<PAGE>
                                                                  EXHIBIT 10(u)


                           LOAN AND SECURITY AGREEMENT

                                  by and among

                         CONGRESS FINANCIAL CORPORATION
                                    as Lender

                                       and

                            CENTRAL SPRINKLER COMPANY
                          CENTRAL CASTINGS CORPORATION
                            CENTRAL CPVC CORPORATION
                                  as Borrowers

                                       and

                          CENTRAL SPRINKLER CORPORATION
                      CENTRAL SPRINKLER EXPORT CORPORATION
                                  as Guarantors



                            Dated: September 18, 1998


<PAGE>





                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S>               <C>                                                                                         <C>

                                                                                                               Page
                                                                                                               ----
SECTION  1.       DEFINITIONS.....................................................................................1

SECTION  2.       CREDIT FACILITIES
         2.1      Revolving Loans................................................................................20
         2.2      Letter of Credit Accommodations; Supplemental Letter
                     of Credit Accommodations....................................................................22
         2.3      Term Loan......................................................................................27
         2.4      Equipment Purchase Term Loans..................................................................27
         2.5      Availability Reserves..........................................................................29
         2.6      Joint and Several Liability....................................................................29

SECTION  3.       INTEREST AND FEES
         3.1      Interest.......................................................................................30
         3.2      Closing Fee....................................................................................32
         3.3      Servicing Fee..................................................................................32
         3.4      Unused Line Fee................................................................................32
         3.5      Changes in Laws and Increased Costs of Loans...................................................32

SECTION  4.       CONDITIONS PRECEDENT
         4.1      Conditions Precedent to Initial Loans and Letter of
                     Credit Accommodations and Supplemental Letter of
                     Credit Accommodations.......................................................................33
         4.2      Conditions Precedent to All Loans and Letter of Credit
                     Accommodations..............................................................................36

SECTION  5.       GRANT OF SECURITY INTEREST.....................................................................37

SECTION  6.       COLLECTION AND ADMINISTRATION
         6.1      Borrowers' Loan Accounts.......................................................................38
         6.2      Statements.....................................................................................39
         6.3      Collection of Accounts.........................................................................39
         6.4      Payments.......................................................................................41
         6.5      Authorization to Make Loans....................................................................41
         6.6      Appointment of Agent for Requesting Loans, Letter of
                     Credit Accommodations, Supplemental Letter of Credit
                     Accommodation and Receipt of Loans and Statements...........................................42
         6.7      Use of Proceeds................................................................................42

</TABLE>

<PAGE>
<TABLE>
<CAPTION>
<S>               <C>                                                                                         <C>
SECTION  7.        COLLATERAL REPORTING AND COVENANTS............................................................43
         7.1      Collateral Reporting...........................................................................43
         7.2      Accounts Covenants.............................................................................44
         7.3      Inventory Covenants............................................................................46
         7.4      Equipment Covenants............................................................................47
         7.5      Power of Attorney..............................................................................47
         7.6      Right to Cure..................................................................................48
         7.7      Access to Premises.............................................................................48

SECTION  8.        REPRESENTATIONS AND WARRANTIES................................................................49
         8.1      Corporate Existence, Power and Authority; Subsidiaries.........................................49
         8.2      Financial Statements; No Material Adverse Change...............................................49
         8.3      Chief Executive Office; Collateral Locations...................................................50
         8.4      Priority of Liens; Title to Properties.........................................................50
         8.5      Tax Returns....................................................................................50
         8.6      Litigation.....................................................................................50
         8.7      Compliance with Other Agreements and Applicable Laws...........................................51
         8.8      Bank Accounts..................................................................................51
         8.9      Environmental Compliance.......................................................................51
         8.10     Employee Benefits..............................................................................52
         8.11     Interrelated Businesses........................................................................53
         8.12     Accuracy and Completeness of Information.......................................................53
         8.13     Survival of Warranties; Cumulative.............................................................53

SECTION  9.       AFFIRMATIVE AND NEGATIVE COVENANTS.............................................................53
         9.1      Maintenance of Existence.......................................................................53
         9.2      New Collateral Locations.......................................................................54
         9.3      Compliance with Laws, Regulations, Etc. .......................................................54
         9.4      Payment of Taxes and Claims....................................................................55
         9.5      Insurance......................................................................................56
         9.6      Financial Statements and Other Information.....................................................57
         9.7      Sale of Assets, Consolidation, Merger, Dissolution, Etc........................................59
         9.8      Encumbrances...................................................................................60
         9.9      Indebtedness...................................................................................62
         9.10     Loans, Investments, Guarantees, Etc............................................................67
         9.11     Dividends and Redemptions......................................................................69
         9.12     Transactions with Affiliates...................................................................69
         9.13     Additional Bank Accounts.......................................................................71

</TABLE>

                                      (ii)

<PAGE>


<TABLE>
<CAPTION>
<S>               <C>                                                                                         <C>
         9.14     Compliance with ERISA..........................................................................71
         9.15     Adjusted Tangible Net Worth....................................................................72
         9.16     Remarketing of Huntsville Bonds................................................................72
         9.17     Costs and Expenses.............................................................................72
         9.18     After Acquired Real Property...................................................................73
         9.19     Further Assurances.............................................................................73

SECTION  10.      EVENTS OF DEFAULT AND REMEDIES.................................................................74
         10.1     Events of Default..............................................................................74
         10.2     Remedies.......................................................................................76

SECTION  11.      JURY TRIAL WAIVER; OTHER WAIVERS
                     AND CONSENTS; GOVERNING LAW.................................................................77
         11.1     Confession of Judgment.........................................................................77
         11.2     Governing Law; Choice of Forum; Service of Process;
                     Jury Trial Waiver...........................................................................78
         11.3     Waiver of Notices..............................................................................79
         11.4     Amendments and Waivers.........................................................................79
         11.5     Waiver of Counterclaims........................................................................80
         11.6     Indemnification................................................................................80

SECTION  12.      TERM OF AGREEMENT; MISCELLANEOUS...............................................................80
         12.1     Term...........................................................................................80
         12.2     Notices........................................................................................82
         12.3     Partial Invalidity.............................................................................82
         12.4     Successors.....................................................................................83
         12.5     Participant's Security Interest................................................................83
         12.6     Entire Agreement...............................................................................83
</TABLE>

                                      (iii)

<PAGE>




                                    INDEX TO
                             EXHIBITS AND SCHEDULES
                             ----------------------


Exhibit A         Information Certificates for each of Central,
                    Castings, CPVC, CSC and CS Export

Exhibit B         Borrowing Base Certificate

Exhibit C         Form of Equipment Purchase Loan Note

Schedule 1.42     Existing Letters of Credit

Schedule 1.44     First Union Letter of Credit Documents

Schedule 1.64     Description of Omega Litigation

Schedule 1.67     Permitted Holders

Schedule 8.4      Existing Liens

Schedule 8.8      Bank Accounts

Schedule 8.9      Environmental Matters

Schedule 9.8(f)   Description of First Union Collateral for Letters of Credit

Schedule 9.9      Existing Indebtedness

Schedule 9.10     Existing Loans, Advances and Guarantees


                                       (i)

<PAGE>



                           LOAN AND SECURITY AGREEMENT
                           ---------------------------


         This Loan and Security Agreement, dated as of September 18, 1998, is
entered into by and among Congress Financial Corporation, a Delaware corporation
("Lender"), Central Sprinkler Company, a Pennsylvania corporation ("Central"),
Central Castings Corporation, an Alabama corporation ("Castings") and Central
CPVC Corporation, an Alabama corporation ("CPVC", and together with Central and
Castings, each individually, a "Borrower" and collectively, "Borrowers") and
Central Sprinkler Corporation, a Pennsylvania corporation ("CSC"), and Central
Sprinkler Export Corporation, a Barbados corporation ("CS Export", and together
with CSC, each individually a "Guarantor" and collectively, "Guarantors").


                              W I T N E S S E T H:
                              --------------------

         WHEREAS, Borrowers and Guarantors have requested that Lender enter into
certain financing arrangements with Borrowers pursuant to which Lender may make
loans and provide other financial accommodations to Borrowers; and

         WHEREAS, Lender is willing to make such loans and provide such
financial accommodations on the terms and conditions set forth herein;

         NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:


SECTION 1. DEFINITIONS
           -----------

         All terms used herein which are defined in Article 1 or Article 9 of
the Uniform Commercial Code shall have the meanings given therein unless
otherwise defined in this Agreement. All references to the plural herein shall
also mean the singular and to the singular shall also mean the plural unless the
context otherwise requires. All references to Borrowers pursuant to the
definitions set forth in the recitals hereto, unless the context otherwise
requires, shall mean each and all of them and their respective successors and
assigns, individually and collectively, jointly and severally. All references to
Guarantors pursuant to the definitions set forth in the recitals hereto, unless
the context otherwise requires, shall mean each and all of them and their
respective successors and assigns, individually and collectively, jointly and
severally. All references to Lender pursuant to the definitions set forth in the
recitals hereto, or to any other person herein, shall include their respective
successors and assigns. The words "hereof", "herein", "hereunder", "this
Agreement" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not any particular provision of this Agreement
and as this Agreement now exists or may hereafter be amended, modified,

<PAGE>


supplemented, extended, renewed, restated or replaced. The word "including" when
used in this Agreement shall mean "including, without limitation". An Event of
Default shall exist or continue or be continuing until such Event of Default is
waived in accordance with Section 11.3 hereof or is cured in a manner
satisfactory to Lender. Any accounting term used herein unless otherwise defined
in this Agreement shall have the meanings customarily given to such term in
accordance with GAAP. For purposes of this Agreement, the following terms shall
have the respective meanings given to them below:

         1.1 "Accounts" shall mean all present and future rights of each
Borrower to payment for goods sold or leased or for services rendered, which are
not evidenced by instruments or chattel paper, and whether or not earned by
performance.

