.,
(the "Company"), the Company's investment in subsidiaries is stated at cost plus
equity in undistributed earnings of subsidiaries since the date of acquisition.
The Company's share of net income of its unconsolidated subsidiaries is included
in consolidated income using the equity method. Pursuant to the Restructuring in
September 1992, Clevaflex, Inc., formerly a subsidiary of Eagle, was merged into
and became an operating division of Eagle. Parent company only financial
statements should be read in conjunction with the Company's consolidated
financial statements.

(2) DEBT

As further discussed in Note 5 to the Company's Consolidated Financial
Statements, in July 1993, the Company issued $315 million principal amount of
Senior Deferred Coupon Notes due 2003 (the "Notes"). The issue price of each
Note was $598.97 per $1,000 principal amount at maturity, which represents a
yield to July 15, 1998 of 10.5% per annum. Cash interest will not accrue on the
Notes prior to July 15, 1998. The proceeds from the issuance of the Notes were
used to redeem $151 million principal amount of the Company's 13% Senior
Subordinated Notes ("13% Notes"). The 13% Notes were redeemed pursuant to a
tender offer at a price of $1,049 per $1,000 principal amount.

As further discussed in Note 17 to the Company's Consolidated Financial
Statements, the Company called for redemption on February 27, 1994, the
remaining $149 million of 13% Notes at 104% of their principal amount, plus
accrued interest. Proceeds for the redemption were derived from a new senior
bank credit facility made available to Eagle Industrial Products Corporation, a
newly formed wholly owned subsidiary of the Company and a $50 million capital
contribution from GAMI.

(3) COMMITMENTS AND CONTINGENCIES

See Note 14 to the Company's Consolidated Financial Statements.

67
<PAGE> 68

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

EAGLE INDUSTRIES, INC.

By: /s/ WILLIAM K. HALL
----------------------------------
William K. Hall
President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ WILLIAM K. HALL Director, President and Chief March 28, 1994
- ----------------------------------------- Executive Officer (Principal
(William K. Hall) Executive Officer)

/s/ SAM A. COTTONE Director, Senior Vice March 28, 1994
- ----------------------------------------- President -- Finance, Chief
(Sam A. Cottone) Financial Officer, and
Treasurer (Principal Financial
and Accounting Officer)

/s/ ROD DAMMEYER Director and Chairman of March 28, 1994
- ----------------------------------------- the Board of Directors
(Rod Dammeyer)

/s/ SHELI Z. ROSENBERG Director March 28, 1994
- -----------------------------------------
(Sheli Z. Rosenberg)
</TABLE>

68
<PAGE> 69

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT DESCRIPTION
- ------- ------------------------------------------------------------------------------------
<S> <C>
3.1 Amended and Restated Articles of Incorporation of the Registrant.
3.2 Amended and Restated By-laws of the Registrant. (Incorporated by reference to
Exhibit 2.2 of the Registrant's Registration Statement on Form 8-A filed July 16,
1992)
4.1 Indenture dated as of July 1, 1993, including therein the form of Note, between the
Registrant and Harris Trust and Savings Bank, as Trustee, providing for the 10.5%
Senior Deferred Coupon Notes due 2003. (Incorporated by reference to the
Registrant's quarterly report on Form 10-Q for the quarterly period ended June 30,
1993)
4.2 Credit Agreement, dated as of January 31, 1994, among Eagle Industrial Products
Corporation and Chemical Bank as administrative agent, Citicorp North America, Inc.
as collateral agent and the other banks named therein.
4.3 Eagle Trade Receivables Master Trust Pooling and Servicing Agreement dated as of
January 1, 1994, among Centrally Held Eagle Receivables Program, Inc., Eagle
Industrial Products Corporation and Continental Bank, National Association as
trustee.
4.4 Series 1994-1 Supplement, dated as of January 1, 1994 to Eagle Trade Receivable
Master Trust Pooling and Servicing Agreement.
10.1 Eagle Industries, Inc. Cash Balance Pension Plan. (Incorporated by reference to
Exhibit 10.9 of the Registrant's Registration Statement on Form S-1, File No.
33-23585)
10.2 Advantage Retirement Savings Plan. (Incorporated by reference to Exhibit 10.10 of
the Registrant's Registration Statement on Form S-1, File No. 33-23585)
10.3 Eagle Industries, Inc. Employee Savings Plan, as amended and restated as of January
1, 1991. (Incorporated by reference to Exhibit 10.6 of the Registrant's Annual
Report on Form 10-K for the fiscal year ended July 31, 1991.
10.4 Eagle Industries, Inc. 1991 Long Term Incentive Plan. (Incorporated by reference to
Exhibit 10.5 of the Registrant's Annual Report on Form 10-K for the fiscal year
ended July 31, 1992)
10.5 Letter Agreement, dated as of November 9, 1987, between the Registrant and Gus J.
Athas. (Incorporated by reference to Exhibit 10.30 of the Registrant's Registration
Statement on Form S-1, File No. 33-23585)
10.6 Indemnity and Hold Harmless Agreement, entered into as of September 25, 1992, among
Great American Management and Investment, Inc., Great American Industrial Group,
Inc. and the Registrant (Incorporated by reference to Exhibit 10.1 of the
Registrant's Current Report on Form 8-K dated October 16, 1992)
10.7 Disaffiliation Agreement, dated as of September 25, 1992, among Great American
Management and Investment, Inc., Great American Industrial Group, Inc. and the
Registrant (Incorporated by reference to Exhibit 10.3 of the Registrant's Current
Report on Form 8-K dated October 16, 1992)
10.8 Agreement, dated as of September 25, 1992, by and between Great American Management
and Investment, Inc. and the Registrant. (Incorporated by reference to Exhibit 10.4
of the Registrant's Current Report on Form 8-K dated October 16, 1992)
10.9 Asset Purchase Agreement between PLF Acquisition Corporation and O.D.E.
Manufacturing, Inc. (Incorporated by reference to Exhibit 2.1 of the Registrant's
Current Report on Form 8-K dated May 5, 1992)
10.10 Contribution to Capital Agreement, entered into as of September 25, 1992, by and
among Great American Industrial Group, Inc. and the Registrant. (Incorporated by
reference to Exhibit 10.16 of the Registrant's Annual Report on Form 10-K for the
fiscal year ended July 31, 1992)
10.11 Asset Purchase Agreement, entered into as of September 25, 1992, between Great
American Leasing Corp. and Great American Management and Investment, Inc.
(Incorporated by reference to Exhibit 10.17 of the Registrant's Annual Report on
Form 10-K for the fiscal year ended July 31, 1992)
10.12 Purchase And Sale Agreement between Industrie Ottiche Europee, S.p.A. and Falcon
Manufacturing, Inc. (Incorporated by reference to Exhibit 2.1 of the Registrant's
Current Report on Form 8-K, dated March 10, 1993)
10.13 First Amendment To Purchase And Sale Agreement between Industrie Ottiche Europee
S.p.A. and Falcon Manufacturing, Inc. (Incorporated by reference to Exhibit 2.2 of
the Registrant's Current Report on Form 8-K, dated March 10, 1993)
</TABLE>

<PAGE> 1

Exhibit 3.i

RESTATED

CERTIFICATE OF INCORPORATION

EAGLE INDUSTRIES, INC.

Eagle Industries, Inc., a corporation organized and existing
under the laws of the State of Delaware, hereby certifies as
follows:

1. (a) The present name of the Corporation is Eagle
Industries, Inc.

(b) The name under which the Corporation was
originally incorporated is Eagle American Industries, Inc. and
the date of filing of its original Certificate of Incorporation
with the Secretary of State of the State of Delaware was November
10, 1986.

2. This Restated Certificate of Incorporation restates and
integrates and further amends the Certificate of Incorporation of
the Corporation to read as herein set forth in full:

FIRST: The name of the Corporation is Eagle Industries,
Inc.

SECOND: The address of the Corporation's registered office
in the State of Delaware is 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered
agent at such address is The Corporation Trust Company.

THIRD: The nature of the business or purpose to be
conducted or promoted by the Corporation is to engage in any
lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.

FOURTH: The total number of shares of capital stock which
the Corporation shall have authority to issue is 80,000,000,
consisting of 75,000,000 shares of Common Stock with a par value
of $.01 per share and 5,000,000 shares of Preferred Stock with a
par value of $.01 per share.

The Board of Directors is authorized, subject to limitations
prescribed by law, to provide for the issuance of the Preferred
Stock in series, and by filing a certificate pursuant to the
applicable law of the State of Delaware, to establish from time
to time the number of shares to be included in each such series,
and to fix the designation, powers, preferences and rights of the
shares of each such series and the qualifications, limitations or
restrictions thereof.
<PAGE> 2

The authority of the Board of Directors with respect to each
series shall include, but not be limited to, determination of the
following:

(a) The number of shares constituting that series and
distinctive designation of that series;

(b) The rate of dividend, if any, and whether (and if so,
on what terms and conditions) dividends shall be cumulative (and,
if so, whether unpaid dividends shall compound or accrue
interest) or shall be payable in preference or in any other
relation to the dividends payable on any other class or classes
of stock or any other series of the Preferred Stock;

(c) Whether that series shall have voting rights in
addition to the voting rights provided by law and, if so, the
terms and extent of such voting rights;

(d) Whether the shares shall be issued with the privilege
of conversion or exchange and, if so, the terms and conditions of
such conversion or exchange (including, without limitation, the
price or prices or the rate or rates of conversion or exchange or
any terms for adjustment thereof);

(e) Whether the shares may be redeemed and, if so, the
terms and conditions on which they may be redeemed (including,
without limitation, the dates upon or after which they may be
redeemed and the price or prices at which they may be redeemed,
which price or prices may be different in different circumstances
or at different redemption dates);

(f) The amounts, if any, payable upon the shares in the
event of voluntary liquidation, dissolution or winding up of the
Corporation in preference of shares of any other class or series
and whether the shares shall be entitled to participate generally
in distributions on the Common Stock under such circumstances;

(g) The amounts, if any, payable under the shares thereof
in the event of involuntary liquidation, dissolution or winding
up of the Corporation in preference of shares of any other class
or series and whether the shares shall be entitled to participate
generally in distributions on the Common Stock under such
circumstances;

(h) Sinking fund provisions, if any, for the redemption or
purchase of the shares (the term "sinking fund" being understood
to include any similar fund, however designated); and

(i) Any other relative rights, preferences, limitations and
powers of that series.

FIFTH: Advance notice of nominations for the election of
directors, other than nominations by the Board of Directors or a
committee thereof, shall be given to the Corporation in the
manner provided in the By-laws.

SIXTH: The Corporation is to have perpetual existence.

2
<PAGE> 3

SEVENTH: (1) Directors of the Corporation shall have no
personal liability to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director,
except (i) for any breach of a director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or knowing
violations of law, (iii) under Section 174 of the General
Corporation Law of the State of Delaware, or (iv) for any
transaction from which a director derived an improper personal
benefit. If the General Corporation Law of the State of Delaware
is amended to authorize corporate action further eliminating or
limiting the personal liability of directors, then by virtue of
this ARTICLE SEVENTH the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent
permitted by the General Corporation Law of the State of
Delaware, as so amended.

(2) The Corporation shall indemnify, in accordance with the
By-laws of the Corporation, to the fullest extent permitted from
time to time by the General Corporation Law of the State of
Delaware or any other applicable laws as presently or hereafter
in effect, any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or
investigative (including, without limitation, an action by or in
the right of the Corporation), by reason of his acting as a
director or officer of the Corporation (and the Corporation, in
the discretion of the Board of Directors, may so indemnify a
person by reason of the fact that he is or was an employee or
agent of the Corporation or is or was serving at the request of
the Corporation in any other capacity for or on behalf of the
Corporation) against any liability or expense actually and
reasonably incurred by such person in respect thereof; provided,
however, the Corporation shall be required to indemnify an
officer or director in connection with an action, suit or
proceeding (or part thereof) initiated by such person only if
such action, suit or proceeding (or part thereof) was authorized
by the Board of Directors of the Corporation. Such
indemnification is not exclusive of any other right to
indemnification provided by law or otherwise. The right to
indemnification conferred by this Section (2) shall be deemed to
be a contract between the Corporation and each person referred to
herein.

(3) If a claim under Section (2) of this ARTICLE SEVENTH is
not paid in full by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful in whole or in
part, the claimant shall be entitled to be paid also the expense
of prosecuting such claim. It shall be a defense to any such
action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its
final disposition where any undertaking required by the By-laws
of the Corporation has been tendered to the Corporation) that the
claimant has not met the standards of conduct which make it
permissible under the General Corporation Law of the State of
Delaware and Section 2 of this ARTICLE SEVENTH for the
Corporation to indemnify the claimant for the amount claimed, but
the burden of proving such defense shall be on the Corporation.
Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to
have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the
circumstances because he or she has met the applicable standard
of conduct set forth in the General Corporation Law of State of
Delaware, nor an actual determination by the Corporation
(including its Board of

3
<PAGE> 4
Directors, independent legal counsel, or its stockholders) that
the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.

(4) The right to indemnification and the payment of
expenses incurred in defending a proceeding in advance of its
final disposition conferred in this ARTICLE SEVENTH shall not be
exclusive of any other right which any person may have or
hereafter acquire under any stature, provision of this
Certificate of Incorporation, by-law, agreement, contract, vote
of stockholders or disinterested directors, or otherwise.

(5) The Corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee
or agent of the Corporation, or is or was serving at the request
of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his
status as such, whether or not the Corporation would have the
power to indemnify him against such liability under the
provisions of this ARTICLE SEVENTH, the General Corporation Law
of the State of Delaware, or otherwise.

(6) No amendment to or repeal of all or any part of this
ARTICLE SEVENTH shall adversely affect any right or protection
existing at the time of such repeal or amendment.

EIGHTH: In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly
authorized to make, adopt, alter, amend or repeal the By-laws of
the Corporation.

NINTH: Meetings of the stockholders may be held at such
places, within or without the State of Delaware, as may be
designated by or in the manner provided in the By-laws. The
books of the Corporation may be kept (subject to the provisions
of any law or regulation) outside the State of Delaware at such
place or places as may be designated from time to time by the
Board of Directors or in the By-laws of the Corporation.
Elections of directors need not be by written ballot unless the
By-laws of the Corporation shall so provide.

TENTH: The Corporation hereby elects not to be governed
by Section 203 of the General Corporation Law of the State of
Delaware, from time to time in effect or any successor provision
thereto.

ELEVENTH: The Corporation reserves the right to amend,
alter, change or repeal any provision contained in this
Certificate of Incorporation, in the manner now or hereafter
prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.

4. This Restated Certificate of Incorporation was duly
adopted by unanimous written consent of the stockholders of the
Corporation in accordance with the applicable provisions of
Sections 228, 242 and 245 of the General Corporation Law of the
State of Delaware.

4
<PAGE> 5

IN WITNESS WHEREOF, Eagle Industries, Inc., a Delaware
corporation has caused this certificate to be signed by William
K. Hall, its President, Chief Executive Officer and Treasurer,
and attested by Susan Obuchowski, its Secretary, this 16th day of
July, 1992.

\s\ William K. Hall
-------------------------------------
William K. Hall
President, Chief Executive Officer,
Chief Operating Officer and Treasurer

ATTEST:\s\ Susan Obuchowski
Susan Obuchowski
Secretary

<PAGE> 1
Exhibit 4.2

CREDIT AGREEMENT

Dated as of January 31, 1994

among

EAGLE INDUSTRIAL PRODUCTS CORPORATION

as Borrower

THE FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTY HERETO,

as Lenders,

and

CHEMICAL BANK,

as Administrative Agent

and

CITICORP NORTH AMERICA, INC.

as Collateral Agent

<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS

ARTICLE I
Definitions

<S> <C> <C>
1.01. Certain Defined Terms. . . . . . . . . . . . . . . 1
1.02. Computation of Time Periods. . . . . . . . . . . . 34
1.03. Accounting Terms . . . . . . . . . . . . . . . . . 34
1.04. Other Definitional Provisions. . . . . . . . . . . 34

ARTICLE II
Amounts and Terms of Loans

2.01. Revolving Loans and Term Loans . . . . . . . . . . 35
2.02. Revolving Loan Facility Mechanics. . . . . . . . . 38
2.03. Interest on the Loans. . . . . . . . . . . . . . . 42
2.04. Fees . . . . . . . . . . . . . . . . . . . . . . . 46
2.05. Mandatory Prepayments. . . . . . . . . . . . . . . 47
2.06. Payments . . . . . . . . . . . . . . . . . . . . . 48
2.07. Interest Periods . . . . . . . . . . . . . . . . . 52
2.08. Special Provisions Governing Eurodollar Rate
Loans . . . . . . . . . . . . . . . . . . . . . 53
2.09. Taxes. . . . . . . . . . . . . . . . . . . . . . . 55
2.10. Increased Capital. . . . . . . . . . . . . . . . . 59
2.11. Use of Proceeds of the Loans . . . . . . . . . . . 59
2.12. Authorized Officers of Borrower. . . . . . . . . . 60
2.13. Replacement of Certain Lenders . . . . . . . . . . 60
2.14. Registered Notes . . . . . . . . . . . . . . . . . 62

ARTICLE III
Letters of Credit

3.01. Obligation to Issue. . . . . . . . . . . . . . . . 63
3.02. Types and Amounts. . . . . . . . . . . . . . . . . 63
3.03. Conditions . . . . . . . . . . . . . . . . . . . . 64
3.04. Issuance of Letters of Credit. . . . . . . . . . . 64
3.05. Reimbursement Obligations; Duties of the
Issuing Bank. . . . . . . . . . . . . . . . . . 65
3.06. Participations . . . . . . . . . . . . . . . . . . 66
3.07. Payment of Reimbursement Obligations . . . . . . . 68
3.08. Compensation for Letters of Credit . . . . . . . . 69
3.09. Indemnification; Exoneration . . . . . . . . . . . 69
3.10. Reporting By Issuing Bank. . . . . . . . . . . . . 71
3.11. Transitional Letter of Credit Provisions . . . . . 71

ARTICLE IV
Conditions to Loans and Letters of Credit

4.01. Conditions Precedent to the Initial Funding. . . . 71
4.02. Conditions Precedent to all Loans and Letters of
Credit. . . . . . . . . . . . . . . . . . . . . 74

ARTICLE V
Representations and Warranties

5.01. Representations and Warranties on the Initial

</TABLE>

<PAGE> 3

<TABLE>

<S> <C> <C>
Funding Date. . . . . . . . . . . . . . . . . . 75
5.02. Subsequent Funding Representations and
Warranties. . . . . . . . . . . . . . . . . . . 85

ARTICLE VI
Reporting Covenants

6.01. Financial Statements . . . . . . . . . . . . . . . 85
6.02. Environmental Notices. . . . . . . . . . . . . . . 91

ARTICLE VII
Affirmative Covenants

7.01. Corporate Existence, Etc.. . . . . . . . . . . . . 92
7.02. Corporate Powers, Etc. . . . . . . . . . . . . . . 92
7.03. Compliance with Laws . . . . . . . . . . . . . . . 92
7.04. Payment of Taxes and Claims. . . . . . . . . . . . 92
7.05. Maintenance of Properties; Insurance . . . . . . . 93
7.06. Inspection of Property; Books and Records;
Discussions . . . . . . . . . . . . . . . . . . 93
7.07. Labor Matters. . . . . . . . . . . . . . . . . . . 94
7.08. Maintenance of Permits . . . . . . . . . . . . . . 94
7.09. Employee Benefit Matters . . . . . . . . . . . . . 94
7.10. Formation of Subsidiaries. . . . . . . . . . . . . 94
7.11. Collateral Audit . . . . . . . . . . . . . . . . . 96
7.12. Separate Corporate Existence . . . . . . . . . . . 96
7.13. Interest Rate Hedging Contracts. . . . . . . . . . 97
7.14. Accountants' Reliance Letter . . . . . . . . . . . 97
7.15. Future Liens on Real Property in Favor of the
Collateral Agent. . . . . . . . . . . . . . . . 97

ARTICLE VIII
Negative Covenants

8.01. Indebtedness . . . . . . . . . . . . . . . . . . . 98
8.02. Sales of Assets; Liens . . . . . . . . . . . . . . 99
8.03. Investments. . . . . . . . . . . . . . . . . . . .101
8.04. Accommodation Obligations. . . . . . . . . . . . .102
8.05. Restricted Junior Payments . . . . . . . . . . . .103
8.06. Conduct of Business. . . . . . . . . . . . . . . .104
8.07. Transactions with Affiliates . . . . . . . . . . .105
8.08. Restriction on Fundamental Changes . . . . . . . .105
8.09. Employee Benefit Matters . . . . . . . . . . . . .106
8.10. Environmental Liabilities. . . . . . . . . . . . .106
8.11. Margin Regulations . . . . . . . . . . . . . . . .106
8.12. Change of Fiscal Year. . . . . . . . . . . . . . .106
8.13. Amendment of Certain Documents . . . . . . . . . .106
8.14. Modification of Receivables Agreements . . . . . .107
8.15. Refinancing. . . . . . . . . . . . . . . . . . . .107

ARTICLE IX
Financial Covenants

</TABLE>

-ii-
<PAGE> 4
<TABLE>

<S> <C> <C>
9.01. Minimum Consolidated Net Worth . . . . . . . . . .107
9.02. Ratio of Total Indebtedness to Net EBITDA. . . . .108
9.03. Interest Coverage Ratio. . . . . . . . . . . . . .108
9.04. Capital Expenditures . . . . . . . . . . . . . . .108
9.05. Fixed Charges Coverage Ratio . . . . . . . . . . .109

ARTICLE X
Events of Default; Rights and Remedies

10.01. Events of Default. . . . . . . . . . . . . . . . .109
10.02. Rights and Remedies. . . . . . . . . . . . . . . .113

ARTICLE XI
Administrative Agent and Collateral Agent

11.01. Appointment. . . . . . . . . . . . . . . . . . . .115
11.02. Nature of Duties . . . . . . . . . . . . . . . . .115
11.03. Rights, Exculpation, Etc.. . . . . . . . . . . . .116
11.04. Reliance . . . . . . . . . . . . . . . . . . . . .117
11.05. Indemnification. . . . . . . . . . . . . . . . . .117
11.06. The Administrative Agent Individually. . . . . . .118
11.07. Successor Administrative Agent or Collateral
Agent; Resignation of Administrative Agent or
Collateral Agent. . . . . . . . . . . . . . . .118
11.08. Collateral Matters . . . . . . . . . . . . . . . .119
11.09. Relations Among Lenders. . . . . . . . . . . . . .122

ARTICLE XII
Miscellaneous

12.01. Survival of Warranties and Agreements. . . . . . .122
12.02. Assignments and Participations . . . . . . . . . .122
12.03. Expenses . . . . . . . . . . . . . . . . . . . . .126
12.04. Indemnification and Waiver . . . . . . . . . . . .128
12.05. Limitation of Liability. . . . . . . . . . . . . .129
12.06. Ratable Sharing; Defaulting Lender; Setoff . . . .129
12.07. Amendments and Waivers . . . . . . . . . . . . . .132
12.08. Notices. . . . . . . . . . . . . . . . . . . . . .134
12.09. Failure or Indulgence Not Waiver; Remedies
Cumulative. . . . . . . . . . . . . . . . . . .134
12.10. Termination. . . . . . . . . . . . . . . . . . . .134
12.11. Marshalling; Recourse to Security; Payments
Set Aside . . . . . . . . . . . . . . . . . . .134
12.12. Severability . . . . . . . . . . . . . . . . . . .135
12.13. Headings . . . . . . . . . . . . . . . . . . . . .135
12.14. GOVERNING LAW. . . . . . . . . . . . . . . . . . .135
12.15. Successors and Assigns; Subsequent Holders
of Notes. . . . . . . . . . . . . . . . . . . .135
12.16. CONSENT TO JURISDICTION; SERVICE OF PROCESS;
JURY TRIAL. . . . . . . . . . . . . . . . . . .136
12.17. Counterparts; Effectiveness; Inconsistencies . . .137
12.18. Performance of Obligations . . . . . . . . . . . .137
12.19. ENTIRE AGREEMENT . . . . . . . . . . . . . . . . .139
</TABLE>

-iii-
<PAGE> 5
<TABLE>
<CAPTION>
EXHIBITS
<S> <C>
Exhibit 1 -- Assignment and Acceptance (Sections 1.01, 12.02(d))
Exhibit 1A -- Assignment of Registered Notes (Sections 1.01, 2.14, 12.02
(a))
Exhibit 2 -- Borrowing Base Certificate (Section 1.01)
Exhibit 3 -- Compliance Certificate (Sections 1.01, 6.01(e))
Exhibit 4 -- Notice of Borrowing (Section 1.01)
Exhibit 5 -- Notice of Conversion/Continuation (Section 1.01)
Exhibit 6 -- Forms of Notes (Section 2.02)
Exhibit 6A -- Forms of Registered Notes (Section 2.14)
Exhibit 7 -- List of Closing Documents (Section 4.01(a))
Exhibit 8 -- Accountants' Reliance Letter (Section 4.01(o))
Exhibit 9 -- Form of Loss Payable Endorsement (Section 7.05)
</TABLE>

-iv-
<PAGE> 6

<TABLE>
<CAPTION>
SCHEDULES
<S> <C>
Schedule A -- List of Lenders, Notice Addresses and Domestic and
Eurodollar Lending Offices (Sections 1.01, 12.02(c),
12.08)

Schedule 1.01-A -- Existing Indebtedness (Section 1.01)

Schedule 1.01-B -- Material Adverse Effect (Section 1.01)

Schedule 1.01-C -- Real Property Subject to Real Estate
Mortgages (Section 1.01)

Schedule 1.01-D -- Permitted Existing Liens (Section 1.01)

Schedule 3.11 -- Transitional Letters of Credit (Section 3.11)

Schedule 5.01(c) -- Subsidiaries (Sections 5.01(c), 7.01)

Schedule 5.01(d) -- Violation of Requirements of Law (Section 5.01(d))

Schedule 5.01(i) -- Capitalization (Section 5.01(i))

Schedule 5.01(j) -- Pending or Threatened Litigation (Section 5.01(j))

Schedule 5.01(l) -- Tax Assessments (Section 5.01(l))

Schedule 5.01(s) -- Environmental Matters (Section 5.01(s))

Schedule 5.01(t) -- ERISA Matters (Section 5.01(t))

Schedule 5.01(w) -- Joint Ventures (Section 5.01(w))

Schedule 5.01(x) -- Labor Matters (Section 5.01(x))

Schedule 7.05 -- Insurance (Section 7.05)

Schedule 8.08 -- Fundamental Changes (Section 8.08(a))
</TABLE>

-v-

<PAGE> 7

CREDIT AGREEMENT

This Credit Agreement dated as of January 31, 1994 (the
"Closing Date") (as amended, supplemented, modified or restated
from time to time, the "Agreement") is entered into among
EAGLE INDUSTRIAL PRODUCTS CORPORATION, a Delaware corporation
("Borrower"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE
PAGES HEREOF and each other financial institution which from time
to time becomes a party hereto in accordance with
Section 12.02(a) (together with their respective successors and
assigns, individually, a "Lender" and, collectively, the
"Lenders"), CHEMICAL BANK, a New York banking corporation, in its
separate capacity as administrative agent for the Lenders
hereunder (in such capacity, the "Administrative Agent") and
CITICORP NORTH AMERICA, INC. as collateral agent for the Lenders
hereunder (the "Collateral Agent").

ARTICLE I
Definitions

1.01. Certain Defined Terms.

The following terms used in this Agreement shall have
the following meanings (such meanings to be applicable, except to
the extent otherwise indicated in a definition of a particular
term, both to the singular and the plural forms of the terms
defined):

"Accommodation Obligation," as applied to any Person,
shall mean any contractual obligation, contingent or otherwise,
of that Person with respect to any Indebtedness or other
obligation or liability of another, including, without
limitation, any such Indebtedness, obligation or liability
directly or indirectly guaranteed, endorsed (otherwise than for
collection or deposit in the ordinary course of business), co-
made or discounted or sold with recourse by that Person, or in
respect of which that Person is otherwise directly or indirectly
liable, including Contractual Obligations (contingent or
otherwise) arising through any agreement to purchase, repurchase,
or otherwise acquire such Indebtedness, obligation or liability
or any security therefor, or to provide funds for the payment or
discharge thereof (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain
solvency, assets, level of income, or other financial condition,
or to make payment other than for value received. For purposes
of interpreting any provision of this Agreement which refers to
the Dollar amount of Accommodation Obligations of any Person,
such provision shall be deemed to mean the maximum amount of such

<PAGE> 8

Accommodation Obligations or, in the case of an Accommodation
Obligation to maintain solvency, assets, level of income or other
financial condition, the amount of Indebtedness to which such
Accommodation Obligation relates, or if less, the stated maximum,
if any, in the documents evidencing such Accommodation
Obligation.

"Account Debtor" shall mean a party that is obligated
to the Borrower or a Guarantor on or under a Receivable.

"Administrative Agent" shall have the meaning ascribed
to such term in the preamble hereto and shall include any
successor Administrative Agent.

"Affiliate," as applied to any Person, shall mean any
other Person directly or indirectly controlling, controlled by,
or under common control with, that Person. For purposes of this
definition, "control" (including, with correlative meanings, the
terms "controlling," "controlled by" and "under common control
with"), as applied to any Person, means the possession, directly
or indirectly, of the power to vote 10% or more of the Securities
having voting power for the election of directors of such Person
or otherwise to direct or cause the direction of the management
and policies of that Person, whether through the ownership of
voting Securities or by contract or otherwise.

"Agreement" shall have the meaning ascribed to such
term in the preamble hereto.

"Agreement Accounting Principles" shall mean GAAP as of
the date of this Agreement together with any changes in GAAP
after the date hereof which are not "Material Accounting Changes"
(as defined below). If any changes in GAAP are hereafter
required or permitted and are adopted by the Parent or Borrower
with the agreement of its independent certified public
accountants and such changes result in a material change in
method of the calculation of any of the financial covenants,
restrictions or standards herein or in the related definitions or
terms used therein ("Material Accounting Changes"), the parties
hereto agree to enter into negotiations, in good faith, in order
to amend such provisions in a credit neutral manner so as to
reflect equitably such changes with the desired result that the
criteria for evaluating the Parent's and Borrower's financial
condition shall be substantially the same after such changes as
if such changes had not been made; provided, however, that no
Material Accounting Change shall be given effect in such
calculations until such provisions are amended, in a manner
reasonably satisfactory to the Requisite Lenders. In the event
such amendment is entered into, all references in this Agreement
to Agreement Accounting Principles shall mean GAAP as of the date
of such amendment together with any changes in GAAP after the
date of such amendment which are not Material Accounting Changes.

-2-
<PAGE> 9

"Agreement Obligations" shall mean all Obligations
other than with respect to Eligible Hedging Contracts.

"Alternate Base Rate" shall mean, for any day, a
fluctuating interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) as shall be in effect from
time to time, which rate per annum shall at all times be equal to
the greatest of (a) the Prime Rate in effect on such day; (b) the
sum of one-half of one percent (0.50%) and the Federal Funds
Effective Rate in effect on such day; and (c) the sum of one
percent (1.0%) and (1) the product of (x) the Three-Month
Secondary CD Rate in effect on such day and (y) Statutory
Reserves and (2) the Assessment Rate. For purposes hereof,
"Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by Chemical Bank as its prime rate in
effect at its principal office in New York City; each change in
the Prime Rate shall be effective on the date such change is
publicly announced as being effective. "Three-Month Secondary CD
Rate" shall mean, for any day, the secondary market rate for
three-month certificates of deposit reported as being in effect
on such day (or, if such day shall not be a Business Day, the
next preceding Business Day) by the Federal Reserve Board through
the public information telephone line of the Federal Reserve Bank
of New York (which rate will, under the current practices of the
Federal Reserve Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such
day), or, if such rate shall not be so reported on such day or
such next preceding Business Day, the average of the secondary
market quotations for three-month certificates of deposit of
major money center banks in New York City received at
approximately 10:00 a.m., New York City time, on such day (or, if
such day shall not be a Business Day, on the next preceding
Business Day) by Chemical Bank from three New York City
negotiable certificate of deposit dealers of recognized standing
selected by the Administrative Agent. "Federal Funds Effective
Rate" shall mean, for any day, a fluctuating interest rate per
annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by Chemical Bank from three Federal funds
brokers of recognized standing selected by the Administrative
Agent. If for any reason the Administrative Agent shall have
determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate or both for
any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in
accordance with the terms hereof, the Alternate Base Rate shall
be determined without regard to clause (b) or (c), or both, of
the first sentence of this definition, as appropriate, until the

-3-
<PAGE> 10

circumstances giving rise to such inability no longer exist. Any
change in the Alternate Base Rate due to a change in the Prime
Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such
change.

"Applicable Base Rate Margin for Tranche A" shall mean
the rate per annum set forth in the chart below which corresponds
to the ratio below as at the end of the immediately preceding
fiscal quarter:

<TABLE>
<CAPTION>
Applicable
Base Rate
Margin for Free Cash Flow
Tranche A Coverage Ratio
---------- --------------
<S> <C>
1.00% Less than 2.5 to 1.0

0.75% 2.5 to 1.0 or greater

0.375% 4.0 to 1.0 or greater

0.00% 5.0 to 1.0 or greater
</TABLE>

Notwithstanding the foregoing, the Applicable Base Rate Margin
for Tranche A shall be 0.75% per annum until December 31, 1994,
and thereafter shall be reset as provided in Section 2.03(a)
based on the Borrower's performance, with the applicable rate
selected that corresponds to the Borrower's achievement in the
immediately preceding four fiscal quarters with respect to the
Free Cash Flow Coverage Ratio set forth above.

"Applicable Base Rate Margin for Tranche B" shall mean
one and one half of one percent (1.50%) per annum.

"Applicable Eurodollar Rate Margin for Tranche A" shall
mean the rate per annum set forth in the chart below which
corresponds to the ratio below as at the end of the immediately
preceding fiscal quarter:

-4-
<PAGE> 11

<TABLE>
<CAPTION>
Applicable
LIBO Rate
Margin for Free Cash Flow
Tranche A Coverage Ratio
----------- --------------
<S> <C>
2.00% Less than 2.5 to 1.0

1.75% 2.5 to 1.0 or greater

1.375% 4.0 to 1.0 or greater

1.00% 5.0 to 1.0 or greater
</TABLE>

Notwithstanding the foregoing, the Applicable LIBO Rate Margin
for Tranche A shall be 1.75% per annum until December 31, 1994,
and thereafter shall be reset as provided in Section 2.03(a)
based on the Borrower's performance, with the applicable rate
selected that corresponds to the Borrower's achievement in the
immediately preceding four fiscal quarters with respect to the
Free Cash Flow Coverage Ratio set forth above.

"Applicable Eurodollar Rate Margin for Tranche B" shall
mean two and one-half of one percent (2.50%) per annum.

"Applicable Lending Office" shall mean, with respect to
each Lender, such Lender's Domestic Lending Office, in the case
of a Base Rate Loan and such Lender's Eurodollar Lending Office,
in the case of a Eurodollar Rate Loan.

"Assessment Rate" shall mean for any date the annual
rate (rounded upwards, if necessary, to the next 1/100 of 1%)
most recently estimated by the Administrative Agent as the then-
current net annual assessment rate that will be employed in
determining amounts payable by the Administrative Agent or any
other Lender to the FDIC (or any successor) for insurance by the
FDIC (or such successor) of time deposits made in dollars at the
Administrative Agent's or such Lenders domestic offices.

"Assignment and Acceptance" shall mean an Assignment
and Acceptance in the form of Exhibit 1 (with blanks appropri-
ately filled in) delivered to the Administrative Agent in connec-
tion with an assignment of a Lender's interest under this
Agreement pursuant to Section 12.02 or in the case of the
transfer of a Registered Note, an Assignment and Acceptance in
the form of Exhibit 1A (with blanks appropriately filled in)
delivered to the Administrative Agent in connection with an
assignment of a Lender's interest under this Agreement pursuant
to Section 12.02.

"Base Rate Loans" shall mean all Loans outstanding
which bear interest at a rate determined by reference to the
Alternate Base Rate, as provided in Section 2.03(a)(i) or (iii).

-5-
<PAGE> 12

"Benefit Plan" shall mean a defined benefit plan as
defined in Section 3(35) of ERISA (other than a Multiemployer
Plan) in respect of which Borrower or any ERISA Affiliate is, or
within the immediately preceding six (6) years was, an "employer"
as defined in Section 3(5) of ERISA while an ERISA Affiliate.

"Borrower" shall have the meaning ascribed to such term
in the preamble hereto.

"Borrower Subsidiary" shall mean any Subsidiary of the
Borrower.

"Borrowing" shall mean a borrowing consisting of Loans
of the same Type, having the same Interest Period, in the case of
Eurodollar Rate Loans, and made on the same day by the Lenders.

"Borrowing Base" shall mean, as of any date of
calculation, an amount equal to the sum of: (a) 85% of the face
amount then outstanding under the Eligible Receivables, and (b)
45% of Eligible Inventory, valued at the lower of cost determined
on a FIFO basis or market value, less such reserves as the
Administrative Agent elects to establish in accordance with its
reasonable credit judgment.

"Borrowing Base Certificate" means a certificate of the
chief financial officer, treasurer or controller of Borrower
substantially in the form of Exhibit 2 (or another form mutually
acceptable to the Administrative Agent and Borrower) setting
forth calculations of the Borrowing Base, including a calculation
of each component thereof, as at the close of business on the
last Business Day of the preceding fiscal month, all in such
detail as shall be reasonably satisfactory to the Administrative
Agent.

"Business Day" shall mean (i) for all purposes other
than as described by clause (ii) below, any day excluding
Saturday, Sunday and any day which is a legal holiday under the
laws of the State of New York, or is a day on which banking
institutions located in New York are required or authorized by
law or other governmental action to close and (ii) with respect
to all notices, determinations, fundings and payments in
connection with Eurodollar Rate Loans, any day which is a
Business Day described in clause (i) and which is also a day for
trading in dollar deposits by and between banks in the London
interbank Eurodollar market.

"Capital Expenditures" shall mean, with respect to any
Person on a consolidated basis for any period, the aggregate of
all expenditures incurred by such Person during such period that,
in accordance with Agreement Accounting Principles, are or should
be included in "additions to property, plant or equipment" or
similar items reflected in the statement of cash flows of such
Person, excluding interest and start-up expenses that otherwise

-6-
<PAGE> 13

would be included and less any cash proceeds from the disposal of
property, plants or equipment not paid to the Lenders as a
mandatory prepayment; provided, however, that Capital
Expenditures shall not include expenditures of proceeds of
insurance settlements in respect of lost, destroyed or damaged
assets, equipment or other property to the extent such
expenditures are made in connection with the replacement or
repair of such lost, destroyed or damaged assets, equipment or
other property commenced within 6 months of such destruction or
damage and pursued with diligence.

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

"Cash Equivalents" shall mean (i) marketable direct
obligations issued or unconditionally guaranteed by the United
States Government or issued by an agency thereof and backed by
the full faith and credit of the United States of America, in
each case maturing within one year after the date of acquisition
thereof; (ii) marketable direct obligations issued by any state
of the United States of America maturing within six months after
the date of acquisition thereof and, at the time of acquisition,
having one of the two highest ratings obtainable from either
Standard & Poor's Corporation ("S&P") or Moody's Investors
Service, Inc. ("Moody's") (or, if at any time neither S&P nor
Moody's shall be rating such obligations, then from such other
nationally recognized rating services acceptable to the
Administrative Agent) and not listed in Credit Watch published by
S&P (or a similar publication of S&P or another nationally
recognized rating service); or (iii) commercial paper (other than
commercial paper issued by Parent, Borrower or any of their
respective Subsidiaries or any of their Affiliates), domestic and
Eurodollar certificates of deposit, time deposits or bankers'
acceptances, in any such case maturing no more than ninety (90)
days after the date of acquisition thereof and, at the time of
the acquisition thereof, the issuer's rating on its commercial
paper is at least A-1 or P-1 from either S&P or Moody's (or, if
at any time neither S&P nor Moody's shall be rating such obliga-
tions, then the highest rating from other nationally recognized
rating services acceptable to the Administrative Agent).

"Cash Interest Expense" shall mean, with respect to any
Person on a consolidated basis for any period, (a) interest
expense of such Person for such period determined on a
consolidated basis in accordance with Agreement Accounting
Principles consistently applied, excluding the amortization of
all fees payable in connection with the incurrence of the
Obligations and also excluding interest accruing after the
Closing Date on the Amerace Corporation 13.75% Senior
Subordinated Notes (or, in the case of the four fiscal quarter

-7-
<PAGE> 14

period ending March 31, 1994, the product of four times such
interest expense for the period from the Closing Date through
March 31, 1994, and, in the case of the four fiscal quarter
period ending June 30, 1994, the product of two times such
interest expense for the period from the Closing Date through
June 30, 1994, and, in the case of the four fiscal quarter period
ending September 30, 1994, the product of four-thirds (4/3) times
such interest expense for the period from the Closing Date
through September 30, 1994, and, in the case of the four fiscal
quarter period ending December 31, 1994, such interest expense
for the period from the Closing Date through December 31, 1994)
plus (b) capitalized interest paid during such period by such
Person minus (c) interest paid to and received by such Person in
cash in the United States during such period minus interest
earned on the funds held in the accounts established pursuant to
the Escrow Agreements.

"Change of Control" shall mean that any of (a) the
Samuel Zell Group shall cease to own, directly or indirectly,
more than 30% of the combined voting power of the Parent's
outstanding securities ordinarily having the right to vote at
elections of directors or (b) the Parent shall cease to directly
own 100% of the Borrower's outstanding securities ordinarily
having the right to vote at elections of directors.

"Chemical" shall mean Chemical Bank, a New York banking
corporation, and any successor thereto.

"Citicorp" shall mean Citicorp North America, Inc., and
any successor thereto.

"Closing Date" shall have the meaning ascribed to that
term in the preamble hereto.

"Collateral" shall mean the stock of the Borrower and
all property and interests in property now owned or hereafter
acquired by the Borrower or any of the Borrower's Subsidiaries in
or upon which a security interest, pledge, lien or mortgage is
intended to be granted, or of which a collateral assignment is
intended to be made, under the Collateral Documents.

"Collateral Agent" shall have the meaning ascribed to
such term in the preamble hereto and shall include any successor
Collateral Agent.

"Collateral Documents" shall mean the Security
Agreement, the Parent Guaranty, the Subsidiary Security
Agreements, the Subsidiary Guaranties, the Intellectual Property
Agreements, the Pledge Agreements, the Mortgages, and all other
security agreements, mortgages, deeds of trust, collateral
assignments, financing statements and other agreements,
conveyances or documents at any time delivered to the
Administrative Agent by the Parent, the Borrower or any Borrower

-8-
<PAGE> 15

Subsidiary which intend to create or evidence Liens to secure or
to guarantee the Obligations.

"Commercial Letter of Credit" shall mean any letter of
credit which is drawable upon presentation of a sight draft and
other documents evidencing the sale or shipment of goods pur-
chased by Borrower or any of its domestic Subsidiaries in the
ordinary course of such entity's business.

"Commission" shall mean the Securities and Exchange
Commission or any Governmental Authority succeeding to the
functions thereof.

"Commitments" shall mean, collectively, the Tranche A
Term Loan Commitments, the Tranche B Term Loan Commitments and
the Revolving Credit Commitments of all Lenders.

"Commitment Fee" shall have the meaning ascribed to
that term in Section 2.04(a).

"Compliance Certificate" shall mean a certificate in
substantially the form of Exhibit 3 delivered to the
Administrative Agent by Borrower covering Borrower's compliance
with the covenants contained in Article IX and certain other
provisions of this Agreement.

"Consolidated Borrower Group" shall mean the Borrower
and each of its Subsidiaries.

"Consolidated Net Income" shall mean, with respect to
any Person on a consolidated basis for any period, net income for
such period but excluding from the definition of Consolidated Net
Income the effect of any extraordinary or non-recurring gains or
losses, or gains or losses from the sale of assets in connection
with any Asset Sale Prepayment Event as defined in Section
2.05(b)(ii) or the sale of Lapp Insulator Company, all computed
on a consolidated basis in accordance with Agreement Accounting
Principles consistently applied.

"Consolidated Parent Group" shall mean the Parent and
each of its Subsidiaries.

"Contaminant" shall mean any pollutant, hazardous
substance, hazardous chemical, toxic substance, hazardous waste
or special waste, as those terms are defined in federal, state or
local laws and regulations, radioactive material, petroleum,
including crude oil or any petroleum-derived substance, or break-
down or decomposition product thereof, or any constituent of any
such substance or waste, including but not limited to polychlor-
inated biphenyls and asbestos.

"Contractual Obligation", as applied to any Person,
shall mean any provision of any Securities issued by that Person

-9-
<PAGE> 16

or any indenture, mortgage, deed of trust, contract, undertaking,
document, instrument or other agreement or instrument to which
that Person is a party or by which it or any of its properties is
bound, or to which it or any of its properties is subject
(including, without limitation, any restrictive covenant
affecting such Person or any of its properties).

"Contribution Agreement" shall mean that certain
contribution agreement executed by Parent and each of the
domestic Subsidiaries (other than the Receivables Subsidiary) of
the Borrower dated as of the date hereof, as the same may be
amended, restated, supplemented or otherwise modified from time
to time with the consent of the Requisite Lenders.

"Customary Permitted Liens" shall mean (i) Liens (other
than Environmental Liens, Liens imposed under ERISA or
Enforceable Judgments) for claims, taxes, assessments or charges
of any Governmental Authority not yet due or which are being con-
tested in good faith by appropriate proceedings and with respect
to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP, (ii) statutory Liens of
landlords, bankers, carriers, warehousemen, mechanics,
materialmen, and other Liens (other than Environmental Liens,
Liens imposed under ERISA or Enforceable Judgments) imposed by
law arising in the ordinary course of business and for amounts
which (A) are not yet due, (B) are not more than thirty (30) days
past due as long as no notice of default has been given or other
action taken to enforce such Liens, or (C) (1) are not more than
thirty (30) days past due and a notice of default has been given
or other action taken to enforce such Liens, or (2) are more than
thirty (30) days past due, and, in the case of clause (1) or (2),
are being contested in good faith by appropriate proceedings
which are sufficient to prevent imminent foreclosure of such
Liens and with respect to which adequate reserves or other
appropriate provisions are being maintained in accordance with
GAAP, (iii) Liens (other than Environmental Liens, Liens imposed
under ERISA or Enforceable Judgments) incurred or deposits made
in the ordinary course of business (including, without
limitation, surety bonds and appeal bonds) in connection with
workers' compensation, unemployment insurance and other types of
employment benefits or to secure the performance of tenders,
bids, leases, contracts (other than for the repayment of Indebt-
edness), statutory obligations and other similar obligations or
arising as a result of progress payments under government con-
tracts, (iv) easements (including, without limitation, recip-
rocal easement agreements and utility agreements), rights-of-
way, covenants, consents, rights of landlords, reservations,
encroachments, variations and other restrictions, charges or
encumbrances (whether or not recorded) affecting the use of real
property, which do not materially interfere with the ordinary
conduct of the business of Parent, Borrower or any of Borrower's
Subsidiaries, (v) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of

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<PAGE> 17

customs duties in connection with the importation of goods; and
(vi) precautionary filings of financing statements in connection
with Operating Leases entered into in the ordinary course of
business.

"Debt Service" shall mean, with respect to the Borrower
on a consolidated basis for any period, without duplication (i)
the aggregate Cash Interest Expense of the Borrower on a
consolidated basis for such period, (ii) the aggregate principal
amount of the Term Loans that was due during such period pursuant
to Section 2.01 as the same may be adjusted from time to time
(or, in the case of each of the four fiscal quarter periods
ending in 1994, $20,000,000) excluding amounts paid on the Term
Loans as a result of a Prepayment Event and applied to such
scheduled amortization payments and (iii) scheduled principal
payments on any other Indebtedness of Borrower for such period.

"Default Rate" shall have the meaning ascribed to that
term in Section 2.03(d).

"DOL" shall mean the United States Department of Labor
and any successor department or agency.

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

"Domestic Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Domestic
Lending Office" under its name on Schedule A or on the Assignment
and Acceptance by which it became a Lender or such other office
of such Lender as such Lender may from time to time specify by
written notice to Borrower and the Administrative Agent.

"EBITDA" shall mean, with respect to any Person on a
consolidated basis for any period, the sum for such Person for
such period of Consolidated Net Income plus, to the extent
reflected in the income statement of such Person for such period
for which Consolidated Net Income is determined, without
duplication, (i) consolidated Net Interest Expense (exclusive of
interest paid on the 13.75% Senior Subordinated Notes issued by
Amerace Corporation between the Initial Funding Date and
redemption or repurchase of such Notes in connection with the
consummation of the Refinancing), (ii) federal, state and local
income and franchise tax expense, (iii) depreciation expense,
(iv) amortization expense, (v) Securitization Expenses, (vi) any
other noncash items which had the effect of reducing Consolidated
Net Income for such period, but minus any noncash items which had
the effect of increasing Consolidated Net Income for such period
and (vii) non-recurring charges, restructuring charges and
management fees incurred prior to the Closing Date.

"Eligible Hedging Contract" shall mean Hedging
Contracts with any Lender as the counterparty.

-11-

<PAGE> 18

"Eligible Inventory" shall mean Inventory of the
Borrower or any Guarantor which is held for sale or lease or
furnished under any contract of service by the Borrower or any
Guarantor and which is at all times and shall continue to be
acceptable to the Administrative Agent and the Collateral Agent
in all respects in accordance with their reasonable credit
judgment. Standards of eligibility may be established and
revised from time to time by the Administrative Agent in the
Administrative Agent's reasonable credit judgment; provided,
however, in general and without limiting the foregoing, the
following Inventory is not Eligible Inventory:

(a) Inventory which is obsolete, not in good
condition, or not either currently usable or currently
salable in the ordinary course of the business of the
Borrower or any Guarantor;

(b) Inventory which the Administrative Agent
determines, in the exercise of reasonable discretion and in
accordance with the Administrative Agent's customary
business practices, to be unacceptable due to age, type,
category and/or quantity; and

(c) Inventory with respect to which the Collateral
Agent does not have a first and valid fully perfected
security interest for the benefit of itself and the Holders
of Secured Obligations.

"Eligible Receivables" shall mean Receivables created
by the Borrower or any Guarantor in the ordinary course of
business arising out of the sale of goods or rendition of
services by the Borrower or any Guarantor, which Receivables are
and at all times shall continue to be acceptable to the
Administrative Agent and the Collateral Agent in all respects in
accordance with their reasonable credit judgment. Standards of
eligibility may be established and revised from time to time by
the Administrative Agent in the Administrative Agent's reasonable
credit judgment; provided, however, in general and without
limiting the foregoing, the following Receivables are not
Eligible Receivables:

(a) Receivables which remain unpaid sixty (60) days
after the due date indicated on the applicable invoice;

(b) all Receivables owing by a single Account Debtor,
including a currently scheduled Receivable, if fifty percent
(50%) of the balance owing by such Account Debtor remains
unpaid sixty (60) days after the due date indicated on the
applicable invoice;

-12-
<PAGE> 19

Borrower, Parent or any Guarantor;

(d) Receivables with respect to which the Account
Debtor is not a resident of the United States, its
territories or its commonwealths unless the Account Debtor
has supplied the Borrower or any Guarantor, as applicable,
with an irrevocable letter of credit, issued by a financial
institution reasonably satisfactory to the Administrative
Agent, sufficient to cover such Receivable in form and
substance satisfactory to the Administrative Agent;

(e) Receivables with respect to which the Account
Debtor has (i) asserted a counterclaim or (ii) a right of
setoff, but only to the extent of such counterclaim or
setoff;

(f) Receivables for which the prospect of payment or
performance by the Account Debtor is or will be impaired as
determined by the Administrative Agent or the Collateral
Agent in the exercise of its reasonable credit judgment;

(g) Receivables with respect to which the Collateral
Agent does not have a first and valid fully perfected and
enforceable security interest for the benefit of itself and
the Holders of Secured Obligations;

(h) Receivables with respect to which the Account
Debtor is the subject of bankruptcy or a similar insolvency
proceeding or has made an assignment for the benefit of
creditors or whose assets have been conveyed to a receiver
or trustee;

(i) Receivables with respect to which the Account
Debtor's obligation to pay the Receivable is conditional
upon the Account Debtor's approval or is otherwise subject
to any repurchase obligation or return right, as with sales
made on a bill-and-hold, guaranteed sale, sale-and-return,
sale on approval (except with respect to Receivables in
connection with which Account Debtors are entitled to return
Inventory on the basis of the quality of such Inventory) or
consignment basis until such time as the condition is waived
or deemed to have been waived;

(j) Receivables with respect to which the Account
Debtor is located in Indiana or Minnesota (or any other
jurisdiction which adopts a statute or other requirement
with respect to which any Person that obtains business from
within such jurisdiction or is otherwise subject to such
jurisdiction's tax law requiring such Person to make any
required filings in a timely manner in order to enforce its
claims in such jurisdiction's courts or arising under such
jurisdiction's laws); provided, however, such Receivables
shall nonetheless be eligible if, the Borrower or any

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<PAGE> 20

Guarantor, as applicable, has filed a current notice of
business activities report with the applicable state office
or is qualified to do business in such jurisdiction and, at
the time the Receivable was created, was qualified to do
business in such jurisdiction or had on file with the
applicable state office a current notice of business
activities report (or other applicable report);

(k) Receivables with respect to which the Account
Debtor's obligation does not constitute its legal, valid and
binding obligation, enforceable against it in accordance
with its terms; and

(l) Receivables with respect to which the Borrower or
any Guarantor, as applicable, has not yet shipped the
applicable goods or performed the applicable service.

"Enforceable Judgment" means a judgment or order as to
which (a) the Borrower has not demonstrated to the reasonable
satisfaction of the Administrative Agent that the Borrower is
covered by third-party insurance (other than retro-premium
insurance that determines retro-premiums solely on the basis of
losses of the Borrower) therefor or that the Borrower has
adequate reserves therefor and (b) the period, if any, during
which the enforcement of such judgment or order is stayed shall
have expired, it being understood that a judgment or order which
is under appeal or as to which the time in which to perfect an
appeal has not expired shall not be deemed an "Enforceable Judg-
ment" so long as enforcement thereof is effectively stayed pend-
ing the outcome of such appeal or the expiration of such period,
as the case may be; provided that if enforcement of a judgment or
order has been stayed on condition that a bond or collateral
equal to or greater than $1,000,000 be posted or provided, such
judgment or order shall be an "Enforceable Judgment."

"Environmental Lien" shall mean a Lien in favor of any
Governmental Authority for (i) any liability of Borrower or any
of its Subsidiaries under federal or state environmental laws or
regulations, or (ii) damages arising from, or costs incurred by
such Governmental Authority in response to, a Release or
threatened Release of a Contaminant into the environment.

"Environmental Property Transfer Acts" shall mean any
applicable Requirement of Law that conditions, restricts,
prohibits or requires notification or disclosure of any closure,
transfer, sale, lease or mortgage of any Property for reasons
relating to environmental matters including, but not limited to,
any so-called Industrial Site Recovery Acts or Responsible
Property Transfer Acts.

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

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<PAGE> 21

"ERISA Affiliate" shall mean any (i) corporation which
is a member of the same controlled group of corporations (within
the meaning of Section 414(b) of the IRC) as Parent, Borrower or
any of their respective Subsidiaries, (ii) partnership or other
trade or business (whether or not incorporated) under common
control (within the meaning of Section 414(c) of the IRC) with
Parent, Borrower or any of their respective Subsidiaries, and
(iii) member of the same affiliated service group (within the
meaning of Section 414(m) of the IRC) as Parent, Borrower or any
of their respective Subsidiaries, any corporation described in
clause (i) above or any partnership or trade or business
described in clause (ii) above.

"Escrow Agreements" shall mean the agreements entered
into between the Borrower and the Parent, respectively, and the
Administrative Agent, the Collateral Agent and Citibank N.A. as
escrow agent pursuant to which funds advanced by the Lenders to
the Borrower on the Initial Funding Date are held in escrow
pending disbursement to consummate the Refinancing.

"Eurodollar Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Eurodollar
Lending Office" under its name on Schedule A or on the Assignment
and Acceptance by which it became a Lender (or, if no such office
is specified, its Domestic Lending Office) or such other office
of such Lender as such Lender may from time to time specify by
written notice to Borrower and the Administrative Agent.

"Eurodollar Rate Loans" shall mean those Loans
outstanding which bear interest at a rate determined by reference
to the LIBO Rate as provided in Section 2.03(a)(ii) or (iv).

"Event of Default" shall mean any of the occurrences
set forth in Section 10.01 after the expiration of any applicable
grace period expressly provided therein.

"Excess Cash Flow" shall mean, with respect to the
Borrower on a consolidated basis for any period, without
duplication, the difference between:

(a) the sum of (i) Consolidated Net Income (excluding
undistributed earnings in Persons which are 50% or less
owned, directly or indirectly, by the Borrower) for such
period, (ii) depreciation deducted in determining such
Consolidated Net Income, (iii) amortization deducted in
determining such Consolidated Net Income, (iv) other non-
cash items (other than taxes) deducted in determining such
Consolidated Net Income and (v) federal, state and local
income and franchise tax liabilities deducted in determining
such Consolidated Net Income; and

(b) the sum of (i) scheduled payments of the

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<PAGE> 22

principal of the Term Loans pursuant to Section 2.01 made
during such period and voluntary prepayments of the
principal of the Term Loans made during such period, (ii)
the aggregate amount of Capital Expenditures made by the
Borrower and its Subsidiaries during such period, (iii)
capitalized interest paid during such period, (iv) other
capitalized cash costs not included in the calculation of
Consolidated Net Income, including cash payments against
reserves established in any prior period, (v) dividends paid
during such period as permitted pursuant to Section 8.05,
(vi) payments made on account of federal, state and local
income and franchise taxes to the extent deducted in
determining Consolidated Net Income, (vii) principal
payments on any other Indebtedness, and (viii) the increase,
if any, in Working Capital during such period, not to exceed
5% of Working Capital at the beginning of such period.

"Existing Indebtedness" shall mean the Indebtedness of
the Borrower or any of its Subsidiaries reflected on Schedule
1.01-A.

"FDIC" shall mean the Federal Deposit Insurance
Corporation or any successor thereto.

"Federal Reserve Board" shall mean the Board of
Governors of the Federal Reserve System or any Governmental
Authority succeeding to its functions.

"Fee Letters" shall have the meaning ascribed to that
term in Section 2.04(c).

"Fiscal Year" shall mean the fiscal year of Borrower,
which shall be each twelve (12) month period ending on December
31 of each calendar year or such other period as Borrower may
designate and the Requisite Lenders may approve in writing.

"Fixed Charges" shall mean, with respect to the
Borrower on a consolidated basis for any period, the sum of (i)
Debt Service during such period (but without duplication of
payments on Capital Leases to the extent included in Capital
Expenditures during such period), (ii) Capital Expenditures (not
to exceed the permitted amount for such period) during such
period and (iii) Federal, state and local income tax expenses
paid in cash during such period.

"Fixed Charges Coverage Ratio" shall mean, for any
period, the ratio of (a) EBITDA for such period to (b) Fixed
Charges for such period.

"Free Cash Flow Coverage Ratio" shall mean, with
respect to the Borrower on a consolidated basis for any period,
the ratio of (a) Net EBITDA for such period minus Capital
Expenditures (not to exceed the permitted amount for such period)

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<PAGE> 23

of the Borrower during such period to (b) Cash Interest Expenses
for such period.

"Funding Date" shall mean, with respect to any Loan or
Letter of Credit, the date of the funding of such Loan or
issuance of such Letter of Credit.

"GAAP" shall mean generally accepted accounting
principles set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, or in such other
statements by such other entity as may be in general use by
significant segments of the accounting profession, which are
applicable to the circumstances as of the date of determination.

"Governmental Authority" shall mean any nation, state,
sovereign, or government, any federal, regional, state, local or
political subdivision and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of
or pertaining to government including without limitation, any
central bank.

"Guarantor" shall mean any Borrower Subsidiary which
has executed a Subsidiary Guaranty.

"Hedging Contracts" shall mean interest rate, foreign
currency or commodity exchange, swap, collar, cap or similar
agreements entered into by Borrower pursuant to which Borrower
has hedged its interest rate, foreign currency or commodity
exposure.

"Holders of Secured Obligations" shall mean the holders
of the Obligations from time to time and shall refer to (i) each
Lender in respect of its Loans, (ii) the Issuing Bank in respect
of Reimbursement Obligations, (iii) the Administrative Agent, the
Collateral Agent, the Lenders and the Issuing Bank in respect of
all other present and future obligations and liabilities of
Borrower of every type and description arising under or in
connection with this Agreement or any other Loan Document,
(iii) each other Person entitled to indemnification pursuant to
Section 12.04, in respect of the obligations and liabilities of
Borrower to such Person thereunder, (iv) each Lender, in respect
of all obligations and liabilities of Borrower to such Lender as
exchange party or counterparty under any Eligible Hedging
Contract, and (v) their respective successors, transferees and
assigns.

"Indebtedness," as applied to any Person, shall mean
any obligation for the payment of money which is a Contractual
Obligation, and shall include, without limitation but without
duplication, (i) all indebtedness, obligations or other
liabilities of such Person for borrowed money or under any debt

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<PAGE> 24

Securities, whether or not subordinated, (ii) all obligations
with respect to redeemable stock and redemption or repurchase
obligations under any equity securities or profit payment
agreements, (iii) all reimbursement obligations (absolute or
contingent) and other liabilities of such Person with respect to
letters of credit issued for such Person's account or for which
such party is a co-applicant, (iv) all obligations of such Person
to pay the purchase price of property or services, except trade
payables and accrued expenses incurred by such Person in the
ordinary course of business as currently conducted, (v) all
obligations in respect of Capital Leases of such Person, (vi) all
Accommodation Obligations of such Person, (vii) all indebtedness,
obligations or other liabilities, contingent or otherwise, of
such Person or others secured, by a Lien on any asset of such
Person, whether or not such indebtedness, obligations or
liabilities are assumed by or are a personal liability of such
Person, (viii) all obligations upon which interest charges are
customarily paid (including zero coupon instruments), (ix) all
obligations under conditional sale or other title retention
agreements relating to property purchased by such person and (x)
obligations in respect of Hedging Contracts.

"Initial Funding" shall mean the first funding of any
Loans hereunder.

"Initial Funding Date" shall mean the date, if any, on
which the Initial Funding occurs.

"Intellectual Property Agreements" shall mean patent or
trademark security agreements executed by the Borrower and
certain of its Subsidiaries in favor of the Collateral Agent on
behalf of itself and the Holders of Secured Obligations as the
same may be amended, restated, supplemented or otherwise modified
from time to time.

"Interest Coverage Ratio" shall mean, with respect to
the Borrower on a consolidated basis for any period, the ratio of
(a) Net EBITDA for such period to (b) the amount of Cash Interest
Expense for such period.

"Interest Payment Date" shall mean with respect to any
Eurodollar Rate Loan, (i) the last day of each Interest Period
applicable to such Loan and (ii) with respect to any Eurodollar
Rate Loan having an Interest Period in excess of three (3)
calendar months, the last day of each three (3) calendar month
interval during such Interest Period and, in addition, the date
of any refinancing or conversion of such Borrowing with or to a
Borrowing of a different Type.

"Interest Period" shall have the meaning ascribed to
such term in Section 2.07.

"Interest Rate Determination Date" shall mean the date

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<PAGE> 25

on which the Administrative Agent determines the LIBO Rate
applicable to a Borrowing, continuation or conversion of Euro-
dollar Rate Loans. The Interest Rate Determination Date shall be
the second (2nd) Business Day prior to the first day of the
Interest Period applicable to such Borrowing, continuation or
conversion.

"Inventory" shall mean any and all goods, including,
without limitation, goods in transit, wheresoever located,
whether now owned or hereafter acquired by the Borrower or any
Guarantor, which are held for sale or lease, furnished under any
contract of service or held as raw materials, work in process or
supplies, and all materials used or consumed in Borrower's or any
Guarantor's business, and shall include such property the sale or
other disposition of which has given rise to Receivables and
which has been returned to or repossessed or stopped in transit
by Borrower or any Guarantor.

"Investment" shall have the meaning ascribed to that
term in Section 8.03.

"IRC" shall mean the Internal Revenue Code of 1986, as
amended from time to time hereafter, and any successor statute.

"IRS" shall mean the Internal Revenue Service of the
United States or any Governmental Authority succeeding to the
functions thereof.

"Issuing Banks" shall mean the Lenders listed on
Schedule A hereto and any other Lender which, at the Borrower's
request, agrees, in each such Lender's sole discretion, to become
an Issuing Bank for the purpose of issuing Letters of Credit, and
their respective successors and assigns, in each case in such
Lender's separate capacity as an issuer of Standby Letters of
Credit or Commercial Letters of Credit, or both, pursuant to
Article III.

"Lender" shall have the meaning ascribed to such term
in the preamble and each Person which at any time becomes a
Lender pursuant to Section 12.02(a).

"Letter of Credit" shall mean any Commercial Letter of
Credit or any Standby Letter of Credit issued by the Issuing Bank
for the account of Borrower in accordance with the provisions of
Article III.

"Letter of Credit Application" shall mean, with respect
to any proposed Letter of Credit requested to be delivered
pursuant to Section 3.03, an application substantially in the
form of the Issuing Bank's standard form application for letters
of credit of the type to be issued.

"Letter of Credit Obligations" shall mean, at any

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<PAGE> 26

particular time, the sum of (i) outstanding Reimbursement Obli-
gations and (ii) the aggregate undrawn face amount of outstanding
Letters of Credit.

"Letter of Credit Reimbursement Agreement" shall mean,
with respect to a Letter of Credit, such reimbursement agreement
as the Issuing Bank may employ in the ordinary course of business
for its own account.

"Liabilities and Costs" shall mean all liabilities,
claims, obligations, responsibilities, losses, damages, punitive
damages, consequential damages, treble damages, charges, costs
and expenses (including, without limitation, attorneys', experts'
and consulting fees and costs of investigation and feasibility
studies), fines, penalties and monetary sanctions, interest,
direct or indirect, known or unknown, absolute or contingent,
past, present or future.

"LIBO Rate" shall mean, with respect to any Interest
Period applicable to a Borrowing of Eurodollar Rate Loans, an
interest rate per annum equal to the product of (i) the rate of
interest determined by the Administrative Agent to be the average
(rounded upwards, if necessary, to the next 1/16 of 1%) of the
rate per annum determined by each of the Reference Banks to be
the rate per annum at which deposits in Dollars are offered to
the principal London office of such Reference Bank in immediately
available funds in the London interbank market at approximately
11:00 a.m. (London time) on the Interest Rate Determination Date
for such Interest Period, in the approximate amount of such
Reference Bank's portion (or, in the case of Citibank, N.A.,
Citicorp USA, Inc.'s portion) of the relevant Eurodollar Rate
Loan and having a maturity comparable to such Interest Period and
(ii) Statutory Reserves.

"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security
interest, encumbrance (including, but not limited to, easements,
rights of way and the like), judgment, lien (statutory or other),
Environmental Lien, Enforceable Judgment, charge, security
agreement or transfer intended as security, including, without
limitation, any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease, any
financing lease having substantially the same economic effect as
any of the foregoing and, in the case of securities, any purchase
option, call or similar right of a third party with respect to
such securities.

"Loan" shall mean any Revolving Loan or any of the Term
Loans.

"Loans" shall mean, collectively, the Revolving Loans
and the Term Loans.

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<PAGE> 27

"Loan Account" shall have the meaning ascribed to such
term in Section 2.06(d).

"Loan Documents" shall mean this Agreement, the Notes,
the Fee Letters, the Collateral Documents, the Letters of Credit,
the Letter of Credit Applications, the Letter of Credit
Reimbursement Agreements and all other agreements delivered to
the Administrative Agent, the Issuing Bank or any Lender by or on
behalf of Parent, Borrower or any of Borrower's Subsidiaries in
satisfaction or furtherance of the requirements of this Agreement
or any other Loan Document.

"Margin Stock" shall have the meaning ascribed to such
term in Regulation G and Regulation U.

"Material Adverse Effect" shall mean a material adverse
effect (a) upon the business, assets or other properties,
liabilities or condition (financial or otherwise), results of
operations or prospects of Borrower, individually, or the
Consolidated Borrower Group taken as a whole; or (b) upon the
ability of any of the Parent, Borrower or any of the Subsidiaries
of the Borrower to perform any of its Obligations under any Loan
Document to which it is or will be a party, including, without
limitation, payment of the Obligations. In no event shall the
events or conditions described in Schedule 1.01-B be deemed to
have resulted in a Material Adverse Effect or be deemed to be
reasonably likely to have a Material Adverse Effect.

"Mortgages" shall mean any and all mortgages, deeds of
trust, collateral assignments of beneficial interest, leasehold
mortgages and leasehold deeds of trust and covering the owned and
leased real property of Borrower and its Subsidiaries identified
on Schedule 1.01-C, executed by Borrower or a Subsidiary of the
Borrower, as applicable, in favor of the Collateral Agent for the
benefit of itself and the Holders of Secured Obligations, as the
same may be amended, supplemented or otherwise modified from time
to time.

"Multiemployer Plan" shall mean a "multiemployer plan"
as defined in Section 4001(a)(3) of ERISA which is, or within the
immediately preceding six (6) years was, contributed to by either
Borrower or any ERISA Affiliate.

"Net EBITDA" shall mean, with respect to the Person for
any period (a) EBITDA for such period minus (b) Securitization
Expenses for such period.

"Net Interest Expense" shall mean, with respect to any
Person on a consolidated basis for any period, net interest
expense of such Person for such period calculated in accordance
with Agreement Accounting Principles.

"Net Proceeds" shall mean with respect to any

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<PAGE> 28

Prepayment Event (a) the gross amount of cash proceeds (including
in each Fiscal Year the amount of insurance settlements and
condemnation awards in such fiscal year in excess of Set Aside
Amounts (it being understood that Set Aside Amounts shall not be
included in "Net Proceeds", and may be retained by the Borrower
or a Subsidiary of Borrower, as applicable, for the purposes
described in clause (i) of the definition of the term "Set Aside
Amount", unless and until any such amount shall cease to be a
"Set Aside Amount" as a result of any failure to meet any of the
criteria set forth in clause (i) or (ii) of such definition))
paid to or received by the Parent, the Borrower or any Subsidiary
of Borrower in respect of such Prepayment Event (including cash
proceeds subsequently received in respect of such Prepayment
Event in respect of non-cash consideration initially received or
otherwise), less (b) the amount, if any, of all taxes (other than
income taxes) and the Borrower's good-faith best estimate of all
income taxes (to the extent that such amount shall have been set
aside or reserved for the purpose of paying such taxes when due),
and customary fees, commissions, costs and other expenses
(excluding fees and expenses payable to the Borrower, any
Affiliate of the Borrower or any Subsidiary of Borrower, other
than the reasonable fees and expenses of Rosenberg & Liebentritt,
P.C., Greenberg & Pociask, Equity Assets Management, Inc. or any
other Affiliate of Borrower performing services in connection
with any such Prepayment Event) that are incurred in connection
with such Prepayment Event and are payable by the seller or the
transferor of the assets or property or issuer of the securities,
as the case may be, to which such Prepayment Event relates, but
only to the extent not already deducted in arriving at the amount
referred to in clause (a).

"Net Worth" shall mean, with respect to any Person on a
consolidated basis, total shareholder's equity of such Person
determined in accordance with Agreement Accounting Principles
consistently applied; adjusted, however, to exclude the effect of
any valuation adjustments, which are required by GAAP or
Agreement Accounting Principles (as applicable) to be shown as a
direct increase or decrease, as the case may be, in Net Worth,
including adjustments for currency translations and unrealized
gains or losses on marketable securities.

"Notes" shall mean the Notes executed by the Borrower
and delivered to each Lender pursuant to Section 2.02 or
Section 12.02.

"Notice of Borrowing" shall mean, with respect to a
proposed Borrowing pursuant to Section 2.02(a), or a proposed
issuance of a Letter of Credit pursuant to Section 3.04(a), a
notice substantially in the form of Exhibit 4.

"Notice of Conversion/Continuation" shall mean, with
respect to a proposed conversion or continuation of a Loan
pursuant to Section 2.03(c), a notice substantially in the form

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<PAGE> 29

of Exhibit 5.

"Obligations" shall mean the principal of and all
interest on all Loans and Reimbursement Obligations, all fees,
expense reimbursements, taxes, compensation and indemnities
payable by Borrower to the Administrative Agent, the Collateral
Agent, the Issuing Bank or any Lender pursuant to this Agreement
and all other present and future Indebtedness and other
liabilities of Borrower arising pursuant to this Agreement or any
other Loan Document and owing to the Administrative Agent, the
Collateral Agent, the Issuing Bank, any Lender, or any Person
entitled to indemnification pursuant to Section 12.04, or any of
their respective successors, transferees or assigns, arising
under or in connection with this Agreement, any Note, the Fee
Letters, any other Loan Document or any Eligible Hedging
Contract, whether or not evidenced by any note, guaranty or other
instrument, whether or not for the payment of money, whether
direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or
hereafter arising and however arising.

"Officer's Certificate" shall mean, as to any
corporation, a certificate executed on behalf of such corporation
by (i) its chairman or vice chairman of the board (if an officer)
or its president or any vice president or (ii) by its chief
financial officer, its controller or its treasurer.

"Operating Lease" shall mean, as applied to any Person,
any lease of any Property by that Person as lessee which is not a
Capital Lease.

"Other Indebtedness" shall mean all Indebtedness of
Borrower other than the Obligations.

"Parent" shall mean Eagle Industries, Inc., a Delaware
corporation.

"Parent Guaranty" shall mean that certain Guaranty
executed by Parent in favor of the Lenders, the Administrative
Agent and the Collateral Agent dated as of the date hereof, as
the same may be amended, supplemented or otherwise modified from
time to time.

"PBGC" shall mean the Pension Benefit Guaranty
Corporation and any Person succeeding to the functions thereof.

"Permits" shall mean any permit, approval, consent,
authorization, license, variance, or permission required from a
Governmental Authority under an applicable Requirement of Law.

"Permitted Existing Liens" shall mean the Liens on any
property of Parent, Borrower or their respective Subsidiaries, in
each case reflected on Schedule 1.01-D.

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<PAGE> 30

"Person" shall mean any natural person, corporation,
limited partnership, general partnership, joint stock company,
joint venture, association, company, trust, bank, trust company,
land trust, business trust or other organization, whether or not
a legal entity, or any other non-governmental entity, or any
Governmental Authority.

"Plan" shall mean an employee benefit plan defined in
Section 3(3) of ERISA in respect of which either the Borrower or
any ERISA Affiliate is, or within the immediately preceding six
(6) years was, an "employer" as defined in Section 3(5) of ERISA.

"Pledge Agreements" shall mean the Pledge Agreements
dated as of the date hereof executed in favor of the Collateral
Agent for the benefit of itself and the Holders of Secured
Obligations by (i) the Parent in connection with the pledge of
the stock of the Borrower, (ii) the Borrower in connection with
the pledge of the stock of each of the Borrower's Subsidiaries,
and (iii) certain of the Borrower's Subsidiaries in connection
with the pledge of the stock of their respective Subsidiaries, as
any of the same may be amended, restated, supplemented or
otherwise modified from time to time.

"Pooling and Servicing Agreement" shall mean the Eagle
Trade Receivables Master Trust Pooling and Servicing Agreement
dated as of January 1, 1994 among Centrally Held Eagle
Receivables Program, Inc., as transferor, Eagle Industrial
Products Corporation, as Master Servicer, and Continental Bank
N.A., as trustee, as such agreement may be amended, supplemented
or otherwise modified from time to time in accordance with
Section 8.14.

"Potential Event of Default" shall mean an event,
condition or circumstance which, with the giving of notice or the
lapse of time, or both, would constitute an Event of Default.

"Prepayment Event" shall mean (i) any sale, lease,
transfer, assignment, loss, damage or destruction (in the case of
loss, damage or destruction, to the extent covered by insurance)
or other disposition of assets (including trademarks and other
intangibles), business units, individual business assets or
property of the Borrower or any of its Subsidiaries, including
the sale, transfer or disposition of any capital stock thereof;
or (ii) the incurrence, creation or assumption by the Borrower or
its Subsidiaries of any Indebtedness (other than Indebtedness
that is permitted to be incurred pursuant to Section 8.01) or the
issuance or sale by the Parent, the Borrower or any Subsidiaries
of the Borrower of any debt securities or other obligations
convertible into or exchangeable for, or giving any person or
entity any right, option or warrant to acquire from the Parent,
the Borrower or any of the Subsidiaries of Borrower any
Indebtedness or any such convertible or exchangeable debt

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<PAGE> 31

securities or obligations; (iii) the issuance by the Parent of
notes, debentures or other debt securities publicly offered or
privately placed in the amount of at least $75,000,000, unless
and to the extent the proceeds thereof are used to refinance the
Senior Deferred Coupon Notes; and (iv) the issuance by the Parent
or the Borrower of any equity securities or options or warrants
convertible into or exchangeable for such equity securities of
the Parent or the Borrower to any party other than Great American
Management and Investment, Inc., any Person in the Sam Zell Group
or Hellman & Friedman Capital Partners II or any other Hellman &
Friedman entity or in connection with any employee stock option
plan of Borrower or any of its Subsidiaries; provided, however,
that none of (a) the sale of inventory in the ordinary course of
business, (b) the sale and/or contribution of accounts receivable
pursuant to the Receivables Agreements, (c) the sale, lease,
transfer, assignment or other disposition of assets of the
Borrower or any Subsidiary of the Borrower to the Borrower or any
other wholly-owned Subsidiary, (d) the sale, lease, transfer,
assignment or other disposition of assets of the Borrower or any
of its Subsidiaries (other than dispositions described in clauses
(a), (b) or (c) of this proviso) to the extent that the Net
Proceeds of any such disposition of assets received do not in any
one Fiscal Year exceed $10,000,000 (or, if the Applicable Base
Rate Margin for Tranche A is less than 0.75% per annum at such
time, then $15,000,000), (e) the loss, damage or destruction (to
the extent covered by insurance) to the extent that the Net
Proceeds of any single loss do not exceed $2,000,000 or (f) the
sale of Lapp Insulator Company described in Section 2.05(b)(v))
shall be deemed to be a "Prepayment Event".

"Property" shall mean with respect to any Person, any
real or personal property, plant, building, facility, structure,
equipment or unit, or other asset (tangible or intangible) owned,
leased or operated by such Person.

"Pro Rata Share" shall mean, at any particular time and
with respect to any Lender, a fraction (expressed as a
percentage), the numerator of which shall be the then amount of
such Lender's Revolving Credit Commitments, if any, plus the
outstanding balance of such Lender's Term Loan or Term Loans and
the denominator of which shall be the then aggregate amount of
all Revolving Credit Commitments plus the outstanding balance of
all Term Loans.

"RCRA" shall mean the Resource Conservation and
Recovery Act, 42 U.S.C. Sections 6901 et seq., and any successor
statute, and regulations promulgated thereunder.

"Receivables" shall mean and include all of Borrower's
and each Guarantor's presently existing and hereafter arising or
acquired accounts, accounts receivable, and all present and
future rights of Borrower to payment for goods sold or leased or
for services rendered (except those evidenced by instruments or

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<PAGE> 32

chattel paper), whether or not they have been earned by
performance, and all rights in any merchandise or goods which any
of the same may represent, and all rights, title, security and
guaranties with respect to each of the foregoing, including,
without limitation, any right of stoppage in transit.

"Receivables Agreements" shall mean, collectively, the
Pooling and Servicing Agreement, each "Supplement" thereto, the
"Sale and Servicing Agreement" and the "Contribution and Sale
Agreement" (as each such term is defined in the Pooling and
Servicing Agreement).

"Receivables Securitization" shall mean, collectively,
(i) the sales to the Borrower by certain of its Subsidiaries of
Receivables originated by such Subsidiaries, (ii) the sale and/or
contribution by the Borrower to the Receivables Subsidiary of
such Receivables and (iii) the transfer of such Receivables by
the Receivables Subsidiary to the trust created by the Pooling
and Servicing Agreement.

"Receivables Subsidiary" shall mean Centrally Held
Eagle Receivables Program, Inc., a Delaware corporation.

"Reference Banks" shall mean Chemical, Citibank, N.A.
and The First National Bank of Boston.

"Refinancing" shall mean the refinancing of certain of
the Borrower Subsidiaries' outstanding senior indebtedness and
the redemption or repurchase of all of the outstanding 13% Senior
Subordinated Notes issued by the Parent and all of the 13.75%
Senior Subordinated Notes issued by Amerace Corporation.

"Registered Note" shall mean a note that has been
issued in registered form as provided by Section 2.14 hereof.

"Regulation D," "Regulation G," "Regulation T,"
"Regulation U" and "Regulation X" shall mean Regulation D,
Regulation G, Regulation T, Regulation U and Regulation X,
respectively, of the Federal Reserve Board as in effect from time
to time.

"Reimbursement Obligations" shall mean the reimburse-
ment or repayment obligations of Borrower to the Issuing Bank
pursuant to any Letter of Credit and related Letter of Credit
Applications or Letter of Credit Reimbursement Agreements issued
or delivered pursuant to Article III hereof.

"Release" shall mean any release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration from any Property into the
indoor or outdoor environment, including the movement of
Contaminants through or in the air, soil, surface water,
groundwater or Property.

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"Remedial Action" shall mean any action required to
(i) clean up, remove, treat or in any other way address
Contaminants in the indoor or outdoor environment; (ii) prevent a
Release or threat of Release or minimize the further Release of
Contaminants so they do not migrate or endanger or threaten to
endanger public health or welfare or the indoor or outdoor
environment; or (iii) perform pre-remedial studies and
investigations or post-remedial monitoring and care.

"Reportable Event" shall mean the events described in
Sections 4043(b)(1), 4043(b)(4), 4043(b)(5), 4043(b)(6) or
4043(b)(9) of ERISA or the regulations thereunder.

"Requirements of Law" shall mean, as to any Person, the
charter and by-laws or other organizational or governing
documents of such Person, and any law, rule or regulation,
Permit, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding
upon such Person or any of its Property or to which such Person
or any of its property is subject, including, without limitation,
the Securities Act, the Securities Exchange Act, Regulation G,
Regulation T, Regulation U and Regulation X, and any certificate
of occupancy, zoning ordinance, building, environmental or land
use, law, rule, regulation, ordinance or Permit or occupational
safety or health law, rule or regulation.

"Requisite Lenders" means, except as otherwise provided
in Section 12.06(b)(v), Lenders whose Pro Rata Shares, in the
aggregate, are greater than fifty percent (50%); provided,
however, that, in the event that the Revolving Credit Commitments
have been terminated pursuant to the terms of this Agreement,
"Requisite Lenders" means, except as otherwise provided in
Section 12.06(b)(v), Lenders (without regard to such Lenders'
performance of their respective obligations hereunder) whose
aggregate ratable shares (stated as a percentage) of the
aggregate outstanding principal balance of all Loans are greater
than fifty percent (50%); provided, further, that in the event
that the Revolving Credit Commitments have been terminated
pursuant to the terms of this Agreement, at any time when Letters
of Credit are outstanding and all Loans have been repaid,
"Requisite Lenders" means, except as otherwise provided in
Section 12.06(b)(v), Lenders whose participations in the
outstanding Letters of Credit, in the aggregate, are equal to or
greater than fifty percent (50%).

"Restricted Junior Payment" shall mean (i) any dividend
or other distribution, direct or indirect, on account of any
shares of any class of capital stock of Borrower or any of its
Subsidiaries, except a distribution of stock as part of a stock
split and except a dividend payable solely in shares of that
class of stock or in any junior class of stock to the holders of
that class, provided that the issuance of such stock or junior

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<PAGE> 34

class of stock is not an incurrence of Indebtedness, (ii) any
redemption, retirement, sinking fund or similar payment, purchase
or other acquisition for value, direct or indirect, of any shares
of any class of capital stock of Borrower or any of its
Subsidiaries now or hereafter outstanding, (iii) any payment made
to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class
of capital stock of Borrower or any of its Subsidiaries now or
hereafter outstanding, (iv) any payment of a claim for the
rescission of the purchase or sale of, or for material damages
arising from the purchase or sale of, any shares of the capital
stock of Borrower or any of its Subsidiaries or of a claim for
reimbursement, indemnification or contribution arising out of or
related to any such claim for damages or rescission, (v) any
payment of tax-sharing payments, allocated corporate overhead
guaranty fees or management fees to Parent or any of its
Affiliates and (vi) any payment in the nature of a loan from
Borrower or any of its Subsidiaries to Parent or any of Parent's
Subsidiaries.

"Revolving Credit Availability" shall mean, as at any
particular date of determination, the amount by which the lesser
of the Revolving Credit Commitments and the Borrowing Base
exceeds Revolving Loan Usage. For purposes of calculating
Revolving Credit Availability as at any date, all Revolving Loans
requested but not yet advanced and the aggregate face amount of
all Letters of Credit requested but not yet issued will be
treated as advanced and issued in calculating Revolving Loan
Usage unless the Borrower has directed that the requested advance
be disbursed to repay the Revolving Loans.

"Revolving Credit Commitment" means, with respect to
any Lender, the obligation of such Lender to make Revolving Loans
and to participate in Letters of Credit pursuant to the terms and
conditions of this Agreement, and which shall not exceed the
principal amount set forth opposite such Lender's name under the
heading "Revolving Credit Commitment" on the signature pages
hereof or the signature page of the Assignment and Acceptance by
which it became a Lender, as modified from time to time pursuant
to the terms of this Agreement or to give effect to any
applicable Assignment and Acceptance, and "Revolving Credit
Commitments" means the aggregate principal amount of the
Revolving Credit Commitments of all the Lenders, the maximum
amount of which shall be $135,000,000.

"Revolving Credit Facility" shall mean the revolving
credit facility established for Revolving Loans pursuant to
Section 2.01.

"Revolving Credit Termination Date" shall mean the
earlier of (a) December 31, 1999 (or, if the Revolving Credit
Facility is extended pursuant to Section 2.02(g), December 31,
2000) and (b) the date of termination of the Revolving Credit

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<PAGE> 35

Commitments pursuant to Section 2.02(d) or Section 10.02(a).

"Revolving Loan" shall have the meaning ascribed to
such term in Section 2.01(a).

"Revolving Loan Usage" shall mean, at any given time,
the sum of (i) the aggregate outstanding principal balance of
Revolving Loans and (ii) the aggregate outstanding Letter of
Credit Obligations.

"Samuel Zell Group" shall mean Samuel Zell or any of
his affiliates (as such term is defined in Rule 12b-2 of the
Securities Exchange Act) or associates (as such term is defined
in Rule 12b-2 of the Securities Exchange Act).

"Securities" shall mean any stock, shares, voting trust
certificates, bonds, debentures, notes or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as
"securities", or any certificates of interest, shares, or
participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to,
purchase or acquire any of the foregoing, but shall not include
any evidence of the Obligations.

"Securities Act" shall mean the Securities Act of 1933,
as amended to the date hereof and from time to time hereafter,
and any successor statute.

"Securities Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended to the date hereof and from time
to time hereafter, and any successor statute.

"Securitization Expenses" shall mean with respect to
any period all payments, excluding payments with respect to the
redemption of certificates, to the "Investor Certificateholders"
under the Pooling and Servicing Agreement (or any supplement
thereto) during such period.

"Security Agreement" shall mean that certain Borrower
Security Agreement executed by the Borrower in favor of the
Collateral Agent for the benefit of itself and the Holders of
Secured Obligations dated as of the date hereof, as the same may
be amended, restated, supplemented or otherwise modified from
time to time.

"Senior Deferred Coupon Notes" shall mean the Senior
Deferred Coupon Notes issued by the Parent and due in 2003.

"Set Aside Amount" shall mean, in respect of any
insurance settlement or condemnation award which does not in the
aggregate exceed $20,000,000 received by the Borrower or any
Subsidiary of Borrower and (i) set aside by the Borrower or the

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<PAGE> 36

applicable Subsidiary for the replacement or repair of any lost,
destroyed or damaged assets, equipment or other property that
were the subject of an insurable loss, destruction or damage and
for which an insurance settlement was made or (ii) set aside by
the Borrower or the applicable Subsidiary for the replacement of
any real property that was the subject of a taking and in respect
of which a condemnation award was made provided such replacement
or repair is commenced within 6 months of the receipt of any such
condemnation award or insurance proceeds related to such loss,
destruction or damage or such taking, as applicable and pursued
with diligence.

"Solvent" shall mean, when used with respect to any
Person, that at the time of determination:

(i) the fair value of its assets (both at fair
valuation and at present fair saleable value) is equal
to or in excess of the total amount of its liabilities,
including, without limitation, contingent liabilities;
and

(ii) it is then able and expects to be able to
pay its debts as they mature; and

(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.

With respect to contingent liabilities (such as litigation,
guarantees and pension plan liabilities), such liabilities shall
be computed at the amount which, in light of all the facts and
circumstances existing at the time, represent the amount which
can reasonably be expected to become an actual or matured
liability.

"Standby Letter of Credit" shall mean any letter of
credit which is not a Commercial Letter of Credit.

"Statutory Reserves" shall mean a fraction (expressed
as a decimal), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of the
maximum applicable reserve percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a
decimal established by the Federal Reserve Board and any other
banking authority to which the Administrative Agent or any Lender
is subject (a) with respect to the Three-month Secondary CD Rate
(as such term is used in the definition of "Alternate Base
Rate"), for new negotiable nonpersonal time deposits in dollars
of over $100,000 with maturities approximately equal to three
months or (b) with respect to the LIBO Rate, for Eurocurrency
Liabilities (as defined in Regulation D of the Federal Reserve
Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Rate Loans shall be
deemed to constitute Eurocurrency Liabilities and to be subject

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<PAGE> 37

to such reserve requirements without benefit of or credit for
proration, exceptions or offsets which may be available from time
to time to any Lender under such Regulation D. Statutory
Reserves shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.

"Subsidiary" shall mean, with respect to any Person,
any corporation, partnership, trust or other entity of which a
majority of the stock (or equivalent ownership or controlling
interest) having voting power to elect a majority of the Board of
Directors (if a corporation) or to select the trustee or
equivalent controlling interest is directly or indirectly owned
or controlled by such Person or one or more of the other
Subsidiaries of such Person or any combination thereof.

"Subsidiary Guaranties" shall mean the guaranties of
the Borrower's Obligations pursuant to the Guaranty dated as of
the date hereof executed by each of the Borrower's domestic
Subsidiaries (other than the Receivables Subsidiary) in favor of
the Administrative Agent, the Collateral Agent and the Lenders,
as the same may be amended, restated, supplemented or otherwise
modified from time to time.

"Subsidiary Security Agreements" shall mean the
Subsidiary Security Agreement dated as of the date hereof
executed by each of the domestic Subsidiaries of the Borrower
(other than the Receivables Subsidiary) in favor of the
Collateral Agent, for the benefit of itself and the Holders of
Secured Obligations as the same may be amended, restated,
supplemented or otherwise modified from time to time.

"Supermajority Lenders" means, except as otherwise
provided in Section 12.06(b)(v), Lenders whose Pro Rata Shares,
in the aggregate, are greater than sixty-six and two-thirds
percent (66 2/3%); provided, however, that, in the event that the
Revolving Credit Commitments have been terminated pursuant to the
terms of this Agreement, "Supermajority Lenders" means, except as
otherwise provided in Section 12.06(b)(v), Lenders whose
aggregate ratable shares (stated as a percentage) of the
aggregate outstanding principal balance of all Loans are greater
than sixty-six and two-thirds percent (66 2/3%); provided,
further, that in the event that the Revolving Credit Commitments
have been terminated pursuant to the terms of this Agreement, at
any time when Letters of Credit are outstanding and all Loans
have been repaid, "Supermajority Lenders" means, except as
otherwise provided in Section 12.06(b)(v), Lenders whose
participations in the outstanding Letters of Credit, in the
aggregate, are equal to or greater than sixty-six and two-thirds
percent (66-2/3%).

"Tax Sharing Agreement" shall mean that certain Tax
Sharing Agreement among Borrower, Parent and Great American
Management and Investment, Inc. dated as of

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<PAGE> 38

________________, as the same may be amended, restated,
supplemented or otherwise modified from time to time (i) in any
respect which does not (a) result in the Borrower being required
to make any greater payments thereunder either in absolute
amounts or percentage terms or (b) reduce either in absolute
amounts or percentage terms the benefits to the Borrower, without
consent of any Lender or (ii) otherwise with the consent of the
Requisite Lenders.

"Taxes" shall have the meaning ascribed to such term in
Section 2.09(a).

"Term Loans" shall have the meaning ascribed to such
term in Section 2.01(c).

