<PAGE>



                                                                 EXHIBIT 10.52




                                 BOND AGREEMENT

                                  BY AND AMONG

                   NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY,

                           FLEET CAPITAL CORPORATION,

                            CHITTENDEN TRUST COMPANY

                                       AND

                                 FOILMARK, INC.





                               DATED JUNE 1, 2000


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                                TABLE OF CONTENTS

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ARTICLE I -BACKGROUND, REPRESENTATIONS AND FINDINGS...............................................................1

   SECTION 1.1    BACKGROUND......................................................................................1
   SECTION 1.2    DEFINITIONS.....................................................................................2
   SECTION 1.3    BORROWER REPRESENTATIONS.......................................................................11
   SECTION 1.4    AUTHORITY REPRESENTATIONS AND FINDINGS.........................................................19
   SECTION 1.5    PURCHASER REPRESENTATIONS......................................................................20
   SECTION 1.6    AFFIRMATIVE COVENANTS OF THE BORROWER..........................................................21
   SECTION 1.7    NEGATIVE COVENANTS OF THE BORROWER.............................................................22
   SECTION 1.8    REPORTING REQUIREMENTS OF THE BORROWER.........................................................23

ARTICLE II -THE PROJECT..........................................................................................24

   SECTION 2.1    DESCRIPTION OF PROJECT.........................................................................24
   SECTION 2.2    NOTICES AND PERMITS............................................................................24
   SECTION 2.3    ADDITIONS AND CHANGES TO PROJECT...............................................................24

ARTICLE III -THE FINANCING.......................................................................................25

   SECTION 3.1    THE FINANCING..................................................................................25
   SECTION 3.2    EFFECTIVENESS OF BOND AND NOTE.................................................................25
   SECTION 3.3    THE BOND.......................................................................................25
   SECTION 3.4    DEPOSIT OF NET PROCEEDS........................................................................26
   SECTION 3.5    ESCROW FUND....................................................................................26
   SECTION 3.6    REBATE FUND....................................................................................29
   SECTION 3.7    ESTABLISHMENT OF COMPLETION DATE...............................................................29
   SECTION 3.8    BOND NOT TO BECOME ARBITRAGE BOND..............................................................29
   SECTION 3.9    RESTRICTION ON USE OF ESCROW FUND..............................................................30
   SECTION 3.10   THREE-YEAR EXPENDITURE REQUIREMENT.............................................................30
   SECTION 3.11   COMPLETION OF PROJECT; EXCESS BOND PROCEEDS....................................................30
   SECTION 3.12   ESCROW AGENT NOT RESPONSIBLE FOR USE OF PROCEEDS...............................................30
   SECTION 3.13   INVESTMENT OF ESCROW FUND......................................................................30
   SECTION 3.14   GENERAL PROVISIONS OF INVESTMENTS..............................................................31
   SECTION 3.15   APPOINTMENT OF ESCROW AGENT; ACCEPTANCE OF THE ESCROW..........................................32
   SECTION 3.16   FEES, CHARGES AND EXPENSES OF ESCROW AGENT.....................................................34
   SECTION 3.17   NOTICE TO AUTHORITY, THE ESCROW AGENT AND BORROWER.............................................35
   SECTION 3.18   INTERVENTION BY ESCROW AGENT...................................................................35
   SECTION 3.19   SUCCESSOR ESCROW AGENT.........................................................................35
   SECTION 3.20   RESIGNATION BY THE ESCROW AGENT................................................................35
   SECTION 3.21   REMOVAL OF THE ESCROW AGENT....................................................................35
   SECTION 3.22   APPOINTMENT OF SUCCESSOR ESCROW AGENT BY THE BORROWER..........................................36
   SECTION 3.23   CONCERNING ANY SUCCESSOR ESCROW AGENT..........................................................36
   SECTION 3.24   ESCROW AGENT PROTECTED IN RELYING UPON RESOLUTIONS, ETC........................................36
   SECTION 3.25   SUCCESSOR ESCROW AGENT AS ESCROW AGENT OF THE ESCROW FUND......................................36
   SECTION 3.26   ESCROW AGENT AND AUTHORITY REQUIRED TO ACCEPT DIRECTIONS AND ACTIONS
                  OF BORROWER....................................................................................37
   SECTION 3.27   REGISTRY BOOKS.................................................................................37
   SECTION 3.28   TRANSFER OF BOND...............................................................................37
   SECTION 3.29   BOND MUTILATED, DESTROYED, STOLEN OR LOST......................................................37
   SECTION 3.30   NOTICE OF NON-COMPLIANCE.......................................................................38
   SECTION 3.31   PAID BOND......................................................................................38

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ARTICLE IV -THE LOAN.............................................................................................39

   SECTION 4.1    THE LOAN.......................................................................................39
   SECTION 4.2    PAYMENT OF LOAN................................................................................39
   SECTION 4.3    SECURITY.......................................................................................39
   SECTION 4.4    INCORPORATION OF TERMS.........................................................................39
   SECTION 4.5    NO DEFENSE OR SET-OFF..........................................................................39
   SECTION 4.6    ASSIGNMENT OF AUTHORITY'S RIGHTS...............................................................40
   SECTION 4.7    OPINION OF COUNSEL FOR BORROWER................................................................40
   SECTION 4.8    OPINION OF BOND COUNSEL........................................................................40
   SECTION 4.9    OPINION OF COUNSEL FOR THE ESCROW AGENT........................................................40
   SECTION 4.10   BOND AND OTHER DOCUMENTS.......................................................................41
   SECTION 4.11   PAYMENTS.......................................................................................41
   SECTION 4.12   PREPAYMENT OF NOTE.............................................................................41

ARTICLE V -COVENANTS OF BORROWER.................................................................................42

   SECTION 5.1    PRESERVATION OF BUSINESS AND PROPERTY..........................................................42
   SECTION 5.2    INSURANCE......................................................................................42
   SECTION 5.3    PAYMENT OF TAXES, ETC..........................................................................43
   SECTION 5.4    CONCERNING THE PROJECT.........................................................................44
   SECTION 5.5    COMPLIANCE WITH CODE AND ARBITRAGE REGULATIONS.................................................44
   SECTION 5.6    COMPLIANCE WITH APPLICABLE LAWS................................................................47
   SECTION 5.7    ENVIRONMENTAL COVENANT.........................................................................47
   SECTION 5.8    [RESERVED].....................................................................................47
   SECTION 5.9    SALES, TRANSFERS, ETC..........................................................................47
   SECTION 5.10   PROJECT USERS..................................................................................47
   SECTION 5.11   INSPECTION OF THE PROJECT......................................................................48
   SECTION 5.12   RELOCATION OF THE PROJECT......................................................................48
   SECTION 5.13   AFFIRMATIVE ACTION AND PREVAILING WAGE REGULATIONS.............................................48
   SECTION 5.14   COSTS AND EXPENSES.............................................................................49
   SECTION 5.15   ANNUAL CERTIFICATE.............................................................................49
   SECTION 5.16   [RESERVED].....................................................................................49
   SECTION 5.17   AGGREGATE LIMIT................................................................................49
   SECTION 5.18   BROKERAGE FEE..................................................................................49
   SECTION 5.19   COST RECOVERY..................................................................................50
   SECTION 5.20   PAYMENT OF COMPENSATION AND EXPENSES OF ESCROW AGENT...........................................50
   SECTION 5.21   PAYMENT OF AUTHORITY'S FEES AND EXPENSES.......................................................50
   SECTION 5.22   INDEMNIFICATION................................................................................50
   SECTION 5.23   DAMAGE TO PROJECT..............................................................................51
   SECTION 5.24   FINANCING STATEMENTS...........................................................................52
   SECTION 5.25   NOTICE AND CERTIFICATION WITH RESPECT TO BANKRUPTCY PROCEEDINGS................................52

ARTICLE VI -EVENTS OF DEFAULT AND REMEDIES.......................................................................56

   SECTION 6.1    EVENTS OF DEFAULT; ACCELERATION................................................................56
   SECTION 6.2    PURCHASER'S REMEDIES...........................................................................57
   SECTION 6.3    ADDITIONAL REMEDIES OF AUTHORITY...............................................................58
   SECTION 6.4    NO REMEDY EXCLUSIVE............................................................................58
   SECTION 6.5    AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES..................................................58
   SECTION 6.6    NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER.....................................................58
   SECTION 6.7    PAYMENT OF LOAN ON EVENT OF DEFAULT; SUIT THEREFOR.............................................58
   SECTION 6.8    EVENT OF CANCELLATION..........................................................................59

ARTICLE VII -MISCELLANEOUS.......................................................................................61

   SECTION 7.1    LIMITATION OF LIABILITY OF AUTHORITY...........................................................61
   SECTION 7.2    NOTICES........................................................................................61

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   SECTION 7.3    SEVERABILITY...................................................................................61
   SECTION 7.4    APPLICABLE LAW.................................................................................62
   SECTION 7.5    ASSIGNMENT.....................................................................................62
   SECTION 7.6    REBATE REMINDER................................................................................62
   SECTION 7.7    AMENDMENTS.....................................................................................62
   SECTION 7.8    TERM OF AGREEMENT..............................................................................62
   SECTION 7.9    NO WARRANTY OF CONDITION OR SUITABILITY BY AUTHORITY...........................................62
   SECTION 7.10   REASONABLE CONSENT.............................................................................63
   SECTION 7.11   AMOUNTS REMAINING IN ESCROW FUND...............................................................63
   SECTION 7.12   HEADINGS.......................................................................................63

EXHIBIT A -FORM OF BOND.........................................................................................A-1

EXHIBIT B -ADDENDUM TO CONSTRUCTION CONTRACT....................................................................B-1

EXHIBIT C -CONTRACTOR'S CERTIFICATE AND AGREEMENT...............................................................C-1

EXHIBIT D -BORROWER'S COMPLETION CERTIFICATE....................................................................D-1

EXHIBIT E -INVESTOR LETTER......................................................................................E-1

EXHIBIT F -PROJECT EQUIPMENT....................................................................................F-1

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                                    ARTICLE I

                    BACKGROUND, REPRESENTATIONS AND FINDINGS

         Section 1.1 BACKGROUND. THIS BOND AGREEMENT, dated the 31st day of May,
2000, by and among the NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY (the
"Authority"), a public body corporate and politic constituting an
instrumentality of the State of New Jersey (the "State"), FLEET CAPITAL
CORPORATION, a Rhode Island corporation (the "Purchaser"), CHITTENDEN TRUST
COMPANY, a Vermont Financial Institution (the "Escrow Agent"), and FOILMARK,
INC., a Delaware Corporation (the "Borrower").

         WHEREAS, the New Jersey Economic Development Act, constituting Chapter
80 of the Pamphlet Laws of 1974 of the State, approved on August 7, 1974, as
amended and supplemented (the "Act"), declares it to be in the public interest
and to be the policy of the State to foster and promote the economy of the
State, increase opportunities for gainful employment and improve living
conditions, assist in the economic development or redevelopment of political
subdivisions within the State, and otherwise contribute to the prosperity,
health and general welfare of the State and its inhabitants by inducing
manufacturing, industrial, commercial, recreational, retail, service and other
employment promoting enterprises to locate, remain or expand within the State by
making available financial assistance; and

         WHEREAS, the Authority, to accomplish the purposes of the Act, is
empowered to extend credit to such employment promoting enterprises in the name
of the Authority on such terms and conditions and in such manner as it may deem
proper for such consideration and upon such terms and conditions as the
Authority may determine to be reasonable; and

         WHEREAS, the Borrower has applied to the Authority for financial
assistance in the principal amount of $4,500,000 for financing a project (the
"Project") consisting of the (i) the acquisition of machinery and equipment to
be used by Transfer Print Foils, Inc., a second tier wholly owned subsidiary of
the Borrower for the purpose of the manufacture of hotstamping, holographic and
wood grain laminate foils; and (ii) the payment of a portion of the costs
associated with the issuance of the Bond (as hereinafter defined), and the
Authority has, by resolution duly adopted in accordance with the Act, accepted
the application of the Borrower for assistance in financing the Project; and

         WHEREAS, the Authority has by resolution, duly adopted in accordance
with the Act, authorized the issuance and sale of $4,500,000 principal amount of
its Economic Development Bond (Foilmark, Inc. Project) to the Purchaser for the
purpose of making a loan to the Borrower; and

<PAGE>

         WHEREAS, the execution and delivery of this Bond Agreement have been
duly authorized by the parties, and all conditions, acts and things necessary
and required by the Constitution or statutes of the State or otherwise to exist,
to have happened or to have been performed precedent to or in the execution and
delivery of this Bond Agreement do exist, have happened and have been performed;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and representations herein, and intending to be legally bound, the
parties hereto hereby mutually agree as follows:

         Section 1.2       DEFINITIONS.

         In this Bond Agreement, the following terms shall have the meanings
specified in the foregoing recitals:

                          Act
                          Authority
                          Borrower
                          Escrow Agent
                          Purchaser
                          Project
                          State

         The following terms shall have the following meanings unless a
different meaning clearly appears from the context:

         "Affirmative Action Program" shall mean the provisions of the Act, and
the resolutions, rules and regulations of the Authority, as adopted, amended and
supplemented from time to time, requiring that the Borrower and all Contractors
make a good faith effort to hire minority workers or to cause minority workers
to be hired for employment in performance of Construction Contracts in
fulfillment of the minority employment goals fixed by the Authority, and that
the Borrower and all Contractors file such certificates, reports and records and
do other prescribed acts as are necessary to demonstrate or assure compliance;

         "Application" shall mean the Borrower's application to the Authority,
dated February 18, 2000, seeking financial assistance for the Project, and all
attachments, exhibits, correspondence and modifications submitted in writing to
the Authority in connection with said application;

         "Article" shall mean a specified article hereof, unless otherwise
indicated;

         "Assignment" shall mean the assignment by the Authority in favor of the
Purchaser of certain of the rights of the Authority hereunder, as the same may
be amended from time to time;

         "Assignment of Leases" shall mean the Assignment of Leases and Rents
dated the date hereof from the Borrower to the Authority, as the same may be
amended from time to time.

                                      -2-

<PAGE>

         "Authority's Fee" shall mean the fee payable to the Authority for its
services in connection with the issuance of the Bond in the amount of $22,500;

         "Authorized Authority Representative" shall mean any individual or
individuals duly authorized by the Authority to act on its behalf;

         "Authorized Borrower Representative" shall mean any individual or
individuals duly authorized by the Borrower to act on its behalf;

         "Bond" shall mean the $4,500,000 Economic Development Bond (Foilmark,
Inc. Project) in the form attached hereto as Exhibit A;

         "Bond Agreement" or "Agreement" shall mean this Bond Agreement, as the
same may be amended from time to time;

         "Bond Counsel" shall mean the law firm of McCarter & English, LLP,
Newark, New Jersey, or an attorney or firm of attorneys of nationally recognized
standing on the subject of municipal bonds;

         "Bond Documents" shall mean this Bond Agreement, the Note, the Security
Agreement, the Assignment, the Guaranties, the Assignment of Leases, the
Financing Statements and all documents and instruments executed in connection
therewith and all amendments and modifications thereto;

         "Bond Proceeds" shall mean the amount, including any accrued interest,
paid to the Authority or its agents by the Purchaser pursuant to this Bond
Agreement as the purchase price of the Bond, and interest income earned thereon
prior to the Completion Date;

         "Bond Year" shall mean each one-year period (or shorter period from
date of issue) that ends at the close of business on a day in the calendar year
selected by the Borrower;

         "Borrower's Completion Certificate" shall mean the certificate
described in Section 3.7 hereof, executed by the Borrower in form and substance
acceptable to the Authority, wherein the Borrower certifies as to such matters
as the Authority shall require;

         "Change of Control" means the occurrence of any of the following (i)
the consumation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any person other than a Continuing
Director or executive officer of the Borrower on the dated hereof or his or
their affiliates becomes the "beneficial owner" (as such terms is defined in
Rule 13d-3 and Rule 13d-5 of the Rules of the United States Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended,
except that a person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether such right is
currently exercisable or is exercisable only upon the occurrence of a subsequent
condition), directly or indirectly, of more than 35% of the common stock of the
Borrower (measured by voting power rather than number of shares) or (ii) the
first day on which a majority of the members of the Board of Directors of the
borrower are not Continuing Directors.

                                      -3-

<PAGE>

         "Code" shall mean the Internal Revenue Code of 1986, as amended, and
the Treasury Regulations in effect thereunder;

         "Completion Date" shall mean the date of completion of the Project as
stated in the Borrower's Completion Certificate described in Section 3.7 hereof;

         "Construction Contract" shall mean, for purposes of the Prevailing Wage
Provision, any contract or subcontract in the amount of $2,000 or more for
construction, reconstruction, demolition, alteration, repair or maintenance
work, including painting and decorating, undertaken in connection with the
Project, and shall mean, for purposes of the Affirmative Action Program, any
contract or subcontract for construction, reconstruction, renovation or
rehabilitation undertaken in connection with the Project;

         "Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Borrower who (i) was a member of such
Board of Directors on the date of this Agreement or (ii) was nominated for
election or elected to such Board of Directors with the approval of a majority
of the continuing directors who were members of such Board a the time of such
nomination or election.

         "Contractor" shall mean the principal or general contractor or
contractors engaged by the Borrower in the performance of a Construction
Contract;

         "Contractor's Certificate and Agreement" shall mean the instrument
executed by the Contractor in form and substance acceptable to the Authority,
wherein the Contractor agrees to undertake or perform such obligations and
certifies as to such matters as the Authority shall require, including, without
limitation, that, for purposes of the Prevailing Wage Provision, all workers
engaged in the performance of Construction Contracts shall be paid a wage rate
not less than the Prevailing Wage Rate and that all Construction Contracts will
so provide and that, for purposes of the Affirmative Action Program, the
Contractor will make a good faith effort to hire or cause to be hired minority
workers so as to meet the minority employment goals of the Affirmative Action
Program and that all Construction Contracts will so provide;

         "Contractor's Completion Certificate" shall mean the certificate or
certificates executed by the Contractor and any Subcontractors, upon substantial
completion of construction of the Project, if any, in form and substance
acceptable to the Authority, wherein the Contractor certifies as to such matters
as the Authority shall require, including, without limitation, that the
Contractor has made a good faith effort to satisfy the minority employment goals
established in the Affirmative Action Program and that the Contractor has
submitted all certificates, reports and records required by the Authority;

         "Cost" shall mean those items set forth in Section 3(c) of the Act and
all expenses as may be necessary or incident to the Project;

         "Counsel for the Escrow Agent" shall mean the law firm of Stalter &
Kennedy, LLP;

                                      -4-

<PAGE>

         "Counsel for the Purchaser" shall mean the law firm of Hurtuk & Daroff
Co., L.P.A.;

         "Determination of Taxability" shall mean one of the following
situations:

         (i)    Cancellation of the Bond pursuant to Section 6.8 of this
Agreement;

         (ii)   The delivery of written notice (the "Audit Notice") to the
Borrower by the Authority or an owner of the Bond (a "Bondholder") declaring
that an audit of the Bond issue has been undertaken by the Internal Revenue
Service (the "IRS"), such Audit Notice to be effective 30 days after the giving
of the same, unless prior thereto the Borrower:

                        (a)    Files written notice with the Authority or the
         Bondholder that it intends to participate in the audit process, at its
         own expense, to obtain a written determination from the IRS affirming
         that the interest on the Bond is excluded from gross income; and

                        (b)    Agrees in writing to reimburse and fully
         indemnify and hold harmless the Authority and the Bondholders from and
         against any and all liability, damage, loss, cost or expense (including
         attorneys' fees) which the Authority or the Bondholder may incur as the
         result of the audit, and further agrees to pay on demand all costs and
         expenses which the Authority or the Bondholder may incur in the audit,
         and to furnish such bond, letter of credit or other form of security as
         the Authority or the Bondholder may reasonably request from time to
         time to secure the Authority or the Bondholder's obligations under the
         Bond, including without limitation any potential increases in interest,
         whether prospective or retroactive, and any potential taxes, closing
         agreement amount, penalties or related interest.

         (iii)    The delivery of written notice (the "Taxability Notice") by a
Bondholder to the Authority and the Borrower declaring that the IRS has issued
to a Bondholder a proposed deficiency letter ("30-day letter"), the effect of
which (in the opinion of the Bondholder) is to assert that the interest on the
Bond is included in the gross income of the Bondholder, such Taxability Notice
to be effective 30 days after the giving of the same, subject to a stay of such
30-day period for the period of litigation if prior thereto the Borrower:

                        (a)    Agrees in writing to participate in and defend a
         final judicial determination to affirm that the interest on the Bond is
         excluded from gross income and

                        (b)    Agrees in writing to reimburse and fully
         indemnify and hold harmless the Authority and the Bondholder from and
         against any and all liability, damage, loss, cost or expense (including
         attorneys' fees) which the Authority or the Bondholder may incur as the
         result of the litigation, and further agrees to pay on demand all costs
         and expenses which the Authority or the Bondholder may incur in the
         litigation, and to furnish such bond, letter of credit or other form of
         security as the Authority or the Bondholder may reasonably request from
         time to time to secure the Authority or the Bondholder's obligations
         with respect to the Bond, including without limitation any

                                      -5-

<PAGE>

         potential increases in interest, whether prospective or retroactive,
         and any potential taxes, closing agreement amount, penalties or related
         interest.

         In the event the final judicial determination is adverse, the
Taxability Notice will be effective 30 days after the entry of such final
judicial determination.

         (iv) The delivery of written notice (the "Event Notice") to the
Borrower by the Authority or the Bondholder declaring that an Event of
Taxability has occurred on a specified date (other than by reason of any of the
events described in the foregoing subparagraphs (i), (ii) and (iii)) and
describing the Event of Taxability, such Event Notice to become effective 30
days after the giving of same unless prior thereto the Borrower, on behalf of
the Authority or the Bondholder:

                        (a)(i)    Agrees in writing to seek a private letter
         ruling or other written determination (hereinafter, referred to as the
         "Ruling") from the IRS affirming that the interest on the Bond is
         excluded from gross income and will remain unaffected by the Event of
         Taxability described in the Event Notice or (ii) agrees in writing to
         take a specific remedial action with respect to the Bond pursuant to
         Treasury Regulation ss.1.141-12 to preserve the exclusion from gross
         income of interest on the Bond; and

                        (b)    Procures an opinion from Bond Counsel, at the
         Borrower's cost, to the effect that there is a substantial and valid
         legal basis for the position that the interest on the Bond has been, is
         and will remain tax-exempt, and (i) Bond Counsel has no reason to
         believe that the IRS will decline to consider the ruling request for
         procedural or technical reasons, and no knowledge or reason to believe
         that the IRS has indicated a position not to rule favorably on similar
         questions or would not rule favorably or (ii) Bond Counsel has no
         reason to believe that the proposed remedial action would not be
         sufficient to preserve the exclusion from gross income of interest on
         the Bond; and

                        (c)    Agrees in writing to reimburse and fully
         indemnify and hold harmless the Bondholder and the Authority from and
         against any and all liability, damage, loss, cost or expense (including
         reasonable attorneys' fees) which the Bondholder or the Authority may
         incur as the result of seeking the Ruling or undertaking the remedial
         action, and further agrees to pay on demand all costs and expenses
         which the Bondholder or the Authority may incur in seeking the Ruling
         or undertaking the remedial action, and to furnish such bond, letter of
         credit or other form of security as the Bondholder or the Authority may
         reasonably request from time to time to secure the Bondholder or the
         Authority's obligations with respect to the Bond, including without
         limitation any potential increases in interest, whether prospective or
         retroactive, and any potential taxes, closing agreement amount,
         penalties or related interest;

         "Equity Account" shall mean the account in the Escrow Fund so
designated and established pursuant to Section 3.5 hereof.