         1.2 "Adjusted Eurodollar Rate" shall mean, with respect to each
Interest Period for any Eurodollar Rate Loan, the rate per annum (rounded
upwards, if necessary, to the next one-sixteenth (1/16) of one (1%) percent)
determined by dividing (a) the Eurodollar Rate for such Interest Period by (b) a
percentage equal to: (i) one (1) minus (ii) the Reserve Percentage. For purposes
hereof, "Reserve Percentage" shall mean the reserve percentage, expressed as a
decimal, prescribed by any United States or foreign banking authority for
determining the reserve requirement which is or would be applicable to deposits
of United States dollars in a non-United States or an international banking
office of Reference Bank used to fund a Eurodollar Rate Loan or any Eurodollar
Rate Loan made with the proceeds of such deposit, whether or not the Reference
Bank actually holds or has made any such deposits or loans. The Adjusted
Eurodollar Rate shall be adjusted on and as of the effective day of any change
in the Reserve Percentage.

         1.3 "Adjusted Tangible Net Worth" shall mean as to any Person, at any
time, in accordance with GAAP (except as otherwise specifically set forth
below), on a consolidated basis for such Person and its Subsidiaries (if any),
the amount equal to the difference between: (a) the aggregate net book value of
all assets of such Person and its Subsidiaries (excluding the value of patents,
trademarks, copyrights, licenses, goodwill and other intangible assets),
calculating the book value of inventory for this purpose on a first-in-first-out
basis, after deducting from such book values all appropriate reserves in
accordance with GAAP (including all reserves for doubtful receivables,
obsolescence, depreciation and amortization) and (b) the aggregate amount of the
indebtedness and other liabilities of such Person and its Subsidiaries
(including tax and other proper accruals).

         1.4 "Alabama State Bond Agreements" shall mean collectively, the
following (as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced): (a) the Trust Indenture,
dated as of November 1, 1995, between the State of Alabama Industrial
Development Authority and the Alabama State Bond Trustee; (b) the Loan
Agreement, dated as of November 1, 1995, between the State of Alabama Industrial
Development Authority and Castings; (c) the Central Castings Corporation
$8,000,000 Registered Promissory Note, dated November 21, 1995, issued by
Castings payable to the State of Alabama Industrial Development Authority; (d)
the Tender Agent Agreement, dated as of November 1, 1995, by and among Castings,

                                      -2-
<PAGE>


the Alabama State Board Trustee and The Chase Manhattan Bank (formerly known as
Chemical Bank) as Tender Agent under the Trust Indenture referred to above; and
(e) all agreements, documents and instruments at any time executed and/or
delivered by any Borrower or Guarantor in connection with any of the foregoing.

         1.5 "Alabama State Bond Letter of Credit" shall mean Letter of Credit
No. 40019564, dated November 21, 1995, issued by First Union National Bank (as
successor by merger to First Fidelity Bank, National Association) for the
account of Castings payable to the Alabama State Bond Trustee in the amount of
up to $8,150,000, as adjusted from time to time in accordance with the terms
thereof, as the same now exists or may hereafter be amended, modified,
supplemented, extended, received, restated or replaced.

         1.6 "Alabama State Bonds" shall mean, collectively, the Adjustable
Convertible Taxable Industrial Revenue Bonds (Central Castings Corporation
Project) Series 1995 issued by the State of Alabama Industrial Development
Authority in the original principal amount of $8,000,000, as the same now exist
or may hereafter be amended, modified, supplemented, extended, renewed, restated
or replaced.

         1.7 "Alabama State Bond Trustee" shall mean The Chase Manhattan Bank, a
New York banking corporation (formerly known as Chemical Bank) in its capacity
as trustee for the holders of the Alabama State Bonds and any successor,
replacement or additional trustee, and their respective successors and assigns.

         1.8 "Availability Reserves" shall mean, as of any date of
determination, such amounts as Lender may from time to time, establish and
revise in good faith reducing the amount of Revolving Loans and Letter of Credit
Accommodations that would otherwise be available to Borrowers under the lending
formula(s) provided for herein: (a) to reflect events, conditions, contingencies
or risks that, as determined by Lender in good faith, do or may affect either
(i) the Collateral or any other property which is security for the Obligations
or its value, or (ii) the security interests and other rights in the Collateral
of Lender (including the enforceability, perfection and priority thereof), or
(iii) the assets, business or prospects of any Borrower or Guarantor; (b) to
reflect Lender's good faith belief that any collateral report or financial
information furnished by or on behalf of any Borrower or Obligor to Lender is or
may have been incomplete, inaccurate or misleading in any material respect; (c)
in respect of any state of facts which Lender determines in good faith
constitutes an Event of Default or may, with notice or passage of time or both,
constitute an Event of Default; (d) to reflect outstanding Letter of Credit
Accommodations as provided in Section 2.2 hereof; (e) to reflect variances in
the physical counts of Inventory conducted by Lender from time to time from the
amounts of Inventory reflected in the books and records of Borrowers; (f) to
reflect indebtedness of Borrowers in connection with the Alabama State Bond
Agreements in excess of the amount of the Alabama State Bond Letter of Credit
and in connection with the Calhoun County Bond Agreements in excess of the
amount of the Calhoun County Bond Letter of Credit; (g) to reflect that dilution
with respect to the Accounts for any period (based on the ratio of (i) the




                                       -3-

<PAGE>



aggregate amount of reduction in Accounts other than as a result of payments in
cash to (ii) the aggregate amount of total sales) is greater than five (5%)
percent and (h) the Special Availability Reserve. To the extent Lender may
revise the lending formula set forth in Section 2.1 hereof or establish new
criteria or revise existing criteria for Eligible Accounts or Eligible Inventory
so as to address any circumstance, condition, event or contingency in a manner
satisfactory to Lender, Lender shall not establish an Availability Reserve for
the same purpose. The amount of any Availability Reserve established by Lender
shall have a reasonable relationship to the event, condition or other matter
which is the basis for such reserve as determined by Lender in good faith.

         1.9 "Blocked Accounts" shall have the meaning set forth in Section 6.3
hereof.

         1.10 "Borrowing Base Certificate" shall mean a certificate
substantially in the form of Exhibit B hereto, as such form may from time to
time be modified by Lender, which is duly completed (including all schedules
thereto) and executed by the chief financial officer or other appropriate
financial officer of Borrowers acceptable to Lender and delivered to Lender.

         1.11 "Business Day" or "business day" shall mean any day other than a
Saturday, Sunday, or other day on which commercial banks are authorized or
required to close under the laws of the State of New York or the Commonwealth of
Pennsylvania, and a day on which the Reference Bank and Lender are open for the
transaction of business, except that if a determination of a Business Day shall
relate to any Eurodollar Rate Loans, the term Business Day shall also exclude
any day on which banks are closed for dealings in dollar deposits in the London
interbank market or other applicable Eurodollar Rate market.

         1.12 "Calhoun County Bond Agreements" shall mean collectively, the
following (as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced): (a) the Trust Indenture,
dated as of November 1, 1995, between the Calhoun County Economic Development
Council and the Calhoun County Bond Trustee, (b) the Lease Agreement, dated as
of November 1, 1995, between the Calhoun County Economic Development Council and
Castings and (c) all agreements, documents and instruments at any time executed
and/or delivered by any Borrower or Guarantor in connection with any of the
foregoing.

         1.13 "Calhoun County Bond Letter of Credit" shall mean Letter of Credit
No. 40019894, dated November 21, 1995, issued by First Union National Bank (as
successor by merger to First Fidelity Bank, National Association) for the
account of Castings payable to the Calhoun County Bond Trustee as beneficiary in
the amount of up to $3,056,250, as adjusted from time to time in accordance with
the terms thereof, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.

         1.14 "Calhoun County Bonds" shall mean, collectively, the Adjustable
Convertible Taxable Industrial Revenue Bonds (Central Castings Corporation
Project) Series 1995 issued by the Calhoun County Economic Development Council
in the original principal amount of $3,000,000, as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.

                                       -4-

<PAGE>


         1.15 "Calhoun County Bond Trustee" shall mean The Chase Manhattan Bank,
a New York banking corporation (formerly known as Chemical Bank) in its capacity
as trustee for the holders of the Calhoun County Bonds and any successor,
replacement or additional trustee, and their respective successors and assigns.

         1.16 "Capital Stock" shall mean, with respect to any Person, any and
all shares, interests, participations or other equivalents (however designated)
of such Person's capital stock or any membership interest at any time
outstanding, and any and all rights, warrants or options exchangeable for or
convertible into such capital stock or membership interest (but excluding any
debt security that is exchangeable for or convertible into such capital stock).

         1.17 "Cash Equivalents" shall mean any of the following: (a) any
investment in direct obligations of the United States of America or any agency
thereof or obligations guaranteed by the United States of America or any agency
thereof; (b) investments in time deposit accounts, certificates of deposit and
money market deposits maturing within one hundred eighty (180) days of the date
of acquisition thereof issued by a bank or trust company which is organized
under the laws of the United States of America, any state thereof or any foreign
country recognized by the United States, and which bank or trust company has
capital, surplus and undivided profits aggregating in excess of $50,000,000 (or
the foreign currency equivalent thereof) and has outstanding debt which is rated
"A" (or such similar equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436 under the
Exchange Act; (c) repurchase obligations with a term of not more than thirty
(30) days for underlying securities of the types described in clause (a) above
entered into with a bank meeting the qualifications described in clause (b)
above; (d) investments in commercial paper maturing not more than ninety (90)
     aw Hill Companies, Inc.; (e) investments in securities with
maturities of six (6) months or less from the date of acquisition issued or
fully guaranteed by any State of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A" by
Standard & Poor's Ratings Group, a division of The McGraw Hill Companies, Inc.
or "A" by Moody's Investor Service, Inc.; and (f) investments in money market
funds and mutual funds which invest substantially all of their assets in
securities of the types described in clauses (a) through (e) above.

