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EXHIBIT 10.1A

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HENRY COMPANY

KIMBERTON ENTERPRISES, INC.

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SECOND AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT
Dated: August   , 2001
$35,000,000

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FLEET CAPITAL CORPORATION
Individually and as Agent for any Lender which is
or becomes a Party hereto

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TABLE OF CONTENTS

 
   
  Page

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          Section 1.   CREDIT FACILITY   1 1.1   Loans   1 1.2   Letters of
Credit; LC Guaranties   2 1.3   Capex Loans   3 Section 2.   INTEREST, FEES AND
CHARGES   3 2.1   Interest   3 2.2   Computation of Interest and Fees   4 2.3  
LIBOR Option   4 2.4   Closing Fee   5 2.5   Letter of Credit and LC Guaranty
Fees   5 2.6   Unused Line Fee   6 2.7   Prepayment Fee   6 2.8   Capital
Adequacy   6 2.9   Audit Fees   7 2.10   Reimbursement of Expenses   7 2.11  
Bank Charges   7 2.12   Collateral Protection Expenses; Appraisals   8 2.13  
Payment of Charges   8 2.14   No Deductions   8 Section 3.   LOAN ADMINISTRATION
  8 3.1   Manner of Borrowing Revolving Credit Loans   8 3.2   Payments   10 3.3
  Mandatory and Optional Prepayments   10 3.4   Application of Payments and
Collections   12 3.5   All Loans to Constitute One Obligation   12 3.6   Loan
Account   12 3.7   Statements of Account   12 3.8   Sharing of Payments, Etc  
13 3.9   Joint and Several Liability   13 Section 4.   TERM AND TERMINATION   15
4.1   Term of Agreement   15 4.2   Termination   15 Section 5.   SECURITY
INTERESTS   15 5.1   Security Interest in Collateral   15 5.2   Lien Perfection;
Further Assurances   17 5.3   Lien on Realty   17 5.4   Commercial Tort Claims  
17 5.5   All Property Acknowledgement   17 Section 6.   COLLATERAL
ADMINISTRATION   18 6.1   General   18 6.2   Administration of Accounts   19 6.3
  Records and Reports of Inventory   20 6.4   Administration of Equipment   20
Section 7.   REPRESENTATIONS AND WARRANTIES   20 7.1   General Representations
and Warranties   20 7.2   Representation of Shareholder   27 7.3   Continuous
Nature of Representations and Warranties   27

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7.4   Survival of Representations and Warranties   27 Section 8.   COVENANTS AND
CONTINUING AGREEMENTS   28 8.1   Affirmative Covenants   28 8.2   Negative
Covenants   30 8.3   Specific Financial Covenants   35 8.4   Covenants of
Shareholders   35 Section 9.   CONDITIONS PRECEDENT   36 9.1   Documentation  
36 9.2   No Default   36 9.3   Other Conditions   36 9.4   Availability   36 9.5
  No Litigation   36 9.6   Material Adverse Effect   37 9.7   Capital Structure
  37 9.8   Insurance   37 9.9   Opinions of Counsel   37 9.10   Cash Management
  37 9.11   Verification of Key Accounts   37 9.12   Due Diligence   37 9.13  
Waivers   37 9.14   Additional Information   37 9.15   No Increased Liability  
38 9.16   Other Agreements   38 Section 10.   EVENTS OF DEFAULT; RIGHTS AND
REMEDIES ON DEFAULT   40 10.1   Events of Default   40 10.2   Acceleration of
the Obligations   42 10.3   Other Remedies   42 10.4   Set Off and Sharing of
Payments   43 10.5   Remedies Cumulative; No Waiver   44 Section 11.   THE AGENT
  45 11.1   Authorization and Action   45 11.2   Agent's Reliance, Etc   45 11.3
  Fleet and Affiliates   46 11.4   Lender Credit Decision   46 11.5  
Indemnification   46 11.6   Rights and Remedies to be Exercised by Agent Only  
47 11.7   Agency Provisions Relating to Collateral   47 11.8   Agent's Right to
Purchase Commitments   47 11.9   Right of Sale, Assignment, Participations   47
11.10   Amendment   49 11.11   Resignation of Agent; Appointment of Successor  
49 Section 12.   MISCELLANEOUS   50 12.1   Power of Attorney   50 12.2  
Indemnity   50 12.3   Sale of Interest   51 12.4   Severability   51 12.5  
Successors and Assigns   51 12.6   Cumulative Effect; Conflict of Terms   51
12.7   Execution in Counterparts   51 12.8   Notice   51

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12.9   Consent   52 12.10   Credit Inquiries   52 12.11   Time of Essence   52
12.12   Entire Agreement   52 12.13   Interpretation   53 12.14  
Confidentiality   53 12.15   GOVERNING LAW; CONSENT TO FORUM   53 12.16  
WAIVERS BY BORROWERS   54 12.17   Revival and Reinstatement of Obligations   54

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SECOND AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT

    THIS SECOND AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT (this
"Agreement") is made as of this       day of August, 2001, by and among FLEET
CAPITAL CORPORATION ("Fleet"), a Rhode Island corporation with an office at
15620 Ventura Blvd., Suite 400, Sherman Oaks, California, individually as a
Lender and as Agent (in such capacity, "Agent") for itself, LASALLE BUSINESS
CREDIT, INC., a Delaware corporation ("LaSalle") and any other financial
institution which is or becomes a party hereto (each such financial institution,
including Fleet and LaSalle, is referred to hereinafter individually as a
"Lender" and collectively as "Lenders"), LENDERS and HENRY COMPANY
(successor-in-interest to Monsey Products, Co. and Monsey Products of America
LLC), a California corporation ("Henry"), with its chief executive office at
2911 Slauson Ave., Huntington Park, California, and KIMBERTON ENTERPRISES, INC.,
a Delaware corporation ("Kimberton"), with its chief executive office at 2911
Slauson Avenue, Huntington Park, California; (Henry, together with Kimberton,
are referred to hereinafter each individually as a "Borrower" and collectively,
jointly and severally, as "Borrowers"). Capitalized terms used in this Agreement
have the meanings assigned to them in Appendix A, General Definitions.
Accounting terms not otherwise specifically defined herein shall be construed in
accordance with GAAP consistently applied.

SECTION 1. CREDIT FACILITY

    WHEREAS, Borrowers and Bank of America, N.A. as successor-in-interest to
Nationsbank, N.A. (the "Original Lender") are party to that certain Amended and
Restated Financing and Security Agreement dated as of April 22, 1998 (the "New
Bank Credit Facility");

    WHEREAS, Borrowers and the Original Lender have agreed to restructure the
New Bank Credit Facility;

    WHEREAS, in connection with the restructure of the New Bank Credit Facility
the Original Lender has assigned all of its right, title and interest in and to
the New Bank Credit Facility to Lenders;

    WHEREAS, to effectuate the restructuring the parties desire to amend and
restate the New Bank Credit Facility in its entirety on the terms and conditions
set forth herein;

    WHEREAS, subject to the terms and conditions of, and in reliance upon the
representations and warranties made in, this Agreement and the other Loan
Documents, Lenders shall continue to provide a Total Credit Facility of up to
$35,000,000 available upon Borrower's request therefor, as follows:

1.1  Loans.

    1.1.1  Revolving Credit Loans.  Each Lender agrees, severally and not
jointly, for so long as no Default or Event of Default exists, to make Revolving
Credit Loans to Borrowers from time to time during the period from the date
hereof to but not including the last day of the Term, as requested by Borrowers
in the manner set forth in subsection 3.1.1 hereof, up to a maximum amount equal
to the lesser of (i) such Lender's Revolving Loan Commitment less the total
amount of such Lender's Revolving Credit Loans then outstanding and (ii) the
product of such Lender's Revolving Loan Percentage and Availability. Agent shall
have the right to establish reserves in such amounts, and with respect to such
matters, as Agent shall deem necessary or appropriate in its reasonable credit
judgment, against the amount of Revolving Credit Loans which Borrowers may
otherwise request under this subsection 1.1.1 with respect to (i) price
adjustments, damages, unearned discounts, returned products or other matters for
which credit memoranda are issued in the ordinary course of Borrowers' business;
(ii) shrinkage, spoilage and obsolescence of Borrowers' Inventory; (iii) slow
moving Inventory; (iv) other sums chargeable (but not yet charged) against
Borrowers' Loan Account as Revolving Credit Loans under any section of this
Agreement; and (v) such other specific events, conditions or

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contingencies as to which Agent, in its reasonable credit judgment determines
reserves should be established from time to time hereunder. As of the date
hereof, Agent has established the Note Payment Reserve, the Test Count Variance
Reserve and the Warranty Reserve against Availability and a reserve for Account
dilution as determined in Agent's sole discretion. The Revolving Credit Loans
shall be repayable in accordance with the terms of the Revolving Notes and shall
be secured by all of the Collateral.

    1.1.2  Overadvances.  Agent may for a period of 60 days, make Revolving
Credit Loans of not more than $1,250,000, on behalf of Lenders, at a time when
an Overadvance exists or would be caused by the making of such Revolving Credit
Loans; provided, however, that such Overadvance is approved by the Majority
Lenders. After the expiration of such 60 day period, no such Overadvance shall
cause or constitute a waiver by any Lender of its right to refuse to make any
further Revolving Credit Loans at any time that an Overadvance exists or would
result therefrom. Agent may not (i) make Revolving Credit Loans on behalf of
Lenders under this subsection 1.1.2 to the extent such Revolving Credit Loans
would cause a Lender's share of the Revolving Credit Loans to exceed such
Lender's Revolving Loan Commitment minus such Lender's Revolving Loan Percentage
of the LC Amount; (ii) make Revolving Credit Loans on behalf of Lenders under
this subsection 1.1.2 at any time within 30 days of the date on which any such
Revolving Credit Loans pursuant to this subsection 1.1.2 have previously been
made; (iii) make Revolving Credit Loans on behalf of Lenders under this
subsection 1.1.2 at any time if such Loans would cause Revolving Credit Loans
under this subsection 1.1.2 to be outstanding for more than 90 days out of any
180 consecutive days; or (iv) make Revolving Credit Loans after the end of the
Term.

    1.1.3  Use of Proceeds.  The Revolving Credit Loans shall be used solely for
(i) the refinancing and restructuring of Indebtedness owed to Original Lender,
(ii) for Borrowers' general operating and working capital needs in a manner
consistent with the provisions of this Agreement and all applicable laws, and
(iii) for other purposes permitted under this Agreement.

1.2  Letters of Credit; LC Guaranties.

    Agent agrees, for so long as no Default or Event of Default exists and if
requested by Borrowers, to (i) issue its, or cause to be issued by Bank or
another Affiliate of Agent, on the date requested by Borrowers, Letters of
Credit for the account of Borrowers or (ii) execute LC Guaranties by which Bank,
or another Affiliate of Lender, on the date requested by Borrowers, shall
guaranty the payment or performance by Borrowers of their reimbursement
obligations with respect to letters of credit, provided that the LC Amount shall
not exceed $2,000,000 at any time. No trade Letter of Credit or LC Guaranty of a
trade letter of credit may have an expiration date that is more than 180 days
after the date of issuance thereof; and no standby Letter of Credit or LC
Guaranty of a standby letter of credit may have an expiration date that is more
than one (1) year from the date of issuance thereof, which expiration date may
be extended for additional periods of up to one (1) year, subject to the
immediately following sentence. No Letter of Credit or LC Guaranty may have an
expiration date that is after 30 days prior to the last day of the Term.
Notwithstanding anything to the contrary contained herein, Borrowers, Agent and
Lenders hereby agree that all LC Obligations and all obligations of Borrowers
relating thereto shall be satisfied by the prompt issuance of one or more
Revolving Credit Loans that are Base Rate Portions, which Borrowers hereby
acknowledge are requested and Lenders hereby agree to fund. In the event that
Revolving Credit Loans are not, for any reason, promptly made to satisfy all
then existing LC Obligations, each Lender hereby agrees to pay to Agent, on
demand, an amount equal to such LC Obligations multiplied by such Lender's
Revolving Loan Percentage, and until so paid, such amount shall be secured by
the Collateral and shall bear interest and be payable at the same rate and in
the same manner as Base Rate Portions. Immediately upon the issuance of a Letter
of Credit or an LC Guaranty under this Agreement, each Lender shall be deemed to
have irrevocably and unconditionally purchased and received from Agent, without
recourse or warranty, an undivided

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interest and participation therein equal to such LC Obligations multiplied by
such Lender's Revolving Loan Percentage.

1.3  Capex Loans.

    1.3.1  Capex Loan A.  Each Lender, severally and not jointly, agrees to make
a capital expenditure loan (the "Capex Loan A") to Borrowers on the Closing
Date, in the aggregate principal amount of such Lender's Capex Loan A Percentage
of $3,500,000, which shall be repayable in accordance with the terms of the
Capex Loan A Notes and shall be secured by all of the Collateral. The proceeds
of Capex Loan A shall be used solely for purposes specified in Section 1.1.3.

    1.3.2  Capex Loan B.  Each Lender, severally and not jointly, upon ten
(10) Business Days' prior written notice to Agent by Borrowers specifying the
date, amount and purpose and for so long as no Default or Event of Default
exists, agrees to make capital expenditure loans (collectively, the "Capex Loan
B") to Borrowers, in the aggregate principal amount of the product of such
Lender's Capex Loan B Percentage and the lesser of (i) $1,500,000 or (ii) an
amount equal to thirty-five percent (35%) of the appraised value acceptable to
Agent (less any environmental remediation costs) of the real Property owned by
Borrowers; provided, that (a) all additional environmental reviews reasonably
requested by Agent have been conducted with respect to such real Property, and
the scope and results of such reviews are acceptable to Lenders in their sole
discretion, (b) Agent has, for the ratable benefit of Lenders, a first-priority
lien on such real Property and (c) the real Property is otherwise acceptable to
Lenders in their sole discretion. Any real Property with remediation costs in
excess of twenty percent (20%) of its appraised value shall be deemed ineligible
for purposes of Capex Loan B. Capex Loan B shall be repayable in accordance with
the terms of the Capex Loan B Notes and shall be secured by all of the
Collateral. The proceeds of Capex Loan B shall be used solely for purposes
specified in Section 1.1.3.

    1.3.3  Capex Loan C.  Each Lender, severally and not jointly, may, in its
sole and absolute discretion and upon ten (10) Business Days' prior written
notice to Agent by Borrowers specifying the date, the amount, the purpose and a
detailing listing of the Eligible Production Equipment to be purchased and for
so long as no Default or Event of Default exists, make capital expenditure loans
(collectively the "Capex Loan C") to Borrowers in the aggregate principal amount
of the product of such Lender's Capex Loan C Percentage multiplied by an amount
equal to seventy-five percent (75%) of the invoice price (net of all taxes,
license and installation expense, transportation and shipping expenses,
discounts, rebates or other credits) of Eligible Production Equipment; provided
that (i) no further amounts are then available to be borrowed under the Capex
Loan A and Capex Loan B, (ii) the Majority Lenders consent in writing to such
borrowing, (iii) the proceeds of Capex Loan C borrowings are used only to
purchase Eligible Production Equipment, (iv) the Capex Loan C borrowings shall
not exceed $5,000,000 in the aggregate at any time, and (v) the Eligible
Production Equipment shall be located at real Property owned by Borrowers or at
premises leased by Borrowers and Agent has received a landlord waiver in form
and substance acceptable to Agent for such leased premises and Agent shall have
the right to inspect the Eligible Production Equipment at any time. All Capex
Loan C borrowings shall be equal to at least $250,000 and in integral multiples
of $50,000. Capex Loan C shall be repayable in accordance with the terms of the
Capex Loan C Notes and shall be secured by all of the Collateral.

    1.3.4  Amounts Borrowed.  Amounts borrowed under the Capex Loans and repaid
may not be reborrowed.

SECTION 2. INTEREST, FEES AND CHARGES

2.1  Interest.

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    2.1.1  Rates of Interest.  Interest shall accrue on the Base Rate Revolving
Portion and the Base Rate Capex Portions outstanding at the end of each day at a
fluctuating rate per annum equal to then Applicable Margin then in effect plus
the Base Rate. Said rate of interest shall increase or decrease by an amount
equal to any increase or decrease in the Base Rate, effective as of the opening
of business on the day that any such change in the Base Rate occurs. If
Borrowers properly exercise their LIBOR Option as provided in Section 2.3,
interest shall accrue on the principal amount of the LIBOR Revolving Portions
and the LIBOR Capex Portions outstanding at the end of each day at a rate per
annum equal to the Applicable Margin then in effect plus the LIBOR Rate
applicable to each LIBOR Portion for the corresponding LIBOR Period.

    2.1.2  Default Rate of Interest.  At the option of Agent, upon and after the
occurrence of an Event of Default, and during the continuation thereof, the
principal amount of all Loans shall bear interest at a rate per annum equal to
2.0% plus the interest rate otherwise applicable thereto (the "Default Rate").

    2.1.3  Maximum Interest.  In no event whatsoever shall the aggregate of all
amounts deemed interest hereunder or under the Notes and charged or collected
pursuant to the terms of this Agreement or pursuant to the Notes exceed the
highest rate permissible under any law which a court of competent jurisdiction
shall, in a final determination, deem applicable hereto. If any provisions of
this Agreement or the Notes are in contravention of any such law, such
provisions shall be deemed amended to conform thereto.

2.2  Computation of Interest and Fees.

    Interest, Letter of Credit and LC Guaranty fees and Unused Line Fees
hereunder shall be calculated daily and shall be computed on the actual number
of days elapsed over a year of 360 days.

2.3  LIBOR Option.

    (i)    Upon the conditions that: (1) Agent shall have received a LIBOR
Request from Borrowers at least 3 Business Days prior to the first day of the
LIBOR Period requested, (2) the proposed borrowing shall be no less than
$500,000 and in integral multiples of $100,000, (3) there shall have occurred no
change in applicable law which would make it unlawful for Lenders to obtain
deposits of U.S. dollars in the London interbank foreign currency deposits
market, (4) as of the date of the LIBOR Request and the first day of the LIBOR
Period, there shall exist no Default or Event of Default, (5) Agent is able to
determine the LIBOR Rate in respect of the requested LIBOR Period, (6) Agent or
Agent's affiliate is able to obtain deposits of U.S. dollars in the London
interbank foreign currency deposits market in the applicable amounts and for the
requested LIBOR Period, and (7) as of the first date of the LIBOR Period, there
are no more than five (5) outstanding LIBOR Portions including the LIBOR Portion
being requested; then interest on the LIBOR Portion requested during the LIBOR
Period requested will be based on the applicable LIBOR Rate.

    (ii)   Each LIBOR Request shall be irrevocable and binding on Borrower.
Borrowers shall indemnify each Lender for any loss, penalty or expense incurred
by such Lender due to failure on the part of Borrowers to fulfill, on or before
the date specified in any LIBOR Request, the applicable conditions set forth in
this Agreement or due to the prepayment of the applicable LIBOR Portion prior to
the last day of the applicable LIBOR Period, including, without limitation, any
loss (including loss of anticipated profits) or expense incurred by reason of
the liquidation or redeployment of deposits or other funds acquired by any
Lender to fund or maintain the requested LIBOR Portion.

    (iii)   If any Legal Requirement shall (1) make it unlawful for any Lender
to fund through the purchase of U.S. dollar deposits any LIBOR Portion or
otherwise give effect to its obligations as contemplated under this Section 2.3,
or (2) shall impose on any Lender any costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of any Lender which includes deposits by reference to which the
LIBOR Rate is determined

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as provided herein or a category of extensions of credit or other assets of any
Lender which includes any LIBOR Portion or (3) shall impose on any Lender any
restrictions (not already taken into account under Statutory Reserves) on the
amount of such a category of liabilities or assets which any Lender may hold,
then, in each such case, each affected Lender may (A) in the case of (1) and
(3) above, by written notice thereof to Borrowers, describing the Legal
Requirement in reasonable detail, terminate such Lender's obligation to make
Loans available to Borrowers under the LIBOR Option and (B) in the case of
(2) above by written notice thereof to Borrowers, describing the Legal
Requirements in reasonable detail, require Borrowers to pay such Lender such
additional amount or amounts as will compensate such Lender for such additional
costs which are properly allocable to the applicable LIBOR Portion. Any LIBOR
Portion subject thereto shall immediately bear interest thereafter at the rate
and in the manner provided for the Base Rate Portion pursuant to subsection
2.1.1. Borrowers shall indemnify each Lender against any loss, penalty or
expense incurred by such Lender due to liquidation or redeployment of deposits
or other funds acquired by such Lender to fund or maintain any LIBOR Portion
that is terminated under this paragraph.

    (iv)   Each Lender shall receive payments of amounts of principal of and
interest with respect to the LIBOR Portions free and clear of, and without
deduction for, any Taxes. If (1) any Lender shall be subject to any Tax in
respect of any LIBOR Portion or any part thereof or, (2) Borrowers shall be
required to withhold or deduct any Tax from any such amount, such Lender shall
provide written notice to Borrowers and Agent of the fact that it is subject to
such Tax or the withholding or deduction requirements and the LIBOR Rate
applicable to such LIBOR Portion shall be adjusted by Agent on behalf of the
affected Lender to reflect all additional costs incurred by such Lender in
connection with the payment by such Lender or the withholding by Borrowers of
such Tax and Borrowers shall provide such Lender with a statement detailing the
amount of any such Tax actually paid by such Borrowers. Determination by Agent
on behalf of a Lender of the amount of such costs shall, in the absence of
manifest error, be conclusive. If after any such adjustment any part of any Tax
paid by any Lender is subsequently recovered by such Lender, such Lender shall
reimburse Borrower to the extent of the amount so recovered. A certificate of an
officer of any Lender setting forth the amount of such recovery and the basis
therefor shall, in the absence of manifest error, be conclusive. In no event
shall Borrowers be required to pay or reimburse Lenders under this subsection
2.3(iv) amounts which are duplicative of amounts paid or reimbursed by Borrowers
to Lenders under subsection 2.3(iii).

    (v)   In the event LIBOR Portions are unavailable to Borrowers for any of
the reasons set forth in Section 2.3(iii) and such reason is not generally
applicable to financial institutions or in the event Agent or any Lender is
subject to any Tax in respect of any LIBOR Portion and such Tax is not generally
applicable to financial institutions, Borrowers may prepay the Loans in full
without paying the prepayment fee specified in Section 2.7; provided that
(1) Agent receives an amount equal to all Obligations (other than the fee set
forth in Section 2.7) in cash on or before the ninetieth (90th) day following
Agent's notice under Section 2.3(iii) or 2.3 (iv), (2) the bank or financial
institution refinancing the Loans is not affected by the reasons set forth in
Section 2.3(iii) or any Tax in respect of any LIBOR loans and (3) no Default or
Event of Default has occurred or is continuing.

2.4  Closing Fee.

    Borrowers shall pay to Agent, for the ratable benefit of Lenders, a fee
equal to $175,000 (the "Closing Fee"). Fifty-percent (50%) ($87,500) of the
Closing Fee was paid by Borrowers on June 22, 2001; the remaining $87,500 shall
be payable by Borrowers on the Closing Date. The Closing Fee shall be fully
earned and non-refundable on the date of the execution of the Commitment Letter.

2.5  Letter of Credit and LC Guaranty Fees.

    For all standby Letters of Credits and LC Guaranties for standby Letters of
Credit, Borrowers shall pay to Agent, for the ratable benefit of Lenders, a fee
equal to the Applicable Margin then in effect for LIBOR Portions per annum
multiplied by the aggregate face amount of all such standby

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Letters of Credit and LC Guaranties for standby Letters of Credit outstanding
from time to time during the term of this Agreement, which fees shall be payable
monthly in arrears on the first day of each month hereafter. For all documentary
Letters of Credits and LC Guaranties for documentary Letters of Credits,
Borrowers shall pay to Agent, for the ratable benefit of Lenders, a fee equal to
two percent (2%) per annum multiplied by the aggregate face amount of all such
documentary Letters of Credit and LC Guaranties for documentary Letters of
Credits which fees shall be payable monthly in arrears on the first day of each
month hereafter plus all normal and customary charges associated with the
issuance of such documentary Letters of Credit and LC Guaranties for documentary
Letters of Credit, which fees and charges shall be as set forth on Exhibit 2.5
and shall be deemed fully earned and shall be due and payable upon issuance of
each such Letter of Credit or LC Guaranty and shall not be subject to rebate or
proration upon the termination of this Agreement for any reason. In addition,
Borrower shall pay to Agent a fronting fee equal to .25% per annum multiplied by
the face amount of all Letters of Credit and LC Guaranties payable upon
issuance.

2.6  Unused Line Fee.

    Borrowers shall pay to Agent, for the ratable benefit of Lenders, a fee (the
"Unused Line Fee") equal to .25% per annum multiplied by the average daily
amount by which (a) the Revolving Credit Maximum Amount exceeds (b) the sum of
(i) the outstanding principal balance of the Revolving Credit Loans, plus
(ii) the LC Amount. The Unused Line Fee shall be payable monthly in arrears on
the first day of each month hereafter.

2.7  Prepayment Fee.

    Borrowers shall pay to Agent, for the ratable benefit of Lenders, a fee in
the event that prior to the second anniversary of the Closing Date, Borrowers
elect to repay the Loans in full and terminate all Revolving Loan Commitments.
Such fee shall be payable upon repayment of the Loans and shall be in an amount
equal to (i) two percent (2%) of the Total Credit Facility if the Loans are
repaid and the Revolving Loan Commitments are terminated on or before the first
anniversary of the Closing Date, and (ii) one percent (1%) of the Total Credit
Facility if the Loans are repaid and the Revolving Loan Commitments are
terminated after the first anniversary of the Closing Date, but on or before the
second anniversary of the Closing Date.

2.8  Capital Adequacy.

    (i)    If any Lender shall have determined that the adoption after the date
of this Agreement of any Legal Requirement regarding capital adequacy, or any
change after the date of this Agreement therein or in the official
interpretation or application thereof or compliance by any Lender with any
request or directive after the date of this Agreement regarding capital adequacy
(whether or not having the force of law) from any central bank or governmental
authority, does or shall have the effect of reducing the rate of return on such
Lender's capital as a consequence of its obligations hereunder to a level below
that which such Lender could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's policies with respect to
capital adequacy) by an amount deemed by such Lender, in its sole discretion, to
be material, then from time to time, after submission by such Lender to
Borrowers of a written demand therefor, Borrowers shall pay to such Lender,
within 30 days of such demand, such additional amount or amounts as will
compensate such Lender for such reduction; provided such Lender is requiring its
borrowers generally to pay such amounts. A certificate of such Lender claiming
entitlement to payment as set forth above shall be conclusive in the absence of
manifest error. Such certificate shall set forth the nature of the occurrence
giving rise to such payment, the additional amount or amounts to be paid to such
Lender, and the method by which such amounts were determined. In determining
such amount, such Lender may use any reasonable averaging and attribution
method.

    (ii)   In the event Agent or any Lender provides a written demand for
payment of amounts reimbursable under Section 2.8(i) and such Legal Requirement
is not generally applicable to financial

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institutions, then Borrowers may prepay the Loans without paying the prepayment
fee specified in Section 2.7 provided that (1) no Default or Event of Default
has occurred or is continuing, and (2) Agent receives an amount equal to all
Obligations (other than the fee set forth in Section 2.7) in cash on or before
the ninetieth (90th) day following such demand.

2.9  Audit Fees.

    Borrowers shall pay to each of Agent and LaSalle for such party's sole
account a fee equal to the lesser (so long as no Event of Default exists and is
continuing) of (i) $750 per day, per examiner employed by Agent and LaSalle at
any time after the Closing Date and (ii) the amounts charged by any third party
examiner hired by Agent and Lenders, plus all out-of-pocket expenses incurred by
such examiner, Agent and Lenders in connection with audits of the books and
records and Properties of Borrowers and their Subsidiaries and such other
matters as Agent shall deem appropriate in its reasonable discretion. During the
occurrence and the continuation of an Event of Default, Borrowers shall pay to
each of Agent and LaSalle the fees of examiners employed by Agent and LaSalle in
accordance with Agent's and LaSalle's then prevailing practices including
amounts in excess of $750 per day per examiner or the amounts actually charged
by and third party examiner hired by Agent and Lenders plus all out-of-pocket
expenses incurred by such examiner, Agent and Lenders. Such fees and expenses
shall be payable on the first day of the month following the date of issuance by
Agent and Lenders of a request for payment thereof to Borrower.

2.10  Reimbursement of Expenses.

    If, at any time or times regardless of whether or not an Event of Default
then exists, (i) Agent incurs legal or accounting expenses or any other costs or
out-of-pocket expenses in connection with (1) the negotiation and preparation of
this Agreement or any of the other Loan Documents, any amendment of or
modification of this Agreement or any of the other Loan Documents, or (2) the
administration of this Agreement or any of the other Loan Documents and the
transactions contemplated hereby and thereby or (3) any visits to or inspections
of Borrowers' locations; or (ii) Agent or any Lender incurs legal or accounting
expenses or any other costs or out-of-pocket expenses in connection with (1) any
litigation, contest, dispute, suit, proceeding or action (whether instituted by
Agent, any Lender, any Borrower or any other Person) relating to the Collateral,
this Agreement or any of the other Loan Documents or Borrowers, any of their
Subsidiaries' (including Bakor) or any Guarantor's affairs; (2) any attempt to
enforce any rights of Agent or any Lender against any Borrower or any other
Person which may be obligated to Agent or any Lender by virtue of this Agreement
or any of the other Loan Documents, including, without limitation, the Account
Debtors; or (3) any attempt to inspect, verify, protect, preserve, restore,
collect, sell, liquidate or otherwise dispose of or realize upon the Collateral;
then all such legal and accounting expenses, other costs and out-of-pocket
expenses of Agent or any Lender, as applicable, shall be charged to Borrowers;
provided, that Borrowers shall not be responsible for such costs and
out-of-pocket expenses to the extent incurred because of the gross negligence or
willful misconduct of Agent or any Lender. Borrowers shall also reimburse Agent
for expenses incurred by Agent in its administration of the Collateral to the
extent and in the manner provided in Section 2.11 hereof.

2.11  Bank Charges.

    Borrowers shall pay to Agent any and all fees, costs or expenses which Agent
pays to a bank or other similar institution arising out of or in connection with
(i) the forwarding to Borrowers or any other Person on behalf of Borrower, by
Agent, of proceeds of Loans made to Borrowers pursuant to this Agreement
including, without limitation, any amounts payable or reimbursed by Agent to
Original Lender in connection with the assignment of the New Bank Credit
Facility by Original Lender to Agent, and (ii) the depositing for collection by
Agent of any check or item of payment received or delivered to Agent on account
of the Obligations.

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2.12  Collateral Protection Expenses; Appraisals.

    All out-of-pocket expenses incurred by Agent and Lenders in protecting,
storing, warehousing, insuring, handling, maintaining and shipping the
Collateral, any and all excise, property, sales, and use taxes imposed by any
state, federal, or local authority on any of the Collateral or in respect of the
sale thereof shall be borne and paid by Borrowers. If any Borrower fails to
promptly pay any portion thereof when due, Agent may, at its option, but shall
not be required to, pay the same and charge such Borrower therefor.
Additionally, from time to time, if Agent or any Lender determines that
obtaining appraisals is necessary in order for it to comply with applicable laws
or regulations, and at any time if a Default or an Event of Default shall have
occurred and be continuing, Agent may, at Borrowers' expense, obtain appraisals
from appraisers (who may be personnel of Agent), stating the then current fair
market value of all or any portion of the real estate or personal property of
any Borrower or any of its Subsidiaries. Borrowers shall pay to Agent for
Agent's sole account a fee of $750 per day, per appraiser employed by Agent at
any time after the Closing Date (so long as no Event of Default exists or is
continuing) or a fee equal to the amounts charged by a third party appraiser
hired by Agent and Lenders, plus all out-of-pocket expenses incurred by such
appraiser, Agent and Lenders in connection with any appraisals of the real
estate or personal property of any Borrower or any of its Subsidiaries. So long
as no Event of Default exists or is continuing, the fees payable by Borrowers
for appraisals shall not exceed $3,000 during any fiscal year. During the
occurrence and the continuation of an Event of Default, Borrowers shall pay to
Agent for Agent's sole account the fees of appraisers employed by Agent in
accordance with Agent's then prevailing practices including amounts in excess of
$750 per day, per appraiser plus all out-of-pocket expenses incurred by such
appraiser, Agent and Lenders.