         "Escrow Fund" shall mean the fund so designated and established
pursuant to Section 3.5 hereof;

                                      -6-

<PAGE>


         "Event of Cancellation" shall mean an event of cancellation as defined
in Section 6.8 hereof;

         "Event of Default" shall mean any event of default as defined in
Section 6.1 hereof;

         "Event of Taxability" shall mean a change in law or fact, or the
interpretation thereof, or the occurrence or recognition of a fact, circumstance
or situation which causes or could cause the loss of the exclusion from gross
income provided under Section 103(a) of the Code for interest on the Bond other
than by reason of the Bond being held by a person who is a Substantial User;

         "Final Rebate Computation Date" shall mean the date the last Bond is
retired;

         "Financing Statements" shall mean the Uniform Commercial Code financing
statements that are made a part of the Record of Proceedings, executed by the
Borrower, as debtor;

         "General Certificate of the Authority" shall mean the certificate of
the Authority that is made a part of the Record of Proceedings;

         "Governmental Authority" or "Governmental Authorities" shall mean the
United States, the State and any political subdivision, agency, department,
commission, board, bureau or instrumentality of any of them, including any local
authorities, which exercise jurisdiction over the Project.

         "Gross Proceeds" shall have the meaning as set forth in Section
148(f)(6)(B) of the Code and Treas. Reg. ss.1.148-1(b), and shall include, with
respect to the Bond, any proceeds as defined in Treas. Reg. ss.1.148-1(c);

         "Guarantors" shall mean, collectively, HoloPak Technologies, Inc.,
Foilmark Manufacturing Corporation, 2945-5649 Quebec, Inc., Transfer Print
Foils, Inc., Alubec Industries, Inc. and Foilmark Foreign Sales Corporation.

         "Guaranties" shall mean, collectively, the Guaranty Agreements, each
dated the date hereof, from the Guarantors to the Authority, as the same may be
amended from time to time.

         The terms "herein", "hereunder", "hereby", "hereto", "hereof" and any
similar terms refer to this Bond Agreement; the term "heretofore" shall mean
before the date of execution of this Bond Agreement; and the term "hereafter"
shall mean after the date of execution of this Bond Agreement.

         "Indemnified Parties" shall mean the State, the Authority, the
Purchaser, the Escrow Agent, any person who "controls" the State, the Authority
or the Purchaser within the meaning of Section 15 of the Securities Act of 1933,
as amended, or Section 20 of the Securities Exchange Act of 1934, as amended,
and any member, officer, official, employee or attorney of the State, the
Authority, the Escrow Agent or the Purchaser;

                                      -7-

<PAGE>

         "Initial Rebate Computation Date" shall have the meaning as set forth
in Section 5.5 of this Bond Agreement;

         "Institutional Investor" means an "accredited investor" within the
meaning of Regulation D of the United States Securities and Exchange Commission
and a "qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, as amended.

         "Loan" shall mean the loan from the Authority to the Borrower in the
principal amount of $4,500,000 under the terms and conditions provided for
herein;

         "Moody's" shall have the meaning ascribed to such term in Section 3.13
hereof;

         "Net Proceeds" shall mean the Bond Proceeds less any amounts placed in
a reasonably required reserve or replacement fund within the meaning of Section
148 of the Code;

         "Note" shall mean the note executed by the Borrower in favor of the
Authority evidencing the Loan;

         "Paragraph" shall mean a specified paragraph of a Section, unless
otherwise indicated;

         "Permitted Investments" shall have the meaning ascribed in such term in
Section 3.13 hereof;

         "Person" or "Persons" shall mean any individual, corporation,
partnership, joint venture, trust or unincorporated organization, or a
governmental agency or any political subdivision thereof;

         "Premises" shall mean the premises and all improvements thereon upon
which the Project is located in the Project Municipality;

         "Prevailing Wage Provision" shall mean the provisions of the Act and
the resolutions, rules and regulations of the Authority, as adopted, amended and
supplemented from time to time, requiring that workers engaged in Construction
Contracts be paid a wage rate not less than the Prevailing Wage Rate, and that
the Borrower and all Contractors file such certificates, reports and records and
do other prescribed acts as are necessary to demonstrate or assure compliance;

         "Prevailing Wage Rate" shall mean the prevailing wage rate established
by the Commissioner of the New Jersey Department of Labor and Industry from time
to time in accordance with the provisions of N.J.S.A. 34:11-56.30 for the
Project Municipality;

         "Principal User" shall mean any principal user within the meaning of
section 144(a) of the Code and Proposed Treasury Regulation 1.103-10(h), and
includes: (a) any Person who has an ownership interest in the Project; (b) any
Person who uses more than 10 percent of the Project, measured by fair rental
value or use of space (as measured as a percentage of the square footage of
non-common areas); (c) under certain circumstances, any Person who manages the
Project; (d) a lessor having a reversionary interest in the Project; (e) under
certain circumstances,
                                      -8-

<PAGE>

any Person who is a principal customer of the output of the Project; and (f) any
other Person who both enjoys the primary use of the Project and directly or
indirectly constitutes the primary source of payment of either the principal of
or interest on any issue of debt obligations used to finance the Project;

         "Proceeds Account" shall mean the account in the Escrow Fund so
designated and established pursuant to Section 3.5 hereof.

         "Project Equipment" shall mean all equipment, machinery or other
personal property purchased by the Borrower with the proceeds of the Bond and
all equipment, machinery or other personal property to which improvements,
renovations, modifications and accessions are to be made with proceeds of the
Bond, and all replacements thereof, accessions thereto and substitutions
therefor and such other equipment as may be approved by the Purchaser in
substitution thereof, including those items set forth in Exhibit F hereto;

         "Project Municipality" shall mean collectively the Township of East
Brunswick, County of Middlesex, State of New Jersey;

         "Proper Charge" shall mean (i) issuance costs of the Bond, including
legal fees, printing costs and similar expenses, to the extent such costs do not
exceed two per centum (2%) of the proceeds of the Bond; (ii) an expenditure for
the Project paid and incurred after January 13, 2000 and used for the
acquisition or improvement of land or the acquisition, construction,
reconstruction or improvement of property of a character subject to the
allowance for depreciation; or (iii) expenditures for the Project which, after
taking into account all expenditures under (i) above, will not result in more
than five per centum (5%) of the Net Proceeds being expended for expenditures
other than those referred to in (ii) above;

         "Rebate Amount" shall have the meaning as set forth in Section 5.5(f)
of this Bond Agreement;

         "Rebate Computation Date" shall mean the date that the Rebate Amount
for an issue is computed under Treas. Reg. ss.1.148-3(e);

         "Rebate Fund" shall mean the fund so designated and established
pursuant to Section 3.6 hereto;

         "Record of Proceedings" shall mean the Bond Documents, certificates,
affidavits, opinions and other documentation executed in connection with the
sale of the Bond and the making of the Loan;

         "Related Person" shall mean a related person within the meaning of
Section 144(a)(3) or Section 147(a) of the Code, as is applicable;

         "Requisition Form" shall mean the form of requisition required by
Section 3.5 hereof as a condition precedent to the disbursement of moneys from
the Escrow Fund, in the form made part of the Record of Proceedings;

                                      -9-

<PAGE>

         "Resolution" shall mean collectively the resolutions of the Authority
adopted on March 14, 2000 and May 9, 2000 accepting the Application, making
certain findings and determinations, authorizing the issuance and sale of the
Bond and determining other matters in connection with the Project;

         "S&P" shall have the meaning ascribed to such term in Section 3.13
hereof;

         "Section" shall mean a specified section hereof, unless otherwise
indicated;

         "Security Agreement" shall mean the Security Agreement dated June 1,
2000 made by the Borrower in favor of the Authority in connection with the Loan
as the same may be amended from time to time;

         "Subcontractor" shall mean any Person engaged by a Contractor or a
Subcontractor in the performance of any Construction Contract.

         "Substantial User" shall mean a substantial user of the Project within
the meaning of Section 147(a) of the Code and Treasury Regulation ss.1.103-11
(or any successor Treasury Regulation Section) or any Related Person to a
Substantial User;

         "Tax-Exempt Bond" shall mean any obligation of a state or political
subdivision thereof under Section 103(c)(1) of the Code (including financing
leases and any other arrangements, however labeled) the interest on which is
excludable from gross income under Section 103(a) of the Code. Tax-Exempt Bond
also includes an interest in a regulated investment company to the extent that
at least 95% of the income to the holder of the interest is interest that is
excludable from gross income under Section 103(a) of the Code;

         "Tax-Exempt Facility-Related Bonds" shall mean tax-exempt
facility-related bonds as defined in Section 144(a)(10)(B) of the Code;

         "Tax Representation Letter" shall mean the certificate executed by the
Borrower in form and substance acceptable to the Authority, wherein the Borrower
certifies as to such matters as the Authority shall require;

         "Transfer Print Foils" shall mean Transfer Print Foils, Inc., a
second-tier, wholly owned subsidiary of the Borrower; and

         "Yield" shall mean the discount rate that, when used in computing the
present value as of the issue date of all unconditionally payable payments of
principal, interest and fees for qualified guarantees on the issue and amounts
reasonably expected to be paid as fees for qualified guarantees on the issue,
produces an amount equal to the issue present value, using the same discount
rate, of the issue price of the Bond of the issue as of the issue date and shall
be determined on the basis of issue price (within the meaning of Treasury
Regulation ss.1.148-1(b)).

         All capitalized terms used herein but not defined herein shall have the
meaning ascribed

                                      -10-

<PAGE>

to such terms in the other Bond Documents.

         Section 1.3    BORROWER REPRESENTATIONS. The Borrower represents that:

         (a) POWERS, ETC. It is duly organized corporation, validly existing and
in good standing under the laws of the State of Delaware and is qualified to do
business and is in good standing in the State, has the power and authority to
own its properties and assets and to carry on its business as now being
conducted (and as now contemplated by the Borrower), and has the power to
perform all the undertakings of the Bond Documents to borrow hereunder and to
execute and deliver the Bond Documents.

         (b) EXECUTION OF BOND DOCUMENTS. The execution, delivery and
performance by the Borrower of the Bond Documents and other instruments required
by this Agreement:

                  (i) have been duly authorized by all requisite company action;

                  (ii) do not and will not conflict with or violate any
         provision of law, rule or regulation, or any order of any court or
         other agency of government;

                  (iii) do not and will not violate or result in a default under
         any provision of any indenture, agreement or other instrument to which
         the Borrower is a party or is subject;

                  (iv) do not and will not result in the creation or imposition
         of any lien, charge or encumbrance of any nature, other than the liens
         created by the Bond Documents; and

                  (v) do not and will not conflict with or violate any provision
         of the certificate of incorporation or By-Laws of the Borrower.

         (c) ACQUISITION COSTS. The Bond Proceeds will only be used for
acquisition, construction, reconstruction, renovation or rehabilitation of the
Project and for payment of costs of issuance of the Bond.

         (d) LITIGATION. There is no action, suit or proceeding at law or in
equity or by or before any governmental instrumentality or other agency now
pending or, to the knowledge of the Borrower, threatened against or affecting it
or any of its properties or rights that, if adversely determined, would (i)
affect the transactions contemplated hereby, (ii) affect the validity or
enforceability of the Bond Documents, (iii) affect the ability of the Borrower
to perform its obligations under the Bond Documents, (iv) materially impair the
Borrower's right to carry on its business substantially as now being conducted
(and as now contemplated by the Borrower), or (v) have a material adverse effect
on the Borrower's financial condition.

         (e) PAYMENT OF TAXES. The Borrower has filed or caused to be filed all
Federal, State and local tax returns that are required to be filed, and has paid
or caused to be paid all taxes as shown on said returns or on any assessment
received by it to the extent that such taxes have become due. The Borrower
represents that the taxes as shown on said returns were computed in good faith
and are believed by the Borrower to be accurate.

                                      -11-

<PAGE>

         (f) NO DEFAULTS. The Borrower is not in breach or default, in any
material respect, in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement or instrument to
which it is a party or by which it is bound.

         (g) NO MATERIAL ADVERSE CHANGE. There has been no material adverse
change in the financial condition of the Borrower since the date of the
financial statements submitted with the Application.

         (h) IMPORTANT INDUCEMENT. The availability of the financial assistance
by the Authority as provided herein has been an important inducement to the
Borrower to undertake the Project and to locate the Project in the State.

         (i) OBLIGATIONS OF THE BORROWER. The Bond Documents have been duly
executed and delivered and are legal, valid and binding obligations of the
Borrower, enforceable against it in accordance with their respective terms,
subject, however, to bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or limiting creditors' rights generally and the
application of general principles of equity.

         (j) NO UNTRUE STATEMENTS. The Bond Documents, the Application or any
other document, certificate or statement furnished to the Authority or the
Purchaser by or on behalf of the Borrower do not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements contained herein and therein not misleading or incomplete. It is
specifically represented that the Borrower, to the best of its knowledge after
diligent inquiry, is not involved in any litigation required to be disclosed in
the Application nor is it the subject of any investigation or administrative
proceeding except as disclosed in the Application. It is specifically understood
by the Borrower that (i) all such statements, representations and warranties
shall be deemed to have been relied upon by the Authority as an inducement to
issue the Bond and to make the Loan and by the Purchaser as an inducement to
purchase the Bond, and (ii) if any such statements, representations and
warranties were false at the time they were made, the Authority or the Purchaser
may, in its or their sole discretion, consider any such misrepresentation or
breach of warranty an Event of Default as defined in Section 6.1 hereof and
exercise the remedies provided for in this Agreement.

         (k) NO ACTION. The Borrower has not taken and will not take any action,
and knows of no action that any other Person has taken or intends to take, that
would cause interest income on the Bond to be included in the gross income of
the recipients thereof under the Code, other than a Person who is a Substantial
User.

         (l) OPERATION OF THE PROJECT. The operation of the Project in the
manner presently contemplated and as described in the Application will not
conflict with any current zoning, water, air pollution or other ordinances,
orders, laws or regulations applicable thereto. The Borrower will acquire and
complete the Project pursuant to this Agreement.

         (m) COMMENCEMENT OF PROJECT; PROPER CHARGES. The Borrower has not
incurred any expense prior to January 13, 2000 for which it shall seek
reimbursement from the Proceeds

                                      -12-

<PAGE>

Account of the Escrow Fund, other than a Proper Charge.

         (n) LIMITATION ON EXPENDITURES; PRINCIPAL USER. The sum of the
following does not exceed $10,000,000:

         (i) the face amount of any outstanding issues of obligations (other
         than the Bond) exempt from taxation under Section 103 of the Code, the
         proceeds of which were or will be used primarily with respect to
         facilities (A) located within the Project Municipality or located in
         the same county (but not in any incorporated municipality) and (B) the
         Principal User of which is or will be the Borrower or any other
         Principal User of the Project or any Related Person;

         (ii) the aggregate amount of any capital expenditures paid or incurred
         by the Borrower or other Principal User of the Project or any Related
         Person to the Borrower or other Principal User of the Project (other
         than those financed out of the proceeds of the Bond or a bond referred
         to in subparagraph (i) above) during the six (6) year period beginning
         three (3) years prior to the date of issuance of the Bond and ending
         three (3) years after such date of issuance with respect to facilities
         located within the Project Municipality or located in the same county
         (but not in any incorporated municipality);

         (iii) the aggregate amount of all capital expenditures paid or incurred
         for the three (3) year period prior to the date of issuance of the Bond
         by any Person other than the Borrower or other Principal User of the
         Project or a Related Person to the Borrower or other Principal User of
         the Project (e.g., a landlord or other lessor), with respect to and for
         the benefit of facilities located within the Project Municipality of
         "contiguous" or "integrated" facilities located in any adjacent
         political jurisdiction of which a Principal User of the Project or any
         Related Person is a Principal User; and

         (iv) the principal amount of the Bond.

         As of the date hereof, the Borrower and Transfer Print Foils are the
only Principal Users of the Project.

         (o) PROJECT MUNICIPALITY. The Project is located wholly within the
borders of the Project Municipality, and the Premises are not contiguous with
the borders of any portion of other municipality. The operation of the Project
is not integrated with any other facility in any municipality other than the
Project Municipality operated by any Principal User of the Project. All of the
facilities financed by the Bond Proceeds are located within one state, and
neither the Borrower nor any Related Person is a user of any facility financed
by the proceeds of the Bond, other than the Project.

         (p)      OUTSTANDING TAX-EXEMPT BONDS.

                           (i) Except for the $4,400,000 Massachusetts
         Industrial Finance Agency Industrial Revenue Bonds Foilmark
         Manufacturing Corporation, 1995 Series A dated January 13, 1998, there
         is outstanding no other issue of Tax-Exempt Bonds

                                      -13-

<PAGE>

         (including industrial development bonds), the proceeds from the sale of
         which have been or will be used with respect to facilities the
         Principal User of which is or will be the Borrower or any Principal
         User of the Project; and

                  (ii) The face amount of the Bond when added to the Tax-Exempt
         Facility-Related Bonds allocated to the Borrower or any other
         Test-Period Beneficiary that are outstanding at the time of the
         issuance of the Bond (not including any bond to be redeemed from the
         Net Proceeds) does not exceed $40,000,000.

         (q) TAX CONSEQUENCES. The Borrower hereby gives the Purchaser notice of
the following tax consequences arising under the Code, including, but not
limited to:

                  (i) interest on the Bond is subject to an alternative minimum
         tax;

                  (ii) a tax may be imposed on the "excess net passive income"
         of S corporations, which may include interest on tax-exempt
         obligations;

                  (iii) a branch profits tax may be levied on the "effectively
         connected earnings and profits" of certain foreign corporations, which
         may include tax-exempt interest;

                  (iv) ownership of tax exempt obligations may result in
         collateral federal income tax consequences to certain taxpayers,
         including, without limitation, financial institutions, property and
         casualty insurance companies, individual recipients of Social Security
         or railroad retirement benefits and taxpayers who may be deemed to have
         incurred or continued indebtedness to purchase or carry such bonds; and

                  (v) interest on the Bond is includable in the gross income of
         a Person who is a Substantial User.

         (r) SUBSTANTIAL USERS. No Person (or any Related Person within the
meaning of Section 147(a) of the Code) who was a Substantial User of the
Project, within the meaning of Section 147(a) of the Code, at any time during
the five (5) year period immediately preceding the date hereof, and who will
receive, directly or indirectly, Bond Proceeds of the Bond in an amount equal to
five per centum (5%) or more of the face amount of the Bond in payment for its
interest in the Project, will be a Substantial User of the Project or a Related
Person at any time during the five (5) year period beginning on the date of
issuance of the Bond.

         (s) PLACEMENT IN SERVICE. The Project was not acquired or placed in
service by the Borrower (determined in accordance with the provisions of Section
103 of the Code and the applicable regulations thereunder) more than one (1)
year prior to the date of issuance of the Bond.

         (t) NO COMMON PLAN OF FINANCING. Subsequent to fifteen (15) days prior
to the date the Bond is sold, the Borrower or any Related Person (or group of
related persons including the Borrower) has not guaranteed, arranged,
participated in, assisted with, borrowed the proceeds of or leased facilities
financed by obligations issued pursuant to Section 103 of the Code by any

                                      -14-

<PAGE>

state or local governmental unit or any constituted authority empowered to issue
obligations by or on behalf of any state or local governmental unit, other than
the Authority. During the period commencing on the date of the sale of the Bond
and ending fifteen (15) days thereafter, there will be no obligations issued
pursuant to Section 103 of the Code that are guaranteed by the Borrower or any
Related Person (or group of Related Persons including the Borrower) or that are
issued with the assistance or participation of, or by arrangement with, the
Borrower or any Related Person (or group of Related Persons including the
Borrower) without the written opinion of Bond Counsel to the effect that the
issuance of such obligation will not adversely affect their opinion as to the
exclusion of interest on the Bond from the gross income of the Purchaser under
Section 103 of the Code, other than a Person who is a Substantial User. Other
than the Borrower or any Related Person (or group of Related Persons including
the Borrower), no person has (i) guaranteed, arranged, participated in, assisted
with the issuance of or paid any portion of the cost of the issuance of the
Bond, or (ii) provided any property or any franchise, trademark or trade name
(within the meaning of Section 1253 of the Code) that is to be used in
connection with the Project.

         (u)      USE OF PROCEEDS.

                  (i) Less than twenty-five per centum (25%) of the Net Proceeds
         will be used directly or indirectly to acquire land or an interest
         therein.

                  (ii) No more than twenty-five per centum (25%) of the Net
         Proceeds will be used to provide facilities the primary purpose of
         which is (i) retail food and beverage services, (ii) automobile sales
         or service, and (iii) the provision of recreation or entertainment.

                  (iii) No portion of the Bond Proceeds will be used to provide
         any private or commercial golf course, country club, massage parlor,
         tennis club, skating facility (including roller skating, skateboarding
         and ice skating), racquet sports facility (including any handball or
         racquetball court), hot tub facility, suntan facility, racetrack,
         airplane, skybox (or other private luxury box), health club facility,
         gambling facility or liquor store.

         (v) ECONOMIC LIFE. The information contained in the Tax Representation
Letter setting forth the respective cost, economic life, ADR midpoint life, if
any, under Rev. Proc. 87-56, as supplemented and amended from time to time, and
guideline life, if any, under Rev. Proc. 62-21, 1962-2 C.B. 118, as supplemented
and amended from time to time, of each asset constituting the Project to be
financed with the proceeds of the Bond is true, accurate and complete.

         (w) AGGREGATION OF ISSUES FOR SINGLE PROJECT. The Project does not
share "substantial common facilities", within the meaning of Section 144(a)(9)
of the Code, with any other facility financed by an outstanding Tax-Exempt Bond.

         (x)      ENVIRONMENTAL REPRESENTATION.

                  (i) For purposes of this Section 1.3(x), "Applicable
         Environmental Laws" shall

                                      -15-

<PAGE>

         mean (A) the Comprehensive Environmental Response, Compensation and
         Liability Act of 1980, as amended, 42 U.S.C. 9601 ET SEQ. ("CERCLA");
         (B) the Resource Conservation and Recovery Act of 1976, as amended, 42
         U.S.C. 6901 ET SEQ. ("RCRA"); (C) the New Jersey Spill Compensation and
         Control Act, as amended, N.J.S.A. 58:10-23.11B ET SEQ. ("Spill Act");
         (D) the New Jersey Leaking Underground Storage Tank Act, as amended,
         N.J.S.A. 58:10A-21 ET SEQ. ("LUST"); (E) the Industrial Site Recovery
         Act adopted June 16, 1993 by the State ("ISRA"); and (F) any and all
         laws, regulations and executive orders, either Federal, State and
         local, pertaining to environmental matters, as the same may be amended
         or supplemented from time to time. Any terms mentioned in the following
         subsections that are defined in any Applicable Environmental Law shall
         have the meanings ascribed to such terms in said laws; provided,
         however, that if any of such laws are amended so as to broaden any term
         defined therein, such broader meaning shall apply subsequent to the
         effective date of such amendment.