"Termination Event" shall mean (i) a Reportable Event
with respect to any Benefit Plan; (ii) the withdrawal of Borrower
or any ERISA Affiliate from a Benefit Plan during a plan year in
which Borrower or such ERISA Affiliate was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA; (iii) the
imposition of an obligation on Borrower or any ERISA Affiliate
under Section 4041 of ERISA to provide affected parties written
notice of intent to terminate a Benefit Plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the
institution by the PBGC of proceedings to terminate a Benefit
Plan; (v) any event or condition which might constitute grounds
under Section 4042 of ERISA for the distress termination of, or
the appointment of a trustee to administer, any Benefit Plan; or
(vi) the partial or complete withdrawal of Borrower or any ERISA
Affiliate at the time the withdrawing entity was an ERISA
Affiliate from a Multiemployer Plan if such withdrawal could
result in the imposition of withdrawal liability under Section
4219 of ERISA.

"Total Indebtedness" shall mean, with respect to any
Person on a consolidated basis, all Indebtedness of such Person
which would be reflected as long-term debt on a consolidated
balance sheet of such Person prepared in accordance with
Agreement Accounting Principles, including all current maturities
thereof but excluding the Amerace Corporation 13.75% Senior
Subordinated Notes.

"Tranche A Base Rate Loans" shall mean all Revolving
Loans and Tranche A Term Loans which bear interest at a rate
determined by reference to the Alternate Base Rate, as provided
in Section 2.03(a)(i).

"Tranche A Eurodollar Rate Loans" shall mean all
Revolving Loans and Tranche A Term Loans which bear interest at a
rate determined by reference to the LIBO Rate, as provided in
Section 2.03(a)(ii).

"Tranche A Pro Rata Share" shall mean, at any

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<PAGE> 39

particular time and with respect to any Lender, a fraction
(expressed as a percentage), the numerator of which shall be the
then aggregate amount of such Lender's Revolving Credit
Commitment plus the outstanding principal balance of such
Lender's Tranche A Term Loans and the denominator of which shall
be the then aggregate amount of all Revolving Credit Commitments
and the outstanding principal balance of the Tranche A Term
Loans.

"Tranche A Term Loan" shall mean a Term Loan made
pursuant to the Tranche A Term Loan Commitment.

"Tranche A Term Loan Commitment" shall mean, with
respect to any Lender, the obligations of such Lender to make its
Term Loan under the Tranche A Term Loan Facility pursuant to the
terms and conditions of this Agreement, and which shall not
exceed the principal amount set forth opposite such Lender's name
under the heading "Tranche A Term Loan Commitment" on the
signature pages hereof or the signature page of the Assignment
and Acceptance by which it became a Lender, as modified from time
to time pursuant to the terms of this Agreement or to give effect
to any applicable Assignment and Acceptance, and "Tranche A Term
Loan Commitments" means the aggregate principal amount of the
Tranche A Term Loan Commitments of all Lenders, the maximum
amount of which shall be $225,000,000.

"Tranche A Term Loan Termination Date" shall mean the
earlier of (a) December 31, 1999, and (b) the date of
acceleration of the Tranche A Term Loans pursuant to Section
10.02(a).

"Tranche B Base Rate Loans" shall mean all Tranche B
Term Loans which bear interest at a rate determined by reference
to the Alternate Base Rate, as provided in Section 2.03(a)(iii).

"Tranche B Eurodollar Rate Loans" shall mean all
Tranche B Term Loans which bear interest at a rate determined by
reference to the LIBO Rate, as provided in Section 2.03(a)(iv).

"Tranche B Pro Rata Share" shall mean, at any
particular time and with respect to any Lender, a fraction
(expressed as a percentage), the numerator of which shall be the
then outstanding principal balance of such Lender's Tranche B
Term Loans and the denominator of which shall be the then
outstanding principal balance of all Tranche B Term Loans.

"Tranche B Term Loan" shall mean a Term Loan made
pursuant to the Tranche B Term Loan Commitment.

"Tranche B Term Loan Commitment" shall mean, with
respect to any Lender, the obligations of such Lender to make its
Term Loan under the Tranche B Term Loan Facility pursuant to the
terms and conditions of this Agreement, and which shall not

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<PAGE> 40

exceed the principal amount set forth opposite such Lender's name
under the heading "Tranche B Term Loan Commitment" on the
signature pages hereof or the signature page of the Assignment
and Acceptance by which it became a Lender, as modified from time
to time pursuant to the terms of this Agreement or to give effect
to any applicable Assignment and Acceptance, and "Tranche B Term
Loan Commitments" means the aggregate principal amount of the
Tranche B Term Loan Commitments of all Lenders, the maximum
amount of which shall be $65,000,000.

"Tranche B Term Loan Termination Date" shall mean the
earlier of (a) December 31, 2000, and (b) the date of
acceleration of the Tranche B Term Loans pursuant to Section
10.02(a).

"Transaction Costs" shall mean the fees, costs and
expenses payable by Borrower or any of its Subsidiaries pursuant
hereto or in connection herewith or in respect hereof or of the
other Loan Documents.

"Transaction Documents" shall mean the Loan Documents
and the Contribution Agreement.

"Type" when used in respect of any Loan or Borrowing,
shall refer to the rate by reference to which interest on such
Loan or on the Loans comprising such Borrowing is determined.

"U.S. Person" shall mean a citizen or resident of the
United States of America, a corporation, partnership or other
entity created or organized in or under any laws of the United
States of America, or any estate or trust that is subject to
Federal income taxation regardless of the source of its income.

"U.S. Taxes" shall mean any present or future tax,
assessment or other charge or levy imposed by or on behalf of the
United States of America or any taxing authority thereof.

"Working Capital" shall mean (i) current assets less
cash minus (ii) current liabilities less the current portion of
long-term debt.

1.02. Computation of Time Periods. In this Agreement,
in the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including"
and the words "to" and "until" each mean "to but excluding".
Periods of days referred to in this Agreement shall be counted in
calendar days unless Business Days are expressly prescribed.

1.03. Accounting Terms. For purposes of this
Agreement, all accounting terms not otherwise defined herein
shall have the meanings assigned to them in conformity with
Agreement Accounting Principles.

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<PAGE> 41

1.04. Other Definitional Provisions. Whenever the
context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the
phrase "without limitation". References to "Articles,"
"Sections," "subsections," "Schedules," "Exhibits" and "the
preamble" shall be to Articles, Sections, subsections, Schedules,
Exhibits and the preamble, respectively, of this Agreement unless
otherwise specifically provided.

ARTICLE II
AMOUNTS AND TERMS OF LOANS

2.01. Revolving Loans and Term Loans.

(a) Availability. Subject to the terms and conditions
set forth in this Agreement, each Lender hereby severally and not
jointly agrees to make revolving loans, in Dollars (each
individually, a "Revolving Loan" and, collectively, the
"Revolving Loans") to Borrower and to participate in Letters of
Credit issued pursuant to Article III hereof from time to time
during the period from the Initial Funding Date to the Business
Day immediately preceding the Revolving Credit Termination Date,
in an amount which shall not exceed such Lender's Tranche A Pro
Rata Share of the Revolving Credit Availability at such time.

(b) Several Commitments. All Revolving Loans
comprising the same Borrowing under this Agreement shall be made
by the Lenders simultaneously and proportionately to their
respective Tranche A Pro Rata Shares, it being understood that no
Lender shall be responsible for any failure by any other Lender
to perform its obligation to make a Revolving Loan hereunder and
that the Commitment of any Lender shall not be increased or
decreased without the prior written consent of such Lender as a
result of the failure by any other Lender to perform its
obligation to make a Revolving Loan. The failure of any Lender
to make available to the Administrative Agent any Borrowing of
the Commitments shall not relieve any other Lender of its
obligation hereunder to make available to the Administrative
Agent such other Lender's Tranche A Pro Rata Share of any
Borrowing of the Commitments on the date such funds are to be
made available pursuant to the terms of this Agreement.

(c) Term Loans. Subject to the terms and conditions
set forth in this Agreement, each Lender hereby severally and not
jointly agrees to make on the Initial Funding Date, a term loan
or loans, in Dollars, to the Borrower in an amount equal to such
Lender's Tranche A Term Loan Commitment and Tranche B Term Loan
Commitment, respectively, (each individually, a "Term Loan" and,
collectively, the "Term Loans"). All Term Loans shall be made by
the Lenders on the Initial Funding Date simultaneously and
proportionately to their respective Tranche A Pro Rata Shares and

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<PAGE> 42

Tranche B Pro Rata Shares, respectively, it being understood that
no Lender shall be responsible for any failure by any other
Lender to perform its obligation to make any Term Loan hereunder
nor the Tranche A Term Loan Commitment or Tranche B Term Loan
Commitment of any Lender be increased or decreased as a result of
any such failure. The Borrower shall deliver to the
Administrative Agent a Notice of Borrowing, signed by it, no
later than 12:00 noon (New York City time) at least one (1)
Business Day in advance of the Initial Funding Date. Such Notice
of Borrowing shall specify (i) the aggregate amount of the
Tranche A Term Loans and the Tranche B Term Loans, respectively,
and (ii) instructions for the disbursement of the proceeds of the
Term Loans. The Term Loans shall initially be Base Rate Loans
and thereafter may be continued as Base Rate Loans or converted
into Eurodollar Rate Loans in the manner provided in Section
2.03(c) and subject to the conditions and limitations therein set
forth and set forth in Section 2.08. Any Notice of Borrowing
given pursuant to this Section 2.01(c) shall be irrevocable.
Promptly after receipt of the Notice of Borrowing under Section
2.01(c) in respect of the Term Loans, the Administrative Agent
shall notify each Lender by telex or telecopy, or other similar
form of transmission, of the proposed Borrowing. Each Lender
shall deposit an amount equal to its Tranche A Pro Rata Share of
the Tranche A Term Loans and its Tranche B Pro Rata Share of the
Tranche B Term Loans, respectively, with the Administrative Agent
at its office in New York, New York, in immediately available
funds, not later than 11:00 a.m. (New York City time) on the
Initial Funding Date specified in the Notice of Borrowing.
Subject to the fulfillment of the conditions precedent set forth
in Section 4.01, the Administrative Agent shall make the proceeds
of such amounts received by it available to the Borrower at the
Administrative Agent's office in New York, New York on such
Initial Funding Date and shall disburse such proceeds in
accordance with the Borrower's disbursement instructions set
forth in such Notice of Borrowing. The failure of any Lender to
deposit the amount described above with the Administrative Agent
on the Initial Funding Date shall not relieve any other Lender of
its obligations hereunder to make its Term Loan or Term Loans on
the Initial Funding Date. The Term Loans shall be payable as
follows:

<TABLE>
<CAPTION>
Amount of Tranche A Term Loans
Period Payable During Such Period
<S> <C>
Closing Date through
December 31, 1994 $19,500,000
January 1, 1995 through
December 31, 1995 24,500,000
January 1, 1996 through
December 31, 1996 34,000,000
January 1, 1997 through
December 31, 1997 39,000,000

</TABLE>
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<PAGE> 43

<TABLE>
<S> <C>
January 1, 1998 through
December 31, 1998 49,000,000
January 1, 1999 through
December 31, 1999 59,000,000
</TABLE>

<TABLE>
<CAPTION>
Amount of Tranche B Term Loans
Period Payable During Such Period
<S> <C>
Closing Date through
December 31, 1994 $ 500,000
January 1, 1995 through
December 31, 1995 500,000
January 1, 1996 through
December 31, 1996 1,000,000
January 1, 1997 through
December 31, 1997 1,000,000
January 1, 1998 through
December 31, 1998 1,000,000
January 1, 1999 through
December 31, 1999 1,000,000
January 1, 2000 through
December 31, 2000 60,000,000
</TABLE>

Each amortization payment for each period described above shall
be payable in equal installments of principal, plus accrued
interest, on the last calendar day of each calendar quarter
during such period beginning with June 30, 1994.

(d) Optional Repayments and Maturity. The Borrower
may, at any time and from time to time, prepay any Base Rate
Loan, in whole or in part upon at least two (2) Business Days'
prior written notice to the Administrative Agent (which the
Administrative Agent shall promptly transmit to each Lender).
Eurodollar Rate Loans may be prepaid (A) in whole or in part on
the expiration date of the then applicable Eurodollar Interest
Period and (B) upon at least three (3) Business Days' prior
written notice to the Administrative Agent (which the
Administrative Agent shall promptly transmit to each Lender) and
only upon payment of the amounts described in Section 2.08(d).
Unless the aggregate outstanding principal balance of the Term
Loans is to be prepaid in full, voluntary prepayments of the Term
Loans shall be in an aggregate minimum amount of $1,000,000 and
integral multiples of $1,000,000 in excess of that amount. Each
voluntary prepayment shall first be allocated ratably between the
Tranche A Term Loans and the Tranche B Term Loans and then
applied to the unpaid installments of the Tranche A Term Loans
and Tranche B Term Loans, respectively, in the following order:
(i) 50% of the amount of such prepayment to the unpaid
installments of the Tranche A Term Loans and Tranche B Term
Loans, respectively, in the order of their maturity and (ii) 50%
of the amount of such prepayment to the unpaid installments of
the Tranche A Term Loans and Tranche B Term Loans, respectively,

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<PAGE> 44

in inverse order of their maturity. Any notice of prepayment
given to the Administrative Agent under this Section 2.01(d)
shall specify the date (which shall be a Business Day) of
prepayment, the aggregate principal amount of the prepayment and
any allocation of such amount among Base Rate Loans and
Eurodollar Rate Loans. When notice of prepayment is delivered as
provided herein, the principal amount of the Loans specified in
the notice shall become due and payable on the prepayment date
specified in such notice.

Each Lender's Revolving Credit Commitment shall expire, and each
of the Revolving Loans then outstanding shall mature and be
repaid by Borrower, without further action on the part of the
Lenders, on the Revolving Credit Termination Date; each Lender's
Tranche A Term Loans then outstanding shall mature and be repaid
by Borrower, without further action on the part of the Lenders,
on the Tranche A Term Loan Termination Date, and each Lender's
Tranche B Term Loans then outstanding shall mature and be repaid
by Borrower, without further action on the part of the Lenders,
on the Tranche B Term Loan Termination Date.

(e) Minimum Amounts. Loans made on any Funding Date
shall be in integral multiples of $500,000 and in the aggregate
minimum amount of $1,000,000, in the case of Loans constituting
Base Rate Loans, and in integral multiples of $1,000,000 and in
the aggregate minimum amount of $5,000,000, in the case of Loans
constituting Eurodollar Rate Loans.

2.02. Revolving Loan Facility Mechanics.

(a) Notice of Borrowing. Whenever Borrower desires to
borrow under Section 2.01(a), Borrower shall deliver to the
Administrative Agent a Notice of Borrowing no later than 12:00
noon (New York City time) (i) at least one (1) Business Day in
advance of the proposed Funding Date, in the case of a Borrowing
of Base Rate Loans, and (ii) at least three (3) Business Days in
advance of the proposed Funding Date, in the case of a Borrowing
of Eurodollar Rate Loans. The Notice of Borrowing shall specify
(A) the Funding Date (which shall be a Business Day) in respect
of the Loan, (B) the amount of the proposed Borrowing, (C)
whether the proposed Borrowing will be of Base Rate Loans or
Eurodollar Rate Loans, and (D) in the case of Eurodollar Rate
Loans, the requested Interest Period. In lieu of delivering the
above-described Notice of Borrowing, and only with the consent of
the Administrative Agent in its sole discretion at such time,
Borrower may give the Administrative Agent telephonic notice of
any proposed Borrowing by the time required under this Section
2.02(a); provided that, in the event the Administrative Agent so
consents, such notice shall be confirmed in writing by delivery
to the Administrative Agent promptly (but in no event later than
12:00 noon on the Funding Date of the requested Loan) of a Notice
of Borrowing. Any Notice of Borrowing (or telephonic notice in
lieu thereof) pursuant to this Section 2.02(a) shall be

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<PAGE> 45

irrevocable.

(b) Making of Loans. Promptly after receipt of a
Notice of Borrowing under Section 2.02(a) (or telephonic notice
in lieu thereof if the Administrative Agent consents to such
telephonic notice), the Administrative Agent shall notify each
Lender by telex or telecopy or other similar form of teletrans-
mission, of the proposed Borrowing. Each Lender shall make the
amount of its Revolving Loan available to the Administrative
Agent in Dollars and in immediately available funds, not later
than 11:00 a.m. (New York City time) on the Funding Date. After
the Administrative Agent's receipt of the proceeds of such
Revolving Loans, the Administrative Agent shall (unless it has
not received the Notice of Borrowing in satisfaction of the
requirements of Section 4.02(a) or has been informed that any of
the other conditions precedent have not been satisfied) make the
proceeds of such Revolving Loans available to Borrower on such
Funding Date and shall disburse such funds in Dollars and in
immediately available funds to an account of Borrower, designated
in writing by Borrower in the Notice of Borrowing.

(c) Failure to Fund by Lender. Unless the
Administrative Agent shall have been notified by any Lender prior
to any Funding Date in respect of any Borrowing of Revolving
Loans that such Lender does not intend to make available to the
Administrative Agent such Lender's Revolving Loan on such Funding
Date, the Administrative Agent may assume that such Lender has
made such amount available to the Administrative Agent on such
Funding Date and the Administrative Agent in its sole discretion
may, but shall not be obligated to, make available to Borrower a
corresponding amount on such Funding Date. If such corresponding
amount is not in fact made available to the Administrative Agent
by such Lender on or prior to 11:00 a.m. (New York City time) on
a Funding Date, such Lender agrees to pay and Borrower agrees to
repay to the Administrative Agent forthwith on demand such corre-
sponding amount together with interest thereon, for each day from
the date such amount is made available to Borrower until the date
such amount is paid or repaid to the Administrative Agent, at (i)
in the case of such Lender, the Federal Funds Effective Rate (as
such term is defined in the definition of Alternate Base Rate)
for the first three (3) Business Days and thereafter at the
Alternate Base Rate, and (ii) in the case of Borrower, the
interest rate which would be applicable at the time to a
Borrowing of Base Rate Loans. If such Lender shall pay to the
Administrative Agent such corresponding amount, such amount so
paid shall constitute such Lender's Revolving Loan, and if both
such Lender and Borrower shall have paid and repaid, respec-
tively, such corresponding amount, the Administrative Agent shall
promptly pay over to Borrower such corresponding amount in same
day funds, but Borrower shall remain obligated for all interest
thereon. Nothing in this Section 2.02(c) shall be deemed to
relieve any Lender of its obligation hereunder to make its
Revolving Loan on any Funding Date.

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<PAGE> 46

(d) Voluntary Reduction of Commitments. Borrower
shall have the right, at any time and from time to time, (i) to
terminate the Revolving Credit Commitments in whole, without
premium or penalty, if no Revolving Loans or Letters of Credit
are then outstanding, and no Revolving Loans or Letters of Credit
have been requested but not yet advanced, or (ii) subject to the
second to last sentence of this Section 2.02(d), permanently to
reduce in part, without premium or penalty, the Revolving Credit
Commitments up to the amount by which the Revolving Credit
Commitments exceed the sum of (A) the Revolving Loan Usage,
(B) the aggregate principal amount of all Revolving Loans
requested hereunder but not yet advanced and (C) the aggregate
face amount of all Letters of Credit requested hereunder but not
yet issued. Borrower shall give not fewer than five (5) Business
Days' prior written notice to the Administrative Agent
designating the date (which shall be a Business Day) of such
termination or reduction and the amount of any partial reduction.
Promptly after receipt of a notice of such termination or
reduction, the Administrative Agent shall notify each Lender of
the proposed termination or reduction. Such termination or
partial reduction of the Revolving Credit Commitments shall be
effective on the date specified in the Borrower's notice and
shall reduce the Revolving Credit Commitment of each Lender
proportionately in accordance with its Pro Rata Share. Any such
partial reduction of the Revolving Credit Commitments shall be in
an aggregate minimum amount of $1,000,000 and integral multiples
of $1,000,000 in excess of that amount. Any notice of reduction
or termination pursuant to this Section 2.02(d) shall be
irrevocable.

(e) Retention of Rights and Remedies. Notwithstanding
the termination of this Agreement on December 31, 2000, until all
of the Obligations shall have been fully and indefeasibly paid in
cash and satisfied and all financing arrangements among Borrower
and the Lenders pursuant to any Loan Document shall have been
terminated, all of the rights and remedies under this Agreement
and the other Loan Documents shall survive and the Administrative
Agent shall be entitled to retain its security interest in and to
all existing and future Collateral for the benefit of itself and
the Holders of Secured Obligations.

(f) Notes. The Borrower shall execute and deliver to
each Lender (or to the Administrative Agent on behalf of each
Lender) on or before the Initial Funding Date promissory notes
substantially in the form of the applicable notes in Exhibit 6 to
evidence the aggregate amount of that Lender's Loans and with
other appropriate insertions. Each Lender is hereby authorized
to, and prior to any transfer of the Notes issued to it each
Lender shall, endorse the date and amount of each Loan made by
such Lender and each payment or prepayment of principal of the
Loans evidenced thereby on the schedule annexed to and
constituting a part of such Note, which endorsement shall

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<PAGE> 47

constitute prima facie evidence, absent manifest error, of the
accuracy of the information so endorsed, provided that failure by
any such Lender to make such endorsement shall not affect the
obligations of the Borrower hereunder or under such Note. In
lieu of endorsing such schedule as hereinabove provided, prior to
any transfer of such Note, each Lender is hereby authorized, at
its option, to record such Loans and such payments or prepayments
in its books and records, such books and records constituting
prima facie evidence, absent manifest error, of the accuracy of
the information contained therein; provided, however, that if the
Loan Account differs from the information endorsed by a Lender on
such Lender's Notes, the Loan Account, absent manifest error,
shall govern.

(g) Extension of Revolving Credit Facility. Subject
to the terms and conditions set forth in this Agreement, the
Revolving Credit Facility shall be in effect until December 31,
1999 (the "Initial Termination Date"), unless it is extended
pursuant hereto to December 31, 2000 (the "Extended Termination
Date"). During the period that is not more than 180 days and not
less than 90 days prior to the Initial Termination Date, the
Borrower may request in writing (the "Extension Request") an
extension of the Revolving Credit Facility to the Extended
Termination Date. The Revolving Credit Facility shall be so
extended if, after receipt of the Extension Request, the
Supermajority Lenders approve such extension within 60 days after
receipt by the Administrative Agent of the Extension Request;
provided, however, that the failure by any Lender to respond to
the Extension Request shall be deemed to constitute such Lender's
denial of such Extension Request. If the Extension Request is
not made or is made but not approved by the Supermajority
Lenders, the Revolving Credit Facility shall expire on the
Initial Termination Date. Notwithstanding anything herein to the
contrary, no Lender that has denied its consent to the Extension
Request ("Dissenting Lender") shall be bound by the approval of
the Extension Request granted by the Supermajority Lenders, and
the Revolving Credit Commitment of each Dissenting Lender, and
each Dissenting Lender's participation in the Letters of Credit,
shall expire on the Initial Termination Date. The Borrower shall
have the right, at any time, to replace a Dissenting Lender with
another financial institution reasonably acceptable to the
Administrative Agent. In the event that one or more Dissenting
Lenders are not so replaced prior to the Initial Termination
Date, on such date the amount of the Revolving Credit Commitments
shall be reduced by the aggregate amount of the expiring
Revolving Credit Commitments of Dissenting Lenders not so
replaced, each remaining Lender's Pro Rata Share shall be
adjusted accordingly (including its pro rata participation in the
Letters of Credit) and the Borrower shall pay to each Dissenting
Lender all amounts due and owing to such Dissenting Lender
hereunder or under any other Loan Document, including, without
limitation, the aggregate outstanding principal amount of the
Revolving and Tranche A Term Loans owed to such Dissenting

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Lender, together with accrued interest and fees thereon through
the date of repayment and amounts payable under Sections 2.09 and
2.10, all of which amounts shall be immediately due and payable
at such time. Upon the replacement of a Dissenting Lender or
payment of a Dissenting Lender's Obligations on the Initial
Termination Date in accordance with the terms hereof, unless and
to the extent such Dissenting Lender shall then hold any Tranche
B Term Loans, such Dissenting Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of
Sections 2.08, 2.09, 2.10, 3.09, 12.03 and 12.04.

2.03. Interest on the Loans.

(a) Rate of Interest. All Loans shall bear interest
on the unpaid principal amount thereof from the date made until
paid in full at a fluctuating rate determined from time to time
by reference to the Alternate Base Rate or the LIBO Rate. The
applicable basis for determining the rate of interest shall be
selected by Borrower at the time a Notice of Borrowing is given
by the Borrower or at the time a Notice of Conversion/Continua-
tion is delivered by Borrower pursuant to Section 2.03(c); pro-
vided, however, that Borrower may not select the LIBO Rate as the
applicable basis for determining the rate of interest on a Loan
(1) to be made on the Initial Funding Date, (2) if at the time of
such selection a Potential Event of Default or Event of Default
exists or (3) if such a selection would be otherwise prohibited
by the terms of this Agreement. If on any day a Loan is out-
standing with respect to which a Notice of Borrowing or a Notice
of Conversion/Continuation has not been delivered to the
Administrative Agent in accordance with the terms of this
Agreement specifying the basis for determining the rate of
interest, then for each such day such Loan shall be a Base Rate
Loan. Loans shall bear interest, subject to Section 2.03(d), at
the following rates:

(i) if a Tranche A Base Rate Loan, then at a rate
per annum equal to the sum of (A) the Applicable Base
Rate Margin for Tranche A and (B) the Alternate Base
Rate as in effect from time to time as interest
accrues;

(ii) if a Tranche A Eurodollar Rate Loan, then at
a rate per annum equal to the sum of (A) the Applicable
Eurodollar Rate Margin for Tranche A and (B) the LIBO
Rate determined for the applicable Interest Period;

(iii) if a Tranche B Base Rate Loan, then at a
rate per annum equal to the sum of (A) the Applicable
Base Rate Margin for Tranche B and (B) the Alternate
Base Rate as in effect from time to time as interest
accrues; and

(iv) if a Tranche B Eurodollar Rate Loan, then at

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a rate per annum equal to the sum of (A) the Applicable
Eurodollar Rate Margin for Tranche B and (B) the LIBO
Rate determined for the applicable Interest Period.

Upon receipt by the Administrative Agent of the first set of
financial statements delivered pursuant to Section 6.01(b) after
the first anniversary of the Closing Date and each set of such
financial statements delivered pursuant to Section 6.01(b)
thereafter, the Applicable Base Rate Margin for Tranche A and the
Applicable Eurodollar Rate Margin for Tranche A shall be
adjusted, such adjustment being effective on the first Business
Day after receipt of such financial statements, provided,
however, if the Borrower shall not have delivered such financial
statements on a timely basis in accordance with Section 6.01(b),
beginning with the date upon which such financial statements
should have been delivered and continuing until such financial
statements are delivered, the Applicable Base Rate Margin for
Tranche A and the Applicable Eurodollar Rate Margin for Tranche A
shall be adjusted based on the assumption that the Free Cash Flow
Coverage Ratio was less than 2.5 to 1.0.

(b) Interest Payments. Subject to Section 2.03(d),
(i) interest accrued on each Base Rate Loan shall be payable in
arrears (A) on the last calendar day of each calendar quarter
occurring after the Initial Funding Date, (B) upon the prepayment
in full of the Loans and the termination of all Commitments under
this Agreement, (C) upon the date any principal of the Loan is
due, with respect to the principal amount then due and (D) on the
Tranche A Term Loan Termination Date or Tranche B Term Loan
Termination Date, as applicable, and (ii) interest accrued on
each Eurodollar Rate Loan shall be payable in arrears (A) on each
Interest Payment Date applicable to such Eurodollar Rate Loan,
(B) upon the prepayment in full of the Loans and the termination
of all Commitments under this Agreement, (C) upon the prepayment
thereof upon the date any principal of the Loan is due, with
respect to the principal then due and (D) on the Tranche A Term
Loan Termination Date or Tranche B Term Loan Termination Date, as
applicable and provided further that no adjustment which reduces
the Applicable Base Rate Margin for Tranche A or the Applicable
Eurodollar Rate Margin for Tranche A shall be made if on the date
such adjustment is to become effective an Event of Default or
Potential Event of Default exists.

(c) Conversion or Continuation. (i) Subject to the
provisions of Sections 2.07 and 2.08, Borrower shall have the
option (A) to convert at any time all or any part of outstanding
Loans which comprise part of the same Borrowing and which, in the
aggregate, equal or exceed $5,000,000 from Base Rate Loans to
Eurodollar Rate Loans; or (B) to convert all or any part of
outstanding Loans which comprise part of the same Borrowing and
which, in the aggregate, equal or exceed $1,000,000 from
Eurodollar Rate Loans to Base Rate Loans on the expiration date
of any Interest Period applicable thereto or upon the payment of

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<PAGE> 50

compensation payable pursuant to Section 2.08(d); or (C) upon the
expiration of any Interest Period applicable to a Borrowing of
Eurodollar Rate Loans, to continue all or any portion of such
Loans equal to or in excess of $5,000,000 as Eurodollar Rate
Loans of the same type, and the succeeding Interest Period of
such continued Loans shall commence on the expiration date of the
Interest Period applicable thereto; provided that no outstanding
Loan may be continued as, or be converted into, a Eurodollar Rate
Loan if any Potential Event of Default or Event of Default exists
or if such a continuation or conversion would otherwise be
prohibited by the terms of this Agreement.

(ii) In the event Borrower shall elect to convert or
continue a Loan under this Section 2.03(c), Borrower shall
deliver a Notice of Conversion/Continuation to the Administrative
Agent no later than 12:00 noon (New York City time) (A) at least
one (1) Business Day in advance of the proposed conversion date
in the case of a conversion to a Base Rate Loan and (B) at least
three (3) Business Days in advance of the proposed conversion or
continuation date in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan. A Notice of Conversion/
Continuation shall specify (1) the proposed conversion or
continuation date (which shall be a Business Day), (2) the amount
of the Loan to be converted or continued, (3) the nature of the
proposed conversion or continuation, and (4) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the
requested Interest Period. If no Interest Period is specified in
any such Notice of Conversion/Continuation with respect to a
Eurodollar Rate Loan, the Borrower shall be deemed to have
selected an Interest Period of one month's duration. In lieu of
delivering the above-described Notice of Conversion/Continuation,
Borrower may give the Administrative Agent telephonic notice of
any proposed conversion or continuation by the time required
under this Section 2.03(c); provided that such notice shall be
confirmed in writing by delivery to the Administrative Agent
promptly (but in no event later than 12:00 noon (New York City
time) on the proposed conversion or continuation date) of a
Notice of Conversion/Continuation. Promptly after receipt of a
Notice of Conversion/Continuation under this Section 2.03(c) (or
telephonic notice in lieu thereof), the Administrative Agent
shall notify each Lender by telex, telecopy, telephone or other
similar form of transmission, of the proposed conversion or
continuation.

(iii) Any Notice of Conversion/Continuation for
conversion to, or continuation of, a Loan (or telephonic notice
in lieu thereof) shall be irrevocable and the Borrower shall be
bound to convert or continue in accordance therewith.

(iv) Any portion of a Borrowing maturing or required
to be repaid in less than one month may not be converted into or
continued as a Eurodollar Rate Loan.

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<PAGE> 51

(d) Default Interest. Notwithstanding the rates of
interest specified in Section 2.03(a) and the payment dates
specified in Section 2.03(b), (i) from and after the occurrence
of an Event of Default and for so long thereafter as such Event
of Default is continuing, the principal balance of all Loans and
other Obligations then outstanding (including, without
limitation, all amounts due and payable pursuant to
Section 10.02(a)) and, to the extent permitted by applicable law,
any interest payments on the Loans not paid when due, shall bear
interest payable upon demand at a rate per annum equal to the sum
of (A) two percent (2.0%) and (B) the interest rate otherwise
applicable to Tranche A Base Rate Loans (the "Default Rate").

(e) Computation of Interest. Interest on all
Agreement Obligations (other than those on which the interest
rate is determined by reference to the Prime Rate) shall be
computed on the basis of the actual number of days elapsed in the
period during which interest accrues and a year of 360 days.
Interest on all Agreement Obligations with respect to which the
interest rate is determined by reference to the Prime Rate shall
be computed on the basis of the actual number of days elapsed in
the period during which interest accrues and a year of 365 or 366
days, as applicable. In computing interest on any Loan, the date
of the making of the Loan or the first day of an Interest Period,
as the case may be, shall be included and the date of payment or
the expiration date of an Interest Period, as the case may be,
shall be excluded; provided that if a Loan is repaid on the same
day on which it is made, one (1) day's interest shall be paid on
that Loan.

(f) Changes; Legal Restrictions. In the event that
after the date hereof (i) the adoption of or any change in any
law, treaty, rule, regulation, guideline or determination of a
Governmental Authority or any change in the interpretation or
application thereof by a Governmental Authority, or (ii)
compliance by any Lender with any request or directive (whether
or not having the force of law and whether or not the failure to
comply therewith would be unlawful) from any central bank or
other Governmental Authority or quasi-governmental authority
exercising jurisdiction, power or control over banks or financial
institutions generally, does impose, modify, or hold applicable,
in the reasonable determination of a Lender, any reserve, special
deposit, compulsory loan, FDIC insurance, capital allocation or
similar requirement against assets held by, or deposits or other
liabilities (including those pertaining to Letters of Credit) in
or for the account of, advances or loans by, Commitments made, or
other credit extended by, or any other acquisition of funds by, a
Lender or any Applicable Lending Office of such Lender (except
with respect to Base Rate Loans, so long as the Base Rate in
effect at the time is determined under clause (a) in the
definition of "Alternate Base Rate"), and the result of any of
the foregoing is to increase the cost to such Lender of making,
renewing or maintaining the Loans or its Commitment or issuing or

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<PAGE> 52

participating in any Letter of Credit or to reduce any amount
receivable hereunder or thereunder; then, in any such case,
Borrower shall upon written notice from and demand by that Lender
pay to such Lender, within thirty (30) Business Days of the date
specified in such notice and demand, such amount or amounts
(based upon a reasonable allocation thereof by such Lender to the
financing transactions contemplated by this Agreement and
affected by this Section 2.03(f)) as may be necessary to compen-
sate that Lender for any such additional cost incurred or reduced
amount received, but without interest. Such Lender shall deliver
to the Borrower a written statement of the costs or reductions
claimed and the basis therefor, and the reasonable allocation
made by such Lender of such costs and reductions, which statement
shall, in the absence of manifest error, be conclusive. If a
Lender subsequently recovers from another Person any amount
previously paid by Borrower pursuant to this Section 2.03(f),
such Lender shall, within thirty (30) days after receipt of such
refund and to the extent permitted by applicable law, pay to the
Borrower, without interest, the amount of any such recovery.

2.04. Fees.

(a) Commitment Fee. The Borrower shall pay to the
Administrative Agent, for the account of the Lenders in
accordance with their respective Tranche A Pro Rata Shares except
as set forth in Section 12.06(b)(vi), a fee (the "Commitment
Fee"), accruing at the rate of one-half of one percent (0.50%)
per annum on the average daily amount by which the Revolving
Credit Commitments exceed Revolving Loan Usage for the period
commencing on the date hereof and ending on the Revolving Credit
Termination Date, provided, however, if the Applicable Eurodollar
Rate Margin for Tranche A is reduced to 1.375% per annum, then
the Commitment Fee shall accrue at the rate of 0.375% per annum,
and, if the Applicable Eurodollar Rate Margin for Tranche A is
reduced to 1.00% per annum, then the Commitment Fee shall accrue
at the rate of 0.25% per annum. The Commitment Fee is payable
quarterly, in arrears, on the last calendar day of each calendar
quarter occurring after the date hereof and on the Revolving
Credit Termination Date.

(b) Letter of Credit Fees. Borrower shall pay to the
Administrative Agent, for the ratable account of the Lenders, a
fee for each Letter of Credit issued on behalf of Borrower, in
accordance with the provisions of Section 3.08(a).

(c) Payment of Fees. The fees described in this
Section 2.04 represent compensation for services rendered and to
be rendered separate and apart from the lending of money or the
provision of credit and do not constitute compensation for the
use, detention or forbearance of money, and the obligation of
Borrower to pay each fee described herein shall be in addition
to, and not in lieu of, the obligation of Borrower to pay inter-
est, other fees and expenses otherwise described in this Agree-

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ment. Fees and expenses shall be payable when due in immediately
available funds. All fees and expenses shall be nonrefundable
when paid. All fees and expenses specified or referred to in
this Agreement or in the letter agreements dated December 2, 1993
between the Borrower and Chemical and Citicorp, respectively (the
"Fee Letters") due to the Administrative Agent, the Collateral
Agent, the Issuing Bank or any Lender, including, without limita-
tion, amounts referred to in this Section 2.04 and in
Section 12.03, shall constitute Obligations and shall be secured
by all the Collateral. All fees described in this Section 2.04
which are expressed as a per annum charge shall be calculated on
the basis of the actual number of days elapsed in a 365 or 366
day year, as applicable.

2.05. Mandatory Prepayments. (a) Borrower shall not
at any time cause or permit Revolving Loan Usage to exceed the
lesser of (i) the Revolving Credit Commitments and (ii) the
Borrowing Base. If at any time any such excess exists, Borrower
shall, without demand or notice, promptly pay to the
Administrative Agent such amount as may be necessary to eliminate
such excess, which prepayment shall be applied as set forth in
Section 2.06(b).

(b) (i) Within one hundred and five (105) days after
the end of each Fiscal Year, the Borrower shall calculate Excess
Cash Flow for such Fiscal Year (and at such time the chief
financial officer, treasurer or controller of the Borrower shall
deliver to the Administrative Agent a certificate setting forth
such amount and the calculation thereof) and Borrower shall
promptly and, in any event not later than five (5) Business Days
after the delivery of such certificate, pay to the Administrative
Agent fifty percent (50%) (or, if the Applicable Base Rate Margin
for Tranche A is less than 0.75% per annum as of the last date in
the period for which such Excess Cash Flow was calculated,
thirty-three percent (33%)) of Excess Cash Flow, which prepayment
shall be applied as set forth in Section 2.06(b).

(ii) In the event and on each occasion after the
Closing Date that a Prepayment Event (other than the sale of Lapp
Insulator Company) that is an event described in clause (i) of
the definition of the term "Prepayment Event" and is not excluded
from the definition of such term pursuant to the proviso in such
definition (an "Asset Sale Prepayment Event") occurs, the Borrower
shall, promptly upon (and in any event not later than the third
Business Day next following) receipt by or on behalf of the
Borrower or any Subsidiary thereof of the Net Proceeds from such
Prepayment Event, pay an amount equal to 100% (or, if the
Applicable Base Rate Margin for Tranche A is 0.375% per annum as
of the date on which such Prepayment Event occurs, seventy-five
percent (75%), or, if the Applicable Base Rate Margin for Tranche
A is 0.00% per annum as of the date on which such Prepayment
Event occurs, fifty percent (50%)) of the aggregate amount of Net
Proceeds of all such Asset Sale Prepayment Events to the

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Administrative Agent which prepayment shall be applied as set
forth in Section 2.06(b).

(iii) In the event and on each occasion after the
Closing Date that a Prepayment Event described in clause (ii) or
clause (iii) of the definition of the term Prepayment Event
occurs, the Borrower shall, promptly upon (and in any event not
later than the third Business Day next following) the occurrence
of such Prepayment Event, pay an amount equal to 75% or, if the
issuance of such debt is by the Parent and 100% of the net
proceeds thereof are contributed to the common equity of the
Borrower, 50% of the amount of Net Proceeds of such Prepayment
Event to the Administrative Agent, which prepayment shall be
applied as set forth in Section 2.06(b).

(iv) In the event and on each occasion after the
Closing Date that a Prepayment Event described in clause (iv) of
the definition of the term Prepayment Event occurs, the Borrower
shall, promptly upon (and in any event not later than the third
Business Day next following) the occurrence of such Prepayment
Event, pay an amount equal to 25% of the Net Proceeds of such
Prepayment Event to the Administrative Agent, which prepayment
shall be applied as set forth in Section 2.06(b).

(v) Upon the sale of Lapp Insulator Company, the
Borrower shall promptly (and in any event not later than the
third Business Day next following such sale) pay $10,000,000 to
the Administrative Agent which prepayment shall be applied as set
forth in Section 2.06(b).

(vi) In the event that the calculation of the Net
Proceeds relating to any Prepayment Event included an estimate
for income taxes that was at least $500,000 greater than the
income taxes actually payable in respect thereof, the Borrower
shall, promptly after determining the amount of income taxes
actually payable, pay the amount by which such estimate exceeded
the amount of taxes actually payable to the Administrative Agent,
which prepayment shall be applied as set forth in Section
2.06(b).

Any payment required by this Section 2.05 shall be payable
without penalty or premium, except as may be required by
Section 2.08(d) with respect to any Eurodollar Rate Loan prepaid
as a result thereof.

2.06. Payments.

(a) Manner and Time of Payment. Except as otherwise
expressly set forth herein, all payments of principal of and
interest on the Loans and other Agreement Obligations (including
without limitation, fees and expenses) payable to the
Administrative Agent, the Lenders or the Issuing Bank (or any of
them) shall be made without setoff, counterclaim, defense,

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<PAGE> 55

condition or reservation of right, in Dollars and in immediately
available funds, delivered to the Administrative Agent (or, in
the case of Reimbursement Obligations, the Issuing Bank) not
later than 12:00 noon (New York City time) on the date and at the
place due, to such account of the Administrative Agent (or the
Issuing Bank) as it may designate, for the account of the
Administrative Agent or the Lenders as the case may be; and funds
received by the Administrative Agent after that time and date
shall be deemed to have been paid and received by the
Administrative Agent on the next succeeding Business Day. Pay-
ments actually received by the Administrative Agent for the
account of the Administrative Agent or the Lenders or the Issuing
Bank or any of them, shall be paid to them promptly after receipt
thereof by the Administrative Agent. All payments of principal,
interest, Reimbursement Obligations and fees, and all
reimbursements for expenses pursuant to this Agreement and the
other Loan Documents, may at the option of the Administrative
Agent (but without any obligation to do so) and upon not less
than fifteen (15) days advance written notice to Borrower be paid
from the proceeds of Revolving Loans made to Borrower hereunder.
Borrower hereby irrevocably and unconditionally authorizes the
Lenders to make Revolving Loans to it under the Revolving Credit
Facility, which Revolving Loans shall be Base Rate Loans, for the
purpose of paying interest, Reimbursement Obligations and fees
due from it and for the purpose of reimbursing the Administrative
Agent, the Issuing Bank and each Lender for expenses due and
payable pursuant to this Agreement and the other Loan Documents
and agrees that all such Revolving Loans so made shall be deemed
to have been requested by it and at the option of the
Administrative Agent (but without any obligation to do so) may be
charged to Borrower's Loan Account; provided, however, that the
Administrative Agent has given Borrower fifteen (15) days advance
written notice of the making of such Revolving Loans.

(b) Apportionment of Payments and Prepayments. (i)
Subject to the provisions of Section 12.06(b), all payments and
prepayments of principal and interest in respect of outstanding
Loans and all payments of fees and all other payments in respect
of any other Agreement Obligations, shall be allocated among such
of the Lenders and the Issuing Bank as are entitled thereto, in
proportion to their respective Tranche A Pro Rata Shares or
Tranche B Pro Rata Shares, as applicable, or otherwise as
provided herein. Subject to the provisions of
Section 2.06(b)(ii), all such payments and prepayments and any
other amounts received by the Administrative Agent from or for
the benefit of the Borrower shall be applied first, to pay
principal of and interest on any portion of the Loans which the
Administrative Agent may have advanced on behalf of any Lender
for which the Administrative Agent has not then been reimbursed
by such Lender or the Borrower, second, to pay principal of and
interest on any advance made under Section 12.18 for which the
Administrative Agent or the Collateral Agent has not then been
paid by the Borrower or reimbursed by the Lenders, third, to pay

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all other Agreement Obligations (other than as those referred to
in clauses fourth through ninth) then due and payable, fourth, to
pay the principal of the Revolving Loans to the extent required
pursuant to Section 2.05(a), fifth, to pay interest due in
respect of the Term Loans and the Revolving Loans ratably, sixth,
to pay principal of the Term Loans then due and payable, seventh,
to pay principal of the Term Loans not then due and payable,
eighth, to pay the principal of the Revolving Loans, ninth, to
pay principal on contingent Letter of Credit Obligations by
depositing such funds as cash collateral pursuant to Section
10.02(b), and tenth, to the ratable payment of all Obligations in
respect of Eligible Hedging Contracts. All principal payments
and prepayments in respect of Loans shall be applied first, to
the Eurodollar Rate Loans maturing on the date of such payment,
second, to repay outstanding Base Rate Loans, and then to repay
outstanding Eurodollar Rate Loans with those Eurodollar Rate
Loans which have earlier expiring Interest Periods being repaid
prior to those which have later expiring Interest Periods.

Notwithstanding the above provisions of this Section 2.06(b), and
except as provided in the last sentence of this paragraph, all of
the mandatory prepayments required pursuant to Section 2.05(b) of
this Agreement to be applied to the Term Loans shall first be
allocated ratably between the Tranche A Term Loans and the
Tranche B Term Loans and applied until the Term Loans are paid in
full. All such prepayments (except in the case of prepayments
governed by Section 2.05(b)(i) above and prepayments governed by
Section 2.05(b)(ii) above to the extent such prepayments governed
by Section 2.05(b)(i) and Section 2.05(b)(ii) in any one Fiscal
Year exceed $15,000,000 in the aggregate) shall be applied to
scheduled principal payments in the inverse order of their
maturity until the aggregate of all such mandatory prepayments
during the term of this Agreement equals or exceeds $50,000,000;
thereafter all such mandatory prepayments shall be applied pro
rata to the remaining installments of the Term Loans; and
thereafter all mandatory prepayments shall be applied to the
Revolving Loans and to the cash collateralization of outstanding
Letters of Credit pursuant to Section 10.02(b). Payments
governed by Section 2.05(b)(i) above and payments governed by
Section 2.05(b)(ii) above to the extent such prepayments governed
by Section 2.05(b)(i) and Section 2.05(b)(ii) in any one Fiscal
Year exceed $15,000,000 in the aggregate shall be applied pro
rata to all remaining scheduled principal payments of the Term
Loans. The amount of any prepayment governed by Section
2.05(b)(ii) shall be determined after the application to the
Revolving Loans of any such portion of such proceeds attributable
to assets included in the Borrowing Base.

(ii) Subject to the provisions of Section 12.06(b),
after the occurrence of an Event of Default and while the same is
continuing, the Administrative Agent shall, unless otherwise
specified at the direction of the Requisite Lenders which
direction shall be consistent with the last sentence of this

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clause (ii), apply all payments and prepayments in respect of any
Obligations and all proceeds of Collateral in the following
order:

(A) first, to pay interest on and then principal of
any portion of the Loans which the Administrative Agent may
have advanced on behalf of any Lender for which the
Administrative Agent has not then been reimbursed by such
Lender or the Borrower;

(B) second, to pay interest on and then principal of
any advance made under Section 12.18 for which the
Administrative Agent and/or Collateral Agent, as applicable,
has not then been paid by the Borrower or reimbursed by the
Lenders;

(C) third, to pay Agreement Obligations in respect of
any fees, expense reimbursements or indemnities then due to
the Administrative Agent and/or Collateral Agent, as
applicable;

(D) fourth, to pay Agreement Obligations in respect of
any fees, expenses, reimbursements or indemnities then due
to the Lenders and the Issuing Bank;

(E) fifth, to pay principal of the Revolving Loans to
the extent required pursuant to Section 2.05(a);

(F) sixth, to the ratable payment of interest due in
respect of the Term Loans, the Revolving Loans and the
Letter of Credit Obligations;

(G) seventh, to the ratable payment or prepayment of
principal outstanding on Loans and Reimbursement
Obligations;

(H) eighth, to pay principal on contingent Letter of
Credit Obligations by depositing such funds as cash
collateral pursuant to Section 10.02(b);

(I) ninth, to the ratable payment of all other
Agreement Obligations; and

(J) tenth, to the ratable payment of all Obligations
in respect of Eligible Hedging Contracts.

The order of priority set forth in this Section 2.06(b)(ii) and
the related provisions of this Agreement are set forth solely to
determine the rights and priorities of the Administrative Agent,
the Lenders and the other Holders of Secured Obligations as among
themselves. The order of priority set forth in clauses (A)
through (C) of this Section 2.06(b)(ii) may be changed only with
the prior written consent of the Administrative Agent and/or

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Collateral Agent, as applicable.

(iii) Subject to Section 12.06(b), the Administrative
Agent shall promptly distribute to each Lender at its primary
address set forth on the appropriate signature page hereof or the
signature page to the Assignment and Acceptance by which it
became a Lender, or at such other address as a Lender or other
Holder of Secured Obligations may request in writing, such funds
as such Person may be entitled to receive.

(c) Payments on Non-Business Days. Whenever any
payment to be made by Borrower hereunder shall be stated to be
due on a day which is not a Business Day, payments shall be made
on the next succeeding Business Day, unless such Business Day
occurs in the succeeding month in which case such payment shall
be made on the immediately preceding Business Day, and such
extension of time, if any, shall be included in the computation
of the payment of interest hereunder and of any of the fees
specified in Section 2.04, as the case may be.

(d) Administrative Agent's and Issuing Banks' Account-
ing. The Administrative Agent shall maintain such accounts,
books and records (a "Loan Account") in which it shall record
(i) the names and addresses of the Lenders and the respective
Commitments of, and principal amount of Loans owing to, each
Lender from time to time; (ii) other appropriate debits and
credits as provided in this Agreement, including, without
limitation, all interest and fees constituting Obligations; and
(iii) all payments of such Obligations made by Borrower or for
Borrower's account. Each Lender shall maintain in accordance
with its usual practices an account or accounts evidencing the
indebtedness of Borrower to such Lender resulting from each Loan
owing to such Lender from time to time, including the amount of
principal and interest payable and paid to such Lender from time
to time hereunder. Each of the Issuing Banks shall maintain a
separate Loan Account in which it shall record appropriate debits
and credits related to the Letter of Credit Obligations. Entries
in any Loan Account made in accordance with the Administrative
Agent's or any Lender's or each Issuing Bank's customary
accounting practices as in effect from time to time shall con-
stitute prima facie evidence of the matters reflected therein,
absent manifest error.

2.07. Interest Periods. By giving notice as set forth
in Section 2.02(a) or 2.03(c) with respect to a Borrowing of,
conversion into or continuation of Loans consisting of Eurodollar
Rate Loans, Borrower shall have the option, subject to the other
provisions of this Section 2.07 and Section 2.08, to specify an
interest period (each an "Interest Period") to apply to the
Borrowing described in such notice, which Interest Period shall
be either a one (1), two (2) or three (3) month period. The
determination of Interest Periods shall be subject to the
following provisions:

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(a) In the case of immediately successive Interest
Periods, each successive Interest Period shall commence on the
day on which the next preceding Interest Period expires;

(b) If any Interest Period would otherwise expire on a
day which is not a Business Day, the Interest Period shall be
extended to expire on the next succeeding Business Day; provided
that if any such Interest Period would otherwise expire on a day
which is not a Business Day and no further Business Day occurs in
that calendar month, that Interest Period shall expire on the
immediately preceding Business Day;

(c) Borrower may not select an Interest Period for
Eurodollar Rate Loans constituting Revolving Loans which
terminates later than the Revolving Credit Termination Date;

(d) Without the prior written consent of the
Administrative Agent, there shall be no more than eight (8)
Interest Periods under this Agreement in effect at any one time.

(e) No Interest Period may be selected for any
Eurodollar Rate Loan that would end later than a scheduled
repayment date for the Term Loans determined pursuant to Section
2.01(c) & (d) if, after giving effect to such selection, the
aggregate outstanding amount of (i) the Eurodollar Rate Loans
with Interest Periods ending on or prior to such repayment date
and (ii) the Base Rate Loans would not be at least equal to the
principal amount of the Term Loans to be paid on such repayment
date.

2.08. Special Provisions Governing Eurodollar Rate
Loans. Notwithstanding other provisions of this Agreement, the
following provisions shall govern with respect to Eurodollar Rate
Loans as to the matters covered:

(a) Determination of Interest Rate. As soon as
practicable after 11:00 a.m. (New York City time) on the Interest
Rate Determination Date, the Administrative Agent shall determine
(which determination shall, absent manifest error, be presump-
tively correct) the interest rate which shall apply to the
Eurodollar Rate Loans for which an interest rate is then being
determined for the applicable Interest Period and shall promptly
give notice thereof (in writing or by telephone confirmed in
writing) to Borrower and to each Lender.

(b) Interest Rate Unascertainable, Inadequate or
Unfair. With respect to any Interest Period, if the
Administrative Agent is advised by any Reference Bank that
deposits in Dollars (in the applicable amount) are not being
offered to such Reference Bank in the London interbank Eurodollar
market for such Interest Period, if the Administrative Agent
shall have reasonably determined that the rates at which such

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dollar deposits are being offered to the Reference Banks will not
adequately and fairly reflect the cost to any Lender of making or
maintaining its Eurodollar Rate Loans during such Interest Period
or if adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the defini-
tion of LIBO Rate, then the Administrative Agent shall forthwith
give notice thereof to Borrower and each Lender, whereupon until
the Administrative Agent has determined that the circumstances
giving rise to such suspension no longer exist, (a) the right of
Borrower to elect to have Loans bear interest based upon the
LIBO Rate shall be suspended, and (b) each outstanding Eurodollar
Rate Loan shall be converted into a Base Rate Loan on the last
day of the then current Interest Period therefor, notwithstanding
any prior election by the Borrower to the contrary.

(c) Illegality. (i) In the event that on any date
any Lender shall have determined (which determination shall, in
the absence of manifest error, be final and conclusive and
binding upon all parties) that the making or continuation of any
Eurodollar Rate Loan has become unlawful by compliance by that
Lender in good faith with any law, governmental rule, regulation
or order of any Governmental Authority (whether or not having the
force of law and whether or not failure to comply therewith would
be unlawful), then, and in any such event, such Lender shall
promptly give notice (by teletransmission or by telephone
promptly confirmed in writing) to Borrower and the Administrative
Agent of that determination and the reasons therefor. The
Administrative Agent shall promptly forward any such notice it
receives to the other Lenders.

(ii) Upon the giving of the notice referred to in
Section 2.08(c)(i), (A) Borrower's right to request of the
Lenders and the Lenders' obligation to make Eurodollar Rate Loans
with respect to the requested Borrowing shall be immediately
suspended, and the Lenders shall make Loans, with respect to such
requested Borrowing of Eurodollar Rate Loans as Base Rate Loans,
and (B) if Eurodollar Rate Loans are then outstanding, Borrower
shall immediately (or, if permitted by applicable law, no later
than the date permitted thereby, upon at least one (1) Business
Day's written notice to the Administrative Agent and the Lenders)
convert all such Loans of the same Borrowing into Base Rate Loans
without cost to the Borrower for any breakage fees or other
costs.

(iii) In the event that a Lender determines at any
time following its giving of a notice referred to in
Section 2.08(c)(i) that such Lender may lawfully make Eurodollar
Rate Loans, such Lender shall promptly give notice (by
teletransmission or by telephone promptly confirmed in writing)
to Borrower and the Administrative Agent of that determination,
whereupon Borrower's right to request of the Lenders and the
Lenders' obligation to make Eurodollar Rate Loans shall be
restored. The Administrative Agent shall promptly forward any

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such notice it receives to the Lenders.

(d) Compensation. In addition to such amounts as are
required to be paid by Borrower pursuant to Sections 2.03(a),
2.03(d), 2.03(f), 2.04 and each other provision of this Agreement
requiring payment by Borrower, Borrower shall compensate each
Lender, upon demand, for all losses (excluding lost profits),
expenses and liabilities (including, without limitation, any loss
or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Lender to fund or
maintain such Lender's Eurodollar Rate Loans to the Borrower)
which such Lender may sustain (i) if for any reason a Borrowing
of, conversion into or continuation of Eurodollar Rate Loans does
not occur on a date specified therefor in a Notice of Borrowing
or a Notice of Conversion/Continuation (other than pursuant to
Section 2.08(c)(i)) or in a telephonic request for borrowing or
conversion or continuation or a successive Interest Period does
not commence after notice therefor is given pursuant to Section
2.03(c)(ii), (ii) if any principal payment of any Eurodollar Rate
Loan (including, without limitation, any prepayment pursuant to
Section 2.05 but excluding any prepayment of any Eurodollar Rate
Loan in connection with the replacement of any Lender under
clause (i) of Section 2.13) occurs for any reason on a date which
is not the last day of the applicable Interest Period, (iii) as a
consequence of an acceleration of the Obligations pursuant to
Section 10.02(a) or (iv) as a consequence of any other failure by
Borrower to repay Eurodollar Rate Loans when required by the
terms of this Agreement. Such Lender shall deliver to Borrower,
as a condition of Borrower's obligation to compensate such
Lender, a written statement as to such losses, expenses and
liabilities which statement, in the absence of manifest error,
shall be conclusive as to such amounts.

(e) Booking of Eurodollar Rate Loans. Any Lender may
make, carry or transfer Eurodollar Rate Loans at, to, or for the
account of, any of its branch offices, agencies or the office of
an Affiliate of that Lender; provided that no such Lender shall
be entitled to receive any greater amount under Section 2.03(f)
or Section 2.09 as a result of the transfer of any such Loan than
such Lender would be entitled to immediately prior thereto unless
(i) such transfer occurred at a time when circumstances giving
rise to the claim for such greater amount did not exist and were
not reasonably foreseeable by such Lender, or (ii) such claim
would have arisen even if such transfer had not occurred.

2.09. Taxes. (a) Any and all payments by Borrower
hereunder shall be made, in accordance with Section 2.06, free
and clear of and without deduction or withholding for or on
account of any and all present or future taxes, levies, imposts,
deductions, charges, or withholdings, and all liabilities with
respect thereto including those arising after the date hereof as
a result of the adoption of or any change in any law, treaty,
rule, regulation, guideline or determination of a Governmental

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Authority or any change in the interpretation or application
thereof by a Governmental Authority but excluding, in the case of
each Lender, the Issuing Bank and the Administrative Agent, such
taxes (including income taxes, franchise taxes and branch profit
taxes) as are imposed on or measured by such Lender's, the
Issuing Bank's or Administrative Agent's, as the case may be,
income by the United States of America or any Governmental
Authority of the jurisdiction under the laws of which such
Lender, Issuing Bank or Administrative Agent, as the case may be,
is organized, maintains an Applicable Lending Office or is deemed
to be engaged in trade or business (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings, and liabili-
ties which the Administrative Agent, the Issuing Bank or a Lender
determines to be applicable to this Agreement, the other Loan
Documents, the Commitments or the Loans or the Letters of Credit
being hereinafter referred to as "Taxes"). If Borrower shall be
required by law to deduct any Taxes from or in respect of any sum
payable hereunder or under the other Loan Documents to any
Lender, the Issuing Bank or the Administrative Agent, (i) the sum
payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable
to additional sums payable under this Section 2.09) such Lender,
the Issuing Bank or Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had no
such deductions been made, (ii) Borrower shall make such deduc-
tions, and (iii) Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance
with applicable law. If a withholding tax of the United States
of America or any other Governmental Authority shall be or become
applicable (y) after the date of this Agreement, to such payments
by Borrower made to the Applicable Lending Office or any other
office that a Lender may claim as its Applicable Lending Office,
or (z) after such Lender's selection and designation of any other
Applicable Lending Office, to such payments made to such other
Applicable Lending Office, such Lender shall use reasonable
efforts to make, fund and maintain its Loans through another
Applicable Lending Office of such Lender in another jurisdiction
so as to reduce such Borrower's liability hereunder, if the
making, funding or maintenance of such Loans through such other
Applicable Lending Office of such Lender does not, in the
judgment of such Lender, otherwise materially adversely affect
such Loans, obligations under the Commitments or such Lender.

(b) In addition, Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property
taxes, charges, or similar levies which arise from any payment
made hereunder or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement, the other Loan
Documents, the Commitments, the Loans or the Letters of Credit
(hereinafter referred to as "Other Taxes").

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full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any Governmental
Authority on amounts payable under this Section 2.09) paid by
such Lender, the Issuing Bank or the Administrative Agent or the
Collateral Agent (as the case may be) and any liability
(including penalties, interest, and expenses) arising therefrom
or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted. This indemnification shall
be made within thirty (30) days after the date such Lender, the
Issuing Bank or the Administrative Agent or the Collateral Agent
(as the case may be) makes written demand therefor. A
certificate as to any additional amount payable to any Lender,
the Issuing Bank or the Administrative Agent or the Collateral
Agent under this Section 2.09 submitted to Borrower and the
Administrative Agent (if a Lender or the Issuing Bank is so
submitting) by such Lender, the Issuing Bank or the
Administrative Agent or the Collateral Agent shall show in
reasonable detail the amount payable and the calculations used to
determine such amount and shall, absent manifest error, be final,
conclusive and binding upon all parties hereto. With respect to
such deduction or withholding for or on account of any Taxes and
to confirm that all such Taxes have been paid to the appropriate
Governmental Authorities, Borrower shall promptly (and in any
event not later than thirty (30) days after receipt) furnish to
each Lender, the Issuing Bank and the Administrative Agent and
the Collateral Agent such certificates, receipts and other
documents as may be required (in the judgment of such Lender, the
Issuing Bank or the Administrative Agent or the Collateral Agent)
to establish any tax credit to which such Lender, the Issuing
Bank or the Administrative Agent or the Collateral Agent may be
entitled.

(d) Within thirty (30) days after the date of any
payment of Taxes or Other Taxes by Borrower, Borrower will
furnish to the Administrative Agent, at its address referred to
in Section 12.08, the original or a certified copy of a receipt
evidencing payment thereof.

(e) Without prejudice to the survival of any other
agreement of Borrower hereunder, the agreements and obligations
of Borrower contained in this Section 2.09 shall survive the
payment in full of principal and interest hereunder, expiration
or termination of the Letters of Credit and the termination of
this Agreement.

(f) Without limiting the obligations of Borrower under
this Section 2.09, each Lender that is not created or organized
under the laws of the United States of America or a political
subdivision thereof shall deliver to Borrower and the
Administrative Agent on or before the Initial Funding Date, or,
if later, the date on which such Lender becomes a Lender pursuant
to Section 12.02 hereof, a true and accurate certificate executed
in duplicate by a duly authorized officer of such Lender, in a

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form satisfactory to Borrower and the Administrative Agent, to
the effect that such Lender is capable under the provisions of an
applicable tax treaty concluded by the United States of America
(in which case the certificate shall be accompanied by two exe-
cuted copies of Form 1001 of the IRS) or under Section 1442 of
the IRC (in which case the certificate shall be accompanied by
two copies of Form 4224 of the IRS) of receiving payments of
interest hereunder without deduction or withholding of United
States federal income tax. Each such Lender further agrees to
deliver to Borrower and the Administrative Agent from time to
time a true and accurate certificate executed in duplicate by a
duly authorized officer of such Lender substantially in a form
satisfactory to Borrower and the Administrative Agent, before or
promptly upon the occurrence of any event requiring a change in
the most recent certificate previously delivered by it to
Borrower and the Administrative Agent pursuant to this Sec-
tion 2.09(f). Further, each Lender which delivers a certificate
accompanied by Form 1001 of the IRS covenants and agrees to
deliver to Borrower and the Administrative Agent within fifteen
(15) days prior to January 1, 1994, and every third (3rd)
anniversary of such date thereafter, on which this Agreement is
still in effect, another such certificate and two accurate and
complete original signed copies of Form 1001 (or any successor
form or forms required under the IRC or the applicable regula-
tions promulgated thereunder), and each Lender that delivers a
certificate accompanied by Form 4224 of the IRS covenants and
agrees to deliver to Borrower and the Administrative Agent within
fifteen (15) days prior to the beginning of each subsequent
taxable year of such Lender during which this Agreement is still
in effect, another such certificate and two accurate and complete
original signed copies of IRS Form 4224 (or any successor form or
forms required under the IRC or the applicable regulations
promulgated thereunder). Each such certificate shall certify as
to one of the following:

(i) that such Lender is capable of receiving
payments of interest hereunder without deduction or
withholding of United States of America federal income
tax;

(ii) that such Lender is not capable of receiving
payments of interest hereunder without deduction or
withholding of United States of America federal income
tax as specified therein but is capable of recovering
the full amount of any such deduction or withholding
from a source other than the Borrower and will not seek
any such recovery from Borrower; or

(iii) that, as a result of the adoption of or any
change in any law, treaty, rule, regulation, guideline
or determination of a Governmental Authority or any
change in the interpretation or application thereof by
a Governmental Authority after the date such Lender

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became a party hereto, such Lender is not capable of
receiving payments of interest hereunder without
deduction or withholding of United States of America
federal income tax as specified therein and that it is
not capable of recovering the full amount of the same
from a source other than the Borrower.

Each Lender shall promptly furnish to Borrower and the
Administrative Agent such additional documents as may be
reasonably required by Borrower or the Administrative Agent to
establish any exemption from or reduction of any Taxes or Other
Taxes required to be deducted or withheld and which may be
obtained without undue expense to such Lender.

2.10. Increased Capital. If any Lender determines
that (a) the applicability of any law, rule, regulation,
agreement or guideline adopted pursuant to or arising out of the
July 1988 report of the Basle Committee on Banking Regulations
and Supervisory Practices entitled "International Convergence of
Capital Measurement and Capital Standards"; (b) the introduction
of or any change in any law, order or regulation or in the inter-
pretation or administration of any law, order or regulation by
any Governmental Authority charged with the interpretation or
administration thereof after the date hereof or (c) compliance
with any guideline or request issued or made after the date
hereof from any central bank or other Governmental Authority
(whether or not having the force of law) has or would have the
effect of reducing the rate of return on the capital of such
Lender or any corporation controlling such Lender, as a
consequence of or with reference to this Agreement, such Lender's
Commitments or its making or maintaining Loans, or, in the case
of such Lender acting in its capacity as the Issuing Bank, the
Issuing Bank's issuance or maintenance of any Letter of Credit,
or any Lender's participation in any Letter of Credit, below the
rate which such Lender or such other corporation could have
achieved but for such compliance (taking into account the
policies of such Lender or corporation with regard to capital),
then Borrower shall from time to time, upon demand by such Lender
(with a copy of such demand to the Administrative Agent), pay to
such Lender additional amounts sufficient to compensate such
Lender for such reduction, upon receipt by Borrower (with a copy
to the Administrative Agent) of a certificate as to such amounts,
by such Lender, setting forth in reasonable detail the basis for,
and the calculations used by such Lender in determining, any such
amounts. Such certificate, in the absence of manifest error
shall be conclusive and binding for all purposes. Each Lender
agrees promptly to notify Borrower and the Administrative Agent
of any circumstances that would cause Borrower to pay additional
amounts pursuant to this Section 2.10, provided that the failure
to give such notice shall not affect Borrower's obligation to pay
such additional amounts hereunder.

2.11. Use of Proceeds of the Loans. The proceeds of

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the Loans shall be used to consummate the Refinancing and for
general corporate purposes of the Borrower and the Borrower's
Subsidiaries, and shall not be used to pay principal on the Term
Loans.

2.12. Authorized Officers of Borrower. Borrower shall
notify the Administrative Agent and the Issuing Bank in writing
of the names of the officers and employees authorized to request
Loans and Letters of Credit and to request a conversion or
continuation of any Loan and shall provide the Administrative
Agent with a specimen signature of each such officer or employee.
The Administrative Agent and the Issuing Bank shall be entitled
to rely conclusively on such officer's or employee's authority to
request such Loan or Letter of Credit or such Conversion or
Continuation until the Administrative Agent and the Issuing Bank
receives written notice to the contrary. The Administrative
Agent and the Issuing Bank shall have no duty to verify the
authenticity of the signature appearing on any written Notice of
Borrowing or Notice of Conversion/Continuation and, with respect
to an oral request for such a Loan or Letter of Credit or such
Conversion or Continuation, the Administrative Agent and the
Issuing Bank shall have no duty to verify the identity of any
person representing himself as one of the officers or employees
authorized to make such request on behalf of Borrower. Neither
the Administrative Agent nor the Issuing Bank nor any Lender
shall incur any liability to Borrower in acting upon any tele-
phonic notice referred to above which the Administrative Agent
believes to have been given by a duly authorized officer or other
person authorized to borrow on behalf of Borrower.

2.13. Replacement of Certain Lenders. In the event a
Lender ("Affected Lender") shall have: (i) failed to fund its
Tranche A Pro Rata Share or Tranche B Pro Rata Share, as
applicable, of any Borrowing requested by the Borrower which such
Lender is obligated to fund under the terms of this Agreement and
which such failure has not been cured, (ii) failed to issue a
Letter of Credit requested by the Borrower which such Lender is
obligated to issue as the Issuing Bank under the terms of this
Agreement, (iii) has requested compensation from the Borrower
under Sections 2.03(f), 2.09 or 2.10 to recover additional costs
incurred by such Lender which are not being incurred generally by
the other Lenders, or (iv) delivered a notice pursuant to Section
2.08(c)(i) claiming that such Lender is unable to extend
Eurodollar Rate Loans to the Borrower for reasons not generally
applicable to the other Lenders, then, in any such case, the
Borrower or the Administrative Agent may make written demand on
such Affected Lender (with a copy to the Administrative Agent in
the case of a demand by the Borrower and a copy to the Borrower
in the case of a demand by the Administrative Agent) for the
Affected Lender to assign, and such Affected Lender shall assign
pursuant to one or more duly executed Assignment and Acceptances
five (5) Business Days after the date of such demand, to one or
more financial institutions which complies with the provisions of

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Section 12.02) (and, if selected by the Borrower is reasonably
acceptable to the Administrative Agent) which the Borrower or the
Administrative Agent, as the case may be, shall have engaged for
such purpose ("Replacement Lender"), all of such Affected
Lender's rights and obligations under this Agreement and the
other Loan Documents (including, without limitation, its
Commitments and all Loans owing to it all of its participation
interests in existing Letters of Credit, and its obligations to
participate in additional Letters of Credit hereunder) in
accordance with Section 12.02. The Administrative Agent is
hereby authorized to execute one or more Assignment and
Acceptances as attorney-in-fact for any Affected Lender failing
to execute and deliver the same within five (5) Business Days
after the date of such demand. Further, with respect to such
assignment,

(a) in the event the Affected Lender is the Issuing
Bank the Borrower shall have, with respect to each
outstanding Letter of Credit, provided the Affected Lender
with cash collateral, arranged for surrender of such Letters
of Credit, arranged for a back-to-back Letter of Credit or
made such other arrangement in respect of such Letter of
Credit as shall be mutually acceptable to the Borrower and
such Affected Lender; and

(b) the Affected Lender shall have concurrently
received, in cash, all amounts due and owing to the Affected
Lender hereunder or under any other Loan Document,
including, without limitation, the aggregate outstanding
principal amount of the Loans owed to such Lender, together
with accrued interest thereon through the date of such
assignment, amounts payable under Sections 2.03(f), 2.09 and
2.10, and compensation payable under Section 2.08(d) in the
event of any replacement of any Affected Lender under clause
(ii) or clause (iii) of this Section 2.13 through the date
of the replacement of any Affected Lender; provided, upon
such Affected Lender's replacement, such Affected Lender
shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 2.08, 2.09, 2.10, 12.03
and 12.04, as well as to any fees accrued for its account
hereunder and not yet paid.

Upon the replacement of any Affected Lender pursuant to this
Section 2.13, (x) each Letter of Credit issued by such Affected
Lender shall cease to be a Letter of Credit under this Agreement,
each such Affected Lender shall cease to have any participation
in, entitlement to, or other right to share in the security
interests and liens of the Collateral Agent and the Holders of
Secured Obligations in the Collateral and shall no longer be
subject to the participation provisions of Section 3.06, all of
which participations shall be deemed to have terminated and been
repurchased by the Issuing Bank hereunder except with respect to
Eligible Hedging Contracts and (y) the provisions of Section

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12.06(b) shall continue to apply with respect to Borrowings which
are then outstanding with respect to which the Affected Lender
failed to fund its Tranche A Pro Rata Share or Tranche B Pro Rata
Share, as applicable, and which failure has not been cured.

2.14. Registered Notes. Any Lender that is not a U.S
Person (a "Non-U.S. Lender") and that could become completely
exempt from withholding of U.S. Taxes in respect of payment of
any obligations due to such Lender hereunder relating to its Term
Loans if its Term Loans were in registered form for U.S. Federal
income tax purposes may request the Borrower (through the
Administrative Agent), and the Borrower agrees thereupon to
exchange such Lender's Note or Notes evidencing its Term Loans
for a note registered as provided in this Section 2.14 (a
"Registered Note"). Registered Notes may not be exchanged for
Notes that are not in registered form. Each Non-U.S. Lender
holding Registered Notes (a "Registered Noteholder") (or, if such
Registered Noteholder is not the beneficial owner thereof, such
beneficial owner) shall deliver to the Borrower prior to or at
the time such Non-U.S. Lender becomes a Registered Noteholder, a
Form W-8 (Certificate of Foreign Status of the Department of
Treasury of the United States of America), or such successor and
related forms as may from time to time be adopted by the relevant
taxing authorities of the United States of America, together with
an annual certificate stating that (i) such Registered Noteholder
or beneficial owner, as the case may be, is not a "bank" within
the meaning of section 881(c)(3)(A) of the IRC and (ii) such
Registered Noteholder or beneficial owner, as the case may be,
shall promptly notify the Borrower, if at any time, such
Registered Noteholder or beneficial owner, as the case may be,
determines that it is no longer in a position to provide such
certificate to the Borrower (or any other form of certification
adopted by the relevant taxing authorities of the United States
of America for such purposes). The Administrative Agent shall,
on behalf of the Borrower, maintain, or cause to be maintained, a
register (the "Register") on which it enters the name of the
registered owner of each Term Loan evidenced by a Registered
Note. A Registered Note and the Term Loan evidenced thereby may
be assigned or otherwise transferred in whole or in part only by
registration of such assignment or transfer of such Registered
Note and the Term Loan evidenced thereby on the Register (and
each Registered Note shall expressly so provide). Any assignment
or transfer of all or part of such Term Loan and the Registered
Note evidencing the same shall be registered on the Register only
upon surrender for registration of assignment or transfer of the
Registered Note evidencing such Term Loan, duly endorsed by (or
accompanied by a written instrument of assignment or transfer
duly executed by) the Registered Noteholder thereof, and
thereupon one or more new Registered Notes in the same aggregate
principal amount in the form of Exhibit 6A shall be issued to the
designated assignee(s) or transferee(s). Prior to the due
presentment for registration of transfer of any Registered Note,
the Borrower and the Administrative Agent shall treat the Person

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in whose name such Term Loan(s) and the Registered Note(s)
evidencing the same is registered as the owner thereof for the
purpose of receiving all payments thereon and for all other
purposes, notwithstanding any notice to the contrary. The
Register shall be available for inspection by the Borrower and
any Lender at any reasonable time upon reasonable prior notice.

ARTICLE III
LETTERS OF CREDIT

3.01. Obligation to Issue. Subject to the terms and
conditions set forth in this Agreement, from time to time during
the period commencing on the Initial Funding Date and ending on
the Business Day which is twenty (20) Business Days prior to the
Revolving Credit Termination Date, Borrower may request any of
the Issuing Banks, and upon such request such Issuing Bank hereby
agrees, to issue for the account of Borrower, one or more Letters
of Credit.

3.02. Types and Amounts. Notwithstanding the
provisions of Section 3.01, the Issuing Banks shall have no
obligation to issue any Letter of Credit at any time:

(a) if the aggregate maximum amount then avail-
able for drawing under Letters of Credit issued by such
Issuing Bank, after giving effect to the Letter of
Credit requested hereunder, shall exceed any limit
imposed by law or regulation upon such Issuing Bank;

(b) if, after giving effect to such requested
Letter of Credit, (i) Revolving Loan Usage exceeds the
lesser of the Revolving Credit Commitments or the
Borrowing Base at such time or (ii) the aggregate
outstanding Letter of Credit Obligations would exceed
$50,000,000; and any letter of credit issued by an
Issuing Bank in excess of any such amounts shall not,
to the extent of the excess, constitute a Letter of
Credit hereunder and the deemed purchase of
participations pursuant to Section 3.06 shall not occur
with respect to such letter of credit; or

(c) which has an expiration date which is (i)
more than (1) one year after the date of issuance of
such Letter of Credit (provided that a Standby Letter
of Credit may provide for an annual renewal, subject to
Section 3.02(c)(ii) below, if such renewal is consented
to by such Issuing Bank and the conditions precedent to
the issuance of such Standby Letter of Credit are met
at the time of such renewal) or (ii) after three (3)
Business Days immediately preceding the Revolving
Credit Termination Date and any letter of credit issued
by an Issuing Bank with an expiration date after three

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(3) Business Days immediately preceding the Revolving
Credit Termination Date shall not constitute a Letter
of Credit hereunder and the deemed purchase of
participations pursuant to Section 3.06 shall not occur
with respect to such letter of credit.

3.03. Conditions. In addition to being subject to the
satisfaction of the conditions precedent contained in
Sections 4.01 and 4.02, the obligation of each Issuing Bank to
issue any Letter of Credit is subject to the satisfaction in full
of the following conditions:

(a) Borrower shall have delivered to the Issuing Bank,
at such times and in such manner as the Issuing Bank may
prescribe, a Letter of Credit Application and a Letter of Credit
Reimbursement Agreement and such other documents and materials as
may be required pursuant to the terms thereof and the terms of
the proposed Letter of Credit shall be reasonably satisfactory to
the Issuing Bank and shall be consistent with the Issuing Bank's
ordinary practice with respect to terms of its letters of credit;
and

(b) as of the date of issuance, no order, judgment or
decree of any court, arbitrator or Governmental Authority shall
purport by its terms to enjoin or restrain the Issuing Bank from
issuing such Letter of Credit and no law, rule or regulation
applicable to the Issuing Bank and no request or directive
(whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) from any Govern-
mental Authority with jurisdiction over the Issuing Bank shall
prohibit or request the Issuing Bank to refrain from the issuance
of letters of credit generally or the issuance of that Letter of
Credit.

3.04. Issuance of Letters of Credit.

(a) Borrower shall give the Issuing Bank written
notice (with a copy to the Administrative Agent) not later than
12:00 noon (New York City time) on the third (3rd) Business Day
immediately preceding the requested issuance of a Letter of
Credit under this Agreement, which notice as provided to the
Administrative Agent shall be accompanied by a Notice of
Borrowing as required pursuant to Section 4.02. Such notice
shall be irrevocable and shall specify (i) the stated amount of
the Letter of Credit requested, (ii) the effective date (which
day shall be a Business Day) of issuance of such requested Letter
of Credit, (iii) whether such Letter of Credit is a Commercial
Letter of Credit or a Standby Letter of Credit, (iv) the date on
which such requested Letter of Credit is to expire, which date
shall be a Business Day, (v) the Person for whose benefit the
requested Letter of Credit is to be issued, (vi) the amount of
Letter of Credit Obligations then outstanding and (vii) any other
terms to be included in such Letter of Credit. Prior to issuing

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any Letter of Credit, the Issuing Bank shall request and the
Administrative Agent shall provide confirmation that the request
for such Letter of Credit complies with the provisions of Section
3.02(b). If the Administrative Agent notifies the Issuing Bank
that it is authorized to issue such Letter of Credit, and the
conditions described in Sections 3.02, 3.03, 4.01 (if issued on
the Initial Funding Date) and 4.02 otherwise have been satis-
fied, then the Issuing Bank shall issue such Letter of Credit as
requested. The Issuing Bank shall give the Administrative Agent
prompt notice of the issuance of any such Letter of Credit.

(b) No Letter of Credit may be amended, extended,
renewed, modified or supplemented unless Borrower shall have
complied with the requirements of Section 3.04(a) to the same
extent as if such Letter of Credit, as so amended, extended,
renewed, modified or supplemented, were requested to be reissued
hereunder. No Issuing Bank may amend, extend, renew, modify or
supplement any Letter of Credit if the issuance of a new Letter
of Credit having the same terms as such Letter of Credit as so
amended, extended, renewed, modified or supplemented would be
prohibited by Section 3.02. Each Issuing Bank shall provide the
Administrative Agent with a copy of each amendment, extension,
renewal, modification or supplement to any Letter of Credit.

3.05. Reimbursement Obligations; Duties of the
Issuing Bank.

(a) Notwithstanding any provisions to the contrary in any
Letter of Credit Reimbursement Agreement or Letter of Credit
Application:

(i) Borrower shall reimburse each Issuing Bank,
as applicable (by paying the Administrative Agent for
the account of the Issuing Bank), for drawings under a
Letter of Credit issued by it no later than the earlier
of (a) the time specified in such Letter of Credit
Reimbursement Agreement or Letter of Credit
Application, and (b) one (1) Business Day after the
payment by such Issuing Bank; and

(ii) any Reimbursement Obligation with respect to
any Letter of Credit shall bear interest from the date
of the relevant drawing under the pertinent Letter of
Credit at the interest rate then applicable to Tranche
A Base Rate Loans until the third (3rd) Business Day
after such date on which the Issuing Bank with respect
to such Letter of Credit gives notice of such drawing
to Borrower and thereafter at the Default Rate.

(b) No action taken or omitted to be taken by any Issuing
Bank under or in connection with any Letter of Credit shall put
such Issuing Bank under any resulting liability to any Lender
(except for its gross negligence or willful misconduct in

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connection therewith, as determined by the final judgment of a
court of competent jurisdiction) or, subject to Sections 3.02 and
3.03, relieve that Lender of its obligations hereunder to such
Issuing Bank. In the event this Agreement and any Letter of
Credit Reimbursement Agreement or any Letter of Credit
Application are inconsistent, the terms of this Agreement shall
prevail. In determining whether to pay under any Letter of
Credit, the Issuing Bank shall have no obligation to the Lenders
other than to confirm that any documents required to be delivered
under such Letter of Credit appear to have been delivered and
that they appear on their face to comply with the requirements of
such Letter of Credit.

3.06. Participations.

(a) Immediately upon issuance by one of the Issuing
Banks of any Letter of Credit for the account of Borrower in
accordance with the provisions set forth in this Article III,
each Lender irrevocably and unconditionally agrees that it shall
be deemed to have purchased and received from such Issuing Bank,
without recourse or warranty, an undivided interest in the amount
of such Lender's Tranche A Pro Rata Share in such Letter of
Credit (other than the fees earned with respect to such Letter of
Credit pursuant to 3.08(b)) and any security therefor or guaranty
pertaining thereto; provided, however, that a letter of credit
issued by an Issuing Bank shall not be deemed to be a Letter of
Credit for purposes of this Section 3.06(a) if the Issuing Bank
shall not have received the confirmation from the Administrative
Agent provided for in Section 3.04(a) or shall have received
written notice from the Administrative Agent or any Lender on or
before the Business Day immediately prior to the date of the
Issuing Bank's issuance of such letter of credit that one or more
conditions of this Article III is not satisfied and, in the event
the Issuing Bank receives such a notice, it shall have no further
obligation to issue any Letter of Credit until such notice is
subsequently withdrawn or it receives notice from the
Administrative Agent that such conditions have been waived in
writing by the Requisite Lenders or otherwise have been
satisfied.

(b) If one of the Issuing Banks makes any payment
under any Letter of Credit and Borrower does not repay such
amount to such Issuing Bank pursuant to Section 3.05(a), 3.07 or
3.09, such Issuing Bank shall promptly notify the Administrative
Agent of such failure and the Administrative Agent shall, in
turn, promptly notify each Lender of such failure, and each
Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of such Issuing Bank the
amount of such Lender's Tranche A Pro Rata Share of such payment,
in Dollars and in immediately available funds, and the
Administrative Agent shall promptly pay such amount, and any
other amounts received by the Administrative Agent for such
Issuing Bank's account pursuant to this Section 3.06(b), to such

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Issuing Bank. If the Administrative Agent so notifies any such
Lender prior to 11:00 a.m. (New York City time) on any Business
Day of such failure, such Lender shall make available to the
Administrative Agent for the account of such Issuing Bank its
Tranche A Pro Rata Share of the amount of such payment on such
Business Day in Dollars and in immediately available funds, and
otherwise on the next succeeding Business Day. If and to the
extent such Lender shall not have so made its Tranche A Pro Rata
Share of the amount of such payment available to the
Administrative Agent for the account of such Issuing Bank, such
Lender agrees to pay to the Administrative Agent for the account
of such Issuing Bank forthwith on demand such amount together
with interest thereon, for each day from the date such payment
was first due until the date such amount is paid to the
Administrative Agent for the account of such Issuing Bank, at the
Federal Funds Effective Rate (as such term is defined in the
definition of Alternate Base Rate) for three (3) Business Days
and then at the Alternate Base Rate. The failure of any Lender
to make available to the Administrative Agent for the account of
any Issuing Bank its Tranche A Pro Rata Share of any such payment
shall not relieve any other Lender of its obligation hereunder to
make available to the Administrative Agent for the account of
such Issuing Bank its Tranche A Pro Rata Share of any payment on
the date such payment is to be made.

(c) Whenever one of the Issuing Banks receives a
payment on account of a Reimbursement Obligation, including any
interest thereon, as to which the Administrative Agent has
previously received payments from the Lenders for such account of
the Issuing Bank pursuant to this Section 3.06, it shall promptly
pay to the Administrative Agent and the Administrative Agent
shall promptly pay to each Lender which has funded its
participating interest therein, in Dollars, an amount equal to
such Lender's Tranche A Pro Rata Share thereof. Each such
payment shall be made by the Issuing Bank or the Administrative
Agent, as the case may be, on the Business Day on which such
Person receives the funds paid to such Person pursuant to the
preceding sentence, if received prior to 11:00 a.m. (New York
City time) on such Business Day, and otherwise on the next
succeeding Business Day together with interest thereon at the
Federal Funds Effective Rate (as such term is defined in the
definition of Alternate Base Rate) unless the Issuing Bank
certifies that it received such amount later than it could be
invested overnight.

(d) Promptly upon the request of any Lender, any
Issuing Bank shall furnish to such Lender copies of any
documentation with respect to the Letters of Credit as may
reasonably be requested by such Lender.

(e) The obligations of a Lender to make payments to
the Administrative Agent for the account one of the Issuing Banks
with respect to a Letter of Credit issued on behalf of the

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Borrower shall be irrevocable, shall not be subject to any
qualification or exception whatsoever, and shall be honored in
accordance with the terms and conditions of this Agreement under
all circumstances (subject to Section 3.02), including, without
limitation, (i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents; (ii) the existence
of any claim, set-off, defense or other right which Borrower may
have at any time against a beneficiary named in a Letter of
Credit or any transferee of any Letter of Credit (or any Person
for whom any such transferee may be acting), the Administrative
Agent, the Issuing Bank, any Lender, or any other Person, whether
in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transactions between Borrower and the
beneficiary named in any Letter of Credit); (iii) any draft,
certificate or any other 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 (in the absence of gross negligence or
willful misconduct in connection therewith, as determined by the
final judgment of a court of competent jurisdiction, on the part
of the Issuing Bank); (iv) the surrender or impairment of any
security for the performance or observance of any of the terms of
any of the Loan Documents; (v) any failure by the Administrative
Agent or the Issuing Bank to make any reports required pursuant
to Section 3.10; or (vi) the occurrence of any Event of Default
or Potential Event of Default.

3.07. Payment of Reimbursement Obligations.

(a) Borrower irrevocably and unconditionally agrees to
pay to each of the Issuing Banks the amount of all Reimbursement
Obligations, interest and other amounts payable to any such
Issuing Bank under or in connection with any Letter of Credit
issued on behalf of Borrower immediately when due, irrespective
of any and all events, including, without limitation, (i) any
lack of validity or enforceability of this Agreement or any of
the other Loan Documents; (ii) the existence of any claim, set-
off, defense or other right which Borrower may have at any time
against a beneficiary named in a Letter of Credit or any
transferee of any Letter of Credit (or any Person for whom any
such transferee may be acting), the Administrative Agent, the
Issuing Bank, any Lender, or any other Person, whether in connec-
tion with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any
underlying transactions between Borrower and the beneficiary
named in any Letter of Credit); (iii) any draft, certificate or
any other 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 (in the absence of gross negligence or willful misconduct
in connection therewith, as determined by the final judgment of a
court of competent jurisdiction, on the part of the Issuing

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Bank); or (iv) the surrender or impairment of any security for
the performance or observance of any of the terms of any of the
Loan Documents.

(b) In the event any payment by Borrower received by
an Issuing Bank with respect to any Letter of Credit and distri-
buted by the Administrative Agent to the Lenders on account of
their participations is thereafter set aside, avoided or
recovered from the Issuing Bank in connection with any receiver-
ship, liquidation or bankruptcy proceeding or otherwise, each
Lender which received such distribution shall, upon demand by the
Issuing Bank, contribute such Lender's Tranche A Pro Rata Share
of the amount set aside, avoided or recovered together with
interest at the rate required to be paid by the Issuing Bank upon
the amount required to be repaid by it.

3.08. Compensation for Letters of Credit.

(a) Lenders' Letter of Credit Fees. Borrower shall
pay, with respect to each Letter of Credit, a Letter of Credit
fee equal to one and three-quarters of one percent (1.75%) per
annum (computed based upon actual days elapsed in a 365/366-day
year) of the maximum amount available to be drawn under such
Letter of Credit, provided, however, if the Applicable Eurodollar
Rate Margin for Tranche A is increased to more than or reduced to
less than 1.75% per annum, then the letter of credit fee shall be
increased or reduced to the same per annum rate. Such fee shall
be paid to the Administrative Agent, for the account of the
Lenders in proportion to their respective Tranche A Pro Rata
Shares, in arrears, on a calendar quarterly basis, on the last
calendar day of each March, June, September and December
occurring after the Initial Funding Date. Each of the Issuing
Banks shall provide the Borrower and the Administrative Agent on
or before the last Business Day of each March, June, September
and December occurring after the Initial Funding Date a statement
calculating the Letter of Credit fees payable under this Section
3.08(a) for the quarter then ending.

(b) Issuing Bank Fees. In addition to the fees under
clause (a) above, Borrower shall pay to each of the Issuing
Banks, (i) with respect to each Commercial Letter of Credit
payable at such time as is agreed to between the Borrower and the
applicable Issuing Bank, the customary charges of such Issuing
Bank with respect thereto for commercial letters of credit of
similar type, (ii) with respect to each Standby Letter of Credit,
such fronting fee as shall have been agreed to (both with respect
to amount and timing) between such Issuing Bank and the Borrower
and (iii) with respect to all Letters of Credit, on demand, each
Issuing Bank's customary administration fees charged in
connection with its issuance, administration, transfer or
amendment of or drawing under any Letter of Credit. Such fees
shall be paid directly to and shall be solely for the account of
the Issuing Banks.

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3.09. Indemnification; Exoneration. (a) In addition
to amounts payable as elsewhere provided in this Article III,
Borrower hereby agrees to protect, indemnify, pay and save
harmless the Administrative Agent, the Issuing Banks and each
Lender from and against any and all Liabilities and Costs which
the Administrative Agent, the Issuing Banks or any Lender may
incur or be subject to as a consequence, direct or indirect, of
(i) the issuance of any Letter of Credit other than, in the case
of any Issuing Bank, as a result of its gross negligence or
willful misconduct, as determined by the final judgment of a
court of competent jurisdiction or (ii) the failure of such
Issuing Bank to honor a drawing under such Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of
any present or future de jure or de facto Governmental Authority
(all such acts or omissions herein called "Governmental Acts").

(b) As among Borrower, the Lenders, the Issuing Banks
and the Administrative Agent, Borrower assumes all risks of the
acts and omissions of, or misuse of such Letter of Credit by, the
beneficiary of any Letter of Credit. In furtherance and not in
limitation of the foregoing, subject to the provisions of the
Letter of Credit Applications and Letter of Credit Reimbursement
Agreements, the Issuing Banks, the Administrative Agent and the
Lenders shall not be responsible (in the absence of gross
negligence or willful misconduct in connection therewith, as
determined by the final judgment of a court of competent
jurisdiction): (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted
by any party in connection with the application for and issuance
of the Letters of Credit, even if it should in fact prove to be
in any or all respects invalid, insufficient, inaccurate, fraudu-
lent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or
assign a Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for failure of the
beneficiary of a Letter of Credit to comply duly with conditions
required in order to draw upon such Letter of Credit; (iv) for
errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, or
other similar form of teletransmission or otherwise; (v) for
errors in interpretation of technical terms; (vi) for any loss or
delay in the transmission or otherwise of any document required
in order to make a drawing under any Letter of Credit or of the
proceeds thereof; (vii) for the misapplication by the beneficiary
of a Letter of Credit of the proceeds of any drawing under such
Letter of Credit; and (viii) for any consequences arising from
causes beyond the control of the Administrative Agent, the
Issuing Banks and the Lenders including, without limitation, any
Governmental Acts. None of the above shall affect, impair, or
prevent the vesting of any of the Issuing Banks' rights or powers
under this Section 3.09.
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(c) In furtherance and extension and not in limitation
of the specific provisions hereinabove set forth, any action
taken or omitted by any Issuing Bank under or in connection with
Letters of Credit issued on behalf of the Borrower or the
Borrower or any related certificates shall not, in the absence of
gross negligence or willful misconduct, as determined by the
final judgment of a court of competent jurisdiction, put any
Issuing Bank, the Administrative Agent or any Lender under any
resulting liability to Borrower or relieve Borrower of any of its
obligations hereunder to any such Person.