2.13  Payment of Charges.

    All amounts chargeable to Borrowers under this Agreement shall be
Obligations secured by all of the Collateral, and shall be, unless specifically
otherwise provided, payable on demand and shall bear interest from the date
demand was made or such amount is due, as applicable, until paid in full at the
rate applicable to Base Rate Portions from time to time.

2.14  No Deductions.

    Any and all payments or reimbursements made hereunder shall be made free and
clear of and without deduction for any and all taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto;
excluding, however, the following: taxes imposed on the income of Agent or any
Lender or franchise taxes by the jurisdiction under the laws of which Agent or
any Lender is organized or doing business or any political subdivision thereof
and taxes imposed on its income by the jurisdiction of Agent's or such Lender's
applicable lending office or any political subdivision thereof or franchise
taxes (all such taxes, levies, imposts, deductions, charges or withholdings and
all liabilities with respect thereto excluding such taxes imposed on net income
or franchise taxes, herein "Tax Liabilities"). If any Borrower shall be required
by law to deduct any such Tax Liabilities from or in respect of any sum payable
hereunder to Agent or any Lender (other than payments of principal and interest
with respect to LIBOR Portions, which shall be governed by subsection 2.3(iv)),
then the sum payable hereunder shall be increased as may be necessary so that,
after all required deductions are made, such Lender receives an amount equal to
the sum it would have received had no such deductions been made.

SECTION 3. LOAN ADMINISTRATION.

3.1  Manner of Borrowing Revolving Credit Loans.

    Borrowings under the credit facility established pursuant to Section 1
hereof shall be as follows:

    3.1.1  Loan Requests.  A request for a Revolving Credit Loan shall be made,
or shall be deemed to be made, in the following manner: (i) Borrowers shall give
Agent written notice via facsimile of their intention to borrow, in which notice
Borrowers shall specify the amount of the proposed borrowing and the proposed
borrowing date, no later than 10:00 a.m. (Los Angeles, California time) on the
proposed

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borrowing date (or in accordance with Section 2.3 in the case of a request for a
LIBOR Revolving Portion), provided, however, that no such request may be made at
a time when there exists a Default or an Event of Default; and (ii) the becoming
due of any amount required to be paid under this Agreement, or the Notes,
whether as interest or for any other Obligation, shall be deemed irrevocably to
be a request for a Revolving Credit Loan on the due date in the amount required
to pay such interest or other Obligation. A request for a Capex Loan shall be
made in accordance with Section 1.3

    3.1.2  Disbursement.  Each Borrower hereby irrevocably authorizes Lender to
disburse the proceeds of each Revolving Credit Loan requested, or deemed to be
requested, pursuant to subsection 3.1.1 as follows: (i) the proceeds of each
Revolving Credit Loan requested under subsection 3.1.1(i) shall be disbursed by
Agent in lawful money of the United States of America in immediately available
funds, in the case of the initial borrowing, in accordance with the terms of the
written disbursement letter from Borrowers, and in the case of each subsequent
borrowing, by wire transfer to such bank account as may be agreed upon by
Borrowers and Agent from time to time or elsewhere if pursuant to a written
direction from Borrowers; and (ii) the proceeds of each Revolving Credit Loan
deemed requested under subsection 3.1.1(ii) shall be disbursed by Agent by way
of direct payment of the relevant interest or other Obligation.

    3.1.3  Payment by Lenders.  Agent shall give to each Lender prompt written
notice by facsimile, telex or cable of the receipt by Agent from Borrowers of
any request for a Revolving Credit Loan or Capex Loan. Each such notice shall
specify the requested date and amount of such Revolving Credit Loan or Capex
Loan, as the case may be, whether such Revolving Credit Loan or Capex Loan shall
be subject to the LIBOR Option, and the amount of each Lender's advance
thereunder (in accordance with its applicable Revolving Loan Percentage or Capex
Loan Percentage). Each Lender shall, not later than 12:00 noon (Los Angeles,
California time) on such requested date, wire to a bank designated by Agent the
amount of that Lender's Revolving Loan Percentage of the requested Revolving
Credit Loan or that Lender's Capex Loan Percentage of the requested Capex Loan,
as the case may be. The failure of any Lender to make the Revolving Credit Loans
or Capex Loans to be made by it shall not release any other Lender of its
obligations hereunder to make its Revolving Credit Loan or Capex Loan. Neither
Agent nor any other Lender shall be responsible for the failure of any other
Lender to make the Revolving Credit Loan or the Capex Loan to be made by such
other Lender. The foregoing notwithstanding, Agent, in its sole discretion, may
from its own funds make a Revolving Credit Loan or the Capex Loan on behalf of
any Lender. In such event, the Lender on behalf of whom Agent made the Revolving
Credit Loan or the Capex Loan shall reimburse Agent for the amount of such
Revolving Credit Loan made on its behalf, on a weekly (or more frequent, as
determined by Agent in its sole discretion) basis. The entire amount of interest
attributable to such Revolving Credit Loan or the Capex Loan for the period from
the date on which such Revolving Credit Loan was made by Agent on such Lender's
behalf until Agent is reimbursed by such Lender, shall be paid to Agent for its
own account.

    3.1.4  Authorization.  Each Borrower hereby irrevocably authorizes Agent to
advance to such Borrower, and to charge to such Borrower's Loan Account
hereunder as a Revolving Credit Loan, a sum sufficient to pay all interest
accrued on the Obligations during the immediately preceding month and to pay all
fees, costs and expenses and other Obligations at any time owed by such Borrower
to Agent or any Lender hereunder.

    3.1.5  Letter of Credit and LC Guaranty Requests.  A request for a Letter of
Credit or LC Guaranty shall be made in the following manner: Borrowers may give
Agent and Bank a written notice of their request for the issuance of a Letter of
Credit or LC Guaranty, not later than 10:00 a.m. (Los Angeles, California time),
one Business Day before the proposed issuance date thereof, in which notice
Borrowers shall specify the proposed issuer, issuance date and format and
wording for the Letter of Credit or LC Guaranty being requested (which shall be
satisfactory to Agent and the Person being asked to issue such Letter of Credit
or LC Guaranty); provided, that no such request may be made at a

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time when there exists a Default or Event of Default. Such request shall be
accompanied by an executed application and reimbursement agreement in form and
substance satisfactory to Agent and the Person being asked to issue the Letter
of Credit or LC Guaranty, as well as any required resolutions.

3.2  Payments.

    Except where evidenced by notes or other instruments issued or made by
Borrowers to any Lender and accepted by such Lender specifically containing
payment instructions that are in conflict with this Section 3.2 (in which case
the conflicting provisions of said notes or other instruments shall govern and
control), the Obligations shall be payable as follows:

    3.2.1  Principal.  Principal payable on account of Revolving Credit Loans
shall be payable by Borrowers to Agent for the ratable benefit of Lenders
immediately upon the earliest of (i) if the Capex Loans have been paid in full,
the receipt by Agent or Borrower of any proceeds of any of the Collateral
(except as otherwise provided herein), including, without limitation, pursuant
to subsections 3.3.1 and 6.2.4, to the extent of said proceeds, subject to
Borrower's rights to reborrow such amounts in compliance with subsection 1.1.1
hereof; (ii) the occurrence of an Event of Default in consequence of which Agent
or Majority Lenders elect to accelerate the maturity and payment of the
Obligations, or (iii) termination of this Agreement pursuant to Section 4
hereof; provided, however, that, if an Overadvance shall exist at any time,
Borrower shall, on demand, repay the Overadvance. Amounts repaid on account of
the Revolving Credit Loans may be reborrowed in accordance with this Agreement.
Principal payable on account of the Capex Loans shall be as set forth in the
Capex Loan Notes.

    3.2.2  Interest.  

(i)Base Rate Portion. Interest accrued on Base Rate Portions shall be due and
payable on the earliest of (1) the first calendar day of each month (for the
immediately preceding month), computed through the last calendar day of the
preceding month, (2) the occurrence of an Event of Default in consequence of
which Agent or Majority Lenders elect to accelerate the maturity and payment of
the Obligations or (3) termination of this Agreement pursuant to Section 4
hereof. (ii)LIBOR Portion. Interest accrued on each LIBOR Portion shall be due
and payable on each LIBOR Interest Payment Date and on the earlier of (1) the
occurrence of an Event of Default in consequence of which Agent or Majority
Lenders elect to accelerate the maturity and payment of the Obligations or
(2) termination of this Agreement pursuant to Section 4 hereof.

    3.2.3  Costs, Fees and Charges.  Costs, fees and charges payable pursuant to
this Agreement shall be payable by Borrowers to Agent, as and when provided in
Section 2 hereof or to any other Person designated by Agent in writing.

    3.2.4  Other Obligations.  The balance of the Obligations requiring the
payment of money, if any, shall be payable by Borrowers to Agent for
distribution to Lenders, as appropriate, as and when provided in this Agreement,
the Other Agreements or the Security Documents, or on demand, whichever is
later.

3.3  Mandatory and Optional Prepayments.

    3.3.1  Proceeds of Sale, Loss, Destruction or Condemnation of
Property.  Except as provided in subsections 6.4.2 and 8.2.9, if any Borrower or
any of its Subsidiaries sells any Property (including, without limitation, the
Collateral) or if any of the Collateral is lost or destroyed or taken by
condemnation, such Borrower shall, unless otherwise agreed by Majority Lenders,
pay to Agent for the ratable benefit of Lenders, and as a mandatory prepayment
of the Capex Loans until paid in full (and thereafter, the Revolving Credit
Loans), as herein provided, a sum equal to one hundred percent (100%) of the
Cash proceeds (including insurance proceeds but net of costs payable to a
non-Affiliate

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and taxes incurred in connection with such sale or event) received by such
Borrower or such Subsidiary from such sale, loss, destruction or condemnation
when the aggregate of such proceeds exceed $100,000 in any calendar year;
provided that upon the occurrence and continuation of an Event of Default, all
such proceeds shall be paid to Agent for the ratable benefit of Lenders
immediately upon receipt by such Borrower or such Subsidiary; provided, further,
however, that in the event the real Property located at 430 Hudson River Road,
Waterford, New York (the "Waterford Property") is sold, Borrowers shall pay to
Agent for the ratable benefit of Lenders an amount equal to (A) if an Event of
Default has occurred and is continuing, one hundred percent (100%) of the Cash
proceeds from such sale (net of costs payable to a non-Affiliate and taxes
incurred in connection with such sale), or (B) if no Event of Default has
occurred and is continuing, the greater of (1) $735,000 and (2) fifty percent
(50%) of the proceeds (net of costs payable to a non-Affiliate and taxes
incurred in connection with such sale) from the sale of the Waterford Property.
The applicable prepayment shall be applied to the installments of principal due
under the Capex Loan Notes ratably, to be applied to future installment payments
in inverse order of maturity until paid in full and thereafter applied to the
Revolving Credit Loans. Notwithstanding the foregoing, if the proceeds of
insurance (net of costs payable to a non-Affiliate and taxes incurred) with
respect to any loss or destruction of Equipment, Inventory or real Property
(i) are less than $100,000, unless an Event of Default is then in existence,
Agent shall remit such proceeds to Borrowers for use in replacing or repairing
the damaged Collateral or (ii) are equal to or greater than $100,000 and
Borrowers have requested that Agent agree to permit Borrowers or the applicable
Subsidiary to repair or replace the damaged Collateral, such amounts shall be
provisionally applied to reduce the outstanding principal balance of the Capex
Loans until the earlier of Agent's decision with respect thereto or the
expiration of 180 days from such request. If Agent agrees, in its reasonable
judgment, to permit such repair or replacement under clause (ii) of the
preceding sentence, such amount shall, unless an Event of Default is in
existence, be remitted to Borrowers for use in replacing or repairing the
damaged Collateral; if Agent declines to permit such repair or replacement or
does not respond to Borrowers within such 180 day period, such amount shall be
applied to the Loans in the manner specified in the second sentence of this
subsection 3.3.1 until payment thereof in full.

    3.3.2  Excess Cash Flow Recapture.  Borrowers shall prepay the Capex Loan
Notes in amounts equal to fifty percent (50%) of Borrowers' Excess Cash Flow
with respect to each fiscal year of Borrowers during the Term hereof, with the
first payment commencing in the fiscal year 2002, such prepayments to be based
upon, and made within 5 Business Days following the due date for delivery by
Borrowers to Agent of the annual financial statements required by subsection
8.1.3(i) hereof and each such prepayment shall be applied to the Loans in the
manner specified in the second sentence of subsection 3.3.1 until payment
thereof in full.

    3.3.3  Proceeds from Issuance of Additional Indebtedness or Equity.  If any
Borrower issues any additional Indebtedness for Money Borrowed (other than
Indebtedness permitted under this Agreement) or issues any additional equity,
such Borrower shall pay to Agent for the ratable benefit of Lenders, when and as
received by any Borrower and as a mandatory prepayment of the Obligations, a sum
equal to one hundred percent (100%) of the net proceeds to such Borrower of the
issuance of such Indebtedness or equity; provided, however, that so long as no
Default or Event of Default exists or is continuing and Agent receives not less
than ten (10) Business Days prior notice of any issuance, the proceeds of
Securities issued by Henry may be used by the Borrowers for their general
operating and working capital needs in the ordinary course of their business.
Any such prepayment shall be applied to the Loans in the manner specified in the
second sentence of subsection 3.3.1 until payment thereof in full.

    3.3.4  Refusal of Prepayments.  Notwithstanding the provisions of this
Section 3.3, if any of Lenders holding any Capex Loan Notes elect not to accept
mandatory or optional prepayments of their Capex Loan B Notes and Capex Loan C
Notes, such Lender's (or Lenders') portion of all mandatory or optional
prepayments with respect to which such an election was made will be applied to

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prepayment of future principal installments on the Capex Loan A Notes in inverse
order of maturity. No such election may be made after any such Lender's Capex
Loan A Notes have been paid in full.

    3.3.5  LIBOR Portions.  If the application of any payment made in accordance
with the provisions of this Section 3.3 at a time when no Event of Default has
occurred and is continuing would result in termination of a LIBOR Portion prior
to the last day of the LIBOR Period for such LIBOR Portion, the amount of such
prepayment shall not be applied to such LIBOR Portion, but will, at Borrowers'
option, be held by Agent in a non-interest bearing account or deposited by
Borrowers in an interest-bearing account at a Lender or another bank
satisfactory to Agent in its discretion, which account is in the name of Agent
and from which account only Agent can make any withdrawal, in each case to be
applied as such amount would otherwise have been applied under this Section 3.3
at the earlier to occur of (i) the last day of the relevant LIBOR Period or
(ii) a Default or an Event of Default.

    3.3.6  Optional Prepayments.  Borrowers may, at their option from time to
time upon not less than 3 days prior written notice to Agent, prepay
installments of the Capex Loan Notes, provided that the amount of any such
prepayment is at least $250,000; that such prepayments are not from Money
Borrowed; and that such prepayments are made ratably with respect to all Capex
Loan Notes. Any such optional prepayment shall be credited against the amount of
the mandatory prepayment required under subsection 3.3.2 for the fiscal year in
which such optional prepayment was made. Except for charges under subsection
2.3(ii) applicable to prepayments of LIBOR Capex Portions, such prepayments
shall be without premium or penalty.

3.4  Application of Payments and Collections.

    All items of payment received on any Business Day shall be deemed received
on the following Business Day. Each Borrower irrevocably waives the right to
direct the application of any and all payments and collections at any time or
times hereafter received by Agent from or on behalf of any Borrower, and each
Borrower does hereby irrevocably agree that Agent shall have the continuing
exclusive right to apply and reapply any and all such payments and collections
received at any time or times hereafter by Agent or its agent against the
Obligations, in such manner as Agent may deem advisable, notwithstanding any
entry by Agent or any Lender upon any of its books and records. If as the result
of collections of Accounts as authorized by subsection 6.2.4 hereof or
otherwise, a credit balance exists in the Loan Account, such credit balance
shall not accrue interest in favor of Borrowers, but shall be disbursed to
Borrowers or otherwise at Borrowers' direction in the manner set forth in
subsection 3.1.2, upon Borrowers' request at any time, so long as no Default or
Event of Default then exists. Agent may at its option, offset such credit
balance against any of the Obligations upon and during the continuance of an
Event of Default.

3.5  All Loans to Constitute One Obligation.

    The Loans shall constitute one general Obligation of Borrowers, and shall be
secured by Lender's Lien upon all of the Collateral.

3.6  Loan Account.

    Agent shall enter all Loans as debits to a loan account (the "Loan Account")
and shall also record in the Loan Account all payments made by Borrowers on any
Obligations and all proceeds of Collateral which are paid to Agent, and may
record therein, in accordance with customary accounting practice, other debits
and credits, including interest and all charges and expenses properly chargeable
to Borrowers pursuant to this Agreement or any other Loan Document.

3.7  Statements of Account.

    Agent will account to Borrowers monthly with a statement of Loans, charges
and payments made pursuant to this Agreement during the immediately preceding
month, and such account rendered by Agent shall be deemed final, binding and
conclusive upon Borrowers absent demonstrable error unless Agent is notified by
Borrowers in writing to the contrary within 30 days of the date each accounting
is

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received by Borrowers. Such notice shall only be deemed an objection to those
items specifically objected to therein.

3.8  Sharing of Payments, Etc.

    If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on account of any
Loan made by it in excess of its ratable share of payments on account of Loans
made by all Lenders, such Lender shall forthwith purchase from each other Lender
such participation in such Loan as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each other Lender; provided,
that if all or any portion of such excess payment is thereafter recovered from
such purchasing Lender, such purchase from each Lender shall be rescinded and
such Lender shall repay to the purchasing Lenders the purchase price to the
extent of such recovery, together with an amount equal to such Lender's ratable
share (according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. Each Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 3.8 may,
to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of Borrowers in the amount of such
participation. Notwithstanding anything to the contrary contained herein, all
purchases and repayments to be made under this Section 3.8 shall be made through
Agent.

3.9  Joint and Several Liability

    3.9.1  Each Borrower, jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrowers, with respect to the payment and
performance of all of the Obligations (including, without limitation, any
Obligations arising under this Section 3.9), it being the intention of the
parties hereto that all the Obligations shall be the joint and several
obligations of each Borrower without preferences or distinction among them.

    3.9.2  Except as otherwise expressly provided in this Agreement, each
Borrower hereby waives notice of acceptance of its joint and several liability,
notice of any Revolving Credit Loans or Letters of Credit or LC Guaranties
issued under or pursuant to this Agreement, notice of the occurrence of any
Default, Event of Default, or of any demand for any payment under this
Agreement, notice of any action at any time taken or omitted by Agent or Lenders
under or in respect of any of the Obligations, any requirement of diligence or
to mitigate damages and, generally, to the extent permitted by applicable law,
all demands, notices and other formalities of every kind in connection with this
Agreement (except as otherwise provided in this Agreement). Each Borrower hereby
assents to, and waives notice of, any extension or postponement of the time for
the payment of any of the Obligations, the acceptance of any payment of any of
the Obligations, the acceptance of any partial payment thereon, any waiver,
consent or other action or acquiescence by Agent or Lenders at any time or times
in respect of any default by any Borrower in the performance or satisfaction of
any term, covenant, condition or provision of this Agreement, any and all other
indulgences whatsoever by Agent or Lenders in respect of any of the Obligations,
and the taking, addition, substitution or release, in whole or in part, at any
time or times, of any security for any of the Obligations or the addition,
substitution or release, in whole or in part, of any Borrower. Without limiting
the generality of the foregoing, each Borrower assents to any other action or
delay in acting or failure to act on the part of any Agent or Lender with
respect to the failure by any Borrower to comply with any of its respective
Obligations, including, without limitation, any failure strictly or diligently
to assert any right or to pursue any remedy or to comply fully with applicable
laws or regulations thereunder, which might, but for the provisions of this
Section 3.9 afford grounds for terminating, discharging or relieving any
Borrower, in whole or in part, from any of its Obligations under this
Section 3.9, it being the intention of each Borrower that, so long as any of the
Obligations hereunder remain unsatisfied, the Obligations of such

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Borrower under this Section 3.9 shall not be discharged except by performance
and then only to the extent of such performance. The Obligations of each
Borrower under this Section 3.9 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any Borrower or any Agent
or Lender. The joint and several liability of the Borrower hereunder shall
continue in full force and effect notwithstanding any absorption, merger,
amalgamation or any other change whatsoever in the name, constitution or place
of formation of any of Borrower or any Agent or Lender.

    3.9.3  Each Borrower waives all rights and defenses arising out of an
election of remedies by Agent or any Lender, even though that election of
remedies, such as a nonjudicial foreclosure with respect to security for a
guaranteed obligation, has destroyed Agent's or such Lender's rights of
subrogation and reimbursement against such Borrower by the operation of
Section 580(d) of the California Code of Civil Procedure or otherwise.

    3.9.4  Each Borrower waives all rights and defenses that such Borrower may
have because the Obligations are secured by real Property. This means, among
other things:

(i)Agent and Lenders may collect from such Borrower without first foreclosing on
any Collateral pledged by any other Borrowers. (ii)If Agent or any Lender
forecloses on any real Property pledged by Borrowers: (iii)The amount of the
Obligations may be reduced only by the price for which that collateral is sold
at the foreclosure sale, even if the collateral is worth more than the sale
price. (iv)Agent and Lenders may collect from such Borrower even if Agent or any
Lender, by foreclosing on the real Property, has destroyed any right such
Borrower may have to collect from the other Borrowers.

    This is an unconditional and irrevocable waiver of any rights and defenses
such Borrower may have because the Obligations are secured by real Property.
These rights and defenses include, but are not limited to, any rights or
defenses based upon Section 580a, 580b, 580d or 726 of the California Code of
Civil Procedure.

    3.9.5  The provisions of this Section 3.9 are made for the benefit of Agent,
Lenders and their respective successors and assigns, and may be enforced by it
or them from time to time against any or all the Borrowers as often as occasion
therefor may arise and without requirement on the part of any such Agent,
Lender, successor or assign first to marshal any of its or their claims or to
exercise any of its or their rights against any Borrower or to exhaust any
remedies available to it or them against any Borrower or to resort to any other
source or means of obtaining payment of any of the Obligations hereunder or to
elect any other remedy. The provisions of this Section 3.9 shall remain in
effect until all of the Obligations shall have been paid in full or otherwise
fully satisfied. If at any time, any payment, or any part thereof, made in
respect of any of the Obligations, is rescinded or must otherwise be restored or
returned by any Agent or Lender upon the insolvency, bankruptcy or
reorganization of any Borrower, or otherwise, the provisions of this Section 3.9
will forthwith be reinstated in effect, as though such payment had not been
made.

    3.9.6  Each Borrower hereby agrees that it will not enforce any of its
rights of contribution or subrogation against any other Borrower with respect to
any liability incurred by it hereunder or under any of the other Loan Documents,
any payments made by it to Agent or Lenders with respect to any of the
Obligations or any collateral security therefor until such time as all of the
Obligations have been paid in full in cash. Any claim which any Borrower may
have against any other Borrower with respect to any payments to any Agent or
Lender hereunder or under any other Loan Documents are hereby expressly made
subordinate and junior in right of payment, without limitation as to any
increases in the Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the Obligations and, in the event of any insolvency,
bankruptcy, receivership, liquidation, reorganization or other similar

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proceeding under the laws of any jurisdiction relating to any Borrower, its
debts or its assets, whether voluntary or involuntary, all such Obligations
shall be paid in full in cash before any payment or distribution of any
character, whether in cash, securities or other property, shall be made to any
other Borrower therefor.

SECTION 4. TERM AND TERMINATION

4.1  Term of Agreement.

    Subject to the right of Lenders to cease making Loans to Borrowers during
the continuance of any Default or Event of Default, this Agreement shall be in
effect for a period of five years from the date hereof, through and including
August  , 2006 (the "Term"), unless terminated as provided in Section 4.2
hereof.

4.2  Termination.

    4.2.1  Termination by Lenders.  Agent may, and at the direction of Majority
Lenders shall, terminate this Agreement without notice upon or after the
occurrence and during the continuance of an Event of Default.

    4.2.2  Termination by Borrower.  Upon at least 90 days prior written notice
to Agent and Lenders, Borrowers may, at their option, terminate this Agreement;
provided, however, no such termination shall be effective until Borrowers have
paid or collateralized to Agent's satisfaction all of the Obligations in
immediately available funds, all Letters of Credit and LC Guaranties have
expired, terminated or have been cash collateralized to Agent's satisfaction and
Borrowers have complied with Sections 2.3(ii) and 2.7. Any notice of termination
given by Borrowers shall be irrevocable unless all Lenders otherwise agree in
writing. No Lender shall have any obligation to make any Loans or issue or
procure any Letters of Credit or LC Guaranties on or after the termination date
stated in such notice. Borrowers may elect to terminate this Agreement in its
entirety only. No section of this Agreement or type of Loan available hereunder
may be terminated singly.

    4.2.3  Effect of Termination.  All of the Obligations shall be immediately
due and payable upon the termination date stated in any notice of termination of
this Agreement. All undertakings, agreements, covenants, warranties and
representations of Borrowers contained in the Loan Documents shall survive any
such termination and Agent shall retain its Liens in the Collateral and Agent
and each Lender shall retain all of its rights and remedies under the Loan
Documents notwithstanding such termination until all Obligations have been
discharged or paid, in full, in immediately available funds, including, without
limitation, all Obligations under Sections 2.3(ii) and 2.7 resulting from such
termination. Notwithstanding the foregoing or the payment in full of the
Obligations, Agent shall not be required to terminate its Liens in the
Collateral unless, with respect to any loss or damage Agent may incur as a
result of dishonored checks or other items of payment received by Agent from
Borrowers or any Account Debtor and applied to the Obligations, Agent shall, at
its option, (i) have received a written agreement satisfactory to Agent,
executed by Borrowers and by any Person whose loans or other advances to
Borrowers are used in whole or in part to satisfy the Obligations, indemnifying
Agent and each Lender from any such loss or damage or (ii) have retained cash
Collateral for such period of time as Agent, in its discretion, may deem
necessary to protect Agent and each Lender from any such loss or damage.

SECTION 5. SECURITY INTERESTS

5.1  Security Interest in Collateral.

    To secure the prompt payment and performance to Agent and each Lender of the
Obligations, each Borrower hereby grants to Agent for the benefit of itself and
each Lender a continuing Lien upon all of such Borrower's assets, including all
of the following Property and interests in Property of

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Borrower, whether now owned or existing or hereafter created, acquired or
arising and wheresoever located:

      (i)   Accounts;
(ii)
 
Certificated Securities;
(iii)
 
Chattel Paper;
(iv)
 
Computer Hardware and Software and all rights with respect thereto, including,
any and all licenses, options, warranties, service contracts, program services,
test rights, maintenance rights, support rights, improvement rights, renewal
rights and indemnifications, and any substitutions, replacements, additions or
model conversions of any of the foregoing;
(v)
 
Contract Rights;
(vi)
 
Deposit Accounts;
(vii)
 
Documents;
(viii)
 
Equipment;
(ix)
 
Financial Assets;
(x)
 
Fixtures;
(xi)
 
General Intangibles, including Payment Intangibles and Software;
(xii)
 
Goods (including all of its Equipment, Fixtures and Inventory), and all
accessions, additions, attachments, improvements, substitutions and replacements
thereto and therefor;
(xiii)
 
Instruments;
(xiv)
 
Intellectual Property;
(xv)
 
Inventory;
(xvi)
 
Investment Property;
(xvii)
 
Insurance Policies, including, without limitation, the Life Insurance Policies;
(xviii)
 
money (of every jurisdiction whatsoever);
(xix)
 
Letter-of-Credit Rights;
(xx)
 
Payment Intangibles;
(xxi)
 
Security Entitlements;
(xxii)
 
Software;
(xxiii)
 
Supporting Obligations;
(xxiv)
 
Uncertificated Securities; and
(xxv)
 
to the extent not included in the foregoing, all other personal property of any
kind or description;

together with all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, or evidencing,
embodying, incorporating or referring to any of the foregoing, and all Proceeds,
products, offspring, rents, issues, profits and returns of and from any of the
foregoing; provided that to the extent that the provisions of any lease or
license of Computer Hardware and Software or Intellectual Property expressly
prohibit (which prohibition is enforceable under applicable law) any assignment
thereof, and the grant of a security interest therein, Agent will not enforce
its security interest in such Borrower's rights under such lease or license
(other than in respect of the Proceeds thereof) for so long as such prohibition
continues, it being understood that upon request of Agent, each Borrower will in
good faith use reasonable efforts to obtain consent for the

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creation of a security interest in favor of Agent for the ratable benefit of
Lenders (and to Agent's enforcement of such security interest) in Agent's rights
under such lease or license except for shrink-wrap licenses used in the ordinary
course of Borrowers' business.

5.2  Lien Perfection; Further Assurances.

    Each Borrower shall execute such UCC-1 financing statements as are required
by the Code and such other instruments, assignments or documents as are
necessary to perfect Agent's Lien upon any of the Collateral and shall take such
other action as may be required to perfect or to continue the perfection of
Agent's Lien upon the Collateral. Unless prohibited by applicable law, each
Borrower hereby authorizes Agent to execute and file any such financing
statement including, without limitation, financing statements that indicate the
Collateral constitutes all assets of each Borrower without the signature of any
Borrower. The parties agree that a carbon, photographic or other reproduction of
this Agreement shall be sufficient as a financing statement and may be filed in
any appropriate office in lieu thereof. At Agent's request, each Borrower shall
also promptly execute or cause to be executed and shall deliver to Agent any and
all documents, instruments and agreements deemed necessary by Agent to give
effect to or carry out the terms or intent of the Loan Documents, including,
without limitation, and in each case in form and substance satisfactory to Agent
(i) delivering the original of all letters of credit issued to it as beneficiary
along with a collateral assignment thereof evidencing the consent to such
assignment by the issuer of the letter of credit and each correspondent or
confirming bank, (ii) obtaining signed acknowledgments of Lenders' Liens from
financial institutions holding Borrowers' depository accounts and bailees having
possession of any Collateral, (iii) obtaining signed control agreements from any
securities intermediary, and (iv) taking all steps necessary to grant Agent
control of all electronic chattel paper.

5.3  Lien on Realty.

    The due and punctual payment and performance of the Obligations shall also
be secured by the Lien created by Mortgages upon all real Property of Borrowers
now or hereafter owned. Each Mortgage shall be executed by such Borrower in
favor of Agent. Each Mortgage shall be duly recorded, at Borrowers' expense, in
each office where such recording is required to constitute a fully perfected
first Lien on the real Property covered thereby. Borrowers shall deliver to
Agent, at Borrowers' expense, mortgagee title insurance policies for each parcel
of Prime Real Property issued by a title insurance company satisfactory to
Agent, which policies shall be in form and substance satisfactory to Agent and
shall insure a valid first Lien in favor of Agent, for the benefit of itself and
Lenders, on the Property covered by each Mortgage, subject only to those
exceptions acceptable to Agent and its counsel. Borrower shall deliver to Agent
such other documents as Agent and its counsel may request relating to the real
Property subject to the Mortgages.

5.4  Commercial Tort Claims.

    If any Borrower or its Subsidiary shall at any time after the date hereof
hold or acquire a commercial tort claim, such Borrower or such Subsidiary shall
immediately notify Agent in writing of the details thereof and do all acts
deemed appropriate by Agent to grant Agent a security interest for the ratable
benefit of Lenders in any such commercial tort claim.

5.5  All Property Acknowledgement.

    Each Borrower acknowledges that the description of Collateral in this
Section 5 is intended to encompass all assets of such Borrower and each Borrower
hereby represents and warrants that the description of Collateral in this
Section 5 constitutes all assets of such Borrower.

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SECTION 6. COLLATERAL ADMINISTRATION

6.1  General.

    6.1.1  Location of Collateral.  All Inventory and Equipment, other than
Inventory in transit and motor vehicles, will at all times be kept by each
Borrower and its Subsidiaries at one or more of business locations set forth in
Exhibit 6.1.1 hereto, as updated pursuant to Section 6.3 hereof.