         1.18 "Change of Control" shall mean the occurrence of any of the
following: (a) all or substantially all of any Borrower's or Guarantor's assets
are sold, in one or in a series of transactions to any "person" or "group" (as
such terms are used in Sections 14(d)(2) and 13(d)(3), respectively, of the


                                       -5-

<PAGE>


Exchange Act) other than to a Permitted Holder; (b) an event or series of events
(whether a stock purchase, amalgamation, merger, consolidation or other business
combination or otherwise) by which any person or group (other than a Permitted
Holder) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) directly or indirectly of fifty (50%) percent or more of the
combined voting power of the then outstanding securities of any Borrower or
Guarantor ordinarily (and apart from rights accruing under certain
circumstances) having the right to vote in election of directors or (c) after
the date of this Agreement, the replacement of a majority of the Board of
Directors of any Borrower or Guarantor over a two (2) year period commencing
from the date of this Agreement from the directors who constituted the Board of
Directors at the beginning of such period other than directors whose nominations
for election by the stockholders of such Borrower or Guarantor was approved by
such Board of Directors.

         1.19 "Code" shall mean the Internal Revenue Code of 1986, as the same
now exists or may from time to time hereafter be amended, modified, recodified
or supplemented, together with all rules, regulations and interpretations
thereunder or related thereto.

         1.20 "Collateral" shall have the meaning set forth in Section 5 hereof.

         1.21 "Collateral Access Agreement" shall mean an agreement in writing,
in form and substance satisfactory to Lender, from any lessor of premises to any
Borrower or Guarantor, or any other person to whom any Inventory is consigned or
who has custody, control or possession of any Inventory or Equipment or is
otherwise the owner or operator of any premises on which any Inventory or
Equipment is located pursuant to which such lessor, consignee or other person,
inter, alia, acknowledges the first priority security interest of Lender in such
Inventory or Equipment, agrees to waive any and all claims such lessor,
consignee or other person may, at any time, have against such Inventory or
Equipment, whether for processing, storage or otherwise, and agrees to permit
Lender access to, and the right to remain on, the premises of such lessor,
consignee or other person so as to exercise Lender's rights and remedies and
otherwise deal with the Collateral.

         1.22 "Consolidated Net Income" shall mean, with respect to any Person
for any period, the aggregate of the net income (loss) of such Person and its
Subsidiaries, on a consolidated basis, for such period (excluding to the extent
included therein any extraordinary and/or unusual and non-recurring gains other
than any such gains to the extent of cash or other immediately available funds
received by such Person and its Subsidiaries) after deducting all charges which
should be deducted before arriving at the net income (loss) for such period and,
without duplication, after deducting the Provision for Taxes for such period,
all as determined in accordance with GAAP; provided, that, (a) the net income of
any Person that is not a wholly-owned Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the amount
of dividends or distributions paid or payable to such Person or a wholly-owned
Subsidiary of such Person; (b) except to the extent included pursuant to the
foregoing clause, the net income of any Person accrued prior to the date it
becomes a wholly-owned Subsidiary of such Person or is merged into or



                                       -6-

<PAGE>

consolidated with such Person or any of its wholly-owned Subsidiaries or that
Person's assets are acquired by such Person or by its wholly-owned Subsidiaries
shall be excluded; and (c) the net income (if positive) of any wholly-owned
Subsidiary to the extent that the declaration or payment of dividends or similar
distributions by such wholly-owned Subsidiary to such Person or to any other
wholly-owned Subsidiary of such Person is not at the time permitted by operation
of the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to such wholly-owned
Subsidiary shall be excluded. For the purposes of this definition, (i) net
income excludes any gain (or loss) together with any related Provision for Taxes
for such gain (or loss) realized upon the sale or other disposition of any
assets that are not sold in the ordinary course of business (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or of any
Capital Stock of such Person or a Subsidiary of such Person, other than any such
gains with respect thereto the extent of cash or other immediately available
funds received by such Person and its Subsidiaries and any net income realized
or loss incurred as a result of changes in accounting principles or the
application thereof to such Person, and (ii) the term "Provision for Taxes"
shall mean an amount equal to all taxes imposed on or measured by net income,
whether Federal, State, Provincial, county or local, and whether foreign or
domestic, that are paid or payable by any Person in respect of any period in
accordance with GAAP.

         1.23 "CPSC Action" shall mean the action brought against CSC and
Central by the staff of the Consumer Product Safety Commission (the "CPSC")
pursuant to the Administrative Complaint filed by the CPSC against CSC and
Central on March 3, 1998 seeking the recall and replacement of the Omega TM fire
sprinkler products manufactured and sold by Central pursuant to 15 U.S.C.
ss.2064, referred to as In the Matter of Central Sprinkler Corp. and Central
Sprinkler Co., Respondents, CPSC Docket No. 98-2.

         1.24 "CSC Finance" shall mean CSC Finance Company, a Delaware
corporation, and its successors and assigns.

         1.25 "CSC Investment" shall mean CSC Investment Company, a Delaware
corporation, as its successors and assigns.

         1.26 "Eligible Accounts" shall mean, as to each Borrower, the Accounts
created by such Borrower which are and continue to be acceptable to Lender based
on the criteria set forth below. In general, an Account shall be an Eligible
Account if:

               (a) such Account arises from the actual and bona fide sale and
delivery of goods by such Borrower or rendition of services by such Borrower in
the ordinary course of its business which transactions are completed in
accordance with the terms and provisions contained in any documents related
thereto;

               (b) such Account is not unpaid after the earlier of sixty (60)
days after the original due date for them or one hundred twenty (120) days after
the date of the original invoice for them;



                                       -7-

<PAGE>




               (c) such Account complies with the terms and conditions contained
in Section 7.2(c) of this Agreement;

               (d) such Account does not arise from sales on consignment,
guaranteed sale, sale and return, sale on approval, or other terms under which
payment by the account debtor may be conditional or contingent;

               (e) the chief executive office of the account debtor with respect
to such Account is located in the United States of America or Canada (provided,
that, at any time promptly upon Lender's request, Borrowers shall execute and
deliver, or cause to be executed and delivered, such other agreements, documents
and instruments as may be required by Lender to perfect the security interests
of Lender in those Accounts of an account debtor with its chief executive office
or principal place of business in Canada in accordance with the applicable laws
of the Province of Canada in which such chief executive office or principal
place of business is located and take or cause to be taken such other and
further actions as Lender may request to enable Lender as secured party with
respect thereto to collect such Accounts under the applicable Federal or
Provincial laws of Canada) or, at Lender's option, if the chief executive office
and principal place of business of the account debtor with respect to such
Accounts is located other than in the United States of America or Canada, then
if either: (i) the account debtor has delivered to such Borrower an irrevocable
letter of credit issued or confirmed by a bank satisfactory to Lender,
sufficient to cover such Account, in form and substance satisfactory to Lender
and, if required by Lender and payable only in the United States of America and
in United States dollars, the original of such letter of credit has been
delivered to Lender or Lender's agent and the issuer thereof notified of the
assignment of the proceeds of such letter of credit to Lender, or (ii) such
Account is subject to credit insurance payable to Borrower and/or Lender prior
to an Event of Default and solely to Lender after an Event of Default and issued
by an insurer and on terms and in an amount acceptable to Lender, or (iii) such
Account is otherwise acceptable in all respects to Lender (subject to such
lending formula with respect thereto as Lender may determine);

               (f) such Accounts does not consist of progress billings, bill and
hold invoices or retainage invoices, except as to bill and hold invoices, if
Lender shall have received an agreement in writing from the account debtor, in
form and substance satisfactory to Lender, confirming the unconditional
obligation of the account debtor to take the goods related thereto and pay such
invoice;

               (g) the account debtor with respect to such Account has not
asserted a counterclaim, defense or dispute and does not have, and does not
engage in transactions which may give rise to, any right of setoff against such
Account (but the portion of the Accounts of such account debtor in excess of the
amount at any time and from time to time owed by such Borrower to such account
debtor or claimed owed by such account debtor may be deemed Eligible Accounts);




                                       -8-

<PAGE>



               (h) there are no facts, events or occurrences which have impaired
the validity, enforceability or collectability of such Account or reduced the
amount payable or delay payment thereunder;

               (i) such Account is subject to the first priority, valid and
perfected security interest of Lender and any goods giving rise thereto are not,
and was not at the time of the sale thereof, subject to any liens except those
permitted in this Agreement;

               (j) neither the account debtor nor any officer or employee of the
account debtor with respect to such Account is an officer, employee or agent of
or affiliated with any Borrower or Guarantor directly or indirectly by virtue of
family membership, ownership, control, management or otherwise;

               (k) the account debtor with respect to such Accounts is not any
foreign government, the United States of America, any State, political
subdivision, department, agency or instrumentality thereof, unless, if the
account debtor is the United States of America, any State, political
subdivision, department, agency or instrumentality thereof, upon Lender's
request, the Federal Assignment of Claims Act of 1940, as amended or any similar
State or local law, if applicable, has been complied with in a manner
satisfactory to Lender;

               (l) there are no proceedings or actions that are pending, or to
the best of the knowledge of Borrowers, threatened, against the account debtor
with respect to such Accounts which have resulted in or have a reasonable
likelihood of resulting in any material adverse change in any such account
debtor's financial condition;

               (m) all Accounts of a single account debtor or its affiliates do
not constitute more than ten (10%) percent of all otherwise Eligible Accounts of
Borrowers (but the portion of the Accounts of such account debtor not in excess
of such percentages may be deemed Eligible Accounts);

               (n) such Account is not owed by an account debtor who has
Accounts unpaid after the earlier of sixty (60) days after the original due date
for them or one hundred twenty (120) days after the date of the original invoice
for them, which constitute more than fifty (50%) percent of the total Accounts
of such account debtor;

               (o) such Account is owed by account debtors whose total
indebtedness to Borrowers does not exceed the credit limit with respect to such
account debtor used by Borrowers in accordance with the current policies of
Borrowers as in effect on the date hereof and acceptable to Lender (but the
portion of the Accounts of such account debtor not in excess of such credit
limit may be deemed Eligible Accounts); and

               (p) such Account is owed by an account debtor deemed creditworthy
at all times by Lender, as determined in good faith by Lender.