(d) Without prejudice to the survival of any other
agreement of Borrower hereunder, the agreements and obligations
of Borrower contained in this Section 3.09 shall survive the
payment in full of principal and interest hereunder, the
termination of the Letters of Credit and the termination of this
Agreement.

3.10. Reporting By Issuing Bank. On or before the
thirtieth (30th) day following the end of each calendar month
ending after the Initial Funding Date, each of the Issuing Banks
shall provide the Administrative Agent and the Administrative
Agent shall provide each Lender with a written report describing,
as of the end of such month, the then aggregate outstanding face
amount of each Letter of Credit, whether such Letter of Credit is
a Standby Letter of Credit or Commercial Letter of Credit, the
beneficiary of such Letter of Credit, and any other additional
information with respect thereto which the Administrative Agent
or any Lender reasonably requests. Together with each monthly
report, each of the Issuing Banks shall provide the
Administrative Agent and the Administrative Agent shall provide
each Lender with a copy of each Letter of Credit issued during
the immediately preceding month and each Letter of Credit
Application and/or Letter of Credit Reimbursement Agreement
executed in connection therewith.

3.11. Transitional Letter of Credit Provisions.
Schedule 3.11 contains a schedule of certain letters of credit
issued for the account of the Parent or one of its Subsidiaries
prior to the Initial Funding Date by one of the Issuing Banks.
Subject to the satisfaction of the conditions precedent contained
in Article IV, from and after the Initial Funding Date (i) such
letters of credit shall be deemed to be Letters of Credit issued
pursuant to this Article III, (ii) the outstanding face amount of
such Letters of Credit shall be included in the calculation of
Revolving Credit Availability and in the calculation of letter of
credit fees payable to the Lenders pursuant to Section 3.08(a)
and (iii) all liabilities of the Borrower with respect to such
Letters of Credit shall constitute Obligations.

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ARTICLE IV
CONDITIONS TO LOANS AND LETTERS OF CREDIT

4.01. Conditions Precedent to the Initial Funding.
The obligation of each Lender to make any Loan requested to be
made by it on the Initial Funding Date, and the obligation of the
Issuing Banks to issue any Letter of Credit on the Initial
Funding Date, shall be subject to the satisfaction of all of the
following conditions precedent:

(a) Documents. The Administrative Agent and the
Collateral Agent shall have received on or before the Initial
Funding Date (i) this Agreement, the Notes, the other Transaction
Documents and all other agreements, documents and instruments
described in the List of Closing Documents attached hereto as
Exhibit 7 and made a part hereof, each duly executed where
appropriate and in form and substance satisfactory to the
Administrative Agent, the Collateral Agent and the Issuing Bank
and (ii) such additional documentation as the Administrative
Agent, the Collateral Agent and the Issuing Bank may reasonably
request.

(b) Perfection of Liens. The Collateral Agent shall
have received (i) evidence that all financing statements relating
to the Collateral have been filed and the Collateral Agent shall
be satisfied that arrangements for the filing and recording of
the Mortgages have been made, (ii) title commitments (in form and
substance acceptable to the Collateral Agent), (iii) certificates
representing capital stock constituting Collateral (together with
duly executed stock powers) and (iv) such other evidence (includ-
ing, without limitation, legal opinions from counsel to the
Borrower), as the Administrative Agent or the Collateral Agent
may request, confirming that the Collateral Agent's security
interests in the Collateral for the benefit of the Holders of
Secured Obligations have been properly perfected and constitute
first and prior security interests subject only to Permitted
Existing Liens and Customary Permitted Liens. In addition, all
title charges, recording fees and filing taxes shall have been
paid or adequate provisions for the payment of such charges, fees
and taxes shall have been made.

(c) Environmental Compliance. The Borrower shall have
provided documentation reasonably satisfactory to the
Administrative Agent demonstrating compliance with applicable
Environmental Property Transfer Acts.

(d) No Legal Impediments. No law, regulation, order,
judgment or decree of any Governmental Authority shall, and the
Administrative Agent shall not have received any notice that
litigation is pending or threatened which is likely to (i)
enjoin, prohibit or restrain the making of the Loans or the
issuance of Letters of Credit on the Initial Funding Date or (ii)
impose or result in the imposition of a Material Adverse Effect.

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(e) No Change in Condition. No change in the
business, assets, management, operations, financial condition or
prospects of Parent, the Borrower or the Consolidated Borrower
Group taken as a whole shall have occurred since December 31,
1992, which change, in the judgment of the Lenders, will have or
is reasonably likely to have a Material Adverse Effect.

(f) No Default. No Event of Default or Potential
Event of Default shall have occurred and be continuing or would
result from the making of the Loans or the issuance of Letters of
Credit.

(g) Representations and Warranties. All of the
representations and warranties contained in Section 5.01 and in
any of the other Loan Documents shall be true and correct in all
material respects on and as of the Initial Funding Date.

(h) Fees and Expenses Paid. There shall have been
paid to the Administrative Agent, for the accounts of the Lenders
and the Administrative Agent, as applicable, all fees due and
payable on or before the Initial Funding Date (including, without
limitation, all fees described in the Fee Letters), and all
expenses due and payable on or before the Initial Funding Date.

(i) Borrowing Base Certificate; Pro Forma Financial
Statements; Excess Availability. The Borrower shall have
delivered to the Administrative Agent a Borrowing Base
Certificate and pro forma financial statements for the Borrower
assuming consummation of the Refinancing and the Receivables
Securitization and such certificate and financial statements
shall confirm that as of the Initial Funding Date, Revolving
Credit Availability is at least $20,000,000.

(j) Legal Matters. All legal and regulatory matters
shall be reasonably satisfactory to the Administrative Agent and
the Collateral Agent.

(k) Refinancing. The Borrower shall have provided to
the Administrative Agent evidence satisfactory to the
Administrative Agent that a portion of the proceeds of the
Initial Funding shall be used to complete the Refinancing.

(l) Contribution. Great American Management and
Investment, Inc. shall have made a cash contribution to the
Parent in the amount of $50,000,000.

(m) Receivables Securitization. The Receivables
Securitization shall have become effective on terms satisfactory
to the Administrative Agent and the Collateral Agent.

(n) Tax Sharing Agreement. The Tax Sharing Agreement
shall have been entered into by the parties thereto on terms

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satisfactory to the Lenders.

(o) Accountants' Reliance Letter. The accounting firm
which audits the Borrower's financial statements in accordance
with Section 6.01(a) shall have received and agreed to a reliance
letter in the form attached hereto as Exhibit 8.

4.02. Conditions Precedent to all Loans and Letters of
Credit. The obligation of each Lender to make any Loan requested
to be made by it and of the Issuing Banks to issue any Letter of
Credit on any date or to convert/continue any Loan requested to
be converted/continued on any date, is subject to the following
conditions precedent as of such date:

(a) Notice of Borrowing. The Administrative Agent
shall have received in accordance with the provisions of
Section 2.02(a), with respect to any Revolving Loan, or Section
3.04(a), with respect to any Letter of Credit, an original and
duly executed Notice of Borrowing or, in accordance with the
provisions of Section 2.03, with respect to
conversion/continuation of any Loan, an original and duly
executed Notice of Conversion/Continuation.

(b) Additional Matters. As of the Funding Date for
any Loan or the date of issuance of any Letter of Credit or as of
the proposed date for continuation/conversion, as applicable:

(i) Representations and Warranties. All of the
representations and warranties of the Borrower
contained in or repeated pursuant to Section 5.02 and
of the Parent, the Borrower or their respective
Subsidiaries contained in any other Loan Document
(other than representations and warranties which
expressly speak only as of a different date) shall be
true and complete in all respects on and as of such
Funding Date as though made on and as of such date both
before and after taking into account the requested
Loans to be made and Letters of Credit to be issued.

(ii) No Default. No Event of Default or
Potential Event of Default shall have occurred and be
continuing or would result from the making of the
requested Loan or the issuance of the requested Letter
of Credit.

(iii) No Injunction. No law or regulation shall
have been adopted, no order, judgment or decree of any
Governmental Authority shall have been issued, and no
litigation shall be pending or threatened (other than
as a result of any condition described in Section
2.08(d), 2.09 or 2.10), which in the reasonable
judgment of the Requisite Lenders, would enjoin,
prohibit or restrain any Lender from making the

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requested Loan or the Issuing Bank from issuing the
requested Letter of Credit or as a result of making any
such Loan or issuing such Letter of Credit impose or
result in the imposition of any material adverse
condition upon any Lender or the Issuing Bank.

(iv) No Material Adverse Change. No event shall
have occurred after December 31, 1992 which, in the
reasonable judgment of the Requisite Lenders, has had
or is reasonably likely to have a Material Adverse
Effect.

(v) No Forfeiture Proceedings. Neither the Borrower
nor any of its Subsidiaries shall have been named as a
defendant in a criminal indictment under the Racketeering
Influenced and Corrupt Organizations Act or any similar
federal or state statute which provides for forfeiture of
assets as a potential criminal penalty unless such
proceeding shall not be adverse to the interests of the
Lenders.

(vi) Borrowing Base. The Borrower shall have
confirmed to the Administrative Agent in writing that since
the delivery of the most recent Borrowing Base Certificate
delivered pursuant to Section 6.01(c) and, after taking into
account the requested Loan or Letter of Credit, the Borrower
has been and is, in its reasonable estimate, in compliance
with the borrowing restrictions formulated in this Agreement
(including, without limitation, under Sections 2.01(a), 2.05
and 3.02(b)) and the Administrative Agent shall have no
reason to believe such confirmation is not accurate.

The request by Borrower for any Loan made, or to be
made, or any Letter of Credit issued, or to be issued, on any
Funding Date other than the Initial Funding Date or delivery of
any Notice of Conversion/Continuation shall constitute a
representation and warranty by Borrower as of such Funding Date
or as of such conversion/continuation date, as applicable that
all the conditions contained in this Section 4.02 have been
satisfied or waived in writing pursuant to Section 12.07.

ARTICLE V
REPRESENTATIONS AND WARRANTIES

5.01. Representations and Warranties on the Initial
Funding Date. To induce each Lender, the Issuing Banks and the
Administrative Agent to enter into this Agreement and to make the
Loans and to issue or participate in the Letters of Credit, the
Borrower hereby represents and warrants to each Lender, the
Issuing Banks and the Administrative Agent that the following
statements are true and correct:

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(a) Organization; Corporate Powers. The Borrower and
each of its Subsidiaries (i) is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) is duly qualified to do
business as a foreign corporation and is in good standing under
the laws of each jurisdiction in which the nature of its business
requires it to be so qualified, except those jurisdictions where
the failure to be in good standing or to so qualify has not had
and will not have a Material Adverse Effect, and (iii) has all
requisite corporate power and authority to own, operate and
encumber its property and assets and to conduct its business as
presently conducted and as proposed to be conducted in connection
with and following the consummation of the transactions
contemplated by the Transaction Documents.

(b) Authority. (i) The Borrower and each of its
Subsidiaries has the requisite corporate power and authority to
execute, deliver and perform its obligations under each of the
Transaction Documents executed by it, or to be executed by it.

(ii) The execution, delivery and performance (or
filing or recording, as the case may be) of each of the Trans-
action Documents to which it is party and the consummation of the
transactions contemplated thereby have been duly authorized by
all necessary corporate action on the part of the Borrower and
each of its Subsidiaries and no other corporate proceedings on
the part of any such Person are necessary to consummate such
transactions.

(iii) Each of the Transaction Documents to which
it is a party has been duly executed and delivered (or filed or
recorded, as the case may be) by the Borrower and each of its
Subsidiaries and constitutes its legal, valid and binding obliga-
tion, enforceable against it in accordance with its terms (except
as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general
equitable principles), is in full force and effect (unless
terminated in accordance with the terms thereof) and no term or
condition thereof has been amended, modified or waived from the
terms and conditions contained therein without the prior written
consent of the Administrative Agent and the Requisite Lenders or,
where so required, the Supermajority Lenders or all of the
Lenders, and the Borrower and each of its Subsidiaries have
performed and complied in all material respects with all the
material terms, provisions, agreements and conditions set forth
therein and required to be performed or complied with by such
parties on or before the effective date thereof, and no default
by any such party exists thereunder.

(c) Subsidiaries. Neither the Borrower nor any of its
Subsidiaries has any Subsidiaries other than those described in
Schedule 5.01(c) and those, if any, which are permitted by

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Section 8.03 to be created after the Initial Funding Date.

(d) No Conflict. The execution, delivery and perfor-
mance of each Transaction Document to which it is a party by the
Parent, the Borrower and each of their respective Subsidiaries
and each of the transactions contemplated thereby do not and will
not (i) conflict with any contractual obligation of any such
Person, any liability resulting from which would have or be
reasonably expected to have a Material Adverse Effect, or (ii)
conflict with or violate such Person's Certificate or Articles
of Incorporation or By-Laws or (iii) except as set forth on
Schedule 5.01(d), conflict with, result in a breach of or
constitute (with or without notice or lapse of time or both) a
default under any Requirement of Law or contractual obligation of
any such Person, any liability resulting from which would have or
be reasonably expected to have a Material Adverse Effect, or
under the Receivables Agreements or the Indenture dated July 1,
1993, between Parent and Harris Trust and Savings Bank pursuant
to which the Senior Deferred Coupon Notes were issued, or (iv)
result in or require the creation or imposition of any Lien
whatsoever upon any of the properties or assets of any such
Person (other than Liens in favor of the Collateral Agent, for
the benefit of itself and the Holders of Secured Obligations,
arising pursuant to the Loan Documents or Liens permitted
pursuant to Section 8.02(b)), or (v) require any approval of
stockholders of any such Person, unless such approval has been
obtained.

(e) Governmental Consents. The execution, delivery
and performance of each Transaction Document to which it is a
party, by the Parent, the Borrower and each of their respective
Subsidiaries and the transactions contemplated thereby do not and
will not require any registration with, consent or approval of,
or notice to, or other action with or by, any Governmental
Authority, except filings, consents or notices which have been
made, obtained or given.

(f) Governmental Regulation. None of the Parent, the
Borrower or any of their respective Subsidiaries is subject to
regulation under the Public Utility Holdings Company Act of 1935,
the Federal Power Act, the Interstate Commerce Act, the
Investment Company Act of 1940 or any other statute or regulation
of any Governmental Authority such that its ability to incur
indebtedness is limited or its ability to consummate the
transactions contemplated hereby or by the other Transaction
Documents is materially impaired.

(g) Financial Position. (i) As of the Initial
Funding Date, all quarterly and annual financial statements of
the Borrower or of the Consolidated Borrower Group delivered to
the Administrative Agent were prepared in conformity with GAAP
(except as otherwise noted therein) and fairly present the
financial position of the Borrower or the consolidated financial

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position of the Consolidated Borrower Group, as the case may be,
as at the respective dates thereof and the results of operations
and changes in cash flows for each of the periods covered
thereby, subject, in the case of any unaudited interim financial
statements, to changes resulting from audit and normal year-end
adjustments.

(ii) All quarterly and annual financial
statements of Consolidated Parent Group, the Borrower or of the
Consolidated Borrower Group delivered to the Administrative Agent
after the Initial Funding Date will have been prepared in
conformity with GAAP (except as otherwise noted therein) and will
fairly present the financial position of the Borrower or the
consolidated financial position of the Consolidated Parent Group
or the Consolidated Borrower Group, as the case may be, as at the
respective dates thereof and the results of operations and
changes in cash flows for each of the periods covered thereby,
subject, in the case of any unaudited interim financial
statements, to changes resulting from audit and normal year-end
adjustments. Except as contemplated or disclosed in the
Transaction Documents, neither the Borrower nor any of its
Subsidiaries has any material obligations, material contingent
liabilities requiring disclosure under GAAP or Agreement
Accounting Principles, as the case may be or material liabilities
for taxes, long term leases or material or unusual forward or
long term commitments which are not reflected in such financial
statements and the notes thereto.

(h) Pro Forma Financials and Projections. As of the
date of this Agreement, the pro forma financial statements of
Consolidated Borrower Group provided by the Parent and set forth
in that certain Confidential Information Memorandum dated
December, 1993 to the Lenders (the "Bank Book") are reasonable
estimates of the pro forma financial condition of the Borrower
and the pro forma results of operations and changes in cash flows
for the periods covered thereby in all material respects. Except
as contemplated or disclosed in the Transaction Documents, as of
the date of such pro forma financial statements, none of the
Borrower or any of its Subsidiaries had any material (i)
obligations, (ii) contingent liabilities or liabilities for
taxes, long-term leases or (iii) material or unusual forward or
long-term commitments which are not reflected in such pro forma
financial statements or the notes thereto and requiring
disclosure under GAAP or Agreement Accounting Principles, as the
case may be. As of the date of this Agreement the projections
(and the assumptions made in preparing such projections)
concerning the Consolidated Borrower Group set forth in the Bank
Book reflected the Borrower's best estimate of the Consolidated
Borrower Group's future performance based upon the information
available to the Borrower at the time, and the assumptions and
methodology used in the projections was, in Borrower's judgment,
reasonable.

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(i) Capitalization.

(i) As of the Initial Funding Date, Schedule 5.01(i)
sets forth the number of shares and the relevant percentages of
capital stock held by each shareholder of the Parent that holds
in excess of 5% of the Capital Stock of the Parent of which the
Parent or the Borrower has knowledge.

(ii) There are outstanding no shares of any class of
capital stock (or any securities, instruments, warrants, option
or purchase rights, conversion or exchange rights, calls,
commitments or claims of any character convertible into or exer-
cisable for capital stock) of:

(A) the Borrower other than capital stock described on
Schedule 5.01(i); or

(B) any Subsidiary of the Borrower other than the
capital stock held directly or indirectly by Borrower and
pledged to the Collateral Agent for the benefit of itself
and Holders of Secured Obligations pursuant to Pledge
Agreements.

None of such capital stock is subject to any security, instru-
ment, warrant, option or purchase rights, agreement, conversion
or exchange rights, call, commitment or claim of any right, title
or interest therein or thereto other than pursuant to the Pledge
Agreements. The outstanding capital stock of the Borrower and
each of their respective Subsidiaries is duly authorized, validly
issued, fully paid and nonassessable.

(j) Litigation; Adverse Effects. (i) Except as set
forth in Schedule 5.01(j), there is no action, suit, proceeding,
investigation of any Governmental Authority or arbitration, at
law or in equity, or before or by any Governmental Authority,
pending, or, to the best knowledge of the Borrower, threatened
against the Parent, the Borrower, or any of the respective
Subsidiaries or any Property of any of them, which if adversely
determined would be reasonably expected to have a Material
Adverse Effect.

(ii) Neither the Borrower nor any of its
Subsidiaries is (A) in violation of any applicable law which
violation has or might reasonably be expected to have a Material
Adverse Effect, or (B) subject to or in default with respect to
any final judgment, writ, injunction, decree, order, rule or
regulation of any court or Governmental Authority which has or is
reasonably likely to have a Material Adverse Effect. Except as
set forth in Schedule 5.01(j), there is no action, suit, pro-
ceeding or investigation pending or, to the knowledge of the
Borrower, threatened in writing against or affecting the Parent,
the Borrower, or any of the Borrower's Subsidiaries (1) which
challenges the validity or the enforceability of any of the

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Transaction Documents or (2) which will or would reasonably be
expected to result in (y) any liability in the aggregate in the
amount of greater than $2,000,000 with respect to any such Person
(in each case net of applicable third-party insurance coverage
other than retro-premium insurance that determines retro-premiums
solely on the basis of losses of the insured person) or (z) which
involves a claim under the Racketeering Influenced and Corrupt
Organizations Act or any similar federal or state statute where
such Person is a defendant in a criminal indictment that provides
for the forfeiture of assets to any Governmental Authority as a
potential criminal penalty.

(k) No Material Adverse Change. There has occurred no
event since December 31, 1992 which has or is reasonably likely
to have a Material Adverse Effect.

(l) Payment of Taxes. All tax returns and reports of
each of the Parent, the Borrower and their respective Subsid-
iaries required to be filed (including extensions), have been
timely filed, and all taxes, assessments, fees and other charges
of Governmental Authorities thereupon and upon their respective
properties, assets, income and franchises which are shown on such
returns as being due and payable, have been paid when due and
payable, except (i) taxes being contested in good faith by
appropriate proceedings and that are reserved against in
accordance with Agreement Accounting Principles, (ii) taxes which
are not yet delinquent, (iii) taxes which are payable in
installments so long as paid before any penalty accrues with
respect thereto and (iv) other taxes, assessments, fees and other
charges of Governmental Authorities which do not exceed $500,000.
On the Initial Funding Date, except as set forth in clause (iv)
above or on Schedule 5.01(l), and after the Initial Funding Date,
except as set forth in clauses (i) through (iv) above or on
Schedule 5.01(l), the Borrower has no knowledge of any proposed
tax assessment against the Parent, the Borrower or any Borrower
Subsidiary. All tax assessments referred to in Schedule 5.01(l)
are being contested in good faith by the Parent, the Borrower or
such Subsidiary or a settlement with respect to any such
assessment is being negotiated in good faith by such Person and
appropriate reserves have been established in accordance with
GAAP or Agreement Accounting Principles, as applicable.

(m) Material Adverse Agreements. None of the Parent,
the Borrower or any of the Borrower's Subsidiaries is a party to
or subject to any Contractual Obligation or other restriction
contained in its charter or By-laws which has or is reasonably
expected to have a Material Adverse Effect after giving effect to
the consummation of the transactions contemplated in the
Transaction Documents or otherwise.

(n) Performance. None of the Parent, the Borrower or
any of the Borrower's Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations,

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covenants or conditions contained in any Contractual Obligation
applicable to it under any agreement or instrument the absence or
termination of which Contractual Obligations would be reasonably
likely to have a Material Adverse Effect, and no condition exists
which, with the giving of notice or the lapse of time, or both,
would constitute a default under such Contractual Obligation,
except where the consequences, direct or indirect, of such
default or defaults, if any, would not have or are not reasonably
expected to have a Material Adverse Effect.

(o) Securities Activities. Neither the Borrower nor
any of the Borrower's Subsidiaries is engaged in the business of
extending credit for the purpose of purchasing or carrying any
Margin Stock.

(p) Disclosure. Subject to changes in facts or
conditions which are required or permitted under this Agreement,
the representations and warranties of the Parent, the Borrower
and any of the Borrower's Subsidiaries contained in the
Transaction Documents, and all certificates and other documents
delivered to the Administrative Agent in connection therewith,
taken as a whole do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements contained herein or therein, in light of
the circumstances under which they were made, not materially
misleading.

(q) Requirements of Law. The Parent, the Borrower,
and each of the Borrower's Subsidiaries is in compliance with all
Requirements of Law (including, without limitation, the
Securities Act and the Securities Exchange Act, the applicable
rules and regulations thereunder, and state securities laws)
applicable to it and its business, where the failure to so comply
would have or would be reasonably expected to have a Material
Adverse Effect.

(r) Patents, Trademarks, Permits, Etc. The Parent,
the Borrower, and each of the Borrower's Subsidiaries owns, is
licensed or otherwise has the lawful right to use, or has all
permits and other approvals of Governmental Authorities, patents,
trademarks, service marks, trade names, copyrights, technology,
know-how and processes used in or necessary for the conduct of
its business as currently conducted which are material to the
financial condition, business, operations, assets and prospects
of the Borrower, any Subsidiary or the Borrower Consolidated
Group. The use of such permits and other approvals of Govern-
mental Authorities, patents, trademarks, service marks, trade
names, copyrights, technology, know-how and processes by the
Parent, the Borrower or any of the Borrower's Subsidiaries does
not infringe on the rights of any Person, subject to such claims
and infringements the existence of which do not have or are not
reasonably expected to have a Material Adverse Effect. The
consummation of the transactions contemplated by the Transaction

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Documents will not impair the ownership of or rights under (or
the license or other right to use, as the case may be) any
permits and governmental approvals, patents, trademarks, service
marks, trade names, copyrights, technology, know-how or processes
by the Parent, the Borrower or any of the Borrower's Subsidiaries
in any manner which has or is reasonably likely to have a
Material Adverse Effect.

(s) Environmental Matters. Except where the
circumstances causing the failure of any of the representations
and warranties set forth in this subsection (s) to be true and
correct are not reasonably likely to result in a Material Adverse
Effect or except as disclosed in the documents identified in
Schedule 5.01(s), (i) each of the operations of the Parent, the
Borrower, and their Subsidiaries comply in all respects with all
applicable environmental, health and safety Requirements of Law;
(ii) each of the Parent, the Borrower and their Subsidiaries has
obtained all environmental, health and safety Permits necessary
for its operations, all such Permits are in good standing and
each of Parent, Borrower, or their respective Subsidiaries is in
compliance with all terms and conditions of such Permits; (iii)
(A) none of the Parent, the Borrower, or any of their respective
Subsidiaries, any of their present Property or operations and
(B) none of the Parent's, the Borrower's or their respective
Subsidiaries' previously owned Property or past operations is
subject to any order from or agreement with any Governmental
Authority or private party or any judicial or administrative
proceeding or investigations respecting any environmental, health
or safety Requirements of Law or is the subject of any
investigation by any Governmental Authority evaluating the need
for Remedial Action to respond to a material Release or
threatened Release of a Contaminant into the environment, or is
subject to any Remedial Action or other Liabilities and Costs
arising from the Release or threatened Release of a Contaminant
into the environment; (iv) none of the operations of the Parent,
the Borrower or any of their respective Subsidiaries is subject
to any judicial or administrative proceeding alleging a violation
of any environmental, health or safety Requirement of Law; (v)
none of the Parent, the Borrower or their respective Subsidiaries
has sent or directly arranged for the transport of any waste or
Contaminant to any site listed or proposed for listing on the
federal national priorities list or any state equivalent list of
sites designated for Remedial Action; (vi) no past or present
property of the Parent, the Borrower or any of their respective
Subsidiaries is now or has ever been a storage, treatment or
disposal facility for hazardous waste, as those terms are defined
under 40 CFR Part 261 or any state equivalent; (vii) none of the
Parent, the Borrower or their respective Subsidiaries has filed
any notice under any applicable Requirement of Law reporting a
Release of a Contaminant into the environment; (viii) there is
not now, nor has there ever been, on or in the Property of the
Parent, the Borrower or any of their respective Subsidiaries: (A)
any underground storage tanks or surface impoundments or (B) any

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polychlorinated biphenyls used in hydraulic oils, electrical
transformers or other equipment; (ix) none of the Parent, the
Borrower or their respective Subsidiaries has received any notice
or claim to the effect that it is or might be liable to any
Person as a result of the Release or threatened Release of a
Contaminant into the environment, or as a result of exposure to
any Contaminant, which might result in liability in excess of
workers compensation; (x) no Environmental Lien has attached to
any Property of the Parent, the Borrower or any of their
respective Subsidiaries; or (xi) within the last eighteen months,
each of the Parent and the Borrower has inspected its Property
and the Property of its respective Subsidiaries and all asbestos
containing material, if any, which is on or part of such Property
(excluding any raw materials which are used in the manufacture of
products or products themselves) is in good repair according to
the current standards and practices governing such material, and
its presence or condition does not violate any currently
applicable or proposed Requirement of Law; and (xii) none of the
products which the Parent, the Borrower or any of their
respective Subsidiaries manufactures, distributes or sells, or
ever has manufactured, distributed or sold, contains asbestos
material.

(t) Employee Benefit Matters. Neither the Borrower
nor any ERISA Affiliate maintains or contributes to any Benefit
Plan or Multiemployer Plan other than those listed on
Schedule 5.01(t). Each Plan which is intended to be qualified
under Section 401(a) of the IRC as currently in effect has been
determined by the IRS to be so qualified (or will be submitted to
the IRS for a determination as to its qualified status within the
applicable remedial amendment period for such Plan), and each
trust related to any such Plan has been determined to be exempt
from Federal income tax under Section 501(a) of the IRC as
currently in effect. Except as disclosed in Schedule 5.01(t),
neither the Borrower nor any ERISA Affiliate maintains or
contributes to any employee welfare benefit plan within the
meaning of Section 3(1) of ERISA which provides benefits to
employees after termination of employment other than as required
by Part 6 of Title I of ERISA. The Borrower and all of its ERISA
Affiliates are in compliance in all material respects with all of
the responsibilities, obligations or duties imposed on them by
ERISA or regulations promulgated thereunder with respect to all
Plans. No Benefit Plan has incurred any accumulated funding
deficiency (as defined in Sections 302(a)(2) of ERISA and 412(a)
of the IRC) whether or not waived which has had or is reasonably
likely to have a Material Adverse Effect. Neither the Borrower
nor any ERISA Affiliate or any fiduciary of any Plan which is not
a Multiemployer Plan (i) has engaged in a nonexempt prohibited
transaction described in Section 406 of ERISA or 4975 of the IRC
or (ii) has taken or failed to take any action which would
constitute or result in a Termination Event. Except as disclosed
on Schedule 5.01(t), neither the Borrower nor any ERISA Affiliate
has any potential liability under Section 4063, 4064, 4069, 4204

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or 4212(c) of ERISA which has had or is reasonably likely to have
a Material Adverse Effect. Neither the Borrower nor any ERISA
Affiliate has incurred any liability to the PBGC which remains
outstanding other than the payment of premiums, and there are no
premium payments which have become due which are unpaid.
Schedule B to the most recent annual report filed with the IRS
with respect to each Benefit Plan and furnished to the
Administrative Agent is complete and accurate. Since the date of
each such Schedule B, there has been no material adverse change
in the funding status or financial condition of the Benefit Plan
relating to such Schedule B. Neither the Borrower nor any ERISA
Affiliate has (i) failed to make a required contribution
or payment to a Multiemployer Plan or (ii) made a complete or
partial withdrawal under Section 4203 or 4205 of ERISA from a
Multiemployer Plan in either case which has had or is reasonably
likely to have a Material Adverse Effect. Neither the Borrower
nor any ERISA Affiliate has failed to make a required installment
or any other required payment under Section 412 of the IRC on or
before the due date for such installment or other payment.
Neither the Borrower nor any ERISA Affiliate is required to
provide security to a Benefit Plan under Section 401(a)(29) of
the IRC due to a Plan amendment that results in an increase in
current liability for the plan year. Neither the Borrower nor
any ERISA Affiliate has by reason of the transactions
contemplated hereby any obligation to make any payment to any
employee pursuant to any Plan or existing contract or
arrangement.

(u) Solvency. Each of the Parent, the Borrower,
individually, and the Consolidated Borrower Group, considered as
one enterprise, is Solvent after giving effect to the transac-
tions contemplated by this Agreement and the other Transaction
Documents and the payment and accrual of all Transaction Costs
with respect to any of the foregoing.

(v) Assets and Properties. The Borrower and each of
its Subsidiaries has good title to all of the assets (tangible
and intangible) owned by it, except for imperfections of title
(including Liens to the extent permitted under Section 8.02(b))
which in the aggregate do not have a Material Adverse Effect; and
all such assets are free and clear of all Liens, except as
otherwise specifically permitted by the terms and provisions of
this Agreement and the other Loan Documents.

(w) Joint Venture; Partnership. Except as set forth
in Schedule 5.01(w), neither the Borrower nor any of its
Subsidiaries is engaged in any joint venture or partnership with
any other Person.

(x) Labor Matters. Except as listed on Schedule
5.01(x), there are no collective bargaining agreements, other
labor agreements or Multiemployer Plans covering any of the
employees of the Parent, the Borrower or any of their respective

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Subsidiaries. No attempt to organize the employees of the
Borrower or any of their respective Subsidiaries, and no labor
disputes, strikes or walkouts affecting the operations of the
Parent, the Borrower or any of their respective Subsidiaries, is
pending, or, to the Borrower's knowledge, threatened, planned or
contemplated which has had or is reasonably likely to have a
Material Adverse Effect.

(y) No Default. No Potential Event of Default or
Event of Default exists.

(z) Restricted Junior Payments. On or after the
Initial Funding Date, neither the Borrower nor any Subsidiary of
the Borrower has directly or indirectly declared, ordered, paid
or made or set apart any sum or property for any Restricted
Junior Payment or agreed to do so, except to the extent permitted
pursuant to Section 8.05.

(aa) Advances to Parent. All Investments of the
Borrower in the Parent as of the Closing Date constitute
Indebtedness of the Parent extended by the Borrower on open
account and none are evidenced by any promissory note or other
instrument.

5.02. Subsequent Funding Representations and
Warranties. To induce each Lender, the Issuing Bank, the
Administrative Agent and the Collateral Agent to enter into this
Agreement and to make the Loans and to issue or participate in
Letters of Credit, the Borrower hereby represents and warrants to
each Lender, the Issuing Bank, the Administrative Agent and the
Collateral Agent that the statements set forth in Section 5.01
(except to the extent that such statements expressly are made
only as of the Initial Funding Date), are true, correct and
complete in all material respects on and as of the Funding Date
in respect of each Borrowing after the Initial Funding Date and
on and as of the date any Notice of Continuation/Conversion is
delivered to the Administrative Agent, except that the
representations and warranties need not be true and correct to
the extent that changes in the facts and conditions on which such
representations and warranties are based are required or
permitted under this Agreement or any Loan Document.

ARTICLE VI
Reporting Covenants

So long as the Borrower shall have any outstanding
Agreement Obligations or any Lender shall have any Commitment
hereunder or any Letter of Credit remains outstanding:

6.01. Financial Statements. Each of the Parent and
the Borrower shall maintain or cause to be maintained a system of
accounting established and administered in accordance with sound

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business practices and consistent with past practice to permit
preparation of financial statements in conformity with GAAP, and,
if required by the terms of this Agreement in conformity with
Agreement Accounting Principles, and each of the financial
statements described below shall be prepared from such system and
records. The Borrower shall deliver or cause to be delivered to
the Administrative Agent:

(a) Annual Reports. As soon as practicable, and in
any event within one hundred and five (105) days after the end of
each Fiscal Year on a consolidated basis for each of the
Consolidated Parent Group, and the Consolidated Borrower Group,
and on a consolidating basis for the Consolidated Borrower Group,
annual financial statements consisting of a balance sheet, income
statement and cash flow statement, setting forth in comparative
form in each case the consolidated figures for the corresponding
periods of the previous Fiscal Year all in reasonable detail, and
accompanied, in the case of such consolidated financial
statements, by an opinion (unqualified as to scope or going
concern and which is not adverse and does not contain any
disclaimer) thereon of Arthur Andersen & Co. or another firm of
independent certified public accountants of recognized national
standing regularly retained by the Parent or the Borrower and
acceptable to the Administrative Agent, which report shall state
that such financial statements present fairly the financial
position of the Persons covered thereby as at the dates indicated
and the results of their operations and cash flow for the periods
indicated in conformity with GAAP or Agreement Accounting
Principles, as applicable, applied on a basis consistent with
prior years (or, in the event of a change in accounting
principles, such accountants' concurrence with such change) and
that such firm's audit has been conducted in accordance with
generally accepted auditing standards; provided, however, such
opinion shall only be required as to Fiscal Years commencing with
the Fiscal Year beginning January 1, 1994.

(b) Quarterly Reports.

As soon as practicable, and in any event within fifty
(50) days after the end of each of the Borrower's and the
Parent's fiscal quarters, on a consolidated basis for each
of the Consolidated Parent Group and the Consolidated
Borrower Group and on a consolidating basis for the
Consolidated Borrower Group as to the most recent fiscal
quarter and the year to date, each of the following:

(A) a balance sheet as of the end of such fiscal
quarter, and as of the end of the previous Fiscal Year;

(B) an income statement for such fiscal quarter
and for the period from the beginning of the current
Fiscal Year to the end of such fiscal quarter, setting

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forth in each case in comparative form and in
reasonable detail the figures for the corresponding
periods of the previous Fiscal Year and in the
projected financial statements delivered pursuant to
clause (d) below; and

(C) a cash flow statement for such fiscal quarter
and for the period from the beginning of the current
Fiscal Year to the end of such fiscal quarter, setting
forth in each case in comparative form and in
reasonable detail the figures for the corresponding
period of the previous Fiscal Year.

all prepared by the Parent or the Borrower, as applicable,
together with a certification by the chief financial officer,
treasurer or controller of Borrower that they fairly represent
the financial condition of the Persons covered thereby as at the
dates indicated in accordance with GAAP or Agreement Accounting
Principles, as applicable, subject to changes resulting from
audit and normal year-end adjustments.

(c) Borrowing Base Report. As soon as practicable,
and in any event within twenty (20) days after the end of each
fiscal month, a Borrowing Base Certificate as of the end of such
fiscal month.

(d) Budget and Business Plan. Promptly upon
completion, but in any event not later than forty-five (45) days
after the end of each Fiscal Year, a copy of the operating budget
and projections by the Borrower of the income statement, balance
sheet and cash flow of the Consolidated Borrower Group each taken
as a whole, for the next succeeding fiscal year of the
Consolidated Borrower Group, all in form customarily prepared by
the Parent's or the Borrower's management, as applicable, and
promptly after preparation of any commentary on any such budget
or projected financial statements, a copy of such commentary,
such operating budget and projected financial statements to be
accompanied by a certificate of the chief financial officer,
treasurer or controller of Borrower, as applicable, to the effect
that such operating budget and projected financial statements
have been prepared on the basis of sound financial planning
practice and that such officer has no reason to believe they are
incorrect or misleading in any material respect.

(e) Compliance Certificate. Together with each
delivery of (i) the financial statements pursuant to
subsections (a) and (b) above, (A) an Officers' Certificate of
the Borrower or the Parent, as applicable stating that the
signers have reviewed the terms of this Agreement and the Loan
Documents, and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions
and condition of Parent, Borrower and their respective
Subsidiaries during the accounting period covered by such

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financial statements, and that such review has not disclosed the
existence during or at the end of such accounting period, and
that the signers do not have knowledge of the existence as at the
date of the Officer's Certificate, of any condition or event
which constitutes an Event of Default or Potential Event of
Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what
action the Borrower has taken, is taking and proposes to take
with respect thereto; and (B) a Compliance Certificate (1) demon-
strating in reasonable detail compliance during and at the end of
such accounting periods with the provisions set forth in Sections
2.05, 8.01, 8.03, 8.04, 8.05 and 8.11 and Article IX and (2) in
the case of the financial statements delivered pursuant to
subsection (a) or subsection (b) above, stating that such
financial statements present fairly the financial position of the
Consolidated Parent Group and the Consolidated Borrower Group, as
at the dates indicated and the results of their operations and
changes in their cash flow for the periods indicated in
conformity with GAAP or Agreement Accounting Principles, as
applicable, (except as otherwise noted therein) consistently
applied and (ii) the financial statements pursuant to subsection
(a) above, a written discussion and analysis by the management of
the Parent or the Borrower, as applicable, of such financial
statements.

(f) Accountants' Compliance Certificate.
Simultaneously with the delivery of the financial statements
referred to in subsection (a) above, a statement of the firm of
independent certified public accountants which reported on such
financial statements whether anything has come to their attention
to cause them to believe that there existed on the date of such
statements any Event of Default or Potential Event of Default
under Article IX hereof.

(g) Report of Material Events. Promptly upon the
Borrower obtaining knowledge (A) of any condition or event which
constitutes an Event of Default or Potential Event of Default, or
(B) of any condition or event which has or is reasonably likely
to have a Material Adverse Effect, an Officer's Certificate
specifying the nature and period of existence of any such
condition or event and what action the Borrower has taken, is
taking and proposes to take with respect thereto.

(h) Notice of Claims and Proceedings. (i) Promptly
after learning thereof, notice of the institution of, or written
threat of, any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Parent, the
Borrower or any of their respective Subsidiaries (or any Property
of such Person) involving claims in excess of $2,000,000 with
respect to any such Person or any Property of such Person valued
in excess of $5,000,000 except where the same is fully covered
(other than any applicable deductible) by insurance (other than
insurance in the nature of retro-premium insurance or other self

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insurance programs) and of any material adverse change in any
existing action, suit, proceeding, governmental investigation or
arbitration; and (ii) promptly upon learning thereof, notice of
any investigation or proceeding before or by any Governmental
Authority, the effect of which might limit, prohibit or restrict
materially the manner in which the Borrower or any of its
Subsidiaries currently conducts its business or to declare any
substance contained in the products manufactured or distributed
by it to be dangerous, if such declaration has or is reasonably
likely to have a Material Adverse Effect.

(i) ERISA Matters.

(i) As soon as possible, and in any event within
fifteen (15) Business Days after the Borrower or any ERISA
Affiliate knows or has reason to know that a Termination
Event has occurred, a written statement of the chief finan-
cial officer of the Borrower describing such Termination
Event and the action, if any, which the Borrower or such
ERISA Affiliate has taken, is taking or proposes to take
with respect thereto, and when known, any action taken or
threatened by the IRS, DOL or PBGC with respect thereto;

(ii) As soon as possible, and in any event within
fifteen (15) Business Days, after the Borrower or any ERISA
Affiliate knows or has reason to know that a prohibited
transaction (as defined in Section 406 of ERISA and
Section 4975 of the IRC) involving the Borrower or any ERISA
Affiliate has occurred, a statement of the chief financial
officer of the Borrower describing such transaction and the
action which the Borrower or such ERISA Affiliate has taken,
is taking or proposes to take with respect thereto;

(iii) Within fifteen (15) Business Days after receipt
by the Borrower or any ERISA Affiliate of a written request
from the Administrative Agent (which shall make such request
at the request of any Lender), a copy of each annual report
(Form 5500 series), including Schedule B thereto, filed
after the Closing Date with respect to each Benefit Plan;

(iv) Within fifteen (15) Business Days after the
filing thereof with the IRS, a copy of each funding waiver
request filed with respect to any Benefit Plan and within
fifteen (15) Business Days after receipt, a copy of any
communications received by the Borrower or any ERISA
Affiliate with respect to such request;

(v) Within fifteen (15) Business Days after receipt by
the Borrower or any ERISA Affiliate of a written request
from the Administrative Agent (which shall make such request
at the request of any Lender), a copy of each actuarial
report for any Benefit Plan or Multiemployer Plan and each
annual report for any Multiemployer Plan; provided that

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neither the Borrower nor any ERISA Affiliate shall have an
obligation to provide a copy of any actuarial report or
annual report for any Multiemployer Plan if it is unable to
obtain such documents after good faith efforts to do so;

(vi) Within fifteen (15) Business Days after the
occurrence thereof, notification of any increases in the
benefits of any existing Benefit Plan or the establishment
of any new Plan or the commencement of contributions to any
Multiemployer Plan to which the Borrower or any ERISA
Affiliate was not previously contributing;

(vii) Within fifteen (15) Business Days after receipt
by the Borrower or an ERISA Affiliate of notice of the
PBGC's intention to terminate a Benefit Plan or to have a
trustee appointed to administer a Benefit Plan, a copy of
each such notice;

(viii) Within fifteen (15) Business Days after receipt
by the Borrower or any ERISA Affiliate of any unfavorable
determination letter from the IRS regarding the
qualification of a Plan under Section 401(a) of the IRC, a
copy of such letter;

(ix) Within fifteen (15) Business Days after receipt
by the Borrower or an ERISA Affiliate of a notice from a
Multiemployer Plan regarding the imposition of withdrawal
liability, copies of each such notice;

(x) Within fifteen (15) Business Days after the
failure by the Borrower or any ERISA Affiliate to make a
required installment or any other payment required under
Section 412 of the IRC on or before the due date for such
installment or payment, a notification of such failure; and

(xi) Within fifteen (15) Business Days after the
Borrower or any ERISA Affiliate knows or has reason to know
(A) a Multiemployer Plan has been terminated, (B) the
administrator or plan sponsor of a Multiemployer Plan
intends to terminate a Multiemployer Plan, or (C) the PBGC
has instituted or will institute proceedings under
Section 4042 of ERISA to terminate a Multiemployer Plan, a
notification of such information.

For purposes of this Section 6.01(i), the Borrower and any ERISA
Affiliate shall be deemed to know all facts known by the
administrator of any Plan of which the Borrower or any ERISA
Affiliate is the plan sponsor.

(j) Other Information. Such other information
respecting the financial condition of the Borrower or its
business, operations, assets, performance or prospects as the
Administrative Agent, the Collateral Agent or any Lender may,

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from time to time, reasonably request including, without
limitation, financial projections, business plans and (following
written notice to Borrower) any information such Person's
accountants may have with respect to such Person's financial
condition, its business, operations, assets, performance and
prospects. The Administrative Agent and the Lenders shall treat
any non-public information so obtained as confidential.

(k) Publicly Distributed Information. On a timely
basis, copies of all financial statements, reports and notices,
sent or made available generally by the Parent or the Borrower to
the holders of its publicly-held securities, if any, or filed
with the Commission, and of all press releases made available
generally by the Parent or the Borrower to the public, if any,
concerning material developments in the business of the Parent or
the Borrower.

(l) Property Damage or Condemnation. Promptly after
the occurrence thereof, written notification (or telephonic
notice promptly confirmed in writing) of and a description of any
Property of the Parent, the Borrower or any of their respective
Subsidiaries with an aggregate value in excess of $1,000,000
damaged, lost or taken and the anticipated amount of any
insurance or condemnation proceeds in connection therewith.

6.02. Environmental Notices. The Borrower shall
notify the Administrative Agent in writing, promptly upon the
Borrower's learning thereof, of any:

(a) Notice or claim to the effect that the
Parent, the Borrower or any of their respective
Subsidiaries is or may be liable to any Person as a
result of the Release or threatened Release of any
Contaminant into the environment;

(b) Notice that the Parent, the Borrower or any
of their respective Subsidiaries is subject to
investigation by any Governmental Authority evaluating
whether any Remedial Action is needed to respond to the
Release or threatened Release of any Contaminant into
the environment;

(c) Notice that any Property of the Parent, the
Borrower or any of their respective Subsidiaries of the
Borrower is subject to an Environmental Lien;

(d) Notice of violation to the Parent, the
Borrower or any of their respective Subsidiaries or
awareness by the Parent, the Borrower or any of their
respective Subsidiaries of a condition which might

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reasonably be expected to result in a notice of violation of
any environmental, health or safety Requirement of Law which
has or could have a Material Adverse Effect;

(e) Commencement or threat of any judicial or
administrative proceeding alleging a violation by the
Parent, the Borrower or any of their respective
Subsidiaries of any environmental, health or safety
Requirement of Law which, if adversely determined, has
or could have a Material Adverse Effect; or

(f) Any proposed acquisition of stock, assets,
real estate, or leasing of property, or any other
action by the Parent, the Borrower or any of their
respective Subsidiaries that is reasonably likely to
subject the Parent, the Borrower or any such Subsidiary
to environmental, health or safety Liabilities and
Costs in excess of $250,000.

ARTICLE VII
Affirmative Covenants

The Borrower covenants and agrees that, on and after
the date hereof and so long as the Borrower shall have any
outstanding Agreement Obligations or any Lender shall have any
Commitment hereunder or any Letter of Credit remains outstanding:

7.01. Corporate Existence, Etc. The Borrower shall,
and shall cause each of its Subsidiaries to, at all times,
maintain its corporate existence and preserve and keep in full
force and effect its rights and franchises. The Borrower shall
promptly provide the Administrative Agent and the Collateral
Agent with a complete list of its Subsidiaries upon the
occurrence of any change in the list set forth on Schedule
5.01(c) hereto.

7.02. Corporate Powers, Etc. The Borrower shall, and
shall cause each of its Subsidiaries to, qualify and remain
qualified to do business in each jurisdiction in which the nature
of its business requires it to be so qualified, except in those
jurisdictions where the failure to so qualify does not have and
is not reasonably likely to have a Material Adverse Effect.

7.03. Compliance with Laws. The Borrower shall, and
shall cause each of its Subsidiaries to, comply with all Require-
ments of Law, and all Contractual Obligations affecting it or its
business, properties, assets or operations, except where the
failure so to comply does not have and is not reasonably likely
to have a Material Adverse Effect.

7.04. Payment of Taxes and Claims. The Borrower
shall, and shall cause each of its Subsidiaries to, pay (a) all

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taxes, assessments and other governmental charges imposed upon it
or on any of its properties or assets or in respect of any of its
franchises, business, income or property before any penalty or
interest accrues thereon, and (b) all claims (including, without
limitation, claims for labor, services, materials and supplies)
for sums which have become due and payable and which by law have
or may become a Lien (other than a Customary Permitted Lien) upon
any of its properties or assets, prior to the time when any
penalty or fine shall be incurred with respect thereto; provided
that no such taxes, assessments and governmental charges referred
to in clause (a) above or claims referred to in clause (b) above
need be paid if being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and if
such reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made therefor.

7.05. Maintenance of Properties; Insurance. The
Borrower shall, and shall cause each of the Borrower Subsidiaries
to, maintain or cause to be maintained in good repair, working
order and condition, excepting ordinary wear and tear and damage,
due to casualty or condemnation, all Property material to its
operations (which shall in any event include each parcel of real
property subject to any Mortgage) and will make or cause to be
made all appropriate repairs, renewals and replacements thereof.
The Borrower shall, and shall cause each of the Borrower Subsidi-
aries to, maintain with financially sound insurance companies the
insurance policies and programs, including, self-insurance
retention levels, listed on Schedule 7.05 hereto (or
substantially similar programs or policies and amounts or other
programs, policies and amounts) insuring all Property and other
assets material to the operations of Borrower and the Borrower
Subsidiaries (which shall in any event include each parcel of
real property subject to any Mortgage) against loss or damage by
fire, theft, burglary, pilferage and loss in transit and business
interruption, together with such other hazards as are reasonably
consistent with prudent industry practice, and maintain liability
insurance consistent with prudent industry practice with
financially sound insurance companies. Not later than thirty
(30) days after the renewal, replacement or material modification
of any policy or program, the Borrower shall deliver or cause to
be delivered to the Collateral Agent (which the Collateral Agent
shall promptly distribute to each Lender) a detailed schedule
setting forth for each such policy or program: (a) the amount of
such policy, (b) the risks insured against by such policy, (c)
the name of the insurer and each insured party under such policy,
and (d) the policy number of such policy. All casualty and
business interruption insurance covering the Borrower or any
Subsidiary of the Borrower or any Property of the Borrower or any
Subsidiary of the Borrower shall contain an endorsement in the
form of Exhibit 9.

7.06. Inspection of Property; Books and Records;
Discussions. The Borrower shall permit, and shall cause each of

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its Subsidiaries to permit, any authorized representative(s)
designated by Administrative Agent or the Collateral Agent to
visit and inspect any of its properties, including financial and
accounting records, and to make copies and take extracts
therefrom, and to discuss its affairs, finances and accounts with
its officers, employees, representatives, agents or independent
certified public accountants, all upon reasonable notice and at
such reasonable time and as often as may be reasonably requested.
Each such reasonable visitation and inspection made by or on
behalf of the Administrative Agent or the Collateral Agent shall
be at the Borrower's expense.

7.07. Labor Matters. The Borrower shall notify the
Administrative Agent, in writing, promptly, but in any event
within two (2) Business Days after learning thereof, of any
material labor dispute to which it or any of its Subsidiaries may
become a party and any strikes or walkouts relating to any of its
or their facilities.

7.08. Maintenance of Permits. The Borrower shall
obtain and maintain, and shall cause each of its Subsidiaries to
obtain and maintain, in full force and effect all licenses,
franchises, Permits or other rights necessary for the operation
of its business, except where the failure to obtain or maintain
such licenses, franchises, Permits or rights does not have and is
not reasonably likely to have a Material Adverse Effect.

7.09. Employee Benefit Matters. The Borrower shall
establish, maintain and operate, and cause each of its Subsid-
iaries to exercise their best efforts to cause other ERISA
Affiliates to establish, maintain and operate, all Plans in all
material respects in compliance with the applicable provisions of
ERISA, the IRC, and all other applicable laws, and the
regulations and interpretations thereunder, and the respective
requirements of the governing documents for such Plans.

7.10. Formation of Subsidiaries.

(a) The Borrower or any of its Subsidiaries may form
additional Subsidiaries organized as corporations under the laws
of one of the states of the United States provided each of the
following conditions precedent is met in connection therewith:

(i) such Subsidiary shall have executed and delivered a
Subsidiary Guaranty, a Subsidiary Security Agreement, and if
requested by the Collateral Agent, an Intellectual Property
Agreement;

(ii) such Subsidiary shall have executed and become a
party to the Contribution Agreement;

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(iii) to the extent such Subsidiary has an interest of
record in real property, such Subsidiary shall execute and
deliver such Mortgages in connection therewith as shall be
requested by the Collateral Agent (with Schedule 1.01-B
being automatically amended as of the execution thereof);

(iv) all financing statements and Mortgages relating
to the Collateral of such Subsidiary shall have been filed
or recorded and the Collateral Agent shall have received in
form and substance reasonably satisfactory to the Collateral
Agent, such assurances, including, without limitation,
insurance policies, as the Collateral Agent may deem
appropriate to establish such Subsidiary's title, the due
creation, perfection and priority of the Collateral Agent's
Liens for the benefit of itself and the Holders of Secured
Obligations on such Collateral and the absence of any Liens
which are not specifically permitted hereunder (with
Schedule 1.01-C being automatically amended to reflect any
Permitted Existing Liens on such proposed Subsidiary's
assets);

(v) the Borrower shall have executed or shall have
caused its appropriate Subsidiary to execute a Pledge Agree-
ment in respect of all of the stock of such Subsidiary;

(vi) the Collateral Agent shall have received an
opinion of counsel, in form and substance reasonably
satisfactory to the Collateral Agent, covering such matters
relating to the proposed Subsidiary and the Collateral
Documents executed and delivered to the Collateral Agent
pursuant to this Section 7.10 as the Collateral Agent deems
necessary;

(vii) the Administrative Agent shall have received a
compliance certificate from the chief financial officer,
treasurer or controller of the Borrower certifying that
after the formation of such Subsidiary, no Event of Default
or Potential Event of Default exists; and

(viii) the Lenders shall have received such other
documents, instruments or agreements as are reasonably
requested by the Administrative Agent, the Collateral Agent
or the Requisite Lenders in order to ensure that the docu-
mentation with respect to such Subsidiary is substantially
the same as that received with respect to the Subsidiaries
of the Borrower existing on the date hereof.

(b) The Borrower or any of its Subsidiaries may form
additional Subsidiaries organized under the laws of jurisdictions
outside of the United States provided each of the following
conditions precedent is met in connection therewith:

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(i) the majority of the outstanding shares of capital
stock of each such Subsidiary shall be owned directly or
indirectly by the Borrower or any of its Subsidiaries,

(ii) immediately following the formation of each such
Subsidiary,

(A) 65% of the shares (or, if the Borrower owns
directly or indirectly less than 65% of such shares,
all of the shares owned directly or indirectly by the
Borrower) of such Subsidiary shall be pledged to the
Collateral Agent, for the ratable benefit of the
Holders of Secured Obligations pursuant to an amendment
to the Borrower's or the owning Subsidiary's Pledge
Agreement in form and substance reasonably satisfactory
to the Administrative Agent,

(B) the Borrower shall deliver to the
Administrative Agent such opinions of counsel with
respect to, and copies of the Boards of Directors
resolutions authorizing, the execution, delivery and
performance of the agreements described in clause (A)
immediately preceding as the Administrative Agent may
reasonably request.

7.11. Collateral Audit. The Borrower shall permit an
independent auditor satisfactory to the Administrative Agent to
conduct, once each Fiscal Year, review of the accounts
receivable, inventory and fixed assets of the Borrower and
Borrowers Subsidiaries and will pay the fees and disbursements of
such auditor in connection therewith. Such reviews shall include
verification of accounts receivable, a physical inventory and
valuations of such inventory, all to the extent included in the
Borrowing Base as reasonably determined by the Administrative
Agent and the Collateral Agent in consultation with the Borrower.

7.12. Separate Corporate Existence. The Borrower
shall take all reasonable steps (including, without limitation,
all steps which the Agent or any Lender may from time to time
reasonably request) to maintain its identity as a separate legal
entity to make it apparent to third parties that such Borrower is
an entity with assets and liabilities distinct from those of
Parent. Without limiting the generality of the foregoing, the
Borrower shall:

(i) compensate all employees, consultants and agents
directly, from Borrower's or Borrower's Subsidiaries' bank
accounts, for services provided to Borrower by such
employees, consultants and agents and, to the extent any
employee, consultant or agent of Borrower is also an
employee, consultant or agent of Parent, allocate the

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compensation of such employee, consultant or agent between
Borrower and Parent on the basis reasonably related to
actual use of such services;

(ii) allocate all overhead expenses (including,
without limitation, telephone and other utility charges) for
items shared between Borrower and Parent on a basis
reasonably related to actual use;

(iii) cause the Borrower to be named as an insured on
the insurance policy covering its property, or enter into an
agreement with the holder of such policy whereby in the
event of a loss in connection with such property, proceeds
are paid to the Borrower;

(iv) maintain the Borrower's books and records
complete and separate from those of Parent;

(v) ensure that any of Borrower's or Parent's
consolidated financial statements or other public
information for the Borrower and its Affiliates on a
consolidated basis contain appropriate disclosures
concerning the Borrower's separate existence;

(vi) not maintain bank accounts or other depository
accounts to which Parent is an account party, into which
Parent makes deposits or from which Parent has the power to
make withdrawals;

(vii) not permit Parent to pay any of the Borrower's
operating expenses (except when paid and charged pursuant to
an allocation based upon actual use, to the extent
practicable and, to the extent such allocation is not
practicable, on a basis reasonably related to actual use);
and

(viii) at all times have at least one member of the
Borrower's board of directors who is neither an officer or
employee of Parent.

7.13. Interest Rate Hedging Contracts. If at any time
during the term of this Agreement for any 30-day period the one-
month LIBO Rate at all times during such period shall exceed by
2% per annum or more the one-month LIBO Rate as determined by the
Administrative Agent on the Initial Funding Date and at such time
the Compliance Certificate most recently delivered pursuant to
Section 6.01(e) shows that Borrower would not be in compliance if
the current one-month LIBO Rate were applied to compute the
Interest Coverage Ratio holding all other elements of the most
recent computation of the Interest Coverage Ratio constant, then
within 60 days after the last day of such 30-day period the
Borrower shall enter into interest rate Hedging Contracts
reasonably acceptable to the Administrative Agent for a notional

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amount equal to at least 35% of the sum of (i) the aggregate
principal amount of the Term Loans then outstanding and (ii) the
Revolving Credit Commitments then in effect.

7.14. Accountants' Reliance Letter. The Borrower
shall cause the accounting firm which audits the Borrower's
financial statements in accordance with Section 6.01(a) to renew
or extend the understanding entered into pursuant to Section
4.01(o) on terms satisfactory to the Requisite Lenders.

7.15. Future Liens on Real Property in Favor of the
Collateral Agent. The Borrower shall cause each of the
Guarantors to execute and deliver to the Collateral Agent,
immediately upon the acquisition or leasing of any real property
after the Closing Date, a mortgage, deed of trust, collateral
assignment or other appropriate instrument evidencing a Lien upon
any such acquired property, lease or interest, the same to be in
form and substance substantially the same as the Mortgages
executed and delivered on the Closing Date, to be subject only to
such Liens as otherwise shall be permitted by this Agreement and
in all respects to be reasonably acceptable to the Collateral
Agent; provided that the foregoing shall not apply to the
acquisition of a new facility for Hill Refrigeration if such
facility shall be financed by nonrecourse Indebtedness permitted
by Section 8.01(ix) and if and so long as such facility shall be
subject to a Lien securing such Indebtedness.

If the sale of Lapp Insulator Company contemplated by
the Borrower shall not have been consummated within one year
after the Closing Date, then the Borrower shall cause Lapp
Insulator Company to execute and deliver to the Collateral Agent
mortgages and other appropriate instruments evidencing Liens upon
its owned and leased real property in accordance with the
foregoing provisions of this Section 7.15.

ARTICLE VIII
Negative Covenants

8.01. Indebtedness. The Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly
create, incur, assume or otherwise become or remain directly or
indirectly liable with respect to any Indebtedness, except:

(i) the Obligations;

(ii) the Existing Indebtedness;

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(iii) Indebtedness in respect of Accommodation
Obligations permitted by Section 8.04;

(iv) Indebtedness incurred by any Subsidiary of
the Borrower with respect to which the Borrower or any
other Subsidiary of the Borrower is the obligee;

(v) Indebtedness incurred by the Borrower with respect
to which the Parent or any Subsidiary of the Borrower is the
obligee;

(vi) net obligations in respect of Hedging Contracts
not exceeding in the aggregate $10,000,000 at any one time
outstanding except as required by Section 7.13;

(vii) Indebtedness incurred by any of the Borrower or
its Subsidiaries in connection with the issuance of letters
of credit (including Letters of Credit but excluding other
letters of credit fully secured by cash collateral and
letters of credit with respect to which the reimbursement
obligation is fully supported by a Letter of Credit) for
which such Person is the account party in an aggregate
amount (for all such Persons) of up to $65,000,000 at any
one time minus the undrawn face amount of letters of credit
permitted under Section 8.04(v);

(viii) other Indebtedness of the Borrower and its
Subsidiaries not exceeding in the aggregate $25,000,000 at
any one time outstanding;

(ix) Indebtedness which is non-recourse to the
Borrower or any of its Subsidiaries not to exceed
$20,000,000 at any one time in the aggregate that relates to
an Investment in a new facility for Hill Refrigeration;

(x) Indebtedness with respect to Capital Leases not in
excess of $10,000,000 at any one time; and

(xi) any refinancing of the Indebtedness described in
clauses (i) through (ix) of this Section 8.01 provided that
any such refinancing is on market terms.

provided, however, in each case after taking such
Indebtedness into account each of the Consolidated Borrower
Group and the Consolidated Parent Group is in full
compliance with the provisions of Article IX hereof.

Any additional Indebtedness (other than Indebtedness already
permitted pursuant to this Section 8.01) consented to by the
Requisite Lenders shall be on terms which shall include without
limitation that the applicable interest rate shall be at a market
rate, covenants shall be no more restrictive than those contained
in this Agreement, such Indebtedness shall be unsecured, no

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principal payments, sinking fund or similar payments shall be
scheduled in the case of subordinated indebtedness prior to six
months after the Tranche B Term Loan Termination Date or in the
case of other Indebtedness prior to two years after the Tranche B
Term Loan Termination Date and such additional Indebtedness shall
not result in a violation of any of the covenants contained in
this Agreement on a pro forma basis.

8.02. Sales of Assets; Liens.

(a) Limitation on Sales. The Borrower shall not, and
shall not permit any of its Subsidiaries to, sell, assign, trans-
fer, lease, convey or otherwise dispose of, in a single
transaction or in a series of related transactions, any proper-
ties or assets, including, without limitation, any capital stock
of any of their respective Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, except
for (i) sales of inventory in the ordinary course of business,
(ii) the disposition of equipment in the ordinary course of
business, (iii) the sales and/or contribution of Receivables
pursuant to the Receivables Agreements, (iv) any other sales or
dispositions if such properties or assets contributed less than
15% of the EBITDA of the Consolidated Borrower Group in the
immediately preceding Fiscal Year and represent, as of the end of
the most recent Fiscal Year, less than 15% of the total assets of
the Consolidated Borrower Group based on valuations reasonably
satisfactory in form and substance to the Requisite Lenders and
(v) the sale of Lapp Insulator Company, Gerry Sportswear
Corporation or Caron International Inc. in arm's-length
transactions. In addition, neither the Borrower nor any Borrower
Subsidiary shall issue any Securities for any consideration other
than cash except with the consent of the Requisite Lenders.

(b) Liens. The Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly create,
incur, assume or permit to exist any Lien on or with respect to
any of its Property (including all capital stock of any
Subsidiary of the Borrower and all Collateral) except:

(i) Liens granted to the Collateral Agent for the
benefit of itself and the Holders of Secured
Obligations securing the Obligations;

(ii) Customary Permitted Liens;

(iii) Permitted Existing Liens;

(iv) Liens on property existing at the time of
acquisition thereof by the Borrower or any of its
Subsidiaries and Liens securing purchase money Indebtedness
for equipment to the extent the aggregate outstanding
principal amount of such Indebtedness is permitted under
Section 8.01 and the value of the equipment securing such

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Indebtedness approximates the amount of such Indebtedness
provided that in each case such Liens do not apply to other
property or assets of such Person;

(v) Liens with respect to judgments or
attachments which do not result in an Event of Default
or Potential Event of Default hereunder;

(vi) Liens granted on cash collateral securing letters
of credit permitted pursuant to Section 8.01(viii) in favor
of the issuer of such letter of credit;

(vii) Liens granted to secure Indebtedness permitted
under Section 8.01(ix) or Section 8.01(x); and

(viii) Liens filed to perfect the transfers of
Receivables pursuant to the Receivables Agreements or
otherwise to evidence the transactions contemplated
thereunder.

8.03. Investments. The Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly
make or commit to make any advance, loan, extension of credit or
capital contribution to, or purchase of any stock, bonds, notes,
debentures or other Securities of, or make any other investment
in, any Person or enter into a partnership with any Person,
including, without limitation, any Affiliate of the Borrower (all
such transactions being referred to as "Investments"), except:

(i) Investments by the Borrower or any of its Subsid-
iaries in Cash Equivalents;

(ii) Investments by the Borrower in the Parent
permitted by Section 8.05(i), provided each advance
from the Borrower is made on open account and is not
evidenced by a promissory note or any other instrument;

(iii) Investments by the Borrower in any Guarantor
and, to the extent contemplated under the Receivables
Agreements, in any other Borrower Subsidiary in existence as
of the Closing Date;

(iv) Investments by the Borrower in any Borrower
Subsidiary not in existence as of the Closing Date pursuant
to the Receivables Agreements;

(v) Investments by the Borrower in the Receivables
Subsidiary which are required by the Pooling and Servicing
Agreement;

(vi) Investments by any Borrower Subsidiary in
the Borrower;

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(vii) Investments by the Borrower or a Borrower
Subsidiary in Subsidiaries created pursuant to Section
7.10(b) (other than Subsidiaries created to effect
acquisitions as permitted in Section 8.03(ix)) not to exceed
$10,000,000 in the aggregate;

(viii) loans to employees and Accommodation
Obligations with respect to loans to employees in the
ordinary course of business not in excess of an aggregate
amount of $1,000,000 outstanding at any one time;

(ix) Investments (exclusive of Investments permitted
pursuant to Section 8.03(vii)) by the Borrower or a Borrower
Subsidiary in any other Person provided such Investments do
not exceed an aggregate amount of $100,000,000 during the
term of this Agreement (plus an amount equal to the amount
realized by the Borrower and the Guarantors from the sale of
any such Investments and which are not required to be
prepaid pursuant to Section 2.05) and no individual
Investment or series of related Investments shall exceed
$20,000,000 (including the cash and noncash consideration
for such Investment plus the amount of any liabilities,
including contingent liabilities, assumed in connection with
such Investment) and provided further that any such
Investment shall be in a Person that is in substantially the
same line of business or a reasonably related business as
existing businesses of the Borrower or any Borrower
Subsidiary, and the Borrower shall deliver an Officer's
Certificate confirming that after such Investment has been
made (a) on a pro forma basis the Borrower will remain in
compliance with the covenants in this Agreement, (b) as a
result of such Investment neither the Borrower nor any of
its Subsidiaries shall be exposed to additional material
contingent liabilities and (c) Revolving Credit Availability
shall be not less than $15,000,000;

(x) other Investments by the Borrower and the Borrower
Subsidiaries not in excess of an annual amount of $2,000,000
during the term of this Agreement;

(xi) increases in Investments arising from
undistributed earnings or changes in currency translations;
and

(xii) Investments by foreign Subsidiaries in other
foreign Subsidiaries.

Notwithstanding anything herein to the contrary, (a) there shall
be excluded from the calculation of Investments the accrual of
intercompany charges incurred in the ordinary course and (b)
there shall be included in the calculation of investments all
transfers of cash or assets (other than the purchase of inventory

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in the ordinary course of business and upon terms that would be
obtained in an arms-length transaction).

8.04. Accommodation Obligations. The Borrower shall
not, and shall not permit any of its Subsidiaries to, directly or
indirectly, create or become or be liable with respect to any
Accommodation Obligation, except:

(i) guaranties resulting from endorsement of
negotiable instruments for collection in the ordinary
course of business;

(ii) Accommodation Obligations arising in
connection with the Transaction Documents;

(iii) Accommodation Obligations issued with respect to
the Indebtedness of the Borrower or any Guarantor in the
ordinary course of business of the Borrower or any of the
Borrower Subsidiaries;

(iv) Accommodation Obligations of any foreign
Subsidiary with respect to the Indebtedness of any other
foreign Subsidiary; and

(v) Accommodation Obligations issued with respect to
the Indebtedness of the Parent not to exceed $5,000,000 at
any one time.

8.05. Restricted Junior Payments. The Borrower shall
not, and shall not permit any Subsidiary of the Borrower to,
declare or make any Restricted Junior Payment, except:

(i)(a) payments of dividends to the Parent by the
Borrower on the Initial Funding Date to redeem or repurchase
all of the outstanding 13% Senior Subordinated Notes issued
by the Parent in connection with the Refinancing, (b)
payments of dividends to the Parent by the Borrower or
Investments by the Borrower in the Parent, provided that (1)
at the time thereof and after taking into account the
payment thereof, no Event of Default or Potential Event of
Default exists or is reasonably likely to result therefrom
or occur within 30 days thereafter, (2) such dividends or
Investments are used solely to pay interest on the Senior
Deferred Coupon Notes, and (3) any such dividends or
Investments can be paid only if, immediately prior to such
payment, the Borrower delivers to the Administrative Agent
an Officer's Certificate which demonstrates that,
immediately following such payment, the ratio of Total
Indebtedness (other than Accommodation Obligations) of the
Consolidated Borrower Group on a consolidated basis
immediately following such payment to Net EBITDA for the
most recently completed four fiscal quarters is less than
2.0 to 1.0, and (c) payments of dividends to the Parent by

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the Borrower or Investments by the Borrower in the Parent
(exclusive of dividends or Investments used solely to pay
interest on the Senior Deferred Coupon Notes), provided that
(1) at the time thereof and after taking into account the
payment thereof, no Event of Default or Potential Event of
Default exists or is reasonably likely to result therefrom
or occur within 30 days thereafter, (2) no such dividends or
Investments shall be paid (exclusive of dividends permitted
pursuant to Section 8.05(i)(a)) prior to January 1, 1997 and
(3) any such dividends or Investments can be paid only if,
immediately prior to such payment, the Borrower delivers to
the Administrative Agent an Officer's Certificate which
demonstrates that, immediately following such payment, the
ratio of Total Indebtedness (other than Accommodation
Obligations) of the Consolidated Borrower Group on a
consolidated basis immediately following such payment to Net
EBITDA for the most recently completed four fiscal quarters
is less than 2.0 to 1.0 and Revolving Credit Availability is
at least $15,000,000;

(ii) any Subsidiary of the Borrower may pay dividends
to the Borrower or another wholly-owned Subsidiary of the
Borrower;

(iii) payments by the Borrower to the Parent under the
Tax Sharing Agreement provided: (a) no such payments shall
be made at any time with respect to the income (whether
trade or business income or passive income) of the Borrow-
er's Subsidiaries unless the Borrower has received a like
amount from such Subsidiaries; (b) no such payments shall
be made at any time to the extent such payments exceed the
amount of taxes which would be due and payable by the
Borrower and the corporations (with the Borrower,
collectively the "Borrower Group") which would be members of
the "affiliated group" (as defined in section 1504 of the
IRC) of which the Borrower would be the common parent if the
Borrower were not a member of the Parent affiliated group
(as so defined) (the "Parent Group") if the Borrower Group
filed a separate consolidated federal income tax return; (c)
no such payments shall be made at any time an Event of
Default or Potential Event of Default exists or is
reasonably likely to result therefrom or occur within 30
days thereafter to the extent such payments exceed the
lesser of (1) the amount of taxes which would be due and
payable by the Borrower Group, if the Borrower Group filed a
separate consolidated federal income tax return and (2) the
amount of the tax liability actually incurred and paid by
the Parent Group; and (d) no such payment shall be made
after the occurrence of an Event of Default under Section
10.01(f) or 10.01(g);

(iv) payments with respect to management services and
overhead expenses by the Borrower or its Subsidiaries to the

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Parent in an amount not to exceed $3,000,000 in the
aggregate in any Fiscal Year;

(v) repayments to the Borrower or any of its
Subsidiaries of any Investments permitted under Section
8.03; and

(vi) payments made by the Borrower to the Parent on
account of the Parent making Accommodation Obligations of
the type permitted to be made by the Borrower pursuant to
Section 8.04 above.

8.06. Conduct of Business. The Borrower shall not,
and shall not permit any of its Subsidiaries to, engage in any
business other than the business engaged in by such persons on
the date hereof and any business activities substantially simi-
lar or related thereto.

8.07. Transactions with Affiliates. The Borrower
shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly enter into or permit to exist any
transaction (including, without limitation, the purchase, sale,
lease or exchange of any property or the rendering of any
service) with any of its Affiliates on terms that are less
favorable to it than those fair and reasonable terms that might
be obtained in a comparable arms-length transaction at the time.

8.08. Restriction on Fundamental Changes.

(a) The Borrower shall not, and shall not permit any
of its Subsidiaries to, enter into any merger or consolidation,
or liquidate, wind-up or dissolve (or suffer any liquidation or
dissolution), discontinue its business or convey, lease, sell,
transfer or otherwise dispose of, in one transaction or series of
transactions, all or any substantial part of its business or
Property, whether now or hereafter acquired, except:

(i) as otherwise permitted under Section 8.02(a)
or as disclosed in Schedule 8.08 attached hereto; and

(ii) any Subsidiary of the Borrower may merge
into or convey, sell, lease or transfer all or sub-
stantially all of its assets to the Borrower or any
other Subsidiary of the Borrower.

(b) Each of the Parent or the Borrower shall not, and
shall not permit their respective Subsidiaries to acquire by
purchase or otherwise any property or assets of, or stock or
other evidence of beneficial ownership of, any Person, except in
the ordinary course of its business or to the extent permitted
pursuant to Section 8.03 or as contemplated by the Receivables
Agreements.
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<PAGE> 112

8.09. Employee Benefit Matters. Each of the Parent
and the Borrower shall not, and shall not permit any of their
respective Subsidiaries to, and will exercise their best efforts
to not permit any of their other ERISA Affiliates to:

(i) Engage in any prohibited transaction
described in Section 406 of ERISA or 4975 of the IRC
for which a statutory or class exemption is not
available or a private exemption has not been
previously obtained from the DOL;

(ii) permit to exist any accumulated funding
deficiency (as defined in Sections 302 of ERISA and 412
of the IRC), whether or not waived;

(iii) fail to pay timely required contributions
or annual installments due with respect to any waived
funding deficiency to any Benefit Plan;

(iv) terminate any Benefit Plan in a distress
termination under Section 4041(c) of ERISA which would
result in any liability to the Parent, the Borrower or
any ERISA Affiliate;

(v) fail to make any contribution or payment to
any Multiemployer Plan which the Borrower or any ERISA
Affiliate may be required to make under any agreement
relating to such Multiemployer Plan, or any law
pertaining thereto;

(vi) fail to pay any required installment or any
other payment required under Section 412 of the IRC on
or before the due date for such installment or other
payment; or

(vii) amend a Plan resulting in an increase in
current liability for the plan year such that the
Parent, the Borrower or any ERISA Affiliate is required
to provide security to such Plan under Section
401(a)(29) of the IRC.

8.10. Environmental Liabilities. The Borrower shall
not, and shall not permit any of its Subsidiaries to, become sub-
ject to any Liabilities and Costs, which are reasonably likely to
have a Material Adverse Effect, arising out of or related to (a)
the Release or threatened Release at any location of any Contami-
nant into the environment, or any Remedial Action in response
thereto, or (b) any violation of any environmental, health and
safety Requirements of Law.

8.11. Margin Regulations. No portion of the proceeds
of any credit extended under this Agreement shall be used in any
manner which might cause the extension of credit or the
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application of such proceeds to violate Regulation G,
Regulation T, Regulation U or Regulation X or any other
regulation of the Federal Reserve Board or to violate the
Securities Exchange Act or the Securities Act, in each case as in
effect on the date or dates of such Borrowing and the use of such
proceeds.

8.12. Change of Fiscal Year. The Borrower shall not
change its Fiscal Year.

8.13. Amendment of Certain Documents. The Borrower
and its Subsidiaries shall not permit any termination of, or any
modification or amendment that is adverse in any respect to the
Lenders to be made to either the certificate of incorporation or
by-laws of the Borrower or any of its Subsidiaries or in the Tax
Sharing Agreement.

8.14. Modification of Receivables Agreements. The
Borrower and the Receivables Subsidiary shall not agree to or
permit the termination of the Receivables Agreements or any
amendment, waiver or other modification thereto or enter into a
"Supplement" to the Pooling and Servicing Agreement (except in
accordance with their terms) that would (i) increase the
certificate rates paid to any investors thereunder to more than a
market rate, (ii) reduce the purchase price or the cash portion
thereof received by the Borrower for receivables sold thereunder,
(iii) materially delay the timing of any payments owed thereunder
to the Borrower or the Receivables Subsidiary, (iv) render the
covenants, representations and warranties or events of
termination thereunder more restrictive in any material respect,
(v) create any recourse obligations of the Borrower or any of its
Subsidiaries in excess of those contemplated by the Receivables
Agreements as in effect on the Initial Funding Date, or (vi)
provide for the continued transfers of Receivables after the
"Amortization Period Commencement Date" (as such term is defined
in the Pooling and Servicing Agreement).

8.15. Refinancing. The Borrower shall not permit any
of the 13% Senior Subordinated Notes issued by the Parent or any
of the 13.75% Senior Subordinated Notes issued by Amerace
Corporation to remain outstanding for more than fifty days after
the Initial Funding Date.

ARTICLE IX
Financial Covenants

9.01. Minimum Consolidated Net Worth.

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<PAGE> 114

Group determined on a consolidated basis at any time to be less
than the amounts set forth below for the periods set forth below:

<TABLE>
<CAPTION>
Period Minimum Amount
<S> <C>
Closing Date through December 30, 1994 $250,000,000
December 31, 1994 through December 30, 1995 265,000,000
December 31, 1995 through December 30, 1996 285,000,000
December 31, 1996 through December 30, 1997 310,000,000
December 31, 1997 through December 30, 1998 350,000,000
December 31, 1998 through December 30, 1999 395,000,000
December 31, 1999 and thereafter 410,000,000
</TABLE>

Each of the minimum amounts specified above for the respective
periods shall be automatically reduced on a cumulative basis by
the amount of any write-off of goodwill by the Borrower in
accordance with Agreement Accounting Principles, provided that
such automatic reductions shall be limited to $25,000,000 in any
one Fiscal Year and $100,000,000 in the aggregate.

9.02. Ratio of Total Indebtedness to Net EBITDA.

The Borrower covenants and agrees that, on and after
the date hereof so long as the Borrower shall have any Agreement
Obligations or any Lender has any Commitment hereunder, the
Borrower shall not permit the ratio of Total Indebtedness (other
than Accommodation Obligations) of the Consolidated Borrower
Group on a consolidated basis to Net EBITDA calculated at the end
of each fiscal quarter during the following periods for the
period of the immediately preceding four fiscal quarters to be
greater than the ratios set forth below:

<TABLE>
<CAPTION>
Period Ratio
<S> <C>
Closing Date through March 31, 1994 3.50 to 1.0
April 1, 1994 through December 31, 1995 3.30 to 1.0
January 1, 1996 through December 30, 1996 2.75 to 1.0
December 31, 1996 through December 30, 1997 2.25 to 1.0
December 31, 1997 through December 30, 1998 1.75 to 1.0
December 31, 1998 through December 30, 1999 1.50 to 1.0
Thereafter 1.25 to 1.0
</TABLE>

9.03. Interest Coverage Ratio.

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at the end of each fiscal quarter during the following periods
for the period of the immediately preceding four fiscal quarters
for the Consolidated Borrower Group to be less than the ratio set
forth below:

<TABLE>
<CAPTION>
For each fiscal quarter
ending during the
following periods Ratio
<S> <C>
Closing Date through December 31, 1994 4.50 to 1.0
January 1, 1995 through December 31, 1995 4.75 to 1.0
January 1, 1996 through December 31, 1996 5.00 to 1.0
January 1, 1997 through December 31, 1997 5.50 to 1.00
Thereafter 6.00 to 1.00
</TABLE>

9.04. Capital Expenditures.

The Borrower shall not, and shall not permit any of
its Subsidiaries to, in any Fiscal Year, incur Capital
Expenditures which exceed the sum of (a) $45,000,000 in Fiscal
Year 1994 (increasing by $1,000,000 in each Fiscal Year
thereafter) plus (b) the difference, if positive, (but not to
exceed $10,000,000) between (1) the maximum aggregate amount of
Capital Expenditures permitted pursuant to this Section 9.04 for
the immediately preceding Fiscal Year and (2) the aggregate
amount of Capital Expenditures actually incurred during such
preceding Fiscal Year plus (c) an amount equal to (x) Excess Cash
Flow as reported pursuant to Section 2.05(b)(i) for the
immediately preceding Fiscal Year minus (y) the sum of $5,000,000
and the amount of all prepayments required pursuant to Section
2.05(b)(i) made during such Fiscal Year.

9.05. Fixed Charges Coverage Ratio.

The Borrower covenants and agrees that, on and after
the date hereof so long as the Borrower shall have any Agreement
Obligations or any Lender has any Commitment hereunder, the
Borrower shall not permit the Fixed Charges Coverage Ratio
calculated at the end of each fiscal quarter for the period of
the immediately preceding four fiscal quarters for the
Consolidated Borrower Group determined in accordance with
Agreement Accounting Principles to be less than 1.0 to 1.0.

ARTICLE X
EVENTS OF DEFAULT; RIGHTS AND REMEDIES

10.01. Events of Default. Each of the following
occurrences shall constitute an Event of Default under this
Agreement:

(a) Failure to Make Payments When Due. The Borrower
shall fail to pay when due any principal of any Loan or

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Reimbursement Obligation or to pay when due any interest on any
Loan or Reimbursement Obligation or any fee or other amount
payable under this Agreement or any of the other Loan Documents
and such failure shall continue for three (3) calendar days.

(b) Breach of Certain Covenants. The Parent, the
Borrower or any of their respective Subsidiaries shall fail duly
and punctually to perform or observe any agreement, covenant or
obligation under Sections 6.01, 7.01, 7.05 or under Articles VIII
and IX or binding on the Parent, the Borrower or any of their
respective Subsidiaries under any section of the Collateral
Documents (which failure continues after the expiration of any
grace period applicable thereto).

(c) Breach of Representation or Warranty. Any
representation or warranty made or deemed made by the Borrower to
the Administrative Agent, the Collateral Agent, any of the
Issuing Banks or any Lender herein or by the Parent, the Borrower
or any of their respective Subsidiaries in any of the other Loan
Documents or in any written statement or certificate at any time
given by the Parent, the Borrower or any of their respective
Subsidiaries pursuant to any of the Loan Documents shall be false
or misleading in any respect on the date as of which made or
deemed made.

(d) Other Defaults. The Parent, the Borrower or any
of their respective Subsidiaries shall fail duly and punctually
to perform or observe any agreement, covenant or obligation
arising under this Agreement (except those described in
Sections 10.01(a), (b) and (c)) or under any of the other Loan
Documents, and such failure shall continue for thirty (30) days
(or, in the case of Loan Documents other than this Agreement, any
longer period of grace expressly set forth therein).

(e) Default as to Other Indebtedness. The Parent, the
Borrower or any of their respective Subsidiaries shall fail to
make any payment when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) on any
Indebtedness of the Parent, the Borrower or any such Subsidiary
other than any of the Obligations, if the aggregate outstanding
amount of all such Indebtedness is $5,000,000 or more with
respect to Indebtedness of such Person or any breach, default or
event of default shall occur, or any other event shall occur or
condition shall exist, under any instrument, agreement or
indenture pertaining thereto, if the effect thereof is to
accelerate, or permit the holder(s) of such Indebtedness to
accelerate, the maturity of any such Indebtedness; or any such
Indebtedness shall be declared to be due and payable or required
to be prepaid or mandatorily redeemed (other than by a regularly
scheduled required prepayment prior to the stated maturity there-
of); or the holder of any Lien, in any amount, shall commence
foreclosure of such Lien upon property of the Parent, the
Borrower or any of their respective Subsidiaries having a book or

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fair market value in excess of $1,000,000 with respect to such
Person in the aggregate.

(f) Involuntary Bankruptcy; Appointment of
Receiver, Etc. (i) An involuntary case shall be commenced
against the Parent, the Borrower or any of their respective
Subsidiaries and the petition shall not be dismissed within sixty
(60) days after commencement of the case, or a court having
jurisdiction in the premises shall enter a decree or order for
relief in respect of the Parent, the Borrower or any of their
respective Subsidiaries in an involuntary case, under any
applicable bankruptcy, insolvency or other similar law now or
hereinafter in effect; or any other similar relief shall be
granted under any applicable federal, state or foreign law.

(ii) A decree or order of a court having jurisdiction
in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar
powers over the Parent, the Borrower or any of their respective
Subsidiaries or over all or a substantial part of the property of
the Parent, the Borrower or any of their respective Subsidiaries
shall be entered; or an interim receiver, trustee or other
custodian of the Parent, the Borrower or any of their respective
Subsidiaries or of all or a substantial part of the property of
the Parent, the Borrower or any of their respective Subsidiaries
shall be appointed or a warrant of attachment, execution or
similar process against any substantial part of the property of
the Parent, the Borrower or any of their respective Subsidiaries,
shall be issued and any such event shall not be stayed, vacated,
dismissed, bonded or discharged within sixty (60) days of entry,
appointment or issuance.

(g) Voluntary Bankruptcy; Appointment of Receiver,
Etc. The Parent, the Borrower or any of their respective
Subsidiaries shall have an order for relief entered with respect
to it or commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in
an involuntary case, or to the conversion of an involuntary case
to a voluntary case, under any such law, or shall consent to the
appointment of or taking of possession by a receiver, trustee or
other custodian for all or a substantial part of its property;
the Parent, the Borrower or any of their respective Subsidiaries
shall make any assignment for the benefit of creditors or shall
be unable or generally fail, or admit in writing its inability,
to pay its debts as such debts become due; or the Board of
Directors (or any committee thereof) of the Parent, the Borrower
or any of their respective Subsidiaries adopts any resolution to
authorize or approve any of the foregoing.

(h) Judgments. (i) Enforceable Judgments (other than
an Enforceable Judgment described in the proviso contained in the
definition of Enforceable Judgment) for the payment of money in

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an aggregate amount in excess of $2,000,000 shall be rendered
against the Parent, the Borrower or any of their respective
Subsidiaries and such Enforceable Judgments shall continue
unsatisfied or unstayed for a period of thirty (30) days or
action shall have been commenced to foreclose on such Enforce-
able Judgments, or (ii) Enforceable Judgments described in the
proviso contained in the definition of Enforceable Judgments
shall be rendered against the Parent, the Borrower or any of
their respective Subsidiaries.

(i) Dissolution. Any order, judgment or decree shall
be entered against the Parent, the Borrower or any of their
respective Subsidiaries decreeing its involuntary dissolution or
split-up and such order shall remain undischarged and unstayed
for a period in excess of thirty (30) days; or the Parent, the
Borrower or any of their respective Subsidiaries shall otherwise
dissolve or cease to exist except as expressly permitted pursuant
to Section 8.08.

(j) Collateral Documents; Failure of Security. For
any reason other than a release of Liens in accordance with the
terms of the Loan Documents or the failure of the Collateral
Agent and the Lenders to take any action available to them to
maintain the perfection of the Liens created in favor of the
Collateral Agent, for the benefit of itself and the Holders of
Secured Obligations, pursuant to this Agreement and the Collat-
eral Documents, any Collateral Document ceases to be in full
force and effect or any Lien intended to be created thereby
ceases to be or is not valid and perfected and such lapse,
invalidity or failure is not corrected within 30 days or the
Parent, the Borrower or any Subsidiary asserts that any such Lien
is not valid and perfected.

(k) Change of Control. Any Change of Control occurs.

(l) Employee Benefit Related Liabilities. (i) Any
Termination Event occurs which the Administrative Agent believes
could subject the Borrower or an ERISA Affiliate to a material
liability to pay money, (ii) the plan administrator of any Plan
applies under Section 412(d) of the IRC for a waiver of the
minimum funding standards of Section 412(a) of the IRC and the
Administrative Agent believes that the substantial business
hardship upon which the application for the waiver is based could
subject either the Borrower or any ERISA Affiliate to a material
liability to pay money.

(m) Parent Guaranty Default. The Parent shall
terminate or revoke any of its obligations under the Parent
Guaranty, breach any of the terms of the Parent Guaranty, or the
Parent Guaranty shall otherwise become unenforceable for any
reason.

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(n) Contribution Agreement Default. Any party to the
Contribution Agreement shall terminate or revoke any of its
obligations under the Contribution Agreement or breach any of the
terms of the Contribution Agreement.

(o) Subsidiary Guaranty Default. Any Subsidiary party
to any Subsidiary Guaranty shall terminate or revoke any of its
obligations under its Subsidiary Guaranty, breach any of the
terms of its Subsidiary Guaranty, or any Subsidiary Guaranty
shall otherwise become unenforceable for any reason.

(p) Receivables Securitization. Either (i) any event
shall have occurred and be continuing which constitutes an "Event
of Termination" within the meaning of the Pooling and Servicing
Agreement or which would allow the "Investor Certificateholders"
under the Pooling and Servicing Agreement to declare that such an
"Event of Termination" had occurred (excluding, in either case,
any such event as to which the Borrower shall have given the
Lenders prior written notice demonstrating, to the satisfaction
of the Administrative Agent, that any resulting "Early
Amortization Period" (a) has resulted from the orderly
liquidation of the receivable pool due to the contraction of the
receivable base or the planned discontinuance of the Receivables
Securitization, (b) has been provided for in the Borrower's
financial plans and (c) will not, on a pro forma basis, result in
the Borrower and its Subsidiaries having insufficient liquidity
for working capital purposes) or (ii) any event shall have
occurred and be continuing which constitutes a "Master Servicer
Default" within the meaning of the Pooling and Servicing
Agreement.

(q) Senior Deferred Coupon Notes. The Parent shall
amend the Senior Deferred Coupon Notes in any way that permits or
requires the Parent to pay interest on such notes in cash prior
to 1999 or permits or requires the Parent to pay interest at a
rate higher than that prescribed as of the Closing Date or
permits or requires the Parent to pay or prepay or make sinking
fund payments with respect to such notes prior to 2003.

For purposes of this Agreement and each of the other
Loan Documents, an Event of Default shall be deemed "continuing"
until cured or waived in writing in accordance with Section
11.08.

10.02. Rights and Remedies.

(a) Acceleration and Termination of Commitments. Upon
the occurrence and during the continuance of any Event of Default
described in Section 10.01(f) or 10.01(g) with respect to the
Parent, the Borrower or any of their respective Subsidiaries, the
Revolving Credit Commitments shall automatically and immediately
terminate and the unpaid principal amount of and any and all
accrued interest on the Loans, all Reimbursement Obligations and

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all other Agreement Obligations shall automatically become
immediately due and payable, with all additional interest from
time to time accrued thereon and without presentment, demand, or
protest or other requirements of any kind (including, without
limitation, valuation and appraisement, diligence, presentment,
notice of intent to demand or accelerate and of acceleration),
all of which are hereby expressly waived by the Borrower, and the
obligation of each Lender to make any Loan hereunder and of the
Issuing Banks to issue any Letter of Credit shall thereupon
terminate; and upon the occurrence and during the continuance of
any other Event of Default, the Administrative Agent shall at the
request, or may with the consent, of the Requisite Lenders, by
written notice to the Borrower, (i) declare that the Revolving
Credit Commitments are terminated, whereupon the Revolving Credit
Commitments and the obligation of each Lender to make any Loan
hereunder and of the Issuing Banks to issue any Letter of Credit
shall immediately terminate, and (ii) declare the unpaid
principal amount of and any and all accrued and unpaid interest
on the Loans, and all Reimbursement Obligations and all other
Agreement Obligations to be, and the same shall thereupon be,
immediately due and payable with all additional interest from
time to time accrued thereon and (except as expressly provided
herein) without presentment, demand, or protest or other
requirements of any kind (including, without limitation,
valuation and appraisement, diligence, presentment, notice of
intent to demand or accelerate and of acceleration), all of which
are hereby expressly waived by the Borrower.