    6.1.2  Insurance of Collateral.  Each Borrower shall maintain and pay for
insurance upon all Collateral (including, without limitation, credit insurance
for accounts receivable) wherever located and with respect to the business of
such Borrower and each of its Subsidiaries, covering casualty, hazard, public
liability, workers' compensation and such other risks in such amounts and with
such insurance companies as are reasonably satisfactory to Agent. Each Borrower
shall deliver certified copies of such policies to Agent as promptly as
practicable, with satisfactory lender's loss payable endorsements, naming Agent
as a loss payee, assignee or additional insured, as appropriate, as its interest
may appear, and showing only such other loss payees, assignees and additional
insureds as are satisfactory to Agent. Each policy of insurance or endorsement
shall contain a clause requiring the insurer to give not less than 30 days'
prior written notice to Agent in the event of cancellation of the policy for
nonpayment of premium and not less than 30 days' prior written notice to Agent
in the event of cancellation of the policy for any other reason whatsoever and a
clause specifying that the interest of Agent shall not be impaired or
invalidated by any act or neglect of Borrowers, any of their Subsidiaries or the
owner of the Property or by the occupation of the premises for purposes more
hazardous than are permitted by said policy. Each Borrower agrees to deliver to
Agent, promptly as rendered, true copies of all reports made in any reporting
forms to insurance companies. All proceeds of business interruption insurance
(if any) of Borrowers and their Subsidiaries shall be remitted to Agent for
application to the outstanding balance of the Revolving Credit Loans.

    Unless each Borrower provides Agent with evidence of the insurance coverage
required by this Agreement, Agent may purchase insurance at such Borrower's
expense to protect Agent's interests in the Properties of such Borrower and its
Subsidiaries. This insurance may, but need not, protect the interests of each
Borrower and its Subsidiaries. The coverage that Agent purchases may not pay any
claim that Borrowers or any Subsidiary makes or any claim that is made against
Borrowers or any such Subsidiary in connection with said Property. Borrowers may
later cancel any insurance purchased by Agent, but only after providing Agent
with evidence that Borrowers and their Subsidiaries have obtained insurance as
required by this Agreement. If Agent purchases insurance, Borrowers will be
responsible for the costs of that insurance, including interest and any other
charges Agent may impose in connection with the placement of insurance, until
the effective date of the cancellation or expiration of the insurance. The costs
of the insurance may be added to the Obligations. The costs of the insurance may
be more than the cost of insurance that Borrowers and their Subsidiaries may be
able to obtain on their own.

    6.1.3  Protection of Collateral.  No Lender shall be liable or responsible
in any way for the safekeeping of any of the Collateral or for any loss or
damage thereto (except for reasonable care in the custody thereof while any
Collateral is in Agent's or any Lender's actual possession) or for any
diminution in the value thereof, or for any act or default of any warehouseman,
carrier, forwarding agency, or other person whomsoever, but the same shall be at
Borrowers' sole risk.

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6.2  Administration of Accounts.

    6.2.1  Records, Schedules and Assignments of Accounts.  Each Borrower shall
keep accurate and complete records of its Accounts and all payments and
collections thereon and shall submit to Agent daily or on such periodic basis as
Agent shall request a sales and collections report for the preceding period, in
form consistent with the reports currently prepared by such Borrower with
respect to such information. On the fifteenth (15th) day of each month (or the
next Business Day thereafter if the fifteenth day is not a Business Day) or more
frequently as requested by Agent, from and after the date hereof, each Borrower
shall deliver to Agent a detailed aged trial balance of all of its Accounts, and
upon Agent's request therefor, copies of proof of delivery and the original copy
of all documents, including, without limitation, repayment histories and present
status reports relating to the Accounts so scheduled and such other matters and
information relating to the status of then existing Accounts as Agent shall
request.

    6.2.2  Taxes.  If an Account includes a charge for any tax payable to any
governmental taxing authority, Agent is authorized, in its sole discretion, to
pay the amount thereof to the proper taxing authority for the account of
Borrowers and to charge Borrowers therefor, except for taxes that (i) are being
actively contested in good faith and by appropriate proceedings and with respect
to which Borrowers maintain reasonable reserves on its books therefor (if
required by GAAP) and (ii) would not reasonably be expected to result in any
Lien other than a Permitted Lien. In no event shall Agent or any Lender be
liable for any taxes to any governmental taxing authority that may be due by any
Borrower.

    6.2.3  Account Verification.  Any of Agent's officers, employees or agents
shall have the right, at any reasonable time or times hereafter, in the name of
Agent, any designee of Agent or any Borrower, to verify the validity, amount or
any other matter relating to any Accounts by mail, telephone, facsimile or
otherwise; provided, that unless a Default or an Event of Default is then in
existence, prior to conducting each set of verifications, Agent shall generally
consult with Borrowers about the verification process. Each Borrower shall
cooperate fully with Agent in an effort to facilitate and promptly conclude any
such verification process.

    6.2.4  Maintenance of Dominion Account.  Borrowers shall maintain a Dominion
Account or Deposit Accounts pursuant to lockbox and blocked account arrangements
acceptable to Agent. Borrowers shall issue to Agent an irrevocable letter of
instruction directing Agent to deposit all payments or other remittances
received in the lockbox and blocked accounts to the Dominion Account for
application on account of the Obligations. Within five Business Days of the
later of the Closing Date or the establishment of the lockbox with the Bank, the
Chief Financial Officer of the Borrowers shall certify to Agent in writing that
(i) Borrowers have notified all customers to remit payments to that certain
lockbox established with the Bank and (ii) all invoices of Borrowers generated
after the Closing Date include written instructions directing that all payments
be remitted to the lockbox with the Bank. All funds deposited in any Dominion
Account shall immediately become the property of Agent, for the ratable benefit
of Lenders, and Borrowers shall obtain the agreement by Bank or by such other
financial institution acceptable to Agent in favor of Agent to waive any
recoupment, offset rights and any security interest in or against the funds so
deposited. Agent assumes no responsibility for such lockbox and blocked account
arrangements, including, without limitation, any claim of accord and
satisfaction or release with respect to deposits accepted by Bank or by such
other financial institution acceptable to Agent thereunder.

    6.2.5  Collection of Accounts, Proceeds of Collateral.  To expedite
collection, Borrowers shall endeavor in the first instance to make collection of
its Accounts for Agent. All remittances received by Borrowers on account of
Accounts, together with the proceeds of any other Collateral, shall be held as
Agent's property, for its benefit and the benefit of Lenders, by Borrowers as
trustee of an express trust for Agent's benefit and Borrowers shall immediately
deposit same in kind in the lockboxes or a

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Dominion Account. Agent retains the right at all times after the occurrence and
during the continuance of a Default or an Event of Default to notify Account
Debtors that Borrowers' Accounts have been assigned to Agent and to collect
Borrowers' Accounts directly in its own name and to charge the collection costs
and expenses, including reasonable attorneys' fees, to Borrowers. Upon the
request of Agent, each Borrower shall so notify Account Debtors. Once any such
notice has been given to any Account Debtor, the affected Borrower shall not
give any contrary instructions to such Account Debtor without Agent's prior
written consent.

6.3  Records and Reports of Inventory.

    Each Borrower shall keep records of its Inventory which records shall be
complete and accurate in all material respects. On the third (3rd) Business Day
of each week or more frequently as requested by Agent, each Borrower shall
deliver to Agent Inventory reports (or more frequently as requested by Agent),
which reports will be in such other format and detail as Agent shall reasonably
request and shall include a current list of all locations of Borrowers'
Inventory. Ninety (90) days after the Closing Date, Agent will review the
variances in the Inventory reports and Agent in its sole discretion may request
delivery of Inventory reports on a monthly basis. Each Borrower shall conduct
(1) a physical inventory each month or such less frequent interval as Agent may
determine at its locations in the following states: Florida, South Carolina,
Pennsylvania, Indiana, Illinois, Texas and Arizona; and (2) a physical inventory
semi-annually or such more frequent interval as Agent may determine at all other
locations. Borrower shall provide to Agent a report based on each such physical
inventory promptly thereafter, together with such supporting information
(including, without limitation, a copy of the physical inventory) as Agent shall
request.

    6.4  Administration of Equipment.

    6.4.1  Records and Schedules of Equipment.  Each Borrower shall keep records
of its Equipment which shall be complete and accurate in all material respects
itemizing and describing the kind, type, quality, quantity and book value of its
Equipment and all dispositions made in accordance with subsection 6.4.2 hereof,
and each Borrower shall, and shall cause each of its Subsidiaries to, furnish
Agent with a current schedule containing the foregoing information on at least
an annual basis and more often if reasonably requested by Agent. Promptly after
the reasonable request therefor by Agent, each Borrower shall deliver to Agent
any and all evidence of ownership, if any, of any of its Equipment.

    6.4.2  Dispositions of Equipment.  Each Borrower shall not, and shall not
permit any of its Subsidiaries to, sell, lease or otherwise dispose of or
transfer any of its respective Equipment or other fixed assets or any part
thereof without the prior written consent of Agent; provided, however, that the
foregoing restriction shall not apply, for so long as no Default or Event of
Default exists and is continuing, to (i) dispositions of Equipment and other
fixed assets which, in the aggregate during any consecutive twelve-month period,
have a book value of $100,000 or less, provided that all proceeds thereof are
remitted to Agent for application to the Loans as provided in subsection 3.3.1,
or (ii) replacements of Equipment or other fixed assets that are substantially
worn, damaged or obsolete with Equipment or other fixed assets which are useful
in the business of Borrower or one of its Subsidiaries, provided that the
replacement Equipment or other fixed assets shall be acquired within 180 days
after any disposition of the Equipment or other fixed assets that are to be
replaced and the replacement Equipment or other fixed assets shall be free and
clear of Liens other than Permitted Liens that are Purchase Money Liens.

SECTION 7. REPRESENTATIONS AND WARRANTIES

7.1  General Representations and Warranties.

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    To induce Agent and each Lender to enter into this Agreement and to make
advances hereunder, each Borrower warrants, represents and covenants to Agent
and each Lender that:

    7.1.1  Organization and Qualification.  Henry is a corporation duly org
anized, validly existing and in good standing under the laws of the State of
California. Kimberton is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Each of Borrower's
Subsidiaries is a corporation, limited partnership or limited liability company
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization. Each Borrower and each of its
Subsidiaries is duly qualified and is authorized to do business and is in good
standing as a foreign limited liability company, limited partnership or
corporation, as applicable, in each state or jurisdiction listed on
Exhibit 7.1.1 hereto and in all other states and jurisdictions in which the
failure of Borrower or any of its Subsidiaries to be so qualified would
reasonably be expected to have a Material Adverse Effect.

    7.1.2  Power and Authority.  Each Borrower and each of its Subsidiaries is
duly authorized and empowered to enter into, execute, deliver and perform this
Agreement and each of the other Loan Documents to which it is a party. The
execution, delivery and performance of this Agreement and each of the other Loan
Documents have been duly authorized by all necessary corporate or other relevant
action and do not and will not (i) require any consent or approval of the
shareholders of any Borrower or any of the shareholders, partners or members, as
the case may be, of any Subsidiary of Borrower; (ii) contravene any Borrower's
or any of its Subsidiaries' charter, articles or certificate of incorporation,
partnership agreement, certificate of formation, by-laws, limited liability
agreement, operating agreement or other organizational documents (as the case
may be); (iii) violate, or cause any Borrower or any of its Subsidiaries
(including Bakor) to be in default under, any provision of any law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award in
effect having applicability to any Borrower or any of its Subsidiaries
(including Bakor), the violation of which would reasonably be expected to have a
Material Adverse Effect; (iv) result in a breach of or constitute a default
under any indenture or loan or credit agreement or any other agreement, lease or
instrument to which any Borrower or any of its Subsidiaries (including Bakor) is
a party or by which it or its Properties may be bound or affected, the breach of
or default under which would reasonably be expected to have a Material Adverse
Effect; or (v) result in, or require, the creation or imposition of any Lien
(other than Permitted Liens) upon or with respect to any of the Properties now
owned or hereafter acquired by Borrower or any of its Subsidiaries.

    7.1.3  Legally Enforceable Agreement.  This Agreement is, and each of the
other Loan Documents when delivered under this Agreement will be, a legal, valid
and binding obligation of each Borrower and each of its Subsidiaries party
thereto, enforceable against it in accordance with its respective terms.

    7.1.4  Capital Structure.  Exhibit 7.1.4 hereto states, as of the date
hereof, (i) the exact legal name of each of the Subsidiaries (including Bakor)
of each Borrower, its jurisdiction of incorporation or organization and the
percentage of its Voting Stock owned by such Borrower, (ii) the exact legal name
of each Borrower's and each of its Subsidiaries' (including Bakor) corporate or
such joint venture relationships and the nature of the relationship, (iii) the
number, nature and holder of all outstanding Securities of each Borrower and the
holder of Securities of each Subsidiary (including Bakor) of each Borrower and
(iv) the number of issued and treasury Securities of each Borrower. Each
Borrower has good title to all of the Securities it purports to own of each of
such Subsidiaries, free and clear in each case of any Lien other than Permitted
Liens. All such Securities have been duly issued and are fully paid and
non-assessable. As of the date hereof, there are no outstanding options to
purchase, or any rights or warrants to subscribe for, or any commitments or
agreements to issue or sell any Securities or obligations convertible into, or
any powers of attorney relating to any Securities of any Borrower or any of its
Subsidiaries. Except as set forth on Exhibit 7.1.4, as of the date hereof, there
are no outstanding agreements or instruments binding upon any of any Borrower's
or any of its Subsidiaries' partners, members or shareholders, as the case may
be, relating to the ownership of its Securities.

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    7.1.5  Names.  None of the Borrowers or any of their Subsidiaries (including
Bakor) has been known as or has used any legal, fictitious or trade names except
those listed on Exhibit 7.1.5 hereto. Except as set forth on Exhibit 7.1.5, none
of the Borrowers or any of their Subsidiaries (including Bakor) has been the
surviving entity of a merger or consolidation or has acquired all or
substantially all of the assets of any Person. Each Borrower's organization I.D.
number and the exact legal name of each Borrower is set forth on Exhibit 7.1.5.

    7.1.6  Business Locations; Agent for Process.  Each Borrower's and each of
its Subsidiaries' (including Bakor) chief executive office and other places of
business as of the date hereof are as listed on Exhibit 6.1.1 hereto as updated
from time to time by such Borrower. During the preceding one-year period, none
of the Borrowers or any of their Subsidiaries has had an office or place of
business other than as listed on Exhibit 6.1.1. All tangible Collateral is and
will at all times be kept by each Borrower and its Subsidiaries in accordance
with subsection 6.1.1. Except as shown on Exhibit 6.1.1, as of the date hereof,
no Inventory is stored with a bailee, distributor, warehouseman or similar
party, nor is any Inventory consigned to any Person.

    7.1.7  Title to Properties; Priority of Liens.  Each Borrower and each of
its Subsidiaries has good, indefeasible and marketable title to and fee simple
ownership of, or valid and subsisting leasehold interests in, all of its real
Property, and good title to all of the Collateral and all of its other Property,
in each case, free and clear of all Liens except Permitted Liens. Each Borrower
and each of its Subsidiaries has paid or discharged all lawful claims known to
such Borrower which, if unpaid, might become a Lien against any such Borrower's
or such Subsidiary's Properties that is not a Permitted Lien. The Liens granted
to Agent under Section 5 hereof are first priority Liens, subject only to
Permitted Liens.

    7.1.8  Accounts.  Agent may rely, in determining which Accounts are Eligible
Accounts, on all statements and representations made by Borrowers with respect
to any Account or Accounts. With respect to each Account of each Borrower,
whether or not such Account is an Eligible Account, unless otherwise disclosed
to Agent in writing:

    (i)  It is genuine and in all respects what it purports to be, and it is not
evidenced by a judgment;

    (ii) It arises out of a completed, bona fide sale and delivery of goods or
rendition of services by Borrowers, in the ordinary course of its business and
in accordance with the terms and conditions of all purchase orders, contracts or
other documents relating thereto and forming a part of the contract between
Borrower and the Account Debtor and the Account Debtor is not an Affiliate of
Borrower or a Subsidiary (including Bakor) of Borrower;

    (iii) It is for a liquidated amount maturing as stated in the invoice
covering such sale or rendition of services, a copy of which has been furnished
or is available to Agent;

    (iv) There are no facts, events or occurrences known to Borrowers which in
any way impair the validity or enforceability of such Account or tend to reduce
the amount payable thereunder from the face amount of the invoice and statements
delivered or made available to Agent with respect thereto;

    (v) To such Borrower's knowledge, the Account Debtor thereunder (1) had the
capacity to contract at the time any contract or other document giving rise to
the Account was executed and (2) such Account Debtor is Solvent; and

    (vi) To such Borrower's knowledge, there are no proceedings or actions which
are threatened or pending against the Account Debtor thereunder which might
result in any material adverse change in such Account Debtor's financial
condition or the collectibility of such Account.

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    7.1.9  Equipment.  The Equipment of each Borrower and its Subsidiaries is in
good operating condition and repair, and all necessary replacements of and
repairs thereto shall be made so that the operating efficiency thereof shall be
maintained and preserved, reasonable wear and tear excepted, except where the
failure to so maintain the same would not reasonably be expected to have a
Material Adverse Effect. Borrowers will not permit any Equipment that (1) is
necessary for the operation of Borrowers' business or (2) has a fair market
value in excess of $10,000 to become affixed to any real Property leased to any
Borrower or any of its Subsidiaries so that an interest arises therein under the
real estate laws of the applicable jurisdiction unless the landlord of such real
Property has executed a landlord waiver or leasehold mortgage in favor of and in
form reasonably acceptable to Agent, and Borrowers will not permit any of the
Equipment of any Borrower or any of its Subsidiaries to become an accession to
any personal Property other than Equipment that is subject to first priority
Liens (except for Permitted Liens) in favor of Agent.

    7.1.10  Financial Statements; Fiscal Year.  The Consolidated balance sheets
of each Borrower and all its Subsidiaries (including the accounts of all
Subsidiaries of each Borrower and their respective Subsidiaries for the
respective periods during which a Subsidiary relationship existed), including
Bakor, as of December 31, 2000, and the related statements of income for the
periods ended on such dates, have been prepared in accordance with GAAP, and
present fairly in all material respects the financial positions of each Borrower
and such Persons, taken as a whole, at such dates and the results of such
Borrower's and such Persons' operations, taken as a whole, for such periods. As
of the date hereof, since December 31, 2000, there has been no material adverse
change in the financial position of any Borrower and such other Persons, taken
as a whole, as reflected in the Consolidated and consolidating balance sheet as
of such date. As of the date hereof, the fiscal year of each Borrower and each
of its Subsidiaries ends on December 31 of each year.

    7.1.11  Full Disclosure.  None of the financial statements referred to in
subsection 7.1.10 hereof, this Agreement, any other written document or
certificate of any Borrower provided to Agent or any Lender pursuant to the Loan
Documents or any other written statement provided to Agent or any Lender on or
after the Closing Date contains any untrue statement of a material fact or omit
a material fact necessary to make the statements contained therein or herein not
misleading. There is no fact which any Borrower has failed to disclose to Agent
or any Lender in writing which would reasonably be expected to have a Material
Adverse Effect.

    7.1.12  Solvent Financial Condition.  Each Borrower and each of its
Subsidiaries, is now and, after giving effect to the initial Loans to be made
and the initial Letters of Credit and LC Guaranties to be issued hereunder and
all related transactions, will be, Solvent.

    7.1.13  Surety Obligations.  Except as set forth on Exhibit 7.1.13, as of
the date hereof, none of the Borrowers or any of their Subsidiaries are
obligated as surety or indemnitor under any surety or similar bond or other
contract issued or entered into to assure payment, performance or completion of
performance of any undertaking or obligation of any Person.

    7.1.14  Taxes.  The federal tax identification number of each Borrower is
shown on Exhibit 7.1.14 hereto. Each Borrower and each of its Subsidiaries has
filed all federal, state and local tax returns and other reports relating to
taxes it is required by law to file, except where the failure to so file would
not reasonably be expected to have a Material Adverse Effect, and has paid, or
made provision for the payment of, all taxes, assessments, fees, levies and
other governmental charges upon it, its income and Properties as and when such
taxes, assessments, fees, levies and charges are due and payable, unless and to
the extent any of the foregoing are being actively contested in good faith and
by appropriate proceedings and such Borrower and such Subsidiary maintains
reasonable reserves on its books therefor (if required by GAAP). The provision
for taxes on the books of each Borrower and its Subsidiaries is adequate for all
years not closed by applicable statutes, and for the current fiscal year.

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    7.1.15  Brokers.  Except as shown on Exhibit 7.1.15 hereto, there are no
claims for brokerage commissions, finder's fees or investment banking fees in
connection with the transactions contemplated by this Agreement.

    7.1.16  Patents, Trademarks, Copyrights and Licenses.  Each Borrower and
each of its Subsidiaries owns, possesses or licenses or has the right to use all
the patents, trademarks, service marks, trade names, copyrights, licenses and
other Intellectual Property necessary for the present and planned future conduct
of its business without any known conflict with the rights of others, except for
such conflicts as would not reasonably be expected to have a Material Adverse
Effect. All such patents, trademarks, service marks, tradenames, copyrights,
licenses, and Intellectual Property are listed on Exhibit 7.1.16 hereto. No
claim has been asserted to any Borrower or any of its Subsidiaries which is
currently pending that their use of their Intellectual Property or the conduct
of their business does or may infringe upon the Intellectual Property rights of
any third party. To the knowledge of each Borrower and except as set forth on
Exhibit 7.1.16 hereto, as of the date hereof, no Person is engaging in any
activity that infringes in any material respect upon any Borrower's or any of
its Subsidiaries' material Intellectual Property. Except as set forth on
Exhibit 7.1.16, each Borrower's and each of its Subsidiaries' (i) material
trademarks, service marks, and copyrights are registered with the U.S. Patent
and Trademark Office or in the U.S. Copyright Office, as applicable and
(ii) material license agreements and similar arrangements relating to its
Inventory (1) permit and do not restrict, the assignment by any Borrower or any
of its Subsidiaries to Agent, or any other Person designated by Agent, of all of
Borrower's or such Subsidiary's, as applicable, rights, title and interest
pertaining to such license agreement or such similar arrangements and (2) would
permit the continued use by such Borrower or such Subsidiary, or Agent or its
assignee, of such license agreements or such similar arrangements and the right
to sell Inventory subject to such license agreements for a period of no less
than 6 months after a default or breach of such agreements or arrangements. The
consummation and performance of the transactions and actions contemplated by
this Agreement and the other Loan Document, including, without limitation, the
exercise by Agent of any of its rights or remedies under Section 10, will not
result in the termination or impairment of any Borrower's or any of its
Subsidiaries' ownership or rights relating to its Intellectual Property, except
for such Intellectual Property rights the loss or impairment of which would not
reasonably be expected to have a Material Adverse Effect. Except as would not
reasonably be expected to have a Material Adverse Effect, (i) none of the
Borrowers or any of their Subsidiaries is in breach of, or default under, any
term of any license or sublicense with respect to any of its Intellectual
Property and (ii) to the knowledge of each Borrower, no other party to such
license or sublicense is in breach thereof or default thereunder, and such
license is valid and enforceable.

    7.1.17  Governmental Consents.  Each Borrower and each of its Subsidiaries
has, and is in good standing with respect to, all governmental consents,
approvals, licenses, authorizations, permits, certificates, inspections and
franchises necessary to continue to conduct its business as heretofore or
proposed to be conducted by it and to own or lease and operate its Properties as
now owned or leased by it, except where the failure to possess or so maintain
such rights would not reasonably be expected to have a Material Adverse Effect.

    7.1.18  Compliance with Laws.  Each Borrower and each of its Subsidiaries
has duly complied in all material respects with, and its Properties, business
operations and leaseholds are in compliance in all material respects with, the
provisions of all federal, state and local laws, rules and regulations
applicable to Borrower or such Subsidiary, as applicable, its Properties or the
conduct of its business, except for such non-compliance as would not reasonably
be expected to have a Material Adverse Effect, and there have been no citations,
notices or orders of noncompliance issued to Borrower or any of its Subsidiaries
under any such law, rule or regulation, except where such noncompliance would
not reasonably be expected to have a Material Adverse Effect. Each Borrower and
each of its Subsidiaries has established and maintains an adequate monitoring
system to insure that it remains in compliance in all material respects with all
federal, state and local rules, laws and regulations applicable to it except

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where such noncompliance would not reasonably be expected to have a Material
Adverse Effect No Inventory has been produced in violation of the Fair Labor
Standards Act (29 U.S.C. §201 et seq.), as amended.

    7.1.19  Restrictions.  None of the Borrowers or any of their Subsidiaries is
a party or subject to any contract or agreement which restricts their right or
ability to incur Indebtedness, other than as set forth on Exhibit 7.1.19 hereto,
none of which prohibit the execution of or compliance with this Agreement or the
other Loan Documents by any Borrower or any of its Subsidiaries, as applicable.

    7.1.20  Litigation.  Except as set forth on Exhibit 7.1.20 hereto, there are
no actions, suits, proceedings or investigations pending, or to the knowledge of
any Borrower, threatened, against or involving any Borrower or any of its
Subsidiaries (including Bakor), or the business, operations, Properties,
prospects, profits or condition of any Borrower or any of its Subsidiaries
(including Bakor) which, singly or in the aggregate, would reasonably be
expected to have a Material Adverse Effect. None of the Borrowers or any of
their Subsidiaries (including Bakor) is in default with respect to any order,
writ, injunction, judgment, decree or rule of any court, governmental authority
or arbitration board or tribunal, which, singly or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.

    7.1.21  No Defaults.  No event has occurred and no condition exists which
would, upon or after the execution and delivery of this Agreement or any
Borrower's performance hereunder, constitute a Default or an Event of Default.
No event has occurred and no condition exists which would constitute a default
under the Senior Notes, the Indenture or the Bakor Facility. None of the
Borrowers or any of their Subsidiaries is in default in (and no event has
occurred and no condition exists which constitutes, or which the passage of time
or the giving of notice or both would constitute, a default in) the payment of
any Indebtedness to any Person for Money Borrowed in excess of $20,000.

    7.1.22  Leases.  Exhibit 7.1.22 hereto is a complete listing of all
capitalized and operating personal property leases of each Borrower and its
Subsidiaries and all real property leases of each Borrower and its Subsidiaries.
Each Borrower and each of its Subsidiaries is in full compliance with all of the
terms of each of its respective capitalized and operating leases, except where
the failure to so comply would not reasonably be expected to have a Material
Adverse Effect.

    7.1.23  Pension Plans.  Except as disclosed on Exhibit 7.1.23 hereto, none
of the Borrowers or any of their Subsidiaries has any Plan. Each Borrower and
each of its Subsidiaries is in compliance with the requirements of ERISA and the
regulations promulgated thereunder with respect to each Plan, except where the
failure to so comply would not reasonably be expected to have a Material Adverse
Effect. No fact or situation that would reasonably be expected to result in a
material adverse change in the financial condition of any Borrower and its
Subsidiaries exists in connection with any Plan. None of the Borrowers or any of
their Subsidiaries has any material withdrawal liability in connection with a
Multi-employer Plan.

    7.1.24  Trade Relations.  Except as set forth on Exhibit 7.1.24, there
exists no actual or, to any Borrower's knowledge, threatened termination,
cancellation or limitation of, or any modification or change in, the business
relationship between any Borrower or any of its Subsidiaries and any customer or
any group of customers whose purchases individually or in the aggregate are
material to the business of any Borrower and its Subsidiaries, or with any
material supplier, except in each case, where the same would not reasonably be
expected to have a Material Adverse Effect, and there exists no present
condition or state of facts or circumstances which would prevent any Borrower or
any of its Subsidiaries from conducting such business after the consummation of
the transaction contemplated by this Agreement in substantially the same manner
in which it has heretofore been conducted.

    7.1.25  Labor Relations.  Except as described on Exhibit 7.1.25 hereto, as
of the date hereof, none of the Borrowers or any of their Subsidiaries is a
party to any collective bargaining agreement. There

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are no material grievances, disputes or controversies with any union or any
other organization of Borrower's or any of its Subsidiaries' employees, or
threats of strikes, work stoppages or any asserted pending demands for
collective bargaining by any union or organization, except those that would not
reasonably be expected to have a Material Adverse Effect.

    7.1.26  Life Insurance Policies.  Exhibit 7.1.26 hereto is a complete
listing of each Eligible Life Insurance Policy.

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    7.1.27  Mergers.  Henry has duly and lawfully completed its merger with
Monsey Products, Co. ("Monsey") and Monsey Products of Arizona LLC ("Monsey
Arizona") in accordance with the General Corporation Law of the State of
California such that, as a matter of law, Henry has succeeded as the surviving
corporation in such merger, to all the assets of Monsey and Monsey Arizona
without any further action on the part of Henry, Monsey or Monsey Arizona, any
of their respective shareholders or members or their operative board of
directors, and the merger agreement and other appropriate documentation to
evidenced such merger has been filed with the California Secretary of State, and
to the extent necessary, with the California Franchise Tax Board.

    7.1.28  Eligible Inventory Locations.  Exhibit 7.1.28 hereto is a complete
listing of each location for which Agent has received a landlord's waiver or a
warehousemen waiver. No Affiliate of Borrowers or any of their Subsidiaries
(including Bakor) has any Goods or Inventory at any of the locations listed on
Exhibit 7.1.28. The Goods and Inventory of Borrowers located at the locations
listed on Exhibit 7.1.28 are not physically united with other Goods or Inventory
in such a manner that their identity is lost in a product or mass.

    7.1.29  Existing Bank Accounts.  Exhibit 7.1.29 hereto is a complete listing
of all Deposit Accounts, lockbox accounts, brokerage accounts, or other type of
accounts maintained by any Borrower with any bank, securities intermediary,
broker or other financial institution. Neither Borrower has entered into any
control agreement or any other similar agreement granting a security interest in
or control (as determined by the Uniform Commercial Code) over such accounts
other than (i) those agreements in favor of Agent or (ii) for each such account,
the institution's standard form agreement for opening such account which may
contain provisions establishing rights of offset for returned items or account
fees.

    7.1.30  Securities Account.  The value of account number 801538000
maintained with Brown & Co. Securities does not and will not exceed $7,500
unless such account is subject to an agreement pursuant to Section 8.1.11.

7.2  Representation of Shareholders.

    Each shareholder of Henry severally represents and warrants that (a) it is
the owner of the Securities of Henry listed on Exhibit 7.1.4, (b) no
shareholder, directly or indirectly, owns more than 20% of the Senior Notes and
the shareholders collectively do not, directly or indirectly, own more than 30%
of the Senior Notes and (c) such Securities of Henry are not subject to any
lien, pledge, security interest or other encumbrance in favor of another Person.

7.3  Continuous Nature of Representations and Warranties.

    Each representation and warranty contained in this Agreement and the other
Loan Documents shall be deemed to have been made at the time of each request for
and again at the time of making of each Loan and shall remain accurate, complete
and not misleading at all times during the term of this Agreement as of the date
of such representation or warranty, except for changes in the nature of any
Borrower's or any Subsidiary's business or operations that would render the
information in any Exhibit attached hereto or to any other Loan Document either
inaccurate, incomplete or misleading, so long as Majority Lenders have consented
to such changes or such changes are expressly permitted by this Agreement.

7.4  Survival of Representations and Warranties.

    All representations and warranties of each Borrower contained in this
Agreement or any of the other Loan Documents shall survive the execution,
delivery and acceptance thereof by Agent and each Lender and the parties thereto
and the closing of the transactions described therein or related thereto.

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SECTION 8. COVENANTS AND CONTINUING AGREEMENTS

8.1  Affirmative Covenants.

    During the term of this Agreement, and thereafter for so long as there are
any Obligations outstanding, each Borrower covenants that, unless otherwise
consented to by Majority Lenders, in writing, it shall:

    8.1.1  Visits and Inspections; Lender Meeting.  Permit representatives of
Agent, and during the continuation of any Default or Event of Default any
Lender, from time to time, as often as may be reasonably requested, but only
during normal business hours, to visit and inspect the Properties of each
Borrower and each of its Subsidiaries, inspect, audit and make extracts from its
books and records, and discuss with its officers, its employees and its
independent accountants, each Borrower's and each of its Subsidiaries' business,
assets, liabilities, financial condition, business prospects and results of
operations. Agent, if no Default or Event of Default then exists, shall give
Borrowers reasonable prior notice of any such inspection or audit. Without
limiting the foregoing, each Borrower will participate and will cause its key
management personnel to participate in a meeting with Agent and Lenders
periodically (but in no event less than once during each year) during each year
except that during the continuation of an Event of Default such meetings may be
held more frequently as requested by Agent or Majority Lenders, which meeting(s)
shall be held at such times and such places as may be reasonably requested by
Agent.