                  (ii) Except for the ongoing investigation under the New Jersey
         Department of Environmental Protection Bureau of Underground Storage
         Tanks Case #91-06-04-1413, UST #0033590, the Borrower represents and
         warrants that neither, to its knowledge, the Borrower nor the Project
         are in violation of or subject to any existing, pending or threatened
         investigation or inquiry by any governmental authority pertaining to
         any Applicable Environmental Law. The Borrower shall not knowingly
         cause or permit the Project to be in violation of, or do anything that
         would subject the Project to any remedial obligations under, any
         Applicable Environmental Law, and shall promptly notify the Authority
         and the Purchaser in writing of any existing, pending or threatened
         investigation or inquiry by any governmental authority in connection
         with any Applicable Environmental Law.

                  (iii) The Borrower represents and warrants that no friable
         asbestos, or any substance containing asbestos deemed hazardous by
         Federal or State regulations, is presently installed in the Project.
         The Borrower covenants that it will not install in the Project friable
         asbestos or any substance containing asbestos deemed hazardous by
         Federal or State regulations. In the event any such materials are found
         to be present at the Project, the Borrower agrees to remove the same
         promptly upon discovery at its sole cost and expense.

                  (iv) Except as permitted by law, the use that the Borrower
         intends to make of the Project will not result in the disposal or other
         release or discharge of any Hazardous Substance or Hazardous Waste on
         or to the Project.

                  (v) The Borrower further represents, warrants, covenants and
agrees as follows:

                  (A) Except as permitted by applicable Federal, State and local
laws, regulations and executive orders, none of the real property owned and/or
occupied by the Borrower, including, without limitation, the Project, will be
used in the future to (1) refine, produce, store, handle, transfer, process or
transport Hazardous Substances or Hazardous

                                      -16-

<PAGE>

Wastes; or (2) generate, manufacture, refine, transport, heat, store, handle or
dispose of Hazardous Substances or Hazardous Wastes.

                  (B) Except for the ongoing investigation under the New Jersey
Department of Environmental Protection Bureau of Underground Storage Tanks Case
#91-06-04-1413, UST #0033590, the Borrower has not received any communication,
written or oral, from the New Jersey Department of Environmental Protection
concerning any intentional or unintentional action or omission on the Borrower's
part resulting in the releasing, spilling, leaking, pumping, pouring, emitting,
emptying or dumping of Hazardous Substances or Hazardous Wastes into the waters
or onto the lands of the State, or into the waters outside the jurisdiction of
the State, resulting in damage to the lands, waters, fish, shellfish, wildlife,
biota, air and other resources owned, managed, held in trust or otherwise
controlled by the State.

                  (C) The Borrower is an owner and operator of a Major Facility
and has furnished the New Jersey Department of Environmental Protection with all
the information required by N.J.S.A. 58:10-23.11d and has filed with the
Director of the Division of Taxation a tax report or return, and has paid all
taxes due therewith, in accordance with N.J.S.A. 58:10-23.11h.

                  (D) The Borrower's facilities and the Project is an activity
which is classified as an Industrial Establishment under ISRA. In the event that
the provisions of ISRA become applicable to the Project subsequent to the date
hereof, the Borrower shall give prompt written notice thereof to the Purchaser
and shall take immediate requisite action to insure full compliance therewith.
The Borrower shall deliver to the Authority and the Purchaser copies of all
correspondence, notices and submissions that it sends to or receives from the
New Jersey Department of Environmental Protection in connection with such ISRA
compliance. The Borrower's obligation to comply with ISRA shall, notwithstanding
its general applicability, also specifically apply to a sale, transfer, closure
or termination of operations associated with any foreclosure action.

                  (E) No lien has been attached to any revenue or any real or
personal property owned by the Borrower and located in the State, including,
without limitation, the Project, as a result of (1) the Administrator of the New
Jersey Spill Compensation Fund expending moneys from said fund to pay for
Damages (as such term is defined in N.J.S.A. 58:10-23.11(g)) and/or Cleanup and
Removal Costs (as such term is defined in N.J.S.A. 58:10-23.11(b)(d)); or (2)
the Administrator of the United States Environmental Protection Agency expending
moneys from the Hazardous Substance Superfund (as such term is referred to in 26
U.S.C. ss.9507) for Damages (as such term is defined in 42 U.S.C. ss.9601(6))
and/or Response Action Costs (as such term is defined in 42 U.S.C. ss.9607(a)).
In the event that any such lien has been filed, the Borrower shall then, within
sixty (60) days from the date that the Borrower is given notice of such lien of
(or within such shorter period of time in the event that the State or the United
States has commenced steps to have the Project sold), either: (i) pay the claim
and remove the lien from the Premises; or (ii) furnish (a) a bond satisfactory
to the Authority and the Purchaser in the amount of the claim out of which the
lien arises, (b) a cash deposit in the amount of the claim out of which the lien
arises, or (c) other security satisfactory to the Authority and the Purchaser in
an amount sufficient to discharge the claim out of which the lien arises.

                                      -17-

<PAGE>

                  (F) In the event that the Borrower shall cause or permit to
exist a releasing, spilling, leaking, pumping, pouring, omitting, emptying or
dumping of Hazardous Substances or Hazardous Wastes into the waters or onto the
lands of the State, or into the waters outside the jurisdiction of the State,
resulting in damage to the lands, waters, fish, shellfish, wildlife, biota, air
or other resources owned, managed, held in trust or otherwise controlled by the
State, without having obtained a permit issued by the appropriate authorities,
the Borrower shall promptly clean up such release, spill, leak, pumping,
pouring, emission, emptying or dumping in accordance with the provisions of the
Spill Act.

         (y) ACTIONS AFFECTING TREATMENT OF INTEREST. The Borrower has not taken
and will not take any action, and knows of no action that any other person has
taken or intends to take, that would cause interest income on the Bond to be
includable in the gross income of the recipients thereof under Section 103 of
the Code, other than a Person who is a Substantial User.

         (z) NO FEDERAL GUARANTY. The Bond will not be Federally guaranteed
within the meaning of Section 149(b) of the Code. For purposes of this
representation, no Principal User of the Project has entered into any leases of
the Project to, or any sales or service contracts with, any Federal government
agency with the result that the Bond is so Federally guaranteed within the
meaning of Section 149(b) of the Code.

         (aa) ISSUANCE COSTS. No more than two percent (2%) of the proceeds of
the Bond will be used to pay the issuance costs of the Bond (as such terms are
used in Section 147(g) of the Code).

         (bb) MANUFACTURING. The Borrower represents that: (i) it will use or
cause the Project to be used as a "manufacturing facility" within the meaning of
Section 144(a)(12)(C) of the Code; (ii) no more than 25 percent of the net
proceeds of the Bond will be used to finance property the use of which is merely
directly related to or ancillary to the core manufacturing facility (e.g.,
product delivery vehicles or inventory storage); and (iii) all such facilities
will be located on the same site as the manufacturing facility.

         (cc) UTILITIES. All utility services necessary for the operation of the
Project for its intended purposes are available at the boundaries of the
Premises, including water supply, storm and sanitary sewer, gas, electric power
and telephone facilities.

         (dd) REQUISITIONS. Each Requisition Form for an advance heretofore
presented to the Escrow Agent and the receipt of the funds requested thereby are
for appropriate direct and indirect costs of the Project.

         (ee) NO LIENS. The Borrower has entered into no contract or arrangement
of any other kind the performance of which by the other party thereto would give
rise to a lien on the Premises or Project prior to the security granted pursuant
to the Bond Documents which has not been subordinated to the lien created by the
Security Agreement.

         (ff) ACCESS. Either roads necessary for the full utilization of the
Project for its

                                      -18-

<PAGE>

intended purposes have been completed or the necessary rights of way therefor
have been acquired by the appropriate Governmental Authority or dedicated to
public use and accepted by such Governmental Authority, and all necessary steps
have been taken by the Borrower and such Governmental Authority to assure the
complete construction and installation thereof no later than the Completion Date
or any earlier date required by any law, order or regulation.

         (gg) TRUE AND CORRECT. The Borrower covenants that the representations
and warranties hereby made by it in this Section 1.3 and within its control will
be true and correct continuously throughout the term of this Agreement.

         Section 1.4       AUTHORITY  REPRESENTATIONS  AND FINDINGS.  The
Authority  hereby  confirms its findings and represents that:

         (a) It is a public body corporate and politic constituting an
instrumentality of the State, duly organized and existing under the laws of the
State, particularly the Act. The Authority is authorized to issue the Bond in
accordance with the Act and to use the proceeds from the sale of the Bond to
make the Loan to the Borrower.

         (b) It has complied with the provisions of the Act and has full power
and authority pursuant to the Act to consummate all of the transactions
contemplated to be consummated by the Authority by this Bond Agreement, the
Bond, the Resolution and any and all other agreements relating thereto and to
issue, sell and deliver the Bond as provided herein.

         (c) By the Resolution duly adopted by the Authority and still in full
force and effect, it has duly authorized the execution, delivery and due
performance of this Bond Agreement, the Assignment and the Bond and the taking
of any and all actions as may be required on the date hereof on the part of the
Authority to carry out, give effect to and consummate the transactions
contemplated by this Bond Agreement. All approvals of the Authority necessary in
connection with the foregoing have been received.

         (d) The Authority has the requisite authority to execute the Bond and
when delivered to and paid for by the Purchaser, the Bond will have been duly
authorized, executed and issued and will constitute a valid and binding limited
obligation of the Authority enforceable in accordance with its terms (subject to
any applicable bankruptcy, insolvency, moratorium or other similar laws or
equitable principles affecting creditors' rights or remedies generally). The
State is not obligated to pay, and neither the faith and credit nor taxing power
of the State is pledged to the payment of the principal or redemption price, if
any, of or interest on the Bond. The Bond is a special, limited obligation of
the Authority, payable solely out of the revenues or other receipts, funds or
moneys of the Authority pledged hereunder and from any amounts otherwise
available hereunder for the payment of the Bond. The Bond does not now and shall
never constitute a charge against the general credit of the Authority. The
Authority has no taxing power.

         (e) The execution and delivery of this Bond Agreement, the Assignment
and the Bond, and compliance with the provisions hereof and thereof, do not
conflict with or constitute on the part of the Authority a violation of the
Constitution of the State or a violation or breach of or default under its
by-laws or any statute, indenture, mortgage, deed of trust, note or other

                                      -19-

<PAGE>

agreement or instrument to which it is a party or by which it is bound or, to
the knowledge of the Authority, any order, rule or regulation of any court or
governmental agency or body having jurisdiction over it or any of its activities
or properties. All consents, approvals, authorizations and orders of
governmental or regulatory authorities that are required to be obtained by the
Authority for the consummation of the transactions contemplated hereby and
thereby have been obtained.

         (f) It shall apply the proceeds from the sale of the Bond and the
revenues derived under this Bond Agreement for the purposes specified and in the
manner provided in this Bond Agreement.

         (g) To the best of its knowledge, there is no action, suit or
proceeding at law or in equity pending or threatened against the Authority to
restrain or enjoin the issuance or sale of the Bond or in any way contesting the
validity or affecting the power of the Authority with respect to the issuance
and sale of the Bond or the documents or instruments executed by the Authority
in connection therewith or the existence or powers of the Authority or the right
of the Authority to finance the Project, nor to the best knowledge of the
Authority, any basis therefor.

         (h) Any certificate signed by an Authorized Authority Representative
and delivered to the Borrower or the Purchaser shall be deemed a representation
and warranty by the Authority to the Borrower or the Purchaser, as the case may
be, as to the statements made therein.

         (i) The Authority covenants to comply with the provisions of the Code
applicable to the Bond and covenants not to take any action, or fail to take any
action, that would cause the interest on the Bond to become includable in gross
income for federal income tax purposes under Section 103 of the Code, other than
a Person who is a Substantial User. Without limiting the generality of the
foregoing, the Authority will not take any action, or permit any action to be
taken which would cause the Bond to be an "arbitrage bond" under the section 148
of the Code. All of the representations and certifications of the Authority
contained in the arbitrage certificate with respect to the Bond are incorporated
herein by reference with the same force and effect as if set out in full herein.

         It is specifically understood and agreed that the Authority makes no
representation as to the financial position or business condition of the
Borrower, and it does not represent or warrant as to any of the statements,
materials (financial or otherwise), representations or certifications furnished
or to be made and furnished by the Borrower in connection with the sale of the
Bond, or as to the correctness, completeness or accuracy of any such statements.

         Section 1.5       PURCHASER REPRESENTATIONS.  The Purchaser hereby
represents as follows:

         (a) It has made an independent investigation and evaluation of the
financial position and business condition of the Borrower and the value of the
Project, or has caused such investigation and evaluation of the Borrower and the
Project to be made by Persons it deems competent to do so. All information
relating to the business and affairs of the Borrower that the Purchaser has
requested in connection with the transactions referred to herein has been
provided to the Purchaser. The Purchaser hereby expressly waives the right to
receive such information

                                      -20-

<PAGE>

from the Authority, and it relieves the Authority and its agents,
representatives and attorneys of any liability for failure to provide such
information or for the inclusion of any untrue fact in such information or in
any of the documents, representations or certifications to be provided by the
Borrower under this Agreement or for the failure therein to include any fact.

         (b) It is purchasing the Bond for its own account with the purpose of
investment and not with the present intention of distribution or resale thereof.
The Bond will not be sold unless (i) registered in accordance with the rules and
regulations of the Securities and Exchange Commission, (ii) the Authority is
furnished with an opinion of counsel or a "No Action" letter from the Securities
and Exchange Commission stating that such registration is not required or (iii)
the transferee is an Institutional Investor and delivers an "Investor Letter" in
the form attached hereto as Exhibit E.

         Section 1.6       AFFIRMATIVE COVENANTS OF THE BORROWER.  The Borrower
hereby affirmatively covenants to:

         (a) Promptly give written notice to the Purchaser of: (i) the details
of any Reportable Events (as defined in ERISA); (ii) the occurrence of any event
that would constitute an Event of Default; and (iii) the commencement of any
proceeding or litigation that, if adversely determined, would materially
adversely affect its financial condition or ability to conduct business.

         (b) Keep and maintain all of its properties and assets in good repair,
maintain insurance of the types and in the amounts deemed, in its reasonable
judgment, sufficient by the Purchaser and as is customary for businesses similar
to the Borrower's business, deliver to the Purchaser certificates of all such
insurance in effect, and cause all policies covering any collateral and business
interruption to contain loss payee endorsements in favor of the Authority and
the Purchaser and to be subject to cancellation or reduction in coverage only
upon thirty (30) days' prior written notice thereof to the Purchaser.

         (c) Pay and discharge when due all taxes, assessments or other
governmental charges imposed on it or its properties, unless the same are
currently being contested in good faith by appropriate proceedings and adequate
reserves are maintained therefor.

         (d) Operate its properties, rented or owned, in compliance with all
applicable orders, rules and regulations, and duly file such reports as may be
required or appropriate.

         (e) Permit the Authority's and the Purchaser's representatives access
to its properties and, upon ten (10) days' prior notice, financial records, to
make extracts from and/or audit such records, and to examine and discuss its
properties, business, finances and affairs with the officers of the Borrower and
its outside accountants.

         (f) In the event that there shall be filed a lien against any of its
properties by any governmental entity in connection with the discharge of
hazardous substances or waste, then either (i) pay the claim and remove the lien
from the applicable property or (ii) furnish to such governmental entity that
imposed the lien a bond, cash deposit or security reasonably satisfactory

                                      -21-

<PAGE>

to such governmental entity in an amount sufficient to discharge the lien.

         (g) Promptly clean up any hazardous substances or waste discharged
without a proper permit therefor and resulting in damage to natural resources.

         (h) All leases of the Project, if any, will be subordinate to the lien
of the Bond Documents and in form satisfactory to the Purchaser.

         (i) Promptly comply with all laws, ordinances, orders, rules, statutes
and regulations of Governmental Authorities and furnish the Purchaser, promptly,
with reports of any official searches made by any Governmental Authority and any
claims of violations thereof.

         (j) Permit the Purchaser and the Authority and their representatives to
enter upon the Premises and inspect the Project.

         (k) Cause the satisfaction of all conditions of this Agreement to be
performed by or imposed upon the Borrower.

         (l) Comply with all restrictions, covenants and easements affecting the
Premises or the Project.

         (m) It has taken all steps necessary to assure that all software or
computer programs used by it, which are material to the operation of its
business, are designed to be used during and after the calendar year 2000 A.D.
and, to the best of the Borrower's knowledge, such software or computer programs
will operate during each time period without error material to the operation of
its business regarding date, data, specifically including any error relating to,
or the product of, date data which represents or references different centuries
or more than one century.

         Section 1.7       NEGATIVE  COVENANTS OF THE  BORROWER.  The Borrower
hereby  affirmatively  covenants not to do any of the following unless it
receives the consent of the Authority and the Purchaser:

         (a) Make or suffer a material change of ownership that constitutes a
Change of Control.

         (b)      Change its fiscal year.

         (c) Create, assume or permit to exist any mortgage, security deed, deed
of trust, pledge, lien, charge or other encumbrance on any of its assets,
whether now owned or hereafter acquired, which has not been subordinated to the
lien created by the Security Agreement, other than (i) liens for taxes contested
in good faith; (ii) liens accruing by law for employee benefits; (iii) liens for
taxes payable but not yet due; or (iv) those liens in favor of or permitted by
the Purchaser.

         (d)      [Reserved]

                                      -22-

<PAGE>

         (e) Transfer any assets, except in the ordinary course of the
Borrower's business for value received; liquidate or discontinue its normal
operations with the intent to liquidate; enter into any merger or consolidation
or acquire all or substantially all of the assets, stock or other equity
interests of another entity; provided however that the Borrower may merge with
another entity if the Borrower is the surviving entity, and further provided:
(i) the tangible net worth of the surviving, resulting or transferee company
following the merger, consolidation or transfer is equal to or greater than the
tangible net worth of the Borrower immediately preceding the merger,
consolidation or transfer; (ii) any litigation or investigations in which the
surviving, resulting or transferee company or its principals, officers and
directors are involved, and any court, administrative or other orders to which
the surviving, resulting or transferee company or its principals, officers and
directors are subject, relate to matters arising in the ordinary course of
business; (iii) the merger, consolidation or transfer shall not impair the
excludability of interest paid on the Bond from the gross income of the
Purchaser thereof for purposes of federal income taxation or cause a reissuance
pursuant to an opinion of a nationally recognized Bond Counsel; and (vi) after
the merger, consolidation or transfer, the Project shall be operated as an
authorized project under the Act.

         Section 1.8       REPORTING  REQUIREMENTS OF THE BORROWER.  The
Borrower hereby agrees to supply to the Authority, upon its request therefor,
and to the Purchaser:

         (a) Annual audited consolidated financial statements prepared by an
independent certified public accountant acceptable to the Purchaser, and
management letters of the Borrower within one hundred twenty (120) days after
the end of each fiscal year.

         (b) Quarterly financial statements of the Borrower within sixty (60)
days after the end of each fiscal quarter on an unaudited management prepared
basis, in reasonable detail and prepared in conformity with generally accepted
accounting principles, applied on a basis consistent with that of the preceding
year or its Form 10-Q as filed with the Securities Exchange Commission for such
fiscal quarter.

         (c) Quarterly certificates of an Authorized Borrower Representative
evidencing covenant compliance with the covenants set forth herein, including
the financial covenants in Section 5.26 herein within sixty (60) days after the
end of each fiscal quarter.

         (d) Quarterly accounts receivable aging summary report and inventory
summary prepared by an Authorized Borrower Representative within sixty (60) days
after the end of each fiscal quarter.

         (e) Any other information reasonably requested by the Purchaser or the
Authority.

                                      -23-

<PAGE>

                                   ARTICLE II

                                   THE PROJECT

         Section 2.1 DESCRIPTION OF PROJECT. As the acquisition, construction,
reconstruction, renovation, rehabilitation and installation of the Project
proceeds, and as improvements, additions, changes and replacements are proposed
by the Borrower, the Borrower will supplement the description of the Project
contained in the recitals hereof by filing with the Authority and the Purchaser
information showing:

                  (a) a description of the nature, function and size of
         machinery and equipment to be included as part of the Project;

                  (b) the Contractors performing work in connection with
         acquisition construction, reconstruction, renovation, rehabilitation
         and installation of the Project; and

                  (c)      the estimated cost of the Project.

The Borrower will provide such supplemental information to reflect material
additions to, deletions from and changes in the Project, and it will notify the
Authority and the Purchaser of such modifications so that the Authority and the
Purchaser will be able to ascertain the nature, location and estimated cost of
the facilities covered by this Agreement.

         Section 2.2 NOTICES AND PERMITS. The Borrower shall give or cause to be
given all notices and shall comply or cause compliance with all laws,
ordinances, municipal rules and regulations and requirements of public
authorities applying to or affecting the conduct of the work on the Project, and
the Borrower will defend and save the Authority, its members, officers, agents
and employees and the Purchaser, its officers, agents and employees harmless
from all fines due to failure to comply therewith. The Borrower shall procure or
cause to be procured all permits and licenses necessary for the construction,
reconstruction, rehabilitation, renovation, acquisition and installation of the
Project.

         Section 2.3 ADDITIONS AND CHANGES TO PROJECT. The Borrower may, at its
option with the consent of the Purchaser and at its own cost and expense, at any
time and from time to time, make such improvements, additions and changes to the
Project as it may deem to be desirable for its uses and purposes; provided that
it does not adversely affect the tax exempt status of the Bond or prevent the
Project from being an authorized project under the Act.

                                      -24-

<PAGE>

                                   ARTICLE III

                                  THE FINANCING

         Section 3.1 THE FINANCING. The Purchaser has agreed with the Authority
to purchase the Bond, and the Authority has agreed to make the Loan to the
Borrower. To accomplish this financing, the following acts will occur
simultaneously and concurrently with the execution and delivery of this
Agreement:

         (1) The Authority will sell, issue and deliver the Bond to the
Purchaser.

         (2) The Purchaser will deliver the proceeds from the sale of the Bond
to the Escrow Agent in accordance with instructions from the Authority to the
Purchaser to such effect.

         (3) The Borrower will execute and deliver to the Authority the Note and
the other Bond Documents.

         (4) The Authority will assign, subject to certain reservations, the
Bond Documents to the Purchaser in accordance with the Assignment.

         Section 3.2 EFFECTIVENESS OF BOND AND NOTE. Subject to Section 6.8
hereof, the Bond will be outstanding and will control the interest rate and
monthly payments due the Purchaser. If there is an Event of Default, the
provisions of Article VI hereof will govern. If the obligations of the Authority
pursuant to the Bond have been released and canceled pursuant to Section 6.8
hereof, the Note will remain fully effective and will control the interest rate
and monthly payments due the Purchaser.

         Section 3.3 THE BOND. The Bond will be a special, limited obligation of
the Authority, the principal of, premium, if any, and interest on which are
payable solely from the moneys to be derived pursuant to the Bond Documents or
derived from the liquidation of any property pledged to the Authority and
assigned to the Purchaser as security for the Loan.

         The Act provides that neither the members of the Authority nor any
Person executing bonds for the Authority shall be liable personally on said
bonds by reason of the issuance thereof.

         The State is not obligated to pay, and neither the faith and credit nor
taxing power of the State is pledged to the payment of, the principal or
redemption price, if any, of or interest on the Bond. The Bond does not now and
shall never constitute a charge against the general credit of the Authority. The
Authority has no taxing power.

         Subject to the terms and conditions and upon the basis of the
representations herein, the Authority hereby agrees to sell the Bond to the
Purchaser, and the Purchaser hereby agrees to purchase the Bond from the
Authority, at the purchase price of $4,500,000 plus accrued interest, if any,
from the date of the Bond to the date of delivery thereof and payment therefor.