(b) Deposit for Letters of Credit. In addition, upon
demand by the Administrative Agent, or any of the Issuing Banks
or the Requisite Lenders after the occurrence and during the
continuance of any Event of Default, the Borrower shall deposit
with the Collateral Agent for the benefit of the Issuing Banks
with respect to each Letter of Credit then outstanding which was
issued by any Issuing Bank, cash or Cash Equivalents in an amount
equal to the greatest amount for which such Letters of Credit may
then be drawn. The Borrower grants to the Collateral Agent, for
the benefit of itself and the Holders of Secured Obligations, a
security interest in and right of setoff against any such deposit
or deposits. Pending the application of such deposit to payment
of the Reimbursement Obligations, the Collateral Agent may invest
such deposit in an open account or similar immediately available
savings deposit and all interest accrued thereon shall be held
with such deposit as additional security for the Reimbursement
Obligations. Such deposits shall be held by the Collateral Agent
until the Reimbursement Obligations have been paid in full and
all Letters of Credit have expired or been cancelled.

(c) Rescission. If at any time after acceleration of
the maturity of the Loans, the Borrower shall pay all arrears of
interest and all payments on account of principal of the Loans
and Reimbursement Obligations which shall have become due other-
wise than by acceleration (with interest on principal and, to the

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extent permitted by law, on overdue interest, at the rates speci-
fied in this Agreement) and all Events of Default and Potential
Events of Default (other than nonpayment of principal of and
accrued interest on the Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Sec-
tion 12.07, then by written notice to the Borrower, the Requisite
Lenders may elect, in the sole discretion of such Requisite
Lenders, to rescind and annul the acceleration and its conse-
quences; but such action shall not affect any subsequent Event of
Default or Potential Event of Default or impair any right or
remedy consequent thereon. The provisions of the preceding
sentence are intended merely to bind the Lenders to a decision
which may be made at the election of the Requisite Lenders; they
are not intended to benefit the Borrower and do not give the
Borrower the right to require the Lenders to rescind or annul any
acceleration hereunder, even if the conditions set forth herein
are met.

ARTICLE XI
ADMINISTRATIVE AGENT AND COLLATERAL AGENT

11.01. Appointment. (a) Each of the Lenders and the
Issuing Banks hereby designates and appoints Chemical as the
Administrative Agent and Citicorp as the Collateral Agent of such
Lender and such Issuing Bank under this Agreement and the Loan
Documents, and each of the Lenders and Issuing Banks hereby
irrevocably authorizes the Administrative Agent and the
Collateral Agent to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to
exercise such powers as are set forth herein or therein, together
with such other powers as are incidental thereto. Each of the
Administrative Agent and the Collateral Agent agrees to act as
such on the express conditions contained in this Article XI.

(b) The provisions of this Article XI are solely for
the benefit of the Administrative Agent, the Collateral Agent,
the Issuing Banks and the Holders of Secured Obligations and the
Borrower shall have no right to rely on or enforce any of the
provisions hereof (other than as expressly set forth in Sec-
tion 11.07 or in Section 11.08). In performing its functions and
duties under this Agreement, the Administrative Agent and the
Collateral Agent shall each act solely as agent for the Issuing
Banks and the Holders of Secured Obligations and neither assumes
or shall be deemed to have assumed any obligation toward or
relationship of agency or trust with or for Borrower or any of
its Affiliates.

11.02. Nature of Duties. The Administrative Agent and
the Collateral Agent shall not have any duties or responsibili-
ties except those expressly set forth in this Agreement or in the
other Loan Documents. The duties of the Administrative Agent and
the Collateral Agent shall be mechanical and administrative in

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nature. Neither the Administrative Agent nor the Collateral
Agent shall have by reason of this Agreement a fiduciary
relationship in respect of any Holder of Secured Obligations or
any Issuing Bank. Nothing in this Agreement or any of the other
Loan Documents, expressed or implied, is intended to or shall be
construed to impose upon the Administrative Agent or the
Collateral Agent any obligations in respect of this Agreement or
any of the other Loan Documents except as expressly set forth
herein or therein. Each Holder of Secured Obligations and each
Issuing Bank shall make its own independent investigation of the
financial condition and affairs of the Parent, the Borrower and
their respective Subsidiaries in connection with the making and
the continuance of the Loans hereunder, the issuance of Letters
of Credit and the entering into any Eligible Hedging Contract and
shall make its own appraisal of the creditworthiness of the
Parent, the Borrower and their respective Subsidiaries, and
neither the Administrative Agent nor the Collateral Agent shall
have any duty or responsibility, either initially or on a
continuing basis, to provide any Holder of Secured Obligations or
any Issuing Bank with any credit or other information with
respect thereto, whether coming into its possession before the
Initial Funding Date or at any time or times thereafter. Each
Lender acknowledges that neither the Administrative Agent nor the
Collateral Agent nor any other Lender nor counsel to any of the
foregoing is providing any assurances, or shall have any respon-
sibility, with respect to the ownership of the Property or the
absence of any prior Liens or defects of title, or the legality,
sufficiency or effect of any mortgage, certificate or notice, or
any other document, or the validity, creation, perfection or
priority of any Lien, or as to any decision to request, take,
defer, omit or release any Collateral or to investigate or not to
investigate any of those matters, and each Lender agrees to look
solely to its rights as one of the Lenders with respect to any of
the foregoing. If the Administrative Agent or the Collateral
Agent seeks the consent or approval of the Requisite Lenders to
the taking or refraining from taking any action hereunder, the
Administrative Agent or the Collateral Agent, as applicable,
shall send notice thereof to each Lender. The Administrative
Agent or the Collateral Agent, as applicable, shall promptly
notify each Lender at any time that the Requisite Lenders or,
where expressly required, all of the Lenders, have instructed the
Administrative Agent or the Collateral Agent, as applicable, to
act or refrain from acting pursuant hereto.

11.03. Rights, Exculpation, Etc. Neither the
Administrative Agent nor the Collateral Agent nor any of the
Affiliates nor any of their officers, directors, employees,
agents, attorneys or consultants shall be liable to any Holder of
Secured Obligations or any Issuing Bank for any action taken or
omitted by it or such Person hereunder or under any of the Loan
Documents, or in connection herewith or therewith, except that
(i) the Administrative Agent and the Collateral Agent shall be
obligated on the terms set forth herein for performance of its

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express obligations hereunder, and (ii) no Person shall be
relieved of any liability imposed by law for its gross negligence
or willful misconduct (as determined by the final judgment of a
court of competent jurisdiction). Neither the Administrative
Agent nor the Collateral Agent shall be responsible to any Holder
of Secured Obligations or any Issuing Bank for any recitals,
statements, representations or warranties herein or for the
execution, effectiveness, genuineness, validity, enforceability,
collectibility, or sufficiency of this Agreement, any of the
Collateral Documents or any of the other Loan Documents, or any
of the transactions contemplated hereby and thereby, or of any of
the Transaction Documents or any of the transactions contemplated
thereby, or for the financial condition of the Parent, the
Borrower or any of their respective Subsidiaries. Neither the
Administrative Agent nor the Collateral Agent shall be required
to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this
Agreement or any of the Loan Documents or the financial condition
of the Parent, the Borrower or any of their respective
Subsidiaries or the existence or possible existence of any
Potential Event of Default or Event of Default. The
Administrative Agent and the Collateral Agent may at any time
request instructions from the Lenders with respect to any actions
or approvals which by the terms of this Agreement or of any of
the other Loan Documents the Administrative Agent or the
Collateral Agent, as applicable, is permitted or required to take
or to grant, and if such instructions are promptly requested, the
Administrative Agent or the Collateral Agent, as applicable,
shall be absolutely entitled to refrain from taking any action or
to withhold any approval and shall not be under any liability
whatsoever to any Person for refraining from any action or
withholding any approval under any of the Loan Documents until it
shall have received such instructions from the Requisite Lenders
or, where expressly required, the Supermajority Lenders or all of
the Lenders. Without limiting the foregoing, no Holder of
Secured Obligations or Issuing Bank shall have any right of
action whatsoever against the Administrative Agent or the
Collateral Agent, as applicable, as a result of the
Administrative Agent or the Collateral Agent, as applicable,
acting or refraining from acting under this Agreement, the
Collateral Documents or any of the other Loan Documents in
accordance with the instructions of the Requisite Lenders or,
where expressly required, all of the Lenders.

11.04. Reliance. The Administrative Agent and the
Collateral Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents or
any telephone message believed by it in good faith to be genuine
and correct and to have been signed, sent or made by the proper
Person, and with respect to all matters pertaining to this
Agreement, the Collateral Documents or any of the other Loan
Documents and its duties hereunder or thereunder, upon advice of
legal counsel (including counsel for the Borrower), independent

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public accountants and other experts selected by it in good
faith.

11.05. Indemnification. To the extent that the
Administrative Agent or the Collateral Agent, as applicable, is
not reimbursed and indemnified by the Borrower or the Borrower
fails upon demand by the Administrative Agent or the Collateral
Agent, as applicable, to perform its obligations to reimburse or
indemnify the Administrative Agent or the Collateral Agent, as
applicable, the Lenders will reimburse and indemnify the
Administrative Agent or the Collateral Agent, as applicable, for
and against any and all liabilities, obligations, losses, damag-
es, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against the Administrative
Agent or the Collateral Agent, as applicable, in any way relating
to or arising out of this Agreement, the Collateral Documents or
any of the other Transaction Documents or any action taken or
omitted by the Administrative Agent or the Collateral Agent, as
applicable, under this Agreement, the Collateral Documents or any
of the other Transaction Documents, in proportion to each
Lender's Pro Rata Share; provided that no Lender shall be liable
for any portion of such liabilities, obligations, losses, dam-
ages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or willful
misconduct of the Administrative Agent or the Collateral Agent,
as applicable, as determined by the final judgment of a court of
competent jurisdiction. The obligations of the Lenders under
this Section 11.05 shall survive the payment in full of the Loans
and Reimbursement Obligations and the termination of this Agree-
ment.

11.06. The Administrative Agent Individually. With
respect to its Pro Rata Share hereunder and the Loans made by it,
the Administrative Agent shall have and may exercise the same
rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein
for any other Lender. The terms "Lenders" or "Requisite Lenders"
or any similar terms shall, unless the context clearly otherwise
indicates, include the Administrative Agent in its individual
capacity as a Lender or one of the Requisite Lenders. The
Administrative Agent may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business
with the Borrower as if it were not acting as Administrative
Agent pursuant hereto.

11.07. Successor Administrative Agent or Collateral
Agent; Resignation of Administrative Agent or Collateral Agent.
(a) The Administrative Agent or the Collateral Agent may resign
from the performance of its functions and duties hereunder at any
time by giving at least thirty (30) days prior written notice to
the Lenders and the Borrower. In the event that the
Administrative Agent or the Collateral Agent gives notice of its

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desire to resign from the performance of its functions and duties
hereunder, any such resignation shall take effect only upon the
acceptance by a successor Administrative Agent or Collateral
Agent of appointment pursuant to clauses (b) and (c) below.

(b) The Requisite Lenders shall appoint a successor
Administrative Agent or Collateral Agent who shall be reasonably
satisfactory to the Borrower provided no such approval of the
Borrower shall be required after the occurrence and during the
continuance of an Event of Default.

(c) If a successor Administrative Agent or Collateral
Agent shall not have been so appointed within said thirty (30)
day period, the retiring Administrative Agent or Collateral
Agent, with the consent of the Borrower (which may not be
withheld unreasonably), shall then appoint a successor
Administrative Agent or Collateral Agent who shall serve as such
until such time, if any, as the Requisite Lenders, with the
consent of the Borrower (which may not be withheld unreasonably),
appoint a successor as provided above. No consent of the
Borrower shall be required after the occurrence and during the
continuance of an Event of Default.

(d) Upon the appointment of a successor Administrative
Agent, the term "Administrative Agent" shall, for all purposes of
this Agreement, thereafter include such successor, except that
the retiring Administrative Agent shall reserve all rights as to
Obligations accrued or due to it, in its capacity as such, at the
time of such succession and all rights (whenever arising) under
Section 12.04.

(e) Upon the appointment of a successor Collateral
Agent, the term "Collateral Agent" shall, for all purposes of
this Agreement, thereafter include such successor, except that
the retiring Collateral Agent shall reserve all rights as to
Obligations accrued or due to it, in its capacity as such, at the
time of such succession and all rights (whenever arising) under
Section 12.04.

(f) Notwithstanding anything in this Section 11.07 to
the contrary, no Person shall serve as an Administrative Agent
unless such Person is a Lender.

11.08. Collateral Matters. (a) Each of the Lenders
and the Issuing Banks authorizes and directs the Administrative
Agent and the Collateral Agent to enter into the Loan Documents
relating to the Collateral for the benefit of itself and the
Holders of Secured Obligations. Each of the Lenders and the
Issuing Banks agrees that any action taken by the Administrative
Agent or the Collateral Agent or the Requisite Lenders (or, where
required by the express terms of this Agreement or any other Loan
Document, a greater proportion of the Lenders) in accordance with
the provisions of this Agreement or the other Loan Documents, and

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the exercise by the Administrative Agent or the Collateral Agent
or the Requisite Lenders (or, where so required, such greater
proportion) of the powers set forth herein or therein, together
with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all of the Lenders and the
Issuing Banks. Without limiting the generality of the foregoing,
the Administrative Agent shall have the sole and exclusive right
and authority to (i) act as the disbursing and collecting agent
for the Lenders and the Issuing Banks with respect to all
payments and collections arising in connection with this
Agreement and the other Loan Documents relating to the Loans or
Collateral; and (ii) execute and deliver each Loan Document
relating to the Collateral and accept delivery of each such
agreement delivered by the Parent, the Borrower or any of their
respective Subsidiaries. Without limiting the generality of the
foregoing, the Collateral Agent shall have the sole and exclusive
right and authority to (i) act as collateral agent for the
Lenders and the Issuing Banks for purposes of the perfection of
all security interests and Liens created by such agreements and
all other purposes stated therein, provided, however, the
Administrative Agent hereby appoints, authorizes and directs the
Lenders and the Issuing Banks to act as collateral sub-agent for
the Administrative Agent and the Issuing Banks and the Lenders
for purposes of the perfection of all security interests and
Liens with respect to the Parent's, the Borrower's and the
Borrower's Subsidiaries' respective deposit accounts maintained
with, and cash and Cash Equivalents held by, such Lender or the
Issuing Banks; (ii) manage, supervise and otherwise deal with the
Collateral in accordance with the terms of this Agreement and the
other Loan Documents; (iii) take such action as is necessary or
desirable to maintain the perfection and priority of the security
interests and Liens created or purported to be created by the
Loan Documents; and (iv) except as may be otherwise specifically
restricted by the terms of this Agreement or any other Loan
Document, exercise all remedies given to the Administrative
Agent, the Collateral Agent, the Lenders or the Issuing Banks
with respect to the Collateral under the Loan Documents relating
thereto, under applicable law or otherwise.

(b) The Holders of Secured Obligations hereby
irrevocably authorize the Collateral Agent, at the option and in
the discretion of the Collateral Agent, to release any Lien
granted to or held by the Collateral Agent upon any Collateral
(i) upon termination of the Commitments and payment and satisfac-
tion of all Loans, Reimbursement Obligations, other Letter of
Credit Obligations (whether or not due) and all other Agreement
Obligations which have matured and which the Administrative Agent
has been notified in writing are then due and payable; or (ii)
constituting property being sold or disposed of if Borrower
certifies to the Administrative Agent that the sale or
disposition is made in compliance with Section 8.02 (and the
Administrative Agent may rely conclusively on any such
certificate, without further inquiry); or (iii) constituting

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property in which the Parent, the Borrower or any Subsidiary of
the Borrower owned no interest at the time the Lien was granted
or at any time thereafter; or (iv) if approved or consented to by
the Requisite Lenders (or, where so required, all of the
Lenders). Upon request by the Collateral Agent at any time, the
Lenders will confirm in writing the Collateral Agent's authority
to release particular types or items of Collateral pursuant to
this Section 11.08(b).

(c) Without in any manner limiting the Collateral
Agent's authority to act without any specific or further authori-
zation or consent by the Requisite Lenders (as set forth in
Section 11.08(b)), each Lender agrees to confirm in writing, upon
request by the Borrower, the authority to release Collateral
conferred upon the Collateral Agent under clauses (i) through
(iv) of Section 11.08(b). So long as no Event of Default is then
continuing, upon receipt by the Administrative Agent of the net
cash proceeds of any sale and transfer of Collateral which is
expressly permitted pursuant to the terms of this Agreement, and
upon at least five (5) Business Days' prior written request by
Borrower, the Collateral Agent shall (and is hereby irrevocably
authorized by the Holders of Secured Obligations to) execute such
documents as may be necessary to evidence the release of the
Liens granted to the Collateral Agent for the benefit of the
Holders of Secured Obligations herein or pursuant hereto upon
such Collateral; provided, that (i) the Collateral Agent shall
not be required to execute any such document on terms which, in
the Collateral Agent's opinion, would expose the Collateral Agent
to liability or create any obligation or entail any consequence
other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or
obligations of Borrower in respect of) all interests retained by
the Borrower, including, without limitation, the proceeds of any
sale, all of which shall continue to constitute part of the
Collateral.

(d) The benefit of the Collateral Documents and of the
provisions of this Agreement relating to the Collateral shall
extend to and be available in respect of any Obligations
("Related Obligations") which arise under any Eligible Hedging
Contracts or which are otherwise owed to Persons entitled to
indemnification pursuant to Section 12.04; provided that (i) the
Related Obligations shall be entitled to the benefit of the
Collateral to the extent and with the priority expressly set
forth in this Agreement and the Collateral Documents, and to such
extent the Collateral Agent shall hold, and have the right and
power to act with respect to, the Collateral on behalf of and as
agent for the holders of the Related Obligations; but the
Administrative Agent and the Collateral Agent are otherwise
acting solely as agents for the Lenders and the Issuing Banks and
shall have no separate fiduciary duty, duty of loyalty, duty of
care, duty of disclosure or other obligation whatsoever to any

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holder of Related Obligations; and (ii) all matters, acts and
omissions relating in any manner to the Collateral, or the
omission, creation, perfection, priority, abandonment or release
of any Lien, shall be governed solely by the provisions of this
Agreement and the Collateral Documents, and no separate Lien,
right, power or remedy shall arise or exist in favor of any
Holder of Secured Obligations under any separate instrument or
agreement or in respect of any Related Obligations; and
(iii) each Holder of Secured Obligations shall be bound by all
actions taken or omitted, in accordance with the provisions of
this Agreement and the Collateral Documents, by the
Administrative Agent, the Collateral Agent and the Requisite
Lenders or, where expressly required, the Supermajority Lenders
or all of the Lenders, each of whom shall be entitled to act at
its sole discretion and exclusively in its own interest given its
own Commitments and its own interest in the Loans, Reimbursement
Obligations, Letter of Credit Obligations and its other Agreement
Obligations, without any duty or liability to any other Holder of
Secured Obligations or as to any Related Obligations and without
regard to whether any Related Obligations remain outstanding or
are deprived of the benefit of the Collateral or become unsecured
or are otherwise affected or put in jeopardy thereby; and (iv) no
holder of Related Obligations and no other Holder of Secured
Obligations (except the Administrative Agent and the Lenders, to
the extent set forth in this Agreement) shall have any right to
be notified of, or to direct, require or be heard with respect
to, any action taken or omitted in respect of the Collateral or
under this Agreement or the Collateral Documents; and (v) no
holder of any Related Obligations shall exercise any right of
setoff, banker's lien or similar right.

11.09. Relations Among Lenders.

(a) Each Lender agrees that it will not take any ac-
tion, nor institute any actions or proceedings, against the
Borrower or any other obligor hereunder or with respect to any
Collateral or Loan Document, without the prior written consent of
the Requisite Lenders or, as may be provided in this Agreement or
the other Loan Documents, at the direction of the Administrative
Agent.

(b) The Lenders are not partners or co-venturers, and
no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the
Administrative Agent or the Collateral Agent, as applicable)
authorized to act for, any other Lender.

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ARTICLE XII
Miscellaneous

12.01. Survival of Warranties and Agreements. All
agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement and the
other Loan Documents and the making of the Loans hereunder.

12.02. Assignments and Participations.

(a) At any time after the Initial Funding Date, each
Lender may assign to one or more banks or financial institutions
all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its
Commitment, Loans, participations in the Letters of Credit and
its obligations to acquire such participations) in conformity
with the following provisions:

(i) each such assignment shall be of a constant, and
not a varying, percentage of the assigning Lender's rights and
obligations under this Agreement with respect to either (A) such
Lender's Revolving Credit Commitment, Revolving Credit Loans,
Tranche A Term Loans, Letter of Credit Obligations and related
interests hereunder (provided, however, any assignment by the
Issuing Bank shall not include an assignment of its obligation to
issue Letters of Credit) or (B) such Lender's Tranche B Term
Loans and related interests hereunder;

(ii) unless the Administrative Agent and the Borrower
otherwise consent, the aggregate amount of the Term Loans and
Revolving Credit Commitments of the assigning Lender 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 or, if
less, the full amount of the assigning Lender's Term Loans and
Revolving Credit Commitments (provided that assignments between
Lenders shall have no minimum amount and assignments after the
occurrence and during the continuance of an Event of Default
shall not require the Borrower's consent regardless of the size
of such assignment);

(iii) the Administrative Agent and in the case of the
assignment of Letter of Credit Obligations, the Issuing Banks
shall each consent (which consent shall not unreasonably be
withheld) to each such assignment and the parties to each such
assignment shall execute and deliver to the Administrative Agent
an Assignment and Acceptance, together with a processing and
recordation fee of $3,000; provided, that such consent of the
Administrative Agent shall not be required for any assignment
made by a Lender to an Affiliate of such Lender; and

(iv) With respect to any assignment made at a time
when no Event of Default exists, the Borrower shall have

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consented to such assignment, which consent shall not
unreasonably be withheld or delayed; provided, that such consent
of the Borrower shall not be required for any assignment made by
a Lender to an Affiliate of such Lender.

Upon such execution, delivery, approval, acceptance and
recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least
five (5) Business Days after the execution date thereof, (x) the
assignee thereunder shall be a party hereto and, to the extent
that rights and obligations hereunder have been assigned or
negotiated to it pursuant to such Assignment and Acceptance, have
the rights and obligations of a Lender hereunder (including, in
respect of the Collateral, all the rights and obligations of a
Holder of Secured Obligations, as fully as if such assignee had
been named as a Lender in accordance with the terms of this
Agreement) and (y) the Lender assignor thereunder shall, to the
extent that rights and obligations hereunder have been assigned
or negotiated 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 or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall
cease to be a party hereto but shall continue to be entitled to
the benefits of Sections 2.08, 2.09, 2.10, 12.03 and 12.04, as
well as to any fees accrued for its account hereunder and not yet
paid.

(v) With respect to a Registered Note, each assignment
shall require compliance with the procedures of Section 2.14.

(b) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) the assignment made under such
Assignment and Acceptance is made without recourse and, other
than as provided in such Assignment and Acceptance, such
assigning Lender 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
any other Loan Document or any other document, instrument or
agreement executed or delivered in connection herewith or
therewith or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other
Transaction Document or any other instrument or document
furnished pursuant hereto or thereto; (ii) such assigning Lender
makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Parent, the
Borrower or any of their respective Subsidiaries or the perfor-
mance or observance by the Parent, the Borrower or any of their
respective Subsidiaries of any of its obligations under any
Transaction Document or any other instrument or document fur-
nished pursuant hereto; (iii) such assignee confirms that it has

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received a copy of this Agreement, together with copies of the
financial statements most recently delivered pursuant to
Article VI and such other Loan Documents and other documents and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Accept-
ance; (iv) such assignee will, independently and without reliance
upon the Administrative Agent, the Collateral Agent, the Issuing
Banks, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee
appoints and authorizes the Administrative Agent and the
Collateral Agent, respectively, to take such action as an
Administrative Agent and the Collateral Agent, respectively, on
its behalf and to exercise such powers under this Agreement and
the other Loan Documents as are delegated to them by the terms
hereof and thereof, together with such powers as are reasonably
incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations
which by the terms of this Agreement are required to be performed
by it as a Lender.

(c) The Administrative Agent shall maintain at its
address referred to on Schedule A a copy of each Assignment and
Acceptance delivered to and accepted by it and shall record in
the Administrative Agent's Loan Account the names and addresses
of each Lender and the Commitment of, and principal amount of the
Loans owing to, such Lender from time to time. The Borrower, the
Administrative Agent, the Collateral Agent and the Lenders may
treat each Person whose name is recorded in the Loan Account as a
Lender hereunder for all purposes of this Agreement.

(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and the assignee, the
Administrative Agent shall, if such Assignment and Acceptance has
been properly completed and is in substantially the form of
Exhibit 1 and if the conditions for the assignment referred to in
the Assignment and Acceptance and set forth in Section 12.02(a)
have been met, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the
Administrative Agent's Loan Account and (iii) give prompt notice
thereof to the Borrower.

(e) Each Lender may sell participations to one or more
banks or other entities as to all or a portion of its rights and
obligations under this Agreement (including, without limitation,
all or a portion of its Commitments and Loans, participations in
the Letters of Credit and its obligations to acquire such
participations); provided, that (i) notice thereof is given to
the Borrower and the Administrative Agent, (ii) such Lender's
obligations under this Agreement (including, without limitation,
its Commitment to the Borrower hereunder) shall remain unchanged,
(iii) such Lender shall remain solely responsible to the other

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parties hereto for the performance of such obligations, (iv) the
participating banks or other entities shall be entitled to the
benefit of the cost protection provisions contained in Sections
2.03(f), 2.08, 2.09 and 2.10 to the same extent as if they were
Lenders; provided, however, that no such participating bank or
entity shall be entitled to receive any greater amount pursuant
to such Sections than the Lender from which it purchased its
participation would have been entitled to receive in respect of
the amount of the participation transferred by such Lender to
such participating bank or entity had no transfer occurred, (v)
the Borrower, the Administrative Agent, the Collateral Agent, the
Issuing Banks and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and with regard to
any and all payments to be made under this Agreement, and
(vi) the holder of any such participation shall not be entitled
to voting rights under this Agreement; provided, that the
participation agreement between a Lender and its participants may
provide that such Lender will obtain the approval of such
participant whose interest would be affected thereby prior to any
amendment or waiver of any provisions of this Agreement which
would (A) extend the Revolving Credit Termination Date (except
pursuant to Section 2.02(g)), the Tranche A Term Loan Termination
Date, or the Tranche B Term Loan Termination Date, or the time of
payment of interest or fees with respect to the Loans or Letter
of Credit Obligations, (B) reduce the interest rate or any fees
hereunder, or the principal amount of the Loans or the Letter of
Credit Obligations, (C) increase the aggregate amount of any of
the Commitments or the Loans of the Lender granting the
participation, or increase such Lender's Pro Rata Share, Tranche
A Pro Rata Share or Tranche B Pro Rata Share, (D) release all or
substantially all of the Collateral, or (E) release the Parent
Guaranty or any of the Subsidiary Guaranties (other than in
connection with the sale of any Subsidiary of the Borrower, or
all or substantially all of the assets of such Subsidiary,
permitted by Section 8.02(a)).

(f) Upon the acceptance by the Administrative Agent of
any Assignment and Acceptance, the parties to such Assignment and
Acceptance may at any time request that new Notes be issued to
the Lender assignor and the Lender assignee by (i) providing
written notice of such request to the Administrative Agent and
the Borrower and (ii) delivering to the Borrower such assigning
Lender's Notes for cancellation and substitution. Promptly
following receipt by the Borrower of any such notice, and
verification from the Administrative Agent that the applicable
Assignment and Acceptance shall have been accepted by the
Administrative Agent, the Borrower forthwith shall cause to be
executed, and shall deliver to the Lender assignee, new Notes to
the order of the assignee and, if applicable, replacement Notes
to the order of the Lender assignor, and such Notes shall equal
the aggregate principal amount of such assigning Lender's Notes
issued by the Borrower immediately prior to the acceptance by the

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Administrative Agent of the applicable Assignment and Acceptance.
The Borrower shall immediately upon delivery of such new Note(s),
cancel the original Notes delivered by the Lender assignor to the
Borrower.

(g) Notwithstanding anything herein to the contrary,
each Lender may assign all or any portion of its rights under
this Agreement as collateral security to the Federal Reserve Bank
or any Governmental Authority succeeding to its functions.

12.03. Expenses.

(a) Generally. Whether or not any Funding Date shall
have occurred, Borrower agrees upon demand to pay, or reimburse
the Administrative Agent and the Collateral Agent for all of
their and any of their Affiliates' out-of-pocket costs and
expenses of every type and nature (including, without limitation,
the reasonable fees, expenses and disbursements of attorneys and
legal assistants, auditors, accountants, appraisers, printers,
insurance and environmental advisers, and other consultants re-
tained by the Administrative Agent or the Collateral Agent, and
other travel, search and filing fees and expenses and all fees,
taxes (except income and franchise taxes), assessments and duties
incurred by any of them) incurred by the Administrative Agent or
the Collateral Agent or their Affiliates in connection with (i)
the negotiation, preparation and execution of this Agreement and
any amendments or waivers thereto (including, without limita-
tion, the satisfaction or attempted satisfaction of any of the
conditions set forth in Article IV, the Collateral Documents and
the other Transaction Documents or any amendment or waiver
thereto and the making of the Loans hereunder; (ii) the cre-
ation, perfection or protection of the Collateral Agent's Liens
in the Collateral for the benefit of the Holders of Secured
Obligations (including, without limitation, any fees and expenses
for title and lien searches, filing and recording fees and taxes,
trustee's fees, duplication costs and corporate search fees);
(iii) reasonable fees, expenses and disbursements of the
Administrative Agent's and the Collateral Agent's legal counsel
in connection with the administration of this Agreement, the
Transaction Documents, the Loans and the Collateral; and (iv) the
protection, collection or enforcement of any of the Obligations
or the Collateral. In addition, the Borrower shall pay, or
reimburse the Administrative Agent, the Collateral Agent, the
Issuing Banks and the Lenders for, all out-of-pocket costs and
expenses, including, without limitation, reasonable attorneys'
and legal assistants' fees incurred by the Administrative Agent,
the Collateral Agent, any Issuing Bank or any Lender prior to the
occurrence of an Event of Default in commencing, defending or
intervening in any litigation or in filing a petition, complaint,
answer, motion or other pleading in any legal proceeding relating
to the Parent, the Borrower, or any of their respective
Subsidiaries and arising out of or in connection with the
Transaction Documents.

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(b) After Default. The Borrower further agrees to
pay, or reimburse the Administrative Agent, the Collateral Agent,
the Issuing Banks and the Lenders for all out-of-pocket costs and
expenses, including, without limitation, reasonable attorneys'
and legal assistants' fees, expenses and disbursements (including
allocated costs of internal counsel and costs of settlement)
incurred by the Administrative Agent, the Collateral Agent, any
Issuing Bank or any Lender after the occurrence of an Event of
Default (i) in enforcing any of the Obligations or in fore-
closing against the Collateral or exercising or enforcing any
other right or remedy available by reason of such Event of
Default; (ii) in connection with any refinancing or restructuring
of the credit arrangements provided under this Agreement in the
nature of a "work-out" or in any insolvency or bankruptcy
proceeding; (iii) in commencing, defending or intervening in any
litigation or in filing a petition, complaint, answer, motion or
other pleading in any legal proceeding relating to the Parent,
the Borrower or any of their respective Subsidiaries and related
to or arising out of the transactions contemplated hereby or by
any of the Transaction Documents; (iv) in taking any other action
in or with respect to any suit or proceeding (whether in
bankruptcy or otherwise); (v) in protecting, preserving, collect-
ing, leasing, selling, taking possession of, or liquidating any
of the Collateral; or (vi) in attempting to enforce or enforcing
any security interest in any of the Collateral or any other
rights under the Collateral Documents. Any payments made by the
Borrower or received by the Administrative Agent or the
Collateral Agent and applied as reimbursements for costs and
expenses under this Section 12.03(b) shall be apportioned among
the Administrative Agent, the Collateral Agent, the Issuing Bank
and the Lenders in the order of priority set forth in
Section 2.06.

12.04. Indemnification and Waiver. The Borrower
agrees: (a) to defend, protect, indemnify, and hold harmless the
Administrative Agent, the Collateral Agent, the Issuing Banks and
each and all of the Lenders, each of their respective Affiliates
and each of the respective officers, directors, employees and
agents of each of the foregoing (collectively called the
"Indemnitees") from and against any and all liabilities, obliga-
tions, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the reasonable fees
and disbursements of counsel for such Indemnitees in connection
with any investigative, administrative or judicial proceeding,
whether or not such Indemnitees shall be designated a party
thereto), imposed on, incurred by, or asserted against such
Indemnitees (whether direct, indirect or consequential and
whether based on any federal or state laws or other statutory
regulations, including, without limitation, securities and
commercial laws and regulations, under common law or at equitable
cause, or on contract or otherwise, including any liabilities and

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costs under federal, state or local environmental, health or
safety laws, regulations, or common law principles, arising from
or in connection with the past, present or future operations of
the Parent, the Borrower and of their respective Subsidiaries, or
their respective predecessors in interest, or the past, present
or future environmental condition of the Property of the Parent,
the Borrower or any of their respective Subsidiaries, the
presence of asbestos-containing materials at any such Property,
or the Release or threatened Release of any Contaminant into the
environment from any such Property) in any manner relating to or
arising out of this Agreement, the Collateral Documents or any of
the other Transaction Documents, the capitalization of the
Borrower, the Lenders' Commitments, the making of, management of
and participation in the Loans or the Letters of Credit, or the
use or intended use of the Letters of Credit and the proceeds of
the Loans hereunder (collectively, the "Indemnified Matters");
provided, that the Borrower shall have no obligation to an
Indemnitee hereunder with respect to (i) matters for which such
Indemnitee has been compensated pursuant to or for which an
exemption is provided in Section 2.03(f) or 2.08(d) or any other
provision of this Agreement and (ii) Indemnified Matters caused
by or resulting from the gross negligence or willful misconduct
of that Indemnitee, as determined by a final judgment of a court
of competent jurisdiction; and (b) to assert no claim against the
Administrative Agent, the Collateral Agent, any of the Lenders,
any of the Issuing Banks or any other Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive
damages, all of which claims, if any, are hereby waived. To the
extent that the undertaking to indemnify, pay and hold harmless
set forth in the preceding clause (a) may be unenforceable
because it is violative of any law or public policy, the Borrower
shall contribute the maximum portion which it is permitted to pay
and satisfy under applicable law, to the payment and satisfaction
of all Indemnified Matters incurred by the Indemnitees. Without
prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower
contained in this Section 12.04 shall survive the payment in full
of principal and interest hereunder, the termination of the
Letters of Credit and the termination of this Agreement.

12.05. Limitation of Liability. No claim may be made
by the Borrower, any Lender or other Person against the
Administrative Agent, the Collateral Agent, any Issuing Bank, or
any Lender or the Affiliates, directors, officers, employees, or
agents of any of them for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract
or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement or any other
Transaction Document, or any act, omission or event occurring in
connection therewith, and the Borrower and each Lender hereby
waives, releases and agrees not to sue upon any claim for any
such damages, whether or not accrued and whether or not known or
suspected to exist in its favor.

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12.06. Ratable Sharing; Defaulting Lender; Setoff.

(a) Subject to Sections 2.06 and 12.06(b), the Lenders
agree among themselves that (i) with respect to all amounts
received by them which are applicable to the payment of the
Agreement Obligations (excluding amounts payable under this
Agreement which are determined on a non-pro-rata basis,
including, without limitation, amounts payable under Sections
2.03(f), 2.04(b), 2.08(d), 2.09, 2.10, 2.13, 12.03 and 12.04),
equitable adjustment will be made so that, in effect, all such
amounts will be shared among them ratably in accordance with
their Tranche A Pro Rata Shares and Tranche B Pro Rata Shares, as
applicable, whether received by voluntary payment, by the
exercise of the right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any or all
of the Agreement Obligations (excluding amounts payable under
this Agreement which are determined on a non-pro-rata basis,
including, without limitation, amounts payable under Sections
2.02(c), 2.03(f), 2.04(b), 2.08(d), 2.09, 2.10, 2.13, 12.03 and
12.04) or the Collateral, (ii) if any of them shall by voluntary
payment or by the exercise of any right of counterclaim, setoff,
banker's lien or otherwise, receive payment of a proportion of
the aggregate amount of the Agreement Obligations held by it
which is greater than its appropriate pro rata share of the
payments on account of the Agreement Obligations (excluding the
fees described or referred to in Section 2.04), the one receiving
such excess payment shall purchase, without recourse or warranty,
an undivided interest and participation (which it shall be deemed
to have been done simultaneously upon the receipt of such
payment) in such Agreement Obligations owed to the others so that
all such recoveries with respect to such Agreement Obligations
shall be applied ratably in accordance with their Tranche A Pro
Rata Shares and Tranche B Pro Rata Shares, as applicable;
provided, that if all or part of such excess payment received by
the purchasing party is thereafter recovered from it, those
purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to that party to the extent
necessary to adjust for such recovery, but without interest
except to the extent the purchasing party is required to pay
interest in connection with such recovery. The Borrower agrees
that any Lender so purchasing a participation from another Lender
pursuant to this Section 12.06(a) may, to the fullest extent
permitted by law, exercise all its rights of payment with respect
to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.

(b) In the event that any Lender fails to fund its
Tranche A Pro Rata Share or Tranche B Pro Rata Share of any
Borrowing requested or deemed requested by the Borrower which
such Lender is obligated to fund under the terms of this
Agreement (the funded portion of such Borrowing being hereinafter
referred to as a "Non Pro Rata Loan"), until the earlier of such

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Lender's cure of such failure and the termination of the
Commitments, the proceeds of all amounts thereafter repaid to the
Administrative Agent by the Borrower and otherwise required to be
applied to such Lender's share of all other Obligations pursuant
to the terms of this Agreement shall be advanced to the Borrower
by the Administrative Agent on behalf of such Lender to cure, in
full or in part, such failure by such Lender, but shall
nevertheless be deemed to have been paid to such Lender in
satisfaction of such other Obligations. Notwithstanding anything
in this Agreement to the contrary:

(i) the foregoing provisions of this Section
12.06(b) shall apply only with respect to the proceeds
of payments of Obligations and shall not affect the
conversion or continuation of Loans pursuant to Section
2.03(c);

(ii) any such Lender shall be deemed to have
cured its failure to fund its Tranche A Pro Rata Share
or Tranche B Pro Rata Share, as applicable, of any
Borrowing at such time as an amount equal to such
Lender's original Tranche A Pro Rata Share or Tranche B
Pro Rata Share, as applicable, of the requested
principal portion of such Borrowing is fully funded to
the Borrower, whether made by such Lender itself or by
operation of the terms of this Section 12.06(b), and
whether or not the Non Pro Rata Loan with respect
thereto has been repaid, converted or continued;

(iii) amounts advanced to the Borrower to cure,
in full or in part, any such Lender's failure to fund
its Tranche A Pro Rata Share or Tranche B Pro Rata
Share, as applicable, of any Borrowing ("Cure Loans")
shall bear interest at the rate applicable to Tranche A
Base Rate Loans or Tranche B Base Rate Loans, as
applicable, under Section 2.03 in effect from time to
time, and for all other purposes of this Agreement
shall be treated as if they were Base Rate Loans;

(iv) regardless of whether or not an Event of
Default has occurred or is continuing, and
notwithstanding the instructions of the Borrower as to
its desired application, all repayments of principal
which, in accordance with the terms of Section 2.06,
would be applied to the outstanding Base Rate Loans
shall be applied first, ratably to all Base Rate Loans
constituting Non Pro Rata Loans, second, ratably to
Base Rate Loans other than those constituting Non Pro
Rata Loans or Cure Loans and, third, ratably to Base
Rate Loans constituting Cure Loans;

(v) for so long as and until the earlier of any
such Lender's cure of the failure to fund its Tranche A

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Pro Rata Share or Tranche B Pro Rata Share, as
applicable, of any Borrowing and the termination of the
Commitments, the term "Requisite Lenders" for purposes
of this Agreement shall mean Lenders (excluding all
Lenders whose failure to fund their respective Tranche
A Pro Rata Shares or Tranche B Pro Rata Shares, as
applicable, of such Borrowing have not been so cured)
whose Pro Rata Shares represent more than fifty percent
(50%) of the aggregate Pro Rata Shares of such Lenders,
and the term "Supermajority Lenders" for purposes of
this Agreement shall mean Lenders (excluding all
Lenders whose failure to fund their respective Tranche
A Pro Rata Shares or Tranche B Pro Rata Shares, as
applicable, if such Borrowing have not been so cured)
whose Pro Rata Shares represent more than sixty-six and
two-thirds percent (66-2/3%) of the aggregate Pro Rata
Shares of such Lenders; and

(vi) for so long as and until any such Lender's
failure to fund its Tranche A Pro Rata Share or Tranche
B Pro Rata Share, as applicable, of any Borrowing is
cured in accordance with Section 12.06(b)(ii), (A) such
Lender shall not be entitled to any Commitment Fees
with respect to its Commitment and (B) the Commitment
Fee shall accrue in favor of the Lenders which have
funded their respective Tranche A Pro Rata Shares or
Tranche B Pro Rata Shares, as applicable, of such
requested Borrowing, shall be allocated among such
performing Lenders ratably based upon their relative
Commitments, and shall be calculated based upon the
average amount by which the aggregate Commitments of
such performing Lenders exceeds the sum of (I) the
outstanding principal amount of the Loans owing to such
performing Lenders, plus (II) the outstanding
Reimbursement Obligations owing to such performing
Lenders, plus, (III) the aggregate participation
interests of such performing Lenders arising pursuant
to Section 3.06 with respect to undrawn and outstanding
Letters of Credit.

(c) In addition to any Liens granted to the Collateral
Agent, the Issuing Banks or Lenders and any rights now or
hereafter granted under applicable law and not by way of
limitation of any such Lien or rights, upon the occurrence and
during the continuance of any Event of Default, each Lender and
Issuing Bank is hereby authorized by the Borrower at any time or
from time to time, without notice to the Borrower, or to any
other Person (any such notice being hereby expressly waived) to
set off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or
unmatured but not including trust accounts) and any other
Indebtedness at any time held or owing by that Lender or Issuing

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Bank to or for the credit or the account of the Borrower against
and on account of the Obligations of the Borrower to that Lender
or Issuing Bank including, but not limited to, all Loans and
Reimbursement Obligations and all claims of any nature or
description arising out of or connected with this Agreement or
any of the other Loan Documents, irrespective of whether or not
(i) that Lender or Issuing Bank shall have made any demand
hereunder or (ii) the Administrative Agent shall have declared
the principal of and interest on the Loans and other amounts due
hereunder to be due and payable as permitted by Article X and
although said obligations and liabilities, or any of them, may be
contingent or unmatured.

12.07. Amendments and Waivers. No amendment or modi-
fication of any provision of this Agreement shall be effective
without the written agreement of the Requisite Lenders and the
Borrower, and no termination or waiver of any provision of this
Agreement, or consent to any departure by the Borrower therefrom,
shall in any event be effective without the written concurrence
of the Requisite Lenders, which the Requisite Lenders shall have
the right to grant or withhold at their sole discretion, except
that waivers or amendments with respect to prepayments required
pursuant to Section 2.05 (other than a prepayment required from
the proceeds of insurance upon the loss, damage or destruction of
any asset exceeding $20,000,000) shall not be effective without
the written concurrence of the Supermajority Lenders and except
that any amendment, modification, or waiver of any provision of
this Agreement which would (i) extend the time of expiration or
termination of any of the Commitments (other than pursuant to
Section 2.02(g)) or the Tranche A Term Loan Termination Date or
the Tranche B Term Loan Termination Date or the time of payment
of principal on any Loan or the Reimbursement Obligations,
interest thereon or fees (provided that any amendment,
modification or waiver with respect to any of the prepayments
required pursuant to Section 2.05 that results in a reduction in
the amount of any such prepayment applied to any particular
scheduled amortization payment of the Term Loans shall be deemed
not to be such an extension of time of payment), including,
without limitation by any amendment to or waiver of Section
10.02(a), (ii) reduce the interest rate, the amount of any fees,
indemnities or reimbursements hereunder, or the principal amount
of the Loans or the Letters of Credit Obligations including,
without limitation by any amendment to or waiver of Section
10.02(a), (iii) increase the amount of any of the Lenders'
Commitments or increase any Lender's Tranche A Pro Rata Share,
Tranche B Pro Rata Share, or Pro Rata Share, (iv) release the
security interest of the Holders of Secured Obligations in all or
substantially all of the Collateral, (v) release the Parent
Guaranty or any of the Subsidiary Guaranties or any party thereto
(other than in connection with the sale of any Subsidiary of the
Borrower, or all or substantially all of the assets of such
Subsidiary, permitted by Section 8.02(a)), (vi) alter the
provisions of Section 2.06(b) which prescribe the ratable sharing

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between Tranche A Term Loans and Trance B Term Loans of all
prepayments required pursuant to Section 2.05 or (vii) amend the
definitions of "Requisite Lenders," "Tranche A Pro Rata Share",
"Tranche B Pro Rata Share", "Pro Rata Share", "Supermajority
Lenders", the provisions of Section 2.01(b), 2.02(g), 3.02, 3.04
or 3.06 the next to the last sentence of Section 12.15 or the
provisions contained in Section 12.06 or in this Section 12.07 or
the parties whose consent is required for action hereunder or
under the other Loan Documents, shall be effective only if evi-
denced by a writing signed by or on behalf of all Lenders.
Notwithstanding the foregoing, with the written approval of the
Supermajority Lenders, individual Lenders may agree to defer
interim amortization payments due to such Lenders with respect to
the Term Loans, provided, however, that each Lender that votes
against such deferral shall receive such payments on each
scheduled interim amortization date as required pursuant to
Section 2.01(c). No amendment, modification, termination, or
waiver of any provision of Article XI or any other provision
referring to the Administrative Agent or the Collateral Agent
shall be effective without the written concurrence of the
Administrative Agent or the Collateral Agent, as applicable. No
amendment, modification, termination or waiver of any provision
of Article III shall be effective without the written consent of
all of the Issuing Banks. The Administrative Agent and the
Collateral Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications,
waivers or consents on behalf of such Lender. Any waiver or
consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or
demand on the Borrower in any case shall entitle Borrower to any
other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver
or consent effected in accordance with this Section 12.07 shall
be binding on each assignee, transferee or recipient of a
Lender's Commitments or Loans, each future assignee, transferee,
recipient of a Lender's Commitments or Loans, and, if signed by
the Borrower, on the Borrower.

12.08. Notices. Unless otherwise specifically
provided herein, any notice or other communication herein
required or permitted to be given shall be in writing and may be
personally served, telecopied, telexed or sent by courier service
or United States mail and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of a
telecopy or telex or four (4) Business Days after deposit in the
United States mail (registered or certified, with postage prepaid
and properly addressed). Notices to the Administrative Agent
shall not be effective until received by the Administrative
Agent. For the purposes hereof, the addresses of the parties
hereto (until notice of a change thereof is delivered as provided
in this Section 12.08) shall be as set forth in Schedule A or on
the applicable Assignment and Acceptance, or, as to each party,
at such other address as may be designated by such party in a

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written notice to all of the other parties.

12.09. Failure or Indulgence Not Waiver; Remedies
Cumulative. No failure or delay on the part of the
Administrative Agent, the Collateral Agent, any Issuing Bank or
any Lender in the exercise of any power, right or privilege under
any of the Loan Documents shall impair such power, right or
privilege or be construed to be a waiver of any default or acqui-
escence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise
thereof or of any other right, power or privilege. All rights
and remedies existing under the Loan Documents are cumulative to
and not exclusive of any rights or remedies otherwise available.

12.10. Termination. Upon the termination in whole of
the Commitments pursuant to the terms of this Agreement, the
Borrower shall pay to the Administrative Agent for the benefit of
the Lenders and the Issuing Banks an amount equal to any and all
Agreement Obligations then outstanding.

12.11. Marshalling; Recourse to Security; Payments
Set Aside. Neither any Lender nor the Collateral Agent nor the
Administrative Agent shall be under any obligation to marshal any
assets in favor of Borrower or any other party or against or in
payment of any or all of the Obligations. Recourse to security
shall not be required at any time. To the extent that the
Borrower makes a payment or payments to the Administrative Agent
or the Lenders, or the Administrative Agent or the Collateral
Agent or the Lenders enforce their security interests or exercise
their rights of setoff, and such payment or payments or the
proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then to the
extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, right and
remedies therefor, shall be revived and continued in full force
and effect as if such payment had not been made or such
enforcement or setoff had not occurred.

12.12. Severability. In case any provision in or
obligation under this Agreement or the other Loan Documents shall
be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions
or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired
thereby.

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12.13. Headings. Article and Section headings in this
Agreement and in the Table of Contents hereto are included herein
for convenience of reference only and shall not constitute a part
of this Agreement for any other purpose or be given any
substantive effect.

12.14. GOVERNING LAW. THE ADMINISTRATIVE AGENT HEREBY
ACCEPTS THIS AGREEMENT, ON BEHALF OF ITSELF, THE COLLATERAL AGENT
AND THE LENDERS, AT NEW YORK, NEW YORK BY ACKNOWLEDGING AND
AGREEING TO IT THERE. ANY DISPUTE AMONG THE BORROWER, THE PARENT
AND THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE ISSUING
BANKS, ANY LENDER OR ANY OTHER HOLDER OF SECURED OBLIGATIONS
ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING
IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

12.15. Successors and Assigns; Subsequent Holders
of Notes. This Agreement and the other Loan Documents shall be
binding upon the parties hereto and their respective successors
and assigns and shall inure to the benefit of the parties hereto
and the successors and permitted assigns of the Lenders. The
terms and provisions of this Agreement shall inure to the benefit
of any assignee or transferee of the Loans and the Commitments of
any Lender (to the extent such assignment or transfer is effected
in accordance with Section 12.02), and in the event of such
transfer or assignment, the rights and privileges herein
conferred upon Lenders shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms
and conditions hereof. The Borrower's rights or any interest
therein hereunder, and the Borrower's duties and Obligations
hereunder, may not be assigned without the written consent of all
of the Lenders. All of the Borrower's obligations and duties
under this Agreement and under each of the other Loan Documents
shall be binding upon each of the Borrower's successors and
assigns, including, without limitation, any receiver, trustee or
debtor-in-possession of or for the Borrower.

12.16. CONSENT TO JURISDICTION; SERVICE OF PROCESS;
JURY TRIAL.

(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN
SUBSECTION (B), EACH OF THE PARTIES HERETO AGREES THAT ALL
DISPUTES AMONG THEM ARISING OUT OF, CONNECTED WITH, RELATED TO,
OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY BY STATE OR FEDERAL
COURTS LOCATED IN NEW YORK, NEW YORK, BUT THE PARTIES HERETO
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK. EACH OF
THE PARTIES HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO

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THIS SUBSECTION ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF
THE COURT CONSIDERING THE DISPUTE.

(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE
ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, THE ISSUING BANKS OR
ANY LENDER SHALL HAVE THE RIGHT TO PROCEED AGAINST THE BORROWER
OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON
TO (1) OBTAIN PERSONAL JURISDICTION OVER THE BORROWER OR (2)
REALIZE ON THE COLLATERAL (INCLUDING, WITHOUT LIMITATION, THE
REAL PROPERTY COLLATERAL) OR ANY OTHER SECURITY FOR THE
OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED
IN FAVOR OF SUCH PERSON. THE BORROWER WAIVES ANY OBJECTION THAT
IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS
COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION.

(C) SERVICE OF PROCESS. THE BORROWER WAIVES PERSONAL
SERVICE OF ANY PROCESS UPON IT AND, AS ADDITIONAL SECURITY FOR
THE OBLIGATIONS, IRREVOCABLY APPOINTS CT CORPORATION SYSTEM, THE
BORROWER'S REGISTERED ADMINISTRATIVE AGENT, WHOSE ADDRESS IS 1633
BROADWAY, NEW YORK, NEW YORK 10019, AS THE BORROWER'S
ADMINISTRATIVE AGENT FOR THE PURPOSE OF ACCEPTING SERVICE OF
PROCESS ISSUED BY ANY COURT; PROVIDED THAT NOTICE OF ANY SUCH
SERVICE IS CONCURRENTLY THEREWITH DELIVERED TO BORROWER PURSUANT
TO SECTION 12.08. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION
(INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH ABOVE.

(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT
OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH
OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.

(E) WAIVER OF BOND. THE BORROWER WAIVES THE POSTING
OF ANY BOND OTHERWISE REQUIRED OF ANY PARTY HERETO IN CONNECTION
WITH ANY JUDICIAL PROCESS OR PROCEEDING TO REALIZE ON THE
COLLATERAL (INCLUDING, WITHOUT LIMITATION, THE REAL PROPERTY

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COLLATERAL) OR ANY OTHER SECURITY FOR THE OBLIGATIONS OR TO
ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
SUCH PARTY, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY
RESTRAINING ORDER, PRELIMINARY OR PERMANENT INJUNCTION, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT.

(F) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS
TO EACH OTHER PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT
AND, SPECIFICALLY, THE PROVISIONS OF THIS SECTION 12.16, WITH ITS
COUNSEL.

12.17. Counterparts; Effectiveness; Inconsistencies.
This Agreement and any amendments, waivers, consents, or
supplements may be executed in counterparts, each of which when
so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same
instrument. This Agreement shall become effective against each
of the Borrower, each Lender, the Collateral Agent, the Issuing
Banks and the Administrative Agent on the date when all of such
parties have duly executed and delivered this Agreement to each
other (delivery by the Parent and the Parent and the Borrower to
the Lenders and by any Lender to the Borrower and any other
Lender being deemed to have been made by delivery to the
Administrative Agent). This Agreement and each of the other Loan
Documents shall be construed to the extent reasonable to be
consistent one with the other, but to the extent that the terms
and conditions of this Agreement are actually inconsistent with
the terms and conditions of any other Loan Document, this
Agreement shall govern.

12.18. Performance of Obligations. The Borrower
agrees that the Administrative Agent and the Collateral Agent may
each, but shall have no obligation to, make any payment or
perform any act required of the Borrower under any Loan Document
or take any other action which the Administrative Agent or the
Collateral Agent in its discretion deems necessary or desirable
to protect or preserve the Collateral, including, without
limitation, any action to (i) pay or discharge taxes, liens,
security interests or other encumbrances levied or placed on or
threatened against any Collateral, (ii) effect any repairs or
obtain any insurance called for by the terms of any of the Loan
Documents and to pay all or any part of the premiums therefor and
the costs thereof and (iii) pay any rents payable by the Borrower
which are more than 30 days past due, or as to which the landlord
has given notice of termination, under any lease. The
Administrative Agent or the Collateral Agent, as applicable,
shall use its best efforts to give the Borrower notice of any
action taken under this Section 12.18 prior to the taking of such
action or promptly thereafter provided the failure to give such
notice shall not affect the Borrower's obligations in respect
thereof. The Borrower agrees to pay the Administrative Agent or
the Collateral Agent, as applicable, upon demand, the principal
amount of all funds advanced by the Administrative Agent or the

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Collateral Agent under this Section 12.18, together with interest
thereon at the rate from time to time applicable to Tranche A
Base Rate Loans from the date of such advance until the
outstanding principal balance thereof is paid in full. If the
Borrower fails to make payment in respect of any such advance
under this Section 12.18 within one (1) Business Day after the
date the Borrower receives written demand therefor from the
Administrative Agent or the Collateral Agent, as applicable, the
Administrative Agent or the Collateral Agent shall promptly
notify each Lender and each Lender agrees that it shall thereupon
make available to the Administrative Agent or the Collateral
Agent, as applicable, in Dollars in immediately available funds,
the amount equal to such Lender's Pro Rata Share of such advance.
If such funds are not made available to the Administrative Agent
or the Collateral Agent, as applicable, by such Lender within one
(1) Business Day after the Administrative Agent's or Collateral
Agent's demand therefor, the Administrative Agent or Collateral
Agent, as applicable, will be entitled to recover any such amount
from such Lender together with interest thereon at the Federal
Funds Rate (as such term is defined in the definition of
Alternate Base Rate) for each day during the period commencing on
the date of such demand and ending on the date such amount is
received. The failure of any Lender to make available to the
Administrative Agent or Collateral Agent, as applicable, its Pro
Rata Share of any such unreimbursed advance under this Section
12.18 shall neither relieve any other Lender of its obligation
hereunder to make available to the Administrative Agent or
Collateral Agent, as applicable, such other Lender's Pro Rata
Share of such advance on the date such payment is to be made nor
increase the obligation of any other Lender to make such payment
to the Administrative Agent or Collateral Agent, as applicable.
All outstanding principal of, and interest on, advances made
under this Section 12.18 shall constitute Obligations secured by
the Collateral until paid in full by the Borrower.

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12.19. ENTIRE AGREEMENT. THIS WRITTEN CREDIT
AGREEMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES AS TO
ITS SUBJECT MATTER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS AMONG THE
PARTIES. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES.

IN WITNESS WHEREOF, this Agreement has been duly
executed on the date set forth above.

EAGLE INDUSTRIAL PRODUCTS CORPORATION,
as Borrower

By:\s\ Gus J. Athas
Name: Gus J. Athas
Title: Vice President

CHEMICAL BANK,
as Administrative Agent

By:\s\ Lisa D. Benitez
Name: Lisa D. Benitez
Title: Vice President

CITICORP NORTH AMERICA, INC.,
as Collateral Agent

By:\s\ Jon R. Hinard
Name: Jon R. Hinard
Title: Vice President

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Revolving Credit Commitment CHEMICAL BANK
$13,125,000

Tranche A Term Loan Commitment By: /s/ Lisa D. Benitez
$21,875,000 ------------------
Name: Lisa D. Benitez
Tranche B Term Loan Commitment ------------------
$22,000,000 Title: Vice President
------------------

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Revolving Credit Commitment CITICORP USA, INC.
$13,125,000

Tranche A Term Loan Commitment By: /s/ Colin M. Cohen
$21,875,000 ------------------
Name: Colin M. Cohen
Tranche B Term Loan Commitment ------------------
$2,000,000 Title: Attorney-In-Fact
------------------

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Revolving Credit Commitment PNC BANK, NATIONAL ASSOCIATION
$13,125,000

Tranche A Term Loan Commitment By: /s/ William S. Richards, Jr.
$21,875,000 ----------------------------
Name: William S. Richards, Jr.
Tranche B Term Loan Commitment ----------------------------
$0 Title: Assistant Vice President
----------------------------

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<PAGE> 150
Revolving Credit Commitment FIRST NATIONAL BANK OF BOSTON
$7,500,000

Tranche A Term Loan Commitment By: /s/ Timothy M. Barns
$12,500,000 --------------------
Name: Timothy M. Barns
Tranche B Term Loan Commitment --------------------
$5,000,000 Title: Managing Director
--------------------

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Revolving Credit Commitment THE BANK OF NEW YORK
$7,500,000

Tranche A Term Loan Commitment By: /s/ R. Wes Towns
$12,500,000 -----------------
Name: R. Wes Towns
Tranche B Term Loan Commitment -----------------
$0 Title: Vice President
-----------------

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Revolving Credit Commitment CAISSE NATIONALE DE CREDIT
$7,500,000 AGRICOLE

Tranche A Term Loan Commitment By: /s/ David Souhl, F.V.P.
$12,500,000 ----------------------------
Name: David Souhl
Tranche B Term Loan Commitment ----------------------------
$0 Title: Head of Corporate Banking
Chicago
----------------------------
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Revolving Credit Commitment DRESDNER BANK AG CHICAGO BRANCH
AND GRAND CAYMAN BRANCH
$7,500,000

Tranche A Term Loan Commitment By: /s/ E.R. Holder John H. Schaus
$12,500,000 --------------------------------
Name: E.R. Holder John H. Schaus
Tranche B Term Loan Commitment --------------------------------
$0 Title: SVP FVP
--------------------------------

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Revolving Credit Commitment NATIONSBANK OF NORTH CAROLINA, N.A.
$7,500,000

Tranche A Term Loan Commitment By: /s/ Michael S. Zehfuss
$12,500,000 ----------------------------
Name: Michael S. Zehfuss
Tranche B Term Loan Commitment ----------------------------
$0 Title: Vice President
----------------------------

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Revolving Credit Commitment FIRST BANK NATIONAL ASSOCIATION
$ 7,500,000

Tranche A Term Loan Commitment By: /s/ Megan G. Mourning
$12,500,000 ---------------------
Name: Megan G. Mourning
Tranche B Term Loan Commitment ---------------------
$0 Title: Vice President
---------------------

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Revolving Credit Commitment BANQUE PARIBAS
$7,500,000

Tranche A Term Loan Commitment By: /s/ O. Gurwood Lisp Peter Toal
$12,500,000 -------------------------------------
Name: O. Gurwood Lisp Peter Toal
Tranche B Term Loan Commitment -------------------------------------
$0 Title: Vice President Regional General
Manager
-------------------------------------

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Revolving Credit Commitment CREDIT LYONNAIS CAYMAN ISLAND BRANCH
$7,500,000

Tranche A Term Loan Commitment By: /s/ W. Michael George
$12,500,000 ---------------------
Name: W. Michael George
Tranche B Term Loan Commitment ---------------------
$0 Title: Vice President
---------------------

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<PAGE> 158

Revolving Credit Commitment THE LONG-TERM CREDIT BANK OF
JAPAN, LTD. CHICAGO BRANCH
$7,500,000

Tranche A Term Loan Commitment By: /s/ Mr. Masahiro Suvama
$12,500,000 -----------------------
Name: Mr. Masahiro Suvama
Tranche B Term Loan Commitment -----------------------
$0 Title: General Manager
-----------------------

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<PAGE> 159

Revolving Credit Commitment BARCLAYS BANK PLC
$5,625,000

Tranche A Term Loan Commitment By: /s/ Olga Georgiev
$9,375,000 -----------------
Name: Olga Georgiev
Tranche B Term Loan Commitment -----------------
$0 Title: Director
-----------------

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<PAGE> 160

Revolving Credit Commitment HARRIS TRUST & SAVINGS BANK
$5,625,000

Tranche A Term Loan Commitment By: /s/ Emilia D. Menso
$9,375,000 ----------------------------
Name: Emilia D. Menso
Tranche B Term Loan Commitment ----------------------------
$0 Title: Vice President
----------------------------

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<PAGE> 161

Revolving Credit Commitment NATIONAL CANADA FINANCE CORP.
$5,625,000

Tranche A Term Loan Commitment By: /s/ K. Craig Gallehugh
/s/ Steven L. Slack
$9,375,000 ----------------------------
Name: K. Craig Gallehugh
Steven L. Slack
Tranche B Term Loan Commitment ----------------------------
$0 Title: Vice President
V.P. & Manager
----------------------------

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<PAGE> 162

Revolving Credit Commitment THE NORTHERN TRUST COMPANY
$3,750,000

Tranche A Term Loan Commitment By: /s/ Kelly L. Otto
$6,250,000 ---------------------------
Name: Kelly L. Otto
Tranche B Term Loan Commitment --------------------------
$0 Title: Commercial Banking Officer
--------------------------
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<PAGE> 163

Revolving Credit Commitment MIDLANTIC NATIONAL BANK
$3,750,000

Tranche A Term Loan Commitment By: /s/ M. Lynn Conover
$6,250,000 ----------------------------
Name: M. Lynn Conover
Tranche B Term Loan Commitment ----------------------------
$0 Title: Assistant Vice President
----------------------------

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<PAGE> 164

Revolving Credit Commitment CONTINENTAL BANK N.A.
$3,750,000

Tranche A Term Loan Commitment By: /s/ John J. Comernolle
$6,250,000 ----------------------------
Name: John J. Comernolle
Tranche B Term Loan Commitment ----------------------------
$0 Title: Vice President
----------------------------

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<PAGE> 165

Revolving Credit Commitment EATON VANCE PRIME RATE RESERVES
$0

Tranche A Term Loan Commitment By: /s/ Barbara Campbell
$0 ----------------------------
Name: Barbara Campbell
Tranche B Term Loan Commitment ----------------------------
$8,000,000 Title: Assistant Treasurer
----------------------------

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<PAGE> 166

Revolving Credit Commitment PILGRIM PRIME RATE TRUST
$0

Tranche A Term Loan Commitment By: /s/ Michael D. Hatley
$0 ----------------------------
Name: Michael D. Hatley
Tranche B Term Loan Commitment ----------------------------
$8,000,000 Title: Assistant Portfolio Manager
----------------------------

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<PAGE> 167

Revolving Credit Commitment PROTECTIVE LIFE INSURANCE COMPANY
$0

Tranche A Term Loan Commitment By: /s/ Mark K. Skode
$0 ----------------------------
Name: Mark K. Skode
Tranche B Term Loan Commitment ----------------------------
$8,000,000 Title: Principal Protection Asset
Management Co.
----------------------------

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<PAGE> 168

Revolving Credit Commitment VAN KAMPEN MERRITT PRIME
RATE INCOME TRUST
$0

Tranche A Term Loan Commitment By: /s/ Jeffrey W. Maillet
$0 ----------------------------
Name: Jeffrey W. Maillet
Tranche B Term Loan Commitment ----------------------------
$8,000,000 Title: Vice Pres. & Portfolio Mgr.
----------------------------

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<PAGE> 169

Revolving Credit Commitment CRESCENT/MACH 1 PARTNERS, L.P.

$0 By its General Partner

Tranche A Term Loan Commitment CRESCENT MACH 1 G.P. CORPORATION

$0 By its attorney-in-fact

Tranche B Term Loan Commitment CRESCENT CAPITAL CORPORATION
$4,000,000
By: /s/ Chester
----------------------------
Name: Chester
----------------------------
Title: Vice President
----------------------------

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<PAGE> 170
EAGLE INDUSTRIES, INC.
Execution Copy

GUARANTY

This GUARANTY ("Guaranty") is made as of the 31st day
of January, 1994, by EAGLE INDUSTRIES, INC., a Delaware
corporation ("Guarantor"), in favor of the "Agents" and the
"Lenders" as such terms are defined below. Unless otherwise
defined herein, capitalized terms used herein shall have the
meanings ascribed to them in the Credit Agreement referred to
below.

W I T N E S S E T H:

WHEREAS, pursuant to that certain Credit Agreement of
even date herewith among Eagle Industrial Products Corporation, a
Delaware corporation ("Borrower"), the financial institutions
listed on the signature pages thereof and each other financial
institution that from time to time becomes a party thereto in
accordance with Section 12.02(a) thereof (together with their
respective successors and assigns, individually, a "Lender" and,
collectively, the "Lenders") Chemical Bank, as administrative
agent for the Lenders (the "Administrative Agent"), and Citicorp
North America, Inc., as collateral agent (together with the
Administrative Agent, the "Agents") (such Credit Agreement, as
amended, restated, supplemented or otherwise modified from time
to time, being referred to herein as the "Credit Agreement"), the
Lenders have agreed to make certain loans and to extend other
financial accommodations to Borrower;

WHEREAS, Borrower is a direct wholly-owned Subsidiary
of Guarantor, and Guarantor will derive both direct and indirect
benefits from the loans and other financial accommodations made
pursuant to the Credit Agreement; and

WHEREAS, as a condition to the Lenders' and the Agents'
willingness to enter into the Credit Agreement and the Lenders'
willingness to make loans and to extend other financial
accommodations to Borrower under the Credit Agreement, the
Lenders have required that Guarantor enter into this Guaranty;

NOW, THEREFORE, in consideration of the premises set
forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
Guarantor agrees as follows:

1. Guaranty. (a) For value received and in
consideration of any loan, advance or financial accommodation of
any kind whatsoever heretofore, now or hereafter made, given or
granted to Borrower by the Lenders, Guarantor unconditionally and
irrevocably guarantees for the benefit of the Agents and each of

<PAGE> 171

the Lenders the full and prompt payment when due (whether at
maturity or earlier, by reason of acceleration or otherwise, and
at all times thereafter) and the performance of (i) all of the
Obligations of Borrower to the Lenders under the Credit Agreement
(including, without limitation, interest accruing following the
filing of a bankruptcy petition by or against Borrower, at the
applicable rate specified in the Credit Agreement, whether or not
such interest is allowed as a claim in bankruptcy) and (ii) all
other Obligations of Borrower to either Agent or any Lender under
the Loan Documents (the Obligations of Borrower which are
described in clauses (i) and (ii) of this Section 1(a) are
hereinafter referred to collectively as the "Obligations").

(b) At any time after the occurrence and during the
continuance of an Event of Default, Guarantor shall pay to the
Administrative Agent, for the benefit of the Agents and the
Lenders, on demand by the Administrative Agent and in immediately
available funds, the full amount of the Obligations then due and
payable. Guarantor further agrees to pay to the Administrative
Agent, for the benefit of the Agents and the Lenders, as
applicable, and reimburse the Administrative Agent for the
benefit of the Agents and the Lenders, as applicable, for, on
demand and in immediately available funds, (i) all losses, fees,
reasonable costs and expenses of the type and to the extent
permitted under Section 12.03 of the Credit Agreement (including,
without limitation, all court costs and reasonable attorneys' and
paralegals' fees, costs and expenses) paid or incurred by either
Agent or any of the Lenders in: (1) endeavoring to collect all or
any part of the Obligations from, or in prosecuting any action
against, Borrower or any other Person relating to the Credit
Agreement, this Guaranty, the other Loan Documents or the
transactions contemplated thereby; (2) taking any action with
respect to any security or collateral securing the Obligations or
obligations of Guarantor hereunder; and (3) preserving,
protecting or defending the enforceability of, or enforcing, this
Guaranty or their respective rights hereunder (all such costs and
expenses described in clauses (1) through (3) of this
Section 1(b)(i) are hereinafter referred to as the "Expenses")
and (ii) interest on the Expenses, from the date of demand under
this Guaranty until paid in full at the Default Rate described in
Section 2.03(d) of the Credit Agreement (the "Interest Rate")
(all such Obligations and other indebtedness, liabilities and
obligations set forth in this Section 1 being hereinafter
collectively referred to as the "Guaranteed Obligations").
Guarantor hereby agrees that this Guaranty is an absolute
guaranty of payment and is not a guaranty of collection.

2. Obligations Unconditional. Guarantor hereby agrees
that its obligations under this Guaranty shall be unconditional,
irrespective of:

(i) the validity, enforceability, avoidance, assignment
or subordination of any of the Guaranteed Obligations or any
of the Loan Documents;

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<PAGE> 172

(ii) the absence of any attempt by, or on behalf of,
any Lender or either Agent to collect, or to take any other
action to enforce, all or any part of the Guaranteed
Obligations whether from or against Borrower, any other
guarantor or any other Person;

(iii) the election of any remedy by, or on behalf of,
any Lender or either Agent with respect to all or any part
of the Guaranteed Obligations;

(iv) any change in the time, manner or place of payment
of, or in any other term of, or any increase in the amount
of, all or any of the Obligations, or the waiver, consent,
extension, forbearance or granting of any indulgence by, or
on behalf of, any Lender or either Agent with respect to any
provision of any of the Loan Documents;

(v) the failure of either Agent or any Lender to take
any steps to perfect and maintain its security interest in,
or to preserve its rights to, any security or collateral for
any or any part of the Guaranteed Obligations;

(vi) the election by, or on behalf of, either Agent
or any one or more of the Lenders, in any proceeding
instituted under Chapter 11 of Title 11 of the United States
Code (11 U.S.C. 101 et seq.) (the "Bankruptcy Code"), of the
application of Section 1111(b)(2) of the Bankruptcy Code;

(vii) any borrowing or grant of a security interest by
Borrower as debtor-in-possession under Section 364 of the
Bankruptcy Code;

(viii) the disallowance, under Section 502 of the
Bankruptcy Code, of all or any portion of the claims of any
of the Lenders or the Agents for repayment of all or any
part of the Guaranteed Obligations;

(ix) any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of
Borrower or Guarantor; or

(x) any change, restructuring or termination of or to
the corporate structure or existence of Borrower or
Guarantor, or any restructuring or refinancing of all or any
portion of the Guaranteed Obligations.

3. Enforcement; Application of Payments. Upon the
occurrence and during the continuance of an Event of Default, the
Administrative Agent may proceed directly and at once against
Guarantor to obtain performance of and to collect and recover the
full amount, or any portion, of the Guaranteed Obligations,
without first proceeding against Borrower or any other guarantor,
or any other Person, or against any security or collateral for

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<PAGE> 173

the Guaranteed Obligations. Subject only to the terms and
provisions of the Credit Agreement, the Administrative Agent
shall have the exclusive right to determine the application of
payments and credits, if any, from Guarantor, Borrower or any
other Person on account of the Guaranteed Obligations or any
other liability of Guarantor to any Lender or either Agent.

4. Waivers. (i) Guarantor hereby waives promptness,
diligence, presentment, demand of payment, filing of claims with
a court in the event of receivership or bankruptcy of Borrower,
protest or notice with respect to any or any part of the
Guaranteed Obligations, all setoffs and permissive counterclaims
and all presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor
and notices of acceptance of this Guaranty or any other guaranty,
the benefits of all statutes of limitation, the benefits of any
statute the effect of which would require the Agent or any Lender
to first proceed against Borrower, any other guarantor or any
other Person to enforce or collect all or any portion of the
Guaranteed Obligations before proceeding against Guarantor for
the enforcement of Guarantor's obligations and indebtedness
hereunder, and all other demands whatsoever (and shall not
require that the same be made on Borrower or Guarantor as a
condition precedent to the obligations of Guarantor hereunder),
and covenants that this Guaranty will not be discharged, except
by indefeasible payment and performance in full of all of the
Guaranteed Obligations and any other obligations contained
herein. Guarantor further waives all notices of the existence,
creation or incurring of new or additional indebtedness, arising
either from additional loans extended to Borrower or otherwise,
and also waives all notices that the principal amount, or any
portion thereof, and/or any interest on any instrument or
document evidencing all or any part of the Guaranteed Obligations
is due, notices of any and all proceedings to collect from the
maker, any endorser or any other guarantor of all or any part of
the Guaranteed Obligations, or from any other Person, and, to the
extent permitted by law, notices of exchange, sale, surrender or
other handling of any security or collateral given to either
Agent or any Lender to secure payment of all or any part of the
Guaranteed Obligations. Guarantor further waives any requirement
that either Agent or any Lender protect, secure, perfect or
insure any security interest or exhaust any right to take action
against Borrower or any other Person or any collateral.

(ii) Guarantor understands that it shall be liable for
the full amount of its liability under this Guaranty,
notwithstanding foreclosure of any real property securing all or
any part of the Guaranteed Obligations by trustee sale or any
other reason impairing the right, if any, of Guarantor, either
Agent or any of the Lenders to proceed against Borrower, any
other guarantor or Borrower's or such guarantor's property.
Guarantor hereby waives, to the fullest extent permitted by law,
all rights and benefits under Section 2809 of the California
Civil Code (or any similar law in any other jurisdiction)
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<PAGE> 174

purporting to reduce a guarantor's obligation in proportion to
the principal obligation. Guarantor hereby waives, to the
fullest extent permitted by law, all rights and benefits under:
(a) Section 580a of the California Code of Civil Procedure (or
any similar law in any other jurisdiction) purporting to limit
the amount of any deficiency judgment which might be recoverable
following the occurrence of a trustee's sale under a deed of
trust, (b) Section 580b of the California Code of Civil Procedure
(or any similar law in any other jurisdiction) providing that no
deficiency may be recovered on a real property purchase money
obligation, (c) Section 580d of the California Code of Civil
Procedure (or any similar law in any other jurisdiction)
providing that no deficiency may be recovered on a note secured
by a deed of trust on real property in case such real property is
sold under the power of sale contained in such deed of trust, and
(d) Section 726 of the California Code of Civil Procedure (or any
similar law in any other jurisdiction) providing that only one
form of action may be maintained to enforce a mortgage on real
property or indebtedness secured by a mortgage on real property,
if such sections, or any of them, have any application hereto.
Guarantor agrees that any election of remedies which might result
in the impairment of either Agent's or any Lender's right to seek
a deficiency judgment shall not impair the obligation of
Guarantor to pay the full amount of the Guaranteed Obligations or
any other obligations contained herein. In addition, Guarantor
hereby waives, to the fullest extent permitted by law, without
limiting the generality of the foregoing or any other provision
hereof, all rights and benefits under California Civil Code
Sections 2810, 2819, 2839, 2845, 2849, 2850, 2899, and 3433 (and
any similar law in any other jurisdiction).

(iii) Guarantor agrees that, notwithstanding the
foregoing and without limiting the generality of the foregoing,
if, after the occurrence and during the continuance of an Event
of Default, either Agent or any Lender is prevented by applicable
law from exercising its rights to accelerate the maturity of the
Obligations, to collect interest on the Obligations, or to
enforce or exercise any other right or remedy with respect to the
Obligations, or either Agent is prevented from taking any action
to realize on the Collateral, Guarantor agrees to pay to the
Administrative Agent for the account of the Agents and the
Lenders, upon demand therefor, the amount which otherwise would
have been due and payable had such rights and remedies been
permitted to be exercised by such Agent or such Lender.

(iv) The Lenders, either themselves or acting through
the Agents, are hereby authorized, without notice or demand and
without affecting the liability of Guarantor hereunder, from time
to time, (a) to renew, extend, accelerate or otherwise change the
time for payment of, or other terms relating to, all or any part
of the Guaranteed Obligations, or to otherwise modify, amend or
change the terms of any of the Loan Documents; (b) to accept
partial payments on all or any part of the Guaranteed
Obligations; (c) to take and hold security or collateral for the

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<PAGE> 175

payment of all or any part of the Guaranteed Obligations, this
Guaranty, or any other guaranty of all or any part of the
Guaranteed Obligations or other liabilities of Borrower or any
other guarantor, (d) to exchange, enforce, waive and release any
such security or collateral; (e) to apply such security or
collateral and direct the order or manner of sale thereof as in
their discretion they may determine; (f) to settle, release,
exchange, enforce, waive, compromise or collect or otherwise
liquidate all or any part of the Guaranteed Obligations, this
Guaranty, any other guaranty of all or any part of the Guaranteed
Obligations, and any security or collateral for the Guaranteed
Obligations or for any such guaranty; or (g) to the extent
permitted under the Credit Agreement, to assign all or any
portion of their rights and interests in the Guaranteed
Obligations and/or any collateral or other security therefor to
any Person. Any of the foregoing may be done in any manner,
without affecting or impairing the obligations of Guarantor
hereunder.

5. Financial Information. Guarantor hereby assumes
responsibility for keeping itself informed of the financial
condition of Borrower and any endorsers and/or other guarantors
of all or any part of the Guaranteed Obligations, and of all
other circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations, or any part thereof, that diligent
inquiry would reveal, and Guarantor hereby agrees that none of
the Lenders or the Agents shall have any duty to advise Guarantor
of information known to any of them regarding such condition or
any such circumstances. In the event any Lender or either Agent,
in its sole discretion, undertakes at any time or from time to
time to provide any such information to Guarantor, such Lender or
Agent shall be under no obligation (i) to undertake any
investigation not a part of its regular business routine, (ii) to
disclose any information which such Lender or Agent pursuant to
accepted or reasonable commercial finance or banking practices,
wishes to maintain confidential or (iii) to make any other or
future disclosures of such information or any other information
to Guarantor.

6. No Marshalling; Reinstatement. Guarantor consents
and agrees that none of the Lenders or the Agents nor any Person
acting for or on behalf of the Lenders or the Agents shall be
under any obligation to marshall any assets in favor of Guarantor
or against or in payment of any or all of the Guaranteed
Obligations. Guarantor further agrees that, to the extent that
Borrower or any other guarantor of all or any part of the
Guaranteed Obligations makes a payment or payments to any Lender
or either Agent, or any Lender or either Agent receives any
proceeds of Collateral, which payment or payments or any part
thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside and/or required to be repaid to
Borrower, such other guarantor or any other Person, or their
respective estates, trustees, receivers or any other party, under
any bankruptcy law, state or federal law, common law or equitable

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<PAGE> 176

cause, then, to the extent of such payment or repayment, the part
of the Guaranteed Obligations which has been paid, reduced or
satisfied by such amount shall be reinstated and continued in
full force and effect as of the time immediately preceding such
initial payment, reduction or satisfaction.

7. Waiver of Subrogation. GUARANTOR HEREBY
IRREVOCABLY WAIVES ALL RIGHTS OF SUBROGATION (WHETHER
CONTRACTUAL, UNDER SECTION 509 OF THE BANKRUPTCY CODE, UNDER
COMMON LAW, OR OTHERWISE) TO THE CLAIMS OF THE LENDERS OR THE
AGENTS AGAINST BORROWER AND ALL CONTRACTUAL, STATUTORY OR COMMON
LAW RIGHTS OF CONTRIBUTION, REIMBURSEMENT, INDEMNIFICATION AND
SIMILAR RIGHTS AND "CLAIMS" (AS SUCH TERM IS DEFINED IN THE
BANKRUPTCY CODE) AGAINST BORROWER WHICH ARISE IN CONNECTION WITH,
OR AS A RESULT OF, THIS GUARANTY OR ANY OF THE OTHER LOAN
DOCUMENTS OR PAYMENT BY GUARANTOR OF ANY OF THE GUARANTEED
OBLIGATIONS.

8. Subordination. Guarantor agrees that any and all
claims of Guarantor against Borrower or any endorser or any other
guarantor of all or any part of the Obligations, or against any
of their respective properties, shall be subordinate and subject
in right of payment to the prior payment, in full, of all of the
Guaranteed Obligations. Notwithstanding any right of Guarantor
to ask, demand, sue for, take or receive any payment from
Borrower or any other guarantor, all rights, liens and security
interests of Guarantor, whether now or hereafter arising and
howsoever existing, in any assets of Borrower or any other
guarantor (whether constituting part of the security or
collateral given to the Collateral Agent, for the benefit of the
Agents and the Lenders, to secure payment of all or any part of
the Guaranteed Obligations or otherwise) shall be and hereby are
subordinated to the rights of the Agents and the Lenders in those
assets. Guarantor shall have no right to possession of any such
asset or to foreclose upon any such asset, whether by judicial
action or otherwise, unless and until all of the Guaranteed
Obligations are indefeasibly paid and performed in full and all
financing arrangements between Borrower and the Lenders have been
terminated. If all or any part of the assets of Borrower or any
other guarantor, or the proceeds thereof, are subject to any
distribution, division or application to creditors, whether
partial or complete, voluntary or involuntary, and whether by
reason of liquidation, bankruptcy, arrangement, receivership,
assignment for the benefit of creditors or any other action or
proceeding, or if the business or all of the assets of Borrower
or any other guarantor are sold, then, and in any such event, any
payment or distribution of any kind or character, either in cash,
securities or other property, which shall be payable or
deliverable upon or with respect to any indebtedness of Borrower
or any other guarantor to Guarantor ("Guarantor Indebtedness")
shall be paid or delivered directly to the Administrative Agent,
for the benefit of the Agents and the Lenders for application on
any of the Guaranteed Obligations, due or to become due, until
such Guaranteed Obligations are indefeasibly paid and performed

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<PAGE> 177

in full. Guarantor irrevocably authorizes and empowers the
Administrative Agent to demand, sue for, collect and receive
every such payment or distribution and give acquittance therefor
and to make and present for and on behalf of Guarantor such
proofs of claim and take such other action, in the Administrative
Agent's own name or in the name of Guarantor or otherwise, as the
Administrative Agent may deem necessary or advisable for the
enforcement of this Guaranty. The Administrative Agent may vote
such proofs of claim in any such proceeding, receive and collect
any and all dividends or other payments or disbursements made
thereon in whatever form the same may be paid or issued and apply
the same on account of any of the Guaranteed Obligations. Should
any payment, distribution, security or instrument or proceeds
thereof be received by Guarantor upon or with respect to the
Guarantor Indebtedness prior to the satisfaction of all of the
Guaranteed Obligations and the termination of all financing
arrangements between Borrower and the Lenders, Guarantor shall
receive and hold the same in trust, as trustee, for the benefit
of the Agents and the Lenders and shall forthwith deliver the
same to the Administrative Agent, in precisely the form received
(except for the endorsement or assignment of Guarantor where
necessary), for application on any of the Guaranteed Obligations,
due or not due, and, until so delivered, the same shall be held
in trust by Guarantor as the property of the Administrative Agent
for the benefit of the Agents and the Lenders. If Guarantor
fails to make any such endorsement or assignment to the
Administrative Agent, the Administrative Agent or any of its
officers or employees are hereby irrevocably authorized to make
the same. Guarantor agrees that until the Guaranteed Obligations
are indefeasibly paid and performed in full and all financing
arrangements between Borrower and the Lenders have been
terminated, Guarantor will not assign or transfer to others any
claim Guarantor has or may have with respect to any Guarantor
Indebtedness.

9. Enforcement; Amendments; Waivers. No delay on the
part of any of the Lenders or either Agent in the exercise of any
right or remedy arising under this Guaranty, the Credit
Agreement, any of the other Loan Documents or otherwise with
respect to all or any part of the Guaranteed Obligations, the
Collateral or any other guaranty of or security for all or any
part of the Guaranteed Obligations, shall operate as a waiver
thereof, and no single or partial exercise by any such Person of
any such right or remedy shall preclude any further exercise
thereof. The remedies set forth herein are cumulative and not
exclusive of any remedies provided by law or the other Loan
Documents. No modification or waiver of any of the provisions of
this Guaranty shall be binding upon the Lenders or either Agent,
except as expressly set forth in a writing duly signed and
delivered in accordance with the provisions of Section 12.07 of
the Credit Agreement. Failure by any of the Lenders or either
Agent at any time or times hereafter to require strict
performance by Borrower, Guarantor, any other guarantor of all or
any part of the Guaranteed Obligations or any other Person of any

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<PAGE> 178

of the provisions, warranties, terms and conditions contained in
any of the Loan Documents now or at any time or times hereafter
executed by such Persons and delivered to either Agent or any
Lender shall not waive, affect or diminish any right of such
Agent or such Lender at any time or times hereafter to demand
strict performance thereof and such right shall not be deemed to
have been waived by any act or knowledge of either Agent or any
Lender, or their respective agents, officers or employees, unless
such waiver is contained in an instrument in writing, directed
and delivered to Borrower or Guarantor, as applicable, specifying
such waiver, and is signed by the party or parties necessary to
give such waiver under Section 12.07 of the Credit Agreement. No
waiver of any Event of Default by either Agent or any Lender
shall operate as a waiver of any other Event of Default or the
same Event of Default on a future occasion, and no action by
either Agent or any Lender permitted hereunder shall in any way
affect or impair either Agent's or any Lender's rights and
remedies or the obligations of Guarantor under this Guaranty.
Any determination by a court of competent jurisdiction of the
amount of any principal and/or interest owing by Borrower or
Guarantor to any of the Lenders or either Agent shall be
conclusive and binding on Guarantor irrespective of whether
Guarantor was a party to the suit or action in which such
determination was made.

10. Representations and Warranties. Guarantor hereby
represents and warrants to the Lenders and the Agents that:

(a) Organization; Corporate Powers. Guarantor (i) is
a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, (ii) is duly
qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction in which the nature
of its business requires it to be so qualified, except those
jurisdictions where the failure to be in good standing or to so
qualify has not had and will not have a Material Adverse Effect,
and (iii) has all requisite corporate power and authority to own,
operate and encumber its property and assets and to conduct its
business as presently conducted and as proposed to be conducted
in connection with and following the consummation of the trans-
actions contemplated by the Transaction Documents.

(b) Authority. (i) Guarantor has the requisite
corporate power and authority to execute, deliver and perform its
obligations under each of the Transaction Documents executed by
it, or to be executed by it.

(ii) The execution, delivery and performance (or
filing or recording, as the case may be) of each of the Trans-
action Documents to which it is party and the consummation of the
transactions contemplated thereby have been duly authorized by
all necessary corporate action on the part of Guarantor, and no
other corporate proceedings on the part of Guarantor are
necessary to consummate such transactions.

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(iii) Each of the Transaction Documents to which
Guarantor is a party has been duly executed and delivered (or
filed or recorded, as the case may be) by Guarantor and
constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms (except as enforceability
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general
equitable principles), is in full force and effect (unless
terminated in accordance with the terms thereof) and no term or
condition thereof has been amended, modified or waived from the
terms and conditions contained therein without the prior written
consent of the Administrative Agent and the Requisite Lenders or,
where so required, the Supermajority Lenders or all of the
Lenders, and Guarantor has performed and complied in all material
respects with all the material terms, provisions, agreements and
conditions set forth therein and required to be performed or
complied with by Guarantor on or before the effective date
thereof, and no default by Guarantor exists thereunder.

(c) No Conflict. The execution, delivery and perfor-
mance of each Transaction Document to which it is a party by
Guarantor and each of the transactions contemplated thereby do
not and will not (i) conflict with or violate Guarantor's
Certificate of Incorporation or By-Laws, or (ii) conflict with,
result in a breach of or constitute (with or without notice or
lapse of time or both) a default under any Requirement of Law or
Contractual Obligation applicable to or binding on Guarantor, any
liability resulting from which would have or be reasonably
expected to have a Material Adverse Effect, or under the
Indenture dated July 1, 1993, between Guarantor and Harris Trust
and Savings Bank, as Trustee, pursuant to which the Senior
Deferred Coupon Notes were issued, or (iii) result in or require
the creation or imposition of any Lien whatsoever upon any of the
properties or assets of Guarantor (other than Liens in favor of
the Collateral Agent, for the benefit of itself and the Holders
of Secured Obligations, arising pursuant to the Loan Documents),
or (iv) require any approval of stockholders of Guarantor, except
such approvals that have been obtained.

11. Covenants. Guarantor covenants and agrees that so
long as any Guaranteed Obligations shall remain outstanding:

(a) Corporate Existence, Etc. Guarantor shall, at all
times, (i) maintain its corporate existence and preserve and keep
in full force and effect its material rights and franchises, and
(ii) qualify and remain qualified to do business in each
jurisdiction in which the nature of its business requires it to
be so qualified, except in those jurisdictions where the failure
so to qualify does not have and is not reasonably likely to have
a Material Adverse Effect.

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(b) Compliance with Laws. Guarantor shall comply with
all Requirements of Law and all Contractual Obligations affecting
it or its business, properties, assets or operations, except
where the failure so to comply does not have and is not
reasonably likely to have a Material Adverse Effect.

(c) Inspection of Property; Books and Records;
Discussions. Guarantor shall permit any authorized
representative(s) designated by the Administrative Agent or the
Collateral Agent to visit and inspect any of its properties,
including financial and accounting records, and to make copies
and take extracts therefrom, and to discuss its affairs, finances
and accounts with its officers, employees, representatives,
agents or independent certified public accountants, all upon
reasonable notice and at such reasonable time and as often as may
be reasonably requested. Each such reasonable visitation and
inspection made by or on behalf of the Administrative Agent or
the Collateral Agent shall be at Guarantor's expense.

(d) Compliance Certificate. Guarantor shall deliver
to the Administrative Agent, together with each delivery of the
financial statements for the Consolidated Parent Group pursuant
to Section 6.01(a) and (b) of the Credit Agreement, a certificate
(i) demonstrating in reasonable detail compliance during such
accounting periods with the indebtedness covenant set forth in
Annex A hereto and (ii) stating that such financial statements
present fairly the financial position of the Consolidated Parent
Group as at the dates indicated and the results of their
operations and changes in their cash flows for the periods
indicated in conformity with GAAP or Agreement Accounting
Principles, as applicable (except as otherwise noted therein),
consistently applied. In addition, Guarantor shall, at any time
that Indebtedness (as defined in Annex A) is incurred pursuant to
subsection (a)(i) of Annex A, deliver to the Administrative Agent
a certificate demonstrating in reasonable detail compliance with
the required Interest Coverage Ratio (as defined in Annex A).

(e) Prepayment Events. Guarantor agrees, in
connection with any Prepayment Event arising as a result of the
issuance by Guarantor of any debt or equity securities as
described in clause (ii), (iii) or (iv) of the definition of
"Prepayment Event" in Section 1.01 of the Credit Agreement, as
promptly as practicable to take any necessary action required on
the part of Guarantor to permit and enable Borrower to comply
with Section 2.05(b)(iii) or (iv) of the Credit Agreement, as
applicable.

(f) Limitation on Indebtedness. Guarantor shall
comply with the limitation on Indebtedness set forth in Annex A.

(g) Senior Deferred Coupon Notes. Guarantor shall not
amend the Senior Deferred Coupon Notes, or the Indenture (as
defined in Annex A) in any way that permits or requires Guarantor
to pay interest on such notes prior to 1999, permits or requires

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Guarantor to pay interest at a rate higher than that prescribed
in such notes or the Indenture as of the Closing Date or permits
or requires Guarantor to pay or prepay or make sinking fund
payments with respect to such notes prior to 2003.

12. Events of Default. Each of the following
occurrences shall constitute an Event of Default pursuant to
Section 10.01(m) of the Credit Agreement (without limitation as
to whether any such occurrence or the facts giving rise to such
occurrence may cause or constitute an Event of Default under any
other provision of Section 10.01):

(a) Failure to Make Payments When Due. Guarantor
shall fail to pay when due any of the Guaranteed Obligations
(taking into account any grace period applicable thereto).