    8.1.2  Notices.  Promptly notify Agent in writing of the occurrence of any
event or the existence of any fact which renders any representation or warranty
in this Agreement or any of the other Loan Documents inaccurate, incomplete or
misleading in any material respect as of the date made or remade. In addition,
each Borrower agrees to provide Agent with (i) at least 30 Business Days' prior
written notice of (1) any change in the legal name of any Borrower or any of its
Subsidiaries (including Bakor), (2) the adoption by any Borrower or any of its
Subsidiaries (including Bakor) of any new fictitious name or tradename, (3) any
change in the chief executive office of any Borrower or any of its Subsidiaries
(including Bakor) and (4) any change in the state of organization or formation
of any Borrower or any of its Subsidiaries (including Bakor), and (ii) prompt
written notice of any change in the information disclosed in any Exhibit hereto,
in each case after giving effect to the materiality limits and Material Adverse
Effect qualifications contained therein.

    8.1.3  Financial Statements.  Keep, and cause each of its Subsidiaries
(including Bakor) to keep, adequate records and books of account with respect to
its business activities in which proper entries are made in accordance with
customary accounting practices reflecting all its financial transactions; and
cause to be prepared and furnished to Agent and each Lender, the following, all
to be prepared in accordance with GAAP applied on a consistent basis, unless
Borrowers' certified public accountants concur in any change therein and such
change is disclosed to Agent in writing (including by means of the financial
statements or notes thereto) and is consistent with GAAP:

    (i)  not later than 90 days after the close of each fiscal year of
Borrowers, unqualified (except for a qualification for a change in accounting
principles with which the accountant concurs) audited financial statements, of
Henry and its Subsidiaries (including Bakor) as of the end of such year, on a
Consolidated and consolidating basis, certified by a firm of independent
certified public accountants of recognized standing selected by Borrowers but
acceptable to Agent and, within a reasonable time thereafter a copy of any
management letter issued in connection therewith;

    (ii) not later than 30 days after the end of each month hereafter, including
the last month of Borrowers' fiscal year, unaudited interim financial
statements, and statements of cash flow of Henry and its Subsidiaries (including
Bakor) as of the end of such month and of the portion of the fiscal year then
elapsed, on a Consolidated and consolidating basis, certified by the principal
financial officer of Borrowers as prepared in accordance with GAAP and fairly
presenting in all

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material respects the financial position and results of operations of Henry and
its Subsidiaries (including Bakor) for such month and period subject only to
changes from audit and year-end adjustments and except that such statements need
not contain notes;

    (iii) together with each delivery of financial statements pursuant to
clauses (i) and (ii) of this subsection 8.1.3, a management report (1) setting
forth in comparative form the corresponding figures for the corresponding
periods of the previous fiscal year and the corresponding figures from the most
recent Projections for the current fiscal year delivered pursuant to subsection
8.1.7 and (2) identifying the reasons for any significant variations. The
information above shall be presented in reasonable detail and shall be certified
by the chief financial officer of Borrowers to the effect that such information
fairly presents in all material respects the results of operation and financial
condition of Borrowers and their Subsidiaries (including Bakor) as at the dates
and for the periods indicated;

    (iv) promptly after the sending or filing thereof, as the case may be,
copies of any proxy statements or financial statements which Borrowers have made
available to its Securities holders and copies of any regular, periodic and
special reports or registration statements which, Borrowers or any of their
Subsidiaries files with the Securities and Exchange Commission or any
governmental authority which may be substituted therefor, or any national
securities exchange;

    (v) upon request of Agent, copies of any annual report to be filed with
ERISA in connection with each Plan;

    (vi) promptly upon receipt, copies of all statements from insurers regarding
the Eligible Life Insurance Policies; and

    (vii)  such other data and information (financial and otherwise) as Agent or
any Lender, from time to time, may reasonably request, bearing upon or related
to the Collateral or any Borrower's or any Subsidiaries' (including Bakor)
financial condition or results of operations.

    Concurrently with the delivery of the financial statements described in
paragraph (i) of this subsection 8.1.3, Henry shall forward to Agent a copy of
the accountants' letter to Henry's management that is prepared in connection
with such financial statements and also shall cause to be prepared and shall
furnish to Agent a certificate of the aforesaid certified public accountants
certifying to Agent that, based upon their examination of the financial
statements of Henry and its Subsidiaries performed in connection with their
examination of said financial statements, they are not aware of any Default or
Event of Default, or, if they are aware of such Default or Event of Default,
specifying the nature thereof. Concurrently with the delivery of the financial
statements described in paragraph (i) and (ii) (but solely for the last month of
each fiscal quarter of Borrowers) of this subsection 8.1.3, or more frequently
if reasonably requested by Agent, Borrowers shall cause to be prepared and
furnished to Agent a Compliance Certificate in the form of Exhibit 8.1.3 hereto
executed by the Chief Financial Officer of Borrower.

    8.1.4  Borrowing Base Certificates.  Borrowers shall deliver to Agent a
Borrowing Base Certificate in the form of Exhibit 8.1.4 with respect to Accounts
each day and a Borrowing Base Certificate with respect to Inventory on the third
Business Day of each week with such supporting materials as Agent shall
reasonably request.

    8.1.5  Landlord, Processor and Storage Agreements.  Provide Agent with
copies of all agreements between any Borrower or any of its Subsidiaries and any
landlord, processor, distributor, warehouseman or consignee which owns any
premises at which any Collateral included in the Borrowing Base Certificate may,
from time to time, be kept.

    8.1.6  Guarantor Financial Statements.  Deliver or cause to be delivered to
Agent financial statements, if any, for each Guarantor (to the extent not
consolidated with the financial statements

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delivered to Agent under subsection 8.1.3) in form and substance satisfactory to
Agent at such intervals and covering such time periods as Agent may request.

    8.1.7  Projections.  No later than the end of each fiscal year of each
Borrower, deliver to Agent Projections of each Borrower and each of its
Subsidiaries (including Bakor) for the forthcoming fiscal year, month by month.

    8.1.8  Subsidiaries.  Cause each Subsidiary of each Borrower, whether now or
hereafter in existence, promptly upon Lender's request therefor, to execute and
deliver to Lender a Guaranty Agreement and a security agreement pursuant to
which such Subsidiary guaranties the payment of all Obligations and grants to
Lender a first priority Lien (subject only to Permitted Liens) on all of its
Properties of the types described in subsection 5.1. Additionally, Borrowers
shall execute and deliver to Lender a pledge agreement (or amendment thereto)
pursuant to which Borrowers grant to Lender a first priority Lien (subject only
to Permitted Liens) with respect to all of the issued and outstanding Securities
of each such Subsidiary.

    8.1.9  Customer and Supplier Listing.  No later than the end of each fiscal
year of each Borrower, deliver to Agent a detailed listing of all customers and
suppliers for each Borrower together with the name, the telephone number, the
facsimile number and address of an appropriate contact person.

    8.1.10  Deposit Accounts with Original Lender and PNC Bank.  Each Borrower
shall cause all of its Deposit Accounts with the Original Lender and PNC Bank to
be closed as of the Closing Date; provided, however, that the Deposit Accounts
bearing Nos. 3750793127, 3750793130, 3750793143 and 3751234931 with the Original
Lender may remain open for a period of not more than one hundred and fifty
(150) days following the Closing Date; the Deposit Account bearing No. 145990210
with the Original Lender may remain open until the later of (i) twenty (20) days
following the Closing Date or (ii) the date of the establishment of the Deposit
Accounts with the Bank; and the Deposit Accounts bearing Nos. 5641741418 and
47-47-002-3003784 with PNC Bank and the Deposit Account bearing No. 3729102005
with the Original Lender may remain open for a period of not more than five
(5) days following the establishment of Deposit Accounts with the Bank and
provided, further that such Deposit Accounts are maintained pursuant to lockbox
and blocked account arrangements acceptable to Agent and Agent has a first
priority perfected security interest in such Account.

    8.1.11  Deposit and Brokerage Accounts.  For each Deposit Account,
securities account, brokerage account or other similar account that any Borrower
at any time opens or maintains, each Borrower shall pursuant to an agreement in
form and substance satisfactory to Agent, cause the depository bank or
securities intermediary, as applicable, to agree to comply at any time with
instructions from Agent to such depository bank or securities intermediary, as
applicable, directing the disposition of funds from time to time credited to
such account without further consent of Borrowers; provided, however, that
Borrowers shall not be required to deliver such an agreement for that certain
securities account no. 801538000 currently maintained by Borrowers with Brown &
Co. Securities so long as such account (i) only holds Securities consisting of a
single share of stock of companies that are Borrowers' competitors, (ii) holds
no more than 40 shares of stock in the aggregate at any time, and (iii) does not
exceed $7500 in value at any time.

    8.1.12  Investments.  Pledge to Agent all investments permitted under this
Agreement (other than the investment in Bakor) in a manner and in form and
substance satisfactory to Agent.

8.2  Negative Covenants.

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    During the Term, and thereafter for so long as there are any Obligations
outstanding, each Borrower covenants that, unless otherwise consented to by
Majority Lenders, in writing, it shall not:

    8.2.1  Mergers; Consolidations; Acquisitions.  Merge or consolidate, or
permit any Subsidiary of any Borrower to merge or consolidate, with any Person;
or acquire, or permit any of their respective Subsidiaries to acquire, all or
any substantial part of the Properties of any Person, except for:

    (i)  mergers of any Subsidiary of any Borrower into Borrower or another
Subsidiary of any Borrower; and

    (ii) acquisitions of assets consisting of fixed assets or real property that
constitute Capital Expenditures permitted under subsection 8.2.8.

    8.2.2  Loans.  Make, or permit any Subsidiary of any Borrower to make, any
loans or other advances of money to any Person, other than (i) for travel
advances, advances against commissions and other similar advances to employees
not in excess of $100,000 in the aggregate at any time, (ii) deposits with
financial institutions permitted under this Agreement, and (iii) prepaid
expenses. Extensions of trade credit in the ordinary course of Borrowers'
business do not constitute an advance for purposes of this Section 8.2.2.

    8.2.3  Total Indebtedness.  Create, incur, assume, or suffer to exist, or
permit any Subsidiary of any Borrower to create, incur or suffer to exist, any
Indebtedness, except:

    (i)  Obligations owing to Agent or any Lender under this Agreement;

    (ii) Indebtedness existing on the date of this Agreement and listed on
Exhibit 8.2.3.;

    (iii) Indebtedness arising out of the refinancing, extension, renewal or
refunding of any Indebtedness existing as of the Closing Date (including the
Indebtedness owed to Lucent in connection with a telephone system) and listed on
Exhibit 8.2.3; provided that such Indebtedness is not increased and is not
secured by additional assets;

    (iv) Permitted Purchase Money Indebtedness;

    (v) Contingent liabilities arising out of endorsements of checks and other
negotiable instruments for deposit or collection in the ordinary course of
business;

    (vi) Subordinated Debt;

    (vii)  To the extent not mentioned above, trade payables, accrued expenses,
income taxes payable, deferrals including deferred compensation and deferred
income taxes, reserves including environmental reserves and warranty reserves,
operating leases, accruals and accounts payable in the ordinary course of
business (in each case to the extent not overdue and not for Money Borrowed and
in each case determined in accordance with GAAP);

    (viii) Indebtedness not included in paragraphs (i)—(vii) above which does
not exceed at any time, in the aggregate, the sum of $500,000;

    (ix)  Indebtedness consisting of intercompany loans and advances made by any
Borrower to such other Borrower; provided that (i) each Borrower shall have
executed and delivered to the other Borrower a demand note (collectively, the
"Intercompany Notes") to evidence such Indebtedness, which Intercompany Notes
shall be in form and substance satisfactory to Agent and shall be pledged and
delivered to Agent pursuant to the Pledge Agreement, (ii) each Borrower shall
record all intercompany transactions on its books and records, and (iii) no
Default or Event of Default would occur and be continuing after giving effect to
any such proposed intercompany loan.

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    8.2.4  Affiliate Transactions.  Enter into, or be a party to, or permit any
Subsidiary of any Borrower to enter into or be a party to, any transaction with
any Affiliate of any Borrower or any holder of any Securities of any Borrower or
any Subsidiary of any Borrower, including without limitation payment of any
management, consulting or similar fees, except (i) in the ordinary course of and
pursuant to the reasonable requirements of such Borrower's or such Subsidiary's
business and upon fair and reasonable terms which are fully disclosed and
acceptable to Agent and Lenders upon at least ten (10) days' prior written
notice and are no less favorable to such Borrower than would be obtained in a
comparable arms-length transaction with a Person not an Affiliate or Security
holder of such Borrower, (ii) as otherwise permitted under this Agreement or as
set forth on Exhibit 8.2.4 hereto, (iii) Permitted Estate Planning Transfers,
and (iv) in the ordinary course and pursuant to the reasonable requirements of
such Borrower's or such Subsidiary's business and upon fair and reasonable terms
fully disclosed to Agent, wages, salaries, bonuses, benefits and other amounts
payable for services rendered by employees, consultants or directors.

    8.2.5  Limitation on Liens.  Create or suffer to exist, or permit any
Subsidiary of any Borrower to create or suffer to exist, any Lien upon any of
its Property (including, without limitation, the Securities of Bakor), income or
profits, whether now owned or hereafter acquired, except:

    (i)  Liens at any time granted in favor of Agent for the benefit of Lenders;

    (ii) Liens for taxes, assessments or governmental charges (excluding any
Lien imposed pursuant to any of the provisions of ERISA) not yet due, or being
contested in the manner described in subsection 7.1.14 hereto, but only if such
Lien would not reasonably be expected to have a Material Adverse Effect;

    (iii) Liens arising in the ordinary course of the business of any Borrower
or any of its Subsidiaries by operation of law or regulation (including liens of
mechanics, warehousemen, landlords, carriers and materialmen), but only if
payment in respect of any such Lien is not at the time required and such Liens
do not, in the aggregate, materially detract from the value of the Property of
any Borrower or any of its Subsidiaries or materially impair the use thereof in
the operation of the business of any Borrower or any of its Subsidiaries;

    (iv) Purchase Money Liens securing Permitted Purchase Money Indebtedness;

    (v) Such other Liens as appear on Exhibit 8.2.5 hereto;

    (vi) Liens incurred or deposits made in the ordinary course of business in
connection with (1) worker's compensation, social security, unemployment
insurance and other like laws or (2) sales contracts, leases, statutory
obligations, work in progress advances and other similar obligations not
incurred in connection with the borrowing of money or the payment of the
deferred purchase price of property;

    (vii)  Reservations, covenants, zoning and other land use regulations, title
exceptions or encumbrances granted in the ordinary course of business, affecting
real Property owned or leased by any Borrower or one of its Subsidiaries;
provided that such exceptions do not in the aggregate materially interfere with
the use of such Property in the ordinary course of such Borrower's or such
Subsidiary's business;

    (viii) Judgment Liens that do not give rise to an Event of Default under
subsection 10.1.15;

    (ix) the Liens permitted pursuant to Section 7 of the Pledge Agreement; and

    (x) Such other Liens as Majority Lenders may hereafter approve in writing.

    8.2.6  Payments and Amendments of Certain Debt.  

    (i)  Make or permit any Subsidiary of any Borrower to make any payment of
any part or all of any Subordinated Debt or take any other action or omit to
take any other action in respect of

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any Subordinated Debt, except in accordance with the subordination agreement
relative thereto or the subordination provisions thereof; or

    (ii) Amend or modify any agreement, instrument or document evidencing or
relating to any Subordinated Debt.

    8.2.7  Distributions.  Declare or make, or permit any Subsidiary of any
Borrower to declare or make, any Distributions, except for:

    (i)  Distributions by any Subsidiary of any Borrower to any Borrower;

    (ii) Distributions paid solely in Securities of any Borrower or any of its
Subsidiaries;

    (iii) Distributions by any Borrower in amounts necessary to permit such
Borrower to repurchase Securities of such Borrower from employees of such
Borrower or any of its Subsidiaries upon the termination of their employment, so
long as no Default or Event of Default exists at the time of or would be caused
by the making of such Distributions and the aggregate cash amount of such
Distributions, measured at the time when made, does not exceed $50,000 in any
fiscal year of such Borrower;

    (iv) Distributions made on or after January 1, 2004 to the holders of
Henry's Series A Convertible Preferred Stock issued to Joseph T. Mooney, Jr.,
provided that (1) such Distributions are in accordance with the terms of such
preferred stock in the form provided to Agent as of the date hereof, (2) such
Distributions are made solely from the proceeds of life insurance policies
insuring Joseph T. Mooney, Jr., and not from any of the proceeds of the Life
Insurance Policies set forth on Exhibit 7.1.26 and subject to Assignments of
Life Insurance in favor of Agent.

    8.2.8  Capital Expenditures.  Make Capital Expenditures (including, without
limitation, by way of capitalized leases) which, in the aggregate, as to
Borrowers and all of their Subsidiaries, exceed the following amounts during the
fiscal year of Borrower set forth below:

Maximum Amount

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

  Fiscal Year

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

$1,500,000   2001 $2,000,000   2002 and each fiscal year thereafter

    8.2.9  Disposition of Assets.  Sell, lease or otherwise dispose of any of,
or permit any Subsidiary of any Borrower to sell, lease or otherwise dispose of
any of, its Properties, including any disposition of Property as part of a sale
and leaseback transaction, to or in favor of any Person, except for:

    (i)  sales of Inventory in the ordinary course of business to non-Affiliated
third parties on ordinary and customary terms;

    (ii) sales of Inventory to Bakor in the ordinary course of business pursuant
to transfer pricing practices disclosed and acceptable to Agent; provided that
(a) the amounts owed by Bakor to Borrowers in connection with such sales do not
exceed $750,000 at any time (including any amounts written off) and (b) such
amounts owed by Bakor are paid in the ordinary course and upon reasonable and
customary terms.

    (iii) transfers of Property to any Borrower by a Subsidiary of any Borrower;

    (iv) dispositions of Property that is substantially worn, damaged,
uneconomic or obsolete (subject to subsection 6.4.2 hereof);

    (v) dispositions of investments described in paragraphs (ii), (iii), (iv),
(v), (vi) and (vii) of the definition of the term "Restricted Investments";

    (vi) the transfer of the property located at 336 Cold Stream Road,
Kimberton, Pennsylvania (the "Kimberton Property") in exchange for the property
located at 2911 Slauson Avenue,

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Huntington Park, California (the "Huntington Park Property") so long as (1) the
Huntington Park Property is of equal or greater value than the Kimberton
Property (as determined by the Agent based on appraisals thereof acceptable to
Agent), (2) Borrowers have provided Agent with all environmental reports
requested by Agent on the Huntington Park Property and Agent is satisfied with
the contents of such reports, and (3) Agent has been granted a Lien pursuant to,
and has received all other documentation required under, Section 5.3;

    (vii)  leases listed on Exhibit 8.2.9; and

    (viii) other dispositions expressly authorized by this Agreement.

    8.2.10  Securities.  Cause or permit any of its Subsidiaries to issue any
additional Securities.

    8.2.11  Bill-and-Hold Sales, Etc.  Make, or permit any Subsidiary of any
Borrower to make, a sale to any customer on a bill-and-hold or consignment basis
other than that certain consignment arrangement with Roofing Wholesale of
Arizona, provided that such arrangement does not exceed $60,000 in book value of
goods in the aggregate at any time.

    8.2.12  Restricted Investment.  Make or have, or permit any Subsidiary of
any Borrower to make or have, any Restricted Investment except as listed in
Schedule 8.2.12.

    8.2.13  Subsidiaries and Joint Ventures.  Create, acquire or otherwise
suffer to exist any Subsidiary or joint venture arrangement not in existence as
of the date hereof.

    8.2.14  Tax Consolidation.  File or consent to the filing of any
consolidated income tax return with any Person other than Borrower's
Subsidiaries.

    8.2.15  Organizational Documents.  Agree to, or suffer to occur, any
amendment, supplement or addition to its or any of its Subsidiaries' (including
Bakor) charter, articles or certificate of incorporation, certificate of
formation, limited partnership agreement, bylaws, limited liability agreement,
operating agreement or other organizational documents (as the case may be), that
would reasonably be expected to have a Material Adverse Effect.

    8.2.16  Fiscal Year End.  Change, or permit any Subsidiary of any Borrower
to change, its fiscal year end.

    8.2.17  Transfer of Funds.  Transfer any funds to (a) any Subsidiaries that
are not Borrowers, (b) Bakor or any Subsidiary of Bakor, other than in
connection with the transfer of products pursuant to transfer pricing practices
that are (i) acceptable to Agent and Lenders, (ii) on terms no less favorable to
Borrowers' than would be obtained in comparable arm's length transactions with
non-affiliates, and (iii) in accordance with Borrowers' past practices; or
(c) to an Affiliate except for transactions authorized under Sections 8.2.4 (i),
(ii), and (iv).

    8.2.18  Senior Notes.  Purchase or pre-pay, or make or permit any Subsidiary
of any Borrower to purchase or pre-pay, the Senior Notes without the prior
written consent of Lenders.

    8.2.19  Organization.  Change its or any Subsidiary's state of incorporation
or organization or the form of its organization or its type of organization or
its or any Subsidiary's legal name.

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    8.2.20  Terminations; Amendments.  File any financing statement with respect
to any Person other than Agent and Lenders except for Permitted Liens or file
any amendment or termination statement with respect to any financing statement
of Agent and Lenders.

    8.2.21  No Restrictions on Payments to Agents. Enter into any contract or
agreement that restricts or prohibits an Account Debtor's duty to make payment
with respect to a Payment Intangible directly to the Agent.

    8.2.22  Inventory in Alabama.  Transfer, store or keep any Inventory or
other Property with a book value in excess of $10,000 at the Mobile, Alabama
location or any other location in Alabama at any time.

    8.2.23  Maintenance of Accounts.  Maintain or open any deposit, brokerage,
securities or other bank account or account with any financial institution or
intermediary except as expressly permitted under this Agreement. Without
limiting the foregoing, Borrowers shall not: (i) maintain a balance in excess of
$20,000 in the aggregate at any time in Account Nos. 5641741418 and
47-47-0002-3003784 with PNC Bank; (ii) maintain a balance in excess of $5,000 at
any time in Account No. 145990210 with the Original Lender or permit or cause
any collections to be deposited to such account; or (iii) maintain a balance in
Account No. 372912005 with the Original Lender in excess of (x) $5,000 or
(y) the amount of payroll accrued plus related payroll taxes. With respect to
Account No. 372912005, Borrower shall not (1) utilize such Deposit Account for
any purpose other than payroll purposes or (2) permit or cause to be permitted
any amounts to be credited or deposited to such account except for amounts
funded from a Revolving Credit Loan.

8.3  Specific Financial Covenants.

    8.3.1  During the Term, and thereafter for so long as there are any
Obligations outstanding, Borrowers covenant that, unless otherwise consented to
by Majority Lenders in writing, Borrower shall maintain Availability of not less
than $3,000,000.

    8.3.2  If GAAP changes from the basis used in preparing the audited
financial statements delivered to Agent by Borrowers on or before the Closing
Date, each Borrower will provide Agent with certificates demonstrating
compliance with such financial covenants and will include, at the election of
Borrowers or upon the request of Agent, calculations setting forth the
adjustments necessary to demonstrate how Borrowers are in compliance with such
financial covenants based upon GAAP as in effect on the Closing Date.

    8.4  Covenants of Henry Shareholders.

    8.4.1  Without the prior written consent of Lenders, each shareholder of
Henry hereby severally covenants and agrees that it will not directly or
indirectly, create or suffer to exist any lien, pledge, security interest, or
other encumbrance upon the Securities of Henry owned by such shareholder or
assign, transfer, pledge, dispose, sell, or otherwise encumber the Securities of
Henry owned by such shareholder; provided, however, that any shareholders whose
total holdings do not exceed 10% of the Securities of Henry may sell such
Securities of Henry at any time or from time to time with the prior written
consent of Agent which such consent shall not be unreasonably withheld.

    8.4.2  Warner W. Henry and the Henry Trust each hereby covenants and agrees
that they will not, without the prior written consent of Lenders, directly or
indirectly, vote or provide their consent to any of the following:

      (i)   the dissolution or liquidation, in whole or in part, of any
Borrower;
(ii)
 
the consolidation or merger of any Borrower with any other Person except as
permitted under Section 8.2.1;

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(iii)
 
the sale, disposition or encumbrance of all or substantially all of the assets
of any Borrower;
(iv)
 
any change in the authorized number of shares, the stated capital or the share
capital of any Borrower or the issuance of any additional Securities in a manner
that violates this Agreement;
(v)
 
the payment of any Distributions in violation of this Agreement;
(vi)
 
the redemption or repurchase of any Securities; or
(vii)
 
the alteration of voting rights with respect to the Securities of any Borrower
in a manner that violates this Agreement.

SECTION 9. CONDITIONS PRECEDENT

9.1  Initial Conditions. Notwithstanding any other provision of this Agreement
or any of the other Loan Documents, and without affecting in any manner the
rights of Agent or any Lender under the other sections of this Agreement, no
Lender shall be required to make any initial Loan, nor shall Agent be required
to or issue or procure any Letter of Credit or LC Guaranty unless and until each
of the following conditions has been satisfied on or before the Closing Date:

    9.1.1  Documentation.  

    Agent shall have received, in form and substance satisfactory to Agent and
its counsel, a duly executed copy of this Agreement and the other Loan Documents
set forth on Exhibit 9.1, together with such additional documents, instruments
and certificates as Agent and its counsel shall reasonably require in connection
therewith from time to time, all in form and substance satisfactory to Agent and
its counsel.

    9.1.2  No Default.  

    No Default or Event of Default shall exist.

    9.1.3  Other Conditions.  

    Each of the conditions precedent set forth in the other Loan Documents shall
have been satisfied.

    9.1.4  Initial Availability.  

    Agent shall have determined that immediately after Lenders have made the
initial Loans and after Agent has issued or procured the initial Letters of
Credit and LC Guaranties contemplated hereby, and Borrowers have paid (or, if
accrued, treated as paid), all closing costs incurred in connection with the
transactions contemplated hereby, and have reserved an amount sufficient to pay
all trade payables greater than 30 days past the due date, Availability shall
not be less than $10,000,000 (without taking into account the Note Payment
Reserve).

    9.1.5  No Litigation.  

    No action, proceeding, investigation, regulation or legislation shall have
been instituted or proposed before any court, governmental agency or legislative
body to enjoin, restrain or prohibit, or to

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obtain damages in respect of, or which is related to or arises out of this
Agreement or the consummation of the transactions contemplated hereby.

    9.1.6  Material Adverse Effect.  

    Since March 31, 2001, there has not been any material adverse change in its
business, assets, financial condition, income or prospects and no event or
condition exists which would be reasonably likely to result in any Material
Adverse Effect.

    9.1.7  Capital Structure.  

    Lenders shall be satisfied with the corporate and legal structure and
capitalization of Borrowers and their Affiliates, including, without limitation,
the charter and bylaws of Borrowers and their Subsidiaries and each agreement or
instrument relating thereto.

    9.1.8  Insurance.  

    Agent shall be satisfied with the amount, types and terms and conditions of
all insurance maintained by Borrowers and its Subsidiaries, and Agent shall have
received endorsements naming Agent as an additional insured and loss payee under
all insurance policies to be maintained with respect to the properties of
Borrowers and its Subsidiaries. Such policies shall contain such endorsements as
required by Agent, contain only those exceptions acceptable to Agent and
otherwise be in form and substance satisfactory to Agent.

    9.1.9  Opinions of Counsel.  

    Lenders shall have received written opinions of counsel for Borrowers in
form and substance satisfactory to Agent and its counsel.

    9.1.10  Cash Management.  

    Borrowers shall establish their primary collection and disbursement accounts
at the Bank and shall have notified and instructed all Account Debtors to remit
payment to the lockbox account with the Bank; provided that Borrowers may retain
those certain accounts listed on Exhibit 8.1.10 for a period of up to one
hundred and fifty (150) days following the Closing Date so long as such accounts
are subject to a security interest in favor of Agent and are otherwise subject
to arrangements acceptable to Agent.

    9.1.11  Verification of Key Accounts.  

    Lenders shall have received a detail listing of each Borrower's customers
and suppliers together with the name, the telephone number, the facsimile number
and address of an appropriate contact person and Lenders shall have verified
customer and supplier relationships, the results of which shall be satisfactory
to Lenders in their sole discretion.

    9.1.12  Due Diligence.  

    Completion by Lenders and their counsel of all business and legal due
diligence with results satisfactory to Lenders, including, without limitation,
lien searches and pre-closing collateral audits.

    9.1.13  Waivers.  

    Receipt of all third party and governmental waivers and consents necessary
or, in the discretion of Lenders, advisable in connection with the financing and
the continuing operations of Borrowers.

    9.1.14  Additional Information.  

    Agent shall not have become aware of any information or other matter
affecting Borrowers or any of their Subsidiaries (including Bakor), if any, or
the transactions contemplated hereby which is inconsistent in an adverse manner
with any such information or other matter disclosed to Agent prior to the
Closing Date.

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    9.1.15  No Material Litigation and No Increased Liability.  

    As of the Closing Date, there will have been since audited consolidated
financial statements for the fiscal year ending December 31, 2000 and the
unaudited consolidated financial statements for the month ending March 30, 2001,
no material increase in the liabilities, liquidated or contingent, of any
Borrower or its Subsidiaries (including Bakor), or a material decrease in the
assets of any Borrower or any litigation which could reasonably be expected to
have a Material Adverse Effect on any Borrower or its Subsidiaries (including
Bakor).

    9.1.16  Other Agreements.  

    There shall not exist (on a pro forma basis after giving effect to the Total
Credit Facility) any default under any material indebtedness or agreement of
Borrowers, any Subsidiary (including, without limitation, the Senior Notes and
the Indenture), Bakor (including, without limitation, the Bakor Facility) and
the Henry II Company.

    9.1.17  Arizona Property.  

    Receipt of evidence satisfactory to Agent that Borrowers shall have paid in
full all indebtedness owing to the Commerce and Economic Development Department
and that the deed of trust on the real property located at 4685 Finance Way,
Kingman, Arizona, has been reconveyed to Borrowers and all UCC-1 financing
statements filed by the Commerce and Economic Development Department have been
terminated.

    9.1.18  Purchase of Equipment.  

    Receipt of evidence satisfactory to Agent that Borrowers shall have
purchased or have otherwise obtained good and valid title to all of the
equipment leased by Henry pursuant to that certain Machinery Lease dated as
June 24, 1969 among Henry and Frances W. Henry, as Trustee of Trust A and
Frances W. Henry and Newton F. Wheeler, as Trustees of Trust B, under the Warner
W. Henry Family Trust.

    9.1.19  Lien Terminations.  Receipt of evidence satisfactory to Agent that
Borrowers shall have terminated the liens held by Sanwa Bank California (UCC
File No. 9364860091), Harris Bank and Provident National Bank.

    9.1.20  Closing Date.  

    The Closing Date shall occur on or before August  , 2001.

    9.1.21  Piper Jaffray Account.  Agent shall have received the U.S. Bancorp
Piper Jaffray Notice to Securities Intermediary and Control Agreement duly
executed by Borrowers and receipt of evidence satisfactory to Agent that
Borrowers shall have completed all the necessary documentation to effectuate the
transfer of the Securities held in account no. 04054515079 with Bear, Stearns
Securities Corp. to an account with U.S. Bancorp Piper Jaffray.

9.2  Condition Precedents to all Loans. Notwithstanding any other provision of
this Agreement or any of the other Loan Documents, and without affecting in any
manner the rights of Agent or any Lender under the other sections of this
Agreement, no Lender shall be required to make any Loan, nor shall Agent be
required to or issue or procure any Letter of Credit or LC Guaranty unless and
until each of the following conditions has been and continues to be satisfied:

    9.2.1  No Default.  

    No Default or Event of Default shall exist.

    9.2.2  Representations and Warranties.  

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    The representations and warranties contained in this Agreement and the other
Loan Documents shall be true and correct in all respects on the date of the
making of such Loan, as though made on and as of such date.

    9.2.3  No Litigation.  

    No action, proceeding, investigation, regulation or legislation shall have
been instituted or proposed before any court, governmental agency or legislative
body to enjoin, restrain or prohibit, or to obtain damages in respect of, or
which is related to or arises out of this Agreement or the consummation of the
transactions contemplated hereby.