                                      -25-

<PAGE>

         The Bond will be delivered in registered form. Payment for the Bond by
the Purchaser and delivery thereof by the Authority shall be made at the offices
of the Authority in Trenton, New Jersey, or at such other place in the State as
the Authority and the Purchaser mutually agree.

         The offering of the Bond has not been registered under the Securities
Act of 1933, as amended, and this Bond Agreement has not been qualified under
the Trust Indenture Act of 1939, as amended. The Bond may not be offered or sold
by the Purchaser in contravention of said acts.

         Section 3.4 DEPOSIT OF NET PROCEEDS. The Net Proceeds of the Bond will
be deposited in the Proceeds Account of Escrow Fund established in Section 3.5
hereof for payment of Costs of the Project, upon requisition by the Borrower as
provided in Section 3.5 hereof. The Borrower agrees that the sums so
requisitioned from the Escrow Fund will be used for the Costs of the Project.

         Section 3.5 ESCROW FUND. (a) The Authority irrevocably authorizes and
directs the Escrow Agent to make payments from the Escrow Fund to pay Costs of
the Project or to reimburse the Borrower for any Cost of the Project paid by it.
Pursuant to this Agreement, the Escrow Agent shall make such payments directly
to or at the direction of the Borrower without any act by the Authority, upon
compliance by the Borrower with the requirements of this Agreement.

         (b) All disbursements from the Escrow Fund are to be approved by the
Purchaser and may also be verified by the Purchaser from time to time.

         (c) Except for the first requisition, all requisitions shall be
received by the Escrow Agent no less than five (5) business days prior to the
date of the requested advance.

         (d) If at any time (which may include the execution of this Agreement
and the inception of the Loan), and from time to time, the Purchaser shall
determine that the Loan, the undisbursed balance thereof or any allocated Loan
budget amount is insufficient to cover the remaining costs of completion of the
Project or the remaining costs associated with such Loan budget amount, then to
further secure the future payment of the Borrower's share of such costs the
Purchaser may require the Borrower to furnish a "Completion Deposit", which
shall consist of a deposit with the Escrow Agent of cash, letters of credit or
marketable securities by the Borrower in an amount satisfactory to the
Purchaser, and which the Purchaser may from time to time apply, or allow the
Borrower to apply, to the satisfaction and payment of the Borrower's share with
respect to completion of the Project. Portions of any Completion Deposit shall
be released to the Borrower when and to the extent that the Purchaser determines
that the value or amount thereof is more than the excess, if any, of the total
remaining costs of completion or remaining costs of such line item of the budget
(as the case may be) over the undisbursed balance of the Loan or such line item
of the budget (as the case may be).

         (e) The Borrower agrees as a condition precedent to the disbursement of
any portion of the Escrow Fund to comply with the terms of this Agreement and to
furnish the Escrow Agent and the Purchaser with a Requisition Form signed by an
Authorized Borrower Representative

                                      -26-

<PAGE>

and approved by the Purchaser stating with respect to each payment made: (i) the
account in the Escrow Fund from which such payment is to be made; (ii) the
requisition number; (iii) the name and address of the Person to whom payment is
to be made by the Escrow Agent, the name, address and a copy of the invoice of
the Person to whom such advance was made or is to be made together, if payment
was made, with proof of payment by the Borrower; (iv) the amount to be paid; (v)
that each obligation for which payment is sought is a Proper Charge against the
applicable account of the Escrow Fund, is unpaid or unreimbursed, and has not
been the basis of any previously paid requisition; (vi) if such payment is a
reimbursement to the Borrower for costs or expenses incurred by reason of work
performed, inspected or supervised by officers or employees of the Borrower or
any of its affiliates, that the amount to be paid does not exceed the actual
cost thereof to the Borrower or any of its affiliates; (vii) that no uncured
Event of Default has occurred under this Bond Agreement; and (viii) the Borrower
has received no written notice of any lien, right to lien or attachment upon, or
other claim affecting the right to receive payment of, any of the moneys payable
under such Requisition Form to any of the Persons named therein, or if any of
the foregoing has been received, it has been released or discharged or will be
released or discharged upon payment of the Requisition Form;.

         (f) The Purchaser or its counsel, as appropriate, shall have received
from the Borrower and approved (unless otherwise indicated) all of the items
listed below. The Escrow Agent shall not make the first disbursement from the
Escrow Fund until the following has been complied with:

                  (i) Either (A) a certificate of an Authorized Borrower
Representative stating that, for purposes of the Prevailing Wage Provision and
the Affirmative Action Program, none of the moneys disbursed at any time from
the Escrow Fund will be used to pay or reimburse a payment for work done in
performance of any Construction Contract unless prior thereto there shall be
submitted to the Escrow Agent an executed Contractor's Certificate and Agreement
or (B) a Contractor's Certificate and Agreement executed by the Contractor.
Nevertheless, prior to the initial disbursement from the Escrow Fund for payment
of any Construction Contract, if not theretofore furnished, a Contractor's
Certificate and Agreement shall be submitted.

                  (ii) Evidence of insurance relating to the Project as required
by Section 5.2 of this Agreement.

                  (iii) The representations and warranties made in Section 1.3
hereof shall be true and correct on and as of the date of the initial
disbursement from the Escrow Fund with the same effect as if made on such date.

                  (iv) The Project shall not have been materially injured or
damaged by fire or other casualty unless the Purchaser shall have received
insurance proceeds sufficient in the judgment of the Purchaser to effect the
satisfactory restoration of the Project and to permit the completion thereof
prior to the Completion Date.

                  (v) As of the date of the initial advance there shall be no
Default on the part of the Borrower under this Agreement, and no default under
the Note or the other Bond Documents, and no event shall have occurred and be
continuing which after notice or passage of time or both

                                      -27-

<PAGE>

would give rise to a Default or default hereunder or thereunder.

                  (vi) With respect to any requisition for moneys from the
Escrow Fund to be applied toward the purchase or reimbursement for the purchase
of Project Equipment or other tangible personal property, a description of each
item sufficient for the purpose of adequately identifying the same in Financing
Statements, and if the moneys are to be applied to purchase Project Equipment
which will be affixed to, or used to modify, renovate or refurbish existing
equipment of the Borrower ("Existing Equipment") a description of each item of
Existing Equipment sufficient for the purpose of adequately identifying the same
in Financing Statements and Financing Statements covering the same in accordance
with Section 5.24 hereof.

                  (vii) Subordination agreements between the Purchaser and any
other parties having or claiming a security interest in the Project Equipment or
the Existing Equipment, subordinating such other parties' interests in the
Project Equipment and Existing Equipment, together with Financing Statements
covering the same, all in form satisfactory to the Purchaser.

                  (viii) Copies of any leases pursuant to which the Borrower has
leased any interest to the Project Equipment or Existing Equipment, evidence
that such leases are subordinate to the security interest created hereby and in
the Security Agreement, and assignments to the Purchaser of the Borrower's
interest therein, all in form satisfactory to the Purchaser.

                  (ix) Such other documentation, including descriptions of the
Project Equipment and Existing Equipment, subordination agreements, assignments
and Financing Statements as the Purchaser may request from time to time to
assure it has a first priority security interest in the Project Equipment and
the Existing Equipment.

         (g) The disbursement of any other advances from the Escrow Fund after
the initial advance shall be subject to the satisfaction of the following
conditions:

                  (i) all other conditions of this Section 3.5 shall remain
satisfied, performed and unimpaired as of the date of such subsequent advances.

                  (ii) the representations and warranties made in Section 1.3
hereof shall be true and correct on and as of the date of the advance with the
same effect as if made on such date.

                  (iii) as of the date of such advance there shall be no Default
on the part of the Borrower under this Agreement, and no default under the Note
or the other Bond Documents, and no event shall have occurred and be continuing
which after notice or passage of time or both would give rise to a Default or
default hereunder or thereunder.

                  (iv) the conditions of Section 3.5(f)(iv), (vi), (vii), (viii)
and (ix) shall be satisfied

         (h) Upon the written request of the Authority, the Escrow Agent shall
furnish the Authority with a record of the requisitions and disbursements from
the Escrow Fund.

                                      -28-

<PAGE>

         Section 3.6 REBATE FUND. There is hereby created and established with
the Escrow Agent an escrow fund in the name of the Authority to be designated
the Rebate Fund. There shall be paid into the Rebate Fund all amounts to be
deposited therein pursuant to Section 5.5 hereof upon written instructions to
the Escrow Agent, and said amounts shall be applied as provided in said Section
5.5. Any surplus remaining in the Rebate Fund after all payments required
therefrom pursuant to Section 5.5 hereof shall be transferred to the Proceeds
Account of the Escrow Fund, but the excess, if any, over such amount as will be
sufficient to discharge and satisfy this Bond Agreement and the fees, charges
and expenses of the Escrow Agent shall be paid over to the Borrower free and
clear of any pledge or lien hereunder.

         Section 3.7 ESTABLISHMENT OF COMPLETION DATE. Within ten (10) business
days after the completion of the Project, the Borrower shall deliver to the
Authority, the Purchaser and the Escrow Agent the Borrower's Completion
Certificate, which shall evidence completion of the Project and shall be signed
by an Authorized Borrower Representative, stating the date of the completion of
the Project and that, as of such date, except for amounts retained by the Escrow
Agent at the Borrower's direction for any cost of the Project not then due and
payable or, if due and payable, not then paid: (i) the Project has been
completed; (ii) the cost of all labor, services, materials and supplies used in
the Project have been paid, or will be paid from amounts retained by the Escrow
Agent at the Borrower's direction for any cost of the Project not then due and
payable or, if due and payable, not then paid; (iii) the Project Equipment, if
any, has been installed to the Borrower's satisfaction, such Project Equipment
so installed is suitable and sufficient for the efficient operation of the
Project for the intended purposes, and all costs and expenses incurred in the
acquisition, construction, reconstruction, renovation, rehabilitation and
installation of such Project Equipment have been paid, or will be paid from
amounts retained by the Escrow Agent at the Borrower's direction for any cost of
the Project not then due and payable or, if due and payable, not then paid; (iv)
the Project is being operated as an authorized "project" under the Act and
substantially as proposed in the Application; (v) the Borrower has reviewed the
Contractor's Completion Certificate, if any, and the Borrower has no knowledge
or information that the representations contained therein are false or
misleading; and (vi) the Borrower has required in all Construction Contracts, if
any, that wages paid to workers employed in the performance of Construction
Contracts be paid at a rate not less than the Prevailing Wage Rate.
Notwithstanding the foregoing, the Borrower's Completion Certificate may state
that it is given without prejudice to any rights against third parties that
exist at the date of the Borrower's Completion Certificate or that may
subsequently come into being. Any amount remaining in the Proceeds Account of
the Escrow Fund thereafter (except for amounts therein sufficient to cover costs
of the Project not then due and payable or not then paid) shall be applied by
the Escrow Agent in accordance with Section 3.11 hereof. The Borrower shall give
the Escrow Agent investment instructions with respect thereto that would not
result in such funds being invested at a Yield materially higher than the Yield
on the Bond.

         Section 3.8 BOND NOT TO BECOME ARBITRAGE BOND. The Escrow Agent will
invest moneys held by the Escrow Agent as directed in writing by the Borrower.
The Borrower hereby covenants to the Authority and to the Purchaser that,
notwithstanding any other provision of this Agreement or any other instrument,
it will neither make nor instruct the Escrow Agent to make any investment or
other use of the Escrow Fund or other proceeds of the Bond that would cause

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<PAGE>

the Bond to be an arbitrage bond under Section 148 of the Code and the
regulations thereunder, and that it will comply with the requirements of such
Section 148 and such regulations throughout the term of the Bond. The Escrow
Agent is entitled to rely on such written directions and shall not be liable for
any direct or consequential damages that may result from the Escrow Agent's
compliance with such directions.

         Section 3.9 RESTRICTION ON USE OF ESCROW FUND. The Borrower shall apply
the proceeds of the Bond as set forth in this Agreement and as further described
in the Tax Representation Letter, and (i) shall not use or direct the use of
moneys from the Escrow Fund, or take or omit to take any other action, so as to
cause the interest on the Bond to be included in the gross income of the
Purchaser for Federal income tax purposes, except if such Purchaser is a
Substantial User, (ii) shall not use more than 2% of the proceeds of the Bond
for costs of issuance thereof, (iii) shall use at least 95% of the proceeds of
the Bond for Project Costs constituting land or property of a character subject
to an allowance for depreciation for Federal income tax purposes within the
meaning of Section 167 of the Code, and (iv) shall not use the proceeds of the
Bond to acquire, construct or install facilities the nature of which would cause
the interest on the Bond to become subject to Federal income tax, other than a
Person who is a Substantial User.

         Section 3.10 THREE-YEAR EXPENDITURE REQUIREMENT. Except to the extent
otherwise approved by an opinion of Bond Counsel furnished by the Borrower to
the Purchaser, within three years of the date of original delivery and payment
for the Bond, the Borrower shall have acquired the Project and caused all of the
proceeds of the Bond to be expended for Costs of the Project.

         Section 3.11 COMPLETION OF PROJECT; EXCESS BOND PROCEEDS. When the
Borrower certifies to the Escrow Agent and the Authority that the Project is
complete, any amounts remaining in (a) the Proceeds Account of the Escrow Fund,
as and when determined by the Escrow Agent and the Purchaser, will be applied to
the payment of the Bond, together with any applicable prepayment premiums and
(b) the Equity Account of the Escrow Fund, as and when determined by the Escrow
Agent and the Purchaser, will be paid to the Borrower. If for any reason the
amount in the Escrow Fund proves insufficient to pay all Costs of the Project,
the Borrower will pay the remainder of such Costs.

         Section 3.12 ESCROW AGENT NOT RESPONSIBLE FOR USE OF PROCEEDS. The
Borrower acknowledges that the Escrow Agent is not responsible for the ultimate
use of the Bond Proceeds or any consequences, of whatever kind, resulting,
directly or indirectly, from the Borrower's use of Bond Proceeds.

         Section 3.13 INVESTMENT OF ESCROW FUND. (a) So long as no Event of
Default has occurred and is continuing, the Escrow Agent may invest or reinvest,
in accordance with written directions or oral directions confirmed in writing of
the Authorized Borrower Representative, only in the following obligations or
securities (collectively, "Permitted Investments"):

                  (i) direct obligations of the United States of America for
which its full faith and credit is pledged,

                                      -30-

<PAGE>

                  (ii) obligations issued by any instrumentality or agency of
         the United States of America, whether now existing or hereafter
         organized, and guaranteed by the United States of America,

                  (iii) obligations issued or guaranteed by any state of the
         United States or the District of Columbia that are rated at least Aa by
         Moody's Investors Service, Inc. ("Moody's") or AA by Standard & Poor's
         Corporation ("S&P"),

                  (iv) repurchase agreements fully secured by obligations of the
         kind specified in (i) or (ii) above, including repurchase agreements
         with the Escrow Agent,

                  (v) interest-bearing deposits in any bank or trust company
         (which may include the Escrow Agent) or any other bank or trust company
         that has a combined capital surplus and undivided profits of at least
         $50,000,000,

                  (vi) commercial paper with one of the two highest ratings from
         Moody's or S&P,

                  (vii) deposits in the Federated Cash Management Fund Trust for
         short-term government obligations or any similar common trust fund
         established pursuant to law as a legal depository of public moneys.

         (b) With respect to Permitted Investments described in clause (iv) of
subsection (a) above, the Escrow Agent shall make any such purchase subject to
agreement with the seller for repurchase by the seller at a later date, and in
such connection may accept the seller's agreement for the payment of interest in
lieu of the right to receive the interest payable by the issuer of the security
purchased, provided that title to the security so purchased by the Escrow Agent
shall vest in the Escrow Agent, that the Escrow Agent shall have a perfected
security interest in such security, and that the current market value of such
security (or of cash or additional securities of the type described in said
clauses pledged with the Escrow Agent as collateral for the purpose) is at all
times at least equal to the total amount thereafter to become payable by the
seller under said agreement, or may purchase shares of a fund whose sole assets
are of a type described in clauses (i) and (ii) of subsection (a) above and such
repurchase agreements thereof.

         (c) If any Event of Default has occurred and is continuing hereunder,
the Escrow Agent may make such investments in Permitted Investments as are
permitted under applicable law as it deems advisable and as directed by the
Purchaser; provided, that in no event shall it invest in securities issued by or
obligations of, or guaranteed by, the Authority, the Borrower or any affiliate
or agent of either of the foregoing.

         Section 3.14 GENERAL PROVISIONS OF INVESTMENTS. (a) Any Permissible
Investments of money in the Escrow Fund shall be held by or under the control of
the Escrow Agent and shall be deemed at all times as part of the fund or account
from which the investment was made, and the interest accruing on any such
investment and any profit realized from such investment shall be credited to
such fund or account and any loss resulting from such investment shall be
charged to such fund or account.

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<PAGE>

         (b) The Borrower shall not direct the Escrow Agent to invest the
proceeds of the Bond or payments due under this Bond Agreement, or any other
funds that may be deemed to be proceeds of the Bond pursuant to Section 103 or
148 of the Code and the applicable regulations thereunder, including proposed
regulations, in such a way as to cause the Bond to be treated as an "arbitrage
bond" within the meaning of Section 103 or 148 of the Code and such regulations
issued thereunder, as applicable to the Bond. In accordance with the foregoing,
unless the Escrow Agent shall have been furnished with an approving opinion of
Bond Counsel, no moneys in the Escrow Fund shall be invested except as provided
in the Authority's Arbitrage Certificate delivered in conjunction with the
issuance of the Bond.

         (c) The Escrow Agent shall not be held liable for any breach by the
Borrower of provisions of the foregoing subsection 3.14(b) as long as the Escrow
Agent invests or reinvests, pursuant to written directions of an Authorized
Borrower Representative, moneys in Permitted Investments pursuant hereto. The
Escrow Agent shall refuse to invest in obligations directed by the Authorized
Borrower Representative that violate the provisions hereof.

         Section 3.15 APPOINTMENT OF ESCROW AGENT; ACCEPTANCE OF THE ESCROW. (a)
Chittenden Trust Company is hereby appointed as Escrow Agent. The Escrow Agent
hereby accepts the escrow imposed upon it by this Agreement, and agrees to
perform said escrow, but only upon and subject to the following express terms
and conditions:

                  (i) The Escrow Agent may execute any of the powers hereof and
         perform any of its duties by or through attorneys or agents (provided
         that neither the Authority, the Borrower nor any affiliate or agent of
         any of the foregoing shall act as an agent of the Escrow Agent), and
         shall not be answerable for any willful misconduct or gross negligence
         on the part of any attorney or agent appointed hereunder and shall be
         entitled to advice of counsel concerning all matters of trusts hereof
         and the duties hereunder and may in all cases pay such reasonable
         compensation to all such attorneys and agents as may reasonably be
         employed in connection with the trusts hereof and may be reimbursed
         therefor. The Escrow Agent may act upon the opinion or advice of any
         attorney (who may be the attorney or attorneys for the Authority or the
         Borrower) approved by the Escrow Agent in the exercise of its
         reasonable judgment. The Escrow Agent shall not be responsible for any
         loss or damage resulting from any action or non-action in good faith in
         reliance upon such opinion or advice.

                  (ii) The Escrow Agent shall not be responsible for any recital
         herein or in the Bond (except in respect of the Certificate of
         Authentication of the Escrow Agent endorsed on the Bond) or for
         insuring the Project, or collecting any insurance moneys, or for the
         validity of execution by the Authority of this Agreement or of any
         supplements hereto or any instruments of further assurance, or for the
         sufficiency of the security for the Bond issued hereunder or intended
         to be secured hereby, or for the value or title of the Project or
         otherwise as to the maintenance of the security hereof, or, except as
         provided in Article VI hereof, for the eligibility of any security as
         an investment of trust funds held by it.

                                      -32-

<PAGE>

                  (iii) The Escrow Agent shall not be accountable for the use of
         the Bond delivered hereunder after the Bond shall have been delivered
         in accordance with the instructions of the Authority or the Borrower,
         as the case may be. The Escrow Agent may become the Purchaser of the
         Bond secured hereby with the same rights that it would have if not
         Escrow Agent. The Escrow Agent may engage in banking or other financial
         transactions with the Borrower with the same rights that it would have
         if not Escrow Agent.

                  (iv) The Escrow Agent shall be protected in acting in good
         faith upon any notice, request, investment instruction, consent,
         certificate, order, affidavit, letter, telegram or other paper or
         document believed to be genuine and correct and to have been signed or
         sent by the proper Person or Persons. Any action taken by the Escrow
         Agent pursuant to this Agreement upon the request or authority or
         consent of any Person, who at the time of making such request or giving
         such authority or consent is the Purchaser of the Bond, shall be
         conclusive and binding upon all future Purchasers of the same Bond and
         upon a Bond issued in exchange therefor or in place thereof.

                  (v) As to the existence or nonexistence of any fact or as to
         the sufficiency or validity of any instrument, paper or proceeding, the
         Escrow Agent shall be entitled, in the absence of bad faith on its
         part, to rely upon a certificate of the Authority signed by an
         Authorized Authority Representative or any certificate signed by an
         Authorized Borrower Representative, as sufficient evidence of the facts
         therein contained, and prior to the occurrence of an Event of Default
         of which the Escrow Agent has been notified or deemed notified as
         provided in Section 6.1 hereof, shall also be at liberty to accept a
         similar certificate to the effect that any particular dealing,
         transaction or action is necessary or expedient, but may at its
         discretion secure such further evidence deemed necessary or advisable,
         but shall in no case be bound to secure the same. The Escrow Agent may
         accept a certificate of the Secretary of the Authority under its seal
         to the effect that a resolution in the form therein set forth has been
         adopted by the Authority as conclusive evidence that such resolution
         has been duly adopted and is in full force and effect.

                  (vi) The permissive right of the Escrow Agent to do things
         enumerated in this Agreement shall not be construed as a duty, and it
         shall not be answerable for other than its gross negligence, willful
         misconduct or willful default. The Escrow Agent shall act on behalf of
         the Authority hereunder only insofar as its duties are expressly set
         forth, and it shall not have implied duties. The Escrow Agent shall not
         be under a duty to inquire into or pass upon the validity,
         effectiveness, genuineness or value of the Bond Documents, and it shall
         assume that the same are valid, effective and genuine and are what they
         purport to be. The Escrow Agent may consult with legal counsel selected
         by it, and shall be entitled to rely upon the opinion of such counsel
         in taking or omitting to take any action. The Escrow Agent shall have
         the same rights and powers as any other bank or lender and may exercise
         the same as though it were not the Escrow Agent, and it may accept
         deposits from, lend money to and generally engage in any kind of
         business with the Borrower as though it were not the Escrow Agent.

                                      -33-

<PAGE>

                  (vii) The Escrow Agent shall not be personally liable for any
         debts contracted or for damages to Persons or to personal property
         injured or damaged or for salaries or non-fulfillment of contracts
         relating to the Project during any period.

                  (viii) Subject to the provisions of this Agreement, the Escrow
         Agent and its duly authorized agents, attorneys, experts, engineers,
         accountants and representatives shall have the right, at any and all
         reasonable times, to inspect the Project fully, including all books,
         papers and records of the Authority pertaining to the Project and the
         Bond, and to copy and make extracts thereof and to take such memoranda
         from and with regard thereto as may be reasonably desired.