(b) Breach of Certain Covenants. Guarantor shall fail
duly and punctually to perform or observe any agreement, covenant
or obligation under Section 11(a), (e), (f) or (g).

(c) Breach of Representation or Warranty. Any
representation or warranty made by Guarantor to the
Administrative Agent, the Collateral Agent or any Lender herein,
in any other Loan Document, or in any certificate or other
writing delivered pursuant hereto shall be false or misleading in
any respect on the date as of which made, and the fact or
circumstance which made such representation or warranty false or
misleading has or is reasonably likely to have a Material Adverse
Effect.

(d) Other Defaults. Guarantor shall fail duly and
punctually to perform or observe any agreement, covenant or
obligation arising under this Guaranty (except those described in
subsection (a), (b) or (c) above), and such failure shall
continue for thirty (30) days.

13. Effectiveness; Termination. This Guaranty shall
become effective upon its execution by Guarantor and shall
continue in full force and effect and may not be terminated or
otherwise revoked until the Credit Agreement and all financing
arrangements governed by the Loan Documents among Borrower, the
Agents and the Lenders shall have been terminated and the
Guaranteed Obligations shall have been indefeasibly and fully
paid and discharged. If, notwithstanding the foregoing,
Guarantor shall have any right under applicable law to terminate
or revoke this Guaranty, Guarantor agrees that such termination
or revocation shall not be effective until a written notice of
such revocation or termination, specifically referring hereto,
signed by Guarantor, is actually received by the Agents and each
of the Lenders. Such notice shall not affect the right and power
of any of the Lenders or either Agent to enforce rights arising
prior to receipt thereof by the Agents and each of the Lenders.
If any Lender or either Agent grants loans or takes other action
after Guarantor terminates or revokes this Guaranty but before

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such Person receives such written notice, the rights of such
Person with respect thereto shall be the same as if such
termination or revocation had not occurred.

14. Successors and Assigns. This Guaranty shall be
binding upon Guarantor and upon its successors and assigns and
shall inure to the benefit of the Lenders and the Agents and
their respective successors and assigns; all references herein to
Borrower and to Guarantor shall be deemed to include their
respective successors and assigns. The successors and assigns of
Guarantor and Borrower shall include, without limitation, their
respective receivers, trustees or debtors-in-possession;
provided, however, that Guarantor shall not voluntarily assign or
transfer its rights or obligations hereunder without the
Administrative Agent's prior written consent.

15. Payments to be Free of Deductions; Withholding Tax
Exemption. All payments by Guarantor under this Guaranty shall
be made without setoff or counterclaim and free and clear of and
without deduction for any and all present or future Taxes. A
delivery by a Lender that is not incorporated under the laws of
the United States of America of its IRS Form 1001 or 4224 to
Borrower pursuant to the Credit Agreement shall be deemed a
delivery of such form to Guarantor hereunder.

16. Officer Authority. Guarantor authorizes its
Chairman, President, and each of its Executive Vice Presidents
and Vice Presidents, severally and not jointly, on behalf and in
the name of Guarantor from time to time in the discretion of such
officer, to take or omit to take any and all action and to
execute and deliver any and all documents and instruments which
such officer may determine to be necessary or desirable in
relation to, and perform any obligations arising in connection
with, this Guaranty and any of the transactions contemplated
hereby, and, without limiting the generality of the foregoing,
hereby gives each such officer individually the power and right
on behalf of Guarantor to do the following on behalf of
Guarantor: (i) to execute and deliver any amendment, waiver,
consent, supplement, other modification or reaffirmation of this
Guaranty or any document covering any of the security for this
Guaranty, and to perform any obligation of Guarantor arising in
connection herewith or therewith; (ii) to sell, transfer, assign,
encumber or otherwise deal in or with the security for this
Guaranty or any part thereof; (iii) to grant liens, security
interests or other encumbrances on or in respect of any property
or assets of Guarantor, whether now owned or hereafter acquired,
in favor of the Lenders and the Agents; (iv) to send notices,
directions, orders and other communications to any Person
relating to this Guaranty, or the security for all or any part of
the Guaranteed Obligations; (v) to take or omit to take any other
action contemplated by or referred to in this Guaranty or any
document covering any of the security for all or any part of the
Guaranteed Obligations; and (vi) to take or omit to take any
action with respect to this Guaranty, any of the security for all

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or any part of the Guaranteed Obligations or any document
covering any such security, all as such officer may determine in
his or her sole discretion. The undersigned hereby certifies
that he/she has all necessary authority to grant and execute this
Guaranty on behalf of Guarantor.

17. Governing Law. The Administrative Agent hereby
accepts this Guaranty, on behalf of the Agents and the Lenders,
at New York, New York, by acknowledging and agreeing to it there.
Any dispute among the Agents, any of the Lenders and Guarantor
arising out of or related to the relationship established among
them in connection with this Guaranty, and whether arising in
contract, tort, equity, or otherwise, shall be resolved in
accordance with the laws of the State of New York.

18. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY
TRIAL.

(B) OTHER JURISDICTIONS. GUARANTOR AGREES THAT EITHER
AGENT OR ANY LENDER SHALL HAVE THE RIGHT TO PROCEED AGAINST
GUARANTOR OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE
SUCH PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER GUARANTOR OR
(2) REALIZE ON THE COLLATERAL (INCLUDING, WITHOUT LIMITATION, THE
REAL PROPERTY COLLATERAL) OR ANY OTHER SECURITY FOR THE
OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED
IN FAVOR OF SUCH PERSON. GUARANTOR AGREES THAT IT WILL NOT
ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY
SUCH PERSON TO REALIZE ON THE COLLATERAL (INCLUDING, WITHOUT
LIMITATION, THE REAL PROPERTY COLLATERAL) OR ANY OTHER SECURITY
FOR THE OBLIGATIONS OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER
IN FAVOR OF SUCH PERSON. GUARANTOR WAIVES ANY OBJECTION THAT IT
MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS
COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION.

(C) SERVICE OF PROCESS. GUARANTOR WAIVES PERSONAL
SERVICE OF ANY PROCESS UPON IT AND, AS ADDITIONAL SECURITY FOR
THE OBLIGATIONS, IRREVOCABLY APPOINTS CT CORPORATION SYSTEM, ITS
REGISTERED AGENT, WHOSE ADDRESS IS 1633 BROADWAY, NEW YORK, NEW
YORK 10019, AS ITS AGENT FOR THE PURPOSE OF ACCEPTING SERVICE OF
PROCESS ISSUED BY ANY COURT; PROVIDED THAT NOTICE OF ANY SUCH

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SERVICE IS CONCURRENTLY THEREWITH DELIVERED TO GUARANTOR PURSUANT
TO SECTION 20. GUARANTOR IRREVOCABLY WAIVES ANY OBJECTION
(INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH ABOVE.

(E) WAIVER OF BOND. GUARANTOR WAIVES THE POSTING OF
ANY BOND OTHERWISE REQUIRED OF ANY PARTY HERETO IN CONNECTION
WITH ANY JUDICIAL PROCESS OR PROCEEDING TO REALIZE ON THE
COLLATERAL (INCLUDING, WITHOUT LIMITATION, THE REAL PROPERTY
COLLATERAL) OR ANY OTHER SECURITY FOR THE OBLIGATIONS OR TO
ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
SUCH PARTY, OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY
RESTRAINING ORDER, PRELIMINARY OR PERMANENT INJUNCTION, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT.

19. Advice of Counsel. Guarantor represents and
warrants to the Agents and the Lenders that it has discussed this
Guaranty and, specifically, the provisions of Section 18 hereof,
with its lawyers.

20. Notices. All notices and other communications
required or desired to be served, given or delivered hereunder
shall be in writing or by a telecommunications device capable of
creating a printed record and shall be addressed to the party to
be notified as follows:

if to Guarantor, at

Eagle Industries, Inc.
Two North Riverside Plaza
Chicago, Illinois 60606
Attention: Gus J. Athas, Vice President
Telecopy: (312) 906-8372

with a copy to

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Rosenberg & Liebentritt
Two North Riverside Plaza
Chicago, Illinois 60606
Attention: Ellen Kelleher
Telecopy: (312) 454-0335

if to the Administrative Agent, at

Chemical Bank
270 Park Avenue
Fifth Floor
New York, New York 10017
Attention: Chris Wardell
Telecopy: (212) 207-1732

with a copy to

Chemical Chicago corporation
10 South LaSalle Street
Chicago, Illinois 60603-1097
Attention: Leonard R. Essex
Telecopy: (312) 443-1964

or, as to each party, at such other address as designated by such
party in a written notice to the other party. All such notices
and communications shall be deemed to be validly served, given or
delivered (i) three (3) days following deposit in the United
States mails, with proper postage prepaid; (ii) upon delivery
thereof if delivered by hand to the party to be notified; or
(iii) upon confirmation of receipt thereof if transmitted by a
telecommunications device.

21. Severability. Wherever possible, each provision
of this Guaranty shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this Guaranty shall be prohibited by or invalid under such law,
such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of
such provision or the remaining provisions of this Guaranty.

22. Collateral. Guarantor hereby acknowledges and
agrees that its obligations under this Guaranty are secured
pursuant to the terms and provisions of the Collateral Documents
to which it is a party.

23. Merger. This Guaranty represents the final
agreement of Guarantor with respect to the matters contained
herein and may not be contradicted by evidence of prior or
contemporaneous agreements, or prior or subsequent oral
agreements, between Guarantor and the Agent or any Lender.

24. Execution in Counterparts. This Guaranty may be
executed in any number of counterparts and by different parties

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hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.

25. Definitions. The singular shall include the
plural and vice versa and any gender shall include any other
gender as the context may require.

26. Section Headings. The section headings herein are
for convenience of reference only, and shall not affect in any
way the interpretation of any of the provisions hereof.

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IN WITNESS WHEREOF, this Guaranty has been duly
executed by Guarantor as of the day and year first set forth
above.

EAGLE INDUSTRIES, INC.

By: \s\ Gus J. Athas
Name: Gus J. Athas
Title: Senior Vice President

Acknowledged and agreed to
as of the day and year first
set forth above.

CHEMICAL BANK, as Administrative
Agent

By: _________________________
Name: ___________________
Title: ___________________

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ANNEX A

Limitation on Indebtedness

(a) Guarantor shall not, and shall not permit any of
its Restricted Subsidiaries to, Incur any Indebtedness other
than:

(i) Indebtedness of Guarantor or a Restricted
Subsidiary if, at the time of Incurrence and after giving
effect thereto and the application of proceeds therefrom,
Guarantor's Interest Coverage Ratio would have been (A) for
the period from July __, 1993, through and including the
second anniversary thereof, at least 1.75:1 and (B) for all
periods after the second anniversary of July __, 1993, at
least 2.00:1;

(ii) Indebtedness existing on July __, 1993, other
than (A) Indebtedness described in clause (iii) of this
subsection (a) and (B) 13% Senior Subordinated Notes
repurchased and cancelled pursuant to the Refinancing Plan;

(iii) Indebtedness allowable under the Credit
Agreement;

(iv) the Securities;

(v) Indebtedness the net proceeds of which are used to
refinance outstanding Indebtedness of Guarantor or any of
its Restricted Subsidiaries, other than Indebtedness
Incurred under clause (iii), (vi), (vii), (viii) or (x) of
this subsection (a) and any refinancings thereof, in a
maximum principal amount not to exceed the amount so
refinanced, plus the amount of any premium required to be
paid in connection with such refinancing pursuant to the
terms of the Indebtedness refinanced or reasonably
determined by Guarantor as necessary to permit such
refinancing by means of tender offer or privately negotiated
repurchase, plus the amount of any fees and expenses of
Guarantor in connection with such refinancing; provided that
in no event may any Indebtedness of Guarantor be refinanced
by means of any Indebtedness of any Restricted Subsidiary
pursuant to this clause (v);

(vi) Indebtedness Incurred solely to finance capital
expenditures of Guarantor and its Restricted Subsidiaries in
an aggregate principal amount not to exceed $20 million in
each fiscal year of Guarantor; provided that 50% of the
portion of such $20 million that is not so Incurred in any
such year may be so Incurred in the next subsequent fiscal
year of the Guarantor;

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(vii) other Indebtedness not to exceed $50 million at
any one time outstanding; provided that the proceeds thereof
shall not be used to make any Restricted Payment;

(viii) Indebtedness (A) in respect of performance
bonds, bankers' acceptances, letters of credit and surety or
appeal bonds Incurred in the ordinary course of business,
(B) under Currency Agreements, Interest Rate Agreements and
Commodity Agreements; provided that, in the case of Currency
Agreements that relate to other Indebtedness, such Currency
Agreements do not increase the Indebtedness of Guarantor
outstanding at any time other than as a result of
fluctuations in foreign currency exchange rates or by reason
of fees, indemnities and compensation payable thereunder and
(C) arising from agreements providing for indemnification,
adjustment of purchase price or similar obligations, or from
Guarantees or letters of credit, surety bonds or performance
bonds securing any obligations of Guarantor or any
Restricted Subsidiary of Guarantor pursuant to such
agreements, in any case Incurred in connection with the
disposition of any business, assets or Restricted Subsidiary
of Guarantor (other than Guarantees of Indebtedness Incurred
by any Person acquiring all or any portion of such business,
assets or Restricted Subsidiary of Guarantor for the purpose
of financing such acquisition), in a principal amount not to
exceed the gross proceeds actually received by Guarantor or
any Restricted Subsidiary in connection with such
disposition;

(ix) Acquired Indebtedness; provided that, after
giving pro forma effect to the Incurrence thereof, Guarantor
could Incur $1.00 of additional Indebtedness pursuant to
clause (i) of this subsection (a); and

(x) Indebtedness of Guarantor to any Wholly Owned
Restricted Subsidiary or Indebtedness of any Wholly Owned
Restricted Subsidiary to Guarantor or any other Wholly Owned
Restricted Subsidiary, in each case Incurred in the ordinary
course of business, consistent with past practice.

(b) Notwithstanding any other provision of this Annex
A, the maximum amount of Indebtedness that Guarantor or any
Restricted Subsidiary may Incur pursuant to this Annex A shall
not be deemed to be exceeded due solely to the result of
fluctuations in the exchange rates of currencies.

(c) For purposes of determining any particular amount
of Indebtedness under this Annex A, Guarantees of, or obligations
with respect to letters of credit supporting, Indebtedness
otherwise included in the determination of such particular amount
shall not be included. For purposes of determining compliance
with this Annex A, in the event that an item of Indebtedness
meets the criteria of more than one of the types of Indebtedness
described in the above clauses, Guarantor, in its sole

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discretion, shall classify such item of Indebtedness and only be
required to include the amount and type of such Indebtedness in
one of such clauses.

For purposes of this Annex A, the following terms shall have the
following meanings:

"Acquired Indebtedness" means Indebtedness of a Person
existing at the time such Person became a Restricted Subsidiary
and not Incurred in connection with, or in contemplation of, such
Person becoming a Restricted Subsidiary.

"Adjusted Consolidated Net Income" means, for any
period, the aggregate net income (or loss) of any Person and its
consolidated Subsidiaries for such period determined in
conformity with GAAP; provided that the following items shall be
excluded in computing Adjusted Consolidated Net Income (without
duplication): (i) the net income (or loss) of such Person (other
than a Subsidiary of such Person) in which any other Person
(other than such Person or any of its Subsidiaries) has a joint
interest, except to the extent of the amount of dividends or
other distributions actually paid to such Person or any of its
Subsidiaries by such other Person during such period; (ii) the
net income (or loss) of any Subsidiary of such Person except to
the extent of the amount of dividends or other distributions
actually paid or allowed to be paid by such Subsidiary to such
Person; (iii) any gains or losses (on an after-tax basis)
attributable to Asset Sales; (iv) any losses attributable to
writedowns of, or amortization of, goodwill; (v) any non-
recurring gains or loses attributable to revaluation or
reclassification of assets in connection with business
relocations and plant consolidations; (vi) any expenses relating
to the Incurrence or refinancing of any Indebtedness; and (vii)
any extraordinary gains and extraordinary losses; provided that,
solely for purposes of calculating the Interest Coverage Ratio
(and in such case, except to the extent includible pursuant to
clause (i) above), "Adjusted Consolidated Net Income" of
Guarantor shall include the amount of all cash dividends received
by Guarantor or any Restricted Subsidiary of Guarantor from an
Unrestricted Subsidiary.

"Affiliate" means, as applied to any Person, any other
Person directly or indirectly controlling, controlled by, or
under direct or indirect common control with, such Person. For
purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means
the 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, by
contract or otherwise. For purposes of this definition, neither
any Bank nor any affiliate of any Bank shall be deemed to be an
Affiliate of Guarantor.

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"Asset Acquisition" means (i) an Investment by
Guarantor or any of its Restricted Subsidiaries in any other
Person pursuant to which such Person shall become a Restricted
Subsidiary of Guarantor or shall be merged into or consolidated
with Guarantor or any of its Restricted Subsidiaries or (ii) an
acquisition by Guarantor or any of its Restricted Subsidiaries of
the assets of any Person other than Guarantor or any of its
Restricted Subsidiaries that constitute substantially all of a
division or line of business of such Person.

"Asset Disposition" means the sale or other disposition
by Guarantor or any of its Restricted Subsidiaries (other than to
Guarantor or another Restricted Subsidiary of Guarantor) of (i)
all or substantially all of the capital stock of any Restricted
Subsidiary of Guarantor or (ii) all or substantially all of the
assets that constitute a division or line of business of
Guarantor or any of its Restricted Subsidiaries.

"Bank" means each of the lenders who are from time to
time parties to the Credit Agreement.

"Board of Directors" means the Board of Directors of
Guarantor or any committee of such Board of Directors duly
authorized to act in connection with the Credit Agreement.

"Capitalized Lease" means, as applied to any Person,
any lease of any property (whether real, personal or mixed) the
discounted present value of the rental obligations of such Person
as lessee of which, in conformity with GAAP, is required to be
capitalized on the balance sheet of such Person; and "Capitalized
Lease Obligation" means the rental obligations under such lease.

"Commodity Agreement" means any agreement or
arrangement designed to protect Guarantor or any of its
Restricted Subsidiaries against fluctuations in the prices of
commodities used by Guarantor or any of its Restricted
Subsidiaries in the ordinary course of its business.

"Consolidated EBITDA" means, with respect to any Person
for any period, the sum of the amounts for such period of (i)
Adjusted Consolidated Net Income, (ii) Consolidated Net Interest
Expense, (iii) income taxes (other than income taxes (either
positive or negative) attributable to extraordinary and
nonrecurring gains or losses or sales of assets), (iv)
depreciation expense, (v) amortization expense, and (vi) all
other non-cash items reducing Adjusted Consolidated Net Income,
all as determined on a consolidated basis for such Person and its
Subsidiaries in conformity with GAAP.

"Consolidated Net Interest Expense" means, with respect
to any Person for any period, the aggregate amount of interest
expense in respect of Indebtedness (including amortization of
original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in

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accordance with the effective interest method of accounting; all
commissions, discounts and other fees and charges owed with
respect to letters of credit supporting or otherwise in respect
of any Indebtedness and bankers' acceptance financing; and the
net costs associated with Interest Rate Agreements) and all but
the principal component of rentals in respect of Capitalized
Lease Obligations paid, accrued or scheduled to be paid or to be
accrued by such Person and its consolidated Subsidiaries during
such period net of the aggregate interest income received or
accrued by such Person and its consolidated Subsidiaries during
such period; excluding, however, (i) any amount of such interest
expense or income of any Subsidiary of such Person if the net
income (or loss) of such Subsidiary is excluded in the
calculation of Adjusted Consolidated Net Income for such Person
pursuant to clause (ii) of the definition thereof (but only in
the same proportion as the net income (or loss) of such
Subsidiary is excluded from the calculation of Adjusted
Consolidated Net Income for such Person pursuant to clause (ii)
of the definition thereof) and (ii) any premiums, fees and
expenses (and any amortization thereof) payable in connection
with the Refinancing Plan or any other refinancing of
Indebtedness, all as determined on a consolidated basis in
conformity with GAAP.

"Currency Agreement" means any foreign exchange
contract, currency swap agreement or other similar agreement or
arrangement designed to protect Guarantor or any of its
Restricted Subsidiaries against fluctuations in currency values
to or under which Guarantor or any of its Restricted Subsidiaries
was a party or a beneficiary on July 1, 1993, or became or
becomes a party or a beneficiary thereafter.

"Fair Market Value" means, with respect to any asset,
the price which could be negotiated in an arm's-length
transaction between a willing seller and a willing buyer, neither
of which is under compulsion to complete the transaction.

"GAAP" means generally accepted accounting principles
in the United States of America as in effect as of July 1, 1993.
All ratios and computations based on GAAP contained in this Annex
A shall be computed in conformity with GAAP, except that such
computations shall be made without giving effect to, except as
otherwise provided, the amortization of any amounts required or
permitted by Accounting Principles Board Opinions Nos. 16 and 17.

"Guarantee" mans any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing any
Indebtedness or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct
or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation of such other
Person (whether arising by virtue of partnership arrangements, or
by agreement to keep-well, to purchase assets, goods, securities

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<PAGE> 193

or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for purposes of
assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment thereof or to protect such
obligee against any loss in respect thereof (in whole or in
part); provided that the term "Guarantee" shall not include (i)
endorsements for collection or deposit in the ordinary course of
business; (ii) agreements providing for indemnification,
adjustment of purchase price or similar obligations in connection
with the disposition of any business, assets or Subsidiary of
Guarantor (other than Guarantees of Indebtedness Incurred by any
Person acquiring all or any portion of such business, assets or
Subsidiary for the purpose of financing such acquisition) in a
principal amount not to exceed the gross proceeds received by
Guarantor or such Restricted Subsidiary in connection with such
disposition; or (iii) agreements, policies or practices providing
for refunds, returns and/or credit therefor in respect of
damaged, defective, surplus or deficient property or assets in
the ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning.

"Incur" means, with respect to any Indebtedness, to
incur, crate, issue, assume, Guarantee or otherwise become liable
for or with respect to, or become responsible for, the payment
of, contingently or otherwise, such Indebtedness; provided that
neither the accrual of interest (whether such interest is payable
in cash or kind) nor the accretion of original issue discount
shall be considered an Incurrence of Indebtedness. The term
"Incurrence" used as a noun has a corresponding meaning.

"Indebtedness" means, with respect to any Person at any
date of determination (without duplication), (i) all indebtedness
of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person in respect of
letters of credit or other similar instruments (including
reimbursement obligations with respect thereto) on account of any
Indebtedness described in any other clause of this definition;
provided that an Incurrence of Indebtedness shall be deemed to
occur when an obligation to reimburse an issuer of a letter of
credit arises pursuant to such letter of credit and is not paid
when due (it being understood that an obligation to reimburse an
issuer of a letter shall always be deemed to be due not later
than 10 Business Days after such letter of credit is drawn upon),
(iv) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services, which purchase
price is due more than six months after the date of placing such
property in service or taking delivery and title thereto or the
completion of such services, except Trade Payables, (v) all
obligations of such Person as lessee under Capitalized Leases,
(vi) all Indebtedness of other Persons secured by a Lien on any
asset of such Person, whether or not such Indebtedness is assumed
by such Person; provided that the amount of such Indebtedness
shall be the lesser of (A) the Fair Market Value of such asset at

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<PAGE> 194

such date of determination and (B) the amount of such
Indebtedness, (vii) all Indebtedness of other Persons Guaranteed
by such Person to the extent such Indebtedness is Guaranteed by
such Person, (viii) all obligations in respect of borrowed money
under the Credit Agreement and any Guarantees thereof and (ix) to
the extent not otherwise included in this definition, obligations
under Currency Agreements, Interest Rate Agreements and Commodity
Agreements. The amount of Indebtedness of any Person at any date
shall be the outstanding balance at such date of all
unconditional obligations as described above and the maximum
liability, upon the occurrence of the contingency giving rise to
the obligation, of any contingent obligations at such date;
provided that the amount outstanding at any time of any
Indebtedness issued with original issue discount is the face
amount of such Indebtedness less the remaining unamortized
portion of the original issue discount of such Indebtedness at
such time as determined in conformity with GAAP.

"Indenture" means the Indenture dated as of July 1,
1993, between Guarantor and Harris Trust and Savings Bank,
Trustee, pursuant to which the Senior Deferred Coupon Notes were
issued, as such Indenture may be amended, supplemented or
otherwise modified as permitted by the Credit Agreement.

"Interest coverage Ratio" means, with respect to any
Person on any Transaction Date, the ratio of (i) the aggregate
amount of Consolidated EBITDA of such Person for the four fiscal
quarters for which financial information in respect thereof is
available immediately prior to such Transaction Date to (ii) the
aggregate amount of Consolidated Net Interest Expense of such
Person during such four fiscal quarters. In making the foregoing
calculation, (A) pro forma effect shall be given to (l) any
Indebtedness Incurred subsequent to the end of the four-fiscal-
quarter period referred to in clause (i) and prior to the
Transaction Date (other than Indebtedness Incurred under a
revolving credit or similar arrangement to the extent of the
commitment thereunder (or under any predecessor revolving credit
or similar arrangement) on the last day of such period), (2) any
Indebtedness Incurred during such period to the extent such
Indebtedness is outstanding at the Transaction Date and (3) any
Indebtedness to be Incurred on the Transaction Date, in each case
as if such Indebtedness had been Incurred on the first day of
such four-fiscal-quarter period and after giving pro forma effect
to the application of the proceeds thereof as if such application
occurred on such first day; (B) Consolidated Net Interest Expense
attributable to interest on any Indebtedness (whether existing or
being Incurred) computed on a pro forma basis and bearing a
floating interest rate (taking into account any Interest Rate
Agreement applicable to such Indebtedness) shall be computed
using the daily average of the applicable rate in effect for the
entire period; (C) there shall be excluded from Consolidated Net
Interest Expense any Consolidated Net Interest Expense related to
any amount of Indebtedness that was outstanding during such four-
fiscal-quarter period or thereafter but that is not outstanding

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<PAGE> 195

or is to be repaid on the Transaction Date, except for
Consolidated Net Interest Expense accrued (as adjusted pursuant
to clause (B)) during such four-fiscal-quarter period under a
revolving credit or similar arrangement to the extent of the
commitment thereunder (or under any successor revolving credit or
similar arrangement) on the Transaction Date; (D) pro forma
effect shall be given to Asset Dispositions and Asset
Acquisitions (including giving pro forma effect to the
application of proceeds of any Asset Dispositions) that occur
during such four-fiscal-quarter period or thereafter and prior to
the Transaction Date as if they had occurred and any such
proceeds had been applied on the first day of such four-fiscal-
quarter period; (E) with respect to any such four-fiscal-quarter
period commencing prior to the Refinancing Plan, the Refinancing
Plan shall be deemed to have taken place on the first day of such
period; and (F) pro forma effect shall be given to asset
dispositions and asset acquisitions that have been made by any
Person that has become a Restricted Subsidiary of Guarantor or
has been merged with or into Guarantor or any Restricted
Subsidiary of Guarantor during the four-fiscal-quarter period
referred to above or subsequent to such period and prior to the
Transaction Date and that would have been Asset Dispositions or
Asset Acquisitions had such transactions occurred when such asset
dispositions or asset acquisitions were Asset Dispositions or
Asset Acquisitions that occurred on the first day of such period;
provided that such pro forma effect referred to in clauses (D)
and (F) above shall exclude any and all net losses incurred by
any Person or business prior to the time that such Person became
a Subsidiary of Guarantor or prior to the time such business was
acquired by Guarantor or any of its Restricted Subsidiaries, as
the case may be.

"Interest Rate Agreement" means any interest rate
protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, interest rate
hedge agreement, or other similar agreement or arrangement
designed to protect Guarantor or any of its Restricted
Subsidiaries against fluctuations in interest rates to or under
which Guarantor or any of its Restricted Subsidiaries is a party
or a beneficiary thereof.

"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including, without
limitation, any conditional sale or other title retention
agreement or lease in the nature thereof, any sale with recourse
against the seller or any Affiliate of the seller, or any
agreement to give any security interest).

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

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<PAGE> 196

"Refinancing Plan" means the refinancing plan of
Guarantor, consisting of the issuance of the Securities and the
application of the proceeds therefrom for the repurchase and
cancellation of an aggregate principal amount of $151 million of
the 13% Senior Subordinated Notes and the solicitation of
consents to amendments to the indenture under which the 13%
Senior Subordinated Notes were issued.

"Restricted Payments" means any payment or action by
Guarantor or any Restricted Subsidiary to, directly or
indirectly, (i) declare or pay any dividend or make any
distribution on its capital stock (other than dividends or
distributions payable solely in shares of its or such Restricted
Subsidiary's capital stock (other than redeemable stock) of the
same class or in options, warrants or other rights to acquire
such shares of capital stock) held by Persons other than
Guarantor or another Restricted Subsidiary, (ii) purchase,
redeem, retire or otherwise acquire for value any shares of
capital stock of Guarantor or any Restricted Subsidiary
(including options, warrants or other rights to acquire such
shares of capital stock) held by Persons other than Guarantor or
another Restricted Subsidiary, or (ii) make any investment in any
Affiliate of Guarantor or such Restricted Subsidiary other than
Guarantor or another Restricted Subsidiary.

"Restricted Subsidiary" means any Subsidiary of
Guarantor other than an Unrestricted Subsidiary.

"Securities" means the Senior Deferred Coupon Notes.

"Subsidiary" means, with respect to any Person, any
corporation, association or other business entity of which more
than 50% of the outstanding Voting Stock is owned, directly or
indirectly, by Guarantor or by one or more other Subsidiaries of
Guarantor, or by such Person and one or more other Subsidiaries
of such Person; provided that, except as the term "Subsidiary" is
used in the definition of "Unrestricted Subsidiary", an
Unrestricted Subsidiary shall not be deemed to be a Subsidiary of
Guarantor.

"13% Senior Subordinated Notes" means Guarantor's 13%
Senior Subordinated Notes due 1998.

"Trade Payables" means, with respect to any Person, any
accounts payable or any other indebtedness or monetary obligation
to trade creditors created, assumed or Guaranteed by such Person
or any of its Subsidiaries arising in the ordinary course of
business in connection with the acquisition of goods or services.

"Transaction Date" means, with respect to the
Incurrence of any Indebtedness by Guarantor or any of its
Subsidiaries, the date such Indebtedness is to be Incurred.
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<PAGE> 197

"Unrestricted Subsidiary" means (i) any Subsidiary of
Guarantor that at the time of determination shall be designated
an Unrestricted Subsidiary by the Board of Directors in the
manner provided below and (ii) any Subsidiary of an Unrestricted
Subsidiary. The Board of Directors may designate any Subsidiary
of Guarantor (including any newly acquired or newly formed
Subsidiary of Guaranty) to be an Unrestricted Subsidiary unless
such Subsidiary owns any capital stock of, or owns or holds any
Lien on any property of, Guarantor or any other Subsidiary of
Guarantor that is not a Subsidiary of the Subsidiary to be so
designated; provided that either (1) the Subsidiary to be so
designated has total assets of $1,000 or less or (2) if such
Subsidiary has assets greater than $1,000, such Subsidiary is an
"Unrestricted Subsidiary" under the terms of the Indenture.

"Voting Stock" means capital stock of any class or kind
ordinarily having the power to vote for the election of
directors.

"Wholly Owned" means, with respect to any Subsidiary of
any Person, any Subsidiary of such Person if all of the common
stock or other similar equity ownership interests (but not
including preferred or preference stock) in such Subsidiary
(other than any director's qualifying shares or investments by
foreign nationals mandated by applicable law) is owned directly
or indirectly by such Person.

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<PAGE> 1
Exhibit 4.3

EXECUTION COPY

CENTRALLY HELD EAGLE RECEIVABLES PROGRAM INC.,

Transferor,

EAGLE INDUSTRIAL PRODUCTS CORPORATION

Master Servicer,

and

CONTINENTAL BANK, NATIONAL ASSOCIATION,

Trustee

on behalf of the Certificateholders

EAGLE TRADE RECEIVABLES MASTER TRUST
POOLING AND SERVICING AGREEMENT

Dated as of January 1, 1994

<PAGE> 2
TABLE OF CONTENTS

Page

ARTICLE I

DEFINITIONS

Section 1.1 Definitions . . . . . . . . . . . . . . . . 1
Section 1.2 Other Definitional Provisions . . . . . . . 1
Section 1.3 Calculations and Payments . . . . . . . . . 2

ARTICLE II

CONVEYANCE OF RECEIVABLES; ISSUANCE OF CERTIFICATES

Section 2.1 Conveyance of Receivables . . . . . . . . . 3
Section 2.2 Declaration of Trust; Acceptance by
Trustee . . . . . . . . . . . . . . . . . 5
Section 2.3 Representations and Warranties of the
Transferor Relating to the Transferor . . 5
Section 2.4 Representations and Warranties of the
Transferor Relating to the Agreement,
any Supplement and the Receivables. . . . 10
Section 2.5 [Reserved]. . . . . . . . . . . . . . . . . 14
Section 2.6 Covenants of the Transferor . . . . . . . . 14
Section 2.7 Authentication of Certificates. . . . . . . 21
Section 2.8 Tax Treatment . . . . . . . . . . . . . . . 21
Section 2.9 Cancellation of the Certificates of any
Series. . . . . . . . . . . . . . . . . . 22
Section 2.10 Separate Corporate Existence. . . . . . . . 22

ARTICLE III

ADMINISTRATION AND SERVICING
OF RECEIVABLES

Section 3.1 Acceptance of Appointment and Other
Matters Relating to the Master
Servicer. . . . . . . . . . . . . . . . . 26
Section 3.2 Servicing Compensation. . . . . . . . . . . 28
Section 3.3 Representations, Warranties and
Covenants of the Master Servicer. . . . . 29
Section 3.4 Reports and Records for the Trustee;
Bank Account Statements . . . . . . . . . 33
Section 3.5 [Reserved]. . . . . . . . . . . . . . . . . 35
Section 3.6 Annual Independent Public Accountants'
Servicing Report. . . . . . . . . . . . . 35
Section 3.7 [Reserved] . . . . . . . . . . . . . . . . 36
Section 3.8 Notices to the Transferor . . . . . . . . . 36

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<PAGE> 3
Page

Section 3.9 Securities and Exchange Commission
Filing. . . . . . . . . . . . . . . . . . 36

ARTICLE IV

RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS

Section 4.1 Rights of Certificateholders. . . . . . . . 37
Section 4.2 Establishment of Collection Account
and Excess Funding Account. . . . . . . . 37
Section 4.3 Collections and Allocations . . . . . . . . 41
Section 4.4 Payments of Interest to Investor
Certificateholders. . . . . . . . . . . . 43
Section 4.5 Payment of Principal to Investor
Certificateholders. . . . . . . . . . . . 43
Section 4.6 [Reserved]. . . . . . . . . . . . . . . . . 43
Section 4.7 Defaulted Receivables . . . . . . . . . . . 43
Section 4.8 Partial Optional Redemption or Sales
to Non-Affiliates. . . . . . . . . . . . . 43
Section 4.9 Misdirected Payments. . . . . . . . . . . . 44

ARTICLE V

DISTRIBUTIONS AND REPORTS TO
CERTIFICATEHOLDERS

Section 5.1 Distributions . . . . . . . . . . . . . . . 45
Section 5.2 Monthly Investor Certificateholders'
Statement; Annual Tax Statement . . . . . 45

ARTICLE VI

THE CERTIFICATES

Section 6.1 The Certificates. . . . . . . . . . . . . . 47
Section 6.2 Authentication of Certificates. . . . . . . 47
Section 6.3 Registration of Transfer and Exchange
of Certificates . . . . . . . . . . . . . 48
Section 6.4 Mutilated, Destroyed, Lost or Stolen
Certificates. . . . . . . . . . . . . . . 51
Section 6.5 Persons Deemed Owners . . . . . . . . . . . 52
Section 6.6 Appointment of Paying Agent . . . . . . . . 52
Section 6.7 Access to List of Certificateholders'
Names and Addresses . . . . . . . . . . . 53
Section 6.8 Authenticating Agent. . . . . . . . . . . . 53

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<PAGE> 4
Page

Section 6.9 Delivery of Additional Series of
Investor Certificates . . . . . . . . . . 55
Section 6.10 [Reserved]. . . . . . . . . . . . . . . . . 57
Section 6.11 Book-Entry Certificates . . . . . . . . . . 57
Section 6.12 Notices to Clearing Agency. . . . . . . . . 58
Section 6.13 Definitive Certificates . . . . . . . . . . 58

ARTICLE VII

OTHER MATTERS RELATING
TO THE TRANSFEROR

Section 7.1 Liability of the Transferor . . . . . . . . 59
Section 7.2 Merger or Consolidation of, or
Assumption of the Obligations of,
the Transferor. . . . . . . . . . . . . . 59
Section 7.3 Limitation on Liability of the
Transferor. . . . . . . . . . . . . . . . 60
Section 7.4 Liabilities . . . . . . . . . . . . . . . . 61

ARTICLE VIII

OTHER MATTERS RELATING
TO THE MASTER SERVICER

Section 8.1 Liability of the Master Servicer. . . . . . 62
Section 8.2 Merger or Consolidation of, or
Assumption of the Obligations of,
Eagle Industrial as Master Servicer . . . 62
Section 8.3 Limitation on Liability of the Master
Servicer and Others . . . . . . . . . . . 63
Section 8.4 Master Servicer Indemnification of
the Trust and the Trustee . . . . . . . . 63
Section 8.5 The Master Servicer Not to Resign . . . . . 64
Section 8.6 Access to Certain Documentation and
Information Regarding the Receivables . . 65
Section 8.7 Delegation of Duties. . . . . . . . . . . . 65
Section 8.8 Examination of Records. . . . . . . . . . . 65
Section 8.9 Successor Master Servicer
Indemnification of Transferor . . . . . . 65
Section 8.10 Fidelity Bond and Errors and Omissions
Insurance . . . . . . . . . . . . . . . . 66

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<PAGE> 5
Page

ARTICLE IX

EVENTS OF TERMINATION

Section 9.1 Events of Termination with Respect to
any Series. . . . . . . . . . . . . . . . 67
Section 9.2 [Reserved]. . . . . . . . . . . . . . . . . 69
Section 9.3 Additional Rights Upon the Occurrence of
Certain Events. . . . . . . . . . . . . . 70

ARTICLE X

MASTER SERVICER DEFAULTS

Section 10.1 Master Servicer Defaults. . . . . . . . . . 72
Section 10.2 Trustee to Act; Appointment of Successor. . 75
Section 10.3 Notification to Certificateholders. . . . . 76
Section 10.4 Waiver of Past Defaults . . . . . . . . . . 77

ARTICLE XI

THE TRUSTEE

Section 11.1 Duties of Trustee . . . . . . . . . . . . . 78
Section 11.2 Certain Matters Affecting the Trustee . . . 80
Section 11.3 Trustee Not Liable for Recitals in
Certificates. . . . . . . . . . . . . . . 82
Section 11.4 Trustee May Own Certificates. . . . . . . . 83
Section 11.5 The Master Servicer to Pay Trustee's
Fees and Expenses . . . . . . . . . . . . 83
Section 11.6 Eligibility Requirements for Trustee. . . . 84
Section 11.7 Resignation or Removal of Trustee . . . . . 84
Section 11.8 Successor Trustee . . . . . . . . . . . . . 85
Section 11.9 Merger or Consolidation of Trustee. . . . . 86
Section 11.10 Appointment of Co-Trustee or Separate
Trustee . . . . . . . . . . . . . . . . . 86
Section 11.11 Tax Returns . . . . . . . . . . . . . . . . 87
Section 11.12 Trustee May Enforce Claims Without
Possession of Certificates. . . . . . . . 88
Section 11.13 Suits for Enforcement . . . . . . . . . . . 88
Section 11.14 Rights of Certificateholders to Direct
Trustee . . . . . . . . . . . . . . . . . 89
Section 11.15 Representations and Warranties of
Trustee . . . . . . . . . . . . . . . . . 89
Section 11.16 Maintenance of Office or Agency . . . . . . 90
Section 11.17 Notices . . . . . . . . . . . . . . . . . . 90

iv
<PAGE> 6
Page

Section 11.18 Compliance Certificates and Opinions. . . . 90
Section 11.19 Monthly Report of Trustee . . . . . . . . . 91

ARTICLE XII

TERMINATION

Section 12.1 Termination of Trust. . . . . . . . . . . . 92
Section 12.2 Optional Purchase and Series
Termination Date of Investor
Certificates of any Series. . . . . . . . 92
Section 12.3 Final Payment . . . . . . . . . . . . . . . 94
Section 12.4 Transferor's Termination Rights . . . . . . 95

ARTICLE XIII

MISCELLANEOUS PROVISIONS

Section 13.1 Amendment . . . . . . . . . . . . . . . . . 96
Section 13.2 Protection of Right, Title and Interest
of Trust. . . . . . . . . . . . . . . . . 98
Section 13.3 Limitation on Rights of
Certificateholders. . . . . . . . . . . . 99
Section 13.4 GOVERNING LAW . . . . . . . . . . . . . . .100
Section 13.5 Notices . . . . . . . . . . . . . . . . . .100
Section 13.6 Severability of Provisions. . . . . . . . .100
Section 13.7 Assignment. . . . . . . . . . . . . . . . .101
Section 13.8 Certificates Nonassessable and Fully
Paid. . . . . . . . . . . . . . . . . . .101
Section 13.9 Further Assurances. . . . . . . . . . . . .101
Section 13.10 No Waiver; Cumulative Remedies. . . . . . .101
Section 13.11 Counterparts. . . . . . . . . . . . . . . .101
Section 13.12 Third-Party Beneficiaries . . . . . . . . .102
Section 13.13 Actions by Certificateholders . . . . . . .102
Section 13.14 Merger and Integration. . . . . . . . . . .103
Section 13.15 Headings. . . . . . . . . . . . . . . . . .103
Section 13.16 No Bankruptcy Petition Against the
Transferor. . . . . . . . . . . . . . . .103

EXHIBITS

Exhibit A: Form of Transferor Certificate (Section 6.1)
Exhibit B: Form of Daily Report (Section 3.4(b)(i))
Exhibit C: Form of Accountants Audit Letter (Section 3.6(b))

v
<PAGE> 7
Exhibit D: Credit and Collection Policies of the Designated
Subsidiaries
Exhibit E: Form of Determination Date Statement
(Section 3.4(c))
Exhibit F: Form of Lock-Box Agreement (Section 2.6(i))
Exhibit G: List of Lock-Box Banks, Lock-Box Accounts and Post
Office Boxes (Section 2.6(i))
Exhibit H: Form of Annual Opinion of Counsel
(Section 13.2(c))
Exhibit I: Form of Rule 144A Letter (Section 6.3(e))
Exhibit J: Form of Non-Rule 144A Letter (Section 6.3(e))

SCHEDULES

Schedule 1. Identification of the Collection Account and
Excess Funding Account (Section 4.2(d))
Schedule 2. List of Days in 1994 on which Eagle Industrial is
Closed
Schedule 3. Accounting Closing Dates
Schedule 4. Location of Records of Receivables and Related
Contracts
Schedule 5. List of Eligible Airline Industry Obligors

ANNEX

Annex X Definitions

vi
<PAGE> 8
POOLING AND SERVICING AGREEMENT, dated as of January 1,
1994, by and among CENTRALLY HELD EAGLE RECEIVABLES PROGRAM,
INC., a limited purpose corporation organized under the laws
of the State of Delaware, as Transferor, EAGLE INDUSTRIAL
PRODUCTS CORPORATION, a Delaware corporation, as Master
Servicer, and CONTINENTAL BANK, NATIONAL ASSOCIATION, a
national banking association, as Trustee.

This Pooling and Servicing Agreement shall be
applicable to the formation of the Trust and the issuance of the
Transferor Certificate and, upon the execution of any Supplement,
shall apply also to the issuance of any Series of Certificates
issued thereby.

In consideration of the mutual agreements herein
contained, each party agrees as follows for the benefit of the
other parties, for the benefit of the Certificateholders and for
the benefit of any credit enhancer with respect to any Series to
the extent provided herein:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. For all purposes of this
Agreement, except as otherwise expressly provided herein or
unless the context otherwise requires, capitalized terms not
otherwise defined herein shall have the meanings assigned to such
terms in the Definitions attached hereto as Annex X which is
incorporated by reference herein. All other capitalized terms
used herein shall have the meanings specified herein.

"Agreement" shall mean this Pooling and Servicing
Agreement as it may from time to time be amended, supplemented or
otherwise modified in accordance with the terms hereof, including
by any Supplement.

Section 1.2 Other Definitional Provisions.

(a) All terms defined in any Supplement or this
Agreement shall have the defined meanings as set forth therein or
herein when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.

(b) The agreements, representations and
warranties of Eagle Industrial in this Agreement in its capacity
as Master Servicer shall be deemed to be the agreements,
representations and warranties of Eagle Industrial solely in such
capacity.

1
<PAGE> 9

(c) The words "hereof," "herein" and "hereunder"
and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular
provision of this Agreement, as the case may be; and Section,
Subsection, Schedule and Exhibit references contained in this
Agreement are references to Sections, Subsections, Schedules and
Exhibits in or to this Agreement unless otherwise specified.

Section 1.3 Calculations and Payments. Unless
otherwise specified herein, expressions of a time of day refer to
such time in Chicago, Illinois. All amounts payable hereunder
shall be paid in immediately available funds.

[END OF ARTICLE I]

2
<PAGE> 10
ARTICLE II

CONVEYANCE OF RECEIVABLES; ISSUANCE OF CERTIFICATES

Section 2.1 Conveyance of Receivables.

(a) By execution of this Agreement, the Trans-
feror does hereby grant, assign, transfer and otherwise convey to
the Trustee from time to time, without recourse (except as
specifically provided herein), and without any formal or other
instrument of assignment, all its right, title and interest,
whether now or hereafter existing or acquired, in, to and under
(i) all Receivables in each case sold or otherwise transferred to
the Transferor pursuant to the Contribution and Sale Agreement
prior to the Final Trust Termination Date and all accounts and
general intangibles (each, as defined in the UCC), and all rights
(but not the obligations thereunder) relating thereto, (ii) the
Contribution and Sale Agreement (but not the obligations there-
under) (including any rights which the Transferor may have under
the Sale and Servicing Agreement as assignee thereof pursuant to
the Contribution and Sale Agreement), (iii) all monies due or to
become due with respect to any of the foregoing, (iv) all pro-
ceeds and investments thereof of any of the foregoing, and (v)
all remittances, deposits and payments made into, and on deposit
in, any of the trust accounts subject to Section 4.9 of this
Agreement. Such property, together with all monies on deposit in
the Lock-Box Accounts, the Collection Account, the Excess Funding
Account, any Principal Funding Account or any other account
established pursuant to any Supplement (and including any invest-
ments thereof), (but excluding investment earnings in excess of
those amounts necessary to make all payments required under this
Agreement or any Supplement with respect to each such account
other than the Excess Funding Account), shall constitute the
assets of the Trust (the "Trust Assets"). The foregoing grant,
transfer, assignment and conveyance does not constitute and is
not intended to result in the creation, or an assumption by the
Trust, the Trustee or any Investor Certificateholder, of any
obligation of Eagle Industrial, any Designated Subsidiary, the
Transferor or any other Person in connection with the Receivables
or under any agreement or instrument relating thereto, including,
without limitation, any obligation to any Obligors.

(b) In connection with such grant and transfer,
the Transferor agrees to record and file on or prior to the
Initial Closing Date, at its own expense, all financing state-
ments (and the Transferor agrees to direct the Trustee to file
continuation statements with respect to such financing statements
when applicable after the Initial Closing Date) required to be
filed with respect to the Receivables now existing and hereafter
created and the other Trust Assets meeting the requirements of

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<PAGE> 11
applicable state law in such manner and in such jurisdictions as
are necessary under the applicable UCC to perfect the first
priority interest of the Trustee in the Receivables and the other
Trust Assets, and to deliver a file-stamped copy of such
financing statements or other evidence of such filings to the
Trustee as soon as is reasonably practicable after the Initial
Closing Date (excluding such continuation statements, which shall
be delivered promptly after filing). Upon direction of the
Transferor or the Master Servicer, the Trustee shall file any
further continuation or financing statements as required under
the applicable UCC to maintain the perfection of the interest of
the Trustee in the Trust Assets transferred and assigned here-
under. Except as otherwise provided herein or directed by
Investor Certificateholders aggregating 51% or more of the
Aggregate Invested Amount, the Trustee shall not be under any
obligation to file any other financing statements or make any
other filings under the UCC in connection with such grant,
transfer and assignment.

In connection with the grant and transfer of the
Receivables hereunder, the Transferor further agrees, at its own
expense, on or prior to each Closing Date, to cause each of Eagle
Industrial and the Designated Subsidiaries to indicate in its
books and records, computer files, tapes or disks, as required by
the Sale and Servicing Agreement and the Contribution and Sale
Agreement, that the Receivables have been conveyed, and will
continue to be conveyed, to the Trust pursuant to this Agreement
for the benefit of the Certificateholders.

(c) In connection with such grant and transfer
the Transferor agrees at its own expense to indicate in its
computer files, and to cause each Designated Subsidiary to
indicate clearly and unambiguously in its computer files, on or
before the Initial Closing Date, that the Receivables have been
transferred and will continue to be transferred to the Trust
pursuant to this Agreement.

(d) To the extent that the conveyance of
Receivables and other Trust Assets hereunder is characterized by
a court or other Governmental Authority of competent jurisdiction
as a financing, it is intended by the parties hereto that the
assignment, conveyance and transfer by the Transferor of its
right, title and interest in the Receivables and other Trust
Assets to the Trustee hereunder constitute the grant of a secur-
ity interest under Section 1-201 of the UCC (as defined in the
UCC as in effect in the State of Illinois). The Transferor
hereby grants to the Trustee on the terms and conditions of this
Agreement a first priority security interest in and against all
of the Transferor's right, title and interest in the Receivables
and the other Trust Assets, whether now or hereafter existing or

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<PAGE> 12
acquired, for the purpose of (i) securing the rights of the
Trustee for the benefit of the Certificateholders under this
Agreement and (ii) securing the payment and performance of the
Transferor's obligations hereunder and the right, ability and
obligation of the Trustee to make all payments required to be
made in accordance with the terms and conditions of this Agree-
ment (the "Secured Obligations"). To the extent that the convey-
ance of Receivables hereunder is characterized by a court or
other Governmental Authority of competent jurisdiction as a
financing, the parties agree that this Agreement constitutes a
"security agreement" under applicable laws.

Section 2.2 Declaration of Trust; Acceptance by
Trustee.

(a) The Trustee hereby declares that it holds and
will hold as trustee in trust under this Agreement all of its
right, title and interest in, to and under, and hereby acknowl-
edges its acceptance on behalf of the Certificateholders of all
right, title and interest in, to and under, the property, now or
hereafter existing or acquired, conveyed to the Trustee pursuant
to Section 2.1; to have and hold such property unto the Trustee
and its successors in trust under this Agreement; in trust,
nevertheless, under and subject to the terms and conditions
hereof for the benefit of all Certificateholders.

(b) The Trustee shall have no power to create,
assume or incur indebtedness or other liabilities in the name of
the Trust other than as contemplated in this Agreement.

(c) None of the Trustee, the Trust or any
Investor Certificateholder shall have any obligation or liability
to any Obligor or other customer or client of any Originator
(including, without limitation, any obligation to perform any of
the obligations of any Originator to any Obligor under any such
Receivables, related Contracts or any other related purchase
orders, invoices or other agreements or otherwise). No such
obligation or liability is intended to be assumed by the Trustee,
the Trust or any Investor Certificateholder hereunder, and any
such assumption is hereby expressly disclaimed.

Section 2.3 Representations and Warranties of the
Transferor Relating to the Transferor. The Transferor hereby
represents and warrants, as of the Initial Closing Date and, with
respect to any Series, as of the date of any Supplement and the
related Closing Date, unless otherwise stated in such Supplement,
that:

(a) Organization and Good Standing. The
Transferor is a corporation duly organized, validly existing and

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<PAGE> 13
in good standing under the laws of the State of Delaware, and has
the full corporate power, authority and legal right to execute,
deliver and perform its obligations under the Contribution and
Sale Agreement, this Agreement and any Supplement and to execute
and deliver to the Trustee pursuant thereto the Certificates of
any outstanding Series, and, in all material respects, to own its
property and conduct its businesses as such properties are pre-
sently owned and such businesses are presently conducted.

(b) Due Qualification. The Transferor is duly
qualified to do business and is in good standing as a foreign
corporation (or is exempt from such requirements), and has
obtained all necessary licenses and approvals with respect to the
Transferor, in each jurisdiction in which the conduct of its
business requires such qualification, except where the failure to
so qualify, to be in good standing or to obtain such licenses and
approvals would not render any Contract unenforceable by the
Transferor or the Trustee and would not have a material adverse
effect on the Investor Certificateholders.

(c) Due Authorization. The execution, delivery
and performance of the Contribution and Sale Agreement, this
Agreement and any Supplement and the execution and delivery to
the Trustee of the Certificates of any Series by the Transferor
and the consummation by the Transferor of the transactions pro-
vided for in Contribution and Sale Agreement and this Agreement
and any Supplement, have been duly authorized by all necessary
corporate action on the part of the Transferor.

(d) Binding Obligation. Each of the Contribution
and Sale Agreement, this Agreement and any Supplement constitutes
the legal, valid and binding obligation of the Transferor, en-
forceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insol-
vency, reorganization, moratorium or other similar laws now or
hereinafter in effect, affecting the enforcement of creditors'
rights in general and except as such enforceability may be
limited by general principles of equity (whether considered in a
proceeding at law or in equity).

(e) No Conflicts. The execution, delivery and
performance of this Agreement, any Supplement, the Contribution
and Sale Agreement and the Certificates of any Series, the
performance of the transactions contemplated by such agreements
and Certificates and the fulfillment of the terms thereof by the
Transferor, do not (a) contravene the Transferor's certificate of
incorporation or By-Laws, (b) violate any provision of, or
require any filing (except for certain filings required by the
UCC), registration, consent or approval under, any law, rule,
regulation, order, writ, judgment, injunction, decree, determi-

6
<PAGE> 14
nation or award presently in effect having applicability to the
Transferor, except for such filings, registrations, consents or
approvals as have already been obtained and are in full force and
effect and except for such violations which would not materially
and adversely affect the performance by the Transferor of such
transactions and the fulfillment by the Transferor of such terms,
and except that the Transferor makes no representation or war-
ranty regarding state securities or "blue sky" laws, (c) result
in a breach of or constitute a default or require any consent
under any indenture or loan or credit agreement or any other
agreement, lease or instrument to which the Transferor is a party
or by which it or its properties are bound or affected except
those to which a consent or waiver has been obtained and is in
full force and effect, or (d) result in, or require, the creation
or imposition of any lien upon or with respect to any of the
properties now owned or hereafter acquired by the Transferor
other than as specifically contemplated by this Agreement.

(f) Taxes. The Transferor has filed all tax
returns (Federal, state and local) that are required to be filed
and has paid or made adequate provision for the payment of all
taxes, assessments and other governmental charges due from the
Transferor or is contesting any such tax, assessment or other
charge in good faith through appropriate proceedings. The
Transferor knows of no basis for any material additional tax
assessment for any fiscal year for which adequate reserves have
not been established.

(g) No Proceedings. There are no proceedings,
investigations, injunctions, writs, restraining orders or other
orders of any nature pending or, to the best knowledge of the
Transferor, threatened against the Transferor, before any court,
regulatory body, administrative agency, or other tribunal or
governmental instrumentality (a) asserting the invalidity of the
Contribution and Sale Agreement, this Agreement or any Supplement
or any Certificates, (b) seeking to prevent the issuance of any
Certificates or the consummation of any of the transactions con-
templated by the Contribution and Sale Agreement, this Agreement
or any Supplement or such Certificates, (c) seeking any determi-
nation or ruling that, in the reasonable judgment of the Trans-
feror, would materially and adversely affect the performance by
the Transferor of its obligations under such agreements, (d)
seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of such agree-
ments or certificates, (e) seeking to assert any tax liability
against the Trust under the United States Federal or Illinois
income tax systems, or (f) that might adversely affect the
Transferor's performance under the Contribution and Sale
Agreement, this Agreement or any Supplement.

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<PAGE> 15

(h) All Consents Required. All approvals,
authorizations, consents, orders or other actions of any Person
required to be obtained by the Transferor in connection with the
execution and delivery by the Transferor of this Agreement, any
Supplement, the Contribution and Sale Agreement, the certificates
of any Series, the performance by the Transferor of the transac-
tions contemplated hereunder and thereunder and the fulfillment
by the Transferor of the terms hereof and thereof, have been ob-
tained and are in full force and effect except where the failure
to obtain such approvals, authorizations, consents, orders or
other actions or the failure of the same to be in full force and
effect would not materially and adversely affect the performance
by the Transferor of such transactions and the fulfillment by the
Transferor of such terms, and except that the Transferor makes no
representation or warranty regarding state securities or "blue
sky" laws.

(i) Place of Business. The place of business of
the Transferor and the location of its chief executive office (as
that term is used in Article 9 of the UCC) is Illinois and there
are no other such locations. The records concerning the Receiva-
bles and related Contracts are kept in offices of the Master
Servicer or of the Designated Subsidiaries acting as subservicers
located as set forth on Schedule 4.

(j) Lock-Box Banks and Accounts and Post Office
Boxes. The Lock-Box Banks are the only institutions holding any
Lock-Box Accounts for receipt of payments from Obligors in re-
spect of the Receivables and all Obligors, and only such
Obligors, have been instructed to make payments to such Lock-Box
Accounts or to the Post Office Boxes, and such instructions are
in full force and effect and all of such Lock-Box Accounts and
Post Office Boxes are listed on Exhibit G hereto; provided,
however, that if, notwithstanding instructions to the contrary
given to any Obligor, Collections from such Obligor are received
by the Master Servicer or any Designated Subsidiary, such Collec-
tions shall be deposited in the Collection Account by the Master
Servicer or such Designated Subsidiary within two Business Days
of receipt thereof; provided, however, that neither the Master
Servicer nor such Designated Subsidiary shall be considered in
breach of the obligation set forth in this sentence to the extent
that a payment received by the Master Servicer or any Designated
Subsidiary is not so deposited because such payment relates to a
Disputed Item.

(k) Event of Termination. No Event of Termina-
tion and no condition that with the giving of notice and/or the
passage of time would constitute, an Event of Termination (a
"Prospective Event of Termination") has occurred and is
continuing.

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<PAGE> 16

(l) Not an Investment Company. The Transferor is
not an "investment company" or a company controlled by an
"investment company" within the meaning of the Investment Company
Act of 1940, as amended, or is exempt from all provisions of such
Act.

(m) ERISA. No Plan maintained by the Transferor
or any of its ERISA Affiliates and subject to ERISA has any
"accumulated funding deficiency" (within the meaning of Section
302 of ERISA or Section 412 of the Code), whether or not waived,
that reasonably could be expected to result, directly or indi-
rectly, in any lien being imposed on the property of the Trans-
feror or the payment by the Transferor of any amount to avoid
such lien. During the preceding five years neither the Trans-
feror nor any ERISA Affiliate has failed to make any contribution
required to be made by it to any Plan or any Multiemployer Plan
where such failure could reasonably be expected to result,
directly or indirectly, in any Lien being imposed on the property
of the Transferor or the payment by the Transferor of any amount
to avoid such lien. No event requiring notice to the PBGC under
Section 302(f) of ERISA has occurred and is continuing or could
reasonably be expected to occur with respect to any such Plan, in
any case, that could reasonably be expected to result, directly
or indirectly, in any lien being imposed on the property of the
Transferor or the payment by the Transferor of any amount to
avoid such lien. No Plan Event with respect to the Transferor or
any of its ERISA Affiliates has occurred or could reasonably be
expected to occur that could reasonably be expected to result,
directly or indirectly, in any lien being imposed on the property
of the Transferor or the payment by the Transferor of any amount
to avoid such lien.

(n) No Claim or Interest. Other than the
Transferor Interest, neither the Transferor nor any Person
claiming through or under the Transferor has any claim or
interest in any Lock-Box Account other than the Lock-Box Bank.

(o) Sale and Servicing Agreement and Contribution
and Sale Agreement. The Sale and Servicing Agreement creates a
valid sale, transfer and assignment to Eagle Industrial of all
right, title and interest of the Designated Subsidiaries in and
to the Receivables transferred during the term thereof, and all
required actions and filing have been made which are necessary
under applicable law to perfect the interest of Eagle Industrial
in such Receivables. The Contribution and Sale Agreement creates
a valid contribution or sale, transfer and assignment to the
Transferor of all right, title and interest of Eagle Industrial
in and to the Receivables transferred during the term thereof,
and all required actions and filing have been made which are

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<PAGE> 17
necessary under applicable law to perfect the interest of the
Transferor in such Receivables.

The representations and warranties set forth in this
Section 2.3 shall survive the transfer and assignment of the
Receivables to the Trust. Upon discovery by the Transferor, the
Master Servicer or a Responsible Officer of the Trustee of a
material breach of any of the foregoing representations and
warranties, the party discovering such breach shall give written
notice thereof to the others and to the Rating Agencies within
three Business Days of such discovery.

Section 2.4 Representations and Warranties of the
Transferor Relating to the Agreement, any Supplement and the
Receivables.

(a) Representations and Warranties. The
Transferor (x) hereby represents and warrants as of the Initial
Closing Date, with respect to the Receivables created on or prior
to, and outstanding on, such date and (y) shall be deemed to re-
present and warrant as of the date of the creation and transfer
to the Trustee of any additional Receivables, with respect to all
outstanding Receivables, that, among other things:

(i) The Transferor is not insolvent and, upon the
transfer of the Receivables to the Trustee, will not be
rendered insolvent and will have adequate capital to conduct
its business.

(ii) The Transferor is the legal and beneficial
owner of all right, title and interest in and to each such
Receivable and each such Receivable has been or will be
transferred to the Trustee free and clear of any Lien. No
effective financing statement or other similar instrument
that covers all or part of any Receivable conveyed to the
Trustee, any other Trust Assets, or any interest therein is
on file in any recording office except such as may be filed
(A) in favor of Eagle Industrial in accordance with the Sale
and Servicing Agreement, (B) in favor of the Transferor
pursuant to the Contribution and Sale Agreement, and (C) in
favor of the Trustee, for the benefit of the
Certificateholders, in accordance with this Agreement or
otherwise filed by or at the direction of the Trustee.

(iii) All consents, licenses, approvals or
authorizations of, registrations or declarations with or
notice to any Governmental Authority or Person required to
be obtained, effected or given by the Transferor in
connection with the transfer by the Transferor of its
interest in the Trust Assets to the Trust have been duly

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<PAGE> 18
obtained, effected or given, and are in full force and
effect and such transfers do not violate any provision of,
or require any filing (except for certain filings required
by the UCC), registration, consent or approval under, any
law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect having
applicability to the Transferor, except for such filings,
registrations, consents or approvals as have already been
obtained and are in full force and effect and except that
the Transferor makes no representation or warranty regarding
state securities or "blue sky" laws.

(iv) There are no proceedings or investigations
pending or, to the best knowledge of the Transferor,
threatened that might adversely affect the payment or
enforceability of the Receivables as a whole.

(v) The Transferor has clearly and unambiguously
marked all its books and records, computer records, files,
tapes and disks and microfiche files, if any, regarding such
Receivables as the property of the Trustee and shall
maintain such records in a manner such that the Trustee
shall have a first priority perfected interest in the
Receivables.

(vi) This Agreement constitutes either (a) a valid
grant, transfer and assignment to the Trustee of all right,
title and interest of the Transferor in the Trust Assets, or
(b) a grant of a first priority "security interest" (as
defined in the Illinois Uniform Commercial Code) in such
property to the Trustee, which in the case of existing
Receivables and Collections with respect thereto and the
proceeds thereof, is enforceable with respect to such
Receivables upon execution and delivery of this Agreement,
and which will be enforceable with respect to such
Receivables hereafter created and the proceeds thereof upon
such creation.

(vii) Each such Receivable and Collections with
respect thereto has been or will be transferred to the
Trustee free and clear of any Adverse Claim of any Person
not holding through the Trustee.

(viii) Each obligation of an Obligor conveyed
pursuant to Section 2.1 of this Agreement is, on the date of
the creation of such obligation, a Receivable (and does not
constitute "chattel paper" within the meaning of the UCC)
and each Receivable classified as an "Eligible Receivable"
by the Transferor, Master Servicer or Sub-Servicer in any
document or report delivered hereunder will satisfy the

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<PAGE> 19
requirements contained in the definition of Eligible
Receivable at such time.

(ix) Each Receivable is or will be at the time of
transfer to the Trustee an obligation arising out of the
performance of Eagle Industrial or a Designated Subsidiary
in accordance with the terms of the Contract giving rise to
such Receivable and neither the Receivable nor the related
Contract has been subordinated, satisfied or rescinded. The
Transferor has no knowledge of any fact that should have led
it to expect at the time of the initial creation of an
interest in any Receivable hereunder that such Receivable
would not be paid in full when due except with respect to
any sales and marketing discount then available to Obligors.

(x) Each such Receivable was purchased by Eagle
Industrial in accordance with the terms of the Sale and
Servicing Agreement and sold or contributed by Eagle
Industrial to the Transferor in accordance with the
Contribution and Sale Agreement, each of which is in full
force and effect.

(xi) The legal name of the Transferor is Centrally
Held Eagle Receivables Program, Inc., as set forth herein,
and the Transferor has no trade names, fictitious names,
assumed names or "doing business as" names.

(xii) (A) On the date on which Eagle Industrial
assigns and transfers any Receivable to the Transferor
(whereupon concurrently pursuant hereto the Transferor
transfers such Receivable to the Trustee), unless otherwise
identified by the Master Servicer in the Daily Report for
such date, such Receivable is an Eligible Receivable, and
(B) on the date of each Daily Report or Settlement Statement
which identifies a Receivable as an Eligible Receivable,
such Receivable is an Eligible Receivable.

(xiii) No acquisition of any Receivable by the
Transferor or the Trustee constitutes a fraudulent transfer
or fraudulent conveyance under the United States Bankruptcy
Code or applicable state bankruptcy or insolvency laws or is
otherwise void or voidable or subject to subordination under
similar laws or principles or for any other reason.

(xiv) The transfer of Receivables by any Designated
Subsidiary to Eagle Industrial pursuant to the Sale and
Servicing Agreement, and Eagle Industrial's concurrent
transfer of such Receivables to the Transferor pursuant to
the Contribution and Sale Agreement, constitutes a true and
valid assignment and transfer of ownership for consideration

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<PAGE> 20
of such Receivables under the applicable state law (and not
merely a pledge or assignment of such Receivables for
security purposes), enforceable against the creditors of any
of the above-described transferors, and any Receivables so
transferred will not constitute property of such transferor
under applicable state law.

(xv) No transaction contemplated by this Agreement
or by any other Transaction Document requires compliance
with, or will be subject to avoidance under, any bulk sales
act or similar law.

(xvi) No use of any funds obtained by the
Transferor under this Agreement will conflict with or
contravene any of Regulations G, T, U and X promulgated by
the Federal Reserve Board from time to time.

(b) Notice of Breach. The representations and
warranties set forth in this Section 2.4 shall survive the
transfer and assignment of the Trust Assets to the Trust. Upon
discovery by the Transferor, the Master Servicer or a Responsible
Officer of the Trustee of a material breach of any of the repre-
sentations and warranties set forth in this Section 2.4(a)(i)
through (xvi), the party discovering such breach shall give
written notice to the others and to the Rating Agencies within
three Business Days of such discovery.

(c) Designation of Ineligible Receivables. In
the event of a breach with respect to a Receivable of any of the
representations and warranties set forth in Section 2.4(a)(i)
through (xvi) above, or in the event that any Receivable fails to
satisfy the definition of an Eligible Receivable, such Receivable
(an "Ineligible Receivable") will be no longer considered an
Eligible Receivable and will be redesignated as an Ineligible
Receivable in any subsequent report or notice delivered hereunder
which so categories the Receivables. On and after the date of
such designation, each Ineligible Receivable will not be included
in the calculation of Aggregate Eligible Receivables, Adjusted
Eligible Receivables, any Invested Percentage, any Invested
Amount or the Transferor Amount. To the extent that the exclu-
sion of an Ineligible Receivable from the calculation of the
Transferor Amount would cause the Transferor Amount to be reduced
below the Minimum Transferor Amount, the Transferor shall make or
cause to be made a deposit in the Excess Funding Account in
immediately available funds. The amount of such deposit shall be
equal to the difference between the Minimum Transferor Amount and
the Transferor Amount after the designation of such Receivable as
an Ineligible Receivable. The obligation of the Transferor set
forth in this Section shall constitute the sole remedy respecting
any breach of the representations and warranties set forth in the

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<PAGE> 21
above-referenced Section or failure to meet the conditions set
forth in the definition of Eligible Receivable with respect to
such Receivable available to the Certificateholders of any
Series, the Trustee on behalf of such Certificateholders, or any
other Person, provided, that neither this sentence nor any other
provisions of this Agreement shall operate to affect any rights
which the Trustee may have, as assignee pursuant to Section 2.1
above, under the Contribution and Sale Agreement or the Sale and
Servicing Agreement.

Section 2.5 [Reserved].

Section 2.6 Covenants of the Transferor. During the
term of this Agreement, and until (i) the Aggregate Invested
Amount is reduced to zero, (ii) the Investor Certificateholders
shall have received all accrued interest on the applicable Cer-
tificates, and (iii) all amounts owed by the Transferor pursuant
to this Agreement have been paid, the Transferor covenants and
agrees as follows:

(a) Compliance with Laws, etc. The Transferor
shall (i) duly satisfy all obligations on its part to be ful-
filled under or in connection with the Receivables, (ii) maintain
in effect all qualifications required under Requirements of Law
in order to properly purchase and convey the Receivables and
other Trust Assets and (iii) comply with all Requirements of Law
in connection with purchasing and conveying the Receivables, in
each instance where the failure to so satisfy, maintain or comply
would have a material adverse effect on the Investor Certificate-
holders.

(b) Preservation of Corporate Existence. The
Transferor shall (i) preserve and maintain its corporate exis-
tence, rights, franchises and privileges in the jurisdiction of
its incorporation and (ii) qualify and remain qualified in good
standing as a foreign corporation in each jurisdiction where the
failure to preserve and maintain such existence, rights, fran-
chises, privileges and qualification would, if not remedied,
either (A) materially adversely affect the interests of the
Investor Certificateholders hereunder, or (B) materially adverse-
ly affect the ability of the Transferor or the Master Servicer to
perform its obligations hereunder.

(c) Audits. At any time and from time to time
during the Transferor's regular business hours, on reasonable
prior notice and for a purpose reasonably related to this
Agreement, the Transferor shall, in response to any reasonable
request of the Trustee, permit the Trustee, or its agents or
representatives, (i) to examine and make copies of and abstracts
from all books, records and documents (including, without limita-

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<PAGE> 22
tion, computer tapes and disks) in the possession or under the
control of the Transferor relating to the Receivables, and (ii)
to visit the offices and properties of the Transferor for the
purpose of examining such materials and to discuss matters relat-
ing to the Receivables or the Transferor's performance hereunder
with any of the officers or employees of the Transferor having
knowledge thereof. Any such examination or visit made pursuant
to this Section 2.6(c) shall be at the cost and expense of the
party or parties making such examination or visit.

(d) Continuous Perfection. The Transferor shall
not change its name, identity or structure in any manner which
might make any financing or continuation statement filed here-
under misleading within the meaning of Section 9-402(7) of the
UCC (or any other then applicable provision of the UCC) unless
the Transferor shall have given the Trustee, the Master Servicer
and the Rating Agencies at least 90 days' prior written notice
thereof and shall have taken all action not later than 5 days
after making such change necessary or advisable to amend such
financing statement or continuation statement so that it is not
misleading. The Transferor shall not change its place of busi-
ness or chief executive office (within the meaning of Article 9
of the UCC, or change the location of its principal records
concerning the Receivables, or the Collections from the locations
specified in Section 2.3(i) unless it has given the Trustee, the
Master Servicer and the Rating Agencies at least 60 days' prior
written notice of its intention to do so and has taken such
action as is necessary or advisable to cause the interest of the
Trustee in the Receivables and the other Trust Assets to continue
to be perfected with the priority required by this Agreement.
The Transferor will at all times maintain its principal executive
office and any other office at which it maintains records relat-
ing to the Receivables within the United States of America. The
Transferor shall provide notice to the Trustee, the Master
Servicer and the Rating Agencies confirming that UCC-1 financing
statements have been filed on or before the Initial Closing Date.

(e) Extension or Amendment of Receivables. The
Transferor shall not extend, amend or otherwise modify (or con-
sent or fail to object to such extension, amendment or modifica-
tion by Eagle Industrial or any Designated Subsidiary) the terms
of any Receivable, or amend, modify or waive any term or condi-
tion of any Contracts related thereto in any manner which would
have a substantial likelihood of having a material adverse effect
on the interests of the Investor Certificateholders.

(f) Reports. The Transferor shall furnish to the
Trustee and to each Rating Agency immediately after it has actual
knowledge of the occurrence of each Event of Termination or the
Transferor's knowledge of a Prospective Event of Termination, an

15
<PAGE> 23
Officer's Certificate of the Transferor setting forth the details
of such Event of Termination or Prospective Event of Termination
and the action taken, or which the Transferor proposes to take,
with respect thereto.

(g) Certain Documentation. The Transferor shall
cause the Master Servicer (directly or through a Sub-Servicer) to
hold for the account of the Trustee (to the extent of its inter-
est therein) any document evidencing a Receivable and the related
Contract.

(h) Assessments. The Transferor will promptly
pay and discharge all taxes, assessments, levies and other
governmental charges imposed on it, the failure of which to pay
and discharge may materially adversely affect any of the Eligible
Receivables or the Trustee's rights with respect thereto or will
establish reserves sufficient for the payment of any such tax,
assessment or other governmental charge which it is contesting in
good faith through appropriate proceedings.

(i) Lock-Box Banks and Accounts; Post Office
Boxes. The Transferor may, provided that the conditions of this
Section 2.6(i) are satisfied, add or terminate any bank as a
Lock-Box Bank or add or terminate any Lock-Box Account or Post
Office Box from those listed in Exhibit G hereto, or make any
reasonable change in the Lock-Box Agreements or in any existing
instructions to Obligors regarding payments to be made to any
Post Office Box or Lock-Box Account which would not (i) have an
adverse impact on the Master Servicer's ability to collect
payments or (ii) cause a withdrawal or downgrade of the then
current rating of the Certificates of any Series (so long as an
Obligor remains instructed to make payments on a Receivable to a
Post Office Box or Lock-Box Account), but in each case only upon
prior written notice from the Master Servicer to the Trustee;
provided that any bank added as a Lock-Box Bank shall have short-
term debt ratings of at least A-3 by S&P or D&P, or its equiva-
lent if rated by any other applicable Rating Agency at the time
it becomes a Lock-Box Bank. The Transferor shall give notice to
the Trustee and the Master Servicer of the number of each account
to be added or terminated as a Lock-Box Account and the name and
address of each bank to be added or terminated as a Lock-Box Bank
and the number and location of each post office box to be added
or terminated as a Post Office Box, and, subject to the proviso
to the preceding sentence, upon giving of such notice, Exhibit G
shall be deemed to be amended accordingly without further action
by any Person. The Transferor will be under the obligation to
promptly procure the execution of the Lockbox Agreement by all
parties thereto. In the event that a Designated Subsidiary
enters into a Lock-Box Agreement with a Lock-Box Bank with
respect to which the Designated Subsidiary had not entered into a

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<PAGE> 24
Lock-Box Agreement by the end of the sixth month following the
Initial Closing Date, prior to instructing any Obligor to make
payment to a related Lock-Box Account the Master Servicer shall
deliver to the Trustee a copy of the executed Lock-Box Agreement
and obtain the Trustee's signature thereon; provided, however,
that such Lock-Box Agreement shall not materially differ in
substance from the form of Lock-Box Agreement attached hereto as
Exhibit G. The Master Servicer shall provide notice to the
Rating Agencies confirming that Lock-Box Agreements have been
executed by each Designated Subsidiary, each Lock Box Bank and
the Trustee not later than six months after the Initial Closing
Date.

(j) Further Action. The Transferor shall, from
time to time, execute and deliver to the Trustee any instruments,
financing or continuation statements or other writings necessary,
or that the Trustee may reasonably request, to maintain the per-
fection or priority of the Trustee's ownership or security inter-
est in the Receivables, the Collections and other Trust Assets
under the UCC or other applicable law. The Transferor shall,
from time to time, execute and deliver to the Obligors any bills,
statements and letters or other writings necessary, or that the
Trustee may reasonably request, to carry out the terms and provi-
sions of this Agreement and to facilitate the collection of the
Receivables. The Transferor will defend the right, title and
interest of the Trust in, to and under the Receivables, whether
now existing or hereafter created, against all claims of third
parties claiming through or under the Transferor.

(k) Additional Indebtedness. The Transferor
shall not create, incur, assume or suffer to exist any indebted-
ness (including, without limitation, any guaranty) or expense
(whether or not accounted for as a liability) except (i) indebt-
edness hereunder (including, without limitation, operating
expenses incurred by the Transferor in connection with the
performance of its obligations hereunder) and any taxes incurred
by the Transferor), under the Contribution and Sale Agreement
(including any Transferor Promissory Note), the Investor Certifi-
cates, or any agreements, contracts or instruments which relate
thereto, (ii) indebtedness or other operating expenses incurred
in the performance of its obligations under this Agreement
(including the expense to its professional advisers and its
counsel not exceeding $50,000 at any one time outstanding, other
than counsel fees, advisory fees, filing fees and other expenses
incurred in connection with the initial establishment of the
series of transactions contemplated by this Agreement, which fees
and expenses shall not be so limited), (iii) where that Person to
whom such indebtedness or expense will be owing has delivered to
the Transferor an undertaking (which is assignable and shall con-
currently be assigned to the Trustee) that it will not institute

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<PAGE> 25
against, or join any other Person in instituting against, the
Transferor any bankruptcy, reorganization, arrangement, insol-
vency or liquidation proceeding, or other proceeding under any
Federal or state bankruptcy or similar law, for one year and a
day after all Investor Certificates are paid in full, and (iv)
other indebtedness in the ordinary course of business not exceed-
ing $20,000 at any one time outstanding and not to exceed in the
aggregate $200,000 per annum on account of incidentals or
services supplied or furnished to the Transferor; provided, that
the obligations of the Transferor to Certificateholders
hereunder, solely with respect to the payment of interest and the
repayment of principal under such Certificate, shall be payable
solely from the Trust Assets in accordance herewith and the
Certificateholders shall not look to any other property or assets
of the Transferor or any other Person in respect of such
obligations, and such obligations shall not constitute a claim
against the Transferor or any other Person in the event that the
Trust Assets are insufficient to pay in full such interest and
principal; provided, further, that the obligations of the
Transferor to Certificateholders hereunder with respect to
amounts other than interest and principal under the Certificates
shall (subject to the proviso in the last sentence of Section
2.4(c) above, be payable from the Trust Assets or any other
assets of the Transferor, except that all such obligations of the
Transferor to Certificateholders shall (again subject to the
above-described proviso) be suspended at any time that, and for
so long as, the Transferor's assets are insufficient to pay in
full such obligations, and that all such obligations are fully
subordinated to the Transferor's obligations with respect to the
payment of interest and principal under the Investor Certificates
and the security interest of the Trustee in the Trust Assets with
respect to such interest and principal obligations.

(l) No Transfer. The Transferor agrees that it
shall not sell, assign, pledge, convey or otherwise transfer any
Trust Asset, except for the transfer of the Trust Assets to the
Trustee as provided herein, and shall defend and hold harmless
the Trustee from any Adverse Claim in or to any Eligible
Receivable transferred to the Trustee hereunder.

(m) No Other Business. The Transferor agrees to
engage in no business other than the business contemplated here-
under and under the Sale and Servicing Agreement and the Contri-
bution and Sale Agreement.

(n) Enforcement and No Modification of Sale and
Servicing Agreement or the Contribution and Sale Agreement. The
Transferor agrees to take all action necessary and appropriate to
enforce its rights and claims under the Sale and Servicing Agree-
ment and the Contribution and Sale Agreement. The Transferor

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<PAGE> 26
agrees not to amend or modify the Sale and Servicing Agreement or
the Contribution and Sale Agreement without the prior written
consent of the Holders of Investor Certificates evidencing frac-
tional undivided interests aggregating not less than 51% of the
Aggregate Invested Amount and without the prior written confirma-
tion from each Rating Agency that such amendment will not result
in such Rating Agency reducing or withdrawing its rating on any
outstanding Series.

(o) Separate Business. The Transferor shall at
all times (a) to the extent the Transferor's office is located in
the offices of Eagle Industrial or any Affiliate of Eagle
Industrial, pay fair market rent, if charged, for its executive
office space located in the offices of Eagle Industrial or any
Affiliate of Eagle Industrial, (b) maintain the Transferor's
books, financial statements, accounting records and other corpo-
rate documents and records separate from those of Eagle Indus-
trial or any other entity, (c) not commingle the Transferor's
assets with those of Eagle Industrial or any other entity, (d)
act solely in its corporate name and through its own authorized
officers and agents, (e) make investments directly or by brokers
engaged and paid by the Transferor or its agents (provided that
if any such agent is an Affiliate of the Transferor it shall be
compensated at a fair market rate for its services), (f) sepa-
rately manage the Transferor's liabilities from those of Eagle
Industrial or any Affiliates of Eagle Industrial and pay its own
liabilities, including all administrative expenses, from its own
separate assets, except that Eagle Industrial may pay the organi-
zational expenses of the Transferor, (g) pay from the Trans-
feror's assets all obligations and indebtedness of any kind
incurred by the Transferor and (h) have at least one Independent
Director. The Transferor shall abide by all corporate formali-
ties, including the maintenance of current minute books, and the
Transferor shall cause its financial statements to be prepared in
accordance with generally accepted accounting principles in a
manner that indicates the separate existence of the Transferor
and its assets and liabilities. The Transferor shall (i) pay all
its liabilities, (ii) not assume the liabilities of Eagle
Industrial or any Affiliate of Eagle Industrial, and (iii) not
guarantee the liabilities of Eagle Industrial or any Affiliates
of Eagle Industrial. The officers and directors of the Transferor
(as appropriate) shall make decisions with respect to the busi-
ness and daily operations of the Transferor independent of and
not dictated by any controlling entity.

(p) Corporate Documents. The Transferor shall
not amend, alter, change or repeal its Certificate of Incorpora-
tion without (i) the prior written consent of its Independent
Director, (ii) without the prior written confirmation by each
Rating Agency that such amendment, alteration, change or repeal

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<PAGE> 27
will not result in such Rating Agency reducing or withdrawing its
rating on any outstanding Series and (iii) without the prior
written consent of the Holders of Certificates aggregating not
less than 51% of the Invested Amount of each Series. The
Transferor shall promptly provide to the Trustee a copy of such
written confirmation together with a copy of the Certificate of
Incorporation as so amended, altered, changed or repealed.

(q) ERISA. The Transferor shall promptly give
the Trustee written notice of the following events, as soon as
possible and in any event within 30 days after the Transferor or
any of its ERISA Affiliates knows or has reason to know thereof:
(i) the occurrence or expected occurrence of any Reportable Event
with respect to any Plan to which the Transferor or any of its
ERISA Affiliates contributes, or any withdrawal by the Transferor
or any of its ERISA Affiliates from, or the termination, Reorgan-
ization or Insolvency of any Multiemployer Plan to which the
Transferor or any of its ERISA Affiliates contributes or to which
contributions have been required to be made by the Transferor or
such ERISA Affiliate during the preceding five years or (ii) the
institution of proceedings or the taking of any other action by
the PBGC or the Transferor or any of its ERISA Affiliates or any
such Multiemployer Plan with respect to the withdrawal by the
Transferor or any ERISA Affiliates from, or the termination of
any such Plan or Multiemployer Plan or the Reorganization or
Insolvency of, any such Multiemployer Plan.

(r) Keeping of Records and Books of Account. The
Transferor will keep proper books of record and account in which
full and correct entries shall be made of all financial transac-
tions and the assets and business of the Transferor in accordance
with generally accepted accounting principles consistently
applied. The Transferor will (or will cause the Master Servicer
to) implement and maintain administrative and operating proce-
dures (including, without limitation, an ability to recreate
records evidencing the Receivables in the event of the destruc-
tion of any original records) to keep and maintain all documents,
books, records and other information reasonably necessary or ad-
visable for the collection of all Receivables (including, without
limitation, records adequate to permit the daily identification
of each new Receivable and Collections of and adjustments to each
existing Receivable).

(s) Schedule of Designated Subsidiaries.
Attached to each Determination Date Statement will be a schedule
of the Designated Subsidiaries (which will be part of the Deter-
mination Date Statement), which will be an accurate and complete
listing of all Designated Subsidiaries in all material respects
as of the end of the preceding Settlement Period and the
information contained therein with respect to the identity of

20
<PAGE> 28
each Designated Subsidiary will be true and correct in all
material respects as of such day.

(t) Accuracy of Information. All written infor-
mation furnished on and after the Initial Closing Date by the
Transferor to the Master Servicer or the Trustee pursuant to or
in connection with any Transaction Document or any transaction
contemplated herein or therein shall not contain any untrue
statement of a material fact or omit to state material facts
necessary to make the statements made not misleading, in each
case in light of the circumstances under which such statements
were made or such information was furnished.

(u) Location of Records and Offices. The
Transferor will not have or maintain, or be a partner in any
partnership which has or maintains, its jurisdictions of organi-
zation, principal place of business in the United States of
America or principal assets in the United States of America in
any of the states of Colorado, Kansas, New Mexico (other than a
manufacturing facility located in the State of New Mexico),
Oklahoma, Utah or Wyoming.

(v) No Liens. Except for the transfers hereunder
and the security interest granted pursuant to Section 2.01(d),
the Transferor will not sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist
any Lien on, any Trust Asset or any other property or asset of
the Transferor, whether now existing or hereafter created, or any
interest therein, and the Transferor shall defend the right,
title and interest of the Trust in and to the Trust Assets,
whether now existing or hereafter created, against all claims of
third parties claiming through or under the Transferor.

(w) Dividends. The Transferor shall not declare
or pay any dividend except as permitted by Delaware law, and in
no event shall any dividends be paid by the Transferor more
frequently than once every fiscal quarter of the Transferor.

Section 2.7 Authentication of Certificates. Pursuant
to the request of the Transferor, the Trustee shall cause
Certificates in authorized denominations evidencing the entire
beneficial ownership of the Trust to be duly authenticated and
delivered to or upon the order of the Transferor, which authen-
tication and delivery shall occur in accordance with Section 6.2.

Section 2.8 Tax Treatment. The Transferor has entered
into this Agreement, and the Investor Certificates have been (or
will be) issued, with the intention that such Investor Certifi-
cates will qualify under applicable tax law as indebtedness. The
Transferor, the Trustee and the Master Servicer and each Investor

21
<PAGE> 29
Certificateholder by acceptance of its Investor Certificate and
each Certificate Owner by acquiring an interest in an Investor
Certificate agrees to treat the Investor Certificates (other than
any Investor Certificate held by the Transferor) as indebtedness,
for purposes of Federal, state and local income or franchise
taxes and for any other tax imposed on or measured by income. In
accordance with the foregoing, except as otherwise required by
law the Transferor agrees that it will report its income for such
Federal, state, and local income or franchise taxes, or for other
taxes on or measured by income, on the basis that it is the owner
of the Receivables. Furthermore, unless otherwise required by
law, the Trustee hereby agrees to treat the Trust as a security
device only, and shall not file tax returns or obtain an employer
identification number on behalf of the Trust.

Section 2.9 Cancellation of the Certificates of any
Series. The Transferor or any of its Affiliates may (with the
consent of the Holders of the Certificates being acquired)
acquire any Certificate of any Series and deliver it to the
Trustee for cancellation under this Section. Upon such delivery,
the Trustee shall cause the Transfer Agent and Registrar to
cancel such Investor Certificate and such Investor Certificate
shall be disposed of in a manner satisfactory to the Trustee. As
a result of such delivery and cancellation, the Transferor Amount
shall be increased by the principal amount of such Investor
Certificate and the Invested Percentages with respect to such
Series, and any other defined term herein (including in the
applicable Supplement), the definition of which depends upon an
assumption that such Investor Certificate had been issued as a
part of such Series, shall be recomputed on the basis of the
assumption that such Investor Certificate had not been issued as
part of such Series. Upon such delivery, such Certificate shall
be accompanied by an Officer's Certificate of the Transferor
stating the recomputed amounts of the defined terms referred to
in the preceding sentence.

Section 2.10 Separate Corporate Existence. The
Transferor hereby acknowledges that the Trustee and the Investor
Certificateholders are, and will be, entering into the transac-
tions contemplated by the Transaction Documents in reliance upon
the Transferor's identity as a legal entity separate from the
Designated Subsidiaries, Eagle Industrial and any other Person.
Therefore, from and after the Initial Closing Date, the Trans-
feror shall take all reasonable steps to continue its identity as
a separate legal entity and to make it apparent to third Persons
that the Transferor is an entity with assets and liabilities dis-
tinct from those of the Designated Subsidiaries, Eagle Industrial
and any other Person, and that the Transferor is not a division
of the Designated Subsidiaries, Eagle Industrial or any other
Person. Without limiting the generality of the foregoing, the

22
<PAGE> 30
Transferor shall take such actions as shall be required in order
that:

(i) The Transferor will be a limited purpose corpo-
ration whose primary activities will be restricted to those
contemplated by its Certificate of Incorporation;

(ii) Not less than one member of the Transferor's
Board of Directors will be an Independent Director. The
Transferor's Board of Directors will not approve, or take
any other action to cause the filing of, a voluntary bank-
ruptcy petition with respect to the Transferor unless the
Independent Director and all other members of the Trans-
feror's Board of Directors unanimously approve the taking of
such action in writing prior to the taking of such action;

(iii) The Transferor will restrict its Independent
Director from at any time serving as a trustee in bankruptcy
for any Affiliate;

(iv) The Transferor will compensate each of its em-
ployees, consultants and agents from the Transferor's own
funds for services provided to the Transferor, it being
understood that this clause (iv) shall not limit payments of
the Servicing Fee. The Transferor will not act as agent for
the Master Servicer and will engage no agents other than a
Master Servicer for the Receivables, which Master Servicer
will be fully compensated for its services hereunder by
payment of the Servicing Fee, placement agents for the
placement of Certificates and accountants and attorneys who,
except to the extent provided otherwise below in clause (v),
will be compensated by the Transferor for their fees and
other charges as agreed to by the Transferor and such place-
ment agents, accountants or attorneys (as applicable);

(v) The Transferor will not incur any material
indirect or overhead expenses for items shared between the
Transferor and any Affiliate, other than shared items of
expenses not reflected in the Servicing Fee, such as legal,
auditing and other professional services, that will be
allocated on a basis reasonably related to the actual use or
the value of services rendered, it being understood that
Eagle Industrial will pay all expenses relating to the
preparation, negotiation, execution and delivery of the
Transaction Documents, including, without limitation, legal,
commitment, agency and other fees; provided, further, that
other than pursuant to this Agreement, the Transferor will
not engage in any other transactions with the Master
Servicer;

23
<PAGE> 31

(vi) The Transferor's operating expenses or liabili-
ties will not be paid by any Affiliate, including guarantees
or advancements of funds from the Master Servicer, recogniz-
ing that certain organizational expenses of the Transferor
and expenses relating to creation and initial implementation
of the transactions contemplated by the Transaction Docu-
ments, however, have been or shall be paid by Eagle
Industrial;

(vii) The Transferor will conduct its business at an
office separate from the offices of each Affiliate, which
office of the Transferor may consist of office space shared
with an Affiliate, a portion of which is allocated solely to
the Transferor and is clearly demarcated as being allocated
solely to the Transferor.

(viii) The Transferor will maintain corporate records
and books of account separate from those of every Affiliate
and telephone numbers, mailing addresses, stationery and
other business forms that are separate and distinct from
those of every Affiliate and will only conduct business
under its own name;

(ix) Any financial statements of any Affiliate which
are consolidated to include the Transferor will contain
detailed notes clearly stating that the Transferor is a
separate corporate entity and that its assets will be
available first and foremost to satisfy the claims of its
own creditors;

(x) The Transferor's assets and liabilities will be
maintained in a manner that facilitates their identification
and segregation from those of any Affiliate and, in a manner
such that it will not be difficult or costly to segregate or
ascertain, and otherwise identify the individual assets and
liabilities of the Transferor on the one hand, from those of
Eagle Industrial or any Designated Subsidiary on the other
hand;

(xi) The Transferor will strictly observe corporate
formalities in its dealings with each Affiliate, and funds
or other assets of the Transferor will not be commingled
with those of any Affiliates (other than funds in the
Collection Account payable to the Transferor as Holder of
the Transferor Certificate). The Transferor shall not
maintain joint bank accounts or other depository accounts to
which any Affiliate (other than Eagle Industrial in its
capacity as Master Servicer) has independent access;

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<PAGE> 32

(xii) The Transferor shall not, directly or indirect-
ly, be named and shall not enter into an agreement to be
named as a direct or contingent beneficiary or loss payee on
any insurance policy with respect to any loss relating to
the property of an Affiliate;

(xiii) Any transaction between the Transferor and an
Affiliate will be fair and equitable to the Transferor, will
be the type of transaction which would be entered into by a
prudent Person in the position of the Transferor with an
Affiliate, and will be on terms which are at least as
favorable as may be obtained from a Person which is not an
Affiliate;

(xiv) Any Affiliate that renders or otherwise fur-
nishes services to the Transferor will be compensated by the
Transferor at market rates for such services;

(xv) Neither the Transferor nor any Affiliate will be
or will hold itself out to be responsible for the debts of
the other; and

(xvi) The duly elected Board of Directors of the
Transferor and the Transferor's duly appointed officers
shall at all times have sole authority to control decisions
and actions with respect to the daily business affairs of
the Transferor.