    9.2.4  Material Adverse Effect.  

    Since March 31, 2001, no event or condition exists which would be reasonably
likely to result in any Material Adverse Effect.

9.3  Condition Subsequent to all Loans. Notwithstanding any other provision of
this Agreement or any of the other Loan Documents, and without affecting in any
manner the rights of Agent or any Lender under the other Sections of this
Agreement, no Lender shall be required to make any loan, nor shall Agent be
required to or issue or procure any Letter of Credit or LC Guaranty unless and
until each of the following conditions has been satisfied:

    9.3.1  Troy Property.  On or before December 31, 2001 either (a) sell the
real property located at Troy, New York and deliver the proceeds of such sale to
Agent for application to the Obligations hereunder; or (b) deliver to Agent a
duly executed Mortgage covering the real property located at Troy, New York
together with an ALTA Lender's title insurance policy and evidence that
counterparts of the Mortgage has been recorded in all places to the extent
necessary or desirable in the judgment of Agent, to create a valid and
enforceable first priority lien on such Property in favor of Agent for the
benefit of Lenders.

    9.3.2  Credit Insurance.  Within thirty (30) days of the Closing Date
deliver to Agent a duly executed collateral assignment of the Fidelity and
Deposit Company of Maryland Credit Insurance Policy or such other credit
insurance policy that Borrowers obtain, in form and substance satisfactory to
Agent.

    9.3.3  Certificates of Title.  Within ten (10) days of the Closing Date
deliver to Agent certificates of title to all the vehicles owned by Borrowers.

    9.3.4  Tax Good Standing Certificates.  Within thirty (30) days of the
Closing Date deliver to tax good standing certificates for the following
jurisdictions: Arizona, Illinois, New Jersey, New York, Pennsylvania, South
Carolina, and Washington.

    9.3.5  Tax Liens.  Within thirty (30) days of the Closing Date, deliver to
Agent evidence satisfactory to Agent indicating that the tax liens of record in
California, New York, South Carolina and Texas have been released, terminated or
paid in full.

    9.3.6  Insurance Policies.  Within ten (10) days of the Closing Date,
deliver to Agent certified copies of policies bearing numbers PHF047444,
BE7395745, 2673583 and 35BDDAC8871 to Agent as promptly as practicable, with
satisfactory lender's loss payable endorsements, naming Agent as a loss payee,
assignee or additional insured, as appropriate, as its interest may appear, and
showing only such other loss payees, assignees and additional insureds as are
satisfactory to Agent.

    9.3.7  Certificates of Occupancy.  Within thirty (30) days of the Closing
Date, deliver to Agent certificates of occupancy for all real Property owned or
leased by Borrowers.

    9.3.8  Originals.  Within ten (10) days of the Closing Date, deliver to
Agent all original signature pages to all Loan Documents containing a facsimile
signature.

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    9.3.9  Piper Jaffray Account.  Within ten (10) days of the Closing Date,
deliver to Agent evidence of the transfer of the Securities held in that certain
account no. 04054515079 with Bear, Stearns Securities Corp. to an account with
U.S. Bancorp Piper Jaffray.

SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT

10.1  Events of Default.

    The occurrence of one or more of the following events shall constitute an
"Event of Default":

    10.1.1  Payment of Obligations.  Any Borrower shall fail to pay any of the
Obligations hereunder or under any Note on the due date thereof (whether due at
stated maturity, on demand, upon acceleration or otherwise).

    10.1.2  Misrepresentations.  Any representation, warranty or other statement
made or furnished to Agent or any Lender by or on behalf of any Borrower, any
Subsidiary of any Borrower in this Agreement, any of the other Loan Documents or
any instrument, certificate or financial statement furnished in compliance with
or in reference thereto proves to have been false or misleading in any material
respect when made, furnished or remade pursuant to Section 7.3 hereof.

    10.1.3  Breach of Specific Covenants.  Any Borrower shall fail or neglect to
perform, keep or observe any covenant contained in Sections 5.2, 5.3, 5.4,
6.1.2, 6.2.4, 8.1 (other than Sections 8.1.5, 8.1.6, 8.1.9), 8.2, 8.3 or 9.3
hereof on the date that such Borrower is required to perform, keep or observe
such covenant. Any shareholder of Henry shall fail or neglect to perform, keep
or observe any covenant contained in Section 8.4 hereof.

    10.1.4  Breach of Other Covenants.  Any Borrower shall fail or neglect to
perform, keep or observe any covenant contained in this Agreement (other than a
covenant which is dealt with specifically elsewhere in Section 10.1 hereof) and
the breach of such other covenant is not cured to Agent's satisfaction within
30 days after the sooner to occur of such Borrower's receipt of notice of such
breach from Agent or the date on which such failure or neglect first becomes
known to any officer of such Borrower.

    10.1.5  Default Under Security Documents or Other Agreements.  Any event of
default shall occur under, or any Borrower, any of its Subsidiaries or any other
Guarantor shall default in the performance or observance of any term, covenant,
condition or agreement contained in, any of the Security Documents, the Other
Agreements or any other Loan Document and such default shall continue beyond any
applicable grace period.

    10.1.6  Other Defaults.  There shall occur any default or event of default
on the part of any Borrower or any Subsidiary of Borrower under any agreement,
document or instrument to which any Borrower or such Subsidiary of Borrower is a
party or by which any Borrower or such Subsidiary of Borrower or any of its
Property is bound, evidencing or relating to (a) any Indebtedness (other than
the Obligations) with an outstanding principal balance in excess of $100,000, if
the payment or maturity of such Indebtedness is accelerated in consequence of
such default or event of default or demand for payment of such Indebtedness is
made or could be made in accordance with the terms thereof or (b) the Senior
Notes or Indenture.

    10.1.7  Uninsured Losses and Condemnation.  Any material loss, theft,
damage, destruction, or condemnation of any portion of the Collateral having a
fair market value of $100,000, in the aggregate, if (a) such loss, theft, damage
or destruction is not fully covered (subject to such deductibles and
self-insurance retentions as Agent shall have permitted) by insurance and
(b) following such loss, theft, damage, destruction or condemnation, there then
exists insufficient Availability to fully reserve for the reduction in the
Borrowing Base on account of such Collateral.

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    10.1.8  Insolvency and Related Proceedings.  Any Borrower or any Subsidiary
(including Bakor) of any Borrower shall cease to be Solvent or shall suffer the
appointment of a receiver, trustee, custodian or similar fiduciary, or shall
make an assignment for the benefit of creditors, or any petition for an order
for relief shall be filed by or against any Borrower or any Subsidiary
(including Bakor) of Borrower under the federal bankruptcy laws or similar laws
in any applicable jurisdiction (if against any Borrower or any Subsidiary
(including Bakor) of Borrower the continuation of such proceeding for more than
30 days), or any Borrower or any Subsidiary (including Bakor) of any Borrower
shall make any offer of settlement, extension or composition to their respective
unsecured creditors generally.

    10.1.9  Business Disruption.  There shall occur a cessation of a substantial
part of the business of any Borrower or any Subsidiary of Borrower for a period
which materially adversely affects any Borrower's or such Subsidiary's capacity
to continue its business on a profitable basis; or any Borrower or any
Subsidiary of Borrower shall suffer the loss or revocation of any material
license or permit now held or hereafter acquired by such Borrower or such
Subsidiary of Borrower which is necessary to the continued or lawful operation
of its business unless such or revocation would not have a Material Adverse
Effect; or any Borrower or any Subsidiary of any Borrower shall be enjoined,
restrained or in any way prevented by court, governmental or administrative
order from conducting all or any material part of its business affairs unless
such injunction or order would not have a Material Adverse Effect; or any
material lease or agreement pursuant to which any Borrower or any Subsidiary of
any Borrower leases, uses or occupies any Property shall be canceled or
terminated prior to the expiration of its stated term, except any such lease or
agreement the cancellation or termination of which would not reasonably be
expected to have a Material Adverse Effect.

    10.1.10  Change of Ownership.  (a) Warner W. Henry and/or the Henry Trust
shall cease, directly or indirectly, to own and control, beneficially and of
record both (i) in excess of 50% of the issued and outstanding Voting Stock of
Henry and (ii) a sufficient percentage of the issued and outstanding Voting
Stock of Henry to control the board of directors of Henry, (b) Warner W. Henry,
the Henry Trust, Carol Henry or the lineal descendants of Warner W. Henry or the
trusts of such individuals of which such individuals are the sole beneficiaries
shall cease to own and control, beneficially and of record (directly or
indirectly), a majority of the issued and outstanding Securities and Voting
Stock of each Borrower and each of its other Subsidiaries (including Bakor),
(c) Warner W. Henry ceases to be the trustee of the Henry Trust, or (d) any
Borrower shall cease to own and control, beneficially and of record (directly or
indirectly), 100% of the issued and outstanding Securities and Voting Stock of
each of its Subsidiaries.

    10.1.11  ERISA.  A Reportable Event shall occur which, in Agent's
determination, constitutes grounds for the termination by the Pension Benefit
Guaranty Corporation of any Plan or for the appointment by the appropriate
United States district court of a trustee for any Plan, or if any Plan shall be
terminated or any such trustee shall be requested or appointed, or if any
Borrower or any Subsidiary of Borrower is in "default" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multi-employer Plan
resulting from any Borrower's or such Subsidiary's complete or partial
withdrawal from such Plan and any such event would reasonably be expected to
have a Material Adverse Effect.

    10.1.12  Challenge to Agreement.  Any Borrower or any Subsidiary of
Borrower, or any Affiliate of any of them, shall challenge or contest in any
action, suit or proceeding the validity or enforceability of this Agreement or
any of the other Loan Documents, the legality or enforceability of any of the
Obligations or the perfection or priority of any Lien granted to Agent.

    10.1.13  Repudiation of or Default Under Guaranty Agreement.  Any Guarantor
shall revoke or attempt to revoke the Guaranty Agreement signed by such
Guarantor, or shall repudiate such Guarantor's liability thereunder or shall be
in default under the terms thereof.

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    10.1.14  Criminal Forfeiture.  Any Borrower or any Subsidiary of Borrower
shall be criminally indicted or convicted under any law that could lead to a
forfeiture of any Property of any Borrower or any Subsidiary of Borrower.

    10.1.15  Judgments.  Any money judgments, writ of attachment or similar
processes (collectively, "Judgments") are issued or rendered against any
Borrower or any Subsidiary of any Borrower, or any of their respective Property
(i) in the case of money judgments, in an amount of $50,000 or more for any
single judgment, attachment or process or $100,000 or more for all such
judgments, attachments or processes in the aggregate, in each case in excess of
any applicable insurance with respect to which the insurer has admitted
liability, and (ii) in the case of non-monetary Judgments, such Judgment or
Judgments (in the aggregate) would reasonably be expected to have a Material
Adverse Effect, in each case which Judgment is not paid, stayed, released or
discharged within 30 days.

    10.1.16  Key Executives.  Warner W. Henry ceases to be the Chief Executive
Officer of Henry for any reason and a successor reasonably satisfactory to
Lenders does not assume his responsibilities. William H. Baribault ceases to be
the Chief Operating Officer of Henry for any reason and a successor reasonably
satisfactory to Lenders does not assume his responsibilities and position within
90 days of such cessation.

    10.1.17  Bakor Indebtedness.  There shall occur any default or event of
default on the part of Bakor under the Bakor Facility if the payment or maturity
of such Indebtedness is accelerated in consequence of such default or event of
default or demand for payment of such Indebtedness is made in accordance with
the terms thereof.

    10.1.18  Adverse Changes.  There shall occur any Material Adverse Effect.

    10.1.19  Life Insurance Policies.  Any Life Insurance Policy listed on
Exhibit 7.1.26 shall cease to be an Eligible Life Insurance Policy and there
then exists insufficient Availability to fully reserve for the reduction in the
Borrowing Base on account of such Life Insurance Policy following the exclusion
of such policy.

10.2  Acceleration of the Obligations.

    Upon or at any time after the occurrence and during the continuance of an
Event of Default, (i) the Revolving Loan Commitments shall, at the option of
Agent or Majority Lenders be terminated and/or (ii) Agent or Majority Lenders
may declare all or any portion of the Obligations at once due and payable
without presentment, demand protest or further notice by Agent or any Lender,
and Borrowers shall forthwith pay to Agent, the full amount of such Obligations,
provided, that upon the occurrence of an Event of Default specified in
subsection 10.1.8 hereof, all of the Obligations shall become automatically due
and payable without declaration, notice or demand by Agent or any Lender.

10.3  Other Remedies.

    Upon the occurrence and during the continuance of an Event of Default, Agent
shall have and may exercise from time to time the following rights and remedies:

    10.3.1  All of the rights and remedies of a secured party under the Code or
under other applicable law, and all other legal and equitable rights to which
Agent or Lenders may be entitled, all of which rights and remedies shall be
cumulative and shall be in addition to any other rights or remedies contained in
this Agreement or any of the other Loan Documents, and none of which shall be
exclusive.

    10.3.2  The right to take immediate possession of the Collateral, and to
(i) require Borrowers and each of their Subsidiaries to assemble the Collateral,
at Borrowers' expense, and make it available to Agent at a place designated by
Agent which is reasonably convenient to both parties, and (ii) enter any
premises where any of the Collateral shall be located and to keep and store the
Collateral on said

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premises until sold (and if said premises be the Property of Borrowers or any
Subsidiary of Borrowers, Borrowers agree not to charge, or permit any of their
Subsidiaries to charge, Agent for storage thereof).

    10.3.3  The right to sell or otherwise dispose of all or any Collateral in
its then condition, or after any further manufacturing or processing thereof, at
public or private sale or sales, with such notice as may be required by law, in
lots or in bulk, for cash or on credit, all as Agent, in its sole discretion,
may deem advisable. Agent may at its option disclaim any and all warranties
regarding the Collateral in connection with any such sale. Each Borrower agrees
that 10 days' written notice to Borrower or any of its Subsidiaries of any
public or private sale or other disposition of Collateral shall be reasonable
notice thereof, and such sale shall be at such locations as Agent may designate
in said notice. Agent shall have the right to conduct such sales on Borrowers'
or any of their Subsidiaries' premises, without charge therefor, and such sales
may be adjourned from time to time in accordance with applicable law. Agent
shall have the right to sell, lease or otherwise dispose of the Collateral, or
any part thereof, for cash, credit or any combination thereof, and Agent, on
behalf of Lenders, may purchase all or any part of the Collateral at public or,
if permitted by law, private sale and, in lieu of actual payment of such
purchase price, may set off the amount of such price against the Obligations.
The proceeds realized from the sale of any Collateral may be applied, after
allowing 2 Business Days for collection, first to the costs, expenses and
reasonable attorneys' fees incurred by Agent in collecting the Obligations, in
enforcing the rights of Agent and Lenders under the Loan Documents and in
collecting, retaking, completing, protecting, removing, storing, advertising for
sale, selling and delivering any Collateral, second to the interest due upon any
of the Obligations; and third, to the principal of the Obligations. If any
deficiency shall arise, each Borrower and each Guarantor shall remain jointly
and severally liable to Agent and Lenders therefor.

    10.3.4  Agent is hereby granted a license or other right to use, without
charge, each Borrower's and each of its Subsidiary's labels, patents,
copyrights, licenses, rights of use of any name, trade secrets, tradenames,
trademarks and advertising matter, or any Property of a similar nature, as it
pertains to the Collateral, in completing, advertising for sale and selling any
Collateral and Borrower's and each of its Subsidiary's rights under all licenses
and all franchise agreements shall inure to Agent's benefit.

    10.3.5  Agent may, at its option, require Borrowers to deposit with Agent
funds equal to the LC Amount and, if Borrowers fail to promptly make such
deposit, Agent may advance such amount as a Revolving Credit Loan (whether or
not an Overadvance is created thereby). Each such Revolving Credit Loan shall be
secured by all of the Collateral and shall bear interest and be payable at the
same rate and in the same manner as Loans. Any such deposit or advance shall be
held by Agent as a reserve to fund future payments on such LC Guaranties and
future drawings against such Letters of Credit. At such time as all LC
Guaranties have been paid or terminated and all Letters of Credit have been
drawn upon or expired, any amounts remaining in such reserve shall be applied
against any outstanding Obligations, or, if all Obligations have been
indefeasibly paid in full, returned to Borrower.

10.4  Set Off and Sharing of Payments.

    In addition to any rights now or hereafter granted under applicable law and
not by way of limitation of any such rights, during the continuance of any Event
of Default, each Lender is hereby authorized by each Borrower at any time or
from time to time, with prior written consent of Agent and with reasonably
prompt subsequent notice to Borrowers (any prior or contemporaneous notice to
Borrowers being hereby expressly waived) to set off and to appropriate and to
apply any and all (i) balances held by such Lender at any of its offices for the
account of Borrowers or any of their Subsidiaries (regardless of whether such
balances are then due to Borrowers or such Subsidiaries), and (ii) other
property at any time held or owing by such Lender to or for the credit or for
the account of Borrowers or any of their Subsidiaries, against and on account of
any of the Obligations. Any Lender exercising a right to set off shall, to the
extent the amount of any such set off exceeds its Revolving

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Loan Percentage of the amount set off, purchase for cash (and the other Lenders
shall sell) interests in each such other Lender's pro rata share of the
Obligations as would be necessary to cause such Lender to share such excess with
each other Lender in accordance with their respective Revolving Loan
Percentages. Each Borrower agrees, to the fullest extent permitted by law, that
any Lender may exercise its right to set off with respect to amounts in excess
of its pro rata share of the Obligations and upon doing so shall deliver such
excess to Agent for the benefit of all Lenders in accordance with the Revolving
Loan Percentages.

10.5  Remedies Cumulative; No Waiver.

    All covenants, conditions, provisions, warranties, guaranties, indemnities,
and other undertakings of Borrowers contained in this Agreement and the other
Loan Documents, or in any document referred to herein or contained in any
agreement supplementary hereto or in any schedule or in any Guaranty Agreement
given to Agent or any Lender or contained in any other agreement between any
Lender and Borrowers or between Agent and Borrowers heretofore, concurrently, or
hereafter entered into, shall be deemed cumulative to and not in derogation or
substitution of any of the terms, covenants, conditions, or agreements of
Borrower herein contained. The failure or delay of Agent or any Lender to
require strict performance by Borrowers of any provision of this Agreement or to
exercise or enforce any rights, Liens, powers, or remedies hereunder or under
any of the aforesaid agreements or other documents or security or Collateral
shall not operate as a waiver of such performance, Liens, rights, powers and
remedies, but all such requirements, Liens, rights, powers, and remedies shall
continue in full force and effect until all Loans and other Obligations owing or
to become owing from Borrowers to Agent and each Lender have been fully
satisfied. None of the undertakings, agreements, warranties, covenants and
representations of Borrowers contained in this Agreement or any of the other
Loan Documents and no Event of Default by Borrowers under this Agreement or any
other Loan Documents shall be deemed to have been suspended or waived by
Lenders, unless such suspension or waiver is by an instrument in writing
specifying such suspension or waiver and is signed by a duly authorized
representative of Agent and directed to Borrowers.

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SECTION 11. THE AGENT

11.1  Authorization and Action.

    Each Lender hereby appoints and authorizes Agent to take such action on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to Agent by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto. Each Lender hereby
acknowledges that Agent shall not have by reason of this Agreement assumed a
fiduciary relationship in respect of any Lender. In performing its functions and
duties under this Agreement, Agent shall act solely as agent of Lenders and
shall not assume, or be deemed to have assumed, any obligation toward, or
relationship of agency or trust with or for, Borrowers. As to any matters not
expressly provided for by this Agreement and the other Loan Documents (including
without limitation enforcement and collection of the Notes), Agent may, but
shall not be required to, exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Majority Lenders,
whenever such instruction shall be requested by Agent or required hereunder, or
a greater or lesser number of Lenders if so required hereunder, and such
instructions shall be binding upon all Lenders; provided, that Agent shall be
fully justified in failing or refusing to take any action which exposes Agent to
any liability or which is contrary to this Agreement, the other Loan Documents
or applicable law, unless Agent is indemnified to its satisfaction by the other
Lenders against any and all liability and expense which it may incur by reason
of taking or continuing to take any such action. If Agent seeks the consent or
approval of the Majority Lenders (or a greater or lesser number of Lenders as
required in this Agreement), with respect to any action hereunder, Agent shall
send notice thereof to each Lender and shall notify each Lender at any time that
the Majority Lenders (or such greater or lesser number of Lenders) have
instructed Agent to act or refrain from acting pursuant hereto.

11.2  Agent's Reliance, Etc.

    Neither Agent, any Affiliate of Agent, nor any of their respective
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement or
the other Loan Documents, except for its or their own gross negligence or
willful misconduct. Without limitation of the generality of the foregoing,
Agent: (i) may treat each Lender party hereto as the holder of Obligations until
Agent receives written notice of the assignment or transfer or such lender's
portion of the Obligations signed by such Lender and in form reasonably
satisfactory to Agent; (ii) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts, (iii) makes no warranties or
representations to any Lender and shall not be responsible to any Lender for any
recitals, statements, warranties or representations made in or in connection
with this Agreement or any other Loan Documents; (iv) shall not have any duty
beyond Agent's customary practices in respect of loans in which Agent is the
only lender, to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement or the other Loan
Documents on the part of Borrowers, to inspect the property (including the books
and records) of Borrowers, to monitor the financial condition of Borrowers or to
ascertain the existence or possible existence or continuation of any Default or
Event of Default; (v) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; (vi) shall not be liable to any
Lender for any action taken, or inaction, by Agent upon the instructions of
Majority Lenders pursuant to Section 11.1 hereof or refraining to take any
action pending such instructions; (vii) shall not be liable for any
apportionment or distributions of payments made by it in good faith pursuant to
Section 3 hereof; (viii) shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, consent,
certificate, message or other instrument or

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writing (which may be by telephone, facsimile, telegram, cable or telex)
believed in good faith by it to be genuine and signed or sent by the proper
party or parties; and (ix) may assume that no Event of Default has occurred and
is continuing, unless Agent has actual knowledge of the Event of Default, has
received notice from Borrowers or Borrowers' independent certified public
accounts stating the nature of the Event of Default, or has received notice from
a Lender stating the nature of the Event of Default and that such Lender
considers the Event of Default to have occurred and to be continuing. In the
event any apportionment or distribution described in clause (vii) above is
determined to have been made in error, the sole recourse of any Person to whom
payment was due but not made shall be to recover from the recipients of such
payments any payment in excess of the amount to which they are determined to
have been entitled.

11.3  Fleet and Affiliates.

    With respect to its commitment hereunder to make Loans, Fleet shall have the
same rights and powers under this Agreement and the other Loan Documents as any
other Lender and may exercise the same as though it were not Agent; and the
terms "Lender," "Lenders" or "Majority Lenders" shall, unless otherwise
expressly indicated, include Fleet in its individual capacity as a Lender. Fleet
and its Affiliates may lend money to, and generally engage in any kind of
business with, Borrowers, and any Person who may do business with or own
Securities of Borrowers all as if Fleet were not Agent and without any duty to
account therefor to any other Lender.

11.4  Lender Credit Decision.

    Each Lender acknowledges that it has, independently and without reliance
upon Agent or any other Lender and based on the financial statements referred to
herein and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon
Agent 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. Agent shall not have any duty
or responsibility, either initially or on an ongoing basis, to provide any
Lender with any credit or other similar information regarding Borrower.

11.5  Indemnification.

    Lenders agree to indemnify Agent (to the extent not reimbursed by
Borrowers), in accordance with their respective Aggregate Percentages, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against
Agent in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by Agent under this Agreement; provided
that no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from Agent's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender agrees to reimburse Agent
promptly upon demand for its ratable share, as set forth above, of any
out-of-pocket expenses (including reasonable attorneys' fees) incurred by Agent
in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiation, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the
extent that Agent is not reimbursed for such expenses by Borrower. The
obligations of Lenders under this Section 11.5 shall survive the payment in full
of all Obligations and the termination of this Agreement. If after payment and
distribution of any amount by Agent to Lenders, any Lender or any other Person,
including any Borrower, any creditor of Borrower, a liquidator, administrator or
trustee in bankruptcy, recovers from Agent any amount found to have been
wrongfully paid to Agent or disbursed by Agent to Lenders, then Lenders, in
accordance with their respective Aggregate Percentages, shall reimburse Agent
for all such amounts.

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11.6  Rights and Remedies to be Exercised by Agent Only.

    Each Lender agrees that, except as set forth in subsection 10.4, no Lender
shall have any right individually (i) to realize upon the security created by
this Agreement or any other Loan Document, (ii) to enforce any provision of this
Agreement or any other Loan Document, or (iii) to make demand under this
Agreement or any other Loan Document.

11.7  Agency Provisions Relating to Collateral.

    Each Lender authorizes and ratifies Agent's entry into this Agreement and
the Security Documents for the benefit of Lenders. Each Lender agrees that any
action taken by Agent with respect to the Collateral in accordance with the
provisions of this Agreement or the Security Documents, and the exercise by
Agent 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
Lenders. Agent is hereby authorized on behalf of all Lenders, without the
necessity of any notice to or further consent from any Lender, from time to time
prior to an Event of Default, to take any action with respect to any Collateral
or the Loan Documents which may be necessary to perfect and maintain perfected
Agent's Liens upon the Collateral, for its benefit and the ratable benefit of
Lenders. Lenders hereby irrevocably authorize Agent, at its option and in its
discretion, to release any Lien granted to or held by Agent upon any Collateral
(i) upon termination of the Agreement and payment and satisfaction of all
Obligations; or (ii) constituting property being sold or disposed of if Borrower
certifies to Agent that the sale or disposition is made in compliance with
subsection 8.2.9 hereof (and Agent may rely conclusively on any such
certificate, without further inquiry); or (iii) constituting property in which
Borrowers owned no interest at the time the Lien was granted or at any time
thereafter; or (iv) in connection with any foreclosure sale or other disposition
of Collateral after the occurrence and during the continuation of an Event of
Default or (v) if approved, authorized or ratified in writing by Agent at the
direction of all Lenders. Upon request by Agent at any time, Lenders will
confirm in writing Agent's authority to release particular types or items of
Collateral pursuant hereto. Agent shall have no obligation whatsoever to any
Lender or to any other Person to assure that the Collateral exists or is owned
by Borrower or is cared for, protected or insured or has been encumbered or that
the Liens granted to Agent herein or pursuant to the Security Documents have
been properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of its rights, authorities and powers granted or
available to Agent in this Section 11.7 or in any of the Loan Documents, it
being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, Agent may act in any manner it may deem
appropriate, in its sole discretion, but consistent with the provisions of this
Agreement, including given Agent's own interest in the Collateral as a Lender
and that Agent shall have no duty or liability whatsoever to any Lender.

11.8  Agent's Right to Purchase Commitments.

    Agent shall have the right, but shall not be obligated, at any time upon
written notice to any Lender and with the consent of such Lender, which may be
granted or withheld in such Lender's sole discretion, to purchase for Agent's
own account all of such Lender's interests in this Agreement, the other Loan
Documents and the Obligations, for the face amount of the outstanding
Obligations owed to such Lender, including without limitation all accrued and
unpaid interest and fees.

11.9  Right of Sale, Assignment, Participations.

    Each Borrower hereby consents to any Lender's participation, sale,
assignment, transfer or other disposition, at any time or times hereafter, of
this Agreement and any of the other Loan Documents, or of any portion hereof or
thereof, including, without limitation, such Lender's rights, title, interests,

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remedies, powers, and duties hereunder or thereunder subject to the terms and
conditions set forth below:

    11.9.1  Sales, Assignments.  Each Lender hereby agrees that, with respect to
any sale or assignment (i) no such sale or assignment shall be for an amount of
less than $5,000,000, (ii) each such sale or assignment shall be made on terms
and conditions which are customary in the industry at the time of the
transaction, (iii) Agent must consent, such consent not to be unreasonably
withheld, to each such assignment to a Person that is not an original signatory
to this Agreement, (iv) the assignee Lender shall pay to Agent a processing and
recordation fee of $3,500 and any out-of-pocket attorneys' fees and expenses
incurred by Agent in connection with any such sale or assignment. After such
sale or assignment has been consummated (x) the assignee Lender thereupon shall
become a "Lender" for all purposes of this Agreement and (y) the assigning
Lender shall have no further liability for funding the portion of Revolving Loan
Commitments or Capex Loan Commitments assumed by such other Lender.

    11.9.2  Participations.  Any Lender may grant participations in its
extensions of credit hereunder to any other Lender or other lending institution
(a "Participant"), provided that (i) no such participation shall be for an
amount of less than $5,000,000, (ii) no Participant shall thereby acquire any
direct rights under this Agreement, (iii) no Participant shall be granted any
right to consent to any amendment, except to the extent any of the same pertain
to (1) reducing the aggregate principal amount of, or interest rate on, or fees
applicable to, any Loan or (2) extending the final stated maturity of any Loan
or the stated maturity of any portion of any payment of principal of, or
interest or fees applicable to, any of the Loans; provided, that the rights
described in this subclause (2) shall not be deemed to include the right to
consent to any amendment with respect to or which has the effect of requiring
any mandatory prepayment of any portion of any Loan or any amendment or waiver
of any Default or Event of Default, (iv) no sale of a participation in
extensions of credit shall in any manner relieve the originating Lender of its
obligations hereunder, (v) the originating Lender shall remain solely
responsible for the performance of such obligations, (vi) Borrower and Agent
shall continue to deal solely and directly with the originating Lender in
connection with the originating Lender's rights and obligations under this
Agreement and the other Loan Documents, (vii) in no event shall any financial
institution purchasing the participation grant a participation in its
participation interest in the Loans without the prior written consent of Agent,
and, in the absence of a Default or an Event of Default, Borrowers, which
consents shall not unreasonably be withheld and (viii) all amounts payable by
Borrowers hereunder shall be determined as if the originating Lender had not
sold any such participation.

    11.9.3  Certain Agreements of Borrower.  Each Borrower agrees that (i) it
will use its best efforts to assist and cooperate with each Lender in any manner
reasonably requested by such Lender to effect the sale of participation in or
assignments of any of the Loan Documents or any portion thereof or interest
therein, including, without limitation, assisting in the preparation of
appropriate disclosure documents and making members of management available at
reasonable times to meet with and answer questions of potential assignees and
Participants; and (ii) subject to the provisions of Section 12.14 hereof, such
Lender may disclose credit information regarding Borrowers to any potential
Participant or assignee.

    11.9.4  Non U.S. Resident Transferees.  If, pursuant to this Section 11.9,
any interest in this Agreement or any Loans is transferred to any transferee
which is organized under the laws of any jurisdiction other than the United
States or any state thereof, the transferor Lender shall cause such transferee
(other than any Participant), and may cause any Participant, concurrently with
and as a condition precedent to the effectiveness of such transfer, to
(i) represent to the transferor Lender (for the benefit of the transferor
Lender, Agent, and Borrower) that under applicable law and treaties no taxes
will be required to be withheld by Agent, any Borrowers or the transferor Lender
with respect to any payments to be made to such transferee in respect of the
interest so transferred, (ii) furnish to the transferor Lender, Agent and
Borrowers either United States Internal Revenue Service Form 4224 or

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United States Internal Revenue Service Form 1001 (wherein such transferee claims
entitlement to complete exemption from United States federal withholding tax on
all interest payments hereunder), and (iii) agree (for the benefit of the
transferor Lender, Agent and Borrowers) to provide the transferor Lender, Agent
and Borrowers a new Form 4224 or Form 1001 upon the obsolescence of any
previously delivered form and comparable statements in accordance with
applicable United States laws and regulations and amendments duly executed and
completed by such transferee, and to comply from time to time with all
applicable United States laws and regulations with regard to such withholding
tax exemption.

11.10  Amendment.

    No amendment or waiver of any provision of this Agreement or any other Loan
Document (including without limitation any Note), nor consent to any departure
by Borrower therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Majority Lenders and Borrower, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, that no amendment, waiver or consent shall be
effective, unless (i) in writing and signed by each Lender, do any of the
following: (1) increase or decrease the aggregate Loan Commitments, or any
Lender's Revolving Loan Commitment, Capex Loan A Commitment, Capex Loan B
Commitment or Capex Loan C Commitment, (2) reduce the principal of, or interest
on, any amount payable hereunder or under any Note, other than those payable
only to Fleet in its capacity as Agent, which may be reduced by Fleet
unilaterally, (3) increase or decrease any interest rate payable hereunder,
(4) postpone any date fixed for any payment of principal of, or interest on, any
amounts payable hereunder or under any Note, other than those payable only to
Fleet in its capacity as Agent, which may be postponed by Fleet unilaterally,
(5) reduce the number of Lenders that shall be required for Lenders or any of
them to take any action hereunder, (6) release or discharge any Person liable
for the performance of any obligations of Borrowers hereunder or under any of
the Loan Documents, (7) amend any provision of this Agreement that requires the
consent of all Lenders or consent to or waive any breach thereof, (8) amend the
definition of the term "Majority Lenders," (9) amend this Section 11.10 or
(10) release any substantial portion of the Collateral, unless otherwise
permitted pursuant to Section 11.7 hereof; or (ii) in writing and signed by
Agent in addition to Lenders required above to take such action, affect the
rights or duties of Agent under this Agreement, any Note or any other Loan
Document.