                  (ix) The Escrow Agent shall not be required to give any bond
         or surety in respect of the execution of the said trusts and powers or
         otherwise in respect of the Premises.

                  (x) Before taking any action hereunder, the Escrow Agent may
         require that a satisfactory indemnity bond be furnished for the
         reimbursement of all expenses to which it may be put and to protect it
         against all liability, except liability that is adjudicated to have
         resulted from gross negligence, willful misconduct or willful default
         by reason of any action so taken.

                  (xi) All moneys or investments received by the Escrow Agent
         shall, until used or applied as herein provided, be held in trust in
         the manner and for the purposes for which they were received.

         (b) In the case of and during the continuance of an Event of Default or
upon the occurrence of an Event of Default as to which the Escrow Agent has
received a notice as provided herein, the Escrow Agent shall exercise the rights
and powers vested in it hereby, and shall use the same degree of care and skill
in their exercise, as a prudent Person would exercise or use under the
circumstances in the conduct of his own affairs.

         Section 3.16 FEES, CHARGES AND EXPENSES OF ESCROW AGENT. The Escrow
Agent shall be entitled to payment or reimbursement for reasonable fees for
services rendered hereunder and all reasonable expenses actually incurred
(including advances, counsel fees and other expenses reasonably and necessarily
made or incurred by the Escrow Agent in connection with such services). The
Escrow Agent shall be entitled to be indemnified for, and be held harmless
against, any loss, liability or expense, incurred without gross negligence or
bad faith on the part of the Escrow Agent, arising out of or in connection with
the acceptance or administration of the trusts hereunder, including the costs
and expenses of defending itself against any claim or liability in the Premises.
All fees, charges and other compensation to which the Escrow Agent may be
entitled under the provisions of this Agreement are required to be paid by the
Borrower under the terms of this Bond Agreement, and, accordingly, neither the
Authority nor the Purchaser shall be liable to indemnify the Escrow Agent for
fees, charges and other compensation to which the Escrow Agent may be entitled,
and by acceptance of the trusts hereunder the Escrow Agent shall be deemed to
have agreed to the foregoing.

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<PAGE>

         Section 3.17 NOTICE TO AUTHORITY, THE ESCROW AGENT AND BORROWER. If the
Escrow Agent is notified in writing by the Internal Revenue Service of the
occurrence or possible occurrence of a Determination of Taxability, the Escrow
Agent shall give written notice thereof to the Authority, the Purchaser and the
Borrower.

         Section 3.18 INTERVENTION BY ESCROW AGENT. In any judicial proceeding
to which the Authority is a party and that, in the opinion of the Escrow Agent
and its counsel, has a substantial bearing on the interests of the Purchaser,
the Escrow Agent may, and if requested in writing by the Purchaser shall,
intervene on behalf of Purchaser provided the Purchaser agrees to indemnify the
Escrow Agent for such intervention.

         Section 3.19 SUCCESSOR ESCROW AGENT. Any corporation or association
into which the Escrow Agent may be converted or merged, or with which it may be
consolidated, or to which it may sell or transfer its trust business and assets
as a whole or substantially as a whole, or any corporation or association
resulting from any such conversion, sale, merger, consolidation or transfer to
which it is a party, provided such corporation or association is a trust company
or national or state bank within or outside the State having trust powers, is in
good standing, is acceptable to the rating agency or agencies rating the Bond,
if any, and has reported capital surplus and undivided profits of not less than
$50 million, IPSO FACTO, shall be and become successor Escrow Agent hereunder
and vested with all the trusts, powers, discretions, immunities, privileges and
all other matters as was its predecessor, without the execution or filing of any
instrument or any further act, deed or conveyance on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.

         Section 3.20 RESIGNATION BY THE ESCROW AGENT. The Escrow Agent and any
successor Escrow Agent may at any time resign by giving not less than thirty
(30) days' written notice to the Authority, the Purchaser and the Borrower. Such
resignation shall take effect only upon the appointment of a successor Escrow
Agent by the Borrower. Such notice to the Authority, the Purchaser and the
Borrower may be served personally or sent by facsimile (with a hard copy to
follow by overnight delivery). In case at any time the Escrow Agent shall resign
and no appointment of a successor Escrow Agent shall be made prior to the date
specified in the notice of resignation as the date when such resignation shall
take effect, the resigning Escrow Agent may forthwith apply to a court of
competent jurisdiction for the appointment of a successor Escrow Agent. The
Escrow Agent shall be compensated for all costs of seeking and appointing a
successor should the Borrower fail to so appoint a successor Escrow Agent within
the thirty (30) day time period to do so.

         Section 3.21 REMOVAL OF THE ESCROW AGENT. (a) Upon thirty (30) days'
written notice, the Escrow Agent may be removed at any time by an instrument or
concurrent instruments in writing delivered to the Escrow Agent, the Authority
and the Borrower and signed by the Purchaser.

         (b) The Escrow Agent may also be removed at any time for any breach of
trust or for acting or proceeding in violation of, or for failing to act or
proceed in accordance with, any provisions of this Agreement by any court of
competent jurisdiction upon the application by the Authority, the Purchaser or
the Borrower.

                                      -35-

<PAGE>

         Section 3.22 APPOINTMENT OF SUCCESSOR ESCROW AGENT BY THE BORROWER. (a)
In case the Escrow Agent shall resign, or be removed, or be dissolved, or shall
be in the course of dissolution or liquidation, or shall otherwise become
incapable of acting hereunder as fiduciary for the Purchaser, or in case it
shall be taken under the control of any public officer or officers or of a
receiver appointed by a court, the Borrower, by an instrument executed by an
Authorized Borrower Representative, shall forthwith appoint a successor Escrow
Agent to fill such vacancy. Such appointment shall become final upon the written
acceptance of such trusts by the successor Escrow Agent so appointed, as
provided in Section 3.23 hereof.

         (b) Every such Escrow Agent appointed pursuant to the provisions of
this Section 3.22 shall be a national banking association or a domestic bank or
trust company having trust powers in good standing, be acceptable to the rating
agency or agencies rating the Bond, if any, and have a reported capital surplus
and undivided profits of not less than $50 million.

         Section 3.23 CONCERNING ANY SUCCESSOR ESCROW AGENT. (a) Every successor
Escrow Agent appointed hereunder shall execute, acknowledge and deliver to its
predecessor Escrow Agent, and to the Authority and the Borrower, an instrument
in writing accepting such appointment hereunder as fiduciary for the Purchaser.
Thereupon, such successor, without any further act, deed or conveyance, shall
become fully vested with all the estates, properties, rights, powers, trusts,
duties and obligations of its predecessors.

         (b) Every predecessor Escrow Agent shall, on the written request of the
Authority or of the successor Escrow Agent, execute and deliver an instrument
transferring to such successor Escrow Agent all the estates, properties, rights,
powers, trusts, duties and obligations of such predecessor hereunder. Every
predecessor Escrow Agent shall deliver all securities and moneys held by it as
Escrow Agent hereunder to its successor for direct deposit in the appropriate
successor trust accounts. Should any instrument in writing from the Authority be
required by a successor Escrow Agent for more fully and certainly vesting in
such successor the estates, properties, rights, powers, trusts, duties and
obligations hereby vested or intended to be vested in the predecessor Escrow
Agent, any and all such instruments in writing shall, on request, be executed,
acknowledged and delivered by the Authority.

         (c) The resignation of any Escrow Agent and the instrument or
instruments removing any Escrow Agent and appointing a successor hereunder, or
the instrument evidencing the transfer of the trust estate, shall be filed
and/or recorded by the successor Escrow Agent in each filing or recording office
where this Agreement (or a memorandum thereof) shall have been filed and/or
recorded, if any.

         Section 3.24 ESCROW AGENT PROTECTED IN RELYING UPON RESOLUTIONS, ETC.
The resolutions, opinions, certificates and other instruments provided for in
this Agreement may be accepted by the Escrow Agent as conclusive evidence of the
facts and conclusions stated therein, and shall be full warrant, protection and
authority to the Escrow Agent for the application of moneys hereunder and the
taking of or omitting to take any other action under this Agreement.

         Section 3.25 SUCCESSOR ESCROW AGENT AS ESCROW AGENT OF THE ESCROW FUND.
Any

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<PAGE>

Escrow Agent that has resigned or has been removed shall cease to be Escrow
Agent of the Escrow Fund, and the successor Escrow Agent shall become such
Escrow Agent of the Escrow Fund. Every predecessor Escrow Agent shall deliver to
its successor Escrow Agent all books of account, the registration books and all
other records, documents and instruments relating to its duties as such
custodian.

         Section 3.26 ESCROW AGENT AND AUTHORITY REQUIRED TO ACCEPT DIRECTIONS
AND ACTIONS OF BORROWER. (a) Whenever, after reasonable request by the Borrower,
the Authority shall fail, refuse or neglect to give any direction to the Escrow
Agent or to require the Escrow Agent to take any other action that the Authority
is required to have the Escrow Agent take pursuant to the provisions of this
Bond Agreement, the Borrower, instead of the Authority, may give such direction
to the Escrow Agent or require the Escrow Agent to take any such action. Upon
receipt by the Escrow Agent of a written notice from the Borrower stating that
the Borrower has made reasonable request of the Authority, and that the
Authority has failed, refused or neglected to give any direction to the Escrow
Agent or to require the Escrow Agent to take any such action, the Escrow Agent
is hereby irrevocably empowered and directed, subject to other provisions of
this Agreement, to accept such direction from the Borrower as sufficient for all
purposes of this Agreement. The Borrower shall have the direct right to cause
the Escrow Agent to comply with any of the Escrow Agent's obligations under this
Agreement to the same extent that the Authority is empowered so to do.

         (b) Certain actions or failures to act by the Authority under this
Agreement may create or result in an Event of Default under this Agreement, and
the Authority hereby agrees that the Borrower may, to the extent permitted by
law, perform any and all acts or take such action as may be necessary for and on
behalf of the Authority to prevent or correct said Event of Default, and the
Escrow Agent shall take or accept such performance by the Borrower as
performance by the Authority in such event.

         Section 3.27 REGISTRY BOOKS. The Escrow Agent shall maintain at the
principal office of the Escrow Agent registry systems for the registration and
transfer of the Bond and the Escrow Agent shall register or cause such Bond to
be registered therein, and permit any Bond to be transferred thereon, under such
reasonable regulations as it or the Authority may prescribe. The Escrow Agent is
hereby appointed the agent of the Authority for such registration and transfer
of the Bond.

         Section 3.28 TRANSFER OF BOND. The Bond shall be transferable only upon
the registry systems maintained at the principal office of the Escrow Agent by
the registered owner thereof in person or by his attorney duly authorized in
writing, upon surrender thereof together with a written instrument of transfer
satisfactory to the Escrow Agent and duly executed by such registered owner or
such duly authorized attorney. No transfer of any Bond shall be valid unless
made on such registry systems and similarly noted by endorsement of the Escrow
Agent on such Bond, or unless, at the expense of the registered owner, the
Authority shall execute, and the Escrow Agent shall deliver, a new Bond
registered in the name of the transferee.

         Section 3.29 BOND MUTILATED, DESTROYED, STOLEN OR LOST. In case any
Bond shall become mutilated, or be destroyed, stolen or lost, the Authority
shall, upon request of

                                      37-

<PAGE>

the registered owner, execute, and thereupon the Escrow Agent shall deliver, a
new Bond of like tenor and of the same principal amount as the Bond so
mutilated, destroyed, stolen or lost, in exchange and substitution for such
mutilated Bond upon surrender and cancellation of such mutilated Bond, or in
lieu of and substitution for the Bond destroyed, stolen or lost, on the
condition that the Escrow Agent shall certify to the Authority that the
registered owner has (a) filed with the Escrow Agent evidence satisfactory to
the Escrow Agent that such Bond has been destroyed, stolen or lost and proof of
ownership thereof, (b) furnished the Escrow Agent with indemnity satisfactory to
the Escrow Agent, (c) complied with such other reasonable regulations as the
Escrow Agent may prescribe, and (d) agreed to pay such fees and expenses as the
Authority and the Escrow Agent may require in connection therewith.

         Section 3.30 NOTICE OF NON-COMPLIANCE. Upon receipt of notice by or
actual knowledge of any officer responsible for the administration of the Escrow
Fund, the Escrow Agent shall report to the Authority and the Purchaser any
breach of any covenant or any Event of Default by the Borrower under this
Agreement or any fact or circumstance that, except for any grace period
permitted by this Agreement, would result in any breach of a covenant or Event
of Default by the Borrower hereunder. The Escrow Agent shall report such breach,
Event of Default or information to the Authority and the Purchaser immediately
after the Escrow Agent becomes aware of such breach or Event of Default.

         Section 3.31 PAID BOND. The Escrow Agent shall notify the Authority
promptly in writing upon the maturity or full prepayment of the Bond.


<PAGE>

                                   ARTICLE IV

                                    THE LOAN

         Section 4.1 THE LOAN. The Authority agrees, upon the terms and subject
to the conditions hereinafter set forth, to make the Loan to the Borrower for
the purposes set forth in the recitals hereinabove.

         Section 4.2 PAYMENT OF LOAN. The Loan shall be evidenced by the Note.
The Loan to be repaid by the Borrower will be an amount equal to the principal
or applicable redemption price of and interest on the Bond which amount shall
not exceed $4,500,000 plus interest. Except as otherwise provided herein and in
the Note, the Loan shall be repayable by, or on behalf of, the Borrower in
installments that, as to amounts and due dates, correspond to the payments of
the principal or applicable redemption price of and interest on the Bond.

         Section 4.3 SECURITY. The Bond and the Note shall be secured by the
Bond Documents. The Borrower also hereby creates and grants in favor of the
Authority and its assignee a security interest in all funds deposited from time
to time in the Escrow Fund. This Agreement shall be deemed to be a security
agreement for the purposes of creating the security interests granted herein
subject to the provisions of the New Jersey Uniform Commercial Code. Any
accounts receivable or inventory of the Borrower or any government grants
expected to be received by the Borrower or any proceeds from either of the
foregoing are not subject to the lien of this Agreement.

         Section 4.4 INCORPORATION OF TERMS. The other Bond Documents shall be
made subject to all of the terms and conditions contained in this Agreement to
the same extent and effect as if this Agreement were fully set forth in and made
a part of the other Bond Documents. This Agreement is made subject to all the
conditions, stipulations, agreements and covenants contained in the other Bond
Documents to the same extent and effect as if the other Bond Documents were
fully set forth herein and made a part hereof. Notwithstanding any of the
foregoing, if any provisions in the other Bond Documents are inconsistent with
this Agreement, this Agreement shall control.

         Section 4.5 NO DEFENSE OR SET-OFF. The obligations of the Borrower to
make or cause to be made payment of the Loan shall be absolute and unconditional
without defense or set-off by reason of any default by the Contractors under the
Construction Contracts or by the Authority, the Escrow Agent or the Purchaser
under this Agreement or under any other agreement between the Borrower and the
Authority, the Escrow Agent or the Purchaser, failure to acquire, construct,
reconstruct, rehabilitate, renovate or install the Project, any acts or
circumstances that may constitute failure of consideration, destruction of or
damage to the Project, commercial frustration of purpose, or failure of the
Authority to perform and observe any agreement, whether express or implied, or
any duty, liability or obligation arising out of or connected with this
Agreement, it being the intention of the parties that the payments required of
the Borrower hereunder will be paid in full when due without any delay or
diminution whatsoever. Repayments of the Loan and additional sums required to be
paid by or on behalf of the Borrower hereunder shall be received by the
Authority or the Escrow Agent as net sums, and the Borrower

                                      -39-

<PAGE>

agrees to pay or cause to be paid all charges against or that might diminish
such net sums.

         Section 4.6 ASSIGNMENT OF AUTHORITY'S RIGHTS. As security for the
payment of the Bond, the Authority has, simultaneously herewith, assigned to the
Purchaser all the Authority's rights under this Agreement (except the rights of
the Authority under Sections 1.3(h), 1.3(j), 1.3(k), 1.5, 1.6(e), 1.6(j),
1.7(a), 1.7(e), 1.8, 2.1, 2.2, 2.3, 3.8, 4.6, 5.1, 5.2, 5.4, 5.5, 5.7, 5.9,
5.10, 5.11, 5.12, 5.13, 5.14, 5.15, 5.18, 5.21, 5.22, 5.24, 5.25, 6.3, 6.4, 6.5,
6.8 (which is retained exclusively by the Authority), 7.1, 7.5 and 7.9 which are
retained jointly with the Purchaser) and the other Bond Documents, to the extent
set forth therein. Except as otherwise provided herein and in the Bond
Documents, the Authority retains the right, jointly and severally with the
Purchaser, to enforce specifically the provisions contained in the Bond
Documents. The Borrower consents to such assignment and agrees to make or cause
to be made payment of the Loan under Section 4.2 hereof directly to the
Purchaser without defense or set-off by reason of any dispute between or among
the Borrower, the Authority and/or the Purchaser.

         Section 4.7 OPINION OF COUNSEL FOR BORROWER. As a condition precedent
to the issuance of the Bond, the Authority and the Purchaser shall have received
the opinion of counsel for the Borrower addressed to the Authority, Bond Counsel
and the Purchaser and satisfactory in form and substance to Bond Counsel to the
effect that (i) the Bond Documents have been duly executed and delivered by the
Borrower and constitute the valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their respective terms,
except to the extent that the enforceability of the Bond Documents may be
limited by bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally, and (ii) such other matters as Bond Counsel or
Counsel for the Purchaser may reasonably require.

         Section 4.8 OPINION OF BOND COUNSEL. As a condition precedent to the
issuance of the Bond, the Authority and the Purchaser shall have received the
opinion of Bond Counsel to the effect that:

                  (i) interest income on the Bond is not includable in gross
income for Federal income tax purposes under Section 103 of the Code, except for
interest accruing on the Bond during the period the Bond is held by a Person who
is a Substantial User;

                  (ii) interest income on the Bond and any gain from the sale
thereof are exempt from gross income under the New Jersey Gross Income Tax Act
(P.L. 1976, Chapter 47); and

                  (iii) the Bond has been duly authorized and issued under the
provisions of the Resolution and the Act and constitutes a valid, binding and
special obligation of the Authority, enforceable against the Authority in
accordance with its terms, except to the extent that the enforceability of the
Bond may be limited by bankruptcy, insolvency, reorganization or other laws
affecting creditors' rights generally.

         Section 4.9 OPINION OF COUNSEL FOR THE ESCROW AGENT. As a condition
precedent to the issuance of the Bond, the Authority shall have received an
opinion of Counsel for the Escrow Agent, dated the date of the Loan, addressed
to the Authority and reasonably satisfactory in form and substance to Bond
Counsel, that the Escrow Agent is lawfully empowered, authorized and

                                      -40-

<PAGE>

duly qualified to serve as escrow agent and to perform the provisions hereof and
to accept the trusts contemplated hereby, and that the Escrow Agent has duly
authorized the acceptance of the escrow contemplated hereby.

         Section 4.10 BOND AND OTHER DOCUMENTS. As a condition precedent to the
issuance of the Bond, the Authority shall have received:

         (a) the Bond Documents duly executed by all parties thereto;

         (b) certificates, in form and substance acceptable to the Authority and
the Escrow Agent, evidencing the insurance required to be maintained by this
Bond Agreement;

         (c) the Tax Representation Letter, in form and substance satisfactory
to Bond Counsel; and

         (d) all other documents required by the Authority, the Escrow Agent and
the Purchaser.

         Any certificate signed by an Authorized Borrower Representative and
delivered to the Authority, the Purchaser or the Escrow Agent shall be deemed a
representation or warranty by the Borrower to the Authority, the Purchaser or
the Escrow Agent, as the case may be, as to the statements made therein.

         Section 4.11 PAYMENTS. Payments to be made under this Agreement or the
Note that are stated to be due on a Saturday, Sunday or public holiday under the
laws of the State shall be made on the next succeeding business day of the
State.

         Section 4.12 PREPAYMENT OF NOTE. The Borrower shall have the right to
prepay the Loan to the same extent and on the same terms and conditions as the
Authority has the right to prepay the Bond. In addition, the Purchaser, as
assignee, may apply certain moneys to the prepayment of the Loan as provided for
in this Agreement and the other Bond Documents. The Authority covenants that it
will not make any optional prepayment on the Bond without the consent of the
Borrower; provided, however, that nothing contained in this Agreement, the Bond
or in any Bond Document shall restrict the Authority's right to cancel the Bond
pursuant to Section 6.8 hereof.

                                      -41-

<PAGE>

                                    ARTICLE V

                              COVENANTS OF BORROWER

         The Borrower covenants and agrees, so long as this Agreement shall
remain in effect, as follows:

         Section 5.1       PRESERVATION OF BUSINESS AND PROPERTY.

         (a) The Borrower will at all times preserve and maintain its existence,
rights, privileges and franchises, conduct substantially the same line of
business as presently conducted or as contemplated hereby, (provided that it
does not adversely affect the tax-exempt status of the bond or prevent the
project from being an authorized project under the Act) and preserve and protect
its property involved in the Project and other property used or useful in the
conduct of its business, and will keep such Property in good repair, working
order and safe condition and, from time to time, will make, or will cause to be
made, all needed and proper repairs, renewals, replacements, betterments and
improvements thereto. The Borrower shall pay all operating costs, utility
charges and other costs and expenses arising out of ownership, possession, use
or operation of the Project. The Authority shall have no obligation and makes no
warranties with respect to the condition or operation of the Project.

         (b) The Borrower will not use as a basis for contesting any assessment
or levy of any tax the financing under this Agreement, or the issuance of the
Bond by the Authority, and if any administrative body or court of competent
jurisdiction shall hold for any reason that the Project is exempt from taxation
by reason of the financing under this Agreement or issuance of the Bond by the
Authority or other Authority action in respect thereto, the Borrower covenants
to make payment in lieu of all such taxes in an amount equal to such taxes and,
if applicable, interest and penalties.

         Section 5.2       INSURANCE.

         (a) The Borrower agrees to insure the Project or cause such to be
insured with insurance companies licensed to do business in the State, in such
amounts as indicated herein or in such amounts, manner and against such loss,
damage and liability (including liability to third parties) as is customary with
companies in the same or similar business and located in the same or similar
areas; and to the extent not paid by a Contractor for the construction,
reconstruction, renovation, rehabilitation, installation or acquisition of any
part of the Project, to pay the premiums thereon. The form and amount of each
insurance policy issued pursuant to this Section 5.2 shall be satisfactory to
the Authority, the Escrow Agent and the Purchaser.

         (b) Each insurance policy issued pursuant to this Section 5.2 shall
name the Borrower, the Authority, the Escrow Agent and the Purchaser as
insureds, as their interests may appear.