                                       -9-

<PAGE>



General criteria for Eligible Accounts may be established and revised from time
to time by Lender in good faith based on an event, condition or other
circumstance arising after the date hereof, or existing on the date hereof to
the extent Lender has no written notice thereof from Borrowers, which adversely
affects or could reasonably be expected to adversely affect the Accounts in the
good faith determination of Lender. Any Accounts which are not Eligible Accounts
shall nevertheless be part of the Collateral.

         1.27 "Eligible Cash Collateral" shall mean the cash or Cash Equivalents
of Central which are: (a) held in account no. 23128002 in the name of Central at
First Union Capital Markets, a Division of Wheat First Securities, Inc. (the
"Collateral Account") or held by Lender subject to a cash collateral pledge
agreement by such Borrower in favor of Lender, in form and substance
satisfactory to Lender; (b) free and clear of any lien, security interest, claim
or other encumbrance or restriction, except in favor of Lender; (c) at all times
on and after September 25, 1998, subject to the first priority, valid and
perfected security interest and pledge in favor of Lender; (d) if held at First
Union Capital Markets, a Division of Wheat First Securities, Inc., on and after
September 25, 1998, subject to an account control agreement by and among First
Union Capital Markets, a Division of Wheat First Securities, Inc., Borrowers and
Lender, in form and substance satisfactory to Lender and duly authorized,
executed and delivered by First Union Capital Markets, a Division of Wheat First
Securities, Inc., and Borrowers; and (e) available to such Borrower without
condition or restriction except those arising pursuant to the pledge in favor of
Lender. Notwithstanding anything to the contrary contained herein, no cash or
Cash Equivalent of Borrowers shall constitute Eligible Cash Collateral on and
after the close of business on September 25, 1998 unless on or before such date
either: (i) Lender shall have received, in form and substance satisfactory to
Lender, both: (A) an account control agreement with respect to the account at
which such cash or Cash Equivalents are held, duly authorized, executed and
delivered by First Union Capital Markets, a Division of Wheat First Securities,
Inc., and Borrowers and (B) a pledge agreement with respect thereto by Borrowers
in favor of Lender, duly authorized, executed and delivered by Borrowers or (ii)
Lender shall have received, in form and substance satisfactory to Lender, both
(A) cash or other immediately available funds constituting the Eligible Cash
Collateral to be held by Lender in its possession and (B) a cash collateral
pledge agreement by Borrowers in favor of Lender with respect to all such funds
received by Lender, duly authorized, executed and delivered by Borrowers.

         1.28 "Eligible Equipment" shall mean, as to each Borrower, Equipment
owned by such Borrower, which is in good order, repair, running and marketable
condition, located at such Borrower's premises and acceptable to Lender in all
respects. In general, Eligible Equpment shall not include: (a) Equipment at
premises other than those owned and controlled by such Borrower, except for
Equipment at locations leased by such Borrower if either (i) Lender shall have
received a Collateral Access Agreement from the owner and lessor of such
premises in form and substance satisfactory to Lender, or (ii) if Lender shall
not have received such an agreement, the Lender shall have, at its option either
(A) established an Availability Reserve with respect to amounts due or to become
due to the owner and lessor of such premises pursuant to Section 1.28(e) below
or (b) reduced the amount of the Equipment Purchase Term Loan based on


                                      -10-

<PAGE>

such Eligible Equipment by amounts due or to become due to the owner and lessor
of such premises in the good faith determination of Lender by an amount equal to
the Availability Reserves that would have been established under Section 1.28(e)
below; (c) Equipment subject to a security interest or lien in favor of any
person other than Lender except those permitted in this Agreement; (d) Equipment
which is not located in the continental United States of America; (e) Equipment
which is not subject to the first priority, valid and perfected security
interest of Lender; or (f) worn-out, obsolete, damaged or defective Equipment or
Equipment not used or usable in the ordinary course of such Borrower's business
as presently conducted. General criteria for Eligible Equipment may be
established and revised from time to time by Lender in good faith based on an
event, condition or other circumstance arising after the date hereof, or
existing on the date hereof to the extent Lender has no written notice thereof
from Borrowers, which adversely affects or could reasonably be expected to
adversely affect the Equipment in the good faith determination of Lender. Any
Equipment which is not Eligible Equipment shall nevertheless be part of the
Collateral.

         1.29 "Eligible Inventory" shall mean, as to each Borrower, the
Inventory consisting of finished goods held for resale in the ordinary course of
the business of such Borrower and raw materials and work-in-process for such
finished goods, in each case, that are acceptable to Lender based on the
criteria set forth below. In general, Eligible Inventory shall not include (a)
components which are not part of finished goods; (b) spare parts for equipment;
(c) packaging and shipping materials; (d) supplies used or consumed in the
business of any Borrower; (e) Inventory at premises other than those owned and
controlled by such Borrower, except for Inventory at locations leased by
Borrowers or held by consignees or vendors of Borrowers if either: (A) Lender
shall have received a Collateral Access Agreement from the owner and lessor of
such premises or the consignee or vendor, as the case may be, in form and
substance satisfactory to Lender or (B) if Lender has not received such an
agreement, as to leased locations, then Lender shall have established an
Availability Reserve in respect of amounts due or to become due to the owner and
lessor of such leased location (without limiting any other rights and remedies
of Lender under this Agreement or under the other Financing Agreements with
respect to the establishment of Availability Reserves or otherwise) and after
giving effect to such Availability Reserves, there is Excess Availability;
provided, that, (i) Borrowers shall use their best efforts to obtain the
Collateral Access Agreement from the owner and lessor with respect to each of
such locations and (ii) the Availability Reserves established pursuant to this
Section shall not exceed at any time the aggregate of amounts payable to such
owners and lessors for the next two (2) months and including amounts, if any,
then outstanding and unpaid owed by any Borrower to such owners and lessors,
provided, that, such limitation on the amount of the Availability Reserves
pursuant to this Section shall only apply so long as: (aa) no Event of Default,
or act, condition or event which with notice or passage of time or both would
constitute an Event of Default shall exist or have occurred and be continuing,
(bb) neither any Borrower or Guarantor nor Lender shall have received notice of
any default or event of default under the lease with respect to such location
and (cc) Lender shall have received evidence, in form and substance satisfactory
to Lender, that no Borrower has granted to the owner and lessor a security


                                      -11-

<PAGE>

interest in or lien upon any assets of such Borrower; (f) Inventory subject to a
security interest or lien in favor of any person other than Lender except those
permitted in this Agreement; (g) bill and hold goods; (h) unserviceable,
obsolete or slow moving Inventory; (i) Inventory which is not subject to the
first priority, valid and perfected security interest of Lender; (j) returned,
damaged and/or defective Inventory; (k) Inventory purchased or sold on
consignment; and (l) Inventory consisting of Omega TM fire sprinkler products.
General criteria for Eligible Inventory may be established and revised from time
to time by Lender in good faith based on an event, condition or other
circumstance arising after the date hereof, or existing on the date hereof to
the extent Lender has no written notice thereof from Borrowers, which adversely
affects or could reasonably be expected to adversely affect the Inventory in the
good faith determination of Lender. Any Inventory which is not Eligible
Inventory shall nevertheless be part of the Collateral.

         1.30 "Environmental Laws" shall mean all foreign, Federal, State and
local laws (including common law), legislation, rules, codes, licenses, permits
(including any conditions imposed therein), authorizations, judicial or
administrative decisions, injunctions or agreements between any Borrower and any
governmental authority, (a) relating to pollution and the protection,
preservation or restoration of the environment (including air, water vapor,
surface water, ground water, drinking water, drinking water supply, surface
land, subsurface land, plant and animal life or any other natural resource), or
to human health or safety, (b) relating to the exposure to, or the use, storage,
recycling, treatment, generation, manufacture, processing, distribution,
transportation, handling, labeling, production, release or disposal, or
threatened release, of Hazardous Materials, or (c) relating to all laws with
regard to recordkeeping, notification, disclosure and reporting requirements
respecting Hazardous Materials. The term "Environmental Laws" includes (i) the
Federal Comprehensive Environmental Response, Compensation and Liability Act of
1980, the Federal Superfund Amendments and Reauthorization Act, the Federal
Water Pollution Control Act of 1972, the Federal Clean Water Act, the Federal
Clean Air Act, the Federal Resource Conservation and Recovery Act of 1976
(including the Hazardous and Solid Waste Amendments thereto), the Federal Solid
Waste Disposal and the Federal Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act, and the Federal Safe Drinking Water
Act of 1974, and (ii) applicable State counterparts to such laws.