The covenants set forth in this Section 2.10 shall survive
the transfer and assignment of the Receivables to the Trustee.
Upon discovery by the Transferor or the Master Servicer or the
Trustee of a breach of any of the foregoing covenants, the party
discovering such breach shall give written notice to the other
parties to this Agreement immediately following such discovery.

[END OF ARTICLE II]

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<PAGE> 33
ARTICLE III

ADMINISTRATION AND SERVICING
OF RECEIVABLES

Section 3.1 Acceptance of Appointment and Other
Matters Relating to the Master Servicer.

(a) Eagle Industrial agrees to act, and is hereby
appointed by the Transferor and the Trustee to act, as the Master
Servicer under this Agreement, and all Certificateholders, in-
cluding the Transferor, by their acceptance of the Certificates
consent to Eagle Industrial's acting as Master Servicer. The
Master Servicer shall supervise the servicing and administration
of the Receivables and shall supervise the collection of payments
due under the Receivables in accordance with (i) prudent stan-
dards and its customary and usual servicing procedures for
servicing receivables owned by it and comparable to the Receiva-
bles and in accordance with the Credit and Collection Policy and
(ii) the standard set forth in clause (iii) of the definition of
"Eligible Master Servicer" in Annex X hereto (which standard the
Master Servicer represents is not inconsistent with the standard
set forth in clause (i) above) and shall have full power and
authority, acting alone or through any Person designated by it
(each, a "Sub-Servicer"), to do any and all things in connection
with such servicing and administration which it may deem neces-
sary or desirable; provided, however, that if Eagle Industrial is
no longer the Master Servicer, the Master Servicer shall service
the Receivables in accordance with the standards that would be
employed by a prudent institution in servicing comparable receiv-
ables for its own account. Pursuant to the Sale and Servicing
Agreement, the Master Servicer will designate one or more of the
Designated Subsidiaries the initial Sub-Servicers, and in such
capacity such Designated Subsidiaries will be responsible on a
daily basis for servicing, managing and accepting or collecting
payments on the Receivables; provided, however, that such Sub-
Servicers and the Master Servicer will hold such collections in
trust for the benefit of the Certificateholders. Servicing
activities performed by the Sub-Servicers with respect to the
Receivables shall include collecting and recording payments,
communicating with Obligors, investigating payment delinquencies,
providing billing records to Obligors and maintaining internal
records. Managerial and custodial services performed by the Sub-
Servicers shall include providing assistance in any inspections
of the documents and records relating to the Receivables by the
Trustee to the extent provided in this Agreement, maintaining the
agreements, documents and files relating to the Receivables as
custodian and providing related data processing and reporting
services for Certificateholders and on behalf of the Trustee to
the extent provided in this Agreement. Without limiting the

26
<PAGE> 34
generality of the foregoing and subject to Article X, the Master
Servicer is hereby authorized and empowered (i) to instruct the
Trustee to make withdrawals and payments from the Collection
Account and Excess Funding Account and any other applicable
account established pursuant to this Agreement (including any
Supplement) as set forth in this Agreement (including any
Supplement), (ii) to execute and deliver, on behalf of the
Trustee for the benefit of the Certificateholders, any and all
instruments of satisfaction or cancellation, or of partial or
full release or discharge, and all other comparable instruments,
with respect to the Receivables and, after the delinquency of any
Receivable and to the extent permitted under and in compliance
with applicable law and regulations, to commence enforcement
proceedings with respect to such Receivable, and (iii) to make
any filings, reports, notices, applications, registrations with,
and to seek any consent or authorizations from, the Securities
and Exchange Commission and any state securities authority on
behalf of the Trust as may be necessary or advisable to comply
with any Federal or state securities or reporting requirements or
laws.

(b) The Master Servicer shall not, and no
Successor Master Servicer shall, be obligated to use separate
servicing procedures (except as may be specified herein), offices
or employees for servicing the Receivables from the procedures,
offices or employees used by the Master Servicer or such Succes-
sor Master Servicer, as the case may be, in connection with
servicing other receivables of the same type.

(c) The Master Servicer shall, on behalf of the
Transferor, the Trustee and the Investor Certificateholders,
enforce their respective rights and interest in and under the
Receivables and the related Contracts. If Eagle Industrial is
not the Master Servicer, Eagle Industrial shall promptly deliver
to the Master Servicer, and the Master Servicer shall hold in
trust for the Transferor, the Trustee and the Investor Certifi-
cateholders in accordance with their respective interests, all
books and records, files, documents, instruments and records
(including, without limitation, computer tapes or disks and
microfiche lists) that evidence or relate to Receivables.

(d) In the event that the Transferor is unable
for any reason to transfer Receivables to the Trustee in accor-
dance with the provisions of this Agreement (including, without
limitation, by reason of any court of competent jurisdiction
ordering that the Transferor not transfer any additional
Receivables to the Trustee) then, in any such event, (A) the
Master Servicer agrees to allocate and pay to the Trustee, after
the date of such inability, all Collections with respect to
Receivables transferred to the Trustee prior to the occurrence of

27
<PAGE> 35
such event; and (B) the Master Servicer agrees to have such
amounts applied as Collections in accordance with Section 4.3.

(e) Obligors shall be instructed by the Trans-
feror, the Master Servicer or a Designated Subsidiary to make all
payments on the Receivables to Lock-Box Accounts maintained by
Lock-Box Banks pursuant to Lock-Box Agreements or to Post Office
Boxes to which Lock-Box Banks have access. The Master Servicer
(and each Sub-Servicer) or, in the event that there is a succes-
sor Master Servicer, Eagle Industrial (and each Sub-Servicer),
shall have the power revocable by the Trustee to instruct each
Lock-Box Bank to make withdrawals from the Lock-Box Accounts and
Post Office Boxes in accordance with this Agreement. All Collec-
tions on Receivables of amounts due and owing will, pending
instructions by the Master Servicer for transfer to the Collec-
tion Account, be deposited in or held in the Lock-Box Account by
the Master Servicer or Sub-Servicer for the benefit of the
Trustee and shall be remitted to the Collection Account not later
than one Business Day after such deposits become available funds;
provided, however, that the Master Servicer shall not be consid-
ered in breach of the obligation set forth in this sentence to
the extent that a payment received by the Master Servicer is not
so deposited because such payment relates to a Disputed Item.

Section 3.2 Servicing Compensation. As compensation
for its servicing activities hereunder and reimbursement for its
expenses as set forth in the immediately following paragraph, the
Master Servicer shall be entitled to receive a servicing fee in
respect of each day prior to the Final Trust Termination Date
(the "Servicing Fee"), equal to the product of (i) one-twelfth,
(ii) the Servicing Fee Percentage and (iii) the average Unpaid
Balances determined by averaging the aggregate Unpaid Balances at
the end of each Business Day of the preceding Settlement Period.

The share of the Servicing Fee allocable to each Series
with respect to any date of payment shall be equal to the product
of (i) one-twelfth, (ii) the Servicing Fee Percentage and (iii)
the Invested Amount of such Series at the end of the last day of
the preceding Settlement Period, as appropriate, on each Business
Day of such measuring period as specified in the applicable
Supplement. The remainder of the Servicing Fee shall be paid by
the Transferor, or retained by the Master Servicer as provided in
Section 4.3(b), and in no event shall the Trust, the Trustee or
the Investor Certificateholders be liable for the share of the
Servicing Fee to be paid by the Transferor. Any Servicing Fees
shall be payable to the Master Servicer solely pursuant to the
terms of, and to the extent amounts are available for payment as
provided in, the Supplement relating to any Series. In the event
a Successor Master Servicer is appointed pursuant to Section 10.2
hereto, the Servicing Fee with respect to such Successor Master

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<PAGE> 36
Servicer shall, unless otherwise agreed, be at least .50% per
annum of the average Unpaid Balances determined by averaging the
aggregate Unpaid Balances on the first and last Business Days of
each Settlement Period; provided, however, that in no event shall
the Servicing Fee equal an amount that would exceed 110% of the
costs and expenses incurred by such Successor Master Servicer.

The Master Servicer's expenses include the amounts due
to the Trustee pursuant to Section 11.5, the reasonable fees and
disbursements of independent accountants, all other expenses
incurred by the Master Servicer in connection with its activities
hereunder, and all other fees and expenses of the Trust not
expressly stated herein to be for the account of the Certificate-
holders; provided that in no event shall the Master Servicer be
liable for any Federal, state or local tax, or any interest or
penalties with respect thereto, assessed on the Trust, the
Trustee or the Certificateholders except as expressly provided
herein. For so long as Eagle Industrial is the Master Servicer,
in the event that the Master Servicer fails to pay the amounts
due to the Trustee pursuant to Section 11.5, the Trustee shall be
entitled to deduct and receive such amounts from the Servicing
Fee, prior to the payment thereof to the Master Servicer. The
Master Servicer shall be required to pay expenses for its own
account and shall not be entitled to any payment or reimbursement
therefor other than the Servicing Fee.

Section 3.3 Representations, Warranties and Covenants
of the Master Servicer. Eagle Industrial, as initial Master
Servicer, and any Successor Master Servicer by its appointment
hereunder, hereby represent and warrant, in the case of the
initial Master Servicer, as of the Initial Closing Date and, with
respect to any Series as of the date of any Supplement and the
related Closing Date, and in the case of any Successor Master
Servicer, as of the date of its appointment and, with respect to
any Series issued after such date, as of the date of the related
Supplement and the related Closing Date, in each case unless
otherwise stated in such Supplement, and covenant until (i) the
Aggregate Invested Amount is reduced to zero, (ii) the Investor
Certificateholders shall have received all accrued interest on
the applicable Certificates, and (iii) all obligations of the
Transferor and the Master Servicer to the Investor Certificate-
holders under this Agreement shall have been finally and fully
paid and performed.

(a) Organization and Good Standing. The Master
Servicer is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation, and
has full power, authority and legal right to execute, deliver and
perform its obligations under this Agreement and any Supplement
and, in all material respects, to own its property and conduct

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<PAGE> 37
its business as such properties are presently owned and as such
business is presently conducted.

(b) Due Qualification. The Master Servicer is
duly qualified to do business and is in good standing as a
foreign corporation (or is exempt from such requirements), and
has obtained all necessary licenses and approvals in each juris-
diction in which the failure to obtain such license, approval or
qualification would have a material adverse affect upon the
Certificateholders or upon the ability of the Master Servicer to
perform its obligations under this Agreement.

(c) Due Authorization. The execution, delivery
and performance by the Master Servicer of this Agreement and any
Supplement, and the consummation by the Master Servicer of the
transactions provided in this Agreement and any Supplement, have
been duly authorized by all necessary corporate action on the
part of the Master Servicer.

(d) Binding Obligation. Each of this Agreement
and any Supplement constitute legal, valid and binding obligation
of the Master Servicer, enforceable against it in accordance with
its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other simi-
lar laws now or hereinafter in effect, relating to the enforce-
ment of creditors' rights in general and, with respect to any
Successor Master Servicer which is a national banking associa-
tion, the rights of creditors of national banks under Federal law
and except as such enforceability may be limited by general prin-
ciples of equity (whether considered in a proceeding at law or in
equity).

(e) No Violation. The execution and delivery of
this Agreement and any Supplement by the Master Servicer, and the
performance by the Master Servicer of the transactions contem-
plated by this Agreement and any Supplement and the fulfillment
by the Master Servicer of the terms hereof applicable to the
Master Servicer, will not conflict with, violate any provision
of, require any filing (except for certain filings required by
the UCC), registration, consent or approval under, any law, rule,
regulation, order, writ, judgment, injunction, decree, determina-
tion or award presently in effect having applicability to the
Master Servicer, or the Certificate of Incorporation or Bylaws of
the Master Servicer, except for such filings, registrations,
consents or approvals as have already been obtained and are in
full force and effect and except for such violations which would
not materially and adversely affect the performance by the Master
Servicer of such transactions and the fulfillment by the Master
Servicer of such terms (and except that the Master Servicer makes
no representation or warranty regarding state securities or "blue

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<PAGE> 38
sky" laws), or result in any breach of any of the material terms
and provisions of, or constitute (with or without notice or lapse
of time or both) a default under, any indenture, contract, agree-
ment, mortgage, deed of trust or other instrument to which the
Master Servicer is a party or by which it is bound.

(f) No Proceeding. There are no proceedings or
investigations pending or, to the best knowledge of the Master
Servicer, threatened against the Master Servicer before any
court, regulatory body, administrative agency or other tribunal
or governmental instrumentality (i) seeking to prevent the
issuance of the Certificates or the consummation of any of the
transactions contemplated by this Agreement or any Supplement,
(ii) seeking any determination or ruling that, in the reasonable
judgment of the Master Servicer, would materially and adversely
affect the performance by the Master Servicer of its obligations
under this Agreement or any Supplement, or (iii) seeking any
determination or ruling that would materially and adversely
affect the validity or enforceability of this Agreement or any
Supplement.

(g) Compliance with Requirements of Law. The
Master Servicer shall duly satisfy all obligations on its part to
be fulfilled under or in connection with the Receivables, will
maintain in effect all qualifications required under requirements
of law in order to service properly the Receivables and will
comply in all material respects with all requirements of law in
connection with servicing the Receivables, the failure to main-
tain or to comply with which would have a material adverse effect
on the holders of any Series of Investor Certificates.

(h) No Rescission or Cancellation. The Master
Servicer shall not permit any rescission or cancellation of a
Receivable or a Contract, except as ordered by a court of compe-
tent jurisdiction or other governmental authority and except in
the ordinary course of business and in accordance with the Credit
and Collection Policies of the Designated Subsidiaries.

(i) Protection of Certificateholders' Rights.
The Master Servicer shall take no action which, nor omit to take
any action the omission of which, would materially impair the
rights of Investor Certificateholders in any Receivable, except,
if no Event of Termination shall have occurred and be continuing,
to (a) extend the maturity of a Receivable to 60 days or more
from the Date of Processing or (b) adjust the Unpaid Balance of
any Receivable as it may deem appropriate to maximize Collections
thereof and to adjust the Unpaid Balance of any Receivable to
reflect Dilutive Credits, both in accordance with the applicable
Credit and Collection Policy; provided, however that Receivables

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<PAGE> 39
that are adjusted as provided in clauses (a) and (b) herein shall
be Defaulted Receivables.

(j) All Consents Required. All approvals,
authorizations, consents, orders or other actions of any Person
or of any Governmental Authority required in connection with the
execution and delivery by the Master Servicer of this Agreement
and any Supplement, the performance by the Master Servicer of the
transactions contemplated by this Agreement and any Supplement
and the fulfillment by the Master Servicer of the terms hereof
and thereof have been obtained, where the failure to obtain the
same would have a material adverse effect on the holders of any
Series of investor certificates; provided, however, that the
Master Servicer makes no representation or warranty regarding
state securities or "blue sky" laws.

(k) Extension or Amendment of Receivables; Change
in Credit and Collection Policy or Contracts. The Master
Servicer will not, without (in the case of clause (ii) below)
written confirmation from each Rating Agency that the rating on
any Series of Certificates will not be adversely affected, (i)
permit the Sub-Servicer or the Transferor to extend, amend or
otherwise modify the terms of any Receivable, (ii) permit the
Sub-Servicer or the Transferor to make any material changes in
the Credit and Collection Policy (including the Sub-Servicer's
written Credit and Collection Policy in effect as on the Initial
Closing Date) or (iii) amend, modify or waive, or permit the Sub-
Servicer or the Transferor to amend, modify or waive, any term or
condition of any Contract related to any Receivable, which exten-
sion, amendment, modification, waiver or change, in the case of
each of foregoing clauses (i) through (iii), would, individually
or in the aggregate (A) materially change the credit standing
required of the Obligors, (B) have a substantial likelihood of
having a material adverse effect on any Investor Certificate-
holders, or (C) cause a Receivable that would otherwise not be an
Eligible Receivable to continue to be or to become an Eligible
Receivable. The Master Servicer shall give the Rating Agencies
notice of any request that it makes for consent under this
Section 3.3(k) at the time such request is made.

(l) No Change in Ability to Service. With
respect to the initial Master Servicer only, since the Initial
Closing Date, there has been no material adverse change in the
ability of the Master Servicer to service and collect the
Receivables.

(m) Lock-Box Banks. The Master Servicer and any
successor Master Servicer shall direct each Lock-Box Bank to make
payments to the Collection Account.

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<PAGE> 40

(n) Keeping of Records and Books of Account. The
Master Servicer shall maintain or cause Sub-Servicers to maintain
and implement administrative and operating procedures (including,
without limitation, the ability to create records evidencing the
Receivables in the event of the destruction of the originals
thereof), and keep and maintain all documents, books, microfiche,
computer records and other information reasonably necessary or
advisable for the collection of all the Receivables. Such
documents, books and records, microfiche lists, computer files,
tapes or disks shall reflect all payments and credits with
respect to the Receivables and the computer records shall be
clearly marked to show the interests of the Trustee in the
Receivables.

(o) Performance and Compliance with Eagle
Industrial's Contracts. The Master Servicer shall or, if Eagle
Industrial is no longer the Master Servicer, Eagle Industrial
shall timely and fully perform and comply with all material pro-
visions, covenants and other promises required to be observed by
it under the Contracts related to the Receivables.

(p) No Master Servicer Default. No Master
Servicer Default has occurred and is continuing.

(q) No Event of Termination. No Event of
Termination has occurred and is continuing.

(r) Maintenance of Privileges. The Master
Servicer shall maintain all of its rights, powers and privileges
material to the collectibility of the Receivables.

(s) Accuracy of Information. All written
information furnished on and after the Initial Closing Date by
the Master Servicer to the Transferor or the Trustee pursuant to
or in connection with any Transaction Document or any transaction
contemplated herein or therein shall not contain any untrue
statement of a material fact or omit to state material facts
necessary to make the statements made not misleading, in each
case in light of the circumstances under which such statements
were made or such information was furnished.

Section 3.4 Reports and Records for the Trustee; Bank
Account Statements.

(a) Daily Records. Upon reasonable prior notice
by the Trustee, the Master Servicer shall make available at an
office of the Master Servicer or Sub-Servicer, selected by the
Master Servicer for inspection by the Trustee or its agent on a
Business Day during the Master Servicer's normal business hours a
record setting forth (i) the Collections on each Receivable and

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<PAGE> 41
(ii) the Unpaid Balance of Receivables for the Business Day
preceding the date of the inspection. The Master Servicer or
Sub-Servicer shall, at all times, maintain its computer files
with respect to the Receivables in such a manner so that the
Receivables will be specifically identified and, upon reasonable
prior request of the Trustee, shall make available to the
Trustee, at an office of the Master Servicer or Sub-Servicer
selected by the Master Servicer, on any Business Day during the
Master Servicer's or Sub-Servicer's normal business hours any
computer programs necessary to make such identification.

(b) Daily Report.

(i) On each Business Day, the Master
Servicer shall prepare, or, if Eagle Industrial is not the
Master Servicer, Eagle Industrial and the Successor Master
Servicer shall prepare, a completed Daily Report substan-
tially in the form attached hereto as Exhibit B.

(ii) The Master Servicer (or if Eagle
Industrial is not the Master Servicer, Eagle Industrial and
the Successor Master Servicer) shall deliver to the Trustee
the Daily Report by 2:00 p.m. on each Business Day with
respect to activity in the Receivables for the prior
Business Day (or, in the case of a Daily Report delivered on
the second Business Day following a Saturday, Sunday or
other non-Business Day, the aggregate activity for the
preceding Business Day and such non-Business Days).

(iii) Upon discovery of any error or receipt
of notice of any error in any Daily Report, the Master
Servicer, Eagle Industrial (if not the Master Servicer), the
Transferor and the Trustee shall arrange to confer and shall
agree upon any adjustments necessary to correct any such
errors. Until correction of such error, the Master Servicer
shall deposit and the Trustee shall retain all Collections
(or such lesser amount as the Trustee and the Master
Servicer shall agree to be necessary to cover any error) in
the Collection Account. Unless the Trustee has actual
knowledge or has received written notice of any discrepancy,
the Trustee may rely on each Daily Report delivered to it
for all purposes hereunder.

(c) Determination Date Statement. By each Deter-
mination Date, the Master Servicer shall, or if Eagle Industrial
is not the Master Servicer, the Successor Master Servicer shall
with information provided by Eagle Industrial, perform the calcu-
lations to be made on such Determination Date and reported on the
related Determination Date Statement and, prior to 2:00 p.m. on
the Determination Date, deliver to the Trustee, the Rating Agen-

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<PAGE> 42
cies and, Eagle Industrial and each Investor Certificateholder
(if prepared by a Successor Master Servicer), the Determination
Date Statement substantially in the form attached hereto as
Exhibit E for the related Settlement Period in accordance with
the provisions of Section 5.2(a).

(d) Principal Payment Statement. With respect to
each Settlement Period during the Amortization Period, within
five Business Days after the end of the immediately preceding
Settlement Period, a certificate stating the amount of principal
payable on the next Payment Date (the "Principal Payment
Statement") shall be delivered to the Trustee.

Section 3.5 [Reserved]

Section 3.6 Annual Independent Public Accountants'
Servicing Report.

(a) On or before August 1, 1994, with respect to
any two months during the five month period ended June 30, 1994,
and on or before June 30 of each calendar year beginning with
June 30, 1995, the Master Servicer shall cause a firm of
nationally recognized independent public accountants to furnish a
report, substantially in the form attached hereto as Exhibit C
for each of such months or for the preceding fiscal year of the
Master Servicer, as applicable, addressed to the Board of
Directors of the Transferor, to the Transferor, the Trustee and
each Rating Agency, to the effect that such accountants have
applied certain procedures and examined certain documents and
records relating to the servicing of Receivables under this
Agreement, and that, based upon such procedures, nothing has come
to the attention of such accountants that caused them to believe
that the servicing has not been conducted in compliance with the
terms and conditions set forth in Sections 4.3, 4.4, 4.5 and 4.7
of this Agreement and in compliance with any Supplement, except
for such exceptions as they believe to be immaterial and such
other exceptions as shall be set forth in such report. A copy of
such report may be obtained by any investor certificateholder by
a request in writing to the Trustee addressed to the Corporate
Trust Office.

(b) On or before August 1, 1994, with respect to
any two months during the five month period ended June 30, 1994,
and on or before June 30 of each calendar year beginning with
June 30, 1995, the Master Servicer shall cause a firm of
nationally recognized independent public accountants to furnish a
report, substantially in the form attached hereto as Exhibit C
for each of such months or for the preceding fiscal year of the
Master Servicer, as applicable, to the Trustee to the effect that
such accountants have compared the mathematical calculations of

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<PAGE> 43
each amount set forth in a sampling of the Determination Date
Statements forwarded by the Master Servicer pursuant to Section
3.4(c) during the period covered by such report (which shall be
the period covered by the report delivered pursuant to Section
3.6(a) above) with the Master Servicer's computer reports which
were the source of such amounts and that on the basis of such
comparison, such accountants have found that such amounts are in
agreement, except for such exceptions as they believe to be
immaterial and such other exceptions as shall be set forth in
such statement. The Master Servicer shall promptly forward a
copy of such report to each Rating Agency. A copy of such report
may be obtained by any Certificateholder by a request in writing
to the Trustee addressed to the Corporate Trust Office.

(c) As soon as practicable and in any event
within 105 days after the close of each of its fiscal years,
beginning with the fiscal year ending December 31, 1994, the
Master Servicer shall deliver to the Trustee its annual audited
financial statements (including balance sheets as of the end of
such period, related revenue and expense statements, and a
statement of cash flows) and an annual audit of the balance sheet
of the Trust Assets both certified by a firm of nationally
recognized independent public accountants and prepared in
accordance with GAAP.

Section 3.7 [Reserved]

Section 3.8 Notices to the Transferor. The Master
Servicer shall deliver or make available to the Transferor each
certificate and report required to be prepared, forwarded or
delivered pursuant to Sections 3.4, 3.5 and 3.6.

Section 3.9 Securities and Exchange Commission Filing.
The Master Servicer shall deliver to the Trustee and the Rating
Agencies copies of each report of the Master Servicer filed with
the Securities and Exchange Commission on forms 10-K and 10-Q
promptly after any such filing has been made.

[END OF ARTICLE III]

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ARTICLE IV

RIGHTS OF CERTIFICATEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS

Section 4.1 Rights of Certificateholders. Each Series
shall represent an Undivided Interest in the Trust Assets, and
the right to receive Collections and other amounts at the times
and in the amounts specified in this Article IV to be deposited
in the Collection Account or paid to or on behalf of the Investor
Certificateholders (the "Investor Interest"). The Transferor
Certificate shall represent the remaining interest in the Trust
Assets, including the right to receive Collections and other
amounts at the times and in the amounts specified in this Article
IV to be paid to or on behalf of the Holder of the Transferor
Certificate (the "Transferor Interest"); provided, however, that
such certificate shall not represent any interest in the Collec-
tion Account (except to the extent provided in this Agreement and
any applicable Supplement) and neither the Transferor nor the
Master Servicer shall have the right to withdraw funds from the
Collection Account or to receive funds on deposit therein except
as and when provided by this Agreement, including any Supplement.

Section 4.2 Establishment of Collection Account and
Excess Funding Account.

(a) The Collection Account. The Trustee, for the
benefit of the Investor Certificateholders of each Series and the
holder of the Transferor Certificate, shall establish or shall
cause to be established and maintained, in the name of the
Trustee, on behalf of the Trust, a fully segregated trust account
(which may include one or more subaccounts) with an Eligible
Institution (the "Collection Account"). The Collection Account
shall bear a designation clearly indicating that the funds depos-
ited therein are held for the benefit of the Certificateholders.
An "Eligible Institution" means a depositary institution, which
may include the Trustee or any of its affiliates, organized under
the laws of the United States or any one of the States thereof
including the District of Columbia (or any domestic branches of
foreign banks), which either (i) at all times has a long-term
unsecured debt rating of at least "AAA" or its equivalent by the
applicable Rating Agency and which is a member of the Federal
Deposit Insurance Corporation (the "FDIC") or (ii) maintains the
applicable account as a fully segregated trust account with the
trust department of such institution and is rated the equivalent
of "BBB-" or "A-3" or higher by the applicable Rating Agency.
Except as provided in this Agreement, the Collection Account
shall be under the sole dominion and control of the Trustee for
the benefit of the Investor Certificateholders of each Series and
the holder of the Transferor Certificate. If, at any time, the

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<PAGE> 45
institution holding the Collection Account ceases to be an
Eligible Institution, the Trustee shall within 30 days of a
responsible officer of the Trustee's learning of such event,
establish a new Collection Account meeting the conditions spe-
cified above with an Eligible Institution, transfer any cash
and/or any investments to such new Collection Account and from
the date such new Collection Account is established, it shall be
the "Collection Account". Funds on deposit in the Collection
Account (other than certain amount specified by the Agreement)
shall at the direction of the Master Servicer as agent for the
Transferor be invested by the Trustee solely in Permitted Invest-
ments that will mature so that such funds will be available prior
to the Payment Date following such investment, provided, that
once invested, no amounts may be released pursuant to the provi-
sions of such applicable Supplement or otherwise until such
Permitted Investments mature. "Permitted Investments" mean (a)
negotiable instruments or securities represented by instruments
in bearer or registered form which evidence (1) obligations fully
guaranteed as to timely payment by the United States of America;
(2) certificates of deposits of, or bankers' acceptances (having
original maturities of no more than 180 days) issued by, any
depositary institution or trust company, subject to supervision
or examination by Federal or state banking or depositary institu-
tion authorities; provided, however, that at the time of the
Trust's investment or contractual commitment to invest therein,
such depositary institution or trust company shall have a credit
rating with respect to commercial paper of at least "A-1+" by S&P
or "Duff-1+" by D&P and in the highest available rating category
applicable to commercial paper if rated by any other applicable
Rating Agency, and a rating of not lower than "AAA" or its equi-
valent by the applicable Rating Agency, in the case of long-term
unsecured debt obligations, or such deposits are fully insured by
the FDIC; (3) commercial paper (having original maturities of not
more than 180 days) having, at the time of the Trust's investment
or contractual commitment to invest therein, a rating of at least
"A-1+" by S&P or "Duff-1+" by D&P and in the highest available
rating category applicable to money market funds if rated by any
other applicable Rating Agency; (4) investments in money market
funds having a rating of at least "AAAm" by S&P and in the high-
est available rating category applicable to money market funds if
rated by any other applicable Rating Agency; (5) any "institution
funds" or "bank funds" that are comprised of assets listed in
clauses (1) - (4) above; and (6) any other investment, if the
Rating Agencies confirm in writing that such investment will not
adversely affect any ratings with respect to any Series of inves-
tor certificates, and which shall be acceptable to the Trustee
and (b) demand deposits or time deposits in the name of the Trust
or the Trustee in any depositary institution or trust company
referred to in (a)(2) above. All interest and earnings (net of
losses and investment expenses) on funds on deposit in the

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<PAGE> 46
Collection Account shall be paid by the Trustee to the Transferor
on each Payment Date. Neither the Transferor nor the Master
Servicer, nor any Person claiming by, through or under the
Transferor or Master Servicer, shall have any right, title or
interest in, or any right to withdraw any amount from, the
Collection Account except to the extent provided in this Agree-
ment. Pursuant to the authority granted to the Master Servicer
pursuant to Section 3.1(a), the Master Servicer shall have the
power to instruct the Trustee to make withdrawals and payments
from the Collection Account for the purposes of carrying out the
Master Servicer's duties hereunder.

(b) The Excess Funding Account. The Trustee, for
the benefit of the holders of each Series of Investor Certifi-
cates and the Transferor Certificate, shall establish or shall
cause to be established and maintained with the same Eligible
Institution maintaining the Collection Account in accordance with
subparagraph (a), in the name of the Trustee, on behalf of the
Certificateholders, a fully segregated trust account with the
trust department of such institution (the "Excess Funding
Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the holders
of each Series of Investor Certificates and the Transferor Cer-
tificate. Except as provided in this Agreement, the Excess
Funding Account shall be under the sole dominion and control of
the Trustee for the benefit of the Investor Certificateholders of
each Series, and the Transferor. If, at any time, the institu-
tion holding the Excess Funding Account ceases to be an Eligible
Institution, the Trustee shall, concurrently with the establish-
ment of a new Collection Account in accordance with subparagraph
(a), establish a new Excess Funding Account meeting the condi-
tions specified above with the same Eligible Institution, trans-
fer any cash and/or any investments to such new Excess Funding
Account and from the date such new Excess Funding Account is
established, it shall be the "Excess Funding Account". All
interests and earnings (net of losses and investment expenses) on
funds on deposit in the Excess Funding Account shall constitute
Trust Assets and shall be included in determining the amount of
the Trust Principal Component. Pursuant to the authority granted
to the Master Servicer pursuant to the Agreement, the Master
Servicer shall have the revocable power to instruct the Trustee
to make withdrawals and payments from the Excess Funding Account
for the purposes of carrying out the Master Servicer's duties
thereunder. Neither the Transferor nor the Master Servicer, nor
any Person claiming by, through or under the Transferor or the
Master Servicer, shall have any right, title or interest in, or
any right to withdraw any amount from, the Excess Funding Account
except to the extent provided in this Agreement. Pursuant to the
authority granted to the Master Servicer pursuant to Section
3.1(a), the Master Servicer shall have the power to instruct the

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<PAGE> 47
Trustee to make withdrawals and payments from the Excess Funding
Account for the purposes of carrying out the Master Servicer's
duties hereunder. The amount to be deposited in the Excess
Funding Account on any day shall equal the Excess Funding Account
Deposit Amount. All amounts from time to time held in the Excess
Funding Account (including any investment earnings) shall consti-
tute Trust Assets and shall be included in determining the Trust
Principal Component. In the event that a Series has entered into
its Amortization Period, a pro rata amount of the balance on
deposit in the Excess Funding Account, based on its Invested
Percentage of such Series on the Amortization Period Commencement
Date relating to such Series, shall be deposited in the Collec-
tion Account to be distributed as Principal Collections in
respect of such Series.

(c) Administration of the Collection Account and
the Excess Funding Account. Funds on deposit in the Collection
Account (other than investment earnings and amounts deposited
pursuant to Section 9.3 or Article XII) shall at the direction of
the Master Servicer, as agent for the Transferor, be invested by
the Trustee in Permitted Investments that will mature so that
such funds will be available prior to the Payment Date following
such investment. Principal Collections on any Business Day
allocable to the Investor Certificates and the Transferor will be
deposited in the Excess Funding Account to the extent that the
Transferor Amount is less than the Minimum Transferor Amount on
the preceding Business Day. Funds on deposit in the Excess
Funding Account shall at the direction of the Master Servicer, as
agent for the Transferor, be invested by the Trustee solely in
Permitted Investments that will mature so that such funds will be
available prior to the date on which the Transferor is expected
to be entitled to the release of such amounts by which the Trans-
feror Amount exceeds the Minimum Transferor Amount, in accordance
with the provisions of the applicable Supplement; provided, that
once invested, no amounts may be released pursuant to the provi-
sions of such applicable Supplement or otherwise until such Per-
mitted Investments mature. Subject to the proviso contained in
the immediately preceding sentence, on any day on which the
amount on deposit in the Excess Funding Account exceeds the
Excess Funding Account Deposit Amount, such excess shall be
returned to the Transferor. Any funds on deposit in the Collec-
tion Account or the Excess Funding Account to be so invested
shall be invested solely in Permitted Investments. Funds on
deposit in the Collection Account or the Excess Funding Account
shall be invested pursuant to the written instructions of the
Master Servicer, which instructions shall certify that the funds
requested to be invested may be so invested pursuant to the terms
of this Agreement, and that the requested investment is a Permit-
ted Investment which matures at or prior to the time required
hereby. If not otherwise directed by the Master Servicer, the

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<PAGE> 48
Trustee shall invest funds on deposit in the Collection Account
or the Excess Funding Account in a money market fund sponsored by
the Trustee that qualifies as a Permitted Investment. The
Trustee shall not be liable, except in the case of any negligence
of the Trustee, by reason of any insufficiency in the Collection
Account or the Excess Funding Account resulting from any loss on
any investment made in accordance with this Section 4.2. The
Trustee shall maintain possession of the negotiable instruments
or securities, if any, evidencing the Permitted Investments
described in clause (a) of the definition thereof from the time
of purchase thereof until maturity. All interest and earnings
(net of losses and investment expenses) on funds on deposit in
the Collection Account shall be paid by the Trustee to the Trans-
feror on each Payment Date. Neither the Transferor nor the
Master Servicer shall deposit any of their funds in the Collec-
tion Account or the Excess Funding Account at any time except for
funds unconditionally required to be paid on account of the
purchase price of Certificates or amounts otherwise deposited
therein for the purpose of increasing the Transferor Amount;
provided, however, that the Transferor shall be permitted to
transfer funds to the Trust to repay any Series to the extent
permitted by the terms of the related Supplement, including under
Section 12.2, in connection with which the applicable Invested
Amount shall be reduced and the Transferor Amount shall be
increased accordingly.

(d) Identification of Collection Account and
Excess Funding Account. Schedule 1, which is hereby incorporated
into and made part of this Agreement, identifies the Collection
Account and the Excess Funding Account by setting forth the
account number of each such account, the account designation of
each such account and the name and location of the institution
with which each such account has been established.

Section 4.3 Collections and Allocations.

(a) Collections. The Master Servicer will allo-
cate, pay or deposit all Collections with respect to the Receiva-
bles (all of which Collections, subject to Section 4.9, shall be
deemed to relate to, and to be received with respect to, Adjusted
Eligible Receivables) for each Business Day as described in this
Article IV. The Master Servicer shall allocate and, as indicated
in Section 4.3(b), deposit such Collections into the Collection
Account (or in certain circumstances specified in Section 4.3(b)
transfer Collections to the Transferor), as indicated in Section
4.3(b).

(b) Payments and Allocations. On each Business
Day, the Master Servicer shall allocate the aggregate amount of
Collections processed on such Business Day (x) to the extent of

41
<PAGE> 49
the product of the total amount of such Collections and the
Discount Factor on such Business Day to Collections of Imputed
Yield (the "Imputed Yield Collections") and (y) to the extent of
the total amount of such Collections minus the amount described
in clause (x) above to Collections of principal (the "Principal
Collections"). On each Business Day, the Master Servicer shall
determine with respect to each Series whether an Amortization
Period has commenced on or prior to such Business Day, and based
upon such determination, shall determine the amounts or percent-
ages of the Imputed Yield Collections and Principal Collections
to be deposited into the Collection Account on such Business Day
and shall allocate such Imputed Yield Collections and Principal
Collections to or among each Series and the Transferor, in each
case as provided in the applicable Supplement and herein;
provided, however, that all Collections allocated to the Trans-
feror during the Revolving Period shall not be deposited into the
Collection Account but shall instead shall be paid directly to
the Transferor or as otherwise provided in the applicable
Supplement.

For the Transferor Certificate throughout the existence
of the Trust, the Master Servicer shall allocate, and pay to the
Transferor an amount equal to the product of the Transferor Per-
centage on such Business Day and the aggregate amount of Imputed
Yield Collections and Principal Collections for such Business
Day; provided, however except as otherwise provided in Section
4.9: (i) in the event that Eagle Industrial becomes unable to
sell Receivables to the Transferor or the Transferor becomes
unable to transfer Receivables to the Trustee, then so long as
such inability exists all Principal Collections allocated to the
Transferor shall be deposited by the Master Servicer into the
Collection Account and paid to the Transferor on each Payment
Date; provided, further, that if as of the beginning of the
preceding Business Day, the Transferor Amount was less than the
Minimum Transferor Amount, such Principal Collections shall be
deposited in the Excess Funding Account up to an amount equal to
such deficiency; and (ii) the Master Servicer shall retain from
such amounts on each Business Day an amount equal to the portion
of the Servicing Fee accrued to such Business Day and not
previously paid to or retained by the Master Servicer.

The Master Servicer shall allocate as Principal Collec-
tions and the Trustee, acting in accordance with instructions
from the Master Servicer pursuant to the terms of this Agreement,
shall immediately pay, or cause to be paid, as Principal Collec-
tions to the Transferor (or, if a Supplement so provides, to the
Collection Account, or any other account maintained pursuant to
the terms of such Supplement), amounts held in the Excess Funding
Account to the extent the Transferor Amount exceeds the Minimum
Transferor Amount.

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<PAGE> 50

Section 4.4 Payments of Interest to Investor
Certificateholders. Payments of interest to Investor Certifi-
cateholders shall be made in the manner set forth in the related
Supplement.

Section 4.5 Payments of Principal to Investor
Certificateholders. Payments of Principal Collections with
respect to any Series shall be made in the manner set forth in
the related Supplement.

Section 4.6 [Reserved]

Section 4.7 Defaulted Receivables. On each day speci-
fied in the Supplement related to any Series, the Master Servicer
shall calculate the Investor Default Amount and Investor Charge-
Offs with respect to the related Series, and the Invested Amount
of such Series shall be reduced by the applicable Investor
Charge-Offs.

Section 4.8 Partial Optional Redemption or Sales to
Non-Affiliates. (a) Within ninety days after the date upon
which any Designated Subsidiary has sold all or substantially all
its assets, or Eagle Industrial has sold all of the stock held by
it in any Designated Subsidiary or a portion of such stock which
would cause such Designated Subsidiary to not be a Designated
Subsidiary thereafter, the Transferor, at the direction of the
Master Servicer, may cause the Trustee to partially redeem the
Series 1994-1 Certificates, on a pro rata basis, and to pay to
the holders of such Certificates a percentage of the Invested
Amount which will be no greater than the percentage of the aggre-
gate Unpaid Balance of Adjusted Eligible Receivables existing in
the Trust that were originated by such Designated Subsidiary as
of the last day of the Settlement Period immediately preceding
the date of such redemption; provided, however, that no such re-
demption shall be permitted unless immediately after such redemp-
tion the Transferor is not in default under any terms of the
Agreement and no Event of Termination shall occur because of such
redemption.

(b) Concurrently with the sale by an Designated
Subsidiary of all or substantially all its assets or a sale by
Eagle Industrial of all of the stock held by it in any Designated
Subsidiary or a portion of such stock which would cause such
Designated Subsidiary to not be a Designated Subsidiary there-
after, the Trustee may sell all or a portion of the Receivables
originated by such Designated Subsidiary and included in Trust
Assets at such time to the purchaser of such assets or stock for
cash in an amount not less than the purchase price which would be
paid to Eagle Industrial by the Transferor if such Receivables
were sold by Eagle Industrial to the Transferor pursuant to the

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<PAGE> 51
Contribution and Sale Agreement at such time; provided, however,
that no such purchaser shall be an Affiliate of such Designated
Subsidiary. The Trustee shall treat all proceeds of such sale of
Receivables as Collections. The Master Servicer, the Transferor
and each Certificateholder by acceptance of any Certificate
hereby consent to and approve any sale of Receivables by the
Trustee in accordance with the previous sentence and agree that
any such sale (or refusal to sell) shall in no event constitute a
breach of the Trustee's duties hereunder or under any applicable
law.

Section 4.9 Misdirected Payments. In the event that
the Master Servicer notifies the Trustee in writing that the
Trustee or any Lock-Box Account, the Collection Account, the
Excess Funding Account or any other account maintained for the
benefit of Certificateholders has received amounts in respect of
payments made by any Person on an account receivable or other
obligation which has not been transferred to the Trust; and with
respect to amounts in excess of $50,000 an explanation of the
circumstances leading to such deposit, the Trustee shall, as soon
as practicable and as instructed in the most recently delivered
Daily Report or Determination Date Statement, forward such
amounts, in the manner specified in writing by Eagle Industrial,
to Eagle Industrial or such other Person as Eagle Industrial
designates and, pending the forwarding of such amounts, hold such
amounts in trust for Eagle Industrial or such other Person
designated by Eagle Industrial. The Trustee will, if requested
in writing by Eagle Industrial, acknowledge and confirm the
foregoing to any Person designated by Eagle Industrial. In the
absence of such instructions, all such payments shall be deemed
to relate to, and be received with respect to, Receivables. Upon
each outstanding Series having entered into its respective
Amortization Period, Receivables shall no longer be transferred
by the Designated Subsidiaries to Eagle Industrial, by Eagle
Industrial to the Transferor or the Transferor to the Trustee,
and any Collections received on any Receivables originated during
the continuance of such Event of Termination, (i) shall not
belong to the Trustee or any Investor Certificateholder, (ii) if
received by the Trustee or any account which it controls shall be
held in trust for the Originator or other party entitled thereto,
and (iii) shall be paid to the Originator or other party entitled
thereto as soon as is practicable.

[END OF ARTICLE IV]

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<PAGE> 52
ARTICLE V

DISTRIBUTIONS AND REPORTS TO
CERTIFICATEHOLDERS

Section 5.1 Distributions. On each Payment Date, the
Paying Agent shall distribute (in accordance with the Determina-
tion Date Statement delivered by the Master Servicer to the
Trustee on the preceding Determination Date pursuant to Section
3.4(c)) to each Investor Certificateholder of record of any
Series on the preceding Record Date (other than as provided in
Section 12.3(b) hereof respectying a final distribution) such
Certificateholder's pro rata share (based on the aggregate
Undivided Interests represented by Investor Certificates of such
Series held by such Certificateholder) of amounts on deposit in
the Collection Account as are payable to the Investor Certifi-
cateholders of such Series pursuant to Sections 4.4 and 4.5.
Such distribution shall be made by check mailed to each Certifi-
cateholder or, if so stated in any Supplement, by wire transfer
to each Certificateholder so qualified as stated therein, except
that if all Investor Certificates are registered in the name of
CEDE & Co., the nominee registrar for The Depository Trust
Company, such distribution to Investor Certificateholders shall
be made in immediately available funds to The Depository Trust
Company. All payments on account of principal and interest to
Certificateholders shall be made from amounts on deposit in the
Collection Account.

Section 5.2 Monthly Investor Certificateholders'
Statement; Annual Tax Statement.

(a) Not later than one Business Day after each
Payment Date, the Trustee shall deliver to each Investor
Certificateholder a copy of the Determination Date Statement and
Principal Payment Statement delivered by the Master Servicer to
the Trustee pursuant to Section 3.4(c) and (d).

(b) Annual Certificateholders' Tax Statement. On
or before the date required by law, beginning with calendar year
1995, the Paying Agent, on behalf of the Trustee and the Trans-
feror shall furnish or cause to be furnished to each Person who
at any time during the preceding calendar year was a Certifi-
cateholder, a statement prepared by the Master Servicer contain-
ing the information contained in each Determination Date
Statement, aggregated for such calendar year, together with such
other information as is required to be provided by an issuer of
indebtedness under the Code for such calendar year, together with
such other customary information as the Master Servicer deems
necessary or desirable to enable the Certificateholders to pre-
pare their tax returns. Such obligation of the Paying Agent

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<PAGE> 53
shall be deemed to have been satisfied to the extent that sub-
stantially comparable information shall be provided by the Paying
Agent pursuant to this Agreement or to any requirements of the
Code as from time to time in effect.

[END OF ARTICLE V]

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<PAGE> 54
ARTICLE VI

THE CERTIFICATES

Section 6.1 The Certificates. The Investor Certifi-
cates of each Series shall be substantially in the form of the
exhibits with respect thereto attached to the related Supplement.
The Transferor Certificate shall be substantially in the form of
Exhibit A hereto. The Transferor Certificate and any Investor
Certificates shall, upon issuance pursuant to this Article VI be
executed and delivered by the Transferor to the Trustee for
authentication and redelivery as provided in Section 6.2. Inves-
tor Certificates shall be issued in the minimum denominations
indicated in the related Supplement. The Transferor Certificate
shall initially be issued to the Transferor. Each Certificate
shall be executed by manual or facsimile signature on behalf of
the Transferor by any of its Chairman of the Board, its Vice
Chairman of the Board, its President or any Vice President.
Certificates bearing the manual or facsimile signature of the
individual who was, at the time when such signature was affixed,
authorized to sign on behalf of the Transferor or the Trustee
shall not be rendered invalid, notwithstanding that such indivi-
dual has ceased to be so authorized prior to the authentication
and delivery of such Certificates or does not hold such office at
the date of such Certificates. No Certificate shall be entitled
to any benefit under this Agreement or any applicable Supplement,
or be valid for any purpose, unless there appears on such Certif-
icate a certificate of authentication substantially in the form
provided for in a form of Certificate attached as an exhibit to
the applicable Supplement or in the form provided for in Section
6.8 executed by or on behalf of the Trustee by the manual or
facsimile signature of a duly authorized signatory, and such
certificate upon any Certificate shall be conclusive evidence,
and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be
dated the date of their authentication.

Section 6.2 Authentication of Certificates.
Contemporaneously with the assignment and transfer of the
Receivables to the Trustee on a Closing Date, the Trustee shall
authenticate and deliver the Transferor Certificate to the
Transferor and, upon the execution of any Supplement and the
satisfaction of the conditions provided in Section 6.9, shall
authenticate and deliver the Series of Investor Certificates to
be issued thereunder as provided in Section 6.9. The Certifi-
cates of each Series shall be duly authenticated by or on behalf
of the Trustee as provided for herein and in the applicable
Supplement, in authorized denominations equal to (in the aggre-
gate) the Initial Invested Amount of such Series specified in
such Supplement. As provided in any Supplement, Investor

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<PAGE> 55
Certificates of any Series may be issued and sold pursuant to an
effective registration statement under the Securities Act, or
pursuant to an exemption therefrom. In such former case, such
Series of Certificates may be delivered in book-entry form as
provided in Sections 6.11 and 6.12 and, in the latter case, may
not be so delivered. Further, if any such Series is sold pursu-
ant to an exemption from registration under the Securities Act
pursuant to Section 4(2) of the Securities Act or its substantial
equivalent (the "Private Placement Exemption") as stated in the
applicable Supplement, the Certificates of such Series may only
be transferred as provided in Section 6.3(e).

Section 6.3 Registration of Transfer and Exchange of
Certificates.

(a) The Trustee shall cause to be kept at the
office or agency to be maintained by a transfer agent and regis-
trar (which may be the Trustee) (the "Transfer Agent and
Registrar") in accordance with the provisions of subsection
6.3(d) a register (the "Certificate Register") in which, subject
to such regulations as it may reasonably prescribe, the Transfer
Agent and Registrar shall provide for the registration of each
Series of the Investor Certificates and the Transferor Certifi-
cate and of transfers and exchanges of such Certificates as
herein provided. The Trustee is hereby initially appointed
Transfer Agent and Registrar for the purpose of registering each
Series of Investor Certificates and the Transferor Certificate
and of registering transfers and exchanges of the Investor
Certificates and the Transferor Certificate as herein provided.
The Trustee shall be permitted to resign as Transfer Agent and
Registrar upon 30 days' written notice to the Transferor and the
Master Servicer; provided, however, that such resignation shall
not be effective and the Trustee shall continue to perform its
duties as Transfer Agent and Registrar until the Master Servicer
has appointed a successor Transfer Agent and Registrar acceptable
to the Transferor. The Trustee shall initially register the
Transferor Certificate in the name of the Transferor.

Upon surrender for registration of transfer of any
Investor Certificate of a Series at any office or agency of the
Transfer Agent and Registrar maintained for such purpose, the
Transferor shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees,
one or more new Investor Certificates of such Series in author-
ized denominations of like aggregate Undivided Interests;
provided, however, that any Investor Certificate of any Series
transferred pursuant to the Private Placement Exemption shall
satisfy the conditions provided in Section 6.3(e) prior to
registration of such transfer.

<PAGE> 56

At the option of an Investor Certificateholder,
Investor Certificates of a Series may be exchanged for other
Investor Certificates of such Series of authorized denominations
of like aggregate Undivided Interests, upon surrender of the
Investor Certificates to be exchanged at any office or agency of
the Transfer Agent and Registrar maintained for such purpose.
Whenever any Investor Certificates are so surrendered for ex-
change, the Transferor shall execute, and the Trustee shall
authenticate and deliver, the Investor Certificates which the
Investor Certificateholder making the exchange is entitled to
receive. Every Investor Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a
written instrument of transfer in a form satisfactory to the
Trustee and the Transfer Agent and Registrar duly executed by the
Certificateholder thereof or his attorney duly authorized in
writing.

No service charge shall be made for any registration of
transfer or exchange of Investor Certificates, but the Transfer
Agent and Registrar may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Investor Certifi-
cates.

All Investor Certificates surrendered for registration
of transfer or exchange shall be cancelled by the Transfer Agent
and Registrar and disposed of in a manner satisfactory to the
Trustee.

It is intended that the registration of Certificates
which is described in this Section 6.3(a) comply with the regis-
tration requirements contained in Section 163 of the Code.

(b) Except as provided in Sections 6.9 and 7.2
hereof, neither the Transferor Certificate nor any interest
represented thereby shall be sold, transferred, assigned,
exchanged, participated, pledged or otherwise conveyed unless (A)
such sale, transfer, assignment, exchange, participation, pledge
or conveyance would not reduce the Transferor Amount below the
Minimum Transferor Amount, (B) the Trustee shall have received
(i) an Opinion of Counsel addressed to the Trustee to the effect
that such sale, transfer, assignment, exchange, participation,
pledge or conveyance will not adversely affect the status of any
Series of Investor Certificates as debt for Federal and applica-
ble state income tax purposes, (ii) the written consent of
Investor Certificateholders having Undivided Interests aggregat-
ing more than 50% of the Aggregate Invested Amount and (iii) an
agreement by the buyer, transferee, assignee, counterparty to
exchange, participant, pledgee or recipient of conveyance that,
prior to the date which is one year and one day after the payment

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<PAGE> 57
in full of all Invested Amounts, it will not institute against or
join any other Person in instituting against the Transferor any
bankruptcy, reorganization, arrangement, insolvency or liquida-
tion proceedings or other similar proceeding under the laws of
the United States or any state of the United States and (C) the
Rating Agencies shall have received notice of such sale, trans-
fer, assignment, exchange, participation, pledge or conveyance.

(d) The Transfer Agent and Registrar will main-
tain at its expense in Chicago, Illinois or such other location
as may be specified in any Supplement, an office or offices or
agency or agencies where Certificates may be surrendered for
registration of transfer or exchange.

(e) Until such time as the Trustee shall receive
an Officer's Certificate of the Transferor certifying that a
Series of Investor Certificates has been registered under the
Securities Act and qualified under all applicable state securi-
ties laws, neither the Trustee nor the Transfer Agent and Regis-
trar shall register a transfer of any Investor Certificates of
such Series or any interest therein unless such transfer is to be
made in a transaction that does not require such registration or
qualification. Until such time as such Series of Investor Cer-
tificates shall be registered pursuant to a registration state-
ment filed under the Securities Act, such Series of Investor
Certificates shall bear a legend to the effect set forth in the
preceding sentence. In the event that registration of a transfer
is to be made in reliance upon Rule 144A under the Securities Act
("Rule 144A"), the Trustee shall require, in order to assure
compliance with Rule 144A, that the transferor deliver a notice
of certification substantially in the form of Exhibit I hereto to
the Trustee which notice shall specify, inter alia, that the
transferor reasonably believes that the transferee is a
"qualified institutional buyer" as defined in Rule 144A. If
registration of the transfer of any Investor Certificate is in
reliance upon an exemption to the Securities Act other than Rule
144A, the Trustee shall require, in order to assure compliance
with the Securities Act, that the transferee deliver a certifica-
tion (in substantially the form of Exhibit J hereto) that such
transferee is an institutional "accredited investor" within the
meaning of paragraph (1), (2), (3) or (7) of Rule 501(a) under
the Securities Act and that such transfer may be made pursuant to
an exemption from the Securities Act and applicable state securi-
ties laws and as to certain other matters. Such certification
shall be delivered to the Trustee and the Transferor prior to or
contemporaneously with any such transfer. Neither the Transferor
nor the Trustee shall be obligated to register any Series of
Investor Certificates under any state securities laws or under

50
<PAGE> 58
the Securities Act or to take any other action not otherwise
required under this Agreement to permit the transfer of such
Series without registration.

Notwithstanding anything to the contrary contained
herein, in no event shall an Investor Certificate of any Series
which is not sold pursuant to an effective registration statement
under the Securities Act and intended to be sold to more than 100
Persons, as evidenced by disclosure in the disclosure document
with respect thereto or any interest therein, be transferred to
an employee benefit plan, trust or account subject to ERISA, or
described in Section 4975(e)(1) of the Code or an entity whose
underlying assets include plan assets by reason of an investment
in the entity by such a plan, trust or account. Each Holder of
an Investor Certificate of any such Series, by its acceptance
thereof, represents and warrants that it is not (i) an employee
benefit plan (as defined in Section 3(3) of ERISA) that is sub-
ject to the provisions of Title I of ERISA, (ii) a plan described
in Section 4975(e)(1) of the Code or (iii) an entity whose under-
lying assets include plan assets by reason of a plan's investment
in the entity. The Transfer Agent and Registrar shall not be
responsible for confirming or otherwise investigating whether a
proposed transferee is an employee benefit plan, trust or account
subject to ERISA, or described in Section 4975(e)(1) of the Code,
and may conclusively rely upon the foregoing representation and
warranty.

Section 6.4 Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificate is surrendered to
the Transfer Agent and Registrar, or the Transfer Agent and
Registrar receives evidence to its satisfaction of the destruc-
tion, loss or theft of any such Certificate and (b) there is
delivered to the Transfer Agent and Registrar, the Trustee and
the Transferor such security or indemnity as may be required by
them to save each of them harmless, then, in the absence of
notice to the Trustee that such Certificate has been acquired by
a bona fide purchaser, the Transferor shall execute and the
Trustee shall authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certifi-
cate, a new Certificate of like tenor and aggregate Undivided
Interest, if applicable; provided, however, that any written
statement of indemnity provided by the related Investor
Certificateholder shall meet the requirements of this Section
6.4. In connection with the issuance of any new Certificate
under this Section 6.4, the Trustee or the Transfer Agent and
Registrar may require the payment by the Certificateholder of a
sum sufficient to cover any tax or other expenses connected
therewith. Any duplicate Certificate issued pursuant to this
Section 6.4 shall constitute complete and indefeasible evidence
of ownership in the Trust Assets, as if originally issued,

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<PAGE> 59
whether or not the lost, stolen or destroyed Certificate shall be
found at any time.

Section 6.5 Persons Deemed Owners. Prior to due
presentation of a Certificate for registration of transfer, the
Trustee, the Paying Agent, the Transfer Agent and Registrar and
any agent of any of them may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Section 5.1
and for all other purposes whatsoever, and neither the Trustee,
the Paying Agent, the Transfer Agent and Registrar nor any agent
of any of them shall be affected by any notice to the contrary;
provided, however, that in determining whether the Holders of the
requisite Undivided Interests have given any request, demand,
authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Transferor, the Master Servicer or any
affiliate (as defined in Rule 405 under the Securities Act)
thereof, shall be disregarded and deemed not to be outstanding,
except that, in determining whether the Trustee shall be pro-
tected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Certificates which a
Responsible Officer of the Trustee knows to be so owned shall be
so disregarded. Certificates so owned which have been pledged in
good faith shall not be disregarded and may be regarded as out-
standing if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such
Certificates and that the pledgee is not the Transferor, the
Master Servicer or an affiliate (as defined above) thereof.

Section 6.6 Appointment of Paying Agent. The Paying
Agent shall have a long-term debt rating of at least "BBB" or the
equivalent by each applicable Rating Agency, and if not so rated,
each applicable Rating Agency shall confirm in writing that the
lack of such rating will not result in such Rating Agency
reducing or withdrawing its respective rating on any outstanding
Series, and, in any case, shall be a depositary institution
organized under the laws of the United States or any one of the
states thereof, including the District of Columbia. The Paying
Agent shall make distributions to Certificateholders from the
Collection Account, any Principal Funding Account and any Excess
Funding Account pursuant to Section 5.1. Any Paying Agent shall
have the revocable power to withdraw funds from the Collection
Account, any Principal Funding Account and any Excess Funding
Account for the purpose of making distributions referred to
above. The Trustee may revoke such power and remove any Paying
Agent if the Trustee determines in its sole discretion that the
Paying Agent shall have failed to perform its obligations under
this Agreement in any material respect. The Paying Agent shall
initially be the Trustee. The Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written notice to the

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<PAGE> 60
Trustee, the Master Servicer and the Transferor; provided,
however, that such resignation shall not be effective and the
Paying Agent shall continue to perform its duties until the
Trustee has appointed, and such appointment has been accepted by,
a successor Paying Agent. The Trustee shall cause the resigning
Paying Agent and each successor Paying Agent to execute and
deliver to the Trustee an instrument in which such resigning or
successor Paying Agent shall agree with the Trustee that, as
Paying Agent, such resigning or successor Paying Agent will hold
all sums, if any, held by it for payment to the Certificate-
holders in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to such Certifi-
cateholders. The Paying Agent shall return all unclaimed funds
relating to this Agreement to the Trustee and upon removal shall
also return all funds relating to this Agreement in its posses-
sion to the Trustee. The provisions of Sections 11.1, 11.2 and
11.3 shall apply to the Trustee in its role as Paying Agent.

Section 6.7 Access to List of Certificateholders'
Names and Addresses. The Trustee shall furnish any Investor
Certificateholder with a written list of the names and addresses
of the Investor Certificateholders appearing on the Certificate
Register without any charge or fee and within five Business Days
of receipt of such Investor Certificateholder's request therefor.

Section 6.8 Authenticating Agent.

(a) The Trustee may appoint one or more authen-
ticating agents with respect to the Certificates which shall be
authorized to act on behalf of the Trustee in authenticating the
Certificates in connection with the issuance, delivery, registra-
tion of transfer, exchange or repayment of the Certificates.
Whenever reference is made in this Agreement to the authentica-
tion of Certificates by the Trustee or the Trustee's certificate
of authentication, such reference shall be deemed to include
authentication on behalf of the Trustee by an authenticating
agent and a certificate of authentication executed on behalf of
the Trustee by an authenticating agent. Each authenticating
agent must be acceptable to the Transferor.

(b) Any institution succeeding to all or substan-
tially all of the corporate agency business of an authenticating
agent shall continue to be an authenticating agent without the
execution or filing of any paper or any further act on the part
of the Trustee or such authenticating agent.

(c) An authenticating agent may at any time
resign by giving written notice of resignation to the Trustee and
to the Transferor. The Trustee may at any time terminate the
agency of an authenticating agent by giving notice of termination

<PAGE> 61
to such authenticating agent and to the Transferor. Upon receiv-
ing such a notice of resignation or upon such a termination, or
in case at any time an authenticating agent shall cease to be
acceptable to the Trustee or the Transferor, the Trustee promptly
may appoint a successor authenticating agent. Any successor
authenticating agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as
an authenticating agent. No successor authenticating agent shall
be appointed unless acceptable to the Trustee and the Transferor.

(d) The Master Servicer agrees to pay, on behalf
of the Trust, to each authenticating agent from time to time
reasonable compensation for its services under this Section 6.8.

(e) The provisions of Sections 11.1, 11.2 and
11.3 shall be applicable to any authenticating agent.

(f) Pursuant to an appointment made under this
Section 6.8, the Certificates may have endorsed thereon, in lieu
of the Trustee's certificate of authentication, an alternate
certificate of authentication in substantially the following
form:

This is one of the Certificates described in the
Pooling and Servicing Agreement.

________________, as Trustee

______________________________,
as Authenticating Agent
for the Trustee

______________________________
Authorized Officer

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<PAGE> 62

Section 6.9 Delivery of Additional Series of Investor
Certificates.

(a) Upon delivery to the Trustee of an Officer's
Certificate of the Transferor (a) requesting the authentication
of a new Series of Investor Certificates and (b) stating the date
upon which such Series is to be issued (such date, the "Issuance
Date" and such notice, the "Issuance Notice") and certifying the
satisfaction of the conditions stated in this Section and Section
6.1, the Trustee shall, subject to Section 6.9(b), authenticate
pursuant to Section 6.2 and deliver to or upon the order of the
Transferor on such Issuance Date such new Series of Investor
Certificates; provided, however, that each Rating Agency shall
have confirmed in writing that the issuance of such new Series of
Investor Certificates, other than the Series 1994-2 Certificates
(if the Series 1994-2 Certificates are issued within ninety days
of the Initial Closing Date), will not result in such Rating
Agency reducing or withdrawing its original rating on any
outstanding Series or class of Certificates. Any such Series of
Investor Certificates shall be substantially in the form of the
exhibit attached to the applicable Supplement and shall bear,
upon its face, the designation for such Series to which it
belongs so selected by the Transferor and set forth in the
related Supplement. Unless otherwise specified in the related
Supplement, the Investor Certificates of any Series shall be
issued in definitive physical form (and not as Book-Entry
Certificates). All Investor Certificates of any Series shall be
identical in all respects except for the denominations thereof
and shall be equally and ratably entitled among themselves as
provided herein to the benefits of this Agreement and any
Supplement thereof without preference, priority or distinction on
account of the actual time or times of authentication and
delivery, all in accordance with the terms and provisions of this
Agreement and such Supplement. No new Series of Investor
Certificates issued pursuant to the provisions of this Section
shall adversely affect the method of allocating Imputed Yield
Collections or Principal Collections of any other Series of
Certificates for any period over which such Series shall be
outstanding.

(b) On the Issuance Date, the Trustee shall
authenticate and deliver any such new Series upon delivery to it
of the following: (i) a Supplement in form reasonably satisfac-
tory to the Trustee executed by the Transferor, the Trustee and
the Master Servicer and specifying the items provided in Section
6.9(c) (the "Principal Terms"), (ii) an Opinion of Counsel to the
effect that (x) the newly issued Series will be treated as debt
for Federal and applicable state income tax purposes under exist-
ing law and will not adversely affect the status of any Series of
Investor Certificates as debt for Federal and applicable state

55
<PAGE> 63
income tax purposes, and (y) will not cause the Trust to be
taxable as a corporation or as a separate entity under Federal or
applicable state tax laws, (iii) except with respect to the ini-
tial Series and the Series 1994-2, issued pursuant to the initial
Supplement and the Series 1994-2 Supplement, written confirmation
from each Rating Agency that the issuance of such new Series will
not result in the Rating Agency's reducing or withdrawing its
original rating on any then outstanding Series or class of Cer-
tificates rated by it, and (iv) such other closing documents,
certificates and Opinions of Counsel as may be required by the
applicable Supplement. Notwithstanding the foregoing, the
Trustee shall not authenticate and deliver any new Series here-
under unless it also receives on or prior to the Issuance Date,
an Officer's Certificate of the Transferor stating: (a) the size
of the Transferor Amount prior to such issuance, (b) the Initial
Invested Amount of the new Series, which, except with respect to
the initial Series issued pursuant to the initial Supplement,
shall be less than the amount given in clause (a), and (c) the
size of the Transferor Amount and the Minimum Transferor Amount
after giving effect to such issuance.

(c) The Principal Terms of any Series shall con-
sist of: (i) with respect to any Series, the name or designation
of the Series, (ii) the Initial Invested Amount thereof, (iii)
the Certificate Rate of such Series (or the formula for the
determination thereof, which may provide that such rate is a
floating rate) in the case of the issuance of a Series of Inves-
tor Certificates, (iv) the method of allocating Collections with
respect to Receivables for such Series, (v) the Series
Termination Date, (vi) the Repurchase Terms, if any, and (vii)
the scheduled Amortization Period Commencement Date.

(d) Any Supplement relating to an additional
Series may define or make provision with respect to the Series to
be issued pursuant thereto for: (i) the establishment of one or
more accounts held at an Eligible Institution for holding
Collections on the Receivables as specified in the Supplement or
for other purposes specified therein, (ii) the deposit of funds
into any such accounts, (iii) the use of a guaranteed investment
contract, surety bond, interest rate protection, swap or other
similar agreement with respect to the Series, (iv) any evergreen
or other extension feature with respect to the Series, (v) any
amendments or modifications of any Events of Termination relating
to such Series, and (vi) such other provisions which the
Transferor may, in its sole discretion, wish to incorporate which
do not affect or alter the provisions of this Agreement, or any
Supplement, applicable to any other then outstanding Series or
class of Certificates and which shall be acceptable to the
Trustee insofar as they affect the rights, duties and obligations
of the Trustee hereunder or under any such Supplement.

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<PAGE> 64

Section 6.10 [Reserved]

Section 6.11 Book-Entry Certificates. If provided in
any Supplement, the Investor Certificates of any Series, upon
original issuance, will be issued in the form of one or more
typewritten Certificates representing the Book-Entry Certifi-
cates, to be delivered to The Depository Trust Company, the
initial Clearing Agency, by, or on behalf of, the Transferor.
The Investor Certificates of such Series shall initially be
registered on the Certificate Register in the name of CEDE & Co.,
the nominee of The Depository Trust Company, which shall be the
initial Clearing Agency, and no Certificate Owner will receive a
definitive certificate representing such Certificate Owner's
interest in the Investor Certificates, except as provided in
Section 6.13. Unless and until definitive, fully registered
Investor Certificates (the "Definitive Certificates") have been
issued to Certificate Owners in respect of a particular Series
pursuant to Section 6.13:

(i) the Transferor, the Master Servicer, the
Paying Agent, the Transfer Agent and Registrar and the
Trustee may deal with the Clearing Agency and the Clearing
Agency Participants for all purposes (including the making
of distributions on the Investor Certificates) as the
authorized representatives of such Certificate Owners;

(ii) to the extent that the provisions of
this Section 6.11 conflict with any other provisions of this
Agreement, the provisions of this Section 6.11 shall
control; and

(iii) the rights of such Certificate Owners
shall be exercised only through the Clearing Agency and the
Clearing Agency Participants and shall be limited to those
established by law and agreements between such Certificate
Owners and the Clearing Agency and/or the Clearing Agency
Participants. The Trustee shall be authorized to enter into
a depositary agreement with the Transferor and the initial
Clearing Agency in connection with the delivery of
Certificates to such Clearing Agency (a "Letter of
Representations"), which Letter of Representations shall be
the governing document with respect to any agreement with
such Clearing Agency, unless and until Definitive Certifi-
cates are issued pursuant to Section 6.13, the initial
Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit dis-
tributions of principal and interest on the Investor Certif-
icates to such Clearing Agency Participants.

<PAGE> 65

Section 6.12 Notices to Clearing Agency. Whenever
notice or other communication to the Investor Certificateholders
of any Series delivered as provided in Section 6.11 is required
under this Agreement, unless and until Definitive Certificates
shall have been issued to Certificate Owners pursuant to Section
6.13, the Trustee, the Master Servicer and the Paying Agent shall
give all such notices and communications specified herein to be
given to Holders of the Investor Certificates of such Series to
the Clearing Agency.

Section 6.13 Definitive Certificates. If (i)(A) the
Transferor advises the Trustee in writing that the Clearing
Agency is no longer willing or able to properly discharge its
responsibilities under any Letter of Representations, and (B) the
Transferor is unable to locate a qualified successor, (ii) the
Transferor, at its option, advises the Trustee in writing that,
with respect to any Series, it elects to terminate the book-entry
system through the Clearing Agency or (iii) after the occurrence
of a Master Servicer Default representing Undivided Interests
aggregating not less than 50% of the Invested Amount of such
Series advise the Trustee and the Clearing Agency through the
Clearing Agency Participants in writing that the continuation of
a book-entry system through the Clearing Agency is no longer in
the best interests of the Certificate Owners of such Series, the
Trustee shall notify the Clearing Agency of the occurrence of any
such event and of the availability of Definitive Certificates of
such Series to Certificate Owners of such Series requesting the
same. Upon surrender to the Trustee of the Investor Certificates
of such Series by the Clearing Agency, accompanied by registra-
tion instructions from such Clearing Agency for registration, the
Trustee shall authenticate and deliver Definitive Certificates of
such Series to the applicable Investor Certificateholders named
in such registration instructions. Neither the Transferor, the
Transfer Agent and Registrar nor the Trustee shall be liable for
any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Certificates of any Series, all
references herein to obligations with respect to such Series
imposed upon or to be performed by the Clearing Agency shall be
deemed to be imposed upon and performed by the Trustee, to the
extent applicable with respect to such Definitive Certificates
and the Trustee shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.

[END OF ARTICLE VI]

58
<PAGE> 66
ARTICLE VII

OTHER MATTERS RELATING
TO THE TRANSFEROR

Section 7.1 Liability of the Transferor. The Trans-
feror shall be liable for each obligation, covenant, representa-
tion and warranty of the Transferor arising under or related to
this Agreement or any Supplement and shall be liable only to such
extent.

Section 7.2 Merger or Consolidation of, or Assumption
of the Obligations of, the Transferor.

(a) The Transferor shall not consolidate with or
merge into any other corporation or convey or transfer its prop-
erties and assets substantially as an entirety to any Person
unless:

(i) the corporation formed by such consoli-
dation or into which the Transferor is merged or the Person
which acquires by conveyance or transfer the properties and
assets of the Transferor substantially as an entirety shall
be, if the Transferor is not the surviving entity, organized
and existing under the laws of the United States of America
or any state or the District of Columbia, and, if the Trans-
feror is not the surviving entity, shall expressly assume,
by an agreement supplemental hereto, executed and delivered
to the Trustee, in form satisfactory to the Trustee, the
performance of every covenant and obligation of the Trans-
feror in this Agreement, any Supplement, the Contribution
and Sale Agreement and such entity's articles or certificate
of incorporation shall limit its business activities to
activities substantially similar to the business activities
of the Transferor; and the Transferor shall have delivered
to the Trustee an Officer's Certificate of the Transferor
and an Opinion of Counsel, each stating that such consolida-
tion, merger, conveyance or transfer and such supplemental
agreement comply with this Section 7.2 and that all condi-
tions precedent herein provided for relating to such trans-
action have been complied with and, in the case of the
Opinion of Counsel, that such supplemental agreement is the
legal, valid and binding obligation of the parties (other
than the Trustee) thereto;

(ii) each Rating Agency shall have confirmed
in writing that the rating of any outstanding Series by such
Rating Agency will not be reduced or withdrawn; and

<PAGE> 67

(iii) The Holders of Investor Certificates
representing not less than 51% of the aggregate of the
Invested Amount of all Series shall have consented thereto
in writing.

(b) The obligations of the Transferor hereunder
shall not be assignable nor shall any Person succeed to the
obligations of the Transferor hereunder except in each case in
accordance with the provisions of Section 7.2(a).

Section 7.3 Limitation on Liability of the Transferor.
Subject to Sections 7.1 and 7.4 with respect to the Transferor,
and except as specifically provided herein or in any Supplement,
neither the Transferor nor any of the directors or officers or
employees or (subject to the proviso in the last sentence of
Section 2.4(c) above) Affiliates or agents of the Transferor
shall be under any liability to the Trust, the Trustee, the
Certificateholders or any other Person for taking any action or
for refraining from taking any action pursuant to this Agreement
(including any Supplement) whether arising from express or im-
plied duties under this Agreement (including any Supplement) or
otherwise; provided, however, that this provision shall not
protect the Transferor or any such Person against any liability
which would otherwise be imposed by reason of willful misfea-
sance, bad faith or gross negligence in the performance of duties
or by reason of reckless disregard of obligations and duties
hereunder. The Transferor and any director or officer or em-
ployee or Affiliate or agent of the Transferor may rely in good
faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising here-
under. Each of the Trustee and the Master Servicer agrees that
the obligations of the Transferor to the Trustee, the Master
Servicer, the Certificateholders and the Trust hereunder, includ-
ing without limitation the obligation of the Transferor in
respect of indemnities pursuant to Section 7.4 hereof, shall
(subject to the proviso in the last sentence of Section 2.4(c)
above) be payable from the Trust Assets (and, solely with respect
to the payment of interest and repayment of principal under the
Certificates, solely from the Trust Assets) in accordance with
the provisions of this Agreement and any Supplement or such other
assets of the Transferor as may be available; provided that such
obligations (other than in respect of principal and interest on
the Certificates) shall be suspended at any time solely to the
extent that, and for so long as, the Transferor's assets are
insufficient to pay in full such obligations; and provided,
further, that such obligations (other than in respect of princi-
pal and interest on the Certificates) are fully subordinated to
the Transferor's obligations with respect to the payment of in-
terest and principal under the Certificates, and the security
interest of the Trustee in the Trust Assets with respect to such

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<PAGE> 68
interest and principal obligations. The provisions of this
Section shall survive termination of this Agreement and termina-
tion of the Trust.

Section 7.4 Liabilities. By entering into this
Agreement, the Transferor as holder of the Transferor Certifi-
cate, which may not be transferred except as provided in Section
6.3(b), Section 6.9 or Section 7.2, agrees to pay, indemnify and
hold harmless (a) each Investor Certificateholder, in accordance
with the provisions of this Agreement and any Supplement or from
such other assets of the Transferor as may be available, (and,
solely with respect to the payment of interest and the repayment
of principal under the Certificates, solely from the Trust
Assets) and (b) any other injured party against and from any and
all losses, claims, damages or liabilities (other than those
incurred by a Certificateholder in the Investor Certificates of
any Series as a result of defaults or other losses (including,
without limitation, Investor Charge-Offs with respect to the
Receivables) suffered by such Certificateholders or other party
arising out of or based on the arrangements created by this
Agreement or any Supplement as though this Agreement and each
Supplement created a partnership among the Transferor and the
Certificateholders under the Uniform Partnership Act in effect in
the State of Illinois in which the Transferor is a general part-
ner, except to the extent that such losses, claims, damages or
liabilities arise from any action by such Investor Certificate-
holder causing such losses, claims, damages or liabilities;
provided, however, that such obligations under this Section 7.4
other than in respect of principal and interest on the Certifi-
cates are fully subordinated to the Transferor's obligations with
respect to the payment of interest and principal under the Cer-
tificates and to the security interest of the Trustee in the
Trust Assets with respect to such interest and principal obliga-
tions, and provided, further, that the obligations under this
Section 7.4 shall be payable only from the assets of the Trans-
feror at the time such liability is asserted and at any time
thereafter and not from the assets of any director, officer,
employee, agent or Affiliate of the Transferor.

[END OF ARTICLE VII]

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<PAGE> 69
ARTICLE VIII

OTHER MATTERS RELATING
TO THE MASTER SERVICER

Section 8.1 Liability of the Master Servicer. The
Master Servicer shall be liable under this Agreement only to the
extent of the obligations specifically undertaken by the Master
Servicer in its capacity as Master Servicer.

Section 8.2 Merger or Consolidation of, or Assumption
of the Obligations of, Eagle Industrial as Master Servicer.
Eagle Industrial, for so long as it is the Master Servicer, shall
not consolidate with or merge into any other corporation or con-
vey or transfer its properties and assets substantially as an
entirety to any Person, unless:

(i) the corporation formed by such consoli-
dation or into which Eagle Industrial is merged or the
Person which acquires by conveyance or transfer the proper-
ties and assets of Eagle Industrial substantially as an
entirety shall be a corporation organized and existing under
the laws of the United States of America or any State or the
District of Columbia, and, if Eagle Industrial is not the
surviving entity, such corporation shall qualify as an
Eligible Master Servicer and shall expressly assume, by an
agreement supplemental hereto executed and delivered to the
Trustee in a form satisfactory to the Trustee, the perfor-
mance of every covenant and obligation of Eagle Industrial
as Master Servicer in this Agreement, any Supplement, the
Sale and Servicing Agreement and the Contribution and Sale
Agreement;

(ii) Eagle Industrial has delivered notice of
such consolidation, merger, transfer or conveyance to the
Rating Agencies and received written confirmation from each
Rating Agency that such action will not result in the with-
drawal or downgrade of the original rating of any outstand-
ing Series; and

(iii) the Master Servicer has delivered to the
Trustee (A) an Officer's Certificate of the Master Servicer
stating that such consolidation, merger, conveyance or
transfer and such supplemental agreement comply with this
Section 8.2 and that all conditions precedent herein pro-
vided for relating to such transaction have been complied
with and (B) an Opinion of Counsel stating that such supple-
mental agreement is the legal, valid and binding obligations
of the parties (other than the Trustee) thereto.

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<PAGE> 70

Section 8.3 Limitation on Liability of the Master
Servicer and Others. Subject to Section 8.4 with respect to the
Master Servicer, except as otherwise specifically provided herein
or in any Supplement, neither the Master Servicer nor any of the
directors or officers or employees or Affiliates or agents of the
Master Servicer shall be under any liability to the Trust, the
Trustee, the Certificateholders or any other Person for taking
any action or for refraining from taking any action pursuant to
this Agreement (including any Supplement), whether arising from
express or implied duties under this Agreement (including any
Supplement) or otherwise; provided, however, that this provision
shall not protect the Master Servicer or any such Person against
any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance
of duties or by reason of reckless disregard of obligations and
duties hereunder. The Master Servicer and any director or
officer or employee or Affiliate or agent of the Master Servicer
may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any
matters arising hereunder. The Master Servicer shall not be
under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the
Receivables in accordance with this Agreement or any Supplement
which in its reasonable opinion may involve it in any expense or
liability. The provisions of this Section shall survive termi-
nation of this Agreement and termination of the Trust.

Section 8.4 Master Servicer Indemnification of the
Trust and the Trustee. The Master Servicer shall indemnify and
hold harmless the Trustee (and each of its directors, officers,
employees and agents) and the Trust, individually and for the
benefit of the Certificateholders, from and against any loss,
liability, expense, damage or injury suffered or sustained by
reason of any acts, omissions or alleged acts or omissions aris-
ing out of activities of the Trustee or the Trust pursuant to
this Agreement or any Supplement, including those arising from
acts or omissions of the Master Servicer pursuant to this Agree-
ment or any Supplement, or otherwise arising out of this
Agreement or any Supplement, including but not limited to any
judgment, award, settlement, reasonable attorneys' fees and other
reasonable costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim;
provided, however, that the Master Servicer shall not indemnify
the Trustee or the Trust, individually or for the benefit of the
Certificateholders, if such acts, omissions or alleged acts or
omissions constitute or result from fraud, negligence, breach of
fiduciary duty or willful misconduct by the Trustee; and
provided, further, that the Master Servicer shall not indemnify
the Trustee or the Trust, individually or for the benefit of the
Certificateholders with respect to (x) any losses, liabilities,

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<PAGE> 71
expenses, damages or injuries of the Trust with respect to any
action taken by the Trustee at the request of any Certificate-
holder of any Series, (y) any Federal, state or local taxes (or
any interest or penalties or additions with respect thereto), or
(z) any losses, liabilities, expenses, damages or injuries in-
curred by any Investor Certificateholder as a result of defaults
or other losses (including, without limitation, Investor Charge-
Offs) with respect to the Receivables arising out of or based on
the arrangement created by this Agreement or any Supplement.
Subject to Sections 7.1 and 10.2(b), any indemnification pursuant
to this Section shall only be from the assets of the Master
Servicer. The provisions of such indemnity shall run directly to
and be enforceable by an injured party subject to the limitations
hereof. The provisions of this Section shall survive the resig-
nation or removal of the Master Servicer or the Trustee and the
termination of this Agreement or the Trust. The Master Servicer
shall indemnify, defend and hold harmless the Trustee (and each
of its directors, officers, employees and agents) from and
against all costs, losses, injuries, damages and liabilities
(including but not limited to any judgment, award, settlement,
reasonable attorneys' fees and other reasonable costs or expenses
incurred in connection with the defense of any actual or threat-
ened action, proceeding or claim) arising out of or incurred in
connection with the acceptance or performance of their respective
duties contained in this Agreement, except to the extent that
such cost, loss, injury, damage or liability: (a) is due to the
willful misconduct, breach of fiduciary duties, acts or omissions
which constitute constructive fraud, or negligence of the Person
indemnified, (b) arises from the Trustee's breach of any of its
representations and warranties set forth in Section 11.15 of this
Agreement, (c) shall arise out of or be incurred in connection
with the performance by the Trustee of the duties of the Succes-
sor Master Servicer hereunder or (d) relates to Federal, state or
local taxes of the Trustee with respect to fees paid or expenses
reimbursed to the Trustee in connection with the acceptance and
performance of its dates contained in this Agreement.

Section 8.5 The Master Servicer Not to Resign. The
Master Servicer shall not resign from the obligations and duties
hereby imposed on it except upon its determination (and notifica-
tion to the Trustee) that (i) the performance of its duties
hereunder is no longer permissible under applicable law and (ii)
there is no reasonable action which the Master Servicer could
take to make the performance of its duties hereunder permissible
under applicable law. Any such determination permitting the
resignation of the Master Servicer shall be evidenced as to
clause (i) above by an Opinion of Counsel (which Opinion of
Counsel may not be provided by in-house counsel to the Master
Servicer) to such effect delivered to the Trustee. No such
resignation shall become effective until the Trustee or a

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<PAGE> 72
Successor Master Servicer shall have assumed the responsibilities
and obligations of the Master Servicer in accordance with Section
10.2 hereof; provided, that if within one hundred twenty (120)
days of the date that the Master Servicer notifies the Trustee of
its determination described in the first sentence of this Section
8.5 and delivers to the Trustee the Opinion of Counsel referred
to above the Trustee does not receive any bids from Eligible
Master Servicers in accordance with Section 10.2(c) to act as
Successor Master Servicer, then the Trustee shall automatically
be appointed Successor Master Servicer in accordance with Section
10.2 (but shall have the continued authority to appoint another
Person as Successor Master Servicer).

Section 8.6 Access to Certain Documentation and
Information Regarding the Receivables. The Master Servicer shall
provide to the Trustee and its representatives access to and
copies of the documents, books, files, microfiche lists, computer
records, disks or tapes and other information regarding the
Receivables and the other Trust Assets where required in connec-
tion with the Trustee's enforcement of the rights of the Certifi-
cateholders, or required by applicable statutes or regulations,
to review such documentation, such access and copies, if any,
being afforded without charge but only (i) upon prior written
request, (ii) during normal business hours and (iii) subject to
the Master Servicer's normal security and confidentiality
procedures.

Section 8.7 Delegation of Duties. In the ordinary
course of business, the Master Servicer may at any time delegate
any duties hereunder to any Person who agrees to conduct such
duties in accordance with the Credit and Collection Policy and
this Agreement or any Supplement; provided, however, with respect
to any proposed delegation of a material function relating to the
servicing of the Receivables to a Person other than a Designated
Subsidiary, written notice shall be given to each Rating Agency
and the Trustee of such delegation. Any delegation shall not
relieve the Master Servicer of its liability and responsibility
with respect to such duties and shall not constitute a resigna-
tion within the meaning of Section 8.5 hereof.

Section 8.8 Examination of Records. The Transferor
and the Master Servicer shall, prior to the sale or transfer to a
third party of any receivable, contract or invoice held in its
custody, examine its computer and other records to determine that
such receivable, contract or invoice is not part of the Trust
Assets.

Section 8.9 Successor Master Servicer Indemnification
of Transferor. In the event of a Service Transfer, the Successor
Master Servicer will indemnify and hold harmless the Transferor

65
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for any losses, claims, damages and liabilities of the Transferor
arising from the fraud, gross negligence, breach of fiduciary
duty or willful misconduct of such Successor Master Servicer.

Section 8.10 Fidelity Bond and Errors and Omissions
Insurance. The Master Servicer shall maintain, at its own
expense, a blanket fidelity bond and an errors and omissions
insurance policy, with broad coverage with responsible companies
on all officers, employees or other persons acting on behalf of
the Servicer in any capacity with regard to the Trust Assets to
handle funds, money, documents and papers relating to the Trust
Assets. Any such fidelity bond and errors and omissions insur-
ance shall protect and insure the Master Servicer against losses,
including forgery, theft, embezzlement, fraud, errors and omis-
sions and negligent acts of such persons and shall be maintained
in a form and amount that would meet the requirements of prudent
institutional servicers. No provision of this Section 8.10
requiring such fidelity bond and errors and omissions insurance
shall diminish or relieve the Master Servicer from its duties and
obligations as set forth in this Agreement. The Master Servicer
shall be deemed to have complied with this provision if one of
its respective Affiliates has such fidelity bond and errors and
omissions policy coverage and, by the terms of such fidelity bond
and errors and omission policy, the coverage afforded the there-
under extends to the Master Servicer. The Master Servicer shall
cause each and every Sub-Servicer for it to maintain a policy of
insurance covering errors and omissions and a fidelity bond which
would meet such requirements. Upon request of the Trustee, the
Master Servicer shall cause to be delivered to the Trustee a
certification evidencing coverage under such fidelity bond and
insurance policy. Any such fidelity bond or insurance policy
shall not be cancelled or modified in a materially adverse manner
without ten days' prior written notice to the Trustee and the
Rating Agencies.

[END OF ARTICLE VIII]

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<PAGE> 74
ARTICLE IX

EVENTS OF TERMINATION

Section 9.1 Events of Termination with Respect to any
Series. If any one of the following events or an event specified
in an applicable Supplement shall occur at such time as there
shall be at least one outstanding Investor Certificate:

(i) failure (A) on the part of the Trans-
feror or the Master Servicer to make (i) any payment or
deposit of principal or interest required by the terms of
the Agreement on or before three Business Days after the
date such payment or deposit is required to be made or (ii)
any other payment or deposit required by the Agreement on or
before five Business Days after the date such other payment
or deposit is required to be made, or (B) on the part of the
Transferor to duly observe or perform in any material
respect the covenant of the Transferor to preserve and
maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation and to
qualify and remain qualified in good standing as a foreign
corporation in each jurisdiction where the failure to pre-
serve and maintain such existence would, if not remedied,
materially adversely affect the interests of the Certifi-
cateholders in the Receivables, or the ability of the Trans-
feror or the Master Servicer to perform its obligations
under this Agreement, if such failure is not remedied within
five days of receipt of notice of such failure by the
Trustee or the Transferor; (C) on the part of the Transferor
to duly observe or perform in any material respect any other
covenants or agreements of the Transferor set forth in this
Agreement or any Supplement; or (D) on the part of the
Master Servicer to deliver the Daily Report required on any
Business Day pursuant to this Agreement or any Determination
Date Statement required pursuant to this Agreement; which
failure with respect to clauses (B), (C) and (D) continues
unremedied for five Business Days after the date on which
written notice of such failure, requiring the same to be
remedied, shall have been given to the Transferor or the
Master Servicer by the Trustee, or to the Transferor and the
Trustee by the Holders of Investor Certificates evidencing
undivided interests aggregating not less than 51% of the
Invested Amount of the applicable Series; provided, however,
that with respect to clause (C) above, the Transferor shall
have 30 days after the date of receipt of notice to cure any
such failure;

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(ii) any representation or warranty made by
the Transferor in this Agreement or any Supplement, or any
information contained in a computer file, microfiche list or
hard copy list required to be delivered by the Transferor
pursuant to this Agreement shall prove to have been incor-
rect in any material respect when made or when delivered,
which continues to be incorrect in any material respect for
a period of 60 days after the date on which written notice
of such failure, requiring the same to be remedied, shall
have been given to the Transferor by the Trustee, or to the
Transferor by the Trustee after receipt of notice from
Certificateholders evidencing Undivided Interests aggregat-
ing not less than 51% of the Invested Amount of the related
Series and as a result of which the interests of the
Certificateholders are materially and adversely affected;

(iii) Eagle Industrial or the Transferor
voluntarily seeks, consents to or acquiesces in the benefit
or benefits of any Debtor Relief Law or becomes a party to
(or is made the subject of) any proceeding provided for by
any Debtor Relief Law, other than as creditor or claimant,
and in the event such proceeding is involuntary, the peti-
tion instituting same is not dismissed within 60 days of its
filing; or Eagle Industrial or the Transferor admits its
inability to pay its debts when due; or the Transferor shall
become unable for any reason to transfer Receivables to the
Trust in accordance with the provisions of the Agreement, or
Eagle Industrial shall become unable for any reason to sell
Receivables to the Transferor in accordance with the provi-
sions of the Contribution and Sale Agreement;

(iv) the Trust becomes an "investment
company" within the meaning of the Investment Company Act of
1940, as amended;

(v) the Trustee has not accepted a bid from
an Eligible Master Servicer to service the Receivables
within 60 days after any Master Servicer Default with
respect to which a Termination Notice has been issued;

(vi) the Transferor Amount, after giving
effect to any amounts deposited in the Excess Funding
Account pursuant to this Agreement for the purpose of
increasing the Transferor Amount, shall be less than the
Minimum Transferor Amount for ten consecutive Business Days;

(vii) the A Rated Weighted Average Loss
Reserve Ratio shall exceed 25% for ten consecutive Business
Days;

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(viii) Eagle Industrial fails to own or
otherwise fails to maintain voting control of the stock of
Transferor.

then, (a) in the case of any event described in clause (C) or
clause (D) of subparagraph (i) or in subparagraphs (ii) and (v)
after any applicable grace period set forth in such subpara-
graphs, either the Trustee, or the Investor Certificateholders
evidencing undivided interests aggregating 66 2/3% or more of the
Invested Amount of such series, by notice then given in writing
to the Transferor and the Master Servicer (and to the Trustee if
given by the Certificateholders) may declare that an Event of
Termination has occurred (A) with respect to all Series of
Certificates (in the case of notice given by the Trustee) or (B)
such Series (in the case of notice given by Investor Certifi-
cateholders) as of the date of such notice, or (b) in the case of
any event described in clause (B) of subparagraph (i) or in
subparagraphs (iii) or (iv) an Event of Termination with respect
to all Series shall occur without any notice or other action on
the part of the Trustee or any Certificateholder immediately upon
the occurrence of such event or (c) in the case of any event
described in clause (A) of subparagraph (i) or subparagraphs
(vi), (vii) and (viii), unless, within fifteen days of any such
event (after any applicable grace period) Investor Certifi-
cateholders evidencing Undivided Interests aggregating 51% or
more of the Invested Amount by notice then given in writing to
the Transferor, the Master Servicer and the Trustee, waive the
occurrence of such event, an Event of Termination shall occur
with respect to the Series without any notice or other action on
the part of the Investor Certificateholders or the Trustee.

In addition to the consequences of an Event of
Termination discussed above, if the Transferor voluntarily files
a bankruptcy petition or consents to the filing of such petition,
and in the event that the resulting proceeding is involuntary,
the petition instituting the same is not dismissed within 60 days
of its filing, or the Transferor goes into liquidation or any
Person is appointed a receiver or bankruptcy trustee of the
Transferor, on the day of such event the Transferor will immedi-
ately cease to transfer Receivables to the Trustee under this
Agreement and will promptly give notice to the Trustee of such
event.