         (c) Such insurance coverage shall include:

                                      -42-

<PAGE>

                  (i) fire and hazard insurance, including extended coverage,
         together with vandalism and malicious mischief endorsements
         (non-reporting form), after reconstruction, renovation, rehabilitation,
         installation, construction or acquisition of the Project, in an amount
         not less than 100% of the agreed upon full insurable replacement value
         of the Project by an insurer satisfactory to the Purchaser, so written
         and endorsed with a loss payee endorsement as to the Project in form
         satisfactory to the Purchaser, so as to make losses, if any, payable to
         the Escrow Agent and the Purchaser as their respective interests may
         appear;

                  (ii) comprehensive general public liability insurance (broad
         form) against any and all liability of the Borrower or claims of
         liability of the Borrower arising out of, occasioned by or resulting
         from any accident or otherwise resulting in or about the Premises and
         the adjoining streets, sidewalks or passageways, in minimum amounts of
         $1,000,000 per person per occurrence, $3,000,000 aggregate per
         occurrence and $500,000 aggregate property damage;

                  (iii) boiler and machinery insurance covering pressure valves,
         air tanks, boilers, machinery, pressure piping, heating, air
         conditioning and elevator equipment, provided that the Project contains
         equipment of such nature;

                  (iv) business interruption insurance and/or rent loss
         insurance sufficient to pay, for a period of not less than one year,
         normal operating expenses of or gross income from the Project;

                  (v) if the Premises is located within a "special flood hazard
         area" as identified by the Secretary of Housing and Urban Development
         under the Flood Disaster Protection Act of 1973 or the National Flood
         Insurance Act of 1968, flood insurance in the maximum available amount
         through the Federal Flood Insurance Program; and

                  (vi) insurance which complies with the workers' compensation
         and employers' liability laws of all states in which the Borrower shall
         have employees.

         (d) The insurance policies or endorsements shall cover the entire
Project, and shall provide that the coverage will not be reduced or canceled
without thirty (30) days' prior written notice to the Authority, the Escrow
Agent and the Purchaser. The Borrower shall provide the Authority, upon its
request, the Escrow Agent and the Purchaser with certificates from the insurers
at closing and evidence of renewal or replacement of policies required to be
maintained by this Section 5.2 at least thirty (30) days prior to the expiration
of any such policy. The Borrower may furnish, instead of original or duplicate
policies, certificates of blanket coverage, provided the Project is identified
and specifically allocated amounts shown.

         Section 5.3 PAYMENT OF TAXES, ETC. The Borrower will promptly pay and
discharge or cause to be promptly paid and discharged all taxes, assessments and
governmental charges or levies imposed upon it or in respect of any of its
property and assets before the same shall become in default, as well as all
lawful claims that, if unpaid, might become a lien or charge upon such property
and assets or any part thereof, except such that are contested in good faith by

                                      -43-

<PAGE>

the Borrower for which the Borrower has maintained adequate reserves
satisfactory to the Purchaser.

         Section 5.4 CONCERNING THE PROJECT. The Borrower shall operate or cause
the Project to be operated as an authorized project for a purpose and use as
provided for under the Act until the expiration or earlier termination of this
Bond Agreement. The Project is of a character included within the definition of
"project" in the Act. The Borrower will acquire and operate the Project
substantially in the form represented in the Application, and will neither (a)
materially alter the operation of the Project without the prior written consent
of the Authority and the Purchaser, nor (b) cause a change in the use of the
Project such that the Bond would cease to be a "qualified small issue bond"
(within the meaning of Section 144(a) of the Code). Specifically, and without
limiting the foregoing, the Borrower shall not permit the Project to be used in
any manner other than as a "manufacturing facility" within the meaning of
Section 144(a)(12)(C) of the Code.

         Section 5.5 COMPLIANCE WITH CODE AND ARBITRAGE REGULATIONS. (a) The
Borrower shall at all times do and perform all acts and things necessary or
desirable in order to assure that interest paid on the Bond shall, for the
purposes of Federal income taxation, not be includable in the gross income of
the Purchaser and shall remain excludable from such taxation, except in the
event that such Purchaser is a Substantial User. The Borrower shall not direct
the Escrow Agent to make any investment of Gross Proceeds that would result in
the Bond becoming an "arbitrage bond" within the meaning of Section 148 of the
Code. For purposes of this Section 5.5, any and all actions of any Substantial
User shall be deemed to be actions of the Borrower. In addition, any and all
actions to be undertaken by the Borrower or by any other Person as to which the
Authority, pursuant to the terms hereof, has granted its consent or approval in
advance shall be deemed to be the actions of the Borrower or such other Person
(and not the actions of the Authority or the Escrow Agent).

         (b) The Borrower will not cause the Bond to be treated as "federally
guaranteed" obligations within the meaning of Section 149(b) of the Code (as may
be modified in any applicable rules, rulings, policies, procedures, regulations
or other official statements promulgated or proposed by the Department of the
Treasury or the Internal Revenue Service with respect to "federally guaranteed"
obligations described in Section 149(b) of the Code).

         (c) The Borrower shall not permit at any time or times any of the Gross
Proceeds or any of its funds to be used, directly or indirectly, to acquire any
investment property (within the meaning of Section 148(b)(2) of the Code) the
acquisition of which would cause the Bond to be an "arbitrage bond" for the
purposes of Section 148 of the Code, and it shall comply with the arbitrage
requirements of Treas. Reg. ss.ss.1.148-1 through 1.148-11, as applicable. The
Borrower shall utilize the Bond Proceeds so as to satisfy the reasonable
expectations of the Borrower set forth in the Tax Representation Letter of the
Borrower.

         (d) The Borrower shall use the Bond Proceeds to acquire, construct and
install the Project in the manner and as specifically set forth in the Tax
Representation Letter furnished to Bond Counsel and the Authority. The Borrower
shall not expend the Bond Proceeds on assets other than those listed in the Tax
Representation Letter without the express written consent of Bond Counsel.

                                      -44-

<PAGE>

         (e) The Borrower hereby covenants that, in connection with complying
with the requirement for payment of the Rebate Amount to the United States of
America with respect to the Bond, the Borrower will take the following actions:

                  (i) Eighteen (18) months after the date of this Bond
Agreement, the Borrower will provide a written certification to the Authority
and the Escrow Agent indicating whether the Borrower complied with the 6-month
exception to the rebate requirement set forth in Section 148(f)(4)(B) of the
Code or the 18-month exception to the rebate requirement set forth in Treasury
Regulation ss.1.148-7(d).

                  (ii) Unless the Borrower has complied with the 6-month
exception or the 18-month exception, the Borrower will retain a Rebate Expert on
or within thirty (30) days before the Initial Rebate Computation Date and on
each Rebate Computation Date thereafter, (A) to compute the Rebate Amount with
respect to the Bond for the period ending on the Initial Rebate Computation
Date, (B) to deliver an opinion to the Authority and the Escrow Agent concerning
its conclusions with respect to the amount (if any) of such Rebate Amount,
together with a written report providing a summary of the calculations relating
thereto, and (C) to deliver an opinion to the Authority and the Escrow Agent
that all of the Gross Proceeds of the Bond (within the meaning of Section 148(f)
of the Code), other than Gross Proceeds of the Bond on deposit in a bona fide
debt service fund (within the meaning of Section 148(f)(4) of the Code), have
been expended on or prior to the Initial Rebate Computation Date. "Rebate
Expert" means any of the following chosen by the Borrower: (1) Bond Counsel, (2)
any nationally recognized accountant, (3) any reputable firm that offers to the
Tax-Exempt Bond industry rebate calculation services and holds itself out as
having expertise in that area, or (4) such other Person as is approved by Bond
Counsel.

                  (iii) In the event the amount in the Escrow Fund is
insufficient to fund the Rebate Fund, the Borrower shall, within ten (10)
business days of receipt of the report furnished by the Rebate Expert pursuant
to subparagraph (ii) above, pay or cause to be paid to the Escrow Agent for
deposit into the Rebate Fund the difference required to fund the Rebate Amount.
If the Borrower fails to make or cause to be made any payment required pursuant
to this subparagraph (iii) when due, the Authority shall have the right, but
shall not be required, to make such payment to the Escrow Agent on behalf of the
Borrower. Any amount advanced by the Authority pursuant to this subparagraph
(iii) shall be added to the moneys owing by the Borrower under this Bond
Agreement.

                  (iv) In the event a Rebate Amount is due, the Borrower will
direct the Escrow Agent to withdraw from the Rebate Fund and pay over to the
United States of America the Rebate Amount with respect to the Bond in
installments as follows: each payment shall be made not later than sixty (60)
days after the current Rebate Computation Date and shall be in an amount that
ensures that 100% of the Rebate Amount with respect to the Bond, as of the
current Rebate Computation Date, will have been paid to the United States of
America.

                                      -45-

<PAGE>

                  (v) The Borrower acknowledges that the Authority shall have
the right at any time and in the sole and absolute discretion of the Authority
to obtain from the Borrower and the Escrow Agent the information necessary to
determine the amount required to be paid to the United States of America
pursuant to Section 148(f) of the Code. Additionally, the Authority may, with
reasonable cause, (A) review or cause to be reviewed any determination of the
amount to be paid to the United States of America made by or on behalf of the
Borrower and (B) make or retain a Rebate Expert to make the determination of the
amount to be paid to the United States of America. The Borrower hereby agrees to
be bound by any such review or determination, absent manifest error, to pay the
costs of such review, including, without limitation, the reasonable fees and
expenses of counsel or a Rebate Expert retained by the Authority, and to pay to
the Escrow Agent any additional amounts for deposit in the Rebate Fund required
as the result of any such review or determination.

                  (vi) Notwithstanding any provision of this Section 5.5(e) to
the contrary, the Borrower shall be liable, and shall indemnify and hold the
Authority and the Escrow Agent harmless against any liability, for payments due
to the United States of America pursuant to Section 148(f) of the Code. Further,
the Borrower specifically agrees that neither the Authority nor the Escrow Agent
shall be held liable, or in any way responsible, and the Borrower shall
indemnify and hold harmless the Authority and the Escrow Agent against any
liability, for any mistake or error in the filing of the payment or the
determination of the amount due to the United States of America or for any
consequences resulting from any such mistake or error. The provisions of this
subparagraph (vi) shall survive termination of this Bond Agreement.

                  (vii) The Authority, the Escrow Agent and the Borrower
acknowledge that the provisions of this Section 5.5(e) are intended to comply
with Section 148(f) of the Code and the regulations promulgated thereunder and
if, as a result of a change in such section of the Code or the regulations
promulgated thereunder or in the interpretation thereof, a change in this
Section 5.5(e) shall be permitted or necessary to assure continued compliance
with Section 148(f) of the Code and the regulations promulgated thereunder, then
with written notice to the Authority and the Escrow Agent, the Borrower shall be
empowered to amend this Section 5.5(e) and the Authority may require, by written
notice to the Borrower and the Escrow Agent, the Borrower to amend this Section
5.5(e) to the extent necessary or desirable to assure compliance with the
provisions of Section 148 of the Code and the regulations promulgated
thereunder; PROVIDED, that either the Authority or the Escrow Agent shall
require, prior to any such amendment becoming effective, at the sole cost and
expense of the Borrower, an opinion of Bond Counsel satisfactory to the
Authority to the effect that either (A) such amendment is required to maintain
the exclusion from gross income under Section 103 of the Code of interest paid
and payable on the Bond or (B) such amendment shall not adversely affect the
exclusion from gross income under Section 103 of the Code of the interest paid
or payable on the Bond.

         (f) The Borrower shall direct the Escrow Agent in writing to pay to the
United States on behalf of the Authority an amount equal to at least ninety
percent (90%) of the Rebate Amount as of each Rebate Computation Date (except
the Final Rebate Computation Date) no later than sixty (60) days after such
Rebate Computation Date. The Borrower shall also direct the Escrow Agent in
writing to pay to the United States on behalf of the Authority all of the Rebate
Amount as of the Final Rebate Computation Date no later than the date sixty (60)
days

                                      -46-

<PAGE>

after the Final Rebate Computation Date. On or prior to each Rebate Computation
Date, the Escrow Agent shall, at the written direction of the Borrower, transfer
from the Escrow Fund to the Rebate Fund an amount equal to the amount of Rebate
Amount due to the United States on such rebate payment date. If there is not a
sufficient amount in the Escrow Fund for such transfer, the Borrower shall pay
to the Escrow Agent from other sources, on or prior to such Rebate Computation
Date, the amount necessary to make up such deficiency. Each rebate payment shall
be treated as paid when filed with the Internal Revenue Service Center, Ogden,
Utah. The rebate payment shall be accompanied by Form 8038-T, which shall be
completed by the Borrower and filed by the Escrow Agent as aforesaid.

         Section 5.6 COMPLIANCE WITH APPLICABLE LAWS. The Borrower agrees to
acquire, construct, reconstruct, rehabilitate, renovate, install, operate and
maintain the Project in accordance with all applicable Federal, State and local
laws, ordinances, rules and regulations now in force or hereinafter enacted,
including, but not limited to, such environmental protection, workers'
compensation, sanitary, safety, non-discrimination and zoning laws, ordinances,
rules and regulations as shall be binding upon the Borrower.

         Section 5.7 ENVIRONMENTAL COVENANT. The Borrower shall not permit any
action to acquire, construct, reconstruct or rehabilitate, occur that would be
in direct violation of any and all applicable Federal, State and local laws,
ordinances, rules and regulations now in force or hereinafter enacted, including
the regulations of the Authority and the regulations of the Department of
Environmental Protection.

         The Borrower shall give immediate written notice to the Authority, the
Escrow Agent and the Purchaser of any inquiry, notices of investigation or any
similar communication from the Department of Environmental Protection regarding
potential violations of ISRA or the Spill Act.

         Section 5.8       [RESERVED].

         Section 5.9 SALES, TRANSFERS, ETC. Other than the lease of the Project
Equipment to Transfer Print Foils, which lease shall be assigned to the
Purchaser, the Borrower shall not sell, assign, transfer or otherwise dispose of
(whether in one transaction or a series of transactions) any interest in the
Project (whether now owned or hereafter acquired) or substantially all of its
assets without the consent of the Authority and the Purchaser.

         Section 5.10 PROJECT USERS. (a) Prior to leasing, subleasing or
consenting to the subleasing or assignment of any lease of all or any part of
the Project, during the period commencing on the issue date and terminating
three years after the issue date, and (b) upon the request of the Authority from
time to time thereafter, the Borrower shall cause a Project Occupant Information
Form (in a form supplied by the Authority) to be submitted to the Authority by
every prospective lessee, sublessee or lease assignee of the Project. The
Borrower shall not permit any such leasing, subleasing or assigning of leases
that would impair the excludability of interest paid on the Bond from the gross
income of the Purchaser for purposes of Federal income taxation, except if such
Purchaser is a Substantial User; or that would impair the ability of the
Borrower to operate the Project or cause the Project not to be operated as an
authorized project under the Act. The Borrower shall not lease, sublease or
consent to the

                                      -47-

<PAGE>

subleasing or assignment of any lease of all or any part of the Project without
the prior express written consent of the Purchaser (not to be unreasonably
withheld, delayed or denied).

         Section 5.11 INSPECTION OF THE PROJECT. The Borrower agrees that the
Authority, the Purchaser and their duly authorized agents shall have the right,
at all reasonable times and upon prior written notice, to enter upon and to
examine and inspect the Project. The Authority and the Purchaser, and their
respective officers and agents, shall also be permitted, at all reasonable times
and upon prior written notice, to examine the books and records of the Borrower
with respect to the Project and to make copies or abstracts thereof. The
Borrower also agrees to provide the Authority with such information and
materials relating to the Project or the Borrower as are reasonably requested by
the Authority from time to time.

         Section 5.12 RELOCATION OF THE PROJECT. The Borrower shall not relocate
the Project or any part thereof out of the Project Municipality or out of the
State.

         Section 5.13 AFFIRMATIVE ACTION AND PREVAILING WAGE REGULATIONS. To the
extent applicable to the Project, the Borrower shall comply with the Authority's
Affirmative Action Program and Prevailing Wage Rate Provisions, and to that end:

         (a) Insert in all construction bid specifications for any construction
contract, the following provisions:

                  (i) Construction of this project is subject to an Affirmative
         Action Program of the New Jersey Economic Development Authority, which
         program establishes hiring goals for minority and female workers. Any
         contractor or subcontractor must agree to make a good faith effort to
         meet the established goals and to submit certified reports and records
         required by the Authority. Copies of the Affirmative Action Program may
         be obtained by writing to: Office of Affirmative Action; New Jersey
         Economic Development Authority; Gateway One; Suite 2403; Newark, New
         Jersey 07102;

                  (ii) Submission of a bid signifies that the bidder knows the
         requirements of the Affirmative Action Program and signifies the
         bidder's intention to comply. Construction of this project is subject
         to N.J.A.C. 19:30-3.1 ET SEQ. Workers employed in construction of this
         project must be paid at a rate not less than the prevailing wage rate
         established by the New Jersey Commissioner of Labor.

         (b) Include in all Construction Contracts those provisions that are set
forth in the Addendum to Construction Contract annexed hereto as Exhibit B.

         (c) Obtain from all Contractors and submit to the Authority a
Contractor's Certificate and Agreement in the form annexed hereto as Exhibit C
within three (3) business days of the execution of any Construction Contract.

         (d) Create an office of Borrower Affirmative Action and maintain in
that office until

                                      -49-

<PAGE>

the Completion Date an individual having responsibility to coordinate compliance
by the Borrower with the Authority's Affirmative Action Program and to act as
liaison with the Authority's Office of Affirmative Action.

         (e) Submit to the Authority on the Completion Date a Borrower's
Completion Certificate in the form annexed hereto as Exhibit D.

         (f) Furnish to the Authority all other reports and certificates
required under the Authority's Affirmative Action Program and Prevailing Wage
Regulations.

         Section 5.14 COSTS AND EXPENSES. All reasonable expenses in connection
with the preparation, execution, delivery, recording and filing of the Bond
Documents and in connection with the preparation, issuance and delivery of the
Bond, the rating agency fees, if any, the Authority's financing fee and the
reasonable fees and expenses of Bond Counsel, the reasonable fees and expenses
of the Escrow Agent and the reasonable fees and expenses of the Escrow Agent's
counsel and the reasonable fees and expenses of the Purchaser's counsel shall be
paid directly by the Borrower. The Borrower shall also pay throughout the term
of the Bond the Authority's annual fees and expenses and the Escrow Agent's
annual and special fees and expenses under this Agreement and the other Bond
Documents, including, but not limited to, reasonable attorney's fees and all
costs of issuing, marketing, collecting payment on and redeeming the Bond
thereunder.

         Section 5.15 ANNUAL CERTIFICATE. On each anniversary date of the Loan,
the Borrower shall furnish to the Authority and the Purchaser the following:

         (a) A certificate of an Authorized Borrower Representative indicating
whether or not the Borrower is aware of any condition, event or act that
constitutes an Event of Default or that would constitute an Event of Default
with the giving of notice or passage of time, or both, under any of the Bond
Documents.

         (b) A written description of the present use of the Project and a
description of any anticipated material change in the use of the Project or in
the number of employees employed at the Premises.

         (c) A report from every entity that leases or occupies space at the
Project indicating the number of persons the entity employs at the Premises.

         Section 5.16      [RESERVED.]

         Section 5.17 AGGREGATE LIMIT. The Borrower shall not allow the
aggregate face amount of any outstanding issue or issues of Tax-Exempt
Facility-Related Bonds (including the face amount of the Bond) allocable to any
Test-Period Beneficiary (not including as outstanding any issue to be redeemed
from the Net Proceeds of any such issue) to exceed $40,000,000.

         Section 5.18 BROKERAGE FEE. The Authority shall not be liable to any
person for any brokerage fee, finders fee or loan servicing fee in connection
with the Loan, and the Borrower shall hold the Authority harmless from any such
fees or claims.

                                      -49-

<PAGE>

         Section 5.19 COST RECOVERY. To the extent that any property is financed
by Bond Proceeds, the cost recovery deduction allowed for such property shall be
determined by using the alternative depreciation system determined in accordance
with Section 168(g) of the Code.

         Section 5.20 PAYMENT OF COMPENSATION AND EXPENSES OF ESCROW AGENT.
Unless otherwise agreed, the Borrower shall pay the Escrow Agent's (and any
other paying, authenticating, tender or rating agent's) closing and annual fees
and expenses hereunder, including, but not limited to, reasonable attorneys'
fees and all costs of issuing, marketing, collecting payment on and redeeming
the Bond hereunder. The Authority shall not be responsible for payment of any
such fees and expenses. Any fees, expenses, reimbursements, or other charges for
which the Escrow Agent may be entitled to receive from the Borrower hereunder
shall be due and payable immediately after a request for payment has been made
by the Escrow Agent, and if not otherwise paid, shall be subject to interest at
the "base rate" of the Escrow Agent.

         Section 5.21 PAYMENT OF AUTHORITY'S FEES AND EXPENSES. In addition to
the Authority's Fee, the Borrower will pay all of the Authority's other standard
administration fees and all reasonable expenses (other than day-to-day operating
expenses of the Authority), including legal and accounting fees, incurred by the
Authority in connection with the issuance of the Bond and the performance by the
Authority of its functions and duties under this Agreement. The Authority's Fee
is payable upon the execution and delivery of this Agreement.

         Section 5.22 INDEMNIFICATION. The Borrower agrees to and hereby does
indemnify and hold harmless to the fullest extent of the law the Indemnified
Parties against any and all losses, claims, damages or liabilities (including
all costs, expenses and reasonable counsel fees incurred in investigating or
defending such claim) suffered by any of the Indemnified Parties and caused by,
relating to, arising out of, resulting from or in any way connected with (a) (i)
the condition, use, possession, conduct, management, planning, design,
acquisition, construction, installation, financing or sale of the Project or any
part thereof, including the payment of rebate to the Federal government; (ii)
accident, injury or damage whatsoever occurring to any person in or about the
Project; (iii) any breach or default by the Borrower of or in any of its
obligations hereunder; (iv) any act or omission of the Borrower or any of its
agents, contractors, servants, employees or licensees, or (v) the offering,
issuance, sale or resale of the Bonds, but only to the extent permitted by law;
(b) any untrue or misleading statement or alleged untrue or alleged misleading
statement of a material fact contained in information submitted or to be
submitted to the Indemnified Parties by the Borrower with respect to the
transactions contemplated hereby; or (c) any omission of a material fact
necessary to be stated therein in order to make such statement to the
Indemnified Parties not misleading or incomplete. In case any action shall be
brought against one or more of the Indemnified Parties based upon any of the
above and in respect of which indemnity may be sought against the Borrower, such
Indemnified Parties shall promptly notify the Borrower in writing and the
Borrower shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Parties, the payment of all costs and
expenses and the right to negotiate and consent to settlement. Any one or more
of the Indemnified Parties shall have the right to employ separate counsel on
the grounds that there are legal defenses available to them that are different
from or in addition to those available to other

                                      -50-

<PAGE>

of the Indemnified Parties at the Borrower's expense in any such action and to
participate in the defense thereof. The Borrower shall not be liable for any
settlement of any such action effected without the Borrower's consent, but if
settled with the consent of the Borrower or if there is a final judgment for the
claimant on any such action, the Borrower agrees to indemnify and hold harmless
the Indemnified Parties from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding anything in this Agreement to the
contrary that may limit recourse to the Borrower or may otherwise purport to
limit the Borrower's liability, the provisions of this Section 5.22 shall
control the Borrower's obligations and shall survive repayment of the Bond.