         1.31 "Equipment" shall mean all of each Borrower's now owned and
hereafter acquired equipment, machinery, computers and computer hardware and
software (whether owned or licensed), vehicles, tools, furniture, fixtures, all
attachments, accessions and property now or hereafter affixed thereto or used in
connection therewith, and substitutions and replacements thereof, wherever
located.

         1.32 "Equipment Purchase Term Loans" shall mean the secured term loans
hereafter made by Lender to any Borrower as provided for in Section 2.4, such
term loans being from time to time referred to herein individually as an
"Equipment Purchase Term Loan".




                                      -12-

<PAGE>



         1.33 "Equipment Purchase Term Notes" shall mean, collectively, the
Equipment Purchase Term Notes which may at any time hereafter be issued by any
Borrower to Lender pursuant to Section 2.4 hereof to evidence an Equipment
Purchase Term Loan, such notes being from time to time referred to herein
individually as an "Equipment Purchase Term Note".

         1.34 "ERISA" shall mean the United States Employee Retirement Income
Security Act of 1974, as the same now exists or may hereafter from time to time
be amended, modified, recodified or supplemented, together with all rules,
regulations and interpretations thereunder or related thereto.

         1.35 "ERISA Affiliate" shall mean any Person required to be aggregated
with any Borrower or Central or any of their Subsidiaries under Sections 414(b),
414(c), 414(m) or 414(o) of the Code.

         1.36 "Eurodollar Rate" shall mean with respect to the Interest Period
for a Eurodollar Rate Loan to a Borrower, the interest rate per annum equal to
the arithmetic average of the rates of interest per annum (rounded upwards, if
necessary, to the next one-sixteenth (1/16) of one (1%) percent) at which
Reference Bank is offered deposits of United States dollars in the London
interbank market (or other Eurodollar Rate market selected by such Borrower or
on its behalf by Central and approved by Lender) on or about 9:00 a.m. (New York
City time) two (2) Business Days prior to the commencement of such Interest
Period in amounts substantially equal to the principal amount of the Eurodollar
Rate Loans requested by and available to such Borrower in accordance with this
Agreement, with a maturity of comparable duration to the Interest Period
selected by such Borrower or on its behalf by Central.

         1.37 "Eurodollar Rate Loans" shall mean any Loans or portion thereof on
which interest is payable based on the Adjusted Eurodollar Rate in accordance
with the terms hereof.

         1.38 "Event of Default" shall mean the occurrence or existence of any
event or condition described in Section 10.1 hereof.

         1.39 "Excess Availability" shall mean the amount, as determined by
Lender, calculated at any time, equal to:

               (a) the lesser of: (i) the amount of the Revolving Loans
available to Borrowers as of such time based on the applicable lending formulas
set forth in Section 2.1 hereof, as determined by Lender, and subject to the
sublimits and Availability Reserves from time to time established hereunder or
(ii) the amount equal to the Revolving Loan Limit, minus

         (b) the sum of: (i) the amount of all then outstanding and unpaid
Obligations of Borrowers (but not including for this purpose the then
outstanding principal amount of the Term Loans to Borrowers), plus (ii) the
aggregate amount of all then outstanding and unpaid trade payables and other
obligations of Borrowers which are more than forty-five (45) days past due as of
such time, plus (iii) the amount of checks issued by Borrowers to pay trade
payables, but not yet sent and the book overdraft of such Borrowers.


                                      -13-

<PAGE>

         1.40 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
the same now exists or may from time to time hereafter be amended, modified,
recodified or supplemented, together with all rules, regulations and
interpretations thereunder or related thereto.

         1.41 "Existing Lenders" shall mean, collectively, First Union National
Bank, LaSalle National Bank and National City Bank of Pennsylvania, and First
Union National Bank as agent for such lenders, and their respective successors
and assigns.

         1.42 "Existing Letters of Credit" shall mean, collectively, the letters
of credit issued for any Borrower or Guarantor by First Union National Bank (as
successor by merger to CoreStates Bank, N.A.) prior to the date hereof listed on
Schedule 1.42 hereto.

         1.43 "Financing Agreements" shall mean, collectively, this Agreement
and all notes, guarantees, security agreements and other agreements, documents
and instruments now or at any time hereafter executed and/or delivered by any
Borrower or Guarantor in connection with this Agreement, as the same now exist
or may hereafter be amended, modified, supplemented, extended, renewed, restated
or replaced.

         1.44 "First Union Letter of Credit Documents" shall mean, collectively,
the Letter of Credit and Reimbursement Agreement, dated as of November 1, 1995,
by and between First Union National Bank and Castings relating to the Alabama
State Bonds and the Calhoun County Bonds and the related agreements, documents
and instruments listed on Schedule 1.44 hereto, as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.

         1.45 "GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time as set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board which are applicable to the
circumstances as of the date of determination consistently applied, provided
that if any change in generally accepted accounting principles after the date
hereof in itself affects the calculation of compliance with the financial
covenant in Section 9.15 hereof, Borrowers may by notice to Lender, or Lender
may, by notice to Central, require that such covenant thereafter be calculated
in accordance with generally accepted accounting principles as in effect, and
applied by Borrowers, immediately before such change in generally accepted
accounting principles occurred. If such notice is given, any calculation by
Borrowers of compliance with covenant in Section 9.15 after such change occurs
shall be accomplished by reconciliations of the difference between the
calculation set forth therein and a calculation made in accordance with
generally accepted accounting principles as in effect from time to time after
such change occurs.



                                      -14-

<PAGE>




         1.46 "Hazardous Materials" shall mean any hazardous, toxic or dangerous
substances, materials and wastes, including hydrocarbons (including naturally
occurring or man-made petroleum and hydrocarbons), flammable explosives,
asbestos, urea formaldehyde insulation, radioactive materials, biological
substances, polychlorinated biphenyls, pesticides, herbicides and any other kind
and/or type of pollutants or contaminants (including materials which include
hazardous constituents), sewage, sludge, industrial slag, solvents and/or any
other similar substances, materials, or wastes and including any other
substances, materials or wastes that are or become regulated under any
Environmental Law (including any that are or become classified as hazardous or
toxic under any Environmental Law).

         1.47 "Hard Costs" shall mean, with respect to the purchase by a
Borrower of an item of Eligible Equipment, the net cash amount actually paid to
acquire title to such item, net of all incentives, trade-in allowances,
discounts and rebates, and exclusive of freight, delivery charges, installation
costs and charges, software costs, charges and fees, warranty costs, taxes,
insurance and other incidental costs or expenses and all indirect costs or
expenses of any kind.

         1.48 "Huntsville Bond Agreements" shall mean shall mean collectively,
the following (as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced): (a) the Mortgage
Indenture, dated as of December 1, 1997, between the Industrial Development
Board of the City of Huntsville, Alabama, CPVC and the Huntsville Bondholder,
(b) the Lease Agreement, dated as of December 1, 1997, between the Industrial
Development Board of the City of Huntsville, Alabama and CPVC, (c) the Guaranty
Agreement, as of December 1, 1997, by CSC, Central, Castings and CPVC in favor
of the Huntsville Bondholder, (d) the Bond Purchase Agreement, as of December 1,
1997, by and among CSC Finance, CPVC, CSC, Central and Castings, and (e) all
agreements, documents and instruments at any time executed and/or delivered by
any Borrower or Guarantor in connection with any of the foregoing.

         1.49 "Huntsville Bond Letter of Credit" shall mean a letter of credit
to be issued after the date hereof by First Union National Bank for the account
of CPVC payable to the Huntsville Bondholder or a duly appointed trustee acting
on behalf of the holders of the Huntsville Bonds, as beneficiary on terms and
conditions acceptable to Lender and to First Union National Bank as the issuer
of such letter of credit in the amount not to exceed $7,641,780.82, as the same
may hereafter exist and may thereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.

         1.50 "Huntsville Bondholder" shall mean CSC Investment (as purchaser of
the Huntsville Bonds from Brown Brothers Harriman & Co. pursuant to the Bond
Purchase Agreement, dated April 21, 1998, by and among Brown Brothers Harriman &
Co., CPVC and CSC Investment) as the direct and beneficial owner and holder of
all of the Huntsville Bonds and any assignee or transferee that hereafter owns
and holds all of the Huntsville Bonds, together with any person who at any time
is acting as trustee or agent on behalf of the owners and holders of the
Huntsville Bonds.



                                      -15-

<PAGE>




         1.51 "Huntsville Bonds" shall mean, collectively, the Industrial
Development Revenue Bonds (Central CPVC Corporation Project) Series 1997 issued
by the Industrial Development Board of the City of Huntsville, Alabama in the
original principal amount of $7,500,000, as the same now exist or may hereafter
be amended, modified, supplemented, extended, renewed, restated or replaced.

         1.52 "Information Certificate" shall mean, collectively, the
Information Certificate with respect to each Borrower and Guarantor constituting
Exhibit A hereto containing material information with respect to each Borrower
and Guarantor, its business and assets provided by or on behalf of Borrowers to
Lender in connection with the preparation of this Agreement and the other
Financing Agreements and the financing arrangements provided for herein.

         1.53 "Interest Period" shall mean for any Eurodollar Rate Loan to
Borrowers, a period of approximately one (1), two (2), three (3) or six (6)
months duration as such Borrower may elect, the exact duration to be determined
in accordance with the customary practice in the applicable Eurodollar Rate
market; provided, that, Borrowers may not elect an Interest Period which will
end after the last day of the then-current term of this Agreement.