Section 9.2 [Reserved]

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Section 9.3 Additional Rights Upon the Occurrence of
Certain Events.

(a) If the Transferor (i) voluntarily or involun-
tarily seeks, consents to or acquiesces in the benefit or bene-
fits of any Debtor Relief Law or becomes a party to (or is made
the subject of) any proceeding provided for by any Debtor Relief
Law, other than as creditor or claimant, and in the event such
proceeding is involuntary, the petition instituting the same is
not dismissed within 90 days of its filing or (ii) goes into
liquidation or any other Person shall be appointed as a bank-
ruptcy trustee or receiver or conservator of the Transferor, then
the Transferor shall on the day of such event (the "Appointment
Date") immediately cease to transfer Receivables to the Trustee
and shall promptly give notice to the Trustee of such event.
Notwithstanding any cessation of the transfer to the Trustee of
additional Receivables, Receivables transferred to the Trustee
prior to the occurrence of such voluntary or involuntary event
and Collections in respect of such Receivables whenever created,
accrued in respect of such Receivables, shall continue to be a
part of the Trust Assets. Within 15 days of the day on which a
Responsible Officer of the Trustee first receives written notice
of the occurrence of the Appointment Date, the Trustee shall (x)
publish a notice in an Authorized Newspaper that (i) the Trans-
feror has sought, consented to or acquiesced in the benefit of
any Debtor Relief Law or has become a party to (or made the
subject of) a proceeding as described in clause (i) of this
Section 9.3(a) or (ii) a bankruptcy trustee, receiver or conser-
vator of the Transferor has been appointed or that a voluntary
liquidation of the Transferor has occurred, and that the Trustee
intends to sell, dispose of or otherwise liquidate the Receiva-
bles on commercially reasonable terms and in a commercially
reasonable manner and (y) send written notice to the Investor
Certificateholders describing the provisions of this Section 9.3
and requesting instructions from such Holders. Unless within 60
days from the day written notice pursuant to clause (y) above is
first sent, the Trustee shall have received written instructions
of the Holders of Investor Certificates representing Undivided
Interests aggregating more than 50% of the Invested Amount of
each Series and in the case of a Series having more than one
Class, more than 50% of the Invested Amount of each Class of such
Series, to the effect that such Certificateholders disapprove of
the liquidation of the Receivables and wish to continue receiving
Receivables under the Trust as before such appointment, or unless
the Trustee shall have received an Opinion of Counsel addressed
to the Trustee to the effect that any such sale, disposition or
liquidation is prohibited by law, the Trustee shall proceed to
sell, dispose of, or otherwise liquidate the Receivables on
commercially reasonable terms and in a commercially reasonable
manner, which shall include the solicitation of competitive bids.

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The Trustee may obtain, and shall be fully protected in relying
on, a prior determination from such bankruptcy trustee or re-
ceiver or conservator that the terms and manner of any proposed
sale, disposition or liquidation hereunder are commercially
reasonable. The provisions of Sections 9.1 and 9.3 shall not be
deemed to be mutually exclusive.

(b) The proceeds from the sale, disposition or
liquidation of the Receivables pursuant to subsection (a) above,
net of all reasonable expenses incurred by the Trustee in con-
nection with such sale, liquidation or other disposition, which
shall be paid to the Trustee from such proceeds, shall be treated
as Collections of the Receivables and shall be allocated in
accordance with the provisions of Section 4.3. On the day fol-
lowing the Payment Date on which such proceeds are distributed to
the Investor Certificateholders, the Trust shall terminate.

(c) Upon the occurrence of an event specified in
Section 9.3(a), if the Trustee has not sold, disposed of or
otherwise liquidated the Receivables as provided therein within
120 days after the Appointment Date, the Trustee, upon the writ-
ten instructions of all of the Holders of Investor Certificates
of any Series shall sell, dispose of or otherwise liquidate
Receivables on a best efforts basis, selected on a random basis
from all Receivables in the Trust, in an amount equal to the
product of the Aggregate Eligible Receivables and the aggregate
percentage of Undivided Interests in the Trust Assets represented
by all Series so instructing the Trustee; provided that such sale
shall not result in the reduction or withdrawal of any rating
assigned by the Rating Agency to any Series not so instructing
the Trustee. The proceeds from such sale, disposition or liqui-
dation, net of all reasonable expenses incurred by the Trustee in
connection with such sale, disposition or liquidation, which
shall be paid to the Trustee, shall be deposited in the Collec-
tion Account by the Trustee and shall be treated as Collections
of Receivables allocable to the Series so instructing the Trans-
feror and shall be allocated in accordance with Section 4.3.
Upon distribution of such proceeds in accordance with Article IV,
such Series shall be deemed paid in full and no further amounts
shall be allocated to such Series.

[END OF ARTICLE IX]

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ARTICLE X

MASTER SERVICER DEFAULTS

Section 10.1 Master Servicer Defaults. If any one of
the following events (a "Master Servicer Default") shall occur
and be continuing:

(a) failure by the Master Servicer to make any
payment, transfer or deposit or to give instructions or to give
notice to the Trustee to make such payment, transfer or deposit
on the date such payment, transfer or deposit or such instruction
or notice is required to be made or given, as the case may be,
under the terms of this Agreement or any Supplement;

(b) failure on the part of the Master Servicer
duly to observe or perform any other covenants or agreements of
the Master Servicer set forth in this Agreement or any Supplement
that has a material adverse effect on the holder of the Trans-
feror Certificate or the Certificates of any Series, which
failure continues unremedied for a period of 30 days after the
date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Master Servicer by
the Trustee, or by the holders of Investor Certificates of any
Series evidencing Undivided Interests in the Trust Assets aggre-
gating not less than 51% of the Invested Amount of any Series
materially adversely affected thereby; or the Master Servicer
shall assign its duties under this Agreement, except as permitted
by Sections 8.2, 8.5 and 8.7;

(c) any representation, warranty or certification
made by the Master Servicer in this Agreement, any Supplement or
in any certificate or report delivered pursuant to this Agreement
or any Supplement shall prove to have been incorrect when made,
which has a material adverse effect on the rights of the holder
of the Transferor Certificate or the Investor Certificates of any
Series and which failure continues unremedied for a period of 30
days after the date on which written notice thereof, requiring
the same to be remedied, shall have been given to the Master
Servicer by the Trustee, or by the holders of Investor Certifi-
cates of any Series evidencing Undivided Interests in the Trust
Assets aggregating not less than 51% of the Invested Amount of
any Series materially adversely affected thereby; or

(d) the Master Servicer shall voluntarily seek,
consent to or acquiesce in the benefit or benefits of any Debtor
Relief Law or, voluntarily or involuntarily, become a party to
(or be made the subject of) any proceeding provided for under any
Debtor Relief Law, other than as creditor or claimant, and in the

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<PAGE> 80
event such proceeding is involuntary, the petition instituting
same is not dismissed within 90 days of its filing;

then, in the event of any Master Servicer Default, so long as the
Master Servicer Default shall not have been remedied, either (i)
the Trustee or (ii) the holders of Investor Certificates evidenc-
ing Undivided Interests aggregating more than 51% of the Invested
Amount of any Series materially and adversely affected thereby,
by notice then given in writing to the Master Servicer and the
Transferor (with a copy thereof to each Rating Agency) and to the
Trustee if given by a Person other than the Trustee (a
"Termination Notice"), may terminate the rights and obligations
of the Master Servicer as Master Servicer under this Agreement
and in and to the Receivables and the proceeds thereof.

After receipt by the Master Servicer of a Termination
Notice, and on the date that a Successor Master Servicer shall
have been appointed pursuant to Section 10.2, all authority and
power of the Master Servicer under this Agreement and each
Supplement shall pass to and be vested in a Successor Master
Servicer (a "Service Transfer"); and, without limitation, the
Trustee is hereby authorized and empowered (upon the failure of
the Master Servicer to cooperate) to execute and deliver, on
behalf of the Master Servicer, as attorney-in-fact or otherwise,
which grant of authority is irrevocable and coupled with an
interest, all documents and other instruments upon the failure of
the Master Servicer to execute or deliver such documents or
instruments, and to do and accomplish all other acts or things
necessary or appropriate to effect the purposes of such Service
Transfer. The Master Servicer agrees to cooperate with the
Trustee, the Transferor and such Successor Master Servicer in
effecting the termination of the responsibilities and rights of
the Master Servicer to conduct servicing hereunder, including,
without limitation, the transfer to such Successor Master
Servicer of all authority of the Master Servicer to service the
Receivables provided for under this Agreement, including, without
limitation, all authority over all Collections which shall on the
date of transfer be held by the Master Servicer for deposit, or
which have been deposited by the Master Servicer in the Collec-
tion Account, or which shall thereafter be received with respect
to the Receivables, and in assisting the Successor Master
Servicer. The Master Servicer shall at its expense promptly
transfer, to the extent it is permitted by applicable law to do
so, its electronic records relating to the Receivables to the
Successor Master Servicer in such electronic form as the Succes-
sor Master Servicer may reasonably request and shall promptly
transfer, to the extent it is permitted by applicable law to do
so, to the Successor Master Servicer all other records, corre-
spondence and documents necessary for the continued servicing of
the Receivables in the manner and at such times as the Successor

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Master Servicer shall reasonably request and shall, to the extent
not prohibited by licensing restrictions, provide access to or
copies of computer software, including by means of sublicensing
arrangements if applicable, to the extent necessary for the
continued servicing of the Receivables; provided, however, that
the Master Servicer shall not be required, to the extent it has
an ownership interest in any electronic records, computer soft-
ware or licenses, to transfer, assign, set-over or otherwise
convey such ownership interest(s) to the Successor Master
Servicer. The Master Servicer at its expense shall provide the
Successor Master Servicer with access to any computer hardware in
its possession for a reasonable time after the Master Servicer's
termination to the extent necessary for the uninterrupted servic-
ing of the Receivables. Notwithstanding the foregoing, the
Master Servicer shall not be required to provide such access,
whether with respect to computer hardware or software, if to
provide such access would violate applicable contractual restric-
tions (including pursuant to any licensing arrangements to which
Eagle Industrial or any Designated Subsidiary is a party);
provided, however, that Eagle Industrial shall use its reasonable
best efforts in seeking consents or waivers necessary to permit
the Successor Master Servicer to have such access. To the extent
that compliance with this Section 10.1 shall require the Master
Servicer to disclose to the Successor Master Servicer information
of any kind which the Master Servicer reasonably deems to be
confidential, the Successor Master Servicer shall be required to
enter into such confidentiality agreements as the Master Servicer
shall reasonably deem necessary to protect its interest.

Notwithstanding the foregoing, a delay in or failure of
performance under Section 10.1(a) shall not constitute a Master
Servicer Default if such delay or failure was caused by an Act of
God, the public enemy, acts of declared or undeclared war, public
disorder, rebellion or sabotage, epidemics, landslides, light-
ning, fire, hurricanes, earthquakes, floods or similar causes and
no funds have been remitted to Eagle Industrial or the Trans-
feror. The preceding sentence shall not relieve the Master
Servicer from using reasonable efforts to perform its obligations
in a timely manner in accordance with the terms of this Agreement
and each Supplement, and the Master Servicer shall provide the
Trustee, the Rating Agencies, the Transferor and the Investor
Certificateholders with an Officer's Certificate giving prompt
notice of such failure or delay by it, together with a descrip-
tion of its efforts to so perform its obligations. The Master
Servicer shall immediately notify the Trustee in writing of any
Master Servicer Default. In connection with any Service Trans-
fer, all reasonable costs and expenses (including attorneys'
fees) incurred by the Trustee in connection with transferring the
Receivables to the Successor Master Servicer and entering into a
written assumption and agreement with the Successor Master

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Servicer pursuant to this Section 10.1 and Section 10.2 shall be
paid by the Master Servicer upon presentation of reasonable docu-
mentation of such costs and expenses.

Section 10.2 Trustee to Act; Appointment of Successor.

(a) On and after the receipt by the Master
Servicer of a Termination Notice pursuant to Section 10.1, the
Master Servicer shall continue to perform all servicing functions
under this Agreement and any Supplement until the date specified
in the Termination Notice or, if no such date is specified in
such Termination Notice, until a date specified by the Trustee.
The Trustee shall as promptly as possible after the giving of a
Termination Notice appoint an Eligible Master Servicer as a
successor servicer (the "Successor Master Servicer") and such
Successor Master Servicer shall have obtained written confirma-
tion from each Rating Agency that the then current rating on any
outstanding Series will not be reduced or withdrawn as a result
of such appointment and shall accept its appointment by a written
assumption and agreement to perform all of the duties, obliga-
tions and liabilities of the Master Servicer hereunder in a form
acceptable to the Trustee. In the event that a Successor Master
Servicer has not been appointed or has not accepted its appoint-
ment at the time when the Master Servicer ceases to act as Master
Servicer, or upon the occurrence of the events specified in
Section 8.5, the Trustee without further action shall automatic-
ally be appointed the Successor Master Servicer. The Trustee may
delegate any of its servicing obligations to an Affiliate or
agent of the Master Servicer or the Trustee; provided, however,
that any such delegation shall not relieve the Trustee as
Successor Master Servicer of its liabilities and responsibilities
with respect to its duties as Successor Master Servicer. Not-
withstanding the above, the Trustee shall, if it is legally
unable so to act, petition a court of competent jurisdiction to
appoint as Successor Master Servicer a Person that is an Eligible
Master Servicer. The Trustee shall promptly give notice to each
Rating Agency of the appointment of a Successor Master Servicer
upon such appointment.

(b) Upon its appointment, the Successor Master
Servicer shall be the successor in all respects to the Master
Servicer with respect to servicing functions under this Agreement
and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Master Servicer by the
terms and provisions hereof, and all references in this Agreement
and any Supplement to the Master Servicer shall be deemed to
refer to the Successor Master Servicer except for the references
in Sections 3.3(l), (m) and (o), 8.4 and 11.5 and the last
sentence of Section 10.1 which shall continue to refer to Eagle
Industrial.

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(c) In connection with any Termination Notice,
the Trustee will review any bids which it obtains from Eligible
Master Servicers and shall be permitted to appoint any Eligible
Master Servicer submitting such a bid as a Successor Master
Servicer for servicing compensation not in excess of the Servic-
ing Fee permitted for a Successor Master Servicer pursuant to
Section 3.2; provided, however, that Eagle Industrial shall be
responsible for payment of all servicing compensation, if any, in
excess of the Servicing Fee if Eagle Industrial shall have agreed
in writing to pay such excess, and that no such monthly compen-
sation paid out of Collections shall be in excess of the Servic-
ing Fee permitted to a Successor Master Servicer pursuant to
Section 3.2.

(d) All authority and power granted to the
Successor Master Servicer under this Agreement shall automatic-
ally cease and terminate upon termination of the Trust pursuant
to Section 12.1, and shall pass to and be vested in the Trans-
feror and, without limitation, the Transferor is hereby author-
ized and empowered to execute and deliver, on behalf of the
Successor Master Servicer, as attorney-in-fact or otherwise,
which grant of authority is irrevocable and coupled with an
interest, all documents and other instruments, and to do and
accomplish all other acts or things necessary or appropriate to
effect the purposes of such transfer of servicing rights. The
Successor Master Servicer shall agree to cooperate with the
Transferor in effecting the termination of the responsibilities
and rights of the Successor Master Servicer to conduct servicing
of the Receivables, including, without limitation, all authority
over Collections then held by the Successor Master Servicer or
which shall thereafter be received by the Successor Master
Servicer. The Successor Master Servicer shall promptly transfer
its electronic records relating to the Receivables to the Trans-
feror in such electronic form as the Transferor may reasonably
request and shall promptly transfer all other records, correspon-
dence and documents to the Transferor in the manner and at such
times as the Transferor shall reasonably request. To the extent
that compliance with this Section 10.2 shall require the Succes-
sor Master Servicer to disclose to the Transferor information of
any kind which the Successor Master Servicer deems to be confi-
dential, the Transferor shall be required to enter into such
licensing and confidentiality agreements as the Successor Master
Servicer shall reasonably deem necessary to protect its
interests.

Section 10.3 Notification to Certificateholders. Upon
the occurrence of any Master Servicer Default, the Master
Servicer shall give prompt written notice thereof to the Trustee
and, upon receipt of such written notice, the Trustee shall give
notice to each Rating Agency and the Investor Certificateholders

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at their respective addresses appearing in the Certificate
Register. Upon any termination or appointment of a Successor
Master Servicer pursuant to this Article X, the Trustee shall
give prompt written notice thereof to the Investor Certificate-
holders at their respective addresses appearing in the Certifi-
cate Register.

Section 10.4 Waiver of Past Defaults. The Holders of
Investor Certificates evidencing Undivided Interests aggregating
more than 50% of the Invested Amount of any Series materially
adversely affected by any default by the Master Servicer or
Transferor may, on behalf of all Certificateholders of such
affected Series, waive any default by the Master Servicer or the
Transferor in the performance of their obligations hereunder and
its consequences, except a default in the failure to make any re-
quired deposits or payments of interest or principal with respect
to any Series of Certificates. Upon any such waiver of a past
default, such default shall cease to exist, and any default aris-
ing therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent there-
on except to the extent expressly so waived.

[END OF ARTICLE X]

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ARTICLE XI

THE TRUSTEE

Section 11.1 Duties of Trustee. (a) If to the knowl-
edge of a Responsible Officer of the Trustee a Master Servicer
Default has occurred (which has not been cured or waived), the
Trustee shall exercise such of the rights and powers vested in it
by this Agreement or any Supplement, as the case may be, and use
the same degree of care and skill in their exercise, as a prudent
person would exercise or use under the circumstances in the
conduct of such prudent person's own affairs.

(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the Trustee which are specifically
required to be furnished pursuant to any provision of this Agree-
ment or any Supplement, shall examine them to determine whether
they substantially conform to the requirements of this Agreement
or any Supplement. The Trustee shall give prompt written notice
to the Certificateholders of any material lack of conformity of
any such instrument to the applicable requirements of this Agree-
ment or any Supplement discovered by the Trustee which would
entitle a specified percentage of the Certificateholders to take
any action pursuant to this Agreement or any Supplement.

(c) Subject to Section 11.1(a), no provision of
this Agreement or any Supplement shall be construed to relieve
the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided,
however, that:

(i) The Trustee shall not be personally
liable for an error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;

(ii) The Trustee shall not be personally
liable with respect to any action taken, suffered or omitted
to be taken by it in good faith in accordance with, unless
otherwise specified herein, the direction of the Holders of
Investor Certificates evidencing Undivided Interests in the
Trust aggregating more than 50% of the Invested Amount of
any Series relating to the time, method and place of con-
ducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the
Trustee, under this Agreement or any Supplement;

<PAGE> 86

(iii) The Trustee shall not be charged with
knowledge of the occurrence of any Master Servicer Default
or any Event of Termination, unless a Responsible Officer of
the Trustee obtains actual knowledge of such occurrence or
the Trustee receives written notice of such occurrence from
the Master Servicer or any Holders of Investor Certificates
evidencing Undivided Interests aggregating not less than 10%
of the Invested Amount of any Series adversely affected
thereby; and

(iv) Prior to the occurrence of a Master
Servicer Default of which a Responsible Officer has knowl-
edge, and after the curing or waiver of such Master Servicer
Defaults that may have occurred, the duties and obligations
of the Trustee shall be determined solely by the express
provisions of this Agreement and any Supplements, the
Trustee shall not be liable except for the performance of
such duties and obligations as shall be specifically set
forth in this Agreement and any Supplement, no implied
covenants or obligations shall be read into this Agreement
or any Supplement against the Trustee and, in the absence of
bad faith on the part of the Trustee, the Trustee may con-
clusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and, if
specifically required to be furnished pursuant to any pro-
vision of this Agreement or any Supplement, conforming to
the requirements of this Agreement or such Supplement.

(d) The Trustee shall not be required to expend or
risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it,
and none of the provisions contained in this Agreement or any
Supplement shall in any event require the Trustee to perform, or
be responsible for the manner of performance of, any obligations
of the Master Servicer under this Agreement or any Supplement
except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and
privileges of, the Master Servicer in accordance with the terms
of this Agreement or any Supplement.

(e) Except for actions expressly authorized by
this Agreement or any Supplement, the Trustee shall take no
action reasonably likely to impair the interests of the Trust in
any Receivable now existing or hereafter created or to impair the
value of any Receivable now existing or hereafter created.

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(f) Except as specifically provided in this
Agreement or any Supplement, the Trustee shall have no power to
vary the corpus of the Trust.

(g) If, to the knowledge of a Responsible Officer
of the Trustee, the Paying Agent or the Transfer Agent and Regis-
trar shall fail to perform any obligation, duty or agreement in
the manner or on the day required to be performed by the Paying
Agent or the Transfer Agent and Registrar, as the case may be,
under this Agreement, the Trustee shall be obligated as soon as
possible after such Responsible Officer obtains knowledge thereof
and receives appropriate records, if any, to perform such obliga-
tion, duty or agreement in the manner so required.

(h) If the Transferor, Eagle Industrial or any
Designated Subsidiary has agreed to transfer any of its receiva-
bles (other than the Receivables transferred to the Trust here-
under) to another Person, upon the written request of the Trans-
feror, the Trustee will enter into such intercreditor agreements
with the transferee of such receivables as are customary and
necessary to identify separately the rights of the Trust and such
other Person in the Receivables and such other receivables; pro-
vided that the Trustee shall not be required to enter into any
intercreditor agreement which could reasonably be expected to
adversely affect the interests of the Certificateholders or the
Trustee and, upon the request of the Trustee, the Transferor,
Eagle Industrial or such Designated Subsidiary will deliver at
its expense an Opinion of Counsel in form and substance reason-
ably satisfactory to the Trustee relating to such intercreditor
agreement.

(i) Except as specifically otherwise provided in
this Agreement, any action, suit or proceeding brought in respect
of one or more particular Series shall have no effect on the
Trustee's rights, duties and obligations hereunder with respect
to any one or more Series not the subject of such action, suit or
proceeding.

Section 11.2 Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 11.1:

(a) The Trustee may rely on and shall be pro-
tected in acting on, or in refraining from acting in accordance
with, any resolution, Officer's Certificate, certificate of audi-
tors or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, appraisal, bond or other
paper or document reasonably believed by it to be genuine and to
have been signed or presented to it pursuant to this Agreement or
any Supplement by the proper party or parties;

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(b) The Trustee may consult with counsel and any
advice or Opinion of Counsel shall be full and complete authori-
zation and protection in respect of any action reasonably taken
or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;

(c) The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agree-
ment or any Supplement, or to institute, conduct or defend any
litigation hereunder or in relation hereto or any Supplement, at
the request, order or direction of any of the Certificateholders,
pursuant to the provisions of this Agreement or any Supplement,
unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; nothing
contained herein shall, however, relieve the Trustee of the
obligation, upon the occurrence of a Master Servicer Default
(which has not been cured or waived) of which a Responsible
Officer has knowledge, to exercise such of the rights and powers
vested in it by this Agreement or any Supplement, and to use the
same degree of care and skill in their exercise as a prudent
person would exercise or use under the circumstances in the
conduct of such prudent person's own affairs;

(d) The Trustee shall not be personally liable
for any action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement or any
Supplement;

(e) The Trustee shall not be bound to make any
investigation into the facts of matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or docu-
ment, unless requested in writing so to do by the Holders of
Investor Certificates evidencing Undivided Interests aggregating
more than 50% of the Invested Amount of any Series which could be
adversely affected if the Trustee does not perform such acts;
provided, however, that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation shall be, in
the reasonable opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this
Agreement, the Trustee may require reasonable indemnity against
such cost, expense or liability as a condition to so proceeding.
The reasonable expense of every such examination shall be paid by
the Master Servicer (or, if Eagle Industrial is no longer the
Master Servicer, by Eagle Industrial) or, if paid by the Trustee,
shall be reimbursed by the Master Servicer (or if Eagle Indus-

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trial is no longer the Master Servicer, by Eagle Industrial) upon
demand;

(f) The Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys or custodians, and the
Trustee shall not be responsible for any misconduct or negligence
on the part of any such agent, attorney or custodian appointed
with due care by it hereunder;

(g) Except as may be required by Section 11.1(a)
or Section 11.2(e) hereof, the Trustee shall not be required to
make any initial or periodic examination of any documents or
records related to the Receivables for the purpose of establish-
ing the presence or absence of defects, the compliance by the
Transferor or the Master Servicer with their representations and
warranties or for any other purpose;

(h) The right of the Trustee to perform any dis-
cretionary act enumerated in this Agreement or any Supplement
shall not be construed as a duty, and the Trustee shall not be
answerable for other than its negligence or willful misconduct in
the performance of any such act;

(i) Whenever in the administration of this
Agreement or any Supplement the Trustee shall deem it desirable
that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may reasonably rely
upon an Officer's Certificate.

Section 11.3 Trustee Not Liable for Recitals in
Certificates. The Trustee assumes no responsibility for the
correctness of the recitals contained herein and in the Certifi-
cates (other than the certificate of authentication on the
Certificates). Except as set forth in Section 11.15, the Trustee
makes no representations as to the validity or sufficiency of
this Agreement or any Supplement or of the Certificates (other
than the certificate of authentication on the Certificates) or of
any Receivable or related document. The Trustee shall not be
accountable for the use or application by the Transferor of any
of the Certificates or of the proceeds of such Certificates, or
for the use or application of any funds paid to the Transferor in
respect of the Receivables or, subject to the other provisions of
this Article XI, deposited in the Collection Account or other
accounts now or hereafter established to effectuate the transac-
tions contemplated herein and in accordance with the terms
hereof.

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The Trustee shall have no duty to conduct any affirma-
tive investigation as to the occurrence of any condition requir-
ing the repurchase of any Receivable by the Transferor or the
Master Servicer pursuant to this Agreement or any Supplement or
the eligibility of any Receivable for purposes of this Agreement
or any Supplement. The Trustee shall have no responsibility for
filing any financing or continuation statement in any public
office at any time or otherwise to perfect or maintain the per-
fection of any security interest or lien granted to it hereunder
(unless the Trustee shall have become the Successor Master
Servicer) or to prepare or file any Securities and Exchange
Commission filing for the Trust or to record this Agreement or
any Supplement.

Section 11.4 Trustee May Own Certificates. The
Trustee in its individual or any other capacity may become the
owner or pledgee of Investor Certificates and may deal with the
Designated Subsidiaries, Eagle Industrial, the Transferor, the
Master Servicer and any of their respective Affiliates in banking
and other transactions with the same rights as it would have if
it were not the Trustee.

Section 11.5 The Master Servicer to Pay Trustee's Fees
and Expenses. The Master Servicer covenants and agrees to pay to
the Trustee from time to time, and the Trustee shall be entitled
to receive, reasonable compensation (which shall not be limited
by any provision of law in regard to the compensation of a trus-
tee of an express trust) for all services rendered by it in the
execution of the trust hereby created and in the exercise and
performance of any of the powers and duties hereunder or under
any Supplement of the Trustee, and, subject to Section 8.4, the
Master Servicer will pay or reimburse the Trustee upon its re-
quest for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any of the
provisions of this Agreement or any Supplement (including the
reasonable fees and expenses of its agents and counsel and all
reasonable fees and expenses incurred in connection with the
appointment of the Trustee or an Affiliate of the Trustee as
Successor Master Servicer) except any such expense, disbursement
or advance as may arise from its negligence or bad faith and
except as provided in the following sentence. If the Trustee is
appointed Successor Master Servicer pursuant to Section 10.2, the
provisions of this Section 11.5 shall not apply to expenses,
disbursements and advances made or incurred by the Trustee in its
capacity as Successor Master Servicer, which shall be paid out of
the Servicing Fee. The provisions of this Section and Sections
8.4 and 8.9 shall survive the termination of this Agreement, the
termination of the Trust and the resignation or removal of the
Trustee.

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Section 11.6 Eligibility Requirements for Trustee.
The Trustee hereunder shall (i) at all times be a bank organized
and doing business under the laws of the United States or any
state thereof, including the District of Columbia, authorized
under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $50,000,000, subject to
supervision or examination by Federal or state authority, and
(ii) except for the initial Trustee, either be an Eligible Master
Servicer or have an Affiliate which is an Eligible Master
Servicer. If such bank publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this
Section 11.6, the combined capital and surplus of such corpora-
tion shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published.
In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 11.6, the Trustee
shall resign immediately in the manner and with the effect
specified in Section 11.7.

Section 11.7 Resignation or Removal of Trustee.

(a) The Holders of Investor Certificates evidenc-
ing in the aggregate 51% of the Aggregate Invested Amount may at
any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of such
instruments shall be delivered to each of the Transferor, the
Master Servicer, the Rating Agencies, the Trustee so removed and
the successor trustee so appointed.

(b) Subject to Section 11.7 (d), the Trustee may
at any time resign and be discharged from the trust hereby cre-
ated by giving written notice thereof to the Transferor, the
Master Servicer and the Rating Agencies. Upon receiving such
notice of resignation, the Master Servicer shall promptly appoint
a successor trustee by written instrument, copies of which in-
strument shall be delivered to the resigning Trustee, the succes-
sor trustee, the Transferor and the Rating Agencies. If no
successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor
trustee.

(c) If at any time the Trustee shall cease to be
eligible in accordance with the provisions of Section 11.6 hereof
and shall fail to resign after written request therefor by the
Master Servicer, or if at any time the Trustee shall be legally
unable to act, or shall be adjudged a bankrupt or insolvent, or

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if a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Master
Servicer may remove the Trustee and promptly appoint a successor
trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee.

(d) Any resignation or removal of the Trustee
pursuant to any of the provisions of this Section 11.7 shall not
become effective until either (i) the Trust has been completely
liquidated in accordance with Article XII of this Agreement and
all proceeds of such liquidation have been distributed pursuant
to the terms of this Agreement or (ii) acceptance of appointment
by a successor trustee having the qualifications set forth in
Section 26(a)(1) of the Investment Company Act of 1940 and
Section 11.6 as provided in Section 11.8 hereof.

Section 11.8 Successor Trustee.

(a) Any successor trustee appointed as provided
in Section 11.7 hereof shall execute, acknowledge and deliver to
the Transferor and to its predecessor Trustee an instrument
accepting such appointment hereunder, and thereupon the resig-
nation or removal of the predecessor Trustee shall become
effective and such successor trustee, without any further act,
deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor
hereunder and under any Supplement with like effect as if
originally named as Trustee herein. The predecessor Trustee
shall deliver to the successor trustee all documents or copies
thereof, and statements held by it hereunder at the expense of
the Master Servicer; and the Transferor and the predecessor
Trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for fully and cer-
tainly vesting and confirming in the successor trustee all such
rights, powers, duties and obligations. The Master Servicer
shall immediately give notice to the Rating Agency upon the
appointment of a successor trustee.

(b) No successor trustee shall accept appointment
as provided in this Section 11.8 unless at the time of such
acceptance such successor trustee shall be eligible under the
provisions of Section 11.6 hereof.

(c) Upon acceptance of appointment by a successor
trustee as provided in this Section 11.8 hereof, such successor
trustee shall mail notice of such succession hereunder to all

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Certificateholders at their addresses as shown in the Certificate
Register.

Section 11.9 Merger or Consolidation of Trustee. Any
Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Trustee shall be
a party, or any Person succeeding to all or substantially all of
the corporate trust business of the Trustee, shall be the succes-
sor of the Trustee hereunder, provided such Person shall be eli-
gible under the provisions of Section 11.6 hereof, without the
execution or filing of any paper or any further act on the part
of any of the parties hereto, anything herein to the contrary
notwithstanding.

Section 11.10 Appointment of Co-Trustee or Separate
Trustee.

(a) Notwithstanding any other provisions of this
Agreement or any Supplement, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any
part of the Trust Assets may at the time be located, the Trustee
shall have the power and may execute and deliver all instruments
to appoint, with the prior written consent of the Master
Servicer, one or more Persons to act as a co-trustee or co-
trustees, or separate trustee or separate trustees, of all or any
part of the Trust Assets, and to vest in such Person or Persons,
in such capacity and for the benefit of the Certificateholders,
such title to the Trust Assets, or any part thereof, and, subject
to the other provisions of this Section 11.10, such powers,
duties, obligations, rights and trusts as the Trustee may con-
sider necessary or desirable. With the consent of Investor
Certificateholders evidencing more than 50% of the Invested
Amount of each Series, any such co-trustee or separate trustee
hereunder shall not be required to meet the terms of eligibility
as a successor trustee under Section 11.6. Any such appointment
of a co-trustee shall not relieve the Trustee of its obligations
under this Agreement.

(b) Every separate trustee and co-trustee shall,
to the extent permitted by law, be appointed and act subject to
the following provisions and conditions:

(i) All rights, powers, duties and obliga-
tions conferred or imposed upon the Trustee shall be con-
ferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is
not authorized to act separately without the Trustee joining
in such act), except to the extent that under any law of any

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jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as successor to
the Master Servicer hereunder), the Trustee shall be incom-
petent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations (including
the holding of title to the Trust Assets or any portion
thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but
solely at the direction of the Trustee;

(ii) No trustee hereunder shall be personally
liable by reason of any act or omission of any other trustee
hereunder; and

(iii) The Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.

(c) Any notice, request or other writing given to the
Trustee shall be deemed to have been given to each of the then
separate trustees and co-trustees, as effectively as if given to
each of them. Every instrument appointing any separate trustee
or co-trustee shall refer to this Agreement and the conditions of
this Article XI. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the
estates or property specified in its instrument of appointment,
either jointly with the Trustee or separately, as may be provided
therein, subject to all the provisions of this Agreement or any
Supplement, specifically including every provision of this Agree-
ment or any Supplement relating to the conduct of, affecting the
liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy there-
of given to the Master Servicer and the Transferor.

(d) Any separate trustee or co-trustee may at any time
constitute the Trustee, its agent or attorney-in-fact with full
power and authority, to the extent not prohibited by law, to do
any lawful act under or in respect to this Agreement or any Sup-
plement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Trustee, to the
extent permitted by law, without the appointment of a new or
successor trustee.

Section 11.11 Tax Returns. In the event the Trust
shall be required to file tax returns, the Master Servicer shall
prepare or shall cause to be prepared any tax returns required to
be filed by the Trust and shall remit such returns to the Trustee
for signature at least five days before such returns are due to
be filed; the Trustee shall promptly sign such returns and

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deliver such returns after signature to or at the direction of
the Master Servicer and such returns shall be filed by or at the
direction of the Master Servicer. The Master Servicer shall also
prepare or shall cause to be prepared all tax information re-
quired by law to be distributed to Investor Certificateholders.
The Trustee, upon request, will furnish the Master Servicer with
all such information known to the Trustee as may be reasonably
required in connection with the preparation of all tax returns of
the Trust, and shall, upon request, execute such returns. Not-
withstanding anything to the contrary in this Agreement, in no
event shall the Trustee or the Master Servicer be liable for any
liabilities, costs or expenses of the Trust, the Investor Certi-
ficateholders or the Certificate Owners arising out of the appli-
cation of any tax law, including without limitation Federal,
state or local income or excise taxes or any other tax imposed on
or measured by income (or any interest, penalty or addition with
respect thereto or arising from a failure to comply therewith).

Section 11.12 Trustee May Enforce Claims Without
Possession of Certificates. All rights of action and claims
under this Agreement or any Supplement or the Certificates may be
prosecuted and enforced by the Trustee without the possession of
any of the Certificates or the production thereof in any pro-
ceeding relating thereto, and any such proceeding instituted by
the Trustee shall be brought in its own name as trustee. Any
recovery of judgment shall, after provision for the payment of
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel, be for the ratable bene-
fit of the Certificateholders in respect of which such judgment
has been obtained.

Section 11.13 Suits for Enforcement. If a Master
Servicer Default of which a Responsible Officer has knowledge
shall occur and be continuing, the Trustee in its discretion may,
subject to the provisions of Section 10.1, proceed to protect and
enforce its rights and the rights of the Certificateholders under
this Agreement or any Supplement by suit, action or proceeding in
equity or at law or otherwise, whether for the specific perfor-
mance of any covenant or agreement contained in this Agreement or
any Supplement or in aid of the execution of any power granted in
this Agreement or any Supplement or for the enforcement of any
other legal, equitable or other remedy as the Trustee, being
advised by counsel, shall deem most effectual to protect and
enforce any of the rights of the Trustee or the Certificate-
holders. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on
behalf of any Certificateholder any plan of reorganization,
arrangement, adjustment or composition affecting the Certificates
or the rights of any holder thereof, or authorize the Trustee to

<PAGE> 96
vote in respect of the claim of any Certificateholder in any such
proceeding.

Section 11.14 Rights of Certificateholders to Direct
Trustee. The Holders of Investor Certificates evidencing
Undivided Interests aggregating more than 50% of the Invested
Amount of any Series with respect to matters affecting the re-
lated Series, shall have the right to direct the time, method and
place at or by which the Trustee conducts any proceeding for any
remedy available to the Trustee, or exercises any such trust or
power conferred upon the Trustee; provided, however, that, sub-
ject to Section 11.1, the Trustee shall have the right to decline
to follow any such direction if the Trustee being advised by
counsel determines that the action so directed may not lawfully
be taken, or if the Trustee shall, by a Responsible Officer or
Responsible Officers of the Trustee, reasonably determine that
the proceedings so directed would be illegal or involve it in
personal liability or be unduly prejudicial to the rights of
Certificateholders not parties to such direction; and provided,
further, that nothing in this Agreement or any Supplement shall
impair the right of the Trustee to take any action deemed proper
by the Trustee and which is not inconsistent with such direction
of the Certificateholders.

Section 11.15 Representations and Warranties of
Trustee. The Trustee represents and warrants, as of the Initial
Closing Date and, with respect to any Series, as of the related
Closing Date, that:

(i) The Trustee is a bank organized, existing and
in good standing under the laws of the United States or
one of the States thereof;

(ii) The Trustee has full power, authority and
right to execute, deliver and perform this Agreement,
and has taken all necessary action to authorize the
execution, delivery and performance by it of this
Agreement;

(iii) This Agreement has been duly executed and
delivered by the Trustee;

(iv) The Trustee is not required to obtain, other
than those that have already been obtained, any author-
ization, consent, approval, exemption or license from,
or to file any registration with, any Governmental
Authority having jurisdiction over the trust powers of
the Trustee, as a condition to the validity of, or for
the execution and delivery of, this Agreement, or to

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the performance by the Trustee of its obligations under
this Agreement; and

(v) This Agreement constitutes the legal, valid
and binding obligation of the Trustee, enforceable in
accordance with its terms (subject to the effect of any
applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors' rights
generally).

Section 11.16 Maintenance of Office or Agency. The
Trustee will maintain at its expense in Chicago, Illinois an
office or offices or agency or agencies where notices and demands
to or upon the Trustee in respect of the Certificates and this
Agreement may be served. The Trustee initially appoints the
Corporate Trust Office as its office for such purposes. The
Trustee will give prompt written notice to the Master Servicer
and to Certificateholders of any change in the location of the
Certificate Register or any such office or agency.

Section 11.17 Notices. The Trustee shall promptly
deliver to the Transferor and the Master Servicer any notices it
receives in connection with this Agreement or any Supplement
which are not otherwise delivered to such parties unless a
Responsible Officer of the Trustee reasonably believes that a
copy of such notice has previously been so delivered.

Section 11.18 Compliance Certificates and Opinions.
Upon any application or request by the Transferor to the Trustee
to take any action under any provision of this Agreement, the
Transferor shall furnish to the Trustee an Officer's Certificate
stating that all conditions precedent, if any, provided for in
this Agreement (including any covenant compliance with consti-
tutes a condition precedent) relating to the proposed action have
been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any,
have been complied with, except that, in the case of any such
application or request as to which the furnishing of documents is
specifically required by any provision of this Agreement relating
to such particular application or request, no additional certifi-
cate or opinion need be furnished.

Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Agreement shall
include:

(a) a statement that each individual signing such
certificate or opinion has read such covenant or condition and
the definitions herein relating thereto;

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(b) a brief statement as to the nature and scope
of the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;

(c) a statement that, in the opinion of each such
individual, he or she has made such examination or investigation
as is necessary to enable him to express an informed opinion as
to whether or not such covenant or condition has been complied
with; and

(d) a statement as to whether, in the opinion of
each such individual, such condition or covenant has been com-
plied with.

Section 11.19 Monthly Report of Trustee. On or
promptly following each Payment Date, commencing on the Payment
Date occurring on February 25, 1994, the Trustee shall provide a
written assurance that, but without conducting any independent
investigation, no Responsible Officer, has actual knowledge that
an event has occurred which, with the passage of time or the
giving of notice or both, would constitute an Event of Termina-
tion or a Master Servicer Default. The Trustee is hereby
authorized to conclusively rely upon an Officer's Certificate of
the Master Servicer as a basis for providing any such assurance.

[END OF ARTICLE XI]

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ARTICLE XII

TERMINATION

Section 12.1 Termination of Trust. (a) The respec-
tive obligations and responsibilities of the Transferor, the
Master Servicer and the Trustee created hereby (other than the
obligation of the Trustee to make payments to Certificateholders
as hereafter set forth) shall terminate, except with respect to
the duties described in Sections 8.4, 11.5 and 12.3(b), on the
Business Day after the day on which funds shall have been depos-
ited in the Collection Account or Excess Funding Account at the
times and in the amounts provided for in this Agreement (includ-
ing, without limitation, pursuant to Sections 2.4, 12.1(b), 12.2
and Article IV hereof) sufficient to pay the Aggregate Invested
Amount plus interest accrued at the applicable Certificate Rates
through the last day of the month preceding the next Payment Date
in full with respect to each Series of Certificates; provided,
however, that in no event shall the Trust continue beyond the
expiration of 21 years from the death of the last survivor of the
descendants, living on the date of this Agreement, of George
Herbert Walker Bush, former President of the United States of
America (the "Final Trust Termination Date"). The Master
Servicer shall notify the Trustee of any prospective termination
pursuant to this Section 12.1(a) not less than ten days in
advance thereof.

(b) If on the Transfer Date in the month immedi-
ately preceding the month in which the Final Trust Termination
Date occurs (after giving effect to all transfers, withdrawals,
deposits and drawings to occur on such date and the payment of
principal on any Series of Investor Certificates to be made on
the related Payment Date pursuant to Section 4.6) the Invested
Amount of any Series would be greater than zero, the Master
Servicer on behalf of the Trustee shall sell in a commercially
reasonable manner not later than 30 days after such Transfer Date
all of the Receivables. The proceeds of such sale, net of all
reasonable expenses of the Master Servicer incurred in connection
with such sale, which shall be paid to the Master Servicer from
such proceeds, shall be treated as Collections of the Receivables
and shall be allocated in accordance with Section 4.3. During
such 30-day period, the Master Servicer shall continue to collect
Collections on the Receivables and allocate such payments in
accordance with the provisions of Section 4.3.

Section 12.2 Optional Purchase and Series Termination
Date of Investor Certificates of any Series.

(a) If provided in any Supplement, on a Payment
Date the Transferor may, but shall not be obligated to, purchase

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any Series of Investor Certificates by depositing into the
Collection Account, on the preceding Transfer Date, an amount
equal to the initial principal balance of such Series of Cer-
tificates minus the amount of principal payments made with
respect to such Certificates prior to such Payment Date thereof
plus interest accrued and unpaid thereon at the applicable
Certificate Rate through the Record Date preceding the Payment
Date on which the purchase will be made; provided, however that
no such purchase of any Certificates shall occur unless the
Transferor shall deliver to the Trustee an Opinion of Counsel
reasonably acceptable to the Trustee to the effect that such
purchase of any Certificates would not constitute a fraudulent
conveyance of the Transferor.

(b) The amount deposited pursuant to Section
12.2(a) shall be paid to the Investor Certificateholders of the
related Series, pursuant to Article IV on the Payment Date fol-
lowing the date of such deposit. All Certificates which are
purchased by the Transferor pursuant to Section 12.2(a) shall be
delivered by the Transferor upon such purchase to, and be can-
celled by, the Transfer Agent and Registrar and be disposed of in
a manner satisfactory to the Trustee and the Transferor.

(c) All principal or interest with respect to any
Series of Investor Certificates shall be due and payable no later
than the Series Termination Date with respect to such Series.
Unless otherwise provided in a Supplement, in the event that the
Invested Amount of any Series of Certificates is greater than
zero on its Series Termination Date, the Trustee will use its
best efforts to sell or cause to be sold in a commercially
reasonable manner, and pay the proceeds (net of all reasonable
expenses of the Trustee incurred in connection with such sale,
which shall be paid to the Trustee from such proceeds), to the
extent necessary, to all Certificateholders of such Series pro
rata based on their respective Undivided Interests in final
payment of all principal of and accrued interest on such Series
of Certificates, an amount of Receivables up to 110% of the
Invested Amount of such Series as of the close of business on
such Series Termination Date; provided, however, that no selec-
tion procedures believed by the Trustee to be adverse to Certifi-
cateholders of any Series shall be used in selecting such Recei-
vables and in no event shall the amount of Receivables sold cause
the Transferor Amount to be less than or equal to zero. Any
proceeds of such sale in excess of such principal and interest
paid and the expenses of the Trustee shall be paid to the
Transferor. Upon payment of the proceeds of such sale as
provided in this Section 12.2(c), all principal of and accrued
interest on such Series shall be deemed for all purposes to have
been paid in full. Upon such Series Termination Date, or (if
applicable) on the first Payment Date following the sale of

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Receivables called for above in this Section 12.2(c), with
respect to the applicable Series of Certificates, final payment
of all amounts allocable to any Investor Certificates of such
Series shall be made in the manner provided in Section 12.3.

Section 12.3 Final Payment.

(a) Written notice of any termination, specifying
the Payment Date upon which the Investor Certificateholders of
any Series may surrender their Certificates for payment of the
final distribution with respect to such Series and cancellation,
shall be given (subject to at least ten days' prior notice from
the Master Servicer to the Trustee) by the Trustee to the Inves-
tor Certificateholders of such Series mailed not later than the
fifth day of the month of such final distribution specifying (i)
the Payment Date (which shall be the Payment Date in the month in
which the deposit is made pursuant to Section 2.4 or 12.2(a))
upon which final payment of such Investor Certificates will be
made upon presentation and surrender of such Investor Certifi-
cates, in accordance with the payment instructions of such
Investor Certificateholders, at the office or offices therein
designated, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such Payment Date is
not applicable, payments being made only upon presentation and
surrender of the Investor Certificates at the office or offices
therein specified; provided, that notwithstanding the failure of
any Investor Certificateholder to surrender an Investor Certifi-
cate for final payment as contemplated herein, payment shall be
made in accordance with the payment instructions of such Investor
Certificateholder upon receipt from such Investor Certificate-
holder of a satisfactory written indemnification of the Trustee
or the Paying Agent with respect to the failure to deliver such
Investor Certificate. The Master Servicer's notice to the Trus-
tee in accordance with the preceding sentence shall be accom-
panied by an Officer's Certificate setting forth the information
specified in Section 5.2(a), as applicable, covering the period
during the then current calendar year through the date of such
notice and setting forth the date of such final distribution.
The Trustee shall give such notice to the Transfer Agent and
Registrar and the Paying Agent at the time such notice is given
to such Certificateholders.

(b) Notwithstanding the termination of the Trust
pursuant to Section 12.1(a) or the occurrence of the Series
Termination Date with respect to any Series, all funds then on
deposit in the Collection Account shall continue to be held in
trust for the benefit of the Certificateholders and the Paying
Agent or the Trustee shall pay such funds to the Certificate-
holders upon surrender of their Certificates. In the event that
all of the Investor Certificateholders of all, or the applicable,

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Series, shall not surrender their Certificates for cancellation
within six months after the date specified in the written notice
referred to in the first sentence of Section 12.3(a), the Trustee
shall give a second written notice to the remaining Investor
Certificateholders, upon receipt of the appropriate records from
the Transfer Agent and Registrar, to surrender their Certificates
for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all, or the
applicable Investor Certificates of such Series shall not have
been surrendered for cancellation, the Trustee may take appro-
priate steps, or may appoint an agent to take appropriate steps,
to contact the remaining Investor Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be
paid out of the funds in the Collection Account held for the
benefit of such Investor Certificateholders.

(c) All Certificates surrendered for payment of
the final distribution with respect to such Certificates and
cancellation, shall be cancelled by the Transfer Agent and
Registrar and be disposed of in a manner satisfactory to the
Trustee. Upon the termination of the Trust, the Transferor shall
return the Transferor Certificate to the Trustee, and the Trustee
shall dispose of such Certificate in a manner satisfactory to the
Trustee.

Section 12.4 Transferor's Termination Rights. Upon
the termination of the Trust pursuant to Section 12.1 and the
surrender of the Transferor Certificate, the Trustee shall return
to the Transferor (without recourse, representation or warranty)
all right, title and interest of the Trustee in the Receivables
and the other Trust Assets, whether then existing or thereafter
created, all moneys due or to become due with respect thereto,
and all proceeds thereof except for amounts held by the Trustee
pursuant to Section 12.3(b). The Trustee shall execute and
deliver such instruments of release, transfer and assignment, in
each case prepared by the Transferor and without recourse,
representation or warranty, as shall be reasonably requested by
the Transferor to vest in the Transferor all right, title and
interest which the Trustee had in the Receivables and other Trust
Assets.

[END OF ARTICLE XII]

<PAGE> 103
ARTICLE XIII

MISCELLANEOUS PROVISIONS

Section 13.1 Amendment.

(a) This Agreement or any Supplement may be
amended from time to time by the Master Servicer, the Transferor
and the Trustee, without the consent of any of the holders of the
Investor Certificates of any Series, to cure any ambiguity, to
correct or supplement any provisions herein, to correct or sup-
plement any provisions herein to maintain a Rating Agency's
rating with respect to any outstanding Series which may be
inconsistent with any other provisions therein or to add any
other provisions with respect to matters or questions raised
under this Agreement which shall not be inconsistent with the
provisions of this Agreement, or to amend or add any provision so
that for the purposes of Federal or applicable state tax the
Investor Certificates will be considered to be indebtedness or
that the Trust will not be taxed as a corporation or a separate
entity; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel delivered to the Trustee,
adversely affect in any material respect the interests of the
holders of the Investor Certificates of any Series, cause the
Trust to be subject to Federal or applicable state tax at the
entity level or adversely affect the Federal or applicable state
tax characterization of any outstanding Series of Certificates.
No provision of this Section 13.1 shall limit the amendments to
Exhibit G hereto contemplated by Section 2.6(i).

(b) This Agreement and any Supplement may also be
amended from time to time by the Master Servicer, the Transferor
and the Trustee with the prior consent of the holders of investor
certificates evidencing Undivided Interests aggregating not less
than 51% of the aggregate of the Invested Amounts of all Series
adversely affected thereby (or in the case of a Series having
more than one class of Investor Certificates, each class of such
Series materially adversely affected thereby), for the purpose of
adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any
manner the rights of the Certificateholders of any Series then
issued and outstanding; provided, however, that no such amendment
under this subsection (b) shall (i) reduce in any manner the
amount of, or delay the timing of distributions that are required
to be made on any Certificate of such Series without the consent
of the related Investor Certificateholder; (ii) change the
definition of or the manner of calculating the interest of any
Investor Certificate without the consent of all such Investor
Certificateholders; (iii) reduce the aforesaid percentage
required to consent to any such amendment by the Investor

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Certificateholders of any Series, in each case without the
consent of all such Investor Certificateholders of any Series;
(iv) be effective unless each Rating Agency first shall have
confirmed in writing that such amendment will not result in such
Rating Agency reducing or withdrawing its then current rating on
any outstanding Series of Certificates; provided, further, that
clauses (i), (ii), (iii) and (iv) of the immediately preceding
provision shall not apply to any amendment or modification for
which consent is obtained from Investor Certificateholders repre-
senting 100% of the Invested Amount of each Series adversely
affected thereby.

(c) Promptly following the execution of any
amendment pursuant to subsection (b) above the Trustee shall
furnish written notification of the substance of such amendment
to each Certificateholder of all Series and each Rating Agency
(or with respect to an amendment of a Supplement, to the applica-
ble Series).

(d) It shall not be necessary for the consent of
the Investor Certificateholders under this Section 13.1 to
approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by the Persons re-
quired to consent under Section 13.1 shall be subject to such
reasonable requirements as the Trustee may prescribe.

(e) Notwithstanding anything to the contrary
contained in this Section 13.1, no consent of any Investor
Certificateholder shall be required for any amendment with
respect to Section 2.5 hereof provided that each Rating Agency
shall have approved and confirmed in writing that such amendment
will not cause any reduction or withdrawal of the rating of any
outstanding Series.

(f) Prior to the execution of any amendment to
this Agreement or any Supplement, the Trustee shall be entitled
to receive and rely upon an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this
Agreement and that all conditions precedent to the execution and
delivery of such amendment have been satisfied and, if appli-
cable, the Opinion of Counsel required by Section 13.2(c). The
Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or
immunities under this Agreement, any Supplement or otherwise.

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Section 13.2 Protection of Right, Title and Interest
of Trust.

(a) The Master Servicer shall cause this Agree-
ment, any Supplement, all amendments hereto or thereto and/or all
financing statements and continuation statements and any other
necessary documents covering the right, title and interest of the
Certificateholders and the Trustee to the Trust Assets to be
promptly recorded, registered and filed, and at all times to be
kept recorded, registered and filed, all in such manner and in
such places as may be required by law fully to preserve and
protect such right, title and interest. The Master Servicer
shall deliver to the Trustee file-stamped copies of, or filing
receipts for, any document recorded, registered or filed as
provided above, as soon as available following such recording,
registration or filing. The Transferor shall cooperate fully
with the Master Servicer in connection with the obligations set
forth above and will execute any and all documents reasonably
required to fulfill the intent of this Section 13.2(a).

(b) The Master Servicer will give the Trustee
prompt written notice of any relocation of any office from which
it services Receivables or keeps records concerning the Receiva-
bles or of its principal place of business or chief executive
office and whether, as a result of such relocation, the applica-
ble provisions of the UCC would require the filing of any amend-
ment of any previously filed financing or continuation statement
or of any new financing statement and shall file such financing
statements or amendments as may be necessary to perfect or to
continue the perfection of the Trustee's security interest in the
Receivables and the other Trust Assets. The Master Servicer will
at all times maintain each office from which it services Receiva-
bles and its principal executive office within the United States
of America.

(c) The Master Servicer will deliver to the
Trustee: (i) upon the execution and delivery of each amendment
of Articles I, II, III or IV hereof other than amendments pursu-
ant to Section 13.1(a), and (ii) on or before April 30 of each
year, beginning with 1995, an Opinion of Counsel (which may be
in-house counsel), substantially in the form of Exhibit H hereto,
dated as of a date between January 1 and April 30 of such year.

(d) If at any time the Master Servicer is no
longer Eagle Industrial, the Transferor shall deliver to the
Successor Master Servicer powers-of-attorney such that such
Successor Master Servicer may perform the obligations set forth
in Sections 13.2(a), 13.2(b) and 13.2(c).

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Section 13.3 Limitation on Rights of
Certificateholders.

(a) The death or incapacity of any Investor
Certificateholder shall not operate to terminate this Agreement
or the Trust, nor shall such death or incapacity entitle such
Investor Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or commence any
proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations and liabil-
ities of the parties hereto or any of them.

(b) No Certificateholder shall have any right to
vote (except as specifically provided in this Agreement or any
Supplement) or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties
hereto, nor shall anything herein set forth, or contained in the
terms of the Certificates, be construed so as to constitute the
Investor Certificateholders from time to time as general partners
or members of an association; nor shall any Investor Certificate-
holder be under any liability to any third person by reason of
any action taken by the parties to this Agreement pursuant to any
provision hereof.

(c) No Investor Certificateholder shall have any
right by virtue of any provisions of this Agreement or any
Supplement to institute any suit, action or proceeding in equity
or at law upon or under or with respect to this Agreement, unless
the Investor Certificateholders evidencing Undivided Interests
aggregating more than 33% of the Invested Amount of any Series
which may be materially adversely affected shall have made
written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may re-
quire against the costs, expenses and liabilities to be incurred
therein or thereby, and the Trustee, for 60 days after its
receipt of such request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or pro-
ceeding; it being understood and intended, and being expressly
covenanted by each Certificateholder with every other Certifi-
cateholder and the Trustee, that no one or more Certificate-
holders of a Series shall have any right in any manner whatever
by virtue or by availing itself or themselves of any provisions
of this Agreement or any Supplement to affect, disturb or pre-
judice the rights of the Certificateholders of any other Series,
or to obtain or seek to obtain priority over or preference to any
other such Certificateholder, or to enforce any right under this
Agreement or any Supplement, except in the manner herein provided
and for the equal, ratable and common benefit of all Certificate-
holders. For the protection and enforcement of the provisions of

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this Section 13.3, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either
at law or in equity.

Section 13.4 GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. FOR PURPOSES OF THE
TAX CLASSIFICATION OF THE TRUST AND THE TAX CHARACTERIZATION OF
ANY CERTIFICATES ISSUED PURSUANT TO THIS AGREEMENT, THE TRUST
SHALL BE CONSTRUED AS ORGANIZED AND EXISTING UNDER THE LAWS OF
THE STATE OF ILLINOIS, WITHOUT REGARD TO ITS CONFLICTS OF LAWS
PROVISIONS.

Section 13.5 Notices. All demands, notices and
communications hereunder shall be in writing and shall be deemed
to have been duly given if personally delivered at, or two days
after mailing by certified or registered mail, return receipt
requested, or one day after dispatching by overnight delivery
service for which a receipt is available, or upon dispatch in the
case of facsimile transmission, (a) in the case of Eagle
Industrial to Two North Riverside Plaza, Suite 1100, Chicago,
Illinois 60606, Attention: Treasurer, Facsimile No.: (312) 993-
7944, with a copy to its General Counsel at the same address,
Facsimile No.: (312) 906-8402, (b) in the case of the Trustee,
to the Corporate Trust Department, Facsimile No.: (312) 828-
6528; (c) in the case of the Transferor to Two North Riverside
Plaza, Suite 1100, Chicago, Illinois 60606, Attention:
Treasurer, Facsimile No.: (312) 906-8372 or, as to each party,
at such other address as shall be designated by such party in a
written notice to each other party. Any notice required or
permitted to be mailed to a Certificateholder shall be given by
first-class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register.
Notwithstanding any other provision hereof, any notice so mailed
within the time prescribed in this Agreement shall be conclusive-
ly presumed to have been duly given, whether or not the Certifi-
cateholder receives such notice.

Copies of all notices, reports, certificates and amend-
ments required to be delivered to the Rating Agencies hereunder
shall be mailed to the Rating Agencies as follows: Duff & Phelps
55 East Monroe Street, Chicago, Illinois 60603, Attention:
Structured Finance/Asset-Backed Monitoring Group and Standard &
Poor's Ratings Group, 26 Broadway, New York, New York 10004,
Attention: Asset-Backed Surveillance Group.

Section 13.6 Severability of Provisions. If any one
or more of the covenants, agreements, provisions or terms of this

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Agreement shall for any reason whatsoever be held invalid, then
such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or
terms of this Agreement and shall in no way affect the validity
or enforceability of the other covenants, agreements, provisions
and terms of this Agreement or of the Certificates or rights of
the Certificateholders thereof.

Section 13.7 Assignment. Notwithstanding anything to
the contrary contained herein, except as provided in Sections 8.2
or 8.5, this Agreement, including any Supplement, may not be
assigned by the Master Servicer without the prior consent of the
Holders of Investor Certificates evidencing Undivided Interests
aggregating not less than 66 2/3% of the Invested Amount of the
Investor Certificates of each Series.

Section 13.8 Certificates Nonassessable and Fully
Paid. It is the intention of the parties to this Agreement that
the Investor Certificateholders shall not be personally liable
for obligations of the Trust, that the interests in the Trust
Assets represented by the Investor Certificates shall be non-
assessable for any losses or expenses of the Trust or for any
reason whatsoever, and that Certificates upon authentication
thereof by the Trustee pursuant to Sections 2.7 and 6.2 are and
shall be deemed fully paid.

Section 13.9 Further Assurances. The Transferor and
the Master Servicer agree to do and perform, from time to time,
any and all acts and to execute any and all further instruments
reasonably requested by the Trustee to effect more fully the
purposes of this Agreement, including, without limitation, the
execution of any financing statements or continuation statements
relating to the Receivables and the other Trust Assets for filing
under the provisions of the UCC.

Section 13.10 No Waiver; Cumulative Remedies. No
failure to exercise and no delay in exercising, on the part of
any party hereto or the Certificateholders, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exhaustive of any rights,
remedies, powers and privileges provided by law.

Section 13.11 Counterparts. This Agreement and any
Supplement may be executed in two or more counterparts (and by
different parties on separate counterparts), each of which shall

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be an original, but all of which together shall constitute one
and the same instrument.

Section 13.12 Third-Party Beneficiaries. This
Agreement and any Supplement will inure to the benefit of and be
binding upon the parties hereto, the Certificateholders, and
their respective permitted successors and assigns. Except as
otherwise provided in this Agreement, no other Person will have
any right or obligation hereunder.

Section 13.13 Actions by Certificateholders.

(a) Wherever in this Agreement or any Supplement,
a provision is made that an action may be taken or a notice,
demand or instruction given by Investor Certificateholders, such
action, notice or instruction may be taken or given by any
Investor Certificateholder of any Series, unless such provision
requires a specific percentage of Investor Certificateholders of
a certain Series or all Series.

(b) Any request, demand, authorization, direc-
tion, notice, consent, waiver or other action by a Certificate-
holder shall bind such Certificateholder and every subsequent
holder of such Certificate issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done or omitted to be done by the Trustee or
the Master Servicer in reliance thereon, whether or not notation
of such action is made upon such Certificate.

(c) Any request, demand, authorization, direc-
tion, notice, consent, waiver or other action provided by this
Agreement or any Supplement to be given or taken by Certificate-
holders may be embodied in and evidenced by one or more instru-
ments which are substantially similar and are signed by such
Certificateholders in person or by agent duly appointed in writ-
ing; and except as herein otherwise expressly provided, such
request, demand, authorization, direction, notice, consent,
waiver or other action shall become effective when such instru-
ment or instruments are delivered to the Trustee and, when re-
quired, to the Transferor or the Master Servicer. Proof of
execution of any such instrument or of a writing appointing any
such agent shall be sufficient for any purpose of this Agreement
or any Supplement and conclusive in favor of the Trustee, the
Transferor and the Master Servicer, if made in the manner pro-
vided in this Section.

(d) The fact and date of the execution by any
Certificateholder of any such instrument or writing may be proved
in any manner which the Trustee reasonably deems sufficient.

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(e) The Trustee may require such additional proof
of any matter referred to in this Section as it reasonably shall
deem necessary.

Section 13.14 Merger and Integration. Except as
specifically stated otherwise herein, this Agreement sets forth
the entire understanding of the parties relating to the subject
matter hereof, and all prior understandings, written or oral, are
superseded by this Agreement. This Agreement may not be modi-
fied, amended, waived or supplemented except as provided herein.

Section 13.15 Headings. The headings herein are for
purposes of reference only and shall not otherwise affect the
meaning or interpretation of any provision hereof.

Section 13.16 No Bankruptcy Petition Against the
Transferor. The Trustee (solely as Trustee, Paying Agent,
Transfer Agent, Registrar and Successor Master Servicer, if
applicable), each Investor Certificateholder and Certificate-
owner, by acquiring an interest in an Investor Certificate or
Book-Entry Certificate, the Master Servicer, any Authenticating
Agent and any Paying Agent and Transfer Agent and Registrar other
than the Trustee and the Master Servicer, severally and not
jointly, each hereby covenants and agrees that, prior to the date
which is one year and one day after the payment in full of all
Invested Amounts, it will not institute against, or join any
other Person in instituting against, the Transferor any bank-
ruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under any Debtor Relief
Law.

[END OF ARTICLE XIII]

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<PAGE> 111
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers as of
the day and year first above written.

CENTRALLY HELD EAGLE RECEIVABLES
PROGRAM, INC.,
as Transferor

By \s\ Anthony Navitsky
Name: Anthony Navitsky
Title: Vice President

EAGLE INDUSTRIAL PRODUCTS
CORPORATION,
as Master Servicer

By \s\ Anthony Navitsky
Name: Anthony Navitsky
Title: Vice President

CONTINENTAL BANK,
NATIONAL ASSOCIATION,
as Trustee

By \s\ M.A. Burns
Name: M.A. Burns
Title: Vice President

-104-
<PAGE> 112
EXECUTION COPY
Annex X

EAGLE TRADE RECEIVABLES MASTER TRUST

DEFINITIONS

As used herein the following terms shall include in the
singular number the plural and in the plural number the singular:

"AAA Rated Dilution Reserve Amount" shall mean with
respect to any Settlement Period for each Designated Subsidiary,
the product of (A) the sum of (i) the Average Dilution Ratio
multiplied by the AAA Rated Stress Factor, plus (ii) the product
of (a) the Highest Rolling Average Dilution Ratio minus the
Average Dilution Ratio and (b) the percentage equivalent of a
fraction the numerator of which is the Highest Rolling Average
Dilution Ratio and the denominator of which is the Average
Dilution Ratio and (B) the aggregate Unpaid Balance of
Receivables Originated by each Originator during its applicable
Dilution Horizon Period.

"A Rated Dilution Reserve Amount" shall mean with
respect to any Settlement period for each Designated Subsidiary,
the product of (A) the sum of (i) the Average Dilution Ratio
multiplied by the A Rated Stress Factor, plus (ii) the product of
(a) the Highest Rolling Average Dilution Ratio minus the Average
Dilution Ratio and (b) the percentage equivalent of a fraction
the numerator of which is the Highest Rolling Average Dilution
Ratio and the denominator of which is the Average Dilution Ratio
and (B) the aggregate Unpaid Balance of Receivables Originated by
each Originator during its applicable Dilution Horizon Period.

"AAA Rated Loss Reserve Amount" on any Determination
Date shall mean the product of (a) the aggregate Unpaid Balance
of Receivables generated by each Designated Subsidiary during the
four most recently ended Settlement periods (or, in the case of
Hill, the three most recently ended Settlement periods) and (b)
the highest Default Ratio Average occurring over the most recent
twelve Settlement Periods and (c) the AAA Rated Stress Factor as
of the end of each Settlement Period.

"A Rated Loss Reserve Amount" on any Determination Date
shall mean the product of (a) the aggregate Unpaid Balance of
Receivables generated by each Designated Subsidiary during the
four most recently ended Settlement Periods (or, in the case of
Hill, the three most recently ended Settlement Periods and (b)
the highest Default Ratio Average occurring over the most recent
twelve Settlement Periods and (c) the A Rated Stress Factor as of
the end of each Settlement Period.

"AAA Rated Stress Factor" shall mean for any
Determination Date the sum of (A) the product of (1) the
percentage equivalent of a fraction (a) the numerator of which is
the aggregate Unpaid Balance of Receivables on such Determination

<PAGE> 113
Date for the five Designated Subsidiaries which have the highest
dollar amount of Receivables during the preceding Settlement
Period and (b) the denominator of which is the aggregate Unpaid
Balance of Receivables on such Determination Date for all of the
Designated Subsidiaries, times (2) 2.5, plus (B) the product of
(1) the percentage equivalent of a fraction (a) the numerator of
which is the aggregate Unpaid Balance of Receivables on such
Determination Date originated for the remaining Designated
Subsidiaries during the preceding Settlement Period and (b) the
denominator of which is the aggregate Unpaid Balance of Receiva-
bles on such Determination Date for all of the Designated
Subsidiaries, times (2) 2.0.

"A Rated Stress Factor" shall mean for any Determi-
nation Date the sum of (A) the product of (1) the percentage
equivalent of a fraction (a) the numerator of which is the
aggregate Unpaid Balance of Receivables on such Determination
Date for the five Designated Subsidiaries which have the highest
dollar amount of Receivables during the preceding Settlement
Period and (b) the denominator of which is the aggregate Unpaid
Balance of Receivables on such Determination Date for all of the
Designated Subsidiaries, times (2) 2.0, plus (B) the product of
(1) the percentage equivalent of a fraction (a) the numerator of
which is the aggregate Unpaid Balance of Receivables on such
Determination Date for the remaining Designated Subsidiaries
during the preceding Settlement Period and (b) the denominator of
which is the aggregate Unpaid Balance of Receivables on such
Determination Date for all of the Designated Subsidiaries, times
(2) 1.65.

"AAA Rated Weighted Average Dilution Ratio" as of any
Determination Date, shall mean the percentage equivalent of a
fraction the numerator of which is the sum of the AAA Rated
Dilution Reserve Amounts for all the Originators and the denomi-
nator of which is the aggregate Unpaid Balance of Adjusted
Eligible Receivables for all the Originators, in each case as of
the last day of the preceding Settlement Period.

"A Rated Weighted Average Dilution Ratio" as of any
Determination Date, shall mean the percentage equivalent of a
fraction the numerator of which is the sum of the A Rated
Dilution Reserve Amounts for all the Originators and the denomi-
nator of which is the aggregate Unpaid Balance of Adjusted
Eligible Receivables for all the Originators, in each case as of
the last day of the preceding Settlement Period.

"AAA Rated Weighted Average Loss Reserve Ratio" shall
mean the percentage equivalent of a fraction the numerator of
which is the sum of all the AAA Rated Loss Reserve Amounts and
the denominator of which is the aggregate Adjusted Eligible
Receivables at the end of a Settlement Period. The AAA Rated

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Weighted Average Loss Reserve Ratio as calculated on each
Determination Date and included in the applicable Settlement
Statement shall remain in effect from and including the related
Determination Date to but excluding the following Determination
Date.

"A Rated Weighted Average Loss Reserve Ratio" shall
mean the percentage equivalent of a fraction the numerator of
which is the sum of all the A Rated Loss Reserve Amounts and the
denominator of which is the aggregate Adjusted Eligible
Receivables at the end of a Settlement Period. The A Rated
Weighted Average Loss Reserve Ratio as calculated on each
Determination Date and included in the applicable Settlement
Statement shall remain in effect from and including the related
Determination Date to but excluding the following Determination
Date.

"Adjusted Eligible Receivables" shall mean, for any
Business Day, the aggregate unpaid balance of Eligible
Receivables minus the sum of the aggregate unpaid balance of
Eligible Receivables for any Obligor at the end of the prior
Business Day in excess of the applicable Concentration Limit for
such Obligor at the end of such prior Business Day.

"Adverse Claim" shall mean any Lien, claim, security
interest, UCC Financing Statement, mortgage, deed of trust,
priority, pledge, charge, conditional sale, title retention
agreement, financing lease, encumbrance, option, interest or
similar right of any other Person or any agreement to give any of
the foregoing other than as expressly permitted pursuant to the
Pooling and Servicing Agreement, the Sale and Servicing Agreement
or the Contribution and Sale Agreement.

"Affiliate" of any Person shall mean any other Person
controlling, controlled by or under common control with such
Person or, in any event, a Person which has the power to vote 25%
or more of the securities having ordinary voting power for the
election of directors of the specified Person. As used herein,
"control" of a specified Person shall mean the ability to direct
or cause the direction of the management and policies of the
specified Person, whether through the direct or indirect
ownership of the voting securities of such specified Person, by
contract or otherwise.

"Aggregate Eligible Receivables" shall mean, for any
Business Day, the aggregate Unpaid Balances of the Receivables
held in the Trust that were Eligible Receivables at the end of
the prior Business Day.

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<PAGE> 115

"Aggregate Invested Amount" shall mean the sum of the
Invested Amounts with respect to all Series of Investor
Certificates then issued and outstanding.

"Aggregate Invested Percentage" shall mean the sum of
the Invested Percentages with respect to all Series of Investor
Certificates then issued and outstanding.

"Amortization" shall have, with respect to each Series,
the meaning specified in the applicable Supplement.

"Amortization Period" shall mean with respect to any
Series, the period following the Revolving Period, which may be
an Accumulation Period, a Controlled Amortization Period, an
Early Amortization Period, a Rapid Amortization Period (each as
defined in any related Supplement, if applicable) or as otherwise
defined in any related Supplement.

"Amortization Period Commencement Date" shall mean with
respect to any Series the day on which the Amortization Period
with respect thereto commences.

"Appointment Date" shall have the meaning specified in
Section 9.3 of the Pooling and Servicing Agreement.

"Authorized Newspaper" shall mean The Wall Street
Journal, The New York Times or if neither of the above is
published any newspaper of general circulation in the Borough of
Manhattan, The City of New York, New York, and printed in the
English language and customarily published on each Business Day,
whether or not published on Saturdays, Sundays and holidays.

"Average Dilution Ratio" shall mean, with respect to
any Settlement Period, the percentage equivalent of a fraction
the numerator of which is the aggregate amount of Dilutive
Credits occurring during the immediately preceding twelve
Settlement Periods for each of the Designated Subsidiaries and
the denominator of which is the aggregate Unpaid Balance of
Receivables originated by each Originator during each of the
immediately preceding twelve Settlement Periods.

"Book-Entry Certificates" shall mean certificates
evidencing a beneficial interest in the Investor Certificates,
ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 6.11 of the
Pooling and Servicing Agreement; provided, however, that after
the occurrence of a condition whereupon book-entry registration
and transfer are no longer permitted and Investor Certificates
are to be issued to the Certificate Owners, such certificates
shall no longer be "Book-Entry Certificates".

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<PAGE> 116

"Business Day" shall mean any day other than (a) a
Saturday or a Sunday, (b) any other day on which banking
institutions or trust companies in the State of New York
generally or The City of New York, New York, or the States of
Illinois and Delaware are not authorized or required by law to
close and, for the purposes of determining LIBOR only, shall mean
a day for dealings by and between banks in U.S. dollar deposits
in the London interbank eurodollar markets.

"Canadian Receivable" shall mean any Receivable the
Obligor of which is located in Canada and which is denominated in
Canadian dollars.

"Certificate" shall mean one of any Series of Investor
Certificates or the Transferor Certificate.

"Certificate Owner" shall mean, with respect to a
Book-Entry Certificate, the Person who is the owner of such
Book-Entry Certificate, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in
accordance with the rules of such Clearing Agency).

"Certificateholder" shall mean the Person in whose name
a Certificate is registered in the Certificate Register.

"Certificate Rate" shall mean, with respect to any
Series of Certificates, the percentage (or formula on the basis
of which such rate shall be determined) stated in the applicable
Supplement, which rate shall be calculated on the basis stated in
such Supplement.

"Certificate Register" shall mean the register
maintained pursuant to Section 6.3 of the Pooling and Servicing
Agreement.

"Clearing Agency" shall mean an organization registered
as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended.

"Clearing Agency Participant" shall mean a broker,
dealer, bank, other financial institution or other Person for
whom from time to time a Clearing Agency effects book-entry
transfers and pledges of securities deposited with the Clearing
Agency.

"Closing Date" shall mean, when used with respect to
any Series, the date of issuance of such Series.

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

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<PAGE> 117

"Collection Account" shall have the meaning specified
in Section 4.2 of the Pooling and Servicing Agreement.

"Collections" shall mean, with respect to the
Receivables on any Business Day, all amounts received by the
Master Servicer or paid to or deposited in Lock-Box Accounts
since the prior Business Day in collected funds in payment of or
in respect of the Receivables, including, without limitation, all
cash proceeds (as such term is defined in the UCC) thereof, all
Recoveries, and all amounts to be deposited into the Collection
Account as proceeds of the sale of Receivables pursuant to
Section 9.3 or Article XII of the Pooling and Servicing
Agreement.

"Concentration Limit" shall mean at any time (i) for
any Obligor the long-term unsecured senior debt obligations of
which are rated at least "A-" or its equivalent by the applicable
Rating Agency or the short-term deposits or commercial paper of
which is rated at least "A-1" or its equivalent by the applicable
Rating Agency or for any Level One Special Obligor, 7.5% of the
Aggregate Eligible Receivables; provided however, that the limit
shall instead be for Sears, Roebuck & Co., 12.0% of the Aggregate
Eligible Receivables so long as Sears, Roebuck & Co. maintains a
short term credit rating of "A-2" or its equivalent from the
applicable Rating Agency, (ii) for any Obligor the long-term
unsecured senior debt obligations of which are rated at least
"BBB-" or its equivalent and not more than "BBB+" or its
equivalent by the applicable Rating Agency, or the short-term
deposits or commercial paper of which is rated at least "A-3" or
its equivalent by the applicable Rating Agency or for any Level
Two Special Obligor, 5.0% of the Aggregate Eligible Receivables,
(iii) for any other Obligor, 2.0%, in each case of the Aggregate
Eligible Receivables; (iv) for all Obligors of Government
Receivables, taken in the aggregate and not individually, 2.0% of
the Aggregate Eligible Receivables, (v) for all Obligors of
Canadian Receivables not subject to currency rate protection,
taken in the aggregate and not individually, 2.0% of the
Aggregate Eligible Receivables, (vi) for all Obligors of Progress
Billing Receivables, taken in the aggregate and not individually,
2.0% of the Aggregate Eligible Receivables, (vii) for any Obligor
which is an Affiliate of Eagle Industrial, taken in the aggregate
and not individually, 1.0% of the Aggregate Eligible Receivables;
provided, that for purposes of this clause (vii), "Affiliate"
shall mean any Person as to which Eagle Industrial has the power
to vote 51% or more of the securities having ordinary voting
power for the election of directors of such Person, (viii) for
Obligors of Receivables which by their terms are payable more
than 60 days from the Date of Processing, taken in the aggregate
and not individually, 15.0% of the Aggregate Eligible
Receivables; provided, however, for purposes of this clause
(viii), if Days Sales Outstanding exceeds 65 as of the last

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<PAGE> 118
Business Day of the preceding Settlement Period, Obligors of such
Receivables may not exceed 5.0% of the Aggregate Eligible
Receivables until Days Sales Outstanding no longer exceeds 65;
and (ix) for any Eligible Airline Industry Obligor, listed on
Schedule 5 of the Agreement, which has a non-investment grade
credit rating, the Receivables generated by sales to any such
Obligor may not exceed 2.0% of Aggregate Eligible Receivables and
Receivables generated by Sales to such Obligors with non-
investment grade credit ratings may not exceed, in the aggregate,
6.0% of Aggregate Eligible Receivables.

"Contract" shall mean either a written agreement
between an Originator and a Person, or an invoice pursuant to an
open account or written agreement of a Person, pursuant to which
such Person is obligated to pay (or to cause payment to be made)
for goods, merchandise and/or services.

"Contribution and Sale Agreement" shall mean the
Contribution and Sale Agreement, dated as of January 1, 1994 by
and between the Transferor, as buyer, and Eagle Industrial, as
seller and contributor, as the same may be amended and supple-
mented from time to time.

"Corporate Trust Office" shall mean the principal
office of the Trustee at which at any particular time its
corporate trust business shall be administered, which office at
the date of the execution of the Pooling and Servicing Agreement
is located at 231 South LaSalle Street, Chicago, Illinois 60697.

"Credit and Collection Policy" shall mean the credit
extension policies and procedures and collection practices of the
Originators relating to Receivables and Contracts as in effect on
the Initial Closing Date, as set forth in Exhibit D to the
Pooling and Servicing Agreement, and as the same may be modified
from time to time in accordance with Section 3.3(k) of the
Pooling and Servicing Agreement.

"Daily Report" shall mean a report substantially in the
form of Exhibit B to the Pooling and Servicing Agreement and
delivered pursuant to Section 3.4(b) of the Pooling and Servicing
Agreement.

"Date of Processing" shall mean, with respect to any
transaction by an Originator which generates a Receivable, the
date that such transaction has been or should have been first
recorded on the computer master file of Receivables maintained by
the Master Servicer or applicable Sub-Servicer (without regard to
the effective date of such recordation).

"Days Sales Outstanding" for any date shall mean an
amount equal to the product of (a) 30 multiplied by (b) the

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<PAGE> 119
amount obtained by dividing (i) the aggregate Unpaid Balance of
Receivables at the end of the most recently ended Settlement
Period by (ii) the average of the Unpaid Balances of Receivables
originated during the three most recently ended Settlement
Periods immediately preceding the most recent Determination Date.

"Debtor Relief Laws" shall mean the Bankruptcy Code of
the United States of America and all other applicable liquida-
tion, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, suspension of payments,
readjustment of debt, marshaling of assets or similar debtor
relief laws of the United States, any state or any foreign
country from time to time in effect affecting the rights of
creditors generally.

"Defaulted Amount" shall mean, with respect to any
Settlement Period, the sum of the amount of Adjusted Eligible
Receivables for each Designated Subsidiary which became Defaulted
Receivables during such Settlement Period and remained Defaulted
Receivables on the last Business Day of such Settlement Period.

"Default Ratio" shall mean, with respect to any
Settlement Period for each Designated Subsidiary, the percentage
equivalent of a fraction the numerator of which is the Defaulted
Amount and the denominator of which is the aggregate Unpaid
Balance of Receivables originated by each Designated Subsidiary
during the fifth Settlement Period prior to the most recently
ended Settlement Period (or, in the case of Hill, Mansfield and
Pfaudler, the seventh Settlement Period prior to the most
recently ended Settlement Period).

"Default Ratio Average" shall mean, with respect to any
Settlement Period for each Designated Subsidiary, the average of
the Default Ratios applicable to such Settlement Period and the
two immediately preceding Settlement Periods.

"Defaulted Receivable" shall mean, with respect to any
Settlement Period for each Designated Subsidiary a Receivable,
which when transferred to the Trust, was an Eligible Receivable,
that as of the end of any Business Day, (i) remains unpaid 91 to
120 days after the Original Due Date for such Receivable, or, in
the case of Receivables originated by Hill, Mansfield or
Pfaudler, remains unpaid for 151 to 180 days after the Original
Due Date for such Receivable or (ii) was written off by the
Master Servicer or the applicable Designated Subsidiary in
accordance with the Credit and Collection Policy as uncollectible
prior to becoming 91 days past due or, in the case of Receivables
originated by Hill, Mansfield and Pfaudler, prior to becoming 151
days past due.

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<PAGE> 120

"Definitive Certificates" shall have the meaning
specified in Section 6.11 of the Pooling and Servicing Agreement.

"Delinquent Receivable" shall mean, with respect to any
Business Day, any Eligible Receivable that is not a Defaulted
Receivable as of the end of any Settlement Period and as to which
all or any part of the outstanding balance remains unpaid more
than 60 days past its Original Due Date.

"Designated Subsidiary" shall mean each Subsidiary
which is designated as a Designated Subsidiary pursuant to
Section 8.07 of the Sale and Servicing Agreement and which has
not (i) been removed as a Designated Subsidiary in accordance
with Section 8.07 of the Sale and Servicing Agreement, or (ii)
ceased to be a Subsidiary. The Designated Subsidiaries shall
initially consist of the parties (other than Eagle Industrial) to
the Sale and Servicing Agreement. No Subsidiary may be
designated as a Designated Subsidiary without written
confirmation from each applicable Rating Agency that such
designation would not result in the withdrawal or reduction of
the rating of the Certificates. In the event that a Subsidiary
is removed as a Designated Subsidiary the Master Servicer shall
notify the Rating Agencies of such removal.

"Determination Date" shall mean the Business Day prior
to a Payment Date.

"Determination Date Statement" shall mean a report
substantially in the form of Exhibit E to the Pooling and
Servicing Agreement and delivered pursuant to Section 3.4(c) of
the Pooling and Servicing Agreement.

"Dilution Horizon Period" shall refer to the list
provided below.

Hart & Cooley 1.4 months
Hill 2.9 months
Mansfield 1.5 months
Elastimold 2.2 months
AEC 2.4 months
M-R-S 2.1 months
Lapp 1.3 months
Hendrix 2.3 months
Amerace-Canada 1.5 months
Pfaudler 1.9 months
Edlon 2.0 months
Chemineer 1.8 months
Burns Aerospace 2.4 months
DeVilbiss 1.5 months
Caron 3.0 months
Denman 1.3 months

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<PAGE> 121
Clevaflex 1.0 months

"Dilutive Credits" shall mean an amount equal to the
sum, without duplication, of (a) the aggregate reduction effected
on any date of determination in the Unpaid Balances of any
Receivables attributable to any defective, rejected or returned
goods, merchandise or services, any other non-cash discount, or
any adjustment or dispute granted with respect thereto by the
Master Servicer other than an adjustment that was made due to the
bankruptcy, insolvency or inability to pay of an Obligor, (b) the
aggregate reduction effected on such date in the Unpaid Balances
of any Receivables resulting from any setoff in respect of any
claim by any Obligor thereunder against Eagle Industrial or the
applicable Originator of the Receivable (whether or not such
claim is related to the transaction giving rise to the related
Receivable), but not to the extent that any Receivable so reduced
would, on the date of such Dilutive Credit, constitute a
Defaulted Receivable, (c) the aggregate Unpaid Balances of any
Receivables which on such date become subject to an Adverse Claim
or with respect to which the Transferor, pursuant to the Contri-
bution and Sale Agreement, or the Trustee, pursuant to the
Pooling and Servicing Agreement does not acquire or ceases to
have a valid transfer and assignment of all right, title and
interest therein and (d) all offsets, non-cash discounts and
other non-cash charges to any Receivable resulting from sales and
marketing activities of any Originator and the Obligor, includ-
ing, without limitation, coupon collection, display allowances or
cooperative advertising.

"Discount Factor" shall mean for the most recent
Settlement Period the greater of (I) the sum of (A) the greater
of (x) the A Rated Weighted Average Loss Reserve Ratio or (y) the
sum of (i) 14% (or 12%, in the event that Sears, Roebuck & Co.
has a long term debt rating of at least "A" or its equivalent
from S&P, or 10% in the event that the aggregate amount of
Eligible Receivables generated by sales to Sears, Roebuck & Co.
is less than or equal to 7.5% of Aggregate Eligible Receivables)
plus (ii) the weighted average of the most recent Highest Rolling
Average Dilution Ratio based on Adjusted Eligible Receivables for
each of the Designated Subsidiaries minus (iii) the most recent A
Rated Weighted Average Dilution Ratio plus (B) the most
recent Servicing Reserve Ratio plus (C) the most recent Yield Reserve
Ratio and (II) the sum of (A) the greater of (x) the most recent AAA Rated
Weighted Average Loss Reserve Ratio or (y) the sum of (i) 17% (or 15%, in the
event that the aggregate amount of Eligible Receivables generated by sales to
Sears, Roebuck & Co. is less than or equal to 7.5% of Aggregate Eligible
Receivables) plus (ii) the weighted average of the most recent Highest Rolling
Average Dilution Ratio based on Adjusted Eligible Receivables for each of the
Designated Subsidiaries minus (iii) the most recent AAA Rated Weighted Average
Dilution Ratio plus (B) the most

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<PAGE> 122
recent Servicing Reserve Ratio plus (C) the most recent Yield Reserve
Ratio plus (D) the most recent AAA Rated Weighted Average Dilution Ratio minus
(E) the most recent A Rated Weighted Average Dilution Ratio minus (F) the
percentage equivalent of a fraction, the numerator of which is the Class B
Invested Amount and the denominator of which is the aggregate Unpaid Balance of
Adjusted Eligible Receivables.

"Disputed Item" shall mean a Receivable with respect to
which the deposit of the payment received for such Receivable
might adversely affect the right to collect the full Unpaid
Balance of such Receivable.

"D&P" shall mean Duff & Phelps Credit Rating Co.

"Dollars" and "$" shall mean dollars in lawful currency
of the United States of America or Canada, as applicable.

"Eagle Industrial" shall mean Eagle Industrial Products
Corporation, a Delaware corporation.

"Eligible Airline Industry Obligors" shall mean,
initially, the Obligors listed on Schedule 5 to the Agreement;
provided, however, that the Master Servicer may add or remove
Obligors from such Schedule if the Master Servicer has received
written confirmation from S&P that such addition or removal would
not result in the withdrawal or reduction of the rating of any
Series of Certificates.

"Eligible Institution" shall have the meaning set forth
in Section 4.2(a) of the Pooling and Servicing Agreement.

"Eligible Master Servicer" shall mean Eagle Industrial
or an entity which, at the time of its appointment as Master
Servicer, (i) is legally qualified and has the capacity to
service the Receivables, (ii) has demonstrated the ability to
service professionally and completely a portfolio of similar
accounts in accordance with high standards of skill and care,
(iii) is qualified and, if required, licensed to use the software
that the Master Servicer is then currently using to service the
Receivables or obtains the right to use or has software which is
adequate to perform its duties under the Pooling and Servicing
Agreement (including pursuant to a license from or other
agreement with Eagle Industrial or any of its Affiliates) and
(iv) is not in a business which is a competitor of either the
Master Servicer or any of the Designated Subsidiaries.

"Eligible Receivable" shall mean a Receivable:

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<PAGE> 123

(i) which was created in the ordinary course of
business from the sale by an Originator of goods, merchan-
dise or services;

(ii) with respect to which the Obligor's
obligation to pay is evidenced by a Contract which provides
for full payment of the amount thereof in accordance with
the Credit and Collection Policy (subject to any applicable
advertising allowance, sales and marketing discount and
customary return policy), the delivery of the goods or
merchandise or the rendering of the services giving rise to
such Receivable has been completed and such goods or
merchandise or such services have not been rejected by the
Obligor;

(iii) that is not, as of the date of transfer to
the Trust, or at any time thereafter, a Delinquent
Receivable or a Defaulted Receivable;

(iv) which, to the extent any applicable law would
prohibit the assignment of any Government Receivable to the
Trustee, does not constitute any such prohibited Government
Receivable;

(v) that was created in compliance, in all
material respects, with the Credit and Collection Policy and
all Requirements of Law applicable to Eagle Industrial or
the applicable Designated Subsidiary and pursuant to a
Contract that complies, in all material respects, with the
Credit and Collection Policy and all Requirements of Law
applicable to Eagle Industrial or the applicable Designated
Subsidiary, that has not been written off by Eagle
Industrial or the applicable Designated Subsidiary, that was
purchased or acquired by the Transferor in accordance with
the Contribution and Sale Agreement, and, as of the date of
purchase or acquisition under the Contribution and Sale
Agreement and the subsequent transfer pursuant to the
Pooling and Servicing Agreement, the terms of which have not
been extended or modified except in accordance with the
Credit and Collection Policy;

(vi) with respect to which all consents, licenses,
approvals or authorizations of, or registrations or
declarations with, any Governmental Authority required to be
obtained, effected or given by Eagle Industrial or the
applicable Designated Subsidiary in connection with the
creation of such Receivable or the execution, delivery and
performance by Eagle Industrial or the applicable Designated
Subsidiary of the related Contract, have been duly obtained,
effected or given and are in full force and effect as of
such date of creation;

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<PAGE> 124

(vii) as to which, at the time of the creation and
contribution or sale to the Transferor of such Receivable,
Eagle Industrial or a Designated Subsidiary had good and
marketable title thereto free and clear of all Liens and
Adverse Claims except as contemplated by the Sale and
Servicing Agreement or the Contribution and Sale Agreement;

(viii) that arises under a Contract which has been
duly authorized and which, together with such Receivable, is
in full force and effect and such Contract, together with
such Receivable, constitutes the legal, valid and binding
payment obligation of the Obligor with respect thereto,
enforceable against such Obligor in accordance with its
terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws, now or hereafter in
effect, affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by
general principles of equity (whether considered in a suit
at law or in equity);

(ix) which, at the date of its creation or at any
time thereafter, is not, and does not arise under a Contract
which is, subject to any dispute, offset, defense, recision,
set-off, recoupment or counterclaim (other than Eagle
Industrial's or any Designated Subsidiary's, as appropriate,
advertising allowances, sales and marketing discount and
customary return policy) which has been communicated to the
Seller or about which the Seller has knowledge;

(x) that is an account receivable representing
all or part of the sales price of merchandise, insurance or
services (within the meaning of Section 3(c)(5) of the
Investment Company Act of 1940, as amended);

(xi) that is denominated and payable only in
United States or Canadian Dollars;

(xii) the Obligor of which (A) is not bankrupt,
insolvent, undergoing composition or adjustment of debts or
unable to make payment of its obligations when due and (B)
except in the case of Eligible Airline Industry Obligors,
Level One Special Obligors, Level Two Special Obligors or
Letter of Credit Obligors is located (within the meaning of
Section 9-103 of the applicable UCC) within the United
States of America or in Canada;

(xiii) that constitutes an "account" or a "general
intangible" under and as defined in Section 9-106 of the UCC
as then in effect in the State of Illinois; and

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<PAGE> 125

(xiv) that arises out of any business or related
business in which Eagle Industrial or a Designated
Subsidiary is engaged, the products or services of which are
distributed through substantially the same distribution
channels as those used with respect to products of such
businesses; provided, however, that any Receivable that
becomes subject to a first priority lien, pursuant to
statutes in effect in the states of Pennsylvania or New
Hampshire, will become an Ineligible Receivable for the
purposes of Section 2.4(c);

Notwithstanding any of the above, no portion of the Unpaid
Balance of an Eligible Receivables that is subject to a Dilutive
Credit will be considered an Eligible Receivable.