         Section 5.23 DAMAGE TO OR CONDEMNATION OF PROJECT. In the event of
damage, destruction or condemnation of all or part of the Project, the Borrower
shall notify the Authority, the Escrow Agent and the Purchaser not later than
five (5) business days after the occurrence of such event. Damage to or
destruction or condemnation of all or a portion of the Project shall not
terminate this Agreement or cause any abatement of or reduction in the payments
to be made by the Borrower or otherwise affect the respective obligations of the
Authority or the Borrower, except as set forth in this Agreement. In the event
of damage or destruction, the net proceeds of any insurance policies required to
be maintained under Section 5.2 hereof, in an amount equal to the greater of the
amounts necessary to effect the election of the Borrower pursuant to clause (i)
or (ii) of this sentence, shall be paid to the Escrow Agent and deposited into
the Proceeds Account of the Escrow Fund, and if no Event of Default hereunder
has occurred and is continuing, at the election of the Purchaser, such net
proceeds shall be (i) applied to the redemption of the Bond, first to the
payment of accrued and unpaid interest and second against payment of principal
or (ii) applied to restore or replace the Project to substantially its condition
immediately prior to such event or to a condition of at least equivalent value;
provided, however, that if the cost of restoration or replacement exceeds the
amount of such proceeds, the Borrower shall deposit the excess in the Proceeds
Account of the Escrow Fund to be applied for such restoration or replacement. In
the event of condemnation, the net condemnation proceeds shall be paid to the
Escrow Agent and deposited into the Proceeds Account of the Escrow Fund, and if
no Event of Default hereunder has occurred and is continuing, at the election of
the Purchaser, such net condemnation proceeds shall be (i) applied to the
redemption of the Bond, first to the payment of accrued and unpaid interest and
second against payment of principal or (ii) applied to replace the Project to
substantially its condition immediately prior to such event or to a condition of
at least equivalent value; provided, however, that if the cost of replacement
exceeds the amount of such proceeds, the Borrower shall deposit the excess in
the Proceeds Account of the Escrow Fund to be applied for such replacement. The
Purchaser shall notify the Escrow Agent of its election within forty-five (45)
days of its receipt of notice of such damage, destruction or condemnation. If
the Authority or the Borrower is the payee, or one of the payees, of any check
or other instrument representing payment of any insurance or condemnation
proceeds referred to in this Section 5.23, the Authority or the Borrower will
endorse the same to the order of the Escrow Agent and deliver the same to the
Escrow Agent; and if the Authority or the Borrower fails to do so, the Authority
and the Borrower hereby irrevocably authorize any officer or employee of the
Escrow Agent to endorse and deliver the same as the Authority's or the
Borrower's attorney-in-fact.

         The Borrower and the Purchaser shall cooperate and consult with each
other in all matters

                                      -51-

<PAGE>

pertaining to the settlement or adjudication of any such insurance claims,
condemnation proceedings or pertaining to the settlement, compromising or
arbitration of any claim on account of any damage, destruction or condemnation
of the Project. In no event shall the Borrower voluntarily settle, or consent to
the settlement of, any insurance claim or condemnation proceeding with respect
to the Project without the written consent of the Purchaser.

         Section 5.24 FINANCING STATEMENTS. The Borrower shall, at the
Borrower's own expense, cause Financing Statements under the New Jersey Uniform
Commercial Code to be filed in the places required by law in order to perfect
the security interests created or contemplated by Section 4.3 hereof and the
Security Agreement naming the Authority as secured party and the Purchaser as
assignee, including Financing Statements subordinating any other security
interest in the Project Equipment and the Existing Equipment to Purchaser's
security interest. From time to time, as reasonably requested by the Purchaser,
but not more often than once each year, the Borrower shall furnish to the
Purchaser an opinion of counsel setting forth what actions, if any, should be
taken by the Borrower or the Purchaser to preserve said security interests and
the priority thereof in favor of the Purchaser and the right, title and interest
of the Purchaser in and to the trust estate created under this Agreement. The
Borrower shall execute and file, or cause to be executed and filed, all further
instruments as shall be required by law to preserve such security interests and
the priority thereof, and it shall furnish satisfactory evidence to the
Authority and the Purchaser of the filing and refiling of such instruments.

         Section 5.25 NOTICE AND CERTIFICATION WITH RESPECT TO BANKRUPTCY
PROCEEDINGS. The Borrower shall promptly notify the Authority, the Purchaser and
the Escrow Agent in writing of the occurrence of any of the following events and
shall keep the Authority, the Purchaser and the Escrow Agent informed of the
status of any petition in bankruptcy filed (or bankruptcy or similar proceeding
otherwise commenced) against the Borrower: (i) application by the Borrower for,
or consent by it to, the appointment of a receiver, trustee, liquidator or
custodian or the like of such party or of its property, (ii) the fact that it is
generally not paying its debts as they become due, (iii) general assignment by
the Borrower for the benefit of creditors, (iv) adjudication of the Borrower as
insolvent or the entry of an order for relief under the United States Bankruptcy
Code, (v) commencement by the Borrower of a voluntary case under the United
States Bankruptcy Code or filing by it of a voluntary petition or answer seeking
its reorganization, an arrangement with creditors of the Borrower, an order for
relief or seeking to take advantage of any insolvency law or filing by the
Borrower of an answer admitting the material allegations of an insolvency
proceeding, or action by the Borrower for the purpose of effecting any of the
foregoing, or (vi) if without the application, approval or consent of the
Borrower, a proceeding shall be instituted in any court of competent
jurisdiction, under any law relating to bankruptcy, insolvency, reorganization
or relief of debtors, seeking in respect of such party an order for relief or an
adjudication in bankruptcy, reorganization, dissolution, winding up,
liquidation, a composition or arrangement with creditors, a readjustment of
debts, the appointment of a trustee, receiver, liquidator or custodian or the
like of the Borrower or of all or any substantial part of its respective assets,
or other relief in respect thereof under any bankruptcy or insolvency law.

         Section 5.26      FINANCIAL COVENANTS OF THE BORROWER.

         (a) DEFINITIONS. Unless otherwise defined or specified herein, all
accounting terms shall

                                      -52-

<PAGE>

be construed and all accounting determinations shall be made in accordance with
GAAP.

         "CAPITAL ASSETS" means assets that in accordance with GAAP are required
or permitted to be depreciated or amortized on a balance sheet.

         "CAPITAL EXPENDITURES" ("CAPEX") means, for any period, the aggregate
amount of all expenditures for the acquisition, construction, improvement,
replacement or purchase of Capital Assets and Intangible Assets, including, but
not limited to, expenditures under Capital Leases.

         "CAPITAL LEASES" means capital leases, conditional sales contracts and
other title retention agreements relating to the purchase or acquisition of
Capital Assets.

         "CASH TAXES" means actual taxes paid during the applicable period.

         "CURRENT MATURITY OF LONG-TERM DEBT" ("CMLTD") means the current
maturity of long-term Indebtedness paid during the applicable period, including,
but not limited to, amounts paid during such period under Capital Leases.

         "CURRENT RATIO" means the ratio of Total Current Assets to the sum of
(i) Total Current Liabilities plus (ii) the aggregate outstanding principal
amount of the Line of Credit.

         "DEBT SERVICE AND UNFINANCED CAPITAL EXPENDITURES COVERAGE RATIO"
means, during the applicable period, that quotient equal to (A) the aggregate of
(i) EBITDA, minus (ii) Unfinanced Capital Expenditures, minus (iii) Dividends
minus (iv) Cash Taxes; divided by (B) the sum of (i) Interest and (ii) Current
Maturity of Long-Term Debt; that is,

         EBITDA- UNFINANCED CAPEX-DIVIDENDS-CASH TAXES

         Interest + CMLTD

         "DIVIDENDS" means, for the applicable period, the aggregate of all
amounts paid or payable (without duplication) as dividends, distributions or
owner withdrawals, and includes any purchase, redemption or other retirement of
any shares or other ownership interest directly or indirectly through a
Subsidiary or otherwise and includes return of capital to shareholders, partners
or members.

         "EARNINGS BEFORE INTEREST AND TAXES" ("EBIT") means, for the applicable
period, income from continuing operations before the payment of Interest and
taxes determined in accordance with GAAP.

         "EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION"
("EBITDA") means, for the applicable period, income from continuing operations
before the payment of Interest and taxes plus depreciation and amortization
determined in accordance with GAAP.

         "FUNDED DEBT" means indebtedness which is not Subordinated Debt and
which is senior to all other Indebtedness.

                                      -53-

<PAGE>

         "GAAP" means generally accepted accounting principles in the United
States of America, as in effect on the date of the preparation and delivery of
the financial statements described herein and consistently followed, without
giving effect to any subsequent changes other than changes consented to in
writing by the Bank.

         "INDEBTEDNESS" means all obligations that in accordance with GAAP
should be classified as liabilities upon a balance sheet or to which reference
should be made by footnotes thereto.

         "INTEREST" means, for the applicable period, all interest expense,
including, but not limited to, interest on Indebtedness and on Capital Leases as
set forth in the financial statements and Exchange Act Reports of the Borrower,
determined in accordance with GAAP.

         "INTANGIBLE ASSETS" means assets that in accordance with GAAP are
properly classifiable as intangible assets, including, but not limited to,
goodwill, franchises, licenses, patents, trademarks, trade names and copyrights,
and "soft assets" such as assets due from officers, employees, stockholders,
affiliates and related parties.

         "LINE OF CREDIT" means Line of Credit as defined in the Amended and
Restated Credit Agreement dated August 6, 1999, between the Borrower and Fleet
National Bank, or any similar type of facility in replacement or substitution
therefor.

         "NET INCOME (NET LOSS)" means the net income (or net loss, expressed as
a negative number) for any period, after all taxes actually paid or accrued and
all expenses and other charges determined in accordance with GAAP.

         "SUBORDINATED DEBT" means Indebtedness subordinated in writing in a
manner approved by the Purchaser to the prior payment, in full, of the Bond and
any other Indebtedness owed by such a person to the Purchaser.

         "SUBSIDIARY" means any corporation, person or entity, a majority of
whose outstanding shares or other ownership interests having ordinary voting
powers, shall at any time be owned or controlled by the Borrower or one or more
of its subsidiaries.

         "TANGIBLE CAPITAL BASE" means the sum of Tangible Net Worth plus
Subordinated Debt.

         "TANGIBLE NET WORTH" means Total Assets minus the sum of (i) Intangible
Assets and (ii) Total Liabilities.

         "TOTAL ASSETS" means total assets determined in accordance with GAAP.

         "TOTAL CURRENT ASSETS" means total current assets determined in
accordance with GAAP.

         "TOTAL CURRENT LIABILITIES" means total current Indebtedness determined
in accordance with GAAP.

         "TOTAL LIABILITIES" means total Indebtedness determined in accordance
with GAAP.

                                      -54-

<PAGE>

         "TOTAL LIABILITIES TO TANGIBLE NET WORTH RATIO (SUBORDINATED DEBT)"
means, during the applicable period, that quotient equal to Total Liabilities
minus Subordinated Debt, divided by Tangible Net Worth plus Subordinated Debt,
that is.

         TOTAL LIABILITIES - SUBORDINATED DEBT

         Tangible Net Worth + Subordinated Debt

         "UNFINANCED CAPITAL EXPENDITURES" ("Unfinanced CAPEX") means Capital
Expenditures minus new long term Indebtedness issued during the applicable
period plus the aggregate amount of all long-term Indebtedness prepaid during
such period.

         (b) CALCULATION OF FINANCIAL COVENANTS. The calculation of the
financial covenants set forth in this Section 5.26 shall be measured against the
consolidated financial statements required to be delivered to the Purchaser
pursuant to Section 1.8 hereunder on a consolidated basis.

         All financial covenants set forth below are to be tested quarterly at
the end of each fiscal quarter.

         (c)      CURRENT RATIO.  The Borrower shall not permit its Current
Ratio to be less that 1.5 to 1.0.

         (d) TANGIBLE CAPITAL BASE. The Borrower shall not permit its Tangible
Capital Base to be less than (a) $14,000,000 at June 30, 2000 (the "Initial
Threshold Amount"); and (b) $250,000 plus the amount of the immediately
preceding Threshold Amount at the end of each subsequent fiscal quarter
thereafter.

         (e) TOTAL LIABILITIES TO TANGIBLE NET WORTH RATIO (SUBORDINATED DEBT).
The Borrower shall not permit its Total Liabilities to Tangible Net Worth Ratio
(Subordinated Debt), to exceed 1.5 to 1.0 for the fiscal quarter ending June 30,
2000, and each quarter thereafter.

         (f) DEBT SERVICE AND UNFINANCED CAPITAL EXPENDITURES COVERAGE RATIO.
The Borrower shall not permit its Debt Service and Unfinanced Capital
Expenditures Coverage Ratio, on a consolidated basis, to be less the 1.25: 1.0,
tested quarterly on a rolling four (4) quarter basis commencing June 30, 2000.

         (g) FUNDED DEBT. The Borrower shall not permit the ratio of Funded Debt
to EBITDA to exceed 3.5 to 1.0 at any time. This covenant shall be tested
quarterly on a rolling four (4) quarter basis commencing June 30, 2000.

                                      -55-

<PAGE>

                                   ARTICLE VI

                         EVENTS OF DEFAULT AND REMEDIES

         Section 6.1 EVENTS OF DEFAULT; ACCELERATION. Each of the following
events is hereby defined as, and is declared to be and to constitute, an "Event
of Default" hereunder:

         (a) Failure by the Borrower to make or cause to be made any payment
required to be made under Section 4.2 hereof on or before the date the same is
due.

         (b) Failure or refusal by the Borrower to comply with any of its other
covenants, conditions or agreements hereunder, and such failure or refusal shall
continue for a period of fifteen (15) days after written notice thereof has been
given to the Borrower by the Purchaser, the Escrow Agent or the Authority.

         (c) The Borrower shall have applied for or consented to the appointment
of a custodian, receiver, trustee or liquidator of all or a substantial part of
its assets; a custodian shall have been appointed with or without consent of the
Borrower; the Borrower shall generally not be paying its debts as they become
due; the Borrower shall have made a general assignment for the benefit of
creditors; the Borrower shall have filed a voluntary petition in bankruptcy, or
a petition or an answer seeking reorganization or an arrangement with creditors,
or has taken advantage of any insolvency law, or has filed an answer admitting
the material allegations of a petition in a bankruptcy, reorganization or
insolvency proceeding; a petition in bankruptcy shall have been filed against
the Borrower and shall not have been dismissed for a period of one hundred
twenty (120) consecutive days, or if an order for relief has been entered under
the Bankruptcy Code; or an order, judgment or decree shall have been entered
without the application, approval or consent of the Borrower by any court of
competent jurisdiction appointing a receiver, trustee, custodian or liquidator
of the Borrower of a substantial part of its respective assets, and such order,
judgment or decree shall have continued unstayed and in effect for any period of
one hundred twenty (120) consecutive days.

         (d) A writ of execution or attachment or any similar process shall be
issued or levied against all or any part of or interest in any of the properties
or assets of the Borrower or any judgment involving monetary damages shall be
entered against the Borrower, which shall become a lien on the Borrower's
properties or assets or any portion thereof or interest therein, and such
execution, attachment or similar process is not released, bonded, satisfied,
vacated or stayed within one hundred twenty (120) days after its entry or levy,
and said writ of execution, attachment, levy or judgment shall involve monetary
damages aggregating more than $100,000.

         (e) Seizure or foreclosure of any of the properties or assets of the
Borrower pursuant to process of law or in respect of legal self-help, involving
monetary damages.

         (f) The transfer of title to the Project Equipment or any part thereof
(in one or more transactions) for any reason and to any party without the prior
express written consent of the Authority and the Purchaser.

         (g) Any substantial change in the nature or character of the business
or the voluntary

                                      -56-

<PAGE>

permanent closing of business or cessation of operations of the Borrower.

         (h) Any representation, covenant or warranty made by the Borrower in
any Bond Document shall prove to have been false, incorrect or misleading in any
material respect as of the date made, or failure by the Borrower to observe any
such covenant.

         (i) An event of default shall have occurred under any of the Bond
Documents.

         (j) An event of default shall have occurred under any other loans,
contracts or agreements of the Borrower entered into with the Purchaser.

         (k) A breach by the Borrower of any term, covenant, condition,
obligation or agreement under any Bond Document.

         (l) Any additional financing on the Project is obtained without the
prior express written consent of the Authority and the Purchaser, other than a
refinancing of the Existing Equipment which is subordinate to the Bond.

         (m) Any Change of Control of the Borrower, except as permitted herein.

         (n) The dissolution or reorganization of the Borrower or a default
under Section 1.7(e) hereof.

         (o) Default by the Borrower in any of the terms or conditions of any
agreement covering the payment of borrowed money in excess of $50,000.

         (p) A material deterioration in the financial condition of the Borrower
or the occurrence of any event, which in the sole opinion of the Purchaser,
impairs the financial responsibility of the Borrower.

         Section 6.2 PURCHASER'S REMEDIES. Upon receipt by the Purchaser of
notice of the occurrence of an Event of Default hereunder, and at any time
thereafter during the continuance of such Event of Default, the Purchaser, as
assignee of the Authority, may, by written notice to the Authority and the
Borrower, declare the entire unpaid principal amount of the Bond and the Note to
be due and payable forthwith, to the extent and in accordance with this
Agreement, whereupon such amount shall become forthwith due and payable, both as
to principal and interest, without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived, anything contained herein
or elsewhere to the contrary notwithstanding, and thereupon the Purchaser may
take one or more of the following remedial steps in such order and sequence as
the Purchaser, in its sole judgment, may determine:

                  (a) take any action at law or in equity to collect the
         payments then due and thereafter to become due under this Agreement or
         to enforce performance and observance of any obligation, agreement or
         covenant of the Borrower under this Agreement; or

                  (b) exercise any and all rights and remedies conferred upon
the Purchaser

                                      -57-

<PAGE>

under the Bond Documents; or

                  (c) exercise any and all rights and remedies conferred upon
         secured parties by the State Uniform Commercial Code and other
         applicable laws.

         If the Purchaser shall have proceeded to enforce its rights under this
Agreement and such proceedings shall have been discontinued or abandoned for any
reason or shall have been determined adversely to the Purchaser, then the
Borrower and the Purchaser shall be restored respectively to their several
positions and rights hereunder, and all rights, remedies and powers of the
Borrower and the Purchaser shall continue as though no such proceedings had
taken place.

         Section 6.3 ADDITIONAL REMEDIES OF AUTHORITY. In addition to the above
remedies, if the Borrower commits a breach or threatens to commit a breach of
this Bond Agreement, the Authority shall have the right and remedy, without
posting bond or other security, to have the provisions of this Bond Agreement
specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed that any such breach or threatened breach will cause
irreparable injury to the Authority and that money damages will not provide an
adequate remedy therefor.

         Section 6.4 NO REMEDY EXCLUSIVE. No remedy herein conferred or reserved
to the Authority or the Purchaser is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given under this Bond Agreement
or now or hereafter existing at law or in equity or by statute. No delay or
omission to exercise any right or power occurring upon any default shall impair
any such right or power or shall be construed to be a waiver thereof, but any
such right or power may be exercised from time to time and as often as may be
deemed expedient. In order to entitle the Authority or the Purchaser to exercise
any remedy reserved to either of them in this Article VI, it shall not be
necessary to give notice other than such notice as may be required in this
Article VI.

         Section 6.5 AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES. In the event
the Borrower should default under any of the provisions of this Bond Agreement,
and either the Authority or the Purchaser shall require and employ attorneys or
incur other expenses for the collection of payments due or to become due or for
the enforcement, performance or observance of any obligation or agreement on the
part of the Borrower herein contained, the Borrower agrees that it will, on
demand therefor, pay to the Authority and the Purchaser the reasonable fees of
such attorneys and such other expenses so incurred by the Authority or the
Purchaser or both, whether or not suit be brought.

         Section 6.6 NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER. In the event
any agreement contained in this Bond Agreement should be breached by any party
and thereafter waived by any other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder.

         Section 6.7 PAYMENT OF LOAN ON EVENT OF DEFAULT; SUIT THEREFOR. (a) The
Borrower covenants that in case it shall fail to pay or cause to be paid any sum
payable by or on behalf of

                                      -58-

<PAGE>

the Borrower under Section 4.2 hereof as and when the same shall become due and
payable, whether at maturity or by acceleration or otherwise, then, the Borrower
will pay to the Purchaser the whole amount of the Loan that shall then have
become due and payable under this Agreement; and, in addition thereto, such
further amount as shall be sufficient to cover the reasonable costs and expenses
of collection, including the Purchaser's agents and counsel, and any reasonable
expenses or liabilities incurred by the Authority or the Purchaser. In case the
Borrower shall fail forthwith to pay such amounts upon such demand, the
Purchaser shall be entitled and empowered to institute any actions or
proceedings at law or in equity for the collection of the sums so due and
unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Borrower
and collect in the manner provided by law out of the property of the Borrower
the moneys adjudged or decreed to be payable.

         (b) In case there shall be pending proceedings for the bankruptcy or
for the reorganization of the Borrower under the Federal bankruptcy laws or any
other applicable law, or in case a receiver or trustee shall have been appointed
for the benefit of the creditors or the property of the Borrower, the Purchaser
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of the Loan,
including interest owing and unpaid in respect thereof, and, in case of any
judicial proceedings, to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Purchaser
allowed in such judicial proceedings relative to the Borrower, its creditors or
its property, and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of its charges and expenses. Any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized to make such payments to the Authority or
the Purchaser, and to pay to the Authority or the Purchaser any amount due it
for reasonable compensation and expenses, including counsel fees incurred by it
up to the date of such distribution.

         Section 6.8 EVENT OF CANCELLATION. (a) The occurrence of an Event of
Default as set forth in Section 6.1(b) or 6.1(h) hereof shall constitute an
Event of Cancellation hereunder, and, at any time thereafter during the
continuance of such Event of Cancellation, the Authority may, by written notice,
direct the Purchaser to call and cancel the Bond. The Purchaser and any
assignees and the Borrower hereby expressly agree that the Bond may be called
and canceled by the Authority in the manner provided above, and upon the date
specified in the notice from the Authority (the "Cancellation Date"), which
shall be at least thirty (30) and no more than sixty (60) days after the giving
of such notice, the Bond will be called and canceled and the Purchaser may, at
its option, declare the obligation evidenced by the Note immediately due and
payable. The Purchaser will deliver the Bond to the Authority for cancellation
upon the Cancellation Date, but even if such delivery does not occur, the Bond
will be considered canceled and of no further force or effect on the
Cancellation Date.

         (b) Upon the Cancellation Date, the Note will evidence the indebtedness
from the Borrower to the Purchaser, and, in the event the Note is not
accelerated by the Purchaser as hereinabove provided, all of the terms of the
Note will control the obligations of the Borrower to the Purchaser under the
Note. The Authority will no longer be a party to the transaction and shall have
no further rights with respect thereto except any right to fees and
indemnification and

                                      -59-

<PAGE>

shall be released of any and all debts, liabilities and obligations to any party
under this Agreement, the Bond or any other Bond Document. The Authority and the
Purchaser shall execute and deliver to each other such other documents and
agreements as the other may reasonably request in order to evidence the
cancellation of the Bond and the withdrawal of the Authority from the
transaction.

         (c) Upon cancellation of the Bond pursuant to the provisions hereof,
the Authority hereby agrees that the Purchaser shall automatically be vested
with all of the Authority's right, title and interest in and to the Bond
Documents, except as expressly reserved. Any amounts remaining in the Escrow
Fund on the Cancellation Date after deduction of amounts that may be due the
Authority pursuant to the terms of this Agreement shall thereby be assigned to
the Purchaser.

         (d) In the event that there is a dispute among any of the parties
concerning the right of the Authority to cancel the Bond pursuant to the
provisions of this Section 6.8, the Borrower shall nevertheless comply with the
terms of Note as hereinabove amended and make all payments required thereunder
from and after the Cancellation Date directly to the Purchaser. If a court of
competent jurisdiction determines finally that the Authority's attempted
cancellation of the Bond violated the terms of this Agreement, the Bond will be
reinstated in accordance with the final order of the court, but until such final
order is made, the Borrower will continue to comply with the terms of the Note
as hereinabove amended. Any overpayment by the Borrower will be returned to it
by the Purchaser upon reinstatement of the Bond.