11.11  Resignation of Agent; Appointment of Successor.

    Agent may resign as Agent by giving not less than thirty (30) days' prior
written notice to Lenders and Borrowers. If Agent shall resign under this
Agreement, then, (i) subject to the consent of the Borrowers (which consent
shall not be unreasonably withheld and which consent shall not be required
during any period in which a Default or an Event of Default exists), the
Majority Lenders shall appoint from among Lenders a successor agent for Lenders
or (ii) if a successor agent shall not be so appointed and approved within the
thirty (30) day period following Agent's notice to Lenders and the Borrowers of
its resignation, then Agent shall appoint a successor agent who shall serve as
Agent until such time as the Majority Lenders appoint a successor agent, subject
to the Borrowers' consent as set forth above. Upon its appointment, such
successor agent shall succeed to the rights, powers and duties of Agent and the
term "Agent" shall mean such successor effective upon its appointment, and the
former Agent's rights, powers and duties as Agent shall be terminated without
any other or further act or deed on the part of such former Agent or any of the
parties to this Agreement. After the resignation of any Agent hereunder, the
provisions of this Section 11 shall inure to the benefit of such former Agent
and such former Agent shall not by reason of such resignation be deemed to be
released from liability for any actions taken or not taken by it while it was an
Agent under this Agreement.

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SECTION 12. MISCELLANEOUS

12.1  Power of Attorney.

    Each Borrower hereby irrevocably designates, makes, constitutes and appoints
Agent (and all Persons designated by Agent) as such Borrower's true and lawful
attorney (and agent-in-fact), solely with respect to the matters set forth in
this Section 12.1, and Agent, or Agent's agent, may, without notice to such
Borrower and in such Borrower's or Agent's name, but at the cost and expense of
such Borrower:

    12.1.1  At such time or times as Agent or said agent, in its sole
discretion, may determine, endorse such Borrower's name on any checks, notes,
acceptances, drafts, money orders or any other evidence of payment or proceeds
of the Collateral which come into the possession of Agent or under Agent's
control.

    12.1.2  At such time or times upon or after the occurrence and during the
continuance of an Event of Default (provided that the occurrence of an Event of
Default shall not be required with respect to clauses (iv) and (viii) below), as
Agent or its agent in its sole discretion may determine: (i) demand payment of
the Accounts from the Account Debtors, enforce payment of the Accounts by legal
proceedings or otherwise, and generally exercise all of such Borrower's rights
and remedies with respect to the collection of the Accounts; (ii) settle,
adjust, compromise, discharge or release any of the Accounts or other Collateral
or any legal proceedings brought to collect any of the Accounts or other
Collateral; (iii) sell or assign any of the Accounts and other Collateral upon
such terms, for such amounts and at such time or times as Agent deems advisable;
(iv) take control, in any manner, of any item of payment or proceeds relating to
any Collateral; (v) prepare, file and sign such Borrower's name to a proof of
claim in bankruptcy or similar document against any Account Debtor or to any
notice of lien, assignment or satisfaction of lien or similar document in
connection with any of the Collateral; (vi) receive, open and dispose of all
mail addressed to such Borrower and notify postal authorities to change the
address for delivery thereof to such address as Agent may designate;
(vii) endorse the name of such Borrower upon any of the items of payment or
proceeds relating to any Collateral and deposit the same to the account of Agent
on account of the Obligations; (viii) endorse the name of such Borrower upon any
chattel paper, document, instrument, invoice, freight bill, bill of lading or
similar document or agreement relating to the Accounts, Inventory and any other
Collateral; (ix) use such Borrower's stationery and sign the name of such
Borrower to verifications of the Accounts and notices thereof to Account
Debtors; (x) use the information recorded on or contained in any data processing
equipment and computer hardware and software relating to the Accounts,
Inventory, Equipment and any other Collateral; (xi) make and adjust claims under
policies of insurance; and (xii) do all other acts and things necessary, in
Agent's determination, to fulfill such Borrowers' obligations under this
Agreement.

    The power of attorney granted hereby shall constitute a power coupled with
an interest and shall be irrevocable.

12.2  Indemnity.

    Each Borrower hereby agrees to indemnify Agent and each Lender (and each of
their Affiliates) and hold Agent and each Lender (and each of their Affiliates)
harmless from and against any liability, loss, damage, suit, action or
proceeding ever suffered or incurred by any such Person (including reasonable
attorneys fees and legal expenses) as the result of each Borrower's failure to
observe, perform or discharge Borrowers' duties hereunder. In addition, each
Borrower shall defend Agent and each Lender (and each of their Affiliates)
against and save it harmless from all claims of any Person with respect to the
Collateral (except those resulting from the gross negligence or intentional
misconduct of any such Person). Without limiting the generality of the
foregoing, these indemnities shall extend to any claims asserted against Agent
or any Lender (and each of their Affiliates) by any

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Person under any Environmental Laws by reason of Borrowers' or any other
Person's failure to comply with laws applicable to solid or hazardous waste
materials or other toxic substances. Notwithstanding any contrary provision in
this Agreement, the obligation of each Borrower under this Section 12.2 shall
survive the payment in full of the Obligations and the termination of this
Agreement.

12.3  Sale of Interest.

    None of the Borrowers may sell, assign or transfer any interest in this
Agreement, any of the other Loan Documents, or any of the Obligations, or any
portion thereof, including, without limitation, Borrowers' rights, title,
interests, remedies, powers, and duties hereunder or thereunder.

12.4  Severability.

    Wherever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.

12.5  Successors and Assigns.

    This Agreement, the Other Agreements and the Security Documents shall be
binding upon and inure to the benefit of the successors and assigns of each
Borrower, Agent and each Lender permitted under Section 11.9 hereof.

12.6  Cumulative Effect; Conflict of Terms.

    The provisions of the Other Agreements and the Security Documents are hereby
made cumulative with the provisions of this Agreement. Except as otherwise
provided in any of the other Loan Documents by specific reference to the
applicable provision of this Agreement, if any provision contained in this
Agreement is in direct conflict with, or inconsistent with, any provision in any
of the other Loan Documents, the provision contained in this Agreement shall
govern and control.

12.7  Execution in Counterparts.

    This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same instrument.

12.8  Notice.

    Except as otherwise provided herein, all notices, requests and demands to or
upon a party hereto, to be effective, shall be in writing and shall be sent by
certified or registered mail, return receipt requested, by personal delivery
against receipt, by overnight courier or by facsimile and, unless otherwise
expressly provided herein, shall be deemed to have been validly served, given,
delivered or

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received immediately when delivered against receipt, one Business Day after
deposit with an overnight courier or, in the case of facsimile notice, when
sent, addressed as follows:

If to Agent:   Fleet Capital Corporation
15260 Ventura Blvd. Suite 400
Sherman Oaks, California 91403
Attention: Loan Administration Manager
Facsimile No.: (818) 382-4291 With a copy to:   Paul, Hastings, Janofsky &
Walker LLP
555 So. Flower Street
23rd Floor
Los Angeles, California 90071
Attention: Hydee R. Feldstein, Esq.
Facsimile No.: (213) 627-0705 If to Borrowers:   Henry Company
Kimberton Enterprises, Inc.
2911 Slauson Avenue
Huntington Park, California 90255
Attention: Jeffrey A. Wahba
Facsimile No.: (323) 581-7764 With a copy to:   Munger, Tolles & Olson
355 Grand Avenue
35th Floor
Los Angeles, California 90071
Attention: Judith T. Kitano, Esq.
Facsimile No.: (213) 687-3702

or to such other address as each party may designate for itself by notice given
in accordance with this Section 12.8; provided, however, that any notice,
request or demand to or upon a Lender pursuant to subsection 3.1.1 or 4.2.2
hereof shall not be effective until received by such Lender.

12.9  Consent.

    Whenever Agent's or Majority's Lenders' consent is required to be obtained
under this Agreement, any of the Other Agreements or any of the Security
Documents as a condition to any action, inaction, condition or event, except as
otherwise specifically provided herein, Agent or Majority Lenders, as
applicable, shall be authorized to give or withhold such consent in their sole
and absolute discretion.

12.10  Credit Inquiries.

    Each Borrower hereby authorizes and permits Agent and each Lender to respond
to usual and customary credit inquiries from third parties concerning any
Borrower or any of its Subsidiaries.

12.11  Time of Essence.

    Time is of the essence of this Agreement, the Other Agreements and the
Security Documents.

12.12  Entire Agreement.

    This Agreement and the other Loan Documents, together with all other
instruments, agreements and certificates executed by the parties in connection
therewith or with reference thereto, embody the entire understanding and
agreement between the parties hereto and thereto with respect to the subject
matter hereof and thereof and supersede all prior agreements, understandings and
inducements, whether express or implied, oral or written.

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12.13  Interpretation.

    No provision of this Agreement or any of the other Loan Documents shall be
construed against or interpreted to the disadvantage of any party hereto by any
court or other governmental or judicial authority by reason of such party having
or being deemed to have structured or dictated such provision.

12.14  Confidentiality.

    Agent and each Lender shall hold all nonpublic information obtained pursuant
to the requirements of this Agreement in accordance with Agent's and such
Lender's customary procedures for handling confidential information of this
nature and in accordance with safe and sound banking practices and in any event
may make disclosure reasonably required by a prospective participant or assignee
in connection with the contemplated participation or assignment or as required
or requested by any governmental authority or representative thereof or pursuant
to legal process and shall require any such participant or assignee to agree to
comply with this Section 12.14.

12.15  GOVERNING LAW; CONSENT TO FORUM.

    THIS AGREEMENT HAS BEEN NEGOTIATED AND DELIVERED IN AND SHALL BE DEEMED TO
HAVE BEEN MADE IN LOS ANGELES, CALIFORNIA. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA; PROVIDED,
HOWEVER, THAT IF ANY OF THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION
OTHER THAN CALIFORNIA, THE LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD,
MANNER AND PROCEDURE FOR FORECLOSURE OF AGENT'S LIEN UPON SUCH COLLATERAL AND
THE ENFORCEMENT OF AGENT'S OTHER REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE
EXTENT THAT THE LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT
WITH THE LAWS OF CALIFORNIA. AS PART OF THE CONSIDERATION FOR NEW VALUE
RECEIVED, AND REGARDLESS OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF
BUSINESS OF ANY BORROWER, AGENT OR ANY LENDER, EACH BORROWER HEREBY CONSENTS AND
AGREES THAT THE SUPERIOR COURT OF LOS ANGELES COUNTY, CALIFORNIA, OR, AT AGENT'S
OPTION, THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA,
SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES
BETWEEN ANY BORROWER ON THE ONE HAND AND AGENT OR ANY LENDER ON THE OTHER HAND
PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS
AGREEMENT. EACH BORROWER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH
BORROWER HEREBY WAIVES ANY OBJECTION WHICH BORROWER MAY HAVE BASED UPON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH BORROWER AT THE ADDRESS SET FORTH
IN THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE
EARLIER OF SUCH BORROWER'S ACTUAL RECEIPT THEREOF OR 3 DAYS AFTER DEPOSIT IN THE
U.S. MAILS, PROPER POSTAGE PREPAID. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO AFFECT THE RIGHT OF AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY AGENT OR ANY
LENDER OF ANY JUDGMENT OR ORDER

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OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO
ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.

12.16  WAIVERS BY BORROWERS.

    EACH BORROWER WAIVES (i) THE RIGHT TO TRIAL BY JURY (WHICH AGENT AND EACH
LENDER HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF
ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS
OR THE COLLATERAL; (ii) PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF
PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT, MATURITY, RELEASE, COMPROMISE,
SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS,
CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY
TIME HELD BY AGENT OR ANY LENDER ON WHICH SUCH BORROWER MAY IN ANY WAY BE LIABLE
AND HEREBY RATIFIES AND CONFIRMS WHATEVER AGENT OR ANY LENDER MAY DO IN THIS
REGARD; (iii) NOTICE PRIOR TO AGENT'S TAKING POSSESSION OR CONTROL OF THE
COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO
ALLOWING AGENT TO EXERCISE ANY OF AGENT'S REMEDIES; (iv) THE BENEFIT OF ALL
VALUATION, APPRAISEMENT AND EXEMPTION LAWS; AND (v) NOTICE OF ACCEPTANCE HEREOF.
EACH BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT
TO AGENT'S AND EACH LENDER'S ENTERING INTO THIS AGREEMENT AND THAT AGENT AND
EACH LENDER IS RELYING UPON THE FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH
SUCH BORROWER. EACH BORROWER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE
FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY
WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.

12.17  Revival and Reinstatement of Obligations.

    If the incurrence or payment of the Obligations by any Borrower or the
transfer to Lenders of any property should for any reason subsequently be
declared to be void or voidable under any state or federal law relating to
creditors' rights, including provisions of the Bankruptcy Code relating to
fraudulent conveyances, preferences, or other voidable or recoverable payments
of money or transfers of property (collectively, a "Voidable Transfer"), and if
Lenders are required to repay or restore, in whole or in part, any such Voidable
Transfer, or elect to do so upon the reasonable advice of their counsel, then,
as to any such Voidable Transfer, or the amount thereof that Lenders are
required or elect to repay or restore, and as to all reasonable costs, expenses,
and attorneys fees of Lenders related thereto, the liability of Borrowers
automatically shall be revived, reinstated, and restored and shall exist as
though such Voidable Transfer had never been made.

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    IN WITNESS WHEREOF, this Agreement has been duly executed on the day and
year specified at the beginning of this Agreement.

 
 
HENRY COMPANY,
a California corporation
 
 

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    Name:   Jeffrey A. Wahba         Title:   Chief Financial Officer    

    KIMBERTON ENTERPRISES, INC.,
a Delaware corporation
 
 

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    Name:   Gary Spence         Title:   Vice President and Assistant Treasurer
   

 
 
FLEET CAPITAL CORPORATION,
a Rhode Island corporation, as Agent and as a Lender
 
 

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    Name:   Matthew R. Van Steenhuyse         Title:   Senior Vice President    
    Revolving Loan Commitment:   $16,428,500         Revolving Loan Percentage:
  65.714%         Capex Loan Commitment:   $6,571,400         Capex Loan
Percentage:   65.714%    

 
 
LASALLE BUSINESS CREDIT, INC.,
a Delaware corporation, as a Lender
 
 

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    Name:   John S. Eby         Title:   Vice President    

–55–

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    Revolving Loan Commitment:   $8,571,500         Revolving Loan Percentage:  
34.286%         Capex Loan Commitment:   $3,428,600         Capex Loan
Percentage:   34.286%    

    The following Person is a signatory to this Agreement in its capacity as a
shareholder and solely with respect to Sections 7.2, 8.4.1 and 8.4.2 of this
Agreement.

 
 
WARNER W. HENRY TRUST
 
 
By:
 
 
 
         

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    Name:   Warner W. Henry         Title:   Trustee    

    The following Person is a signatory to this Agreement solely with respect to
Section 8.4.2 of this Agreement.

 
 

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    Warner W. Henry

    The following Persons are signatories to this Agreement in their capacities
as shareholders and solely with respect to Sections 7.2 and 8.4.1 of this
Agreement.

 
 
WILLIAM WARNER HENRY TRUST
 
 
By:
 
 
 
         

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    Name:   Terrill M. Gloege         Title:   Trustee    
 
 
CATHERINE ANNE HENRY TRUST
 
 
By:
 
 
 
         

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    Name:   Terrill M. Gloege         Title:   Trustee    

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MICHAEL ANDREW HENRY TRUST
 
 
By:
 
 
 
         

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    Name:   Terrill M. Gloege         Title:   Trustee    

 
 

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    Frederick H. Muhs

 
 

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    Joseph T. Mooney, Jr.

 
 

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    Carol F. Henry

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APPENDIX A

    GENERAL DEFINITIONS

When used in the Second Amended and Restated Financing and Security Agreement
(this "Agreement") dated as of August  , 2001, by and among Fleet Capital
Corporation, individually and as Agent, the other financial institutions which
are or become parties thereto and the Borrowers, (a) the terms Account,
Certificated Security, Chattel Paper, Commercial Tort Claims, Electronic Chattel
Paper, Letter-of-Credit Rights, Payment Intangibles, Software, Supporting
Obligations and Tangible Chattel Paper, Deposit Account, Document, Financial
Asset, Fixture, Goods, Instrument, Inventory, Investment Property, Security,
Proceeds, Security Entitlement and Uncertificated Security have the respective
meanings assigned thereto under the Code (as defined below); (b) all terms
indicating Collateral having the meanings assigned thereto under the Code shall
be deemed to mean such Property, whether now owned or hereafter created or
acquired by any Borrower or in which any Borrower now has or hereafter acquires
any interest; (c) capitalized terms which are not otherwise defined shall have
the respective meanings assigned thereto in said Agreement; and (d) the
following terms shall have the following meanings (terms defined in the singular
to have the same meaning when used in the plural and vice versa):

    Account Debtor—any Person who is or may become obligated under or on account
of an Account, Contract Right, Chattel Paper or General Intangible of any
Borrower or its Subsidiaries.

    Affiliate—with respect to any Person means any other Person: (i) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Person designated;
(ii) which beneficially owns or holds 5% or more of any class of the Voting
Stock (or in the case of a designated Person which is not a corporation, 5% or
more of the equity interest) in such designated Person; (iii) which beneficially
owns or holds 5% or more of the Voting Stock (or in the case of a designated
Person which is not a corporation, 5% or more of the equity interest) of which
is beneficially owned or held by a Subsidiary of such designated Person, or
(iv) who is an officer or director of (a) such designated Person;, (b) of any
Subsidiary of such designated Person or (c) of such designated Person described
in clause (i) above. Without limiting the generality of the foregoing; with
respect to the Borrowers, the term "Affiliate" shall include Warner W. Henry,
the Henry Trust, Henry II Company, Central Coast Wine Company, Frederick H.
Muhs, Joseph T. Mooney, Jr. and Carol F. Henry and the immediate family members,
spouses and lineal descendants of individuals who are Affiliates of any
Borrower.

    Agent—Fleet Capital Corporation in its capacity as agent for Lenders under
the Agreement and any successor in that capacity appointed pursuant to
subsection 11.11.

    Aggregate Percentage—with respect to each Lender, the percentage equal to
the quotient of (i) such Lender's Loan Commitment divided by (ii) the aggregate
of all Loan Commitments.

    Agreement—the Second Amended and Restated Financing and Security Agreement
referred to in the first sentence of this Appendix A, all Exhibits and Schedules
thereto and this Appendix A, as each of the same may be amended from time to
time.

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    Applicable Margin—The percentages set forth below with respect to the Base
Rate Revolving Portion, the Base Rate Capex A Portion, the Base Rate Capex B
Portion, the LIBOR Revolving Portion, the LIBOR Capex A Portion and the LIBOR
Capex B Portion:

Base Rate Revolving Portion   0 % Base Rate Capex A Portion   0 % Base Rate
Capex B Portion   0 % Base Rate Capex C Portion   0 % LIBOR Revolving Portion  
2.75 % LIBOR Capex A Portion   2.75 % LIBOR Capex B Portion   2.75 % LIBOR Capex
C Portion   2.75 %

    Assignment of Life Insurance—those certain assignments of life insurance as
collateral dated the date hereof from the Borrower for the benefit of Lenders,
which Assignments of Life Insurance assign to the Lender all of the right, title
and interest of the Borrowers in, and to, the Life Insurance Policies, as those
assignments are amended, restated, reissued, supplemented or otherwise modified
in writing at any time and from time to time.

    Availability—the amount of additional money which Borrowers are entitled to
borrow from time to time as Revolving Credit Loans, such amount being the
difference between (a) the Borrowing Base minus (b) the sum of the principal
amount of Revolving Credit Loans then outstanding (plus any amounts which Agent
or any Lender may have paid for the account of Borrowers pursuant to any of the
Loan Documents and which have not been reimbursed by Borrowers or charged as a
Revolving Credit Loan), plus the LC Amount, plus the amount of all reserves. If
the amount outstanding is equal to or greater than the Borrowing Base,
Availability is 0.

    Bakor—Bakor, Inc., a Canadian corporation.

    Bakor Facility—that certain credit facility between Bakor and National Bank
of Canada as evidenced by that certain Amended and Restated Credit Agreement
dated as of October 1, 1999.

    Bank—Fleet National Bank.

    Base Rate—the rate of interest announced or quoted by Bank from time to time
as its prime rate for commercial loans, whether or not such rate is the lowest
rate charged by Bank to its most preferred borrowers; and, if such prime rate
for commercial loans is discontinued by Bank as a standard, a comparable
reference rate designated by Bank as a substitute therefor shall be the Base
Rate.

    Base Rate Portion—a Base Rate Capex Portion or a Base Rate Revolving
Portion.

    Base Rate Revolving Portion—that portion of the Revolving Credit Loans that
is not subject to a LIBOR Option.

    Base Rate Capex A Portion—that portion of Capex Loan A that is not subject
to a LIBOR Option.

    Base Rate Capex B Portion—that portion of Capex Loan B that is not subject
to a LIBOR Option.

    Base Rate Capex C Portion—that portion of Capex Loan C that is not subject
to a LIBOR Option.

    Base Rate Capex Portion—a Base Rate Capex A Portion, a Base Rate Capex B
Portion and/or a Base Rate Capex C Portion.

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    Borrowing Base—as at any date of determination thereof, an amount equal to
the lesser of:

(i)the Revolving Credit Maximum Amount; or

(ii)an amount equal to:

    (a) 85% of the net amount of Eligible Accounts outstanding at such date;
plus

    (b) the lesser of (1) $750,000 and (2) Eligible Foreign Accounts; plus

    (c) the lesser of (1) $10,000,000 and (2) the sum of (i) 60% of the value of
Eligible Finished Inventory at such date, plus (ii) 45% of Eligible Raw
Materials Inventory at such date, plus (iii) the lesser of (x) $150,000 and
(y) 60% of Eligible In Transit Inventory at such date, plus (iv) the lesser of
(aa) $600,000 and (bb) 60% of Eligible Private Label Goods Inventory; plus

    (d) 95% of the aggregate cash surrender value immediately available to Agent
as assignee of the Eligible Life Insurance Policies.

    For purposes hereof, (1) the net amount of Eligible Accounts at any time
shall be the face amount of such Eligible Accounts less any and all returns,
rebates, discounts (which may, at Agent's option, be calculated on shortest
terms), credits, allowances or excise taxes of any nature at any time issued,
owing, claimed by Account Debtors, granted, outstanding or payable in connection
with such Accounts at such time and (2) the amount of Eligible Finished
Inventory and Eligible Raw Materials Inventory shall be determined on a
first-in, first-out, lower of cost or market basis in accordance with GAAP.

    Borrowing Base Certificate—a certificate by a responsible officer of
Borrowers in the form of Exhibit 8.1.4 and otherwise in form and substance
satisfactory to Agent

    Business Day—(i) when used with respect to the LIBOR Option, shall mean a
day on which dealings may be effected in deposits of United States Dollars in
the London interbank foreign currency deposits market and on which Agent or its
affiliate is conducting and other banks may conduct business in London, England
and in the State of California and (ii) when used with respect to any other
provision of the Agreement, any day excluding Saturday, Sunday and any day which
is a legal holiday under the laws of the State of California or is a day on
which banking institutions located in such state are closed or any day which is
a legal holiday under the laws of the state in which the Bank or any Lender is
located.

    Capex Loans—Capex Loan A, Capex Loan B and Capex Loan C.

    Capex Loan A—the Loans described in Section 1.3.1.

    Capex Loan B—the Loans described in Section 1.3.2.

    Capex Loan C—the Loans described in Section 1.3.3.

    Capex Loan A Commitment—with respect to any Lender, the amount of such
Lender's Capex Loan A Commitment as set forth below such Lender's name on the
signature pages hereof, minus all Capex Loan A payments made to such Lender.

    Capex Loan B Commitment—with respect to any Lender, the sum of the amount of
such Lender's Capex Loan B Commitment as set forth below such Lender's name on
the signature pages hereof, minus either (a) for purposes of determining
borrowing availability under Section 1.3.2, all Capex Loan B advances made by
such Lender, whether or not repaid, or (b) for all other purposes, all Capex
Loan B payments made to such Lender.

    Capex Loan C Commitment—with respect to any Lender, the sum of the amount of
such Lender's Capex Loan C Commitment as set forth below such Lender's name on
the signature pages hereof, minus either (a) for purposes of determining
borrowing availability under Section 1.3.3, all Capex

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Loan C advances made by such Lender, whether or not repaid, or (b) for all other
purposes, all Capex Loan C payments made to such Lender.

    Capex Loan Commitments—the Capex Loan A Commitments, the Capex Loan B
Commitments, and the Capex Loan C Commitments.

    Capex Loan A Notes—the Secured Promissory Notes to be executed by Borrowers
on or about the Closing Date in favor of each applicable Lender to evidence
Capex Loan A, which shall be in the form of Exhibit 1.3A to the Agreement,
together with any replacement or successor notes therefor.

    Capex Loan B Notes—the Secured Promissory Notes to be executed by Borrowers
on or after the Closing Date in favor of each applicable Lender to evidence
Capex Loan B, which shall be in the form of Exhibit 1.3B to the Agreement,
together with any replacement or successor notes therefor.

    Capex Loan C Notes—the Secured Promissory Notes to be executed by Borrowers
on or after the Closing Date in favor of each applicable Lender to evidence
Capex Loan C, which shall be in the form of Exhibit 1.3C to the Agreement,
together with any replacement or successor notes therefor.

    Capex Loan Notes—the Capex Loan A Notes, the Capex Loan B Notes and the
Capex Loan C Notes.

    Capex Loan Percentage—means the Capex Loan A Percentage, the Capex Loan B
Percentage or the Capex Loan C Percentage, as the case may be.

    Capex Loan A Percentage—with respect to each Lender, the percentage equal to
the quotient of such Lender's Capex Loan A Commitment divided by the aggregate
of all Capex Loan A Commitments.

    Capex Loan B Percentage—with respect to each Lender, the percentage equal to
the quotient of such Lender's Capex Loan B Commitment divided by the aggregate
of all Capex Loan B Commitments.

    Capex Loan C Percentage—with respect to each Lender, the percentage equal to
the quotient of such Lender's Capex Loan C Commitment divided by the aggregate
of all Capex Loan C Commitments.

    Capital Expenditures—expenditures made or liabilities incurred for the
acquisition of any fixed assets or improvements, replacements, substitutions or
additions thereto which have a useful life of more than one year, including the
total principal portion of Capitalized Lease Obligations.

    Capitalized Lease Obligation—any Indebtedness represented by obligations
under a lease that is required to be capitalized for financial reporting
purposes in accordance with GAAP.

    Cash—all cash, currency, checks, cashier's checks, money orders or other
cash equivalents.

    Closing Date—the date on which all of the conditions precedent in Section 9
of the Agreement are satisfied and the initial Loan is made or the initial
Letter of Credit or LC Guaranty is issued under the Agreement.

    Code—the Uniform Commercial Code as adopted and in force in the State of
California, as from time to time in effect.

    Collateral—all of the Property and interests in Property described in
Section 5 of the Agreement, and all other Property and interests in Property
that now or hereafter secure the payment and performance of any of the
Obligations.

    Commitment Letter—that certain letter agreement among Borrowers, Agent and
Lenders dated as of June 20, 2001.

    Compliance Certificate—a certificate by a responsible officer of Borrowers
in the form of Exhibit 8.1.3.

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    Computer Hardware and Software—all of each Borrower's rights (including
rights as licensee and lessee) with respect to (i) computer and other electronic
data processing hardware, including all integrated computer systems, central
processing units, memory units, display terminals, printers, computer elements,
card readers, tape drives, hard and soft disk drives, cables, electrical supply
hardware, generators, power equalizers, accessories, peripheral devices and
other related computer hardware; (ii) all Software and all software programs
designed for use on the computers and electronic data processing hardware
described in clause (i) above, including all operating system software,
utilities and application programs in any form (source code and object code in
magnetic tape, disk or hard copy format or any other listings whatsoever);
(iii) any firmware associated with any of the foregoing; and (iv) any
documentation for hardware, Software and firmware described in clauses (i),
(ii) and (iii) above, including flow charts, logic diagrams, manuals,
specifications, training materials, charts and pseudo codes.

    Consolidated—the consolidation in accordance with GAAP of the accounts or
other items as to which such term applies.

    Contract Right—any right of any Borrower to payment under a contract for the
sale or lease of goods or the rendering of services, which right is at the time
not yet earned by performance.

    Current Assets—at any date means the amount at which all of the current
assets of a Person would be properly classified as current assets shown on a
balance sheet at such date in accordance with GAAP.

    Default—an event or condition the occurrence of which would, with the lapse
of time or the giving of notice, or both, become an Event of Default.

    Default Rate—as defined in subsection 2.1.2 of the Agreement.

    Derivative Obligations—every obligation of a Person under any forward
contract, futures contract, swap, option or other financing agreement or
arrangement (including, without limitation, caps, floors, collars and similar
agreement), the value of which is dependent upon interest rates, currency
exchange rates, commodities or other indices.

    Distribution—in respect of any Person means and includes: (i) the payment of
any dividends or other distributions on Securities (except distributions in such
Securities) and (ii) the redemption or acquisition of Securities of such Person,
as the case may be, unless made contemporaneously from the net proceeds of the
sale of Securities.

    Dominion Account—a special bank account or accounts of Agent established by
Borrowers pursuant to subsection 6.2.4 of the Agreement at the Bank and over
which Agent shall have sole and exclusive access and control for withdrawal
purposes.

    Eligible Account—an Account arising in the ordinary course of the business
of Borrowers from the sale of goods or rendition of services which Agent, in its
reasonable credit judgment, deems to be an Eligible Account. Without limiting
the generality of the foregoing, no Account shall be an Eligible Account if:

    (i)  it arises out of a sale made or services rendered by any Borrower to a
Subsidiary of Borrower or an Affiliate (including without limitation, Bakor,
Henry II Company, and Central Coast Wine Company) of any Borrower or to a Person
controlled by an Affiliate of any Borrower or to an employee, shareholder,
officer or director, or

    (ii) it remains unpaid more than 60 days after the due date or more than
90 days after the original invoice date; or

    (iii) (a) except as otherwise specified in this paragraph, it is owed by any
Account Debtor and the total unpaid Accounts of such Account Debtor and such
Account Debtor's Affiliates exceed

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10% of the net amount of all Eligible Accounts but only to the extent of such
excess; or (b) it is owed by Lowe's Companies, Inc. and the total unpaid
Accounts of Lowe's Companies, Inc. and its Affiliates exceed 20% of the net
amount of all Eligible Accounts, but only to the extent of such excess, or
(c) during the months of December, January, February, March, April, May, June
and July, it is owed by The Home Depot, Inc. and the total unpaid Accounts of
The Home Depot, Inc. and its Affiliates exceed 25% of the net amount of all
Eligible Accounts, but only to the extent of such excess, or (d) during the
months of August, September, October and November it is owed by The Home
Depot, Inc. and the total unpaid Accounts of The Home Depot, Inc. and its
Affiliates exceed 35% of the net amount of all Eligible Accounts, but only to
the extent of such excess;

    (iv) any covenant, representation or warranty contained in the Agreement
with respect to such Account has been breached; or

    (v) the Account Debtor is also a creditor or supplier of Borrower or any
Subsidiary (including Bakor) of any Borrower, or the Account Debtor has disputed
liability with respect to such Account, or the Account Debtor has made any claim
with respect to any other Account due from such Account Debtor to any Borrower
or any Subsidiary of any Borrower, or the Account otherwise is or may become
subject to right of setoff by the Account Debtor, provided, that any such
Account shall be eligible to the extent such amount thereof exceeds such
contract, dispute, claim, setoff or similar right; or

    (vi) the Account Debtor has commenced a voluntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or made an assignment
for the benefit of creditors, or a decree or order for relief has been entered
by a court having jurisdiction in the premises in respect of the Account Debtor
in an involuntary case under the federal bankruptcy laws, as now constituted or
hereafter amended, or any other petition or other application for relief under
the federal bankruptcy laws, as now constituted or hereafter amended, has been
filed against the Account Debtor, or if the Account Debtor has failed, suspended
business, ceased to be Solvent, or consented to or suffered a receiver, trustee,
liquidator or custodian to be appointed for it or for all or a significant
portion of its assets or affairs; or

    (vii)  it arises from a sale made or services rendered to an Account Debtor
outside the United States,

    (viii) (a) it arises from a sale to the Account Debtor on a bill-and-hold or
consignment basis; or (b) it is subject to a reserve established by any Borrower
or any of its Subsidiaries for potential returns or refunds or extended warranty
claims, to the extent of such reserve; or

    (ix) the Account Debtor is the United States of America or any department,
agency or instrumentality thereof, unless any Borrower or any such Subsidiary,
as applicable, assigns its right to payment of such Account to Agent, in a
manner satisfactory to Agent, in its sole judgment, so as to comply with the
Assignment of Claims Act of 1940 (31 U.S.C. §203 et seq., as amended); or

    (x) it is not at all times subject to Agent's duly perfected, first priority
security interest and to no other Lien that is not a Permitted Lien; or

    (xi) the goods giving rise to such Account have not been delivered to and
accepted by the Account Debtor or the services giving rise to such Account have
not been performed by any Borrower and accepted by the Account Debtor or the
Account otherwise does not represent a final sale; or

    (xii)  the Account is evidenced by chattel paper or an instrument of any
kind, or has been reduced to judgment; or

    (xiii) any Borrower or a Subsidiary of any Borrower has made any agreement
with the Account Debtor for any deduction therefrom (including, without
limitation, any deductions for

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volume rebates or co-op advertising credits) to the extent of such deduction or
the accrual of such deduction in accordance with GAAP; or

    (xiv) more than 50% of the Accounts owing from the Account Debtor are not
Eligible Accounts hereunder except solely by reason of (iii) above.