         1.54 "Interest Rate" shall mean, as to Prime Rate Loans, the Prime Rate
per annum and as to Eurodollar Rate Loans, a rate of one and three-quarters (1
3/4%) percent per annum in excess of the Adjusted Eurodollar Rate (in each case
as to Eurodollar Rate Loans to a Borrower based on the Eurodollar Rate
applicable for the Interest Period selected by such Borrower as in effect two
(2) Business Days prior to the commencement of such Interest Period for such
Eurodollar Rate Loans in accordance with the terms hereof, whether such rate is
higher or lower than any rate previously quoted to such Borrower); provided,
that: notwithstanding anything to the contrary contained in this Agreement or in
any of the other Financing Agreements, the Interest Rate, as to Prime Rate Loans
and Eurodollar Rate Loans, shall mean the rate two (2%) percent per annum more
than the otherwise then applicable Interest Rate, at Lender's option, without
notice, for the period from and after the date of the occurrence of any Event of
Default, and for so long as such Event of Default is continuing, and on the
Revolving Loans to Borrowers at any time outstanding in excess of the amounts
available to Borrowers under Section 2 hereof (whether or not such excess(es),
arise or are made with or without Lender's knowledge or consent and whether made
before or after an Event of Default).

         1.55 "Inventory" shall mean all of each Borrower's now owned and
hereafter acquired inventory, wherever located, including, without limitation,
all raw materials, work-in-process, and finished inventory of any kind, nature
or description, wherever located.

         1.56 "Inventory Loan Limit" shall mean, at any time, the amount equal
to $35,000,000.

         1.57 "Letter of Credit Accommodations" shall mean the letters of
credit, merchandise purchase or other guaranties which are from time to time
either (a) issued or opened by Lender for the account of any Borrower or
Guarantor or (b) with respect to which Lender has agreed to indemnify the issuer


                                      -16-

<PAGE>

or guaranteed to the issuer the performance by each Borrower of its obligations
to such issuer (including, without limitation, the Existing Letters of Credit),
provided, that, the term "Letter of Credit Accommodations" shall not include the
Supplemental Letter of Credit Accommodations as such term is defined herein.

         1.58 "Loans" shall mean the Revolving Loans, the Term Loan, the
Equipment Purchase Term Loans and the Supplemental LC Loans.

         1.59 "Material Adverse Effect" shall mean a material adverse effect on
(a) the condition (financial or otherwise), business, assets, profits,
operations or properties of Borrowers (taken as a whole); (b) the legality,
validity or enforceability of this Agreement or any of the other Financing
Agreements; (c) the legality, validity, enforceability, perfection or priority
of the security interests and liens of Lender upon the Collateral or any other
property which is security for the Obligations; (d) the Collateral or any other
property which is security for the Obligations, or the value of the Collateral
or such other property; (e) the ability of Borrowers (taken as a whole) to repay
the Obligations or of any Borrower or Guarantor to perform its obligations under
this Agreement or any of the other Financing Agreements; or (f) the ability of
Lender to enforce the Obligations or realize upon the Collateral or otherwise
with respect to the rights and remedies of Lender under this Agreement or any of
the other Financing Agreements.

         1.60 "Maximum Credit" shall mean the amount of $110,000,000.

         1.61 "Mortgages" shall mean, individually and collectively, each of the
following (as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced): (a) the Open-End
Mortgage and Security Agreement, dated of even date herewith, by Central in
favor of Lender with respect to the Real Property and related assets of Central
located in Lansdale, Pennsylvania and Newtown, Pennsylvania; and (b) the Fee and
Leasehold Mortgage with Security Agreement and Assignment of Leases and Rents,
dated of even date herewith, by CPVC and the Industrial Development Board of the
City of Huntsville, Alabama in favor of Lender with respect to the Real Property
and related assets of CPVC located in Madison, Alabama.

         1.62 "Net Amount of Eligible Accounts" shall mean the gross amount of
Eligible Accounts less (a) sales, excise or similar taxes included in the amount
thereof and (b) returns, discounts, claims, credits and allowances of any nature
at any time issued, owing, granted, outstanding, available or claimed with
respect thereto.

         1.63 "Obligations" shall mean any and all Revolving Loans, the Term
Loan, the Equipment Purchase Term Loans, the Supplemental LC Loans, the Letter
of Credit Accommodations, the Supplemental Letter of Credit Accommodations, and
all other obligations, liabilities and indebtedness of every kind, nature and
description owing by any or all of Borrowers to Lender and/or its affiliates,
including principal, interest, charges, fees, costs and expenses, however
evidenced, whether as principal, surety, endorser, guarantor or otherwise,

                                      -17-

<PAGE>


whether arising under this Agreement or otherwise, whether now existing or
hereafter arising, whether arising before, during or after the initial or any
renewal term of this Agreement or after the commencement of any case with
respect to any Borrower under the United States Bankruptcy Code or any similar
statute (including, without limitation, the payment of interest and other
amounts which would accrue and become due hereunder or under the other Financing
Agreements but for the commencement of such case, whether or not such amounts
are allowed or allowable in whole or in part in such case), whether direct or
indirect (and including obligations to Lender arising indirectly pursuant to the
participation by Lender in the obligations of Borrowers to First Union National
Bank under the First Union Letter of Credit Documents), absolute or contingent,
joint or several, due or not due, primary or secondary, liquidated or
unliquidated, secured or unsecured, and however acquired by Lender.

         1.64 "Omega Litigation" shall mean the class action lawsuits against
CSC and its Subsidiaries filed in the State of California regarding the Omega TM
sprinkler heads manufactured and sold by Borrower, as such lawsuits are
described on Schedule 1.64.

         1.65 "Participant" shall mean any person which at any time participates
with Lender in respect of the Loans or other Obligations or any portion thereof.

         1.66 "Payment Account" shall have the meaning set forth in Section 6.6
hereof.

         1.67 "Permitted Holders" shall mean the persons listed on Schedule 1.67
hereto.

         1.68 "Person" or "person" shall mean any individual, sole
proprietorship, partnership, corporation (including, without limitation, any
corporation which elects subchapter S status under the Code), limited liability
company, limited liability partnership, business trust, unincorporated
association, joint stock corporation, trust, joint venture or other entity or
any government or any agency or instrumentality or political subdivision
thereof.

         1.69 "Prime Rate" shall mean the rate from time to time publicly
announced by First Union National Bank, or its successors, as its prime rate,
whether or not such announced rate is the best rate available at such bank.

         1.70 "Prime Rate Loans" shall mean any Loans or portion thereof on
which interest is payable based on the Prime Rate in accordance with the terms
thereof.

         1.71 "Real Property" shall mean all now owned and hereafter acquired
real property of Borrowers, including leasehold interests, together with all
buildings, structures, and other improvements located thereon and all licenses,
easements and appurtenances relating thereto, wherever located, including the
real property and related assets more particularly described in the Mortgages
located in the State of Alabama and the Commonwealth of Pennsylvania.




                                      -18-

<PAGE>



         1.72 "Records" shall mean all of each Borrower's present and future
books of account of every kind or nature, purchase and sale agreements,
invoices, ledger cards, bills of lading and other shipping evidence, statements,
correspondence, memoranda, credit files and other data relating to the
Collateral or any account debtor, together with the tapes, disks, diskettes and
other data and software storage media and devices, file cabinets or containers
in or on which the foregoing are stored (including any rights of Borrowers with
respect to the foregoing maintained with or by any other person).

         1.73 "Reference Bank" shall mean First Union National Bank, or such
other bank as Lender may from time to time designate.

         1.74 "Revolving Loan Limit" shall mean the amount equal to $79,600,000
minus the then outstanding principal amount of the Term Loan.

         1.75 "Revolving Loans" shall mean the loans now or hereafter made by
Lender to or for the benefit of Borrowers on a revolving basis (involving
advances, repayments and readvances) as set forth in Section 2.1 hereof.

         1.76 "Special Availability Reserve" shall mean the Availability Reserve
in the amount equal to $9,578,000 established as of the date hereof reducing the
amount of Revolving Loans and Letter of Credit Accommodations otherwise
available to Borrowers, provided, that, if after the date hereof, but prior to
November 30, 1998, Lender shall receive a revised or supplemental report from MB
Valuation or another appraiser acceptable to Lender, in form and substance
satisfactory to Lender, in connection with the appraisal of the Equipment
delivered by MB Valuation to Lender on or about September 11, 1998 which
increases the amount of the orderly liquidation value of the Equipment owned by
Borrowers included in such appraisal and/or includes the orderly liquidation
value of other Equipment owned by a Borrower (free and clear of any lien,
security interest, lien claim or other encumbrance, except in favor of Lender)
and acceptable to Lender, so that the increase in the amount of the orderly
liquidation value of the Equipment previously included in the appraisal,
together with the orderly liquidation value of such other Equipment, is greater
than $1,900,000, the Special Availability Reserve shall be decreased by the
amount by which such increase and such value exceeds $1,900,000 (provided, that,
no Event of Default shall exist or have occurred and be continuing).

         1.77 "Subsidiary" or "subsidiary" shall mean, with respect to any
Person, any corporation, limited or general partnership, trust, association or
other business entity of which an aggregate of at least a majority of the
outstanding Capital Stock or other interests entitled to vote in the election of
the board of directors of such corporation (irrespective of whether, at the
time, Capital Stock of any other class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency),
managers, trustees or other controlling persons, or an equivalent controlling
interest therein, of such Person is, at the time, directly or indirectly, owned
by such Person and/or one or more subsidiaries of such Person.