                                      -60-

<PAGE>

                                   ARTICLE VII

                                  MISCELLANEOUS

         Section 7.1 LIMITATION OF LIABILITY OF AUTHORITY. In the event of any
default by the Authority hereunder, the liability of the Authority to the
Borrower shall be enforceable only out of its interest in the Project and under
this Agreement, and there shall be no other recourse for damages by the Borrower
against the Authority, its officers, members, agents and employees, or any of
the property now or hereafter owned by it or them.

         Section 7.2 NOTICES. Notice hereunder shall be effective upon receipt
or refusal and shall be given by personal service or by certified or registered
mail, return receipt requested, to:

         The Authority:

                  New Jersey Economic Development Authority
                  36 West State Street, P.O. Box 990
                  Trenton, New Jersey 08625
                  Attention: Managing Director of Investment Banking

         The Borrower:

                  Foilmark, Inc.
                  15 Cotters Lane
                  East Brunswick, New Jersey 08816
                  Attention:  Philip Leibel, Vice President - Finance,
                              Chief Financial Officer

         The Purchaser:

                  Fleet Capital Corporation
                  50 Kennedy Plaza
                  Providence, RI 02903

                  Attention: Customer Service

         The Escrow Agent:

                  Chittenden Trust Company
                  2 Burlington Square
                  Burlington, Vermont 05401
                  Attention:

         Section 7.3 SEVERABILITY. If any provision hereof is found by a court
of competent jurisdiction to be prohibited or unenforceable, it shall be
ineffective only to the extent of such prohibition or unenforceability, and such
prohibition or unenforceability shall not invalidate the

                                      -61-

<PAGE>

balance of such provision to the extent it is not prohibited or unenforceable
nor shall it invalidate the other provisions hereof, all of which shall be
liberally construed in order to effect the provisions of this Agreement.

         Section 7.4 APPLICABLE LAW. This Agreement shall be deemed to be a
contract made in New Jersey and governed by New Jersey law, and the parties
hereto hereby expressly submit and consent to the jurisdiction of all Federal
and state courts sitting in the State of New Jersey for all suits brought by any
party hereto.

         Section 7.5 ASSIGNMENT. The Borrower shall not assign this Agreement or
any interest of the Borrower herein, either in whole or in part, without the
prior written consent of the Authority and the Purchaser. This Agreement shall
be binding upon, and shall inure to the benefit of, the parties hereto and their
respective permitted successors and assigns, and the terms "Authority",
"Borrower", "Escrow Agent" and "Purchaser" shall, where the context requires,
include the respective permitted successors and assigns of such persons.

         Section 7.6 REBATE REMINDER. The Escrow Agent shall furnish the
Borrower and the Authority with notice of the Borrower's obligation to file a
written certification to the Authority and the Escrow Agent indicating whether
the Borrower has complied with the 6-month exception or the 18-month exception
to the arbitrage rebate requirement. In addition, the Escrow Agent shall furnish
the Borrower and the Authority with notice of the Borrower's obligation to file
its rebate calculation and make its rebate payment, if any, to the Internal
Revenue Service. Such reminder notice shall be furnished to the Borrower and the
Authority at least 90 days prior to each fifth anniversary of the issuance of
the Bond and within 30 days following the redemption or final payment of the
Bond. The Escrow Agent shall have no further obligation for the preparation of
the rebate calculation or the filing or payment thereof.

         Section 7.7 AMENDMENTS. This Agreement may not be amended except by an
instrument in writing signed by the parties and, if such amendment occurs after
the issuance of the Bond, consented to by the Purchaser and the Escrow Agent.

         Section 7.8 TERM OF AGREEMENT. This Agreement and the respective
obligations of the parties hereto shall be in full force and effect from the
date hereof until the principal or applicable redemption price of and interest
on the Bond shall have been paid. Notwithstanding the foregoing, the rebate
requirements of Section 5.5 hereof and the indemnification provisions of
Sections 5.18 and 5.22 hereof shall survive the termination of this Agreement.

         Section 7.9 NO WARRANTY OF CONDITION OR SUITABILITY BY AUTHORITY. The
Authority makes no warranty, either express or implied, as to the condition of
the Project or any part thereof or that it will be suitable for the Borrower's
purposes or needs. The Borrower acknowledges and agrees that the Authority is
not a dealer in property of such kind, and that the Authority has not made, and
does not hereby make, any representation, warranty or covenant with respect to
the merchantability, fitness for a particular purpose, condition or suitability
of the Project in any respect, in connection with or for the purposes and uses
of the Borrower or its tenants.

                                      -62-

<PAGE>

         Section 7.10 REASONABLE CONSENT. Any and all consents required to be
given pursuant to this Bond Agreement or any of the Bond Documents by the
Authority, the Escrow Agent or the Purchaser shall be based on a
"reasonableness" standard.

         Section 7.11 AMOUNTS REMAINING IN ESCROW FUND. It is agreed hereto by
the parties that any amounts remaining in the Escrow Fund, after payment in full
of the Bond and of the fees, charges and expenses of the Purchaser, the Escrow
Agent and the Authority in accordance herewith, shall be paid to the Borrower by
the Escrow Agent as overpayment of the Loan.

         Section 7.12 HEADINGS. The captions or headings in this Agreement are
for convenience of reference only and shall not control or affect the meaning or
construction of any provision hereof.

         Section 7.13 PURCHASER'S RIGHT OF SET-OFF. For so long as the Purchaser
holds the Bond, it will have the right to immediately and without notice or
other acts to set-off against any of the Borrower's obligations to the Purchaser
any sum owed by the Purchaser or any of its affiliates in any capacity to the
Borrower whether due or not, or any property of the Borrower in the possession
of the Purchaser or any of its affiliates, and the Purchaser will be deemed to
have exercised such right of set-off and to have made a charge against any such
sum or property immediately upon the occurrence of any Event of Default, even
though the actual book entries may be made at some time subsequent thereto.

                                      -63-

<PAGE>

         IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have caused this Agreement to be executed and delivered as of the date first
written above.

[SEAL]
                                     NEW JERSEY ECONOMIC
ATTEST:                              DEVELOPMENT AUTHORITY

                                     BY:
----------------------------             -----------------------------
FRANK T. MANCINI, JR.                    CAREN S. FRANZINI
ASSISTANT SECRETARY                      EXECUTIVE DIRECTOR

                                         FOILMARK, INC.

                                     BY:
                                         -----------------------------
                                         PHILIP LEIBEL
                                         VICE PRESIDENT - FINANCE AND
                                         CHIEF FINANCIAL OFFICER

                                     CHITTENDEN TRUST COMPANY

                                     BY:
                                         -----------------------------
                                         SONJA R. SHAVER
                                         VICE PRESIDENT

                                     FLEET CAPITAL CORPORATION

                                     BY:
                                         -----------------------------
                                         FRANK GIANINO
                                         VICE PRESIDENT

                                      -64-

<PAGE>

                                    EXHIBIT A

                                  FORM OF BOND

         THE STATE OF NEW JERSEY IS NOT OBLIGATED TO PAY, AND NEITHER THE FAITH
         AND CREDIT NOR THE TAXING POWER OF THE STATE OF NEW JERSEY IS PLEDGED
         TO THE PAYMENT OF, THE PRINCIPAL OR REDEMPTION PRICE, IF ANY, OF OR THE
         INTEREST ON THIS BOND. THIS BOND IS A SPECIAL, LIMITED OBLIGATION OF
         THE AUTHORITY, PAYABLE SOLELY OUT OF THE REVENUES OR OTHER RECEIPTS,
         FUNDS OR MONEYS OF THE AUTHORITY PLEDGED UNDER THE BOND AGREEMENT FOR
         THE PAYMENT OF THIS BOND. THIS BOND DOES NOT NOW AND SHALL NEVER
         CONSTITUTE A CHARGE AGAINST THE GENERAL CREDIT OF THE AUTHORITY. THE
         AUTHORITY HAS NO TAXING POWER.

$4,500,000

                    NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY
                            ECONOMIC DEVELOPMENT BOND
                            (FOILMARK, INC. PROJECT)

DATED DATE:                MATURITY DATE:                     INTEREST RATE:
June 1, 2000                June  , 2008                           5.85%

         NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY (herein called the
"Authority"), a public body corporate and politic constituting an
instrumentality of the State of New Jersey (the "State"), acknowledges itself
indebted and for value received hereby promises to pay, in any coin or currency
of the United States of America that at the time of payment is legal tender for
the payment of public and private debts, to FLEET CAPTIAL CORPORATION or
registered assigns, the principal sum of FOUR MILLION FIVE HUNDRED THOUSAND
Dollars ($4,500,000) together with interest thereon at the rate of 5.85% per
annum, subject to adjustment as provided herein, in ninety-six consecutive equal
monthly installments of $58,808.31, payable on the first day of each month,
commencing July 1, 2000 and continuing thereafter until and including June 1,
2008, at which time the final installment in the amount of the unpaid principal
balance, together with all accrued and unpaid interest and any other sums due
will be paid.

         Notwithstanding the foregoing, in the event of an increase or decrease
in the Corporate Tax Rate (as hereinafter defined) enacted or effective after
the date of original issuance of the Bond, the interest rate set forth herein
shall be decreased (in the case of an increase in said Corporate Tax Rate) or
increased (in the case of a decrease in said Corporate Tax Rate) to the Adjusted
Tax Exempt Rate (as hereinafter defined), effective thirty (30) days after
receipt of written notice by the Purchaser to the Borrower of such change in the
corporate Tax Rate. For purposes hereof, (i) "Adjusted Tax Exempt Rate" shall
mean the product of (x) the interest rate set forth in the above paragraph times
(y) a fraction (expressed as a decimal) the numerator of which is the number one
minus the Corporate Tax Rate in effect following the change in such

                                       A-1

<PAGE>

rate referred to in the preceding sentence and the denominator of which is the
number one minus the Corporate Tax Rate in effect on the date of original
issuance of the Bond; and (ii) "Corporate Tax Rate" shall mean the highest
marginal statutory rate of Federal income tax imposed on corporations.

         Notwithstanding the foregoing, in the event any payment has not been
made hereunder within five (5) days of the due date, such payment shall bear
interest thereafter at the otherwise applicable rate of interest on this Bond,
plus two percent (2%)

         The determination of the interest rate or any adjustments to the
interest rate as contemplated by the foregoing paragraphs shall be conclusive
and binding upon the Purchaser, the Authority and the Borrower.

         In the event of a Determination of Taxability, the interest payable
upon this Bond shall be increased effective as of the date of the Determination
of Taxability to a rate equal to the Purchaser's cost of funds plus two percent
(2%).

         Each of said monthly payments shall be applied first in payment of
accrued and unpaid interest and the balance to the payment of unpaid principal.

         Said sums shall be paid solely from the revenues or other moneys
derived from the loan made with respect to the Project hereinafter referred to
or any other revenues pledged therefor under the Bond Agreement hereinafter
referred to. This Bond, as to principal, interest and premium, if any, when due,
will be payable at the offices of Fleet Capital Corporation, Providence, Rhode
Island (the "Purchaser").

         This Bond is the duly authorized bond designated as the New Jersey
Economic Development Authority Economic Development Bond (Foilmark, Inc.
Project) issued in the principal amount of $4,500,000 (this "Bond"). This Bond
has been issued under and by virtue of the New Jersey Economic Development
Authority Act, constituting Chapter 80 of the Pamphlet Laws of 1974 of the State
and the acts amendatory thereof and supplemental thereto (the "Act"), and by
virtue of resolutions duly adopted by the Authority on March 14, 2000 and May 9,
2000 (collectively, the "Resolution"), and this Bond is secured under a Bond
Agreement dated June 1, 2000 by and among the Authority, Foilmark, Inc. (the
"Borrower"), the Purchaser and Chittenden Trust Company, as escrow agent (the
"Escrow Agent"), as the same has been or may be amended, modified or
supplemented from time to time by supplemental agreements (being herein
collectively called the "Bond Agreement"), for the purpose of financing the
Project (as defined in the Bond Agreement).

         This Bond is further secured pursuant to the terms of (i) the
promissory note of the Company to the Authority, dated June 1, 2000, as evidence
of the obligations of the Borrower pursuant to the Bond Agreement, (ii) a
Security Agreement, dated June 1, 2000, from the Company to the Authority and
the Purchaser, (iii) six (6) Guaranty Agreements from HoloPak Technologies,
Inc., Foilmark Manufacturing Corporation, 2945-5649 Quebec, Inc., Transfer Print
Foils, Inc., Alubec Industries, Inc. and Foilmark Foreign Sales Corporation,
respectively, each dated June 1, 2000 to the Authority and the Purchaser, and
(iv) an Assignment of Leases and Rents dated June 1, 2000, from the Borrower to
the Authority.

                                       A-2

<PAGE>

         Reference is hereby made to the Resolution and the Bond Agreement,
copies of which are on file at the office of the Escrow Agent, for a description
of the provisions, among others, with respect to the terms upon which this Bond
is issued, the nature and extent of the security for this Bond, the rights,
duties and obligations of the Authority, the Borrower, the Purchaser and the
Escrow Agent, and the modification or amendment of the Bond Agreement, to all of
which the holder of this Bond hereto assents by acceptance of this Bond.
Capitalized terms used but not defined herein shall have the meanings assigned
to such terms in the Bond Agreement.

         This Bond is subject to cancellation as provided in Section 6.8 of the
Bond Agreement upon the following events:

         (a) Failure or refusal by the Borrower to comply with any of its
covenants, conditions or agreements under the Bond Agreement (with the exception
of the failure to make payments due under the Note), and such failure or refusal
shall continue for a period of fifteen (15) days after written notice thereof
has been given to the Borrower by the Purchaser, the Escrow Agent or the
Authority; or

         (b) Any representation, covenant or warranty made by the Borrower in
any Bond Document shall prove to have been false, incorrect or misleading in any
material respect as of the date made, or failure by the Borrower to observe any
such covenant.

         This Bond may be redeemed or prepaid in whole or in part, at the option
of the Borrower, at any time upon three (3) business days prior written notice
to the Purchaser, the Escrow Agent and the Authority. Any prepayment made by the
Borrower shall be accompanied by the payment to the Purchaser of an additional
sum (the "Prepayment Consideration") equal to (a) two and twenty-five hundredths
per centum (2.25%) of the principal amount prepaid during the first year; (b)
one and seventy-five hundredths per centum (1.75%) of the principal amount
prepaid during the second year; (c) one and twenty-five hundredths per centum
(1.25%) of the principal amount prepaid during the third year; (d) seventy-five
hundredths per centum (0.75%) of the principal amount prepaid during the fourth
year; (e) fifty hundredths per centum (0.50%) of the principal amount prepaid
during the fifth year; and (f) twenty-five hundredths per centum (0.25%) of the
principal amount prepaid during the sixth year. There shall be no Prepayment
Consideration due for any principal amount prepaid by the Borrower during the
seventh or eighth years.

         This Bond shall be redeemed in whole or in part pursuant to Section
3.11 of the Bond Agreement.

         In the event that it is finally determined by the Internal Revenue
Service or a court of competent jurisdiction that the interest on this Bond is
includable in part or in full for the purposes of Federal income taxation in the
gross income of the recipients thereof (except if the reason for such inclusion
is because the recipient is a "substantial user" or "related person", as
provided in Section 144(a)(3) or Section 147(a) of the Internal Revenue Code of
1986, as amended) (a "Determination of Taxability"), then this Bond shall be
subject to optional redemption at the direction of the Purchaser in whole at a
redemption price equal to 103%

                                       A-3

<PAGE>

of the principal amount thereof plus accrued interest to the date of redemption,
the date of redemption to be determined by the Purchaser.

         The Borrower agrees to reimburse and fully indemnify and hold harmless
the Authority and the Purchaser from and against any and all liability, damage,
loss, cost or expense (including attorneys' fees) which the Authority or the
Purchaser may incur as the result of a Determination of Taxability, and further
agrees to furnish upon demand a bond, letter of credit or other form of security
as the Purchaser may reasonably request from time to time to secure the
Authority's obligations under the Bond, including without limitation any
potential increases in interest, whether prospective or retroactive, and any
potential taxes, penalties or related interest.

         The Act provides that neither the members of the Authority nor any
person executing this Bond for the Authority shall be liable personally on this
Bond by reason of the issuance thereof. No recourse shall be had for the payment
of principal of or interest or premium, if any, on this Bond or for any claim
based thereon, against any past, present or future official, officer or employee
of the Authority or any successor corporation, as such, either directly or
through the Authority, or any successor corporation, under any rule of law or
equity, statute or constitution, or by the enforcement of any assessment or
penalty or otherwise; and all such liability of any such official, officer or
employee, as such, is hereby expressly waived and released as a condition of and
in consideration for the issuance of this Bond.

         In case an Event of Default, as defined in the Bond Agreement, shall
have occurred, the principal of all Bonds then Outstanding under the Bond
Agreement may become due and payable before their maturity dates.

         It is hereby certified and recited that all conditions, acts and things
required by the Constitution or statutes of the State or the Bond Agreement to
exist, to have happened or to have been performed precedent to or in the
issuance of this Bond, exist, have happened and have been performed and that the
issuance of this Bond is within every debt and other limit prescribed by said
constitution or statutes.

                                       A-4

<PAGE>

         IN WITNESS WHEREOF, the Authority has caused this bond to be signed in
its name and on its behalf by the manual or facsimile signature of its Executive
Director and its corporate seal to be affixed, imprinted or reproduced hereon
and attested by the manual or facsimile signature of its Assistant Secretary.

[SEAL]                                   NEW JERSEY ECONOMIC
                                         DEVELOPMENT AUTHORITY
ATTEST:

                                         BY:
--------------------------                   -----------------------
FRANK T. MANCINI, JR.                       CAREN S. FRANZINI
ASSISTANT SECRETARY                         EXECUTIVE DIRECTOR

A-5

<PAGE>

                                    EXHIBIT B























                                       B-1


<PAGE>

                                    EXHIBIT C























                                       C-1
<PAGE>

                                    EXHIBIT D
                        BORROWER'S COMPLETION CERTIFICATE

CHITTENDEN TRUST COMPANY

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


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

Dear Ladies and Gentlemen:

         Pursuant to Section 3.7 of the Bond Agreement by and among the New
Jersey Economic Development Authority ("the Authority"), Chittenden Trust
Company (the "Escrow Agent") and Foilmark, Inc. (the "Borrower"), dated [DATED
DATE] (the "Bond Agreement"), the undersigned, an Authorized Borrower
Representative (all capitalized terms used herein and not defined herein shall
have the meanings ascribed to such terms in the Bond Agreement), as of the date
hereof, certifies that:

         (i)               the acquisition of the Project was completed as of
                           _________________, 20__;

         (ii)              the cost of all labor, services, materials and
                           supplies used in the Project have been paid, or will
                           be paid from amounts retained by the Escrow Agent at
                           the Borrower's direction for any cost of the Project
                           not now due and payable or, if due and payable, not
                           presently paid;

         (iii)             the Project Equipment necessary for the Project has
                           been installed to the Borrower's satisfaction; such
                           Project Equipment so installed is suitable and
                           sufficient for the efficient operation of the Project
                           for the intended purposes, and all costs and
                           expenses, if any, incurred in the acquisition and
                           installation of such Project Equipment have been
                           paid, or will be paid from amounts retained by the
                           Escrow Agent at the Borrower's direction for any cost
                           of the Project not now due and payable or, if due and
                           payable, not presently paid;

         (iv)              the Project is being operated as an authorized
                           "project" under the Act and substantially as proposed
                           in the Application of the Borrower;

         (v)               in the event the Project included construction, (a)
                           the Borrower has reviewed the Contractor's Completion
                           Certificate and the Borrower has no knowledge or
                           information that the representations contained
                           therein are false or misleading, and (b) the Borrower
                           required in all Construction Contracts that wages
                           paid to the workers employed in the performance of
                           the Construction Contracts be paid at a rate not less
                           than the Prevailing Wage Rate.

                                      D-1

<PAGE>

         I acknowledge that any amounts hereafter remaining in the Proceeds
Account of the Escrow Fund (except amounts therein sufficient to cover costs of
the Project not now due and payable or not presently paid and except for
interest or other income earned from the investment of the moneys held in the
Escrow Fund, if any) shall be used by the Escrow Agent to make prepayments of
principal only on the Loan as provided in Section 3.7 of the Bond Agreement and
shall not be invested at a Yield materially higher than the Yield on the Bond.

         This certificate is given without prejudice to any rights against third
parties that exist on the date hereof or that may subsequently come into being.

                                             FOILMARK, INC.

                                             BY:
                                                 AUTHORIZED BORROWER OFFICER

Dated:

                                      D-2

<PAGE>


                                    EXHIBIT E

                                INVESTMENT LETTER

                                                                       [Date]

New Jersey Economic Development Authority
36 West State Street
Trenton, New Jersey  08625

Re:      New Jersey Economic Development Authority Economic Development Bond
         (Foilmark, Inc. Project)

Ladies and Gentlemen:

                  ______________ (the "Purchaser"), is purchasing $_________
principal amount of the referenced Bond issued by the New Jersey Economic
Development Authority (the "Authority"). In connection with the sale of the Bond
from __________ to the undersigned (the "Purchaser"), the Authority requires
that the Purchaser make certain representations. Accordingly, the Purchaser
represents and warrants to the Authority as follows:

         1. The Purchaser is an "accredited investor" within the meaning of
Regulation D of the United States Securities and Exchange Commission and a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act").

         2. The Purchaser acknowledges that it has been informed by the
Authority that the Bond has not been registered under the Securities Act or any
state securities law, that the Bond is being offered and sold by the Authority
without such registration in reliance upon exemptions therein for private
offerings to institutional or other accredited investors.

         3. The Purchaser is purchasing the Bond for its own account with no
present intention of distributing the Bond, but without prejudice, however, to
its right at all times to sell or otherwise dispose of all or any part of the
Bond under a registration under the Securities Act or under an exemption from
such registration available under such Act. The Purchaser will require each
subsequent purchaser of the Bond to provide a letter to the Authority in
substantially the same form as this letter.

         4. The Purchaser hereby confirms that it has performed such
investigation as the Purchaser has considered necessary or appropriate of the
borrower to whom the proceeds of the Bond were loaned by the Authority and it is
not relying upon any actions or statements of the

                                      E-1

<PAGE>

Authority in connection with such investigation or its evaluation of the risks
and merits of the borrower or the Bond.

         5. The Purchaser has not relied on the Authority or any member, officer
or employee of the Authority (collectively, the "Authority Parties") with
respect to any information concerning the borrower or the Bond. The Purchaser
further acknowledges and confirms that it has not received from any of the
Authority Parties any representations or assurances with respect to the borrower
or the Bond. The Purchaser hereby waives any claims, actions or causes of action
which the Purchaser may have now or in the future against any of the Authority
Parties arising from or relating to any disclosure or non-disclosure with
respect to the borrower or the Bond.

                  The above representations are provided solely for the benefit
of the Authority Parties and may not be relied upon by or furnished to any other
person without our prior written consent. Without limiting the foregoing, the
execution of this letter by the Purchaser is not intended in any manner to alter
or reduce the disclosure duties to the Purchaser under applicable federal and
state securities laws of any other party involved in the issuance or sale of the
Bond.

                                    [PURCHASER]

                                     By:
                                         --------------------------------
                                     Name:
                                     Title:





                                       E-2