    Eligible Finished Inventory—all Inventory of Borrowers consisting of first
quality goods held for sale in the ordinary course of Borrowers' business which
satisfies each of the Inventory Eligibility Requirements.

    Eligible Foreign Accounts—an Account arising in the ordinary course of
business of Borrowers from the sale of goods or rendition of services which
(1) otherwise constitutes an Eligible Account; and (2) arises from a sale made
or services rendered to an Account Debtor outside the United States and such
sale is on letter of credit, guaranty or acceptance terms, in each case
acceptable to Agent in its sole judgment.

    Eligible In Transit Inventory—Inventory of Borrowers which (1) is in-transit
between facilities owned by Borrowers or those leased facilities listed on
Exhibit 7.1.28; and (2) otherwise constitutes Eligible Finished Inventory.

    Eligible Inventory—all Eligible Finished Inventory and Eligible Raw
Materials Inventory.

    Eligible Life Insurance Policies—at any time of determination thereof, the
collective reference to each Life Insurance Policy covered by the Assignments of
Life Insurance provided such Life Insurance Policy conforms and continues to
conform to the following criteria in Agent's reasonable credit judgment:

(a)the Life Insurance Policy arose in the ordinary course of the Borrowers'
business from a bona fide transaction between Borrowers and the Life Insurance
Policy issuer;

(b)the Life Insurance Policy is an issued, valid, legally enforceable obligation
of the Life Insurance Policy issuer, is in full force and effect and requires no
further act on the part of any Person under any circumstances (other than the
payment of premiums) to make cash surrender value payable at any time, and the
death benefits and other benefits payable as set forth in the Life Insurance
Policy, by the Life Insurance Policy issuer;

(c)the Life Insurance Policy issuer has not rejected or refused to honor, or
otherwise notified Borrowers or Agent of any dispute concerning with respect to,
the Life Insurance Policy;

(d)all premiums have been fully paid when due, without giving effect to and
without relying on any grace period;

(e)the Life Insurance Policy is not subject to any present or known contingent
(and no facts exist which are the basis for any future) offset, claim, deduction
or counterclaim, dispute or defense in law or equity on the part of the issuer
including, without limitation, those arising on account of a breach of any
express or implied representation or warranty;

(f)the Life Insurance Policy issuer is not a Subsidiary or Affiliate of
Borrowers or an employee, officer, director of shareholder of Borrowers or any
Subsidiary or Affiliate of Borrowers;

(g)the Life Insurance Policy issuer is not incorporated or primarily conducting
business or otherwise located in any jurisdiction outside of the United States
of America;

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(h)the Life Insurance Policy issuer with respect to such Life Insurance Policy
is not insolvent or the subject of any receivership, conservatorship, bankruptcy
or insolvency proceedings of any kind or of any other similar proceeding or
action, threatened or pending;

(i)the Life Insurance Policy issuer is not the United States of America or any
department, agency, state or other instrumentality thereof.

(j)Borrowers are not indebted in any manner to the Life Insurance Policy issuer
(as creditor, lessor, supplier otherwise), with the exception of premiums which
are not past due;

(k)the title of Borrowers to the Life Insurance Policy is absolute and is not
subject to any prior assignment, claim, Lien, or security interest, except
Permitted Liens;

(l)Borrowers have the full and unqualified right and power to assign and grant a
security interest in, and Lien on, the Life Insurance Policy to Agent as
security and collateral for the payment of the Obligations;

(m)the Life Insurance Policy does not by its terms nor by operation of
applicable laws, forbid or make void or unenforceable the applicable Assignment
of Life Insurance as Collateral;

(n)the Life Insurance Policy is subject to the Lien and assignment in favor of
Agent, which Lien and assignment is perfected as to the Life Insurance Policy by
the filing of the applicable Assignment of Life Insurance with the Life
Insurance Policy issuer and constitutes a first priority security interest and
Lien and a first assignment;

(o)the Life Insurance Policy issuer has acknowledged the applicable Assignment
of Life Insurance as collateral;

(p)the Life Insurance Policy issuer has not loaned any money against the Life
Insurance Policy; and

(q)any Life Insurance Policy which is not excluded for reasons addressed by
items (a) through (o) above, but which Agent in its sole discretion has deemed
to be ineligible.

    Eligible Private Label Goods—means private label goods produced by Borrowers
which (1) is produced in connection with a written purchase order, (2) shipped
within thirty (30) days of the production date and (3) otherwise constitutes
Eligible Finished Inventory.

    Eligible Production Equipment—means and includes any equipment which is
purchased after the Closing Date, fully operational and purchased after the
Closing Date and acceptable to Agent in its reasonable credit judgment; but in
no event shall any computer equipment or hardware, computer software, telephones
and/or telephone systems constitute Eligible Production Equipment.

    Eligible Raw Materials Inventory—all Inventory of Borrowers consisting of
asphalt, mineral spirits, various fibers, resins, polyester, glass matting and
all other raw materials used in the course of Borrowers' business for the
manufacture of finished goods which satisfies each of the Inventory Eligibility
Requirements.

    Environmental Indemnity Agreement—the Environmental Indemnity Agreement
which is to be executed on the Closing Date by Borrowers, in form and substance
satisfactory to Agent.

    Environmental Laws—all federal, state and local laws, rules, regulations,
ordinances, orders and consent decrees relating to pollution or the protection
of the environment.

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    Equipment—all "equipment" as defined in the Code including, without
limitation, all machinery, apparatus, equipment, fittings, furniture, fixtures,
motor vehicles, data processing and computer equipment, rolling stock, trailers
and other tangible personal Property (other than Inventory) and all including
embedded software and peripheral equipment and supporting information relating
to any of the foregoing, of every kind and description used in the operations of
Borrowers or owned by Borrowers or in which Borrowers has an interest, whether
now owned or hereafter acquired by Borrowers and wherever located, and all
parts, accessories and special tools and all increases and accessions thereto
and substitutions and replacements therefor.

    ERISA—the Employee Retirement Income Security Act of 1974, as amended, and
all rules and regulations from time to time promulgated thereunder.

    Event of Default—as defined in Section 10.1 of the Agreement.

    Excess Cash Flow—with respect to any fiscal year of Borrowers, the amount
equal to the sum of net income plus(a) depreciation, amortization and other
non-cash charges deducted in determining net income minus the sum of
(b) regularly scheduled payments of principal on Indebtedness for Money
Borrowed, and (c) Capital Expenditures which are not financed for such fiscal
year.

    GAAP—generally accepted accounting principles in the United States of
America in effect from time to time.

    General Intangibles—all "general intangibles" as defined in the Code
including, without limitation, all payment intangibles, all customer lists,
interests in partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and
records, goodwill, all rights and claims in or under insurance policies
(including insurance for fire, damage, loss and casualty, whether covering
personal property, real property, tangible rights or intangible rights, all
liability, life, key man and business interruption insurance, and all unearned
premiums), uncertificated securities, choices in action, deposit, checking and
other bank accounts, rights to receive tax refunds and other payments, rights to
receive for pledged Securities and Investment Property, rights of
indemnification, all books and records, correspondence, credit files, invoices
and other papers, including without limitation, all tapes, cards, computer runs
and other papers and documents whether now owned or hereafter created or
acquired by Borrower.

    Guarantors—any Person who now or hereafter guarantees payment or performance
of the whole or any part of the Obligations.

    Guaranty Agreements—any continuing guaranty agreement and other guaranty in
form and substance satisfactory to Agent, hereafter executed by any Guarantor.

    Henry Trust—Warner W. Henry Living Trust, dated December 4, 1982, Warner H.
Henry, trustee.

    Huntington Park Property—has the meaning specified in subsection 8.2.9(v).

    Indebtedness—as applied to a Person means, without duplication:

    (i)  all items which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a balance sheet
of such Person as at the date as of which Indebtedness is to be determined,
including, without limitation, Capitalized Lease Obligations;

    (ii) all obligations of other Persons which such Person has guaranteed;

    (iii) all reimbursement obligations in connection with letters of credit or
letter of credit guaranties issued for the account of such Person;

    (iv) Derivative Obligations; and

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    (v) in the case of Borrowers (without duplication), the Obligations.

    Indenture—that certain Indenture dated as of April 22, 1998 (as amended,
supplemented, or otherwise modified from time to time between Henry and the
Trustee.

    Insurance Policies—all insurance policies owned by Borrowers or to which
Borrowers are a party.

    Intellectual Property—all past, present and future: trade secrets, know-how
and other proprietary information; trademarks, internet domain names, service
marks, trade dress, trade names, business names, designs, logos, slogans (and
all translations, adaptations, derivations and combinations of the foregoing)
indicia and other source and/or business identifiers, and the goodwill of the
business relating thereto and all registrations or applications for
registrations which have heretofore been or may hereafter be issued thereon
throughout the world; copyrights (including copyrights for computer programs)
and copyright registrations or applications for registrations which have
heretofore been or may hereafter be issued throughout the world and all tangible
property embodying the copyrights, unpatented inventions (whether or not
patentable); patent applications and patents; industrial design applications and
registered industrial designs; license agreements related to any of the
foregoing and income therefrom; books, records, writings, computer tapes or
disks, flow diagrams, specification sheets, computer software, source codes,
object codes, executable code, data, databases and other physical
manifestations, embodiments or incorporations of any of the foregoing; the right
to sue for all past, present and future infringements of any of the foregoing;
all other intellectual property; and all common law and other rights throughout
the world in and to all of the foregoing.

    Intellectual Property Security Agreement—that certain Amended and Restated
Intellectual Property Security Agreement which is to be executed on the Closing
Date by each Borrower, in form and substance satisfactory to Agent.

    Intercompany Notes—has the meaning specified in Section 8.2.3 (ix) of the
Agreement.

    Inventory Eligibility Requirements—such Inventory of Borrowers (other than
packaging materials and supplies, tooling, samples and literature) which Agent,
in its reasonable judgment, deems to be Eligible Inventory. Without limiting the
generality of the foregoing, no Inventory shall be Eligible Inventory if:

    (i)  it is not raw materials which are readily marketable in their current
form or it is not finished goods; or

    (ii) it is work-in-process; or

    (iii) it is not in good, new and saleable condition; or

    (iv) it is slow-moving, obsolete or unmerchantable; or

    (v) it does not meet all standards imposed by any applicable governmental
agency or authority; or

    (vi) it does not conform in all respects to any covenants, warranties and
representations set forth in the Agreement; or

    (vii)  it is not at all times subject to Agent's duly perfected, first
priority security interest and no other Lien except a Permitted Lien; or

    (viii) it is located outside the United States or it is located in Alabama;
or

    (ix) it is not situated at a location in compliance with the Agreement,
provided that Inventory situated at a domestic location not owned by Borrowers
will be Eligible Inventory only if (a) Agent has received a satisfactory
landlord's agreement or bailee letter, as applicable, with respect to such
domestic location and (b) the Inventory located at such domestic location has a
book value of $50,000.00 or more; or

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    (x) it is in transit unless it satisfies the requirements of Eligible In
Transit Inventory; or

    (xi) it consists of goods returned or rejected by any Borrower's customers;
or

    (xii)  it is used for demonstration purposes; or

    (xiii) it is damaged or reclaimed; or

    (xiv)  it is private label goods produced by Borrowers; or

    (xv)  it is lithographed pails devoid of product, or pre-printed cartridges;
or

    (xvi)  it is in unlabeled pails or unlabeled containers, including but not
limited to brite stock; or

    (xvii) it consists of goods consigned or on a bill-and-hold basis; or

    (xviii) it is not otherwise acceptable to Agent in its sole judgment.

    Kimberton Property—has the meaning specified in subsection 8.2.9(v).

    LC Amount—at any time, the aggregate undrawn face amount of all Letters of
Credit and LC Guaranties then outstanding.

    LC Guaranty—any guaranty pursuant to which Agent or any Affiliate of Agent
shall guaranty the payment or performance by any Borrower of its reimbursement
obligation under any letter of credit.

    LC Obligations—Any Obligations that arise from any draw against any Letter
of Credit or against any Letter of Credit supported by an LC Guaranty.

    Legal Requirement—any requirement imposed upon Agent or any Lender by any
law of the United States of America or the United Kingdom or by any regulation,
order, interpretation, ruling or official directive (whether or not having the
force of law) of the Federal Reserve Board, the Bank of England or any other
board, central bank or governmental or administrative agency, institution or
authority of the United States of America, the United Kingdom or any political
subdivision of either thereof.

    Letter of Credit—any standby or documentary letter of credit issued by Agent
or any Affiliate of Agent for the account of Borrowers.

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    LIBOR Capex A Portion—that portion of Capex Loan A specified in a LIBOR
Request which is not less than $500,000 and is an integral multiple of $100,000,
which does not exceed the outstanding balance of Capex Loan A not already
subject to a LIBOR Option and, which, as of the date of the LIBOR Request
specifying such LIBOR Capex A Portion, has met the conditions for basing
interest on the LIBOR Rate in Section 2.3 of the Agreement and the LIBOR Period
of which was commenced and not terminated.

    LIBOR Capex B Portion—that portion of Capex Loan B specified in a LIBOR
Request which is not less than $500,000 and is an integral multiple of $100,000,
which does not exceed the outstanding balance of Capex Loan B not already
subject to a LIBOR Option and, which, as of the date of the LIBOR Request
specifying such LIBOR Capex B Portion, has met the conditions for basing
interest on the LIBOR Rate in Section 2.3 of the Agreement and the LIBOR Period
of which was commenced and not terminated.

    LIBOR Capex C Portion—that portion of Capex Loan C specified in a LIBOR
Request which is not less than $500,000 and is an integral multiple of $100,000,
which does not exceed the outstanding balance of Capex Loan C not already
subject to a LIBOR Option and, which, as of the date of the LIBOR Request
specifying such LIBOR Capex C Portion, has met the conditions for basing
interest on the LIBOR Rate in Section 2.3 of the Agreement and the LIBOR Period
of which was commenced and not terminated.

    LIBOR Capex Portion—a LIBOR Capex A Portion, a LIBOR Capex B Portion, and/or
a LIBOR Capex C Portion.

    LIBOR Interest Payment Date—the first day of each calendar month during and
immediately following the applicable LIBOR Period.

    LIBOR Option—the option granted pursuant to Section 2.3 of the Agreement to
have the interest on all or any portion of the principal amount of the Revolving
Loans or the Capex Loans based on a LIBOR Rate.

    LIBOR Period—any period of 1 month, 2 months, 3 months or 6 months
commencing on a Business Day, selected as provided in subsection 2.3(i);
provided, that (i) no LIBOR Period shall extend beyond the last day of the Term,
unless Borrowers and Lenders have agreed to an extension of the Term beyond the
expiration of the LIBOR Period in question; and (ii) with respect to any LIBOR
Capex Portion, no applicable LIBOR Period shall extend beyond the scheduled
installment payment date for such LIBOR Capex Portion. If any LIBOR Period so
selected shall end on a date that is not a Business Day, such LIBOR Period shall
instead end on the next preceding or succeeding Business Day as determined by
Agent in accordance with the then current banking practice in London; provided,
that Borrowers shall not be required to pay double interest, even though the
preceding LIBOR Period ends and the new LIBOR Period begins on the same day.
Each determination by Agent of the LIBOR Period shall, in the absence of
manifest error, be conclusive.

    LIBOR Portion—a LIBOR Revolving Portion or a LIBOR Capex Portion.

    LIBOR Rate—with respect to any LIBOR Portion for the related LIBOR Period,
an interest rate per annum (rounded upwards, if necessary, to the next higher
1/16 of 1%) equal to the product of (i) the Base LIBOR Rate (as hereinafter
defined) multiplied by (ii) Statutory Reserves. For purposes of this definition,
the term "Base LIBOR Rate" shall mean the rate (rounded upwards, if necessary,
to the next higher 1/16 of 1%) at which deposits of U.S. dollars approximately
equal in principal amount to the LIBOR Portion specified in the applicable LIBOR
Request are offered to Agent or Agent's affiliate by prime banks in the London
interbank foreign currency deposits market at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such LIBOR Period, for
delivery on the first day of such LIBOR Period. Each determination by Agent of
any LIBOR Rate shall, in the absence of manifest error, be conclusive.

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    LIBOR Request—a notice in writing from Borrowers to Agent requesting that
interest on all or any portion of a Revolving Credit Loan or all or any portion
of a Capex Loan be based on the LIBOR Rate, specifying: (i) the first day of the
LIBOR Period; (ii) the length of the LIBOR Period consistent with the definition
of that term; and (iii) the dollar amount of the LIBOR Revolving Portion or the
LIBOR Capex Portion, consistent with the definitions of such terms.

    LIBOR Revolving Portion—that portion of the Revolving Credit Loans specified
in a LIBOR Request (including any portion of Revolving Credit Loans which is
being borrowed by Borrower concurrently with such LIBOR Request) which is not
less than $1,000,000 and is an integral multiple of $100,000, which does not
exceed the outstanding balance of Revolving Credit Loans not already subject to
a LIBOR Option and, which, as of the date of the LIBOR Request specifying such
LIBOR Revolving Portion, has met the conditions for basing interest on the LIBOR
Rate in Section 2.3 of the Agreement and the LIBOR Period of which was commenced
and not terminated.

    Lien—any interest in Property securing an obligation owed to, or a claim by,
a Person other than the owner of the Property, whether such interest is based on
common law, statute or contract. The term "Lien" shall also include rights of
seller under conditional sales contracts or title retention agreements,
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
affecting Property. For the purpose of the Agreement, Borrowers shall be deemed
to be the owner of any Property which it has acquired or holds subject to a
conditional sale agreement or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for security
purposes.

Life Insurance Policies—all the policies set forth on Exhibit 7.1.26.

    Loan Account—the loan account established on the books of Agent pursuant to
Section 3.6 of the Agreement.

    Loan Commitment—with respect to any Lender, the amount of such Lender's
Revolving Loan Commitment plus such Lender's Capex Loan A Commitment plus such
Lender's Capex Loan B Commitment plus such Lender's Capex Loan C Commitment.

    Loan Documents—the Agreement, the Other Agreements and the Security
Documents.

    Loans—all loans and advances of any kind made by Agent or any Lender
pursuant to the Agreement.

    Majority Lenders—as of any date, Lenders holding 51% of the Capex Loans and
Revolving Loan Commitments determined on a combined basis and following the
termination of the Revolving Loan Commitments, Lenders holding 51% or more of
the outstanding Loans, LC Amounts and LC Obligations not yet reimbursed by
Borrowers or funded with a Revolving Credit Loan; provided, that (i) in each
case, if there are 2 or more Lenders with outstanding Loans, LC Amounts,
unfunded and unreimbursed LC Obligations or Revolving Loan Commitments, at least
2 Lenders shall be required to constitute Majority Lenders; and (ii) prior to
termination of the Revolving Loan Commitments, if any Lender breaches its
obligation to fund any requested Revolving Credit Loan, for so long as such
breach exists, its voting rights hereunder shall be calculated with reference to
its outstanding Loans, LC Amounts and unfunded and unreimbursed LC Obligations,
rather than its Revolving Loan Commitment.

    Material Adverse Effect—(i) a material adverse effect on the business,
condition (financial or otherwise), operation, performance or properties of
Borrowers or any of their Subsidiaries, (ii) a material adverse effect on the
rights and remedies of Agent or Lenders under the Loan Documents, (iii) a
material adverse effect on the value of the Collateral or Lenders' Lien, or
(iv) the material impairment of the ability of Borrowers or any of their
Subsidiaries to perform its obligations hereunder or under any Loan Document.

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    Money Borrowed—means, without duplication, (i) Indebtedness arising from the
lending of money by any Person to Borrowers or any of their Subsidiaries;
(ii) Indebtedness, whether or not in any such case arising from the lending by
any Person of money to Borrowers or any of their Subsidiaries, (1) which is
represented by notes payable or drafts accepted that evidence extensions of
credit, (2) which constitutes obligations evidenced by bonds, debentures, notes
or similar instruments, or (3) upon which interest charges are customarily paid
(other than accounts payable) or that was issued or assumed as full or partial
payment for Property; (iii) Indebtedness that constitutes a Capitalized Lease
Obligation; (iv) reimbursement obligations with respect to letters of credit or
guaranties of letters of credit and (v) Indebtedness of Borrowers or any of
their Subsidiaries under any guaranty of obligations that would constitute
Indebtedness for Money Borrowed under clauses (i) through (iii) hereof, if owed
directly by Borrowers or any of their Subsidiaries. Money Borrowed shall not
include trade payables or accrued expenses.

    Mortgages—All mortgages, deeds of trust, leasehold mortgages and comparable
documents now or at any time hereafter securing the whole or any part of the
Obligations.

    Multiemployer Plan—has the meaning set forth in Section 4001(a)(3) of ERISA.

    New Bank Credit Facility—has the meaning specified in the Recitals hereof.

    Note Payment Reserve—with respect to the period from October 16 through
April 15, an amount equal to $1,000,000 on the 15th day of each of the months of
December, January, February and March, and, with respect to the period from
April 16 to October 15, an amount equal to $1,000,000 on the 15th day of each of
the months of June, July, August and September of each year, prior to each
Senior Note payment.

    Notes—the Revolving Notes and the Capex Notes.

    Obligations—all Loans, all LC Obligations and all other advances, debts,
liabilities, obligations, covenants and duties, together with all interest, fees
and other charges thereon, owing, arising, due or payable from Borrowers to
Agent, for its own benefit and the benefit of Lenders, from Borrowers to
Lenders, or from Borrowers to Bank, of any kind or nature, present or future,
whether or not evidenced by any note, guaranty or other instrument, whether
arising under the Agreement or any of the other Loan Documents or otherwise,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, primary or secondary, due or to become due, now existing or
hereafter arising and however acquired, including without limitation any
Derivative Obligations owing to Agent, any Lender or Bank.

    Other Agreements—the Environmental Indemnity Agreement, all Borrowing Base
Certificates, all Compliance Certificates, and any and all agreements,
instruments and documents (other than the Agreement and the Security Documents),
heretofore, now or hereafter executed by any Borrower, any Subsidiary of any
Borrower or any other third party and delivered to Agent in respect of the
transactions contemplated by the Agreement.

    Original Lender—has the meaning specified in the Recitals hereof.

    Overadvance—the amount, if any, by which the outstanding principal amount of
Revolving Credit Loans, plus the LC Amount, plus the amount of LC Obligations
that have not been reimbursed by Borrowers or funded with a Revolving Credit
Loan, plus reserves established in accordance with this agreement, exceeds the
Borrowing Base.

    Permitted Estate Planning Transfers—the collective reference to transfers of
any of the Borrowers' common stock to a revocable trust or trusts for the
grantor's estate planning purposes or which are made to or for the benefit of
the families of Warner W. Henry, Frederick H. Muhs, and Joseph T. Mooney, Jr. or
trusts or other entities exclusively benefiting such persons, provided that
Warner W.

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Henry or the Henry Trust shall retain at least 51% of the Voting Stock of
Borrowers and Warner W. Henry shall remain as the trustee of the Henry Trust.

    Permitted Liens—any Lien of a kind permitted pursuant to subsection 8.2.5 of
the Agreement.

    Permitted Purchase Money Indebtedness—Purchase Money Indebtedness of
Borrowers incurred after the date hereof which is secured by a Purchase Money
Lien and the principal amount of which, when aggregated with the principal
amount of all other such Purchase Money Indebtedness does not exceed $750,000
and Capitalized Lease Obligations of Borrowers at the time outstanding, does not
exceed $100,000. For the purposes of this definition, the principal amount of
any Purchase Money Indebtedness consisting of capitalized leases (as opposed to
operating leases) shall be computed as a Capitalized Lease Obligation.

    Person—an individual, partnership, corporation, limited liability company,
joint stock company, land trust, business trust, or unincorporated organization,
or a government or agency or political subdivision thereof.

    Plan—an employee benefit plan now or hereafter maintained for employees of
Borrowers or any of their Subsidiaries that is covered by Title IV of ERISA.

    Pledge Agreement—the Pledge Agreement which is to be executed on the Closing
Date by Borrowers, in form and substance satisfactory to Agent.

    Prime Real Property—means each of the real property parcels at the following
locations: (1) 320, 330, 343 Coldstream, Kimberton, Pennsylvania, (2) 729 Pike
Springs Road, Kimberton Pennsylvania, (3) Corner of Pike Springs Road and
Coldstream, (4) 2701 State Road 60, Bartow, Florida, (5) 4685 Finance Way,
Kingman Arizona, (6) 11155 East 47th Avenue, Denver, Colorado, and (7) 430
Hudson River Road, Waterford, New York.

    Projections—Borrowers' forecasted Consolidated and consolidating (i) balance
sheets, (ii) profit and loss statements, (iii) cash flow statements, and
(iv) capitalization statements, all prepared on a consistent basis with the
historical financial statements of Borrowers and their Subsidiaries, together
with appropriate supporting details and a statement of underlying assumptions
and Borrower's forecasted Availability.

    Property—any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible.

    Purchase Money Indebtedness—means and includes (i) Indebtedness (other than
the Obligations) for the payment of all or any part of the purchase price of any
fixed assets, (ii) any Indebtedness (other than the Obligations) incurred at the
time of or within 10 days prior to or after the acquisition of any fixed assets
for the purpose of financing all or any part of the purchase price thereof, and
(iii) any renewals, extensions or refinancings thereof, but not any increases in
the principal amounts thereof outstanding at the time.

    Purchase Money Lien—a Lien upon fixed assets which secures Purchase Money
Indebtedness, but only if such Lien shall at all times be confined solely to the
fixed assets the purchase price of which was financed through the incurrence of
the Purchase Money Indebtedness secured by such Lien.

    Reportable Event—any of the events set forth in Section 4043(b) of ERISA.

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    Restricted Investment—any investment or any acquisition, whether made in
cash or by delivery of Property to any Person, by acquisition of stock,
Indebtedness or other obligation or Security, or by loan, advance or capital
contribution, or otherwise, or in any Property except the following:

(i)investments by any Borrower, to the extent existing on the Closing Date, in
one or more Subsidiaries of any Borrower (including the investment in Bakor) or
intercompany loans in accordance with Section 8.2.3 (ix);

(ii)loans and advances to officers and employees of a Borrower or its Subsidiary
permitted under Section 8.2.2;

(iii)Property to be used in the ordinary course of business;

(iv)Current Assets arising from the sale of goods and services in the ordinary
course of business of any Borrower or any of its Subsidiaries;

(v)investments in direct obligations of the United States of America, or any
agency thereof or obligations guaranteed by the United States of America or any
agency thereof, provided that such obligations mature within one year from the
date of acquisition thereof;

(vi)investments in certificates of deposit maturing within one year from the
date of acquisition and fully insured by the Federal Deposit Insurance
Corporation or maintained with Agent, any Lender or other financial institution
with capital and surplus in excess of $100 million or as otherwise approved by
Agent;

(vii)investments in commercial paper rated at least A-1 by Standard & Poor's
Corporation or P-1 by Moody's Investors Service, Inc.

(viii)investments in money market, mutual or similar funds having assets in
excess of $100,000,000 and the investments of which are limited to investment
grade securities;

(ix)investments existing on the date hereof and listed on Exhibit 8.2.12 hereto;
and

(x)investments otherwise expressly permitted pursuant to the Agreement.

    Revolving Credit Loan—a Loan made by Lender pursuant to Section 1.1.1 of the
Agreement.

    Revolving Credit Maximum Amount—$25,000,000.

    Revolving Loan Commitment—with respect to any Lender, the amount of such
Lender's Revolving Loan Commitment as set forth below such Lender's name on the
signature page hereof.

    Revolving Loan Percentage—with respect to each Lender, the percentage equal
to the quotient of such Lender's Revolving Loan Commitment divided by the
aggregate of all Lenders' Revolving Loan Commitments.

    Revolving Notes—the Secured Promissory Notes to be executed by each Borrower
on or about the Closing Date in favor of each Lender to evidence the Revolving
Credit Loans, which shall be in the form of Exhibit 1.1 to the Agreement,
together with any replacement or successor notes therefor.

    Security—all shares of stock, partnership interests, membership interests,
membership units or other ownership interests in any other Person and all
warrants, options or other rights to acquire the same.

    Security Documents—the Guaranty Agreements, the Pledge Agreement, the
Mortgages, the Intellectual Property Security Agreement, the Assignments of Life
Insurance, all lockbox, blocked account and control agreements and all other
instruments and agreements now or at any time hereafter securing the whole or
any part of the Obligations.

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    Senior Notes—any and all 10% Senior Notes due 2008 to be issued from time to
time under the Indenture.

    Solvent—as to any Person, such Person (i) owns Property whose fair saleable
value is greater than the amount required to pay all of such Person's
Indebtedness (including contingent debts discounted based on the likelihood of
their having to be paid), (ii) is able to pay all of its Indebtedness as such
Indebtedness matures and (iii) has capital sufficient to carry on its business
and transactions and all business and transactions in which it is about to
engage.

    Statutory Reserves—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 reserve percentages (including, without limitation,
any marginal, special, emergency or supplemental reserves), expressed as a
decimal, established by the Board of Governors of the Federal Reserve System and
any other banking authority to which Lender is subject for Eurocurrency
Liabilities (as defined in Regulation D of the Board of Governors of the Federal
Reserve System or any successor thereto). Such reserve percentages shall
include, without limitation, those imposed under such Regulation D. LIBOR
Portions shall be deemed to constitute Eurocurrency Liabilities and as such
shall be deemed to be subject to such reserve requirements without benefit of or
credit for proration, exceptions or offsets which may be available from time to
time to any 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.

    Subordinated Debt—Indebtedness of any Borrower or any Subsidiary of Borrower
that is subordinated to the Obligations in a manner satisfactory to Agent, and
contains terms, including without limitation, payment terms, satisfactory to
Agent.

    Subsidiary—any Person of which another Person owns, directly or indirectly
through one or more intermediaries, more than 50% of the Voting Stock at the
time of determination; provided, however, that unless otherwise indicated, the
term "Subsidiary" when used in connection with the Borrowers shall not include
Bakor.

    Tax—in relation to any LIBOR Portion and the applicable LIBOR Rate, any tax,
levy, impost, duty, deduction, withholding or charges of whatever nature
required by any Legal Requirement (i) to be paid by any Lender and/or (ii) to be
withheld or deducted from any payment otherwise required hereby to be made by
Borrowers to any Lender; provided, that the term "Tax" shall not include any
taxes imposed upon the income of any Lender or franchise taxes.