                                      -19-

<PAGE>




         1.78 "Supplemental LC Loans" shall mean the loans hereafter made by
Lender to or for the benefit of Borrowers pursuant to any payments by Lender in
respect of the Supplemental Letter of Credit Accommodations, as provided in
Section 2.2 hereof.

         1.79 "Supplemental Letter of Credit Accommodations" shall mean,
collectively, the Calhoun County Bond Letter of Credit, the Alabama State Bond
Letter of Credit and the Huntsville Bond Letter of Credit, to the extent Lender
has agreed in writing to indemnify the issuer or guarantee to the issuer the
performance by the Borrower who is the account party with respect thereto of
such Borrower's obligations to such issuer (or in the case of the Calhoun County
Bond Letter of Credit and the Alabama State Bond Letter of Credit, to the extent
Lender may have agreed to purchase a participation in the obligations of any
Borrower to First Union National Bank as the issuer thereof pursuant to the
Agency and Participation Agreement, dated of even date herewith, between First
Union National Bank as issuer of such letters of credit and Lender).

         1.80 "Swap Agreement" shall mean the Master Agreement, dated as of
January 25, 1996, between Castings and First Union National Bank (as successor
by merger to CoreStates Bank, N.A.), and all confirmations with respect to swap
transactions between First Union National Bank and Castings or any other
Borrower pursuant thereto, as the foregoing may now exist or may hereafter be
entered into or amended, modified, supplemented, extended, renewed, restated or
replaced.

         1.81 "Term Loan" shall mean the term loan made by Lender to Central as
provided for in Section 2.3 hereof.

         1.82 "Term Note" shall mean the Term Promissory Note, dated of even
date herewith, made by Central payable to the order of Lender in the original
principal amount of $12,600,000, as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.

         1.83 "Value" shall mean, as determined by Lender in good faith, with
respect to Inventory, the lower of (a) cost computed on a first-in-first-out
basis in accordance with GAAP or (b) market value.


SECTION 2. CREDIT FACILITIES
           -----------------

          2.1  Revolving Loans.

         (a) Subject to and upon the terms and conditions contained herein,
Lender agrees to make Revolving Loans to Borrowers from time to time in amounts
requested by any Borrower or on their behalf by Central up to the amount equal
to the sum of:



                                      -20-

<PAGE>



                  (i) eighty-five (85%) percent of the Net Amount of Eligible
         Accounts of Borrowers, plus

                  (ii) the lesser of: (A) the sum of (1) sixty (60%) percent of
         the Value of Eligible Inventory of Borrowers consisting of finished
         goods, plus (2) fifty-five (55%) percent of the Value of Eligible
         Inventory of Borrowers consisting of raw materials and work-in-process
         for such finished goods, or (B) the Inventory Loan Limit, plus

                  (iii) one hundred (100%) percent of Eligible Cash Collateral,
         less

                  (iv) any Availability Reserves.

         (b) Lender may, in its discretion, from time to time, upon not less
than five (5) days prior notice to any Borrower, (i) reduce the lending formula
with respect to Eligible Accounts to the extent that Lender determines in good
faith that the general creditworthiness of account debtors has declined, or (ii)
reduce the lending formula(s) with respect to Eligible Inventory to the extent
that Lender determines that: (A) the number of days of the turnover of the
Inventory for any period has adversely changed or (B) the value of the Eligible
Inventory or any category thereof has decreased or (C) the nature, quality or
mix of the Inventory has deteriorated. In determining whether to reduce the
lending formula(s), Lender may consider events, conditions, contingencies or
risks which are also considered in determining Eligible Accounts, Eligible
Inventory or in establishing Availability Reserves. To the extent Lender shall
have established an Availability Reserve which is sufficient to address any
event, condition or matter in a manner satisfactory to Lender in good faith,
Lender shall not exercise its rights under this Section 2.1(b) to reduce the
lending formulas, to address such event, condition or matter. The amount of any
reduction in the lending formula by Lender pursuant to this Section 2.1(b) shall
have a reasonable relationship to the matter which is the basis for such
reduction.

         (c) Except in Lender's discretion, (i) the aggregate amount of the
Revolving Loans based on Eligible Inventory outstanding at any time shall not
exceed the Inventory Loan Limit, (ii) the aggregate amount of the Revolving
Loans based on Eligible Inventory consisting of work-in-process outstanding at
any time shall not exceed $3,000,000, (iii) the aggregate amount of the
Revolving Loans and Letter of Credit Accommodations outstanding at any time
shall not exceed the Revolving Loan Limit, (iv) the aggregate amount of the
Revolving Loans based on Eligible Cash Collateral outstanding at any time shall
not exceed $7,500,000, provided, that, such amount may be increased or decreased
as follows: (A) such amount may be increased effective one (1) Business Day
after each of the following conditions is satisfied: (1) Lender shall have
received a written request for such increase from Central, (2) Lender shall have
received evidence that the amount of cash or Cash Equivalents held in the
Collateral Account (as defined in Section 1.27 hereof) is not less than such
amount, (3) in no event shall such amount be increased to more than $15,000,000,
and (4) such amount may not be increased more than one (1) time in any week, and
(B) such amount may be decreased effective one (1) Business Day after each of




                                      -21-

<PAGE>


the following conditions is satisfied: (1) Lender shall have received a written
request for such decrease from Central, (2) as of the date of such decrease and
after giving effect thereto, there shall be Excess Availability, (3) as of the
date of such decrease and after giving effect thereto, no Event of Default shall
exist or have occurred, (4) such amount may not be decreased more than one (1)
time in any week, and (v) the aggregate amount of the Loans, the Letter of
Credit Accommodations and the Supplemental Letter of Credit Accommodations
outstanding at any time shall not exceed the Maximum Credit. In the event that
the outstanding amount of any component of the Loans, or the aggregate amount of
the outstanding Loans, exceeds the amounts available under the lending formulas,
the sublimits for Letter of Credit Accommodations and Supplemental Letter of
Credit Accommodations set forth in Sections 2.2(d) and 2.2(e) hereof, the
Revolving Loan Limit, the sublimits set forth herein, or the Maximum Credit, as
applicable, such event shall not limit, waive or otherwise affect any rights of
Lender in that circumstance or on any future occasions and Borrowers shall, upon
the demand by Lender, which may be made at any time or from time to time, repay
to Lender the entire amount of any such excess(es) for which payment is
demanded.

         (d) For purposes only of applying the sublimit on Revolving Loans based
on Eligible Inventory pursuant to Section 2.1(a)(ii)(B) hereof, Lender may treat
the then undrawn amounts of outstanding Letter of Credit Accommodations for the
purpose of purchasing Eligible Inventory as Revolving Loans to the extent Lender
is in effect relying on the Eligible Inventory being purchased with such Letter
of Credit Accommodations. In determining the actual amounts of such Letter of
Credit Accommodations to be so treated for purposes of the sublimit, the
outstanding Revolving Loans and Availability Reserves shall be attributed first
to any components of the lending formulas in Section 2.1(a) hereof that are not
subject to such sublimit, before being attributed to the components of the
lending formulas subject to such sublimit.

         2.2 Letter of Credit Accommodations; Supplemental Letter of Credit
Accommodations.

         (a) Subject to and upon the terms and conditions contained herein, at
the request of any Borrower or on behalf such Borrower by Central, Lender agrees
to provide or arrange for Letter of Credit Accommodations for the account of
Borrowers containing terms and conditions acceptable to Lender and the issuer
thereof. Any payments made by Lender to any issuer thereof and/or related
parties in connection with the Letter of Credit Accommodations shall constitute
additional Revolving Loans to Borrowers pursuant to this Section 2.

         (b) Subject to and upon the terms and conditions contained herein, at
the request of any Borrower or on behalf of such Borrower by Central, Lender
agrees to arrange for the Supplemental Letter of Credit Accommodations for the
account of Borrowers containing terms and conditions acceptable to Lender and
the issuer thereof. Any payments made by Lender to any issuer thereof and/or
related parties in connection with the Supplemental Letter of Credit
Accommodations shall constitute Supplemental LC Loans to Borrowers and shall be
automatically and unconditionally due and payable on the next Business Day after
the date of such Loan, without notice or demand.




                                      -22-

<PAGE>


         (c) In addition to any charges, fees or expenses charged by any bank or
issuer in connection with the Letter of Credit Accommodations, Borrowers shall
pay to Lender a letter of credit fee at a rate equal to one and one-half (1
1/2%) percent per annum on the daily outstanding balance of the Letter of Credit
Accommodations and the Supplemental Letter of Credit Accommodations for the
immediately preceding month (or part thereof), payable in arrears as of the
first day of each succeeding month, except that Borrowers shall pay to Lender
such letter of credit fee, at Lender's option, upon notice to Central, at a rate
equal to three and one-half (3 1/2%) percent per annum on such daily outstanding
balance for: (i) the period from and after the date of termination or
non-renewal hereof until Lender has received full and final payment of all
Obligations (notwithstanding entry of a judgment against Borrowers) and (ii) the
period from and after the date of the occurrence of an Event of Default for so
long as such Event of Default is continuing as determined by Lender. Such letter
of credit fee shall be calculated on the basis of a three hundred sixty (360)
day year and actual days elapsed and the obligation of Borrowers to pay such fee
shall survive the termination or non-renewal of this Agreement.

         (d) No Letter of Credit Accommodations shall be available unless on the
date of the proposed issuance of any Letter of Credit Accommodations, the
Revolving Loans available to the Borrower requesting it (subject to the Maximum
Credit and any Availability Reserves) are equal to or greater than: (i) if the
proposed Letter of Credit Accommodation is for the purpose of purchasing
Eligible Inventory, the sum of (A) the percentage equal to one hundred (100%)
percent minus the applicable percentage set forth in Section 2.1(a)(ii)(A)
hereof multiplied by the Value of the Eligible Inventory being purchased with
such proposed Letter of Credit Accommodation, plus (B) freight, taxes, duty and
other amounts which Lender estimates must be paid in connection with such
Inventory upon arrival and for delivery to one of such Borrower's locations for
Eligible Inventory within the United States of America and (ii) if the proposed
Letter of Credit Accommodation is for any other purpose, an amount equal to one
hundred (100%) percent of the face amount thereof and all other commitments and
obligations made or incurred by Lender with respect thereto. Effective on the
issuance of each Letter of Credit Accommodation, an Availability Reserve shall
be established in the applicable amount set forth in this Section 2.2(d)(i) or
Section 2.2(d)(ii).

         (e) In addition to the other conditions precedent to any Loan, Letter
of Credit Accommodation or Supplemental Letter of Credit Accommodation, the
arrangement by Lender for the issuance of the Huntsville Bond Letter of Credit
shall be subject to the satisfaction of each of the following additional
conditions precedent, as determined by Lender:

                  (i) Lender shall have received, in form and substance
satisfactory to Lender, all releases, terminations and such other documents as
Lender may request to evidence and effectuate the termination of and release by
the Huntsville Bondholder of any interest in and to any assets and properties of




                                      -23-

<PAGE>

Borrowers and Guarantors, duly authorized, executed and delivered by it,
including, but not limited to, (A) UCC termination statements for all UCC
financing statements previously filed by it or its predecessors, as secured
party, and Borrowers or Guarantors, as debtor and (B) satisfactions and
discharges of any mortgages, deeds of trust or deeds to secure debt by any
Borrower or Guarantor in favor of the Huntsville Bondholder, in form acceptable
for recording in the appropriate government office;

                  (ii) Lender shall have received, in form and substance
satisfactory to Lender, the Fee and Leasehold Mortgage with Security Agreement
and Assignment of Leases and Rents by CPVC and the Huntsville Bondholder in
favor of Lender with respect to the Real Property of CPVC in Madison, Alabama,
duly authorized, executed and delivered by CPVC and the Huntsville Bondholder;

                  (iii) Lender shall have received, in form and substance
satisfactory to Lender, amendments to the Huntsville Bond Agreements providing
for the restructuring of the terms of the Huntsville Bonds to, inter alia,
provide for a trustee to act on behalf of the holders of the Bonds, release all
collateral for the obligations of CPVC and any other Borrower or Guarantor in
connection with the Huntsville Bonds and the Huntsville Bond Agreements and the
issuance of the Huntsville Bond Letter of Credit;

                  (iv) CPVC or Central shall receive, concurrently with the
issuance of the Huntsville Bond Letter of Credit, not less than $7,500,000 in
cash or other immediately available funds constituting the net proceeds of a
loan by CSC Investment or CSC to CPVC or Central with the proceeds received by
CSC Investment from the remarketing and sale of the Huntsville Bonds to third
parties who are not affiliates of any Borrower or Guarantor;

                  (v) Lender shall have received environmental audits of the
plant and Real Property of CPVC in Madison, Alabama conducted by an independent
environmental engineering firm acceptable to Lender, and in form, scope and
methodology satisfactory to Lender, confirming (A) such Borrower is in
compliance with all material applicable Environmental Laws and (B) the absence
of any material environmental problems;

                  (vi) Lender shall have received, in form and substance
satisfactory to Lender, a valid and effective title insurance policy issued by a
company and agent acceptable to Lender (A) insuring the priority, amount and
sufficiency of the Mortgage with respect to the Real Property of CPVC in
Madison, Alabama referred to in clause (iv) above, (B) insuring against matters
that would be disclosed by surveys and (C) containing any legally available
endorsements, assurances or affirmative coverage requested by Lender for
protection of its interests;

                  (vii) Lender shall have received evidence, in form and
substance satisfactory to Lender, that Lender has a first priority mortgage and
lien upon, and security interest in, the Real Property and Equipment of CPVC
located in Madison, Alabama;



                                      -24-

<PAGE>




                  (viii) Lender shall have received, in form and substance
satisfactory to Lender, a written appraisal of the Real Property of CPVC located
in Madison, Alabama, at the expense of Borrower by an appraiser acceptable to
Lender, addressed to Lender and on which Lender is expressly permitted to rely,
in form, scope and methodology satisfactory to Lender;

                  (ix) as of the date of the issuance of the Huntsville Bond
Letter of Credit and after giving effect thereto, Excess Availability shall be
not less than $2,500,000; and

                  (x) each of the conditions set forth above shall have
occurred, and the Huntsville Bond Letter of Credit shall have been issued by, no
later than December 31, 1998.

         (f) Except in Lender's discretion, the amount of all outstanding Letter
of Credit Accommodations and all other commitments and obligations made or
incurred by Lender in connection therewith shall not at any time exceed
$5,000,000.

         (g) Except in Lender's discretion, (i) the aggregate amount of the
obligations of Lender to the issuer of the Huntsville Bond Letter of Credit and
all other commitments and obligations made or incurred by Lender in connection
therewith and any Supplemental LC Loans arising in connection therewith shall
not exceed the amount of $7,641,780.82, as reduced effective as of January 1,
April 1, July 1 and October 1 of each year commencing on January 1, 2000 by an
amount equal to $140,000 on each such date, (ii) the aggregate amount of the
obligations of Lender to the issuer of the Calhoun County Bond Letter of Credit
and all other commitments and obligations made or incurred by Lender in
connection therewith (whether pursuant to an indemnification, participation or
other arrangement) and any Supplemental LC Loans arising in connection therewith
shall not exceed the amount of $2,753,437.50, as reduced effective as of
November 1 of each year by an amount equal to $150,000 and (iii) the aggregate
amount of the obligations of Lender to the issuer of the Alabama State Bond
Letter of Credit and all other commitments and obligations made or incurred by
Lender in connection therewith (whether pursuant to an indemnification,
participation or other arrangement) and any Supplemental LC Loans arising in
connection therewith shall not exceed the amount of $7,335,000, as reduced
effective as of November 1 of each year by an amount equal to $400,000.

         (h) At any time an Event of Default exists or has occurred and is
continuing, upon Lender's request, Borrowers will either furnish cash collateral
to secure the reimbursement obligations to the issuer in connection with any
Letter of Credit Accommodations and the Supplemental Letter of Credit
Accommodations or furnish cash collateral to Lender for the Letter of Credit
Accommodations and the Supplemental Letter of Credit Accommodations.

         (i) Each Borrower shall indemnify and hold Lender harmless from and
against any and all losses, claims, damages, liabilities, costs and expenses
which Lender may suffer or incur in connection with any Letter of Credit
Accommodations or any Supplemental Letter of Credit Accommodations and any




                                      -25-

<PAGE>
documents, drafts or acceptances relating thereto, including, but not limited
to, any losses, claims, damages, liabilities, costs and expenses due to any
action taken by any issuer or correspondent with respect to any Letter of Credit
Accommodation or any Supplemental Letter of Credit Accommodations other than
losses, claims, damages, liabilities, costs and expenses due to the gross
negligence or willful misconduct of Lender as determined pursuant to a final
non-appealable order of a court of competent jurisdiction. Each Borrower assumes
all risks with respect to the acts or omissions of the drawer under or
beneficiary of any Letter of Credit Accommodation or Supplemental Letter of
Credit Accommodation and for such purposes the drawer or beneficiary shall be
deemed such Borrower's agent. Each Borrower assumes all risks for, and agrees to
pay, all foreign, Federal, State and local taxes, duties and levies relating to
any goods subject to any Letter of Credit Accommodations or any Supplemental
Letter of Credit Accommodations or any documents, drafts or acceptances
thereunder. Each Borrower hereby releases and holds Lender harmless from and
against any acts, waivers, errors, delays or omissions, whether caused by such
Borrower, by any issuer or correspondent or otherwise with respect to or
relating to any Letter of Credit Accommodation or any Supplemental Letter of
Credit Accommodations. The provisions of this Section 2.2(i) shall survive the
payment of Obligations and the termination or non-renewal of this Agreement.

         (j) Nothing contained herein shall be deemed or construed to grant
Borrowers any right or authority to pledge the credit of Lender in any manner.
Lender shall have no liability of any kind with respect to any Letter of Credit
Accommodation or Supplemental Letter of Credit Accommodation provided by an
issuer other than Lender unless Lender has duly executed and delivered to such
issuer the application or a guarantee or indemnification in writing with respect
to such Letter of Credit Accommodation or Supplemental Letter of Credit
Accommodation, as the case may be. At any time on or after an Event of Default
or act, condition or event which with notice or passage of time or both would
constitute an Event of Default and for so long as the same is continuing,
Borrowers shall be bound by any interpretation made in good faith by Lender, or
any other issuer or correspondent under or in connection with any Letter of
Credit Accommodation or any documents, drafts or acceptances under any of the
foregoing, notwithstanding that such interpretation may be inconsistent with any
instructions of Borrowers. Lender shall have the sole and exclusive right and
authority to, and Borrowers shall not: (i) at any time an Event of Default
exists or has occurred and is continuing, (A) approve or resolve any questions
of non-compliance of documents, (B) give any instructions as to acceptance or
rejection of any documents or goods or (C) execute any and all applications for
steamship or airway guaranties, indemnities or delivery orders, and (ii) at all
times, (A) grant any extensions of the maturity of, time of payment for, or time
of presentation of, any drafts, acceptances, or documents, and (B) agree to any
amendments, renewals, extensions, modifications, changes or cancellations of any
of the terms or conditions of any