"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time, and the
regulations promulgated thereunder.

"ERISA Affiliate" shall mean with respect to any
Person, at any time, each trade or business (whether or not
incorporated) that would, at the time, be treated together with
such Person as a single employer under Section 4001 of ERISA or
Sections 414(b), (c), (m) or (o) of the Code.

"Event of Termination" shall have, with respect to any
Series, the meaning specified in Section 9.1 of the Pooling and
Servicing Agreement and any Supplement.

"Excess Funding Account" shall have the meaning set
forth in Section 4.2(b) of the Pooling and Servicing Agreement.

"Excess Funding Account Deposit Amount" shall mean,
with reference to any day on which the Transferor Amount is, or
would be, less than the Minimum Transferor Amount, an amount
equal to the difference between the Minimum Transferor Amount and
the Transferor Amount.

"FDIC" shall mean the Federal Deposit Insurance
Corporation or any successor entity thereto.

"Final Trust Termination Date" shall have the meaning
specified in Section 12.1(a) of the Pooling and Servicing
Agreement.

"GAAP" shall mean generally accepted accounting
principles.

"Governmental Authority" shall mean the United States
of America, any state or other political subdivision thereof, or
any agency, instrumentality, or subdivision of any of the

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<PAGE> 126
foregoing and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining
to government.

"Government Receivable" shall mean any obligation of a
Governmental Authority.

"Highest Rolling Average Dilution Ratio" shall mean
with respect to any Settlement Period for each Designated
Subsidiary, the highest Rolling Average Dilution Ratio occurring
during the immediately preceding twelve Settlement Periods.

"Holder" shall mean, in the case of the Certificates,
the Person in whose name a Certificate is registered as owner in
the Certificate Register.

"Imputed Yield" shall mean with respect to any date of
determination the product of the Unpaid Balances and the Discount
Factor.

"Imputed Yield Collections" shall have the meaning
specified in Section 4.3(b) of the Pooling and Servicing
Agreement.

"Indebtedness" of a Person shall mean such Person's (i)
obligations for borrowed money, (ii) obligations representing the
deferred purchase price of property other than accounts payable
arising in the ordinary course of such Person's business on terms
customary in the trade, (iii) obligations, whether or not
assumed, secured by Liens or payable out of the proceeds or
production from property now or hereafter owned or acquired by
such Person, (iv) obligations which are evidenced by notes,
acceptances or other instruments, (v) obligations for which such
Person is obligated pursuant to a guaranty, keepwell, capital
requirement, take-or-pay, "put" or similar agreement and (vi)
obligations in respect of a lease of property which is required
to be capitalized in accordance with GAAP.

"Independent Director" shall mean a member of the Board
of Directors of the Transferor who (i) is not employed by the
Transferor an officer or an employee or by any of its subsidi-
aries or Affiliates as a director, officer or employee, (ii) is
not (and is not affiliated with a company or a firm that is) a
significant advisor or consultant to the Transferor or any of its
subsidiaries and Affiliates; (iii) is not affiliated with a
significant customer or supplier of the Transferor or any of its
subsidiaries or Affiliates; (iv) is not affiliated with a company
of which the Transferor or any of its subsidiaries and Affiliates
is a significant customer or supplier; (v) does not have signifi-
cant personal services contract(s) with the Transferor or any of

15
<PAGE> 127
its subsidiaries or Affiliates; (vi) is not affiliated with a
tax-exempt entity that receives significant contributions from
the Transferor or any of its subsidiaries or Affiliates; (vii) is
not the beneficial owner at the time of such individual's
appointment as an Independent Director, or at any time thereafter
while serving as an Independent Director, of such number of
shares of any classes of common stock of the Transferor, the
value of which constitutes more than 0% of the outstanding common
stock of the Transferor; and (viii) is not a spouse, parent,
sibling or child of any Person described by (i) through (vii).
As used in this definition of "Independent Director", the
following terms shall have the meanings set forth in this
section: (i) a "subsidiary" of the Transferor shall mean any
corporation a majority of the voting stock of which is owned,
directly or indirectly through one or more other subsidiaries, by
the Transferor; (ii) a Person shall be deemed to be, or to be
affiliated with, a company or firm that is a "significant advisor
or consultant to the Transferor or any of its subsidiaries or
Affiliates" if he, she, or it, as the case may be, received or
would receive fees or similar compensation from the Transferor or
any of its subsidiaries or Affiliates in excess of the lesser of
(A) 3% of the consolidated gross revenues which the Transferor and
its subsidiaries received for the sale of their products and
services during the last fiscal year of the Transferor; (B) 5% of
the gross revenues of the Person during the last calendar year if
such person is a self-employed individual; and (C) 5% of the
consolidated gross revenues received by such company or firm for
the sale of its products and services during its last fiscal
year, if the Person is a company or firm; provided, however, that
director's fees and expense reimbursements in his capacity as a
director shall not be included in the gross revenues of an indi-
vidual for purposes of this determination; (iii) a "significant
customer of the Transferor or any of its subsidiaries or
Affiliates" shall mean a customer from which the Transferor and
any of its subsidiaries or Affiliates collectively in the last
fiscal year of the Transferor received payments in consideration
for the products and services of the Transferor and its subsidi-
aries or Affiliates which are in excess of 3% of the consolidated
gross revenues of the Transferor and its subsidiaries during such
fiscal year; (iv) a "significant supplier of the Transferor or
any of its subsidiaries or Affiliates" shall mean a supplier to
which the Transferor and any of its subsidiaries or Affiliates
collectively in the last fiscal year of the Transferor made
payments in consideration for the supplier's products and
services in excess of 3% of the consolidated gross revenues of
the Transferor and its subsidiaries during such fiscal year; (v)
the Transferor or any of its subsidiaries and Affiliates shall be
deemed a "significant customer" of a company if the Transferor
and any of its subsidiaries and Affiliates collectively were the
direct source during such company's last fiscal year of in excess
of 5% of the gross revenues which such company received for the

16
<PAGE> 128
sale of its products and services during such fiscal year; (vi)
the Transferor or any of its subsidiaries and Affiliates shall be
deemed a "significant supplier" of a company if the Transferor
and any of its subsidiaries and Affiliates collectively received
in such company's last fiscal year payments from such company in
excess of 5% of the gross revenues which such company received
during such fiscal year for the sale of its products and
services; (vii) a person shall be deemed to have "significant
personal services contract(s) with the Transferor or any of its
subsidiaries or Affiliates" if the fees and other compensation
received by the person pursuant to personal services contract(s)
with the Transferor and any of its subsidiaries or Affiliates
exceeded or would exceed 5% of his or her gross revenue during
the last calendar year; and (viii) a tax-exempt entity shall be
deemed to receive "significant contributions from the Transferor
or any of its subsidiaries or Affiliates" if such tax-exempt
entity received during its contributions from or its subsidiaries
or Affiliates in excess of the lesser of (A) 3% of the consoli-
dated gross revenues of the Transferor and its subsidiaries
during such fiscal year and (B) 5% of the contributions received
by the tax-exempt entity during such fiscal year.

In the event that any Independent Director's certificate shall be
required, such certificate shall state that the signer has read
this definition and that the signer is an Independent Director
within the meaning hereof.

"Ineligible Receivable" shall have the meaning speci-
fied in Section 2.4(c) of the Pooling and Servicing Agreement.

"Initial Closing Date" shall mean January 31, 1994.

"Initial Invested Amount" shall mean, with respect to
any Series, the amount specified in the applicable Supplement.

"Insolvency" or "Insolvent" shall mean, with respect to
any Multiemployer Plan, the condition that such Plan is insolvent
within the meaning of Section 4245 of ERISA.

"Interest Funding Account" shall mean, for any Series,
the account, if any, established pursuant to the related
Supplement in which amounts representing interest payable on the
Investor Certificates of such Series will be deposited and held
until paid to Certificateholders.

"Invested Amount" shall have the meaning with respect
to any Series as set forth in the applicable Supplement.

"Invested Percentage" shall have the meaning with
respect to any Series as set forth in the applicable Supplement.

17
<PAGE> 129

"Investor Certificate" shall mean a certificate issued
pursuant to Section 6.1 or Section 6.9 of the Pooling and
Servicing Agreement by the Transferor and authenticated by or on
behalf of the Trustee, substantially in the form of an exhibit to
the related Supplement.

"Investor Certificateholder" shall mean the Holder of
record of an Investor Certificate as indicated in the Certificate
Register.

"Investor Default Amount" shall mean, for any Series
the amount, if any, set forth in the applicable Supplement.

"Investor Interest" shall have the meaning specified in
Section 4.1 of the Pooling and Servicing Agreement.

"Issuance Date" shall have the meaning, with respect to
any Series issued pursuant to Section 6.9 of the Pooling and
Servicing Agreement, stated in such Section.

"Issuance Notice" shall have the meaning, with respect
to any Series issued pursuant to Section 6.9 of the Pooling and
Servicing Agreement, stated in such Section.

"Letter of Representations" shall have the meaning set
forth in Section 6.11 (iii) of the Pooling and Servicing
Agreement.

"Level One Special Obligor" shall mean an Obligor for
which the Master Servicer or the Transferor has received written
confirmation from the Rating Agencies that, for purposes of
calculating the amount of Adjusted Eligible Receivables, the
Receivables generated by sales to such Obligor may be included in
the aggregate amount of Eligible Receivables up to the limit set
forth in clause (i) of the definition of Concentration Limit set
forth herein without causing a withdrawal or reduction of the
rating of the Certificates.

"Level Two Special Obligor" shall mean an Obligor for
which the Master Servicer or the Transferor has received written
confirmation from the Rating Agencies that, for purposes of
calculating the amount of Adjusted Eligible Receivables, the
Receivables generated by sales to such Obligor may be included in
the aggregate amount of Eligible Receivables up to the limit set
forth in clause (ii) of the definition of Concentration Limit set
forth herein without causing a withdrawal or reduction of the
rating of the Certificates.

"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), preference, UCC Financing Statement

18
<PAGE> 130
priority or other security agreement or preferential arrangement
of any kind or nature whatsoever, including, without limitation,
any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as
any of the foregoing and the filing of any financing statement
under the UCC or comparable law of any jurisdiction to evidence
any of the foregoing; provided, however, that any assignment
permitted by Section 6.3(b), 7.2, or 7.4 of the Pooling and
Servicing Agreement shall not be deemed to constitute a Lien;
provided, further, however, that any lien created by the Pooling
and Servicing Agreement, Contribution and Sale Agreement or Sale
and Servicing Agreement shall not be deemed to constitute a Lien.

"Lock-Box Account" shall mean a bank account in the
name of the Trustee, on behalf of Certificateholders, maintained
with a Lock-Box Bank.

"Lock-Box Agreements" shall mean the collective
reference to each agreement between an Originator and a Lock-Box
Bank, substantially in the form of Exhibit F to the Pooling and
Servicing Agreement.

"Lock-Box Banks" shall mean any of the banks listed in
Exhibit G to the Pooling and Servicing Agreement (including their
successors) and any other bank which becomes a Lock-Box Bank pur-
suant to Section 2.6(i) of the Pooling and Servicing Agreement
and which is a party to a Lock-Box Agreement.

"Loss Reserve Amount" on any Determination Date shall
mean for each Designated Subsidiary the product of (A) the
aggregate Unpaid Balance of Receivables generated by each
Designated Subsidiary during the four most recently ended
Settlement Periods (or, in the case of Hill, the three most
recently ended Settlement Periods) and (B) the highest Default
Ratio Average occurring for it over the most recent twelve
Settlement Periods and (C) the AAA Rated Stress Factor or the
A Rated Stress Factor, as applicable as of the end of the most
recently ended Settlement Period.

"Master Servicer" shall initially mean Eagle Industrial
and thereafter any Person appointed as successor as provided in
the Pooling and Servicing Agreement to service the Receivables.

"Master Servicer Default" shall have the meaning speci-
fied in Section 10.1 of the Pooling and Servicing Agreement.

"Minimum Transferor Amount" shall mean, with respect to
any Business Day, an amount equal to the product of the Minimum
Transferor Percentage and the aggregate Unpaid Balance of
Adjusted Eligible Receivables, in each case at the end of the
preceding Business Day.

19
<PAGE> 131

"Minimum Transferor Percentage" shall mean the highest
Minimum Transferor Percentage specified in any Supplement relat-
ing to Certificates that are outstanding at the time such per-
centage is computed.

"Multiemployer Plan" shall mean a "multiemployer plan"
as defined in Section 4001(a)(3) of ERISA to which contributions
are or have been made during the preceding five (5) years by any
Person or any ERISA Affiliate of such Person.

"Obligor" shall mean, with respect to any Receivable,
the Person or Persons obligated to make payments with respect to
such Receivable under a Contract.

"Officer's Certificate" shall mean a certificate signed
by the Chairman of the Board, President, Treasurer, Controller or
any Vice President of the Transferor or the Master Servicer or,
in the case of a Successor Master Servicer, a certificate signed
by a Vice President (or an officer holding an office with equiva-
lent or more senior responsibilities) of such Successor Master
Servicer, and delivered to the Trustee.

"Official Body" shall mean any government or political
subdivision or any agency, authority, bureau, central bank,
commission, department or instrumentality thereof, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign
or domestic.

"Opinion of Counsel" shall mean a written opinion of
counsel, who may be an employee of the Transferor or the Master
Servicer and who shall be reasonably acceptable to the Trustee.

"Original Due Date" shall mean, for each Eligible
Receivable, the last day of the stated term (which shall not
exceed 90 days or in the case of Hill, Mansfield or Pfaudler, 150
days) allowed to the related Obligor for payment of such Eligible
Receivable at the time such Eligible Receivable was created and
transferred to the Trust.

"Originator" shall mean any Designated Subsidiary or
Eagle Industrial.

"Paying Agent" shall mean any paying agent appointed
pursuant to Section 6.6 of the Pooling and Servicing Agreement
and shall initially be the Trustee.

"Payment Date" shall mean with respect to any Series
the date specified as such in the applicable Supplement.

20
<PAGE> 132

"PBGC" shall mean the Pension Benefit Guaranty
Corporation as established under the provisions of Section 4002
of ERISA.

"Permitted Investments" shall have the meaning set
forth in Section 4.2(a) of the Pooling and Servicing Agreement.

"Person" shall mean any legal person, including any
individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, govern-
mental entity or other entity of similar nature.

"Plan" shall mean, with respect to any Person, any
employee pension benefit plan that (a) is maintained by such
Person or any ERISA Affiliate of such Person, or to which contri-
butions by any such Person are required to be made or under which
such Person has or could have any liability, (b) is subject to
the provisions of Title IV of ERISA and (c) is not a
Multiemployer Plan.

"Plan Event" shall mean, with respect to the Transferor
and any ERISA Affiliate, (a) the provision of a notice of intent
to terminate any Plan under Section 4041 of ERISA other than in a
"standard termination", (b) the receipt of any notice by any Plan
to the effect that the PBGC intends to apply for the appointment
of a trustee to administer any Plan, (c) the termination of any
Plan which results in any material liability of the Transferor,
(d) the withdrawal of the Transferor or any ERISA Affiliate from
any Plan described in Section 4063 of ERISA which could be rea-
sonably expected to result in a material liability of the Trans-
feror, (e) the complete or partial withdrawal of the Transferor
or any ERISA Affiliate from any Multiemployer Plan which could be
reasonably anticipated to result in a material liability of the
Transferor, (f) a Reportable Event or an event described in
Section 4068(f) of ERISA which could be reasonably anticipated to
result in a material liability of the Transferor, and (g) any
other event or condition which under ERISA or the Code could be
reasonably expected to constitute grounds for the imposition of a
material Lien on the assets of the Transferor in respect of any
Plan or Multiemployer Plan, except for contributions not exceed-
ing the limit for contributions deductible for Federal income tax
purposes and the payment of benefits in accordance with the terms
of the Plan or the Multiemployer Plan.

"Pooling and Servicing Agreement" shall mean the
Pooling and Servicing Agreement, dated as of January 1, 1994, by
and among the Transferor, the Master Servicer, and the Trustee,
and all amendments thereof and supplements thereto, including any
Supplement.

21
<PAGE> 133

"Portfolio Yield" with respect to any Series shall have
the meaning (if any) specified in the applicable Supplement.

"Post Office Boxes" shall mean the post office boxes
identified on Exhibit G to the Pooling and Servicing Agreement.

"Principal Collections" shall have the meaning speci-
fied in Section 4.3(b) of the Pooling and Servicing Agreement.

"Principal Funding Account" shall mean, for any Series,
the account, if any, established pursuant to the related
Supplement in which amounts representing principal payable on the
Investor Certificates of such Series will be deposited and held
until paid to Certificateholders.

"Principal Terms" shall have the meaning specified in
Section 6.9(b) of the Pooling and Servicing Agreement.

"Private Placement Exemption" shall have the meaning
specified in Section 6.2 of the Pooling and Servicing Agreement.

"Progress Billing Receivables" shall mean a Receivable
which (i) represents an installment payment for goods in the
process of being manufactured, due upon receipt of such
Receivable, or (ii) represents the final payment for completed
goods, due upon the delivery of such goods, and which represents
only the amount not already received as an installment payment
for such goods.

"Prospective Event of Termination" shall have the mean-
ing specified in Section 2.3(k) of the Pooling and Servicing
Agreement.

"Rating Agency" shall mean, with respect to each
Series, the rating agency or rating agencies that rated the
Series, at the request of the Master Servicer.

"Receivable" shall mean each account receivable or
general intangible that is owing upon creation to an Originator
by a Person under a contract, invoice or purchase order arising
from the sale of goods or services rendered by an Originator in
connection with its businesses, including all obligations of such
Person with respect thereto, including, without limitation, all
proceeds of the foregoing. A Receivable shall be deemed to have
been created at the end of the day on the Date of Processing of
such Receivable.

"Record Date" shall have the meaning specified in the
applicable Supplement.

22
<PAGE> 134

"Recoveries" shall mean all amounts (including proceeds
of credit insurance, if any) received by the Master Servicer with
respect to Receivables which have previously become Defaulted
Receivables, provided, however, that Recoveries shall not include
any amounts received with respect to any Receivable to the extent
such amounts have been previously paid by credit insurers and
credited as Recoveries.

"Reorganization" shall mean, with respect to any
Multiemployer Plan, the condition that such Plan is in reorgani-
zation within the meaning of Section 4241 of ERISA.

"Reportable Event" shall mean any of the events set
forth in Section 4043(b) of ERISA, other than those events as to
which the thirty-day notice period is waived under subsections
.13, .14, .16, .18, .19 or .20 of PBGC Regulation Section 2615.

"Repurchase Terms" shall mean, with respect to any
Series, the terms and conditions, if any, under which the
Transferor may repurchase such Series pursuant to Section 12.2 of
the Pooling and Servicing Agreement as stated as such in the
applicable Supplement.

"Requirements of Law" for any Person shall mean the
certificate of incorporation or articles of association and
by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation, or determination
of an arbitrator or Governmental Authority, in each case applica-
ble to or binding upon such Person or to which such Person is
subject, whether Federal, state or local (including, without
limitation, usury laws, the Federal Truth in Lending Act and
Regulation Z and Regulation B of the Board of Governors of the
Federal Reserve).

"Responsible Officer", when used with respect to the
Trustee, shall mean any officer within the Corporate Trust Office
(or any successor group of the Trustee) who has direct responsi-
bility for the administration of the Pooling and Servicing Agree-
ment or who is otherwise exercising judgment with respect to the
Pooling and Servicing Agreement or a Supplement.

"Revolving Period" shall mean, with respect to each
Series, the period from and including the Closing Date for such
Series, up to and including the day prior to the Amortization
Period Commencement Date for such Series, as described in the
applicable Supplement.

"Rolling Average Dilution Ratio" shall mean for each
Designated Subsidiary, with respect to any Settlement Period, the
percentage equivalent of a fraction the numerator of which is the
sum of Dilutive Credits occurring during such Settlement Period

23
<PAGE> 135
and the immediately preceding Settlement Period and the denomina-
tor of which is the aggregate Unpaid Balance of Receivables
originated during such Settlement Period and the immediately
preceding Settlement Period.

"Rule 144A" shall mean Rule 144A as promulgated under
the Securities Act.

"Sale and Servicing Agreement" shall mean the
Receivables Sale and Servicing Agreement, dated as of January 1,
1994, entered into among Eagle Industrial, as buyer, and each of
the Designated Subsidiaries, as sellers, as such Receivables Sale
and Servicing Agreement may be amended or supplemented from time
to time.

"Securities Act" shall mean the Securities Act of 1933,
as amended.

"Series" shall mean any series of Investor Certificates
issued under Section 6.9 of the Pooling and Servicing Agreement.

"Series Termination Date" shall mean, with respect to
any Series, the date stated as such in the applicable Supplement.

"Service Transfer" shall have the meaning specified in
Section 10.1 of the Pooling and Servicing Agreement.

"Servicing Fee" shall have the meaning specified in
Section 3.2 of the Pooling and Servicing Agreement.

"Servicing Fee Percentage" shall mean 1.0% per annum.

"Servicing Officer" shall mean any officer or employee
of the Master Servicer involved in, or responsible for, the ad-
ministration and servicing of the Receivables whose name appears
on a list furnished to the Trustee by the Master Servicer, as
such list may from time to time be amended.

"Servicing Reserve Ratio" shall mean (A) the product of
(i) the Servicing Fee Percentage and (ii) 2.0, divided by (B) 12.

"Settlement Period" shall mean each fiscal month of
Eagle Industrial ending on the applicable date set forth in
Schedule 3 to the Pooling and Servicing Agreement; provided,
however, that, in the case of the initial Settlement Period,
"Settlement Period" shall mean the period from and including the
Initial Closing Date to and including the last day of the fiscal
month in which the Initial Closing Date occurs.

"Standard & Poor's" or "S&P" shall mean Standard &
Poor's Ratings Group, a division of McGraw-Hill, Inc.

24
<PAGE> 136

"Sub-Servicer" shall have the meaning specified in
Section 3.1(a) of the Pooling and Servicing Agreement.

"Subsidiary" shall mean any corporation of which more
than 50% of the outstanding voting securities of which shall at
the time be owned or controlled, directly or indirectly, by Eagle
Industrial and/or by one or more Subsidiaries, or any similar
business organization which is so owned or controlled.

"Successor Master Servicer" shall have the meaning
specified in Section 10.2 of the Pooling and Servicing Agreement.

"Supplement" shall mean, with respect to any Series,
the supplement to the Pooling and Servicing Agreement related
thereto complying with the terms of Section 6.9 thereof.

"Termination Notice" shall have the meaning specified
in Section 10.1 of the Pooling and Servicing Agreement.

"Transaction Documents" shall mean the Contribution and
Sale Agreement, the Sale and Servicing Agreement and the Pooling
and Servicing Agreement (and any applicable Supplements thereto).

"Transfer Agent and Registrar" shall have the meaning
specified in Section 6.3 of the Pooling and Servicing Agreement.

"Transfer Date" shall mean, with respect to any Payment
Date, the Business Day immediately preceding such Payment Date.

"Transferor" shall mean Centrally Held Eagle Receiva-
bles Program, Inc., a Delaware corporation.

"Transferor Amount" shall mean for any day, the Trust
Principal Component at the end of the previous Business Day minus
the Aggregate Invested Amount at the end of such Business Day.

"Transferor Certificate" shall mean the certificate
executed by the Transferor and authenticated by the Trustee, sub-
stantially in the form of Exhibit A to the Pooling and Servicing
Agreement.

"Transferor Interest" shall have the meaning specified
in Section 4.1 of the Pooling and Servicing Agreement.

"Transferor Promissory Note" shall mean the note from
the Transferor in favor of Eagle Industrial substantially in the
form attached as Exhibit 2.03(a) to the Contribution and Sale
Agreement.

25
<PAGE> 137

"Transferor Percentage" shall mean, with respect to the
Transferor Certificate for any day, the excess on such day, if
any, of (a) 100% over (b) the Aggregate Invested Percentage.

"Trust" shall mean the trust created by the Pooling and
Servicing Agreement; such trust may be referred to as the "Eagle
Trade Receivables Master Trust".

"Trust Assets" shall have the meaning specified in
Section 2.1(a) of the Pooling and Servicing Agreement.

"Trustee" shall mean the institution executing the
Pooling and Servicing Agreement as trustee, or its successor in
interest, or any successor trustee appointed as provided in the
Pooling and Servicing Agreement.

"Trust Principal Component" shall mean, with respect to
any Business Day, an amount equal to the sum of (A) the product
of (i) the Adjusted Eligible Receivables as of the end of the
prior Business Day and (ii) 100% minus the Discount Factor as of
the end of such prior Business Day, and (B) the amount, if any,
held in the Excess Funding Account as of the end of such prior
Business Day.

"UCC" shall mean the Uniform Commercial Code, as
amended from time to time, as in effect in any specified or
applicable jurisdiction.

"Undivided Interest" shall mean the undivided interest
of any Investor Certificateholder in the Trust Assets. Such
Undivided Interest is to be measured, in the case of any Investor
Certificateholder, by such Holder's pro rata share of the
Invested Amount of the related Series or the Aggregate Invested
Amount, as the context may require.

"Unpaid Balance" shall mean with respect to a
Receivable, the outstanding amount of the indebtedness of the
related Obligor under or evidenced by the related Contract or
Contracts, exclusive of any sales or other tax, if any, included
or payable with respect to such purchase.

"Vice President" when used with respect to the
Transferor or the Master Servicer shall mean any vice president
whether or not designated by a number or word or words added
before or after the title "vice president".

"written" or "in writing" shall mean any form of writ-
ten communication, including, without limitation, by means of
telex, telecopier device, telegraph or cable.

26
<PAGE> 138

"Yield Reserve Ratio" means as of any day, the amount
obtained by dividing (A) the product of (i) 2.0 multiplied by the
Days Sales Outstanding calculated as of the most recent Deter-
mination Date and (ii) the weighted average of the Certificate
Rate for all Series (based on the Invested Amounts thereof)
(plus, in the case of any Series which bear interest at a float-
ing rate, 1.0%) by (B) 360. The Yield Reserve Ratio as calcu-
lated on each Determination Date and included in the applicable
Settlement Statement shall remain in effect from and including
the related Determination Date to but excluding the following
Determination Date.

<PAGE> 1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXHIBIT 4.4
CENTRALLY HELD EAGLE RECEIVABLES PROGRAM, INC.,

TRANSFEROR,
EAGLE INDUSTRIAL PRODUCTS CORPORATION,
MASTER SERVICER,
AND
CONTINENTAL BANK, NATIONAL ASSOCIATION,
TRUSTEE
ON BEHALF OF THE CERTIFICATEHOLDERS
-------------------------
SERIES 1994-1 SUPPLEMENT
DATED AS OF JANUARY 1, 1994
TO
EAGLE TRADE RECEIVABLES MASTER TRUST
POOLING AND SERVICING AGREEMENT

DATED AS OF JANUARY 1, 1994
-------------------------
FLOATING RATE TRADE RECEIVABLES-BACKED CERTIFICATES,
SERIES 1994-1, CLASS A

FLOATING RATE TRADE RECEIVABLES-BACKED CERTIFICATES,
SERIES 1994-1, CLASS B
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

SERIES 1994-1 SUPPLEMENT, dated as of January 1, 1994 (this "Supplement")
among CENTRALLY HELD EAGLE RECEIVABLES PROGRAM, INC., a Delaware corporation, as
Transferor (the "Transferor"), EAGLE INDUSTRIAL PRODUCTS CORPORATION, a Delaware
corporation, as Master Servicer (the "Master Servicer"), and CONTINENTAL BANK,
NATIONAL ASSOCIATION, a national banking association, as trustee (together with
its successors in trust thereunder as provided in the Pooling and Servicing
Agreement referred to below, the "Trustee"), under the Pooling and Servicing
Agreement, dated as of January 1, 1994 (the "Agreement") among the Transferor,
the Master Servicer and the Trustee.

PRELIMINARY STATEMENT

Section 6.9 of the Agreement provides, among other things, that the
Transferor and the Trustee may enter into a supplement to the Agreement for the
purpose of authorizing the issuance of Investor Certificates. The Transferor
hereby enters into this Supplement with the Master Servicer and the Trustee as
required by Section 6.9(b) of the Agreement to provide for the issuance,
authentication and delivery of the Floating Rate Trade Receivables-Backed
Certificates, Series 1994-1, Class A (the "Class A Certificates") and the
Floating Rate Trade Receivables-Backed Certificates, Series 1994-1, Class B (the
"Class B Certificates, and, together with the Class A Certificates, the "Series
1994-1 Certificates"). In the event that any term or provision contained herein
shall conflict with or be inconsistent with any term or provision contained in
the Agreement, the terms and provisions of this Supplement shall govern.

All capitalized terms not otherwise defined herein are defined in Annex X
to the Agreement. All Article, Section, Subsection, Schedule or Exhibit
references herein shall mean Articles, Sections, Subsections, Schedules or
Exhibits of the Agreement, as amended and supplemented by this Supplement,
except as otherwise provided herein.

Any reference to the Early Amortization Period, the Series 1994-1
Amortization Period, or the Revolving Period in this Supplement shall refer only
to such periods as they relate to the Series 1994-1 Certificates.

SECTION 1. Designation and Definitions.

(a) The Class A Certificates shall be designated generally as Floating
Rate Trade Receivables-Backed Certificates, Series 1994-1, Class A or the
Class A Certificates. The Class B Certificates shall be designated
generally as Floating Rate Trade Receivables-Backed Certificates, Series
1994-1, Class B or the Class B Certificates. The Class A Certificates and
the Class B Certificates together shall be designated generally as the
Series 1994-1 Certificates.

(b) For the purposes of the Agreement and this Supplement, the
following capitalized terms shall be defined as follows and shall
supersede, with respect to the Series 1994-1 Certificates, any definitions
of such terms contained in the Agreement or Annex X thereto:

"AEC " shall mean Amerace Electronic Components, a division of
Amerace Corporation, a Delaware corporation.

"Amerace-Canada" shall mean Amerace Ltd., a Canadian corporation.

"Burns Aerospace " shall mean Burns Aerospace Corporation, a
Delaware corporation.

"Caron" shall mean Caron International, Inc., a Delaware
corporation.

"Chemineer " shall mean Chemineer, Inc., a Delaware corporation.

"Class A Adjusted Invested Amount " for any Business Day shall mean
an amount equal to the Class A Invested Amount minus the amount on
deposit in the Collection Account allocated to Principal Collections.

"Class A Certificate Rate " shall mean 0.52% per annum in excess of
LIBOR.

"Class A Invested Amount " shall mean, with respect to any Business
Day, an amount equal to (i) the initial principal balance of the Class A
Certificates minus (ii) the amount of principal payments made to Class A
Certificateholders prior to such Business Day.
<PAGE> 3

"Class A Monthly Interest " has the meaning specified in Section
4.4(a) of the Agreement as set forth in this Supplement.

"Class A Monthly Principal " has the meaning specified in Section
4.5(a) of the Agreement as set forth in this Supplement.

"Class B Certificate Rate" shall mean 1.0% per annum in excess of
LIBOR.

"Class B Invested Amount" shall mean, with respect to any Business
Day, an amount equal to (i) the initial principal balance of the Class B
Certificates minus (ii) the amount of principal payments made to Class B
Certificateholders prior to such Business Day.

"Class B Monthly Interest" has the meaning specified in Section
4.4(b) of the Agreement as set forth in this Supplement.

"Class B Monthly Principal" has the meaning specified in Section
4.5(b) of the Agreement as set forth in this Supplement.

"Clevaflex" shall mean Clevaflex, a division of Eagle Industries, a
Delaware corporation.

"Denman" shall mean Denman Tire Corporation, a Delaware
corporation.

"DeVilbiss" shall mean DeVilbiss Air Power Company, a Delaware
corporation.

"Early Amortization Period" shall mean with respect to the Class A
Certificates and the Class B Certificates, the period commencing on the
date when an Event of Termination has occurred and has not been
otherwise waived, and continuing to and including the earlier of (i) the
payment in full to the Class A Certificateholders of the Initial Class A
Invested Amount and the payment in full to the Class B
Certificateholders of the Initial Class B Invested Amount and (ii) the
Series 1994-1 Termination Date.

"Edlon" shall mean Edlon Products, Inc. a Delaware corporation.

"Elastimold" shall mean Elastimold, a division of Amerace
Corporation, a Delaware corporation.

"Fixed Allocation Percentage" shall mean, (i) with respect to any
Business Day in the Series 1994-1 Amortization Period, the percentage
equivalent of a fraction, the numerator of which is the Invested Amount
at the end of the Business Day prior to such Series 1994-1 Amortization
Period and the denominator of which is the Trust Principal Component at
the end of the Business Day prior to such Series 1994-1 Amortization
Period or (ii) with respect to any Business Day in any Early
Amortization Period, the percentage equivalent of a fraction, the
numerator of which is the Invested amount at the end of the Business Day
prior to the commencement of such Early Amortization Period and the
denominator of which is the Aggregate Invested Amount at the end of the
Business Day prior to such Early Amortization Period.

"Floating Allocation Percentage" shall mean, with respect to any
Business Day during the Revolving Period, the percentage equivalent of a
fraction, the numerator of which is the sum of the Class A Adjusted
Invested Amount and the Class B Invested Amount as of the end of the
preceding Business Day, and the denominator of which is the Trust
Principal Compenent as of the end of such preceding Business Day.

"Hart & Cooley" shall mean Hart & Cooley, Inc., a Delaware
corporation.

"Hendrix" shall mean Conductron Corporation d/b/a Hendrix Wire &
Cable, a Massachusetts corporation.

"Hill" shall mean Hill Refrigeration, a division of Falcon
Manufacturing, Inc. a Delaware corporation.

"Invested Amount" shall mean, with respect to any Business Day, the
sum of the Class A Invested Amount and the Class B Invested Amount.

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<PAGE> 4

"Invested Percentage" shall mean, with respect to the Revolving
Period, the Floating Allocation Percentage or, with respect to the
Series 1994-1 Amortization Period or an Early Amortization Period, the
Fixed Allocation Percentage, for the Series 1994-1 Certificates.

"Lapp" shall mean Lapp Insulator Company, a Delaware corporation.

"Legal Final Maturity" shall mean June 25, 1999.

"LIBOR" shall have the meaning set forth in Section 4.4 hereof.

"LIBOR Determination Date" shall mean with respect to interest
payable on the Series 1994-1 Certificates on any Payment Date, the
second Business Day prior to the immediately preceding Payment Date.

"Mansfield" shall mean Mansfield Fixtures of Delaware, Inc. and
Mansfield Plumbing Products, Inc., a Delaware corporation.

"Minimum Transferor Percentage" shall mean, with respect to the
Series 1994-1 Certificates, initially, 7.65% and thereafter shall be
equal to the A Rated Weighted Average Dilution Ratio.

"M-R-S" shall mean MRS Power Systems, a division of Amerace
Corporation, a Delaware corporation.

"Payment Date" shall mean the 25th day of each month (or if such
day is not a Business Day, the next succeeding Business Day), commencing
February 25, 1994.

"Pfaudler" shall mean Pfaudler (United States), Inc., a Delaware
corporation.

"Rating Agencies" shall mean S&P and D&P.

"Record Date" shall mean, with respect to any Payment Date, the
last day of the calendar month immediately preceding such Payment Date.

"Reference Banks" shall be the major banks operating in the
interbank Eurodollar market.

"Required Amount" shall mean, as calculated on each Business Day
with respect to the next Payment Date, the sum of (i) the Class A
Monthly Interest, (ii) the Class B Monthly Interest, (iii) the Series
1994-1 Servicing Fee and (iv) the Series 1994-1 Trustee's Fee.

"Reuters Screen LIBO Page" shall mean the display page designated
as "LIBO" on the Reuters Monitor Money Rates Service.

"Series 1994-1 Amortization Period" shall mean the period beginning
on the Series 1994-1 Amortization Period Commencement Date and ending
upon payment in full of the Invested Amount, all accrued and unpaid
interest thereon and all other amounts owed to the Investor
Certificateholders hereunder.

"Series 1994-1 Amortization Period Commencement Date" shall mean
November 25, 1998.

"Series 1994-1 Servicing Fee" shall mean the portion of the
Servicing Fee allocable to the Holders of the Series 1994-1 Certificates
pursuant to Section 3.2 of the Agreement.

"Series 1994-1 Termination Date" shall mean June 25, 1999.

"Series 1994-1 Trustees' Fee" shall mean the portion of the
compensation paid to the Trustee in respect of the duties specified in
the Agreement and hereunder that is allocable to the Series 1994-1
Certificates.

"Series 1994-2 Certificate" shall mean the Certificate issued
pursuant to the Series 1994-2 Supplement, dated as of March 1, 1994,
among the Transferor, the Master Servicer and the Trustee.

"Special Payment Date" shall mean each Payment Date during any
Early Amortization Period and each Payment Date following the Legal
Final Maturity.

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<PAGE> 5

"Undistributed Principal Collections" shall mean, a pro rata amount
of the balance on deposit in the Excess Funding Account, if any, based
on, with respect to the Class A Certificates, the Invested Percentage of
the Class A Certificates as of the Series 1994-1 Amortization Period
Commencement Date or, with respect to the Class B Certificates,
commencing on the date the Class A Certificates have been paid in full,
the Invested Percentage of the Class B Certificates.

The words "hereof," "herein" and "hereunder " and words of similar import
when used in this Supplement shall refer to this Series Supplement or the
Agreement as a whole and not to any particular provision of this Supplement or
the Agreement, as the case may be.

SECTION 2. Agreement Modifications.

The following terms of the Agreement are hereby modified with respect to
the Series 1994-1 Certificates issued pursuant to this Supplement as follows:

Section 2.4 of the Agreement is modified by adding the following subsection
thereto:

(i) The Transferor shall deliver to all Series 1994-1
Certificateholders, at its own expense, the most current version of the
Series Supplement relating to a proposed new series of Certificates (which
shall include all proposed Principal Terms and provisions set forth in
Section 6.9(c) and (d) of the Agreement) no later than six Business Days
prior to the Issuance Date of such new Series and if any Holder of a Series
1994-1 Certificateholder so requests, shall deliver to such
Certificateholders any later version of such Supplement.

Section 3.3 of the Agreement is modified by adding the following
subsection(s) thereto:

(s) Inspection of Books and Records. Each Series 1994-1
Certificateholder shall have the right, upon reasonable prior written
notice to the Master Servicer, not more than once a year (x) to visit the
Master Servicer, to discuss the affairs, finances and accounts of the
Master Servicer with, and to be advised as to the same by, its officers,
and to examine the books of account and records (including, without
limitation, computer files, tapes and disks and microfiche lists) of the
Master Servicer, and to make or be provided with copies and extracts
therefrom, and (y) to discuss the affairs, finances and accounts of the
Master Servicer with, and to be advised as to the same by, the independent
accountants of the Master Servicer (and by these provisions Master Servicer
authorizes such accountants to discuss such affairs, finances and accounts,
whether or not a representative of the Master Servicer is present, it being
understood that nothing contained herein is intended to confer any right to
exclude any such representative from such discussions). Each Series 1994-1
Certificateholder shall pay its own expenses, and all out-of-pocket
expenses incurred by the Master Servicer, in connection with the inspection
activities contemplated hereunder; provided, however, that the Master
Servicer will pay the reasonable out-of-pocket photocopying expenses of any
Series 1994-1 Certificateholder exercising its rights pursuant to this
Section 3.3(s) at any time on or after the occurrence and during the
continuance of an Event of Termination or a Master Servicer Default.

Each Series 1994-1 Certificateholder shall be deemed to have agreed, by
acceptance of such Investor Certificate, to hold in confidence all non-public
information regarding the Receivables, the Trust Assets, the Transferor, Eagle
Industrial, the Master Servicer, any Obligors and any Affiliate of the
Transferor, Eagle Industrial or the Master Servicer (collectively, the "Eagle
Information") including, without limitation, non-public information provided in
accordance with the first paragraph of this Section 3.3(s) or provided by or on
behalf of the Trustee or another Certificateholder to such Certificateholder;
provided that nothing herein shall prevent any Series 1994-1 Certificateholder
from delivering copies of any financial statements and other documents whether
or not constituting confidential information, and disclosing other information,
whether or not confidential information, to (i) any of its directors, officers,
employees, agents and professional consultants who are subject to
confidentiality arrangements at least substantially similar hereto, to the
extent necessary to evaluate the Trust Assets or the Receivables in connection
with such Series 1994-1 Certificateholder's investment hereunder, (ii) any other
Series 1994-1 Certificateholder, (iii) any prospective transferee in

4
<PAGE> 6

connection with the contemplated transfer of an Investor Certificate or any part
thereof or participation therein who is subject to confidentiality arrangements
at least substantially similar hereto, (iv) any Governmental Authority only to
the extent required by such Governmental Authority, (v) each of the Rating
Agencies in connection with its rating on the Series 1994-1 Certificates, (vi)
in response to any subpoena or other legal process, (vii) in connection with any
litigation to which Eagle Industrial, the Transferor, the Master Servicer or any
Designated Subsidiary is a party or (viii) any other Person if such information
does not name Eagle Industrial or any Designated Subsidiary as the subject of
such information or indicate that such information relates to Eagle Industrial
or any Designated Subsidiary.

In the event that any Series 1994-1 Certificateholder or any of its
directors, officers, employees, agents or professional consultants is requested
or becomes legally compelled (by interrogatories, requests for information or
documents, subpoena, civil or criminal investigative demand or similar process)
to disclose any of the Eagle Information, such Series 1994-1 Certificateholder
shall (or shall cause its directors, officers, employees, agents and
professional consultants to):

(i) provide Eagle Industrial with prompt written notice so that (A)
Eagle Industrial may seek a protective order or other appropriate remedy,
or (B) Eagle Industrial may, if it so chooses, agree that such Series
1994-1 Certificateholder (or its directors, officers, employees, agents and
professional consultants) may disclose such Eagle Information pursuant to
such request or legal compulsion;

(ii) unless Eagle Industrial agrees that such Eagle Information may
be disclosed, make (or permit Eagle Industrial to make on its behalf and
with its consent) a timely objection to the request or compulsion to
provide such Eagle Information on the basis that such Eagle Information is
confidential and subject to the agreements contained in this Section
3.3(s);

(iii) take (or permit Eagle Industrial to take on its behalf and with
its consent) any action as Eagle Industrial may reasonably request to seek
a protective order or other appropriate remedy; provided that, in
connection therewith, such Series 1994-1 Certificateholder shall have first
received such assurances as it may reasonably request that Eagle Industrial
shall reimburse its reasonable costs and expenses (including attorneys'
fees and expenses) or provide such other assistance as it may reasonably
require; and

(iv) in the event that such protective order or other remedy is not
obtained, or Eagle Industrial agrees that such Eagle Information may be
disclosed, furnish only that portion of the Eagle Information which is
required to be furnished pursuant to such process or processes described
above, and, provided such Series 1994-1 Certificateholder is reimbursed or
assisted as referred to in clause (iii) above, exercise its best efforts to
obtain reliable assurance that confidential treatment will be accorded the
Eagle Information.

Notwithstanding the foregoing, to the extent that applicable law prohibits
disclosure to Eagle Industrial of the existence of any information described
above, or the taking of any action contemplated above, the Series 1994-1
Certificateholders shall be under no obligation to disclose such information or
take such action.

This Section 3.3(s) shall survive termination of this Agreement.

Section 3.6 of the Agreement is modified by addition to the following
subsection:

(c) The Trustee shall, within five Business Days of receipt thereof,
send to each Investor Certificateholder a copy of the reports of
independent public accountants which have been provided to the Trustee
pursuant to subsections (a), (b) and (c) of this Section 3.6.

Section 4.3 of the Agreement is modified by adding the following
subsections:

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<PAGE> 7

(i) On each Business Day, the Master Servicer shall determine
whether an Early Amortization Period or the Series 1994-1 Amortization
Period has commenced, and in the Revolving Period the Master Servicer
shall:

(A) Allocate with respect to the Investor Certificateholders on
each Business Day, the Floating Allocation Percentage of Imputed
Yield Collections processed on such Business Day and deposit such
amount into the Collection Account;

(B) Allocate with respect to the Investor Certificateholders on
each Business Day, an amount equal to the Floating Allocation
Percentage of Principal Collections processed on such Business Day
and deposit such amount in the Collection Account;

(C) If, as of the beginning of the preceding Business Day, the
Transferor Amount was less than the Minimum Transferor Amount, the
Master Servicer shall retain in the Collection Account from amounts
otherwise payable to the Transferor pursuant to (D) herein an amount
equal to such deficiency (or such lesser amount as is payable to the
Transferor) and direct the Trustee to pay (to the extent available)
from the Collection Account to the Excess Funding Account an amount
equal to such deficiency; and

(D) On any Business Day, provided that the amount on deposit in
the Collection Account is equal to the Required Amount for the then
current Settlement Period, any amounts in excess of the Required
Amount shall be paid to the Transferor and used by the Transferor to
purchase additional Receivables to the extent available or, if no
Receivables are available, the Transferor may use such amount for
such other purposes as the Transferor may deem appropriate including,
at the discretion of the Transferor, to pay the outstanding principal
of the Series 1994-2 Certificates

(ii) On each Business Day on and after the Master Servicer
determines that the Series 1994-1 Amortization Period or an Early
Amortization Period has commenced, the Master Servicer shall:

(A) Allocate with respect to the Investor Certificateholders,
the Fixed Allocation Percentage of Imputed Yield Collections
processed on such Business Day and deposit such amount into the
Collection Account; and

(B) Allocate with respect to the Investor Certifcateholders, the
Fixed Allocation Percentage of Principal Collections processed on
such Business Day and retain such amount in the Collection Account;
provided, however, that no such allocation or retention shall be made
on any Business Day in excess of the Invested Amount on such Business
Day; provided, further, that to the extent that the Early
Amortization Period has commenced, the Master Servicer shall not
allocate any amounts with respect to the Transferor Percentage until
the outstanding Invested Amount of the Class A and Class B
Certificates has been reduced to zero.

Section 4.4 of the Agreement is modified in its entirety to read as
follows:

Section 4.4 Payments of Interest with Respect to the Series 1994-1
Certificates.

(a) The amount of monthly interest distributable from the Collection
Account with respect to the Class A Certificates ("Class A Monthly
Interest") on any Payment Date shall be an amount equal to the product of
(i) the Class A Certificate Rate and (ii) the Invested Amount of the Class
A Certificates as of the last Business Day of the previous Settlement
Period, calculated on the basis of actual days elapsed since the
immediately preceding Payment Date and a 360-day year or, with respect to
the initial Payment Date, $286,031.00. Class A Monthly Interest shall be
distributed to Class A Certificateholders in accordance with Section 5.1 of
the Agreement and Section 4.6 of the Series 1994-1 Supplement.

(b) The amount of monthly interest distributable from the Collection
Account with respect to the Class B Certificates ("Class B Monthly
Interest") on any Payment Date shall be an amount equal to the product of
(i) the Class B Certificate Rate and (ii) the Class B Invested Amount as of
the last Business Day of the previous Settlement Period, calculated on the
basis of actual days elapsed since the immediately preceding Payment Date
and a 360-day year or, with respect to the initial Payment Date,

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<PAGE> 8

$20,052.00. Class B Monthly Interest shall be distributed to Class B
Certificateholders in accordance with Section 5.1 of the Agreement and
Section 4.6 of the Series 1994-1 Supplement.

(c) Commencing on the Initial Closing Date and thereafter on each
LIBOR Determination Date until the principal amount of the Certificates has
been paid, in full, the Trustee will establish LIBOR as the rate obtained
by dividing (i) the one-month rate described on the Dow Jones Telerate
System, page 3750, as of 11:00 a.m. London time on the LIBOR Determination
Date divided by (ii) for any Certificateholder that is subject to such
reserve requirements, a percentage equal to one minus the stated maximum
rate (stated as a decimal) of all reserves required to be maintained
against "Eurocurrency Liabilities" as specified in Regulation D (or against
any other category of liabilities which includes deposits by reference to
which the interest rate on LIBOR is determined or any category of
extensions of credit or other assets which includes loans by a non-United
States office of any bank to United States residents); provided, however,
with respect to clause (i) above, in the event such rate shall not be
provided, "LIBOR" shall mean (A) the one-month rate provided on the Reuters
Screen LIBO Page (or, in the event such rate shall not be provided, the
arithmetic average (rounded upwards to the nearest 1/16th of 1%) of the
rates at which deposits in United States dollars are offered to four
reference banks (each, a "Reference Bank") selected by Bankers Trust
Company at approximately 11:00 a.m. (London time)) divided by (B) the
percentage specified in clause (ii) above.

If on any LIBOR Determination Date only one or none of the Reference Banks
provides such offered quotations, LIBOR for the next interest accrual period
shall be the rate per annum which the Trustee determines to be either (i) the
arithmetic mean (rounded upwards if necessary to the nearest whole multiple of
1/32%) of the one-month United States dollar lending rates that New York City
banks selected by the Trustee are quoting, on the relevant LIBOR Determination
Date, to the principal London offices of at least two of the Reference Banks to
which such quotations are, in the opinion of the Trustee, being so made, or (ii)
in the event that the Trustee, being so made, or (ii) in the event that the
Trustee can determine no such arithmetic mean, the lowest one-month United
States dollar lending rate which New York City banks selected by the Trustee are
quoting on such LIBOR Determination Date to leading European banks.

If, on any LIBOR Determination Date, the Trustee is required but is unable
to determine LIBOR in the manner provided in this paragraph (c), LIBOR shall be
LIBOR as determined on the previous LIBOR Determination Date.

The establishment of LIBOR on each LIBOR Determination Date by the Trustee
and the Trustee's calculation of the rate of interest applicable to the
Certificates will (in the absence of manifest error) be final and binding.

Section 4.5 of the Agreement is modified in its entirety to read as
follows:

Section 4.5. Determination of Principal to be Distributed with respect to
the Series 1994-1 Certificates.

(a) The amount of monthly principal (the "Class A Monthly Principal")
distributable from the Collection Account, which will be in minimum amounts
of $100,000, with respect to the Class A Certificates on each Payment Date
beginning with the earlier to occur of (x) the first Special Payment Date
of the Class A Certificates and (y) the first Payment Date to occur with
respect to the Series 1994-1 Amortization Period shall be equal to an
amount calculated as follows: the sum of (i) an amount equal to the Fixed
Allocation Percentage of all Principal Collections received on each
Business Day from and including the Series 1994-1 Amortization Period
Commencement Date to and including the last Business Day related to the
Settlement Period immediately preceding such Payment Date (except that with
respect to the first Special Payment Date occurring after an Event of
Termination, the amount due pursuant to this clause (i) shall be equal to
the sum of the Fixed Allocation Percentage of Principal Collections
received on each Business Day from and including the day on which the Event
of Termination occurred to and including the last Business Day of the
related Settlement Period), (ii) Undistributed Principal Collections for
such Payment Date, (iii) any remaining Excess Imputed Yield Collections
pursuant to the last sentence of Section 4.6(v); provided, however, that
with respect to

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<PAGE> 9

any Payment Date, Class A Monthly Principal payable to the Class A
Certificateholders may not exceed the Class A Invested Amount.

(b) The amount of monthly principal (the "Class B Monthly Principal")
distributable from the Collection Account with respect to the Class B
Certificates on each Payment Date beginning with the Payment Date on which
the Class A Certificates are paid in full shall be equal to an amount
calculated as follows: the sum of (i) an amount equal to the Fixed
Allocation Percentage of all Principal Collections received on each
Business Day from and including the Series 1994-1 Amortization Period
Commencement Date to and including the last Business Day related to the
Settlement Period immediately preceding such Payment Date (minus all
payments of principal made to the Class A Certificates), (ii) the
Undistributed Principal Collections for such Payment Date, and (iii) any
remaining Excess Imputed Yield Collections pursuant to Section 4.6(v);
provided, however, that with respect to any Payment Date, Class B Monthly
Principal payable to the Class B Certificateholders may not exceed the
Class B Invested Amount.

Section 4.6 of the Agreement shall be modified to read in its entirety as
follows:

Section 4.6. Application and Payment of Funds on Deposit in the Collection
Account for the Certificates.

(a) On the Business Day before each Payment Date, the Master Servicer
shall instruct the Trustee to withdraw or retain, and on the succeeding
Payment Date the Trustee acting in accordance with such instructions shall
withdraw or retain, the following amounts required to be withdrawn from or
retained in the Collection Account pursuant to this Section:

(i) Series 1994-1 Servicing Fee. On each Payment Date when Eagle
Industrial is not the Master Servicer, the Trustee, acting in accordance
with instructions from the Master Servicer, shall withdraw from the
Collection Account and pay to the Master Servicer, to the extent that
funds are available from the Floating Allocation Percentage of Imputed
Yield Collections for the Settlement Period immediately preceding such
Payment Date an amount equal to the Series 1994-1 Servicing Fee accrued
for each day during the related Settlement Period plus any Series 1994-1
Servicing Fee accrued but not distributed to the Master Servicer on any
prior Payment Date. Interest shall not accrue on any amounts owed but
not paid to the Master Servicer with respect to any overdue Series
1994-1 Servicing Fee.

(ii) Class A Monthly Interest. On each Payment Date, the Trustee,
acting in accordance with instructions from the Master Servicer, shall
withdraw from the Collection Account and pay to the Class A
Certificateholders, to the extent that funds are available from the
Floating Allocation Percentage of Imputed Yield Collections for the
Settlement Period immediately preceding such Payment Date, (after giving
effect to the withdrawals pursuant to Section 4.6(a)(i)), an amount
equal to the Class A Monthly Interest for such Payment Date, plus the
amount of any Class A Monthly Interest previously due but not paid to
the Class A Certificateholders on any prior Payment Date, plus any
additional interest with respect to interest amounts that were due but
not paid on a prior Payment Date.

(iii) Class B Monthly Interest. On each Payment Date, the Trustee,
acting in accordance with instructions from the Master Servicer, shall
withdraw from the Collection Account and pay to the Class B
Certificateholders, to the extent that funds are available from the
Floating Allocation Percentage of Imputed Yield Collections for the
Settlement Period immediately preceding such Payment Date (after giving
effect to the withdrawal pursuant to Section 4.6(a)(i) and (ii)), an
amount equal to the Class B Monthly Interest for such Payment Date, plus
the amount of any Class B Monthly Interest previously due but not paid
to the Class B Certificateholders on any prior Payment Date, plus any
additional interest with respect to interest amounts that were due but
not paid on a prior Payment Date.

(iv) Series 1994-1 Servicing Fee. On each Payment Date when Eagle
Industrial is the Master Servicer, the Trustee, acting in accordance
with the instructions from the Master Servicer, shall withdraw from the
Collection Account and pay to the Master Servicer, to the extent that
the funds

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<PAGE> 10
are available from the Floating Allocation Percentage of Imputed Yield
Collections for the Settlement Period immediately preceding such Payment
Date (after giving effect to the withdrawals pursuant to Sections
4.6(a)(i), (ii) and (iii)), an amount equal to the Series 1994-1
Servicing Fee accrued for each day during the related Settlement Period
plus any Series 1994-1 Servicing Fee accrued but not distributed to the
Master Servicer on any prior Payment Date. Interest shall not accrue on
any amounts owed but not paid to the Master Servicer with respect to any
overdue Series 1994-1 Servicing Fee.

(v) Excess Imputed Yield Collections. On each Payment Date, the
Trustee, acting in accordance with instructions from the Master
Servicer, shall withdraw from the Collection Account the Floating
Allocation Percentage of Imputed Yield Collections for the Settlement
Period immediately preceding such Payment Date which remain in the
Collection Account, after giving effect to the withdrawals pursuant to
Sections 4.6(a)(i), (ii), (iii) and (iv), and shall, during the
Revolving Period apply such remaining amounts of Excess Imputed Yield
Collections to cover shortfalls, if any, in amounts payable from Imputed
Yield Collections to Certificateholders of other Series. Excess Imputed
Yield Collections which are not so used shall be paid to the Transferor.
During any time that an Amortization Period is in effect for the Series
1994-1 Certificates, the Trustee shall deposit all Excess Imputed Yield
Collections remaining after giving effect to withdrawals pursuant to
Sections 4.6(a)(i), (ii), (iii) and (iv) into the Collection Account to
be distributed as Principal Collections (pursuant to Section 4.5(a) and
(b));

(b) On each Business Day during the Revolving Period, Principal
Collections allocated to the Investor Certificateholders shall be
distributed in accordance with Section 4.3(c)(i)(B) of the Agreement (which
Section is set forth in this Series 1994-1 Supplement). On each Business
Day during the Series 1994-1 Amortization Period or any Early Amortization
Period, Principal Collections allocated to the Investor Certificateholders
shall be retained in the Collection Account in accordance with Section
4.3(c)(ii)(B) of the Agreement (which Section is set forth in this Series
1994-1 Supplement). For each Payment Date with respect to the Series 1994-1
Amortization Period or any Early Amortization Period, the Class A Monthly
Principal for such Payment Date will be distributed by the Trustee from the
Collection Account in accordance with Section 4.6(c)(i) and the Class B
Monthly Principal for such Payment Date will be retained by the Trustee in
the Collection Account until the Class A Certificates have been paid in
full and distributed in accordance with Section 4.6(c)(ii).

(c) The Master Servicer shall make or shall cause the Trustee to make
the following distributions at the following times from the Collection
Account:

(i) On each Special Payment Date and each Payment Date during the
Series 1994-1 Amortization Period, all amounts on deposit in the
Collection Account, up to the amount calculated pursuant to Section
4.5(a), shall be paid to the Class A Certificateholders.

(ii) On each Special Payment Date and each Payment Date during the
Series 1994-1 Amortization Period, in each case on and after the Class A
Certificates have been paid in full, all amounts on deposit in the
Collection Account, up to the amount calculated pursuant to Section
4.5(b) shall be paid to the Class B Certificateholders.

(iii) On each Special Payment Date and each Payment Date during the
Series 1994-1 Amortization Period, in each case on and after the Class A
Certificates and Class B Certificates have been paid in full, all
amounts on deposit in the Collection Account shall be paid to the
Transferor.

Section 6.9 of the Agreement is modified by adding the following subsection
(e) thereto:

(e) In addition to the other requirements of this Section 6.9, the
Trustee will not authenticate any Class A or Class B Certificates to be
issued hereunder unless each of the following conditions have been
satisfied or waived at the direction of all of the initial purchasers of
the Class A and Class B Certificates:

(i) The Trustee shall have received the documentation described in
Section 4(a) and (d) of the Class A and Class B Purchase Agreement,
dated January 27, 1994 by and among the purchasers

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<PAGE> 11
of the Class A and Class B Certificates, the Transferor and the Master
Servicer (the "Class A and Class B Purchase Agreement").

(ii) The Trustee shall have received written notification from S&P
and D&P that (i) the Class A Certificates and the Class B Certificates,
shall each be rated "AAA" and "A", respectively;

(iii) The Trustee or its agent shall have received, and shall be
holding in trust pursuant to the Pooling and Servicing Agreement, the
Trust Assets and all documents, instruments and other assets required by
the Agreement to be delivered to the Trustee with respect thereto as of
the Closing Date as provided in Section 6.9 of the Supplement;

(iv) The initial purchasers shall have received a letter of Arthur
Andersen & Co. with respect to Eligible Receivables sold to the Trust;

(v) The Trustee shall have received an opinion of counsel stating
that upon the filing of certain financing statements the Trustee will
have a first priority perfected security interest in the Trust Assets;

(vi) The Trustee shall have received certified copies of the
certificate of incorporation and by-laws of the Transferor and the
Master Servicer, and of all documents evidencing corporate action taken
by the Master Servicer and the Transferor approving the execution and
delivery to the Transaction Documents to which they are parties
contemplated thereby;

(vii) The Trustee shall have received signature and incumbency
certificates executed by the authorized officers of the Master Servicer
and the Transferor certifying the identities and signatures of those
officers who executed the Transaction Documents to which they are
parties;

(viii) As evidenced by a certificate of the Transferor, the
Transferor shall have paid or shall have made arrangements for payment
of all taxes fees and governmental charges, if any, due in connection
with the execution and delivery of this Supplement and the Agreement,
the issuance and sale of the Certificates and the assignment and pledge
of the Trust Assets to the Trustee under the Agreement;

(ix) The Trustee shall have received executed copies of each of the
following estoppel letters:

(1) Payoff and Estoppel Letter (the "Heller Letter") executed by
Heller Financial, Inc. and American National Bank and Trust Company
of Chicago, and addressed to the Administrative Agent, the Collateral
Agent, and the Trustee on behalf of the Certificateholders for the
Eagle Receivables Master Trust, in connection with that certain
Second Amended and Restated Credit Agreement dated as of February 3,
1992, as amended and restated effective as of July 31, 1992; backup
letter of credit issued by Chemical Bank in favor of American
National Bank and Trust Company of Chicago in the aggregate amount of
all "Outstanding L/C's" (as defined in the Heller Letter);

(2) Payoff and Estoppel Letter executed by Chemical Bank and
addressed to the Administrative Agent, the Collateral Agent and the
Trustee on behalf of the Certificateholders for the Eagle Receivables
Master Trust, in connection with that certain Credit Agreement dated
as of July 31, 1990, among Amerace Corporation, Conductron
Corporation, the banks and other financial institutions from time to
time parties thereto and Manufacturers Hanover Trust Company, as
agent; and

(3) Payoff and Estoppel Letter executed by Chemical Bank and
addressed to the Administrative Agent, the Collateral Agent and the
Trustee on behalf of the Certificateholders for the Eagle Receivables
Master Trust, in connection with that certain Credit Agreement dated
as of January 9, 1991, among Falcon Manufacturing, Inc., the banks
and other financial institutions party thereto, Chemical Bank and
Manufacturers Hanover Trust Company, as co-agents, and Chemical Bank,
as collateral agent.

10
<PAGE> 12

(x) The Trustee shall have received true and complete copies of the
Credit Agreement between Eagle Industrial, Chemical Bank, as
Administrative Agent, Citicorp North America, Inc. as Collateral Agent,
and the Lenders (as defined therein), dated January 31, 1994 (the
"Credit Agreement") and the Pledge Agreement between Eagle Industrial
and Citicorp North America, Inc., as Collateral Agent, also dated
January 31, 1994 (the "Pledge Agreement").

Section 8.7 of the Agreement is hereby modified by adding at the end
thereof the following:

In the event that any delegation of a material servicing function by the
Master Servicer to any Person other than a Designated Subsidiary is proposed,
the Master Servicer shall obtain (i) written confirmation from the Rating
Agencies that such proposed delegation shall not result in the reduction or
withdrawal of any then outstanding rating on the Series 1994-1 Certificates and
(ii) the consent of the Holders of Investor Certificates aggregating not less
than 51% of the Invested Amount, the Master Servicer shall promptly deliver to
each Series 1994-1 Investor Certificateholder a copy of such notice delivered to
the Rating Agencies and a copy of such written confirmation from the Rating
Agencies.

Section 10.1 of the Agreement is hereby modified by adding the following
clauses thereto:

(e) The Master Servicer shall fail to provide to the Series 1994-1
Investor Certificateholders a copy of any notice, document or certificate
required to be delivered by the Master Servicer hereunder or under the
Series 1994-1 Supplement to the Series 1994-1 Investor Certificateholders
and such failure shall continue for 10 days after the date such notice,
document or certificate is required to be delivered pursuant to this
Pooling and Servicing Agreement or this Supplement; or

(f) The Master Servicer shall fail to provide the Determination Date
Statement to the Series 1994-1 Certificateholders on the date required
pursuant to Section 12(iii) of this Supplement and the Master Servicer
shall fail to provide the Principal Payment Statement to the Series 1994-1
Certificateholders within three days after the date on which such Statement
is due pursuant to Section 3.4(d) of the Agreement.

Notwithstanding anything to the contrary in the Agreement or this
Supplement, Section 10.1 may not be amended, modified or supplemented in the
future to allow any other event, occurrence, delay or omission to constitute a
Master Servicer Default other than the events, occurrences, delays or omissions
set forth in the Agreement and this Supplement as of the date of this Supplement
without the prior consent of Investor Certificateholders evidencing Undivided
Interests aggregating 66 2/3% or more of the Invested Amount of the Series
1994-1 Certificates given in writing to the Transferor, the Master Servicer and
the Trustee within five Business Days after the Series 1994-1 Certificateholders
have received written notice from the Master Servicer, or any other Person, of
such proposed amendment, modification or supplement.

Annex X of the Agreement is hereby modified by adding the following
sentence:

For purposes of this Supplement, the Discount Factor will be increased at
the commencement of the 51st Settlement Period by the percentage equivalent of a
fraction the numerator of which is the aggregate amount of Recoveries collected
during the immediately preceding twelve Settlement Periods and the denominator
of which is the average of the Unpaid Balances of Aggregate Eligible Receivables
measured at the end of each of the first Business Days of the immediately
preceding Settlement Period and the twelfth immediately preceding Settlement
Period.

SECTION 3. Initial Invested Amount of the Series 1994-1 Certificates.

The "Initial Invested Amount " of the Series 1994-1 Certificates shall be
$120,000,000. The Initial Invested Amount of the Class A Certificates shall be
$113,000,000 (the "Class A Initial Invested Amount "). The Initial Invested
Amount of the Class B Certificates shall be $7,000,000 (the "Class B Initial
Invested Amount ").

11
<PAGE> 13

SECTION 4. Series 1994-1 Certificate Rates.

The Class A Certificate Rate shall be 0.52% per annum in excess of LIBOR.
The Class B Certificate Rate shall be 1.00% per annum in excess of LIBOR.

SECTION 5. Series 1994-1 Events of Termination.

Section 9.1 is modified by the addition of the following sentence:

In the event that any Event of Termination provided for in the Agreement,
this Supplement or any other Series Supplement occurs with respect to the Series
1994-1 Certificates, Investor Certificateholders evidencing Undivided Interests
aggregating 66 2/3% or more of the Invested Amount of the Series 1994-1
Certificates, by notice given in writing to the Transferor, the Master Servicer
and the Trustee, may waive the occurrence of such Event of Termination with
respect to the Series 1994-1 Certificates.

SECTION 6. Repurchase Terms.

Pursuant to Article XII of the Agreement, the Series 1994-1 Certificates
may be repurchased by the Transferor on any Payment Date on or after the day on
which the Invested Amount is reduced to an amount less than or equal to 10% of
the sum of the Initial Class A Invested Amount and the Initial Class B Invested
Amount upon the satisfaction of the conditions described in Section 12.2(a) of
the Agreement. In connection with any such repurchase, the repurchase price
shall be equal to the aggregate initial principal balance of such Certificates
minus the amount of principal payments made to such Certificates prior to such
Payment Date plus accrued and unpaid interest through the day preceding the
Payment Date on which the repurchase occurs.

SECTION 7. Delivery and Payment for the Series 1994-1 Certificates.

The Trustee shall deliver the Series 1994-1 Certificates to the Transferor
when authenticated upon the written direction of the Transferor.

SECTION 8. Minimum Authorized Denominations; Special Rule on Transfer and
Exchange.

The Class A Certificates shall be issued in fully registered form in
denominations of $500,000 and integral multiples of $1,000 in excess thereof. No
registration of transfer or exchanges shall be permitted in a manner that would
permit any Class A Certificate initially issued in a denomination of $500,000 or
more to be registered upon transfer or exchange in any denomination less than
the amount of such Class A Certificate (or predecessor Class A Certificate) upon
the issuance thereof on the Initial Closing Date. The Class B Certificates shall
be issued in fully registered form in denominations of $500,000 and integral
multiples of $1,000 in excess thereof; provided that, as directed by the
Transferor, the Trustee may on the Initial Closing Date authenticate Class B
Certificates in denominations of less than $500,000. No registration of transfer
or exchanges shall be permitted in a manner that would permit any Class B
Certificate initially issued in a denomination of $500,000 or less to be
registered upon transfer or exchange in any denomination less than the amount of
such Class B Certificate (or predecessor Class B Certificate) upon the issuance
thereof on the Initial Closing Date. No Certificate may be issued in a
denomination of less than $20,000 or be subdivided for resale into a
denomination of less than $20,000.

SECTION 9. Accrual of Interest on the Series 1994-1 Certificates.

Interest shall accrue on the Series 1994-1 Certificates from January 31,
1994.

SECTION 10. Distributions.

The Trustee shall send distributions to the Series 1994-1
Certificateholders under Section 5.1 of the Agreement to each such
Certificateholder by 12:30 p.m. (New York City time) on each Payment Date by
wire transfer of immediately available funds to an account or accounts
designated by such Certificateholders by written notice to the Trustee and the
Paying Agent given at least three Business Days prior to any Payment

12
<PAGE> 14

Date (such notice to remain effective with respect to a Holder until different
instructions from such Holder are received by the Trustee), or if no such notice
is given, by check mailed as provided in Section 5.1 of the Agreement.

SECTION 11. Article VI of the Agreement.

Article VI shall, for purposes of Series 1994-1, contain the following
Section 6.14:

Section 6.14 Subsequent Transfers of the Class B Certificates. No Class B
Certificate may be sold, transferred, assigned, pledged (provided, however,
"pledge" in this context means the commencement of the enforcement of the
pledgee's security interest in the Class B Certificates), hypothecated,
participated or otherwise conveyed, nor may any security interest therein be
granted (provided, however, "grant" in this context means the commencement of
the enforcement of the grantee's security interest in the Class B Certificates)
(each such event, a "Subsequent Transfer" and any Person other than a Series
1994-1 Certificateholder who is a party to a Subsequent Transfer shall be
hereinafter referred to as a "Subsequent Transferee") without the consent of the
Transferor; provided, however, that such consent will not be required if the
Trustee shall have received an Opinion of Counsel from the proposed Subsequent
Transferee of such Class B Certificate stating that Subsequent Transfers can be
made without the consent of the Transferor without adversely affecting the
status of either the Trust or the Class A Certificates or the Class B
Certificates for Federal income tax purposes.

SECTION 12. Delivery of Documents to the Series 1994-1 Certificateholders.

The following reports, notices, documents, and certificates required to be
delivered under the Agreement shall be delivered to the Series 1994-1
Certificateholders and each of the Rating Agencies by the Trustee, at the
expense of the Transferor, in the form and manner as otherwise required in the
relevant Section of the Agreement within a reasonable period of time after
receipt by the Trustee:

(i) the notice provided for in Section 2.6(i) to be delivered by the
Transferor to the Trustee;

(ii) a copy of the written confirmation and the Transferor's
Certificate of Incorporation delivered by the Transferor to the Trustee
pursuant to Section 2.6(p) of the Agreement;

(iii) a copy of the Determination Date Statement and Principal
Payment Statement delivered pursuant to Section 3.4(c) and (d) of the
Agreement; provided, however, the initial Holder of the Series 1994-1
Certificates shall receive the Determination Date Statement on the day the
Trustee receives such Statement;

(iv) the Annual Independent Public Accountants' Servicing Reports to
be delivered pursuant to Sections 3.6(a) and (b);

(v) the financial statements and balance sheets to be delivered
pursuant to Section 3.6(c);

(vi) the documents to be delivered pursuant to Section 3.9;

(vii) the Officer's Certificate to be delivered pursuant to Section
6.9(a);

(viii) the documents to be delivered pursuant to Section 6.9(b)(i),
(ii) and (iii);

(ix) the Officer's Certificate and Opinion of Counsel to be delivered
pursuant to Section 7.2(a)(i);

(x) the rating confirmation to be delivered pursuant to Section
7.2(a)(ii) by the Rating Agencies;

(xi) the Officer's Certificate and the Opinion of Counsel required to
be delivered pursuant to Section 8.2(iii);

(xii) the notice to be delivered by the Master Servicer pursuant to
Section 8.7;

(xiii) any notice to be delivered by the Trustee pursuant to Section
9.1;

13
<PAGE> 15

(xiv) the notice to be delivered by the Trustee pursuant to Section
11.19; and

(xv) any amendment entered into pursuant to Section 13.1(b).

Notwithstanding anything in this Agreement to the contrary, the Trustee
shall, upon the request of any Investor Certificateholder, and at the expense of
such Investor Certificateholder, provide any reasonable information received
with respect to the Trust or the Trust Assets in connection with the exercise of
its duties hereunder to any Series 1994-1 Certificateholder, subject to such
Series 1994-1 Certificateholder's agreement to maintain the confidentiality of
such information in accordance with the confidentiality standards set forth in
Section 3.3(s).

SECTION 13. Ratification of Agreement.

As supplemented by this Supplement, the Agreement is in all respects
ratified and confirmed and the Agreement as so supplemented by this Supplement
shall be read, taken, and construed as one and the same instrument.

SECTION 14. The Trustee.

The Trustee shall not be responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this Supplement or for or in respect
of the Preliminary Statement contained herein, all of which recitals are made
solely by the Transferor.

SECTION 15. Instructions in Writing.

All instructions given by the Master Servicer to the Trustee pursuant to
this Supplement shall be in writing, and may be included in a Daily Report or
Settlement Statement.

SECTION 16. Counterparts.

This Supplement may be executed in any number of counterparts, which may
include facsimile counterparts, each of which so executed shall be deemed to be
an original, but all of such counterparts shall together constitute but one and
the same instrument.

SECTION 17. Governing Law.

THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF ILLINOIS, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS. FOR PURPOSES OF THE TAX CLASSIFICATION OF THE TRUST
AND THE TAX CHARACTERIZATION OF ANY CERTIFICATES ISSUED PURSUANT TO THIS
AGREEMENT, THE TRUST SHALL BE CONSTRUED AS ORGANIZED AND EXISTING UNDER THE LAWS
OF THE STATE OF ILLINOIS, WITHOUT REGARD TO ITS CONFLICT OF LAW PROVISIONS.

SECTION 18. Modifications to Remittance Procedures.

In lieu of the procedures for daily remittance of Collections provided for
in the Agreement, the Master Servicer may propose and adopt procedures for the
remittance of Collections on a less frequent basis, subject to the consent of
the Holders of at least 66 2/3% of the aggregate Invested Amount of the Series
1994-1 Certificates and the obtaining of written confirmation from each Rating
Agency that the adoption of such procedures will not result in the reduction or
withdrawal of the then rating on the Series 1994-1 Certificates.

14
<PAGE> 16

IN WITNESS WHEREOF, the Transferor, the Master Servicer and the Trustee
have caused this Series 1994-1 Supplement to be duly executed by their
respective officers thereunto duly authorized as of the date first above
written.

CENTRALLY HELD EAGLE RECEIVABLES
PROGRAM, INC.,
as Transferor

By /s/ GUS J. ATHAS
-----------------------------
Name: Gus J. Athas
Title: Vice-President

EAGLE INDUSTRIAL PRODUCTS
CORPORATION,
as Master Servicer

By /s/ GUS J. ATHAS
-----------------------------
Name: Gus J. Athas
Title: Vice-President

CONTINENTAL BANK,
NATIONAL ASSOCIATION,
as Trustee

By /s/ M.A. BURNS
-----------------------------
Name: M.A. Burns
Title: Vice-President

15
<PAGE> 17

EXHIBIT A

FORM OF SERIES 1994-1 INVESTOR CERTIFICATE,
CLASS A

THIS OBLIGATION HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT
BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND ALL APPLICABLE
STATE SECURITIES LAWS.

THIS CERTIFICATE MAY NOT BE ACQUIRED
BY OR FOR THE BENEFIT OF A
PLAN (AS DEFINED BELOW).

EAGLE TRADE RECEIVABLES MASTER TRUST

FLOATING RATE TRADE RECEIVABLES-BACKED CERTIFICATE,
SERIES 1994-1, CLASS A

REGISTERED CUSIP NO. 270016 AA6
NO. $

EAGLE TRADE RECEIVABLES MASTER TRUST

Evidencing an undivided interest in a trust, the corpus of which consists
of receivables generated from time to time arising from sales of goods,
merchandise and/or services by Eagle Industrial Products Corporation and certain
of its subsidiaries (each a "Designated Subsidiary"), which receivables have
been acquired by the Transferor (defined below) and transferred to the Trustee
(defined below).

(Not an interest in or obligation of Eagle Industrial Products Corporation or
any affiliate thereof except to the limited extent described herein)

This certifies that
---------------------------------------------

(the "Certificateholder") is the registered owner of an undivided interest in
certain assets of a trust (the "Trust"), created pursuant to the Pooling and
Servicing Agreement, dated as of January 1, 1994, as supplemented by the Series
1994-1 Supplement, dated as of January 1, 1994 and as further amended or
supplemented from time to time (collectively referred to herein as the
"Agreement") by and among Centrally Held Eagle Receivables Program, Inc., a
Delaware corporation, as transferor (the "Transferor"), Eagle Industrial
Products Corporation, a Delaware corporation, as master servicer (the "Master
Servicer"), and Continental Bank, National Association, as trustee (the
"Trustee"). Although a summary of certain provisions of the Agreement is set
forth below, this Certificate does not purport to summarize the Agreement and is
qualified in its entirety by the terms and provisions of the Agreement and any
Supplement thereto. Reference is made to the Agreement for information with
respect to the interests, rights, benefits, obligations, proceeds, and duties
evidenced hereby and the rights, duties and obligations of the Trustee. A copy
of the Agreement may be requested from the Trustee by writing to the Trustee at
231 South LaSalle Street, Chicago, Illinois 60697, Attention: Corporate Trust
Department. To the extent not defined herein, capitalized terms used herein have
the meanings ascribed to them in the Agreement.

A-1
<PAGE> 18

This Certificate is issued under and is subject to the terms, provisions
and conditions of the Agreement, to which Agreement as amended from time to
time, the Holder hereof by virtue of the acceptance hereof assents and by which
the Holder hereof is bound. In the event of a conflict between the provisions of
this Certificate and the Agreement, the terms of the Agreement shall be
controlling.

The corpus of the Trust consists of the Trust Assets.

It is the intent of the Transferor, the Master Servicer, the Trustee, the
Investor Certificateholders and the holder of this Class A Certificate that, for
federal, state and local income and franchise tax purposes, the Investor
Certificates and this Class A Certificate will be indebtedness secured by the
Receivables. The Holder of this Certificate, by the acceptance of this
Certificate, agrees to treat this Certificate for federal, state and local
income and franchise tax purposes as indebtedness.

Subject to the terms of the Agreement, payments of principal are limited to
the unpaid Class A Invested Amount, which may be less than the unpaid balance of
this Certificate pursuant to the terms of the Agreement. All principal of and
interest on this Certificate is due and payable no later than June 25, 1999.

The Trust's assets are allocated in part to the Holders of the Class A
Certificates with the remainder allocated to the Holders of the Floating Rate
Trade Receivables-Backed Certificates, Series 1994-1, Class B (the "Class B
Certificates"), and the holders of any other Series of Investor Certificates
issued by the Trust after the date hereof and to the Transferor. Certain assets
may be for the benefit of only one or more Series. In addition to the Class A
Certificates, the Class B Certificates will be issued to the Transferor together
with the Transferor Certificate. The Transferor Certificate will represent the
interest in the Trust not represented by the Class A Certificates, the Class B
Certificates or any other Series of the Trust.

Interest will be distributed on the 25th day of each month (or if such day
is not a Business Day, the next succeeding Business Day) (each a "Payment
Date"), commencing on February 25, 1994 at the product of (i) the Class A
Certificate Rate and (ii) the outstanding principal balance of the Class A
Certificates as of the last Business Day of the previous Settlement Period,
calculated on the basis of actual days elapsed since the immediately preceding
Payment Date and a 360-day year or, with respect to the first Payment Date,
$286,031.00, to the Holder hereof of record as of the Record Date. The Record
Date with respect to any Payment Date shall be the last day of the calendar
month immediately preceding such Payment Date.

As described in the Agreement, Principal Collections with respect to any
day will be allocated to this Class A Certificate in accordance with Article IV
of the Agreement.

On each Payment Date, the Paying Agent shall distribute to the Holder
hereof of record on the Record Date such Certificateholder's pro rata share of
amounts on deposit in the Collection Account as are payable to the Holder hereof
pursuant to the Agreement. On each Payment Date during the Series 1994-1
Amortization Period and each Special Payment Date, all amounts on deposit in the
Collection Account, up to a maximum amount on any such date equal to the Class A
Invested Amount on such date, shall be paid to the Class A Certificateholders.
Distributions with respect to this Certificate will be made by the Paying Agent
by check mailed to each Certificateholder, or if so stated in any supplement, by
wire transfer of immediately available funds, appearing in the Certificate
Register as notified to the Trustee three Business Days prior to such Payment
Date without the presentation or surrender of this Certificate or the making of
any notation in the Certificate Register (except for the final distribution in
respect of this Certificate). Unless an acceptable indemnity agreement is
delivered to the Trustee and Paying Agent, final payment of this Certificate
will be made only upon presentation and surrender of this Certificate at the
office or agency specified in the notice of final distribution delivered by the
Trustee to the Holder hereof in accordance with the Agreement.

The Agreement may be amended by the Transferor, the Master Servicer and the
Trustee, without the Holder's consent, to cure any ambiguity, to correct or
supplement any provision therein which may be inconsistent with any other
provision therein. No such amendment, however, may adversely affect in any
material respect the interests of the Holder hereof.

A-2
<PAGE> 19

less than 66 2/3% of the Invested Amount of all Series of Investor Certificates
(excluding the Invested Amount of any subordinated class of a Series) materially
adversely affected thereby (or in the case of a series having more than one
class of investor certificates, each unsubordinated class of such Series
materially adversely affected thereby) for the purpose of adding any provisions
to, changing in any manner or eliminating any of the provisions of the Agreement
or of modifying in any manner the rights of the Investor Certificateholder;
provided, however, that no such amendment shall (a) reduce in any manner the
amount of, or delay the timing of, distributions which are required to be made
on this Certificate without the consent of the Holder hereof, (b) change the
definition of or the manner of calculating the interest of the Holder hereof,
without the consent of such Holder, or (c) change the requirement to obtain the
Holder's consent to any such amendment, without the consent of the Holder
hereof, or (d) be effective unless each Rating Agency first shall have confirmed
in writing that such amendment will not result in such Rating Agency reducing or
withdrawing its rating on any outstanding series of certificates; provided that
clauses (a), (b), (c) and (d) of the immediately preceding provision shall not
apply to any amendment or modification for which consent is obtained from 100%
of the Invested Amount of such Series of Certificates materially adversely
affected thereby. Any such amendment and any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Class A Certificate and of any Class A Certificate issued in
exchange hereof or in lieu hereof whether or not notation thereof is made upon
this Class A Certificate.

The Holder of this Certificate, by the acceptance of this Certificate,
agrees that, prior to the date which is one year and one day after the payment
in full of all Invested Amounts, it will not institute against, or join any
other Person in instituting against, the Transferor any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under any Debtor Relief Law.

This Class A Certificate may be transferred or exchanged only upon the
satisfaction of the conditions set forth in Section 6.3 of the Agreement.

The Master Servicer, the Trustee, the Paying Agent and the Transfer Agent
and Registrar, and any agent of any of them, may treat the person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Master Servicer, nor the Trustee, the Paying Agent, the Transfer Agent and
Registrar, nor any agent of any of them shall be affected by notice to the
contrary except in certain circumstances described in the Agreement.

FINAL PAYMENT ON THIS CERTIFICATE MAY BE MADE WITHOUT DELIVERY HEREOF TO
THE TRUSTEE OR ANY PAYING AGENT. EACH HOLDER AND PROSPECTIVE HOLDER HEREOF IS
HEREBY PLACED ON NOTICE THAT THIS CERTIFICATE MAY REMAIN OUTSTANDING ALTHOUGH
FINAL PAYMENT HEREON HAS BEEN MADE. FINAL PAYMENT HEREON MAY, UNDER CERTAIN
CIRCUMSTANCES, BE MADE EARLIER THAN JUNE 25, 1999.

THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF ILLINOIS WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS.

Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.

THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A BENEFIT
PLAN. AS USED HEREIN, "BENEFIT PLAN" SHALL MEAN ANY EMPLOYEE BENEFIT PLAN (AS
DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, A
PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A
PLAN'S INVESTMENT IN SUCH ENTITY. BY ACCEPTING AND HOLDING THIS CERTIFICATE, THE
HOLDER HEREOF REPRESENTS

A-3
<PAGE> 20
AND WARRANTS THAT IT IS NOT A BENEFIT PLAN. BY ACQUIRING ANY INTEREST IN THIS
CERTIFICATE, THE APPLICABLE CERTIFICATE OWNER OR OWNERS SHALL BE DEEMED TO HAVE
REPRESENTED AND WARRANTED THAT IT OR THEY ARE NOT BENEFIT PLANS.

IN WITNESS WHEREOF, the Transferor has caused this Class A Certificate to
be duly executed.

Dated: January 31, 1994

CENTRALLY HELD EAGLE RECEIVABLES
PROGRAM, INC.

By:_____________________________

Title:__________________________

CERTIFICATE OF AUTHENTICATION

This is one of the Class A Certificates described in the within-mentioned
Pooling and Servicing Agreement.

CONTINENTAL BANK, NATIONAL
ASSOCIATION,
as Trustee

By:_____________________________
Authorized Signatory

A-4
<PAGE> 21

EXHIBIT B

FORM OF SERIES 1994-1 INVESTOR CERTIFICATE,
CLASS B

THIS OBLIGATION HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT") AND MAY NOT
BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND ALL APPLICABLE
STATE SECURITIES LAWS.

THIS CERTIFICATE MAY NOT BE ACQUIRED
BY OR FOR THE BENEFIT OF A
PLAN (AS DEFINED BELOW).

THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF
PAYMENT TO THE CLASS A CERTIFICATES AS
DESCRIBED IN THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.

EAGLE TRADE RECEIVABLES MASTER TRUST

FLOATING RATE TRADE RECEIVABLES-BACKED CERTIFICATE,
SERIES 1994-1, CLASS B (SUBORDINATE)

REGISTERED CUSIP NO. 270016 AB4
NO. NOT TO EXCEED $

EAGLE TRADE RECEIVABLES MASTER TRUST

(Not an interest in or obligation of Eagle Industrial Products Corporation or
any affiliate thereof except to the limited extent described herein)

This certifies that

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

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Agreement is set forth below, this Certificate does not purport to summarize the
Agreement and is qualified in its entirety by the terms and provisions of the
Agreement and any Supplement thereto. Reference is made to the Agreement for
information with respect to the interests, rights, benefits, obligations,
proceeds, and duties evidenced hereby and the rights, duties and obligations of
the Trustee. A copy of the Agreement may be requested from the Trustee by
writing to the Trustee at 231 South LaSalle Street, Chicago, Illinois 60697,
Attention: Corporate Trust Department. To the extent not defined herein,
capitalized terms used herein have the meanings ascribed to them in the
Agreement.

The corpus of the Trust consists of the Trust Assets.

It is the intent of the Transferor, the Master Servicer, the Trustee, the
Investor Certificateholders and the holder of this Class B Certificate that, for
federal, state and local income and franchise tax purposes, the Investor
Certificates and this Class B Certificate (if not held by the Transferor) will
be indebtedness secured by the Receivables. The Holder of this Certificate (if
not the Transferor), by the acceptance of this Certificate, agrees to treat this
Certificate for federal, state and local income and franchise tax purposes as
indebtedness.

Subject to the terms of the Agreement, payments of principal are limited to
the unpaid Class B Invested Amount, which may be less than the unpaid balance of
this Certificate pursuant to the terms of the Agreement. All principal of and
interest on this Certificate is due and payable no later than June 25, 1999.

The Trust's assets are allocated in part to the Holders of the Class B
Certificates with the remainder allocated to the Holders of the Floating Rate
Trade Receivables-Backed Certificates, Series 1994-1, Class A (the "Class A
Certificates") and the holders of any other Series of Investor Certificates
issued by the Trust after the date hereof and to the Transferor. Certain assets
may be for the benefit of only one or more Series. The Class B Certificates will
be issued to the Transferor together with the Transferor Certificate and the
Class A Certificates will be issued to investors. The Transferor Certificate
will represent the interest in the Trust not represented by the Class B
Certificates, the Class A Certificates, or any other Series of the Trust.

Interest will be distributed on the 25th day of each month (or if such
month is not a Business Day, the next succeeding Business Day) (each a "Payment
Date"), commencing on February 25, 1994 at the product of (i) the Class B
Certificate Rate and (ii) the Class B Invested Amount as of the last Business
Day of the previous Settlement Period, calculated on the basis of actual days
elapsed since the immediately preceding Payment Date and a 360-day year or, with
respect to the first Payment Date, $20,052.00 to the Holder hereof of record as
of the Record Date. The Record Date with respect to any Payment Date shall be
the last day of the calendar month immediately preceding such Payment Date.

As described in the Agreement, Principal Collections with respect to any
day will be allocated to this Class B Certificate in accordance with Article IV
of the Agreement.

On each Payment Date, the Paying Agent shall distribute to the Holder
hereof of record on the Record Date such Certificateholder's pro rata share of
amounts on deposit in the Collection Account as are payable to the Holder hereof
pursuant to the Agreement. On each Payment Date during the Series 1994-1
Amortization Period and each Special Payment Date, all amounts on deposit in the
Collection Account, up to a maximum amount on any such date equal to the Class B
Invested Amount on such date, shall be paid to the Class B Certificateholders.
The rights of the holders of this Class B Certificate to receive cash flows with
respect to interest and principal owed will be subordinate to the rights of the
holders of Class A Certificates to receive cash flows with respect to interest
and principal owed. Distributions with respect to this Certificate will be made
by the Paying Agent by check mailed to each Certificateholder, or if so stated
in any supplement, by wire transfer of immediately available funds, appearing in
the Certificate Register as notified to the Trustee three Business Days prior to
such Payment Date without the presentation or surrender of this Certificate or
the making of any notation in the Certificate Register (except for the final
distribution in respect of this

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<PAGE> 23

Certificate). Final payment on this Certificate will be made only upon
presentation and surrender of this Certificate at the office or agency specified
in the notice of final distribution delivered by the Trustee to the Holder
hereof in accordance with the Agreement.

Subject to the preceding paragraph, the Agreement may be amended by the
Master Servicer, the Transferor and the Trustee with the consent of the Holders
of unsubordinated Investor Certificates owning not less than 66 2/33% of the
Invested Amount of all Series of Investor Certificates (excluding the Invested
Amount of any subordinated class of a Series) materially adversely affected
thereby (or in the case of a series having more than one class of investor
certificates, each unsubordinated class of such Series materially adversely
affected thereby) for the purpose of adding any provisions to, changing in any
manner or eliminating any of the provisions of the Agreement or of modifying in
any manner the rights of the Investor Certificateholder; provided, however, that
no such amendment shall (a) reduce in any manner the amount of, or delay the
timing of, distributions which are required to be made on this Certificate
without the consent of the Holder hereof, (b) change the definition of or the
manner of calculating the interest of the Holder hereof, without the consent of
such holder, or (c) change the requirement to obtain the Holder's consent to any
such amendment, without the consent of the Holder hereof, or (d) be effective
unless each Rating Agency first shall have confirmed in writing that such
amendment will not result in such Rating Agency reducing or withdrawing its
rating on any outstanding series of certificates; provided that clauses (a),
(b), (c) and (d) of the immediately preceding provision shall not apply to any
amendment or modification for which consent is obtained from 100% of the
Invested Amount of such Series of Certificates materially adversely affected
thereby. Any such amendment and any such consent by the Holder of this Class B
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Class B Certificate issued in exchange
hereof or in lieu hereof whether or not notation thereof is made upon this Class
B Certificate. AS DESCRIBED ABOVE, CERTAIN AMENDMENTS TO THE AGREEMENT MAY BE
MADE WITHOUT THE CONSENT OF THE HOLDER HEREOF.

This Class B Certificate may be transferred or exchanged only upon the
satisfaction of the conditions set forth in Section 6.3 of the Agreement.

THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF ILLINOIS WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS.

Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, by manual signature, this certificate shall not be
entitled to any benefit under the Agreement, or be valid for any purpose.

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<PAGE> 24
OF TITLE I OF ERISA, A PLAN DESCRIBED IN SECTION 4975(E)(1) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE
PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN SUCH ENTITY. BY ACCEPTING AND
HOLDING THIS CERTIFICATE, THE HOLDER HEREOF REPRESENTS AND WARRANTS THAT IT IS
NOT A BENEFIT PLAN. BY ACQUIRING ANY INTEREST IN THIS CERTIFICATE, THE
APPLICABLE CERTIFICATE OWNER OR OWNERS SHALL BE DEEMED TO HAVE REPRESENTED AND
WARRANTED THAT IT OR THEY ARE NOT BENEFIT PLANS.

IN WITNESS WHEREOF, the Transferor has caused this Class B Certificate to
be duly executed.

Dated: January 31, 1994

CENTRALLY HELD EAGLE RECEIVABLES
PROGRAM, INC.

By:_______________________________
Title:____________________________

CERTIFICATE OF AUTHENTICATION

This is one of the Class B Certificates described in the within-mentioned
Pooling and Servicing Agreement.

CONTINENTAL BANK, NATIONAL
ASSOCIATION, as Trustee

By:_______________________________
Authorized Signatory

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