    Term—has the meaning specified in Section 4.1 of the Agreement.

    Test Count Variance Reserve—an amount determined by Agent based upon any
variance resulting from Agent's test count of Borrowers' Inventory.

    Total Credit Facility—$35,000,000, as reduced from time to time pursuant to
the terms of the Agreement.

    Trustee—U.S. Trust Company of California, N.A. and its successors and
assigns as Trustee under the Indenture.

    Unused Line Fee—has the meaning specified in Section 2.6.

    Voting Stock—Securities of any class or classes of a corporation, limited
partnership or limited liability company or any other entity the holders of
which are ordinarily, in the absence of contingencies, entitled to vote with
respect to the election of corporate directors (or Persons performing similar
functions).

    Warranty Reserve—an amount equal to the average annual warranty expense for
the past three years.

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Waterford Property—has the meaning specified in Section 3.3.1.

    Other Terms.  All other terms contained in the Agreement shall have, when
the context so indicates, the meanings provided for by the Code to the extent
the same are used or defined therein.

    Certain Matters of Construction.  The terms "herein," "hereof" and
"hereunder" and other words of similar import refer to the Agreement as a whole
and not to any particular section, paragraph or subdivision. Any pronoun used
shall be deemed to cover all genders. The section titles, table of contents and
list of exhibits appear as a matter of convenience only and shall not affect the
interpretation of the Agreement. All references to statutes and related
regulations shall include any amendments of same and any successor statutes and
regulations. All references to any of the Loan Documents shall include any and
all modifications thereto and any and all extensions or renewals thereof.

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LIST OF EXHIBITS AND SCHEDULES

 
   
Exhibit 1.1   Form of Revolving Note Exhibit 1.3A   Form of Capex Loan A Note
Exhibit 1.3B   Form of Capex Loan B Note Exhibit 1.3C   Form of Capex Loan C
Note Exhibit 2.5   Letter of Credit and LC Guaranty Fees Exhibit 6.1.1  
Business Locations Exhibit 7.1.1   Jurisdictions in which Borrower and each
Subsidiary is Authorized to do Business Exhibit 7.1.4   Capital Structure of
Borrowers and each Subsidiary Exhibit 7.1.5   Names Exhibit 7.1.13   Surety
Obligations Exhibit 7.1.14   Tax Identification Numbers of Borrowers and
Subsidiaries Exhibit 7.1.15   Brokers' Fees Exhibit 7.1.16   Patents,
Trademarks, Copyrights and Licenses Exhibit 7.1.19   Contracts Restricting Right
to Incur Debt Exhibit 7.1.20   Litigation Exhibit 7.1.22   Capitalized and
Operating Leases Exhibit 7.1.23   Pension Plans Exhibit 7.1.24   Trade Relations
Exhibit 7.1.25   Labor Relations Exhibit 7.1.26   Life Insurance Policies
Exhibit 7.1.28   Eligible Inventory Locations Exhibit 7.1.29   Bank Accounts
Exhibit 8.1.3   Compliance Certificate Exhibit 8.1.4   Form of Borrowing Base
Certificate Exhibit 8.2.3   Existing Indebtedness Exhibit 8.2.4   Permitted
Affiliate Transactions Exhibit 8.2.5   Permitted Liens Exhibit 8.2.9   Permitted
Leases Exhibit 8.2.12   Permitted Investments Exhibit 9.1   Schedule of Closing
Documents

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EXHIBIT 1.1
FORM OF REVOLVING NOTE

Page 1

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EXHIBIT 1.3A
FORM OF CAPEX LOAN A NOTE

Page 1

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EXHIBIT 1.3B
FORM OF CAPEX LOAN B NOTE

Page 1

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EXHIBIT 1.3C
FORM OF CAPEX LOAN C NOTE

Page 1

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EXHIBIT 2.5

DOCUMENTARY LETTER OF CREDIT AND LC GUARANTY FEES

Issuance   $250 + 1/8% flat on face amount of l/c (overall minimum: $325)
Amendment   $85 (Note: An amendment to increase and/or extend the l/c will be
treated as an issuance.) A maximum of six amendments will be allowed for each
l/c. Negotiation/Payment   1/8% flat (minimum: $125)
Non-Utilization/Cancellation Of Unused Credits   $150 Transfer/Assignment of L/C
  0.25% flat (minimum: $250) Shipping Guaranty/ Airway Release   $150 Wire
Transfer   $35 per transfer Mail/Domestic Courier   $15 per item up to one pound
SWIFT issuance/amendment   $50/$20 Plus any and all out-of-pocket expenses.    

Please note that this fee schedule is subject to change from time to time.

Page 1

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EXHIBIT 6.1.1

BUSINESS LOCATIONS

1.Borrower currently has the following business locations, and no others:

Chief Executive Office:

Other Locations:

2.Borrower maintains its books and records relating to Accounts and General
Intangibles at:

3.Borrower has had no office, place of business or agent for process located in
any county other than as set forth above, except:

4.Each Subsidiary currently has the following business locations, and no others:

Chief Executive Office:

Other Locations:

5.Each Subsidiary maintains its books and records relating to Accounts and
General Intangibles at:

6.Each Subsidiary has had no office, place of business or agent for process
located in any county other than as set forth above, except:

7.The following bailees, warehouseman, similar parties and consignees hold
inventory of Borrower or one of its Subsidiaries:

Name and Address of Party

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

  Nature of Relationship

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

  Amount of Inventory

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

  Owner of Inventory

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

             

Page 2

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EXHIBIT 7.1.1

JURISDICTIONS IN WHICH BORROWER
AND EACH SUBSIDIARY
IS AUTHORIZED TO DO BUSINESS

Name of Entity

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

  Jurisdictions

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

                                   

Page 1

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EXHIBIT 7.1.4

    CAPITAL STRUCTURE OF BORROWERS AND EACH SUBSIDIARY

1.The class and the number of authorized and issued Securities of each Borrower
and each of its Subsidiaries and the record owner of such Securities are as
follows:

Henry:

Class of Securities

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

  Number of Securities
Issued and Outstanding

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

  Record Owners

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

  Number of Securities
Authorized but Unissued

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

    Kimberton:

Class of Securities

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

  Number of Securities
Issued and Outstanding

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

  Record Owners

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

  Number of Securities
Authorized but Unissued

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

Subsidiaries of Henry:

Class of Securities

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

  Number of Securities
Issued and Outstanding

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

  Record Owners

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

  Number of Securities
Authorized but Unissued

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

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

 

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Page 1

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Subsidiaries of Kimberton:

Class of Securities

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

  Number of Securities
Issued and Outstanding

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

  Record Owners

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

  Number of Securities
Authorized but Unissued

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

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

 

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2.The number, nature and holder of all other outstanding Securities of each
Borrower and each of its Subsidiaries are as follows:

3.The correct name and jurisdiction of incorporation or organization of each
Subsidiary of each Borrower and the percentage of its issued and outstanding
Voting Stock owned by such Borrower are as follows:

Name

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

  Jurisdiction of Incorporation/Organization

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

  Percentage of Voting
Stock Owned by Borrower

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

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

 

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

 

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

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

 

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

 

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

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

 

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

 

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

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

 

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

 

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

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

4.The name of each Borrowers' and each of its Subsidiaries' corporate or joint
venture Affiliates and the nature of the affiliation are as follows:

5.The agreements or instruments binding upon the partners, members or
shareholders of each Borrower or any of its Subsidiaries and relating to the
ownership of its Securities, are as follows:

Page 2

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EXHIBIT 7.1.5

NAMES

1.Borrowers' correct name, as registered with the applicable Secretary of State
of the State of its incorporation or formation is:

2.In the conduct of its business, Borrowers have used the following names:

3.Each Subsidiary's correct name, as registered with the Secretary of State of
the State of its incorporation or formation, is:

4.In the conduct of its business, each Subsidiary has used the following names:

5.Neither Borrower has been the surviving entity of a merger or consolidation
nor has it acquired substantially all the assets of any person.

6.No Subsidiary has been the surviving entity of a merger or consolidation nor
has it acquired substantially all the assets of any person.

Page 3

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EXHIBIT 7.1.13

SURETY OBLIGATIONS

Page 1

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EXHIBIT 7.1.14

TAX IDENTIFICATION NUMBERS OF BORROWERS AND SUBSIDIARIES

Name

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

  Number

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

                                   

Page 2

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EXHIBIT 7.1.15

BROKERS' FEES

Page 3

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EXHIBIT 7.1.16

PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES

1.Borrowers' and their Subsidiaries' patents:

Patent

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

  Owner

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

  Status in
Patent Office

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

  Federal Registration
Number

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

  Registration
Date

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

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

 

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

 

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

 

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

 

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

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

 

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

 

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

 

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

 

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

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

 

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

 

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

 

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

 

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

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

 

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

 

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

 

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

 

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

2.Borrowers' and their Subsidiaries' trademarks:

Trademark

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

  Owner

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

  Status in
Patent Office

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

  Federal Registration
Number

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

  Registration
Date

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

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

 

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

 

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

 

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

 

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

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

 

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

 

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

 

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

 

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

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

 

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

 

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

 

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

 

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

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

 

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

 

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

 

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

 

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

3.Borrowers' and their Subsidiaries' copyrights:

Copyrights

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

  Owner

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

  Status in
Copyright Office

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

  Federal Registration
Number

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

  Registration
Date

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

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

 

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

 

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

 

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

 

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

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

 

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

 

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

 

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

 

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

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

 

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

 

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

 

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

 

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

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

 

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

 

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

 

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

 

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

4.Borrowers' and their Subsidiaries' licenses (other than routine business
licenses, authorizing them to transact business in local jurisdictions):

Name of License

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

  Nature of License

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

  Licensor

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

  Term of License

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

5.Infringement Activities:

6.Unregistered material trademarks, service marks and copyrights:

7.Material license agreements that do not permit assignment or limit the use of
license after default:

Page 1

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EXHIBIT 7.1.19

CONTRACTS RESTRICTING RIGHT TO INCUR DEBT

Contracts that restrict the right of any Borrower or any of its Subsidiaries to
incur Indebtedness:

Title of Contract

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

  Identity of Parties

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

  Nature of Restriction

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

  Term of Contract

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

Page 2

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EXHIBIT 7.1.20

LITIGATION

1.Actions, suits, proceedings and investigations pending against any Borrower or
any Subsidiary:

Title of Action

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

  Nature of Action

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

  Complaining Parties

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

  Jurisdiction or Tribunal

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

2.The only threatened actions, suits, proceedings or investigations of which any
Borrower or any Subsidiary is aware are as follows:

Page 3

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EXHIBIT 7.1.22

CAPITALIZED AND OPERATING LEASES

Each Borrower and its Subsidiaries have the following capitalized and operating
leases:

Lessee

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

  Lessor

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

  Term of Lease

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

  Property Covered

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

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

 

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

 

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

 

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

Page 4

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EXHIBIT 7.1.23
PENSION PLANS

Each Borrower and its Subsidiaries have the following Plans:

Party

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

  Type of Plan

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

Borrower
 
 
 
 
 
Subsidiaries
 
 
 
 
 

Page 5

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EXHIBIT 7.1.24
TRADE RELATIONS

Page 6

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EXHIBIT 7.1.25

LABOR RELATIONS

1.Borrowers and their Subsidiaries are parties to the following collective
bargaining agreements:

Type of Agreement

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

  Parties

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

  Term of Agreement

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

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

 

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

 

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

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

 

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

 

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

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

 

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

 

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

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

 

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

 

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

2.Material grievances, disputes of controversies with employees of any Borrower
or any of its Subsidiaries are as follows:

Parties Involved

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

  Nature of Grievance,
Dispute or Controversy

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

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

 

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

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

 

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

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

 

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

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

 

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

3.Threatened strikes, work stoppages and asserted pending demands for collective
bargaining with respect to any Borrower or any of its Subsidiaries are as
follows:

Parties Involved

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

  Nature of Matter

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

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

 

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

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

 

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

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

 

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

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

 

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

Page 1

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EXHIBIT 7.1.26

LIFE INSURANCE POLICIES

Name

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

  Policy Number

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

  Net Surrender Value

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

  Policy Total

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

Executive Life Insurance Plan—07/01/92               Doose, J.   6032742   99  
    Gordinier, R.   6032751   214       Wahba, J.   6054678   49   361 Executive
Life Insurance Plan—07/01/1993               Enright, J.   6075010-1   159   159
Executive Life Insurance Plan—07/01/1992               Gordinier, R.   6044614-1
  181   181 Executive Life Insurance Plan—04/01/1995               Pasterick, G.
  2201431   113       Pugh, N.   2201434   105       Reno, F.   2201433   94  
312 Executive Life Insurance Plan—04/01/1999               Moffat, S.   1079030
  43   43 Executive Life Insurance Plan—Quiggle — 11/01/1994              
Quiggle, L.   1066593   58   58

[To be confirmed by Borrowers]

Page 2

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EXHIBIT 7.1.28

ELIGIBLE INVENTORY LOCATIONS

Page 3

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EXHIBIT 7.1.29

BANK ACCOUNTS

372912005
 
B of A—Henry Group of Companies
1464300101
 
B of A—Resin Technology Company
1459904210
 
B of A—World Asphalt Companies
372500887
 
B of A—Factory Payroll
3750793224
 
Nations Bank—Group Funding
3750793127
 
Nations Bank—Coatings Deposits
3750793130
 
Nations Bank—RTC Deposits
3750793143
 
Nations Bank—Sealants Deposits
3750793156
 
Nations Bank—Group Payroll
3751234931
 
Nations Bank—Monsey Deposits
3299962102
 
Nations Bank—Monsey Payroll
3299906695
 
Nations Bank—Disbursement Checking
 
 
[need to add Kimberton accounts]

Page 4

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EXHIBIT 8.1.3

COMPLIANCE CERTIFICATE
[                              ]

    [                        ], [    ]

Fleet Capital Corporation, as Agent
15260 Ventura Boulevard
Suite 400
Sherman Oaks, California 91403

    The undersigned, the chief financial officer of Henry Company and Kimberton
Enterprises, Inc. ("Borrowers"), gives this certificate to Fleet Capital
Corporation, in its capacity as Agent ("Agent") in accordance with the
requirements of subsection 8.1.3 of that certain Second Amended and Restated
Financing and Security Agreement dated                        , 2001 among
Borrowers, Agent and Lenders party thereto ("Financing Agreement"). Capitalized
terms used in this Certificate, unless otherwise defined herein, shall have the
meanings ascribed to them in the Financing Agreement.

1.Based upon my review of the balance sheets and statements of income of each
Borrower and its Subsidiaries for the monthly period
ending                        ,      , copies of which are attached hereto, I
hereby certify that:

(i)Capital Expenditures during the period and for the fiscal year to date total
$            and $            , respectively.

(ii)Availability during the period was [$            ].
2.No Default exists on the date hereof, other than:                        [if
none, so state]; and

3.No Event of Default exists on the date hereof, other
than                        [if none, so state].

 
   
          Very truly yours,
 
 
 
 
 

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

    Chief Financial Officer

Page 5

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EXHIBIT 8.1.4

    FORM OF BORROWING BASE CERTIFICATE (Accounts Receivable)

Client:    HENRY COMPANY & KIMBERTON ENTERPRISES

Accounts Receivable Loan Number:    HE Foreign Receivables Loan Number:    HEN02

Dates Covered Accounts Receivable:        Dates Covered—Foreign Receivables:

 
  COLLATERAL

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

 
  HEN01

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

  HEN02

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

 
  AR-
Coatings

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

  AR-
Resin Tech

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

  AR-
Sealants

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

  AR-
Sub Total

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

  Foreign
Receivables

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

                      Beginning Balance               0.00     2. Sales (+)    
          0.00     3. Credit Memos (-)               0.00     4. Adjustment (+)
              0.00     5. Adjustment (-)               0.00     6. Net
Collections (-)               0.00     7. Discounts (-)               0.00    
8. Overpayments (+)               0.00     Current Balance   0.00   0.00   0.00
  0.00   0.00 Ineligible               0.00   0.00 Eligible Collateral (85%)  
0.00   0.00   0.00   0.00   0.00 Less Reserve               0.00   0.00
Qualified A/R Collateral (Foreign Receivables capped at $750,000.00)   0.00  
0.00   0.00   0.00   0.00 Qualified Inventory Collateral (from Inventory
Borrowing Certificate—Capped at $10,000,000.00)                   0.00 Eligible
Life Insurance Policies @95%                     Aggregate Cash Surrender Value
=
Less Letters of Credit                   0.00 Total Qualified Collateral        
          0.00

LOAN

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

   
      Beginning Balance     10. Cash (Checks/ACH) (-)   0.00 11. Cash (Wire) (-)
    12. Adjustment (+/-)     13. Advance (+)     Current Balance   0.00
Remaining Availability   0.00

    The foregoing information is delivered to Fleet Capital Corporation in
accordance with a Secured Amended and Restated Financing and Security Agreement
(the "Financing Agreement") between Fleet Capital Corporation and HENRY
COMPANY & KIMBERTON ENTERPRISES, INC., dated            . I hereby certify that
the information contained herein is true and correct as of the dates

Page 1

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shown herein. Nothing contained herein shall constitute a waiver, modification,
or limitation of any of the terms or conditions set forth in the referenced
Financing Agreement.

Approved by:   Prepared by: Title:   Title: Date:   Date:

Page 2

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FORM OF BORROWING BASE CERTIFICATE (Inventory)

 
   
      Client: HENRY COMPANY & KIMBERTON ENTERPRISES   Report Date: Assignment
Number:   Dates Covered:

Advance Rate -

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

  HEN05 - FG FINISHED GOODS 60%

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

  HEN06-FG INTER COMPANY IN TRANSIT 60%

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

  HEN07 - FG PRIVATE LABEL 60%

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

  HEN08 RAW MATERIALS 45%

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

                  Beginning Balance                 2. Inventory Additions (+)  
              4. Adjustment (+)                 5. Adjustment (-)              
  6. Inventory Removal (-)                 Current Balance   0.00   0.00   0.00
  0.00 Ineligible                 Eligible Collateral (60%)   0.00   0.00   0.00
  0.00 Less Reserve                 Qualified Collateral   0.00   0.00   0.00  
0.00

    The foregoing information is delivered to Fleet Capital Corporation in
accordance with a Secured Amended and Restated Financing and Security Agreement
(the "Financing Agreement") between Fleet Capital Corporation and HENRY
COMPANY & KIMBERTON ENTERPRISES, INC., dated            . I hereby certify that
the information contained herein is true and correct as of the dates shown
herein. Nothing contained herein shall constitute a waiver, modification, or
limitation of any of the terms or conditions set forth in the referenced
Financing Agreement.

Approved by:   Prepared by: Title:   Title: Date:   Date:

Page 3

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EXHIBIT 8.2.3

EXISTING INDEBTEDNESS

Page 4

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

Borrower

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

  Lender

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

  Amount

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

  Maturity

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

EXHIBIT 8.2.4

PERMITTED AFFILIATE TRANSACTIONS

Page 5

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EXHIBIT 8.2.5

PERMITTED LIENS

Secured Party

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

  Nature of Lien

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

     

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

 

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

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

 

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

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

 

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

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

 

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

Page 6

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EXHIBIT 8.2.12

PERMITTED INVESTMENTS

Page 7

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EXHIBIT 9.1

    SCHEDULE OF CLOSING DOCUMENTS

    In addition to, and not in limitation of, the conditions described in
Section 9 of the Agreement, pursuant to Section 9.1, the following items must be
received by Agent in form and substance satisfactory to Agent on or prior to the
Closing Date (each capitalized term used but not otherwise defined herein shall
have the meaning ascribed thereto in Annex A to the Agreement):

    A.  Appendices.  All exhibits, schedules and appendices to the Agreement, in
form and substance satisfactory to Agent.

    B.  Revolving Notes and Capex Notes.  Duly executed originals of the
Revolving Notes and Capex Notes for each applicable Lender, dated the Closing
Date.

    C.  Security Interests and Code Filings.  

    (a) Evidence satisfactory to Agent that Agent (for the benefit of itself and
Lenders) has a valid and perfected first priority security interest in the
Collateral, including (i) such documents duly executed by each Borrower
(including financing statements under the Code and other applicable documents
under the laws of any jurisdiction with respect to the perfection of Liens) as
Agent may request in order to perfect its security interests in the Collateral,
and (ii) copies of Code search reports listing all effective financing
statements that name any Borrower as debtor, together with copies of such
financing statements, none of which shall cover the Collateral, except for those
relating to the obligations to Original Lender under the New Bank Credit
Facility (all of which shall be amended on the Closing Date) or Permitted Liens.

    (b) Evidence satisfactory to Agent, including copies, of all UCC-1 and other
financing statements filed in favor of any Borrower with respect to each
location, if any, at which Inventory may be consigned.

    (c) Control Letters from (i) all issuers of uncertificated securities and
financial assets held by any Borrower, (ii) all securities intermediaries with
respect to all securities accounts and securities entitlements of any Borrower,
and (iii) all futures commission agents and clearing houses with respect to all
commodities contracts and commodities accounts held by any Borrower.

    (d) Assignments of Life Insurance Policies duly executed by all issuers of
Life Insurance Policies.

    D.  Assignment Agreement, Amended Statements.  Copies of a duly executed
assignment agreement, in form and substance satisfactory to Agent, by and
between all parties to the New Bank Credit Facility evidencing assignment of all
right, title and interest in the New Bank Credit Facility to Lenders, together
with (a) UCC-2/3 or other appropriate assignment and amendment statements, in
form and substance satisfactory to Agent, manually signed by the Original Lender
assigning all liens of Original Lender upon any of the personal property of each
Borrower, (b) termination of all bank, agency agreements or other similar
agreements or arrangements in favor of Original Lender, and (c) all executed
originals of the New Bank Credit Facility loan documentation.

    E.  Intellectual Property Security Agreements.  Duly executed originals of
the Intellectual Property Security Agreement dated the Closing Date and signed
by each Borrower which owns any Intellectual Property, all in form and substance
satisfactory to Agent, together with all instruments, documents and other
agreements executed pursuant thereto.

    F.  Initial Borrowing Base Certificate.  Duly executed originals of an
initial Borrowing Base Certificate from Borrowers, dated the Closing Date,
reflecting information concerning Eligible Accounts and Eligible Inventory of
Borrower as of a date not more than three (3) days prior to the Closing Date.

Page 1

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

    G.  Initial Loan Request.  Duly executed originals of a request for a
Revolving Credit Loan or Capex Loan, as the case may be, dated the Closing Date,
with respect to the initial Revolving Credit Loan or Capex Loan to be requested
by Borrower on the Closing Date.

    H.  Cash Management System, Blocked Account Agreements.  Evidence
satisfactory to Agent that, as of the Closing Date, cash management systems
complying with Section 6.2.4 and Section 9.10 of the Agreement have been
established and are currently being maintained in the manner set forth in
Section 6.2.4 and Section 9.10, together with copies of duly executed tri-party
blocked account and lock box agreements, satisfactory to Agent, with the Bank as
required by Section 6.2.4.

    I.  Charter and Good Standing.  For each Borrower, such Person's (a) charter
and all amendments thereto, (b) good standing certificates (including
verification of tax status) in its state of incorporation and (c) good standing
certificates (including verification of tax status) and certificates of
qualification to conduct business in each jurisdiction where its ownership or
lease of property or the conduct of its business requires such qualification,
each dated a recent date prior to the Closing Date and certified by the
applicable Secretary of State or other authorized governmental authority.

    J.  Bylaws and Resolutions.  For each Borrower, (a) such Person's bylaws,
together with all amendments thereto and (b) resolutions of such Person's Board
of Directors and stockholders, approving and authorizing the execution, delivery
and performance of the Loan Documents to which such Person is a party and the
transactions to be consummated in connection therewith, each certified as of the
Closing Date by such Person's corporate secretary or an assistant secretary as
being in full force and effect without any modification or amendment.

    K.  Incumbency Certificates.  For each Borrower, signature and incumbency
certificates of the officers of each such Person executing any of the Loan
Documents, certified as of the Closing Date by such Person's corporate secretary
or an assistant secretary as being true, accurate, correct and complete.

    L.  Pledge Agreement.  Duly executed originals of each of the Pledge
Agreement accompanied by (as applicable) (a) share certificates representing all
of the outstanding Securities being pledged pursuant to such Pledge Agreement
and stock powers for such share certificates executed in blank and (b) the
original any intercompany notes and other instruments evidencing Indebtedness
being pledged pursuant to such Pledge Agreement, duly endorsed in blank.

    M.  Accountants' Letters.  A letter from the Borrowers to their independent
auditors authorizing the independent certified public accountants of the
Borrowers to communicate with Agent and Lenders in accordance with
Section 8.1.3, and a letter from such auditors acknowledging Lenders' reliance
on the auditor's certification of past and future financial statements of
Borrowers.

    N.  Officer's Certificate.  Agent shall have received duly executed
originals of a certificate of the Chief Executive Officer and Chief Financial
Officer of Borrowers, dated the Closing Date, stating that, since March 31, 2001
(a) no event or condition has occurred or is existing which could reasonably be
expected to have a Material Adverse Effect; (b) there has been no material
adverse change in the industry in which Borrower operates; (c) no Litigation has
been commenced which, if successful, could reasonably be expected to have a
Material Adverse Effect or could challenge any of the transactions contemplated
by the Agreement and the other Loan Documents; (d) there have been no Restricted
Investments made by any Borrower; (e) there has been no material increase in
liabilities, liquidated or contingent, and no material decrease in assets of
Borrower or any of its Subsidiaries; and (f) there shall not exist (on a pro
forma basis after giving the effect to the Total Credit Facility) any default
under any material indebtedness or agreement of Borrowers (including without
limitation, the Senior Notes and Indenture) and any Subsidiary or Affiliate of
Borrowers (including, without limitation, the Bakor Facility).

Page 2

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    O.  Waivers.  Agent, on behalf of Lenders, shall have received landlord
waivers and consents, bailee letters and mortgagee agreements in form and
substance satisfactory to Agent for each of the following locations:

 
   
  420 H Street
N.W. Auburn, WA      
2900 Bristol Street, Suite #A-101
Costa Mesa, CA
 
   
10144 Waterman Road
Elk Grove, CA
 
   
2911 Slauson Avenue
Huntington Park, CA
 
   
2270 Castle Harbor Place
Ontario, CA
 
   
2946 N.E. Columbia Boulevard
Portland, OR
 
 

    P.  Mortgages.  Mortgages covering all of the following real Property (the
"Mortgaged Properties") together with: (a) ALTA Lender's title insurance
policies (with the exception of real Property located in Texas, which shall use
the standard "Texas Mortgagee Policy"), for each parcel of Prime Real Property
and certificates of occupancy, in each case satisfactory in form and substance
to Agent, in its sole discretion; and (b) evidence that counterparts of the
Mortgages have been recorded in all places to the extent necessary or desirable,
in the judgment of Agent, to create a valid and enforceable first priority

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lien (subject to Permitted Liens) on each mortgaged Property in favor of Agent
for the benefit of itself and Lenders (or in favor of such other trustee as may
be required or desired under local law):

 
   
  430 Hudson River Road
Waterford, New York      
320, 330, 343 Coldstream Road
Kimberton, PA
 
   
729 Pike Springs Road
Kimberton, PA
 
   
Corner of Pike Springs Road and Coldstream
 
   
4351 West Morris
Indianapolis, IN
 
   
2651 Commerce Drive
Rock Hill, SC
 
   
3802 Miller Park Drive
Garland, TX
 
   
2701 State Road 60 West
Bartow, FL
 
   
4685 Finance Way
Kingman, AZ
 
   
1301 Herkimer Street
Joliet, IL
 
   
11155 East 47th Avenue
Denver, CO
 
 

    Q.  Leasehold Mortgages.  Leasehold Mortgages covering all of the following
leased real Property:

 
   
  420 H Street N.W.
Auburn, WA      
10144 Waterman Road
Elk Grove, CA
 
   
2901 Slauson Avenue
Huntington Park, CA
 
   
2909-2911 Slauson Avenue
Huntington Park, CA
 
   
5731 Bickett Street
Huntington Park, CA
 
   
2270 Castle Harbor Place
Ontario, CA
 
   
2946 N.E. Columbia Boulevard
Portland, OR
 
 

    R.  Subordination and Intercreditor Agreements.  Agent and Lenders shall
have received any and all subordination and/or intercreditor agreements, all in
form and substance reasonably satisfactory to

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Agent, in its sole discretion, as Agent shall have deemed necessary or
appropriate with respect to any Indebtedness of any Borrower.

    S.  Environmental Reports.  Agent shall have received Phase I Environmental
Site Assessment Reports, consistent with American Society of Testing and
Materials (ASTM) Standard E 1527-94, and applicable state requirements, on all
of the real Property, dated no more than 6 months prior to the Closing Date,
prepared by environmental engineers satisfactory to Agent, all in form and
substance satisfactory to Agent, in its sole discretion; and Agent shall have
further received such environmental review and audit reports, including Phase II
reports, with respect to the real Property of any Borrower as Agent shall have
requested, and Agent shall be satisfied, in its sole discretion, with the
contents of all such environmental reports. Agent shall have received letters
executed by the environmental firms preparing such environmental reports, in
form and substance satisfactory to Agent, authorizing Agent and Lenders to rely
on such reports.

    T.  Environmental Indemnity Agreement.  Duly executed originals of the
Environmental Indemnity Agreement dated the Closing Date and signed by each
Borrower, in form and substance satisfactory to Agent.

    U.  Appraisals.  Agent shall have received appraisals as to all Equipment
and as to each parcel of real Property owned by each Borrower, each of which
shall be in form and substance satisfactory to Agent.

    V.  Audited Financials; Financial Condition.  Agent shall have received
Borrowers' final financial statements for its Fiscal Year ended December 31,
2001, audited by PriceWaterhouseCoopers and unaudited consolidated and
consolidating financial statements for each monthly period ending 30 days prior
to the Closing Date. Borrowers shall have provided Agent with its current
operating statements, a consolidated and consolidating balance sheet and
statement of cash flows, and Projections certified by its Chief Financial
Officer, in each case in form and substance satisfactory to Agent, and Agent
shall be satisfied, in its sole discretion, with all of the foregoing. Agent
shall have further received a certificate of the Chief Executive Officer and/or
the Chief Financial Officer of Borrower, based on such Projections, to the
effect that (a) Borrowers will be Solvent upon the consummation of the
transactions contemplated herein; (b) the Projections are based upon estimates
and assumptions stated therein, all of which Borrowers believe to be reasonable
and fair in light of current conditions and current facts known to Borrower and,
as of the Closing Date, reflect Borrowers' good faith and reasonable estimates
of its future financial performance and of the other information projected
therein for the period set forth therein; and (c) containing such other
statements with respect to the solvency of Borrowers and matters related thereto
as Agent shall request.

    W.  Other Documents.  Such other certificates, documents and agreements
respecting any Borrower as Agent may, in its sole discretion, request.

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EXHIBIT 10.1A

TABLE OF CONTENTS
SECOND AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT
SECTION 1. CREDIT FACILITY
SECTION 2. INTEREST, FEES AND CHARGES
SECTION 3. LOAN ADMINISTRATION.
SECTION 4. TERM AND TERMINATION
SECTION 5. SECURITY INTERESTS
SECTION 6. COLLATERAL ADMINISTRATION
SECTION 7. REPRESENTATIONS AND WARRANTIES
SECTION 8. COVENANTS AND CONTINUING AGREEMENTS
SECTION 9. CONDITIONS PRECEDENT
SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
SECTION 11. THE AGENT
SECTION 12. MISCELLANEOUS
APPENDIX A
LIST OF EXHIBITS AND SCHEDULES
EXHIBIT 1.1 FORM OF REVOLVING NOTE
EXHIBIT 1.3A FORM OF CAPEX LOAN A NOTE
EXHIBIT 1.3B FORM OF CAPEX LOAN B NOTE
EXHIBIT 1.3C FORM OF CAPEX LOAN C NOTE
EXHIBIT 7.1.1
EXHIBIT 7.1.4
EXHIBIT 7.1.13
EXHIBIT 7.1.14
EXHIBIT 7.1.15
EXHIBIT 8.1.4
FORM OF BORROWING BASE CERTIFICATE (Inventory)
EXHIBIT 8.2.3
EXHIBIT 8.2.4
EXHIBIT 8.2.5
EXHIBIT 8.2.12
EXHIBIT 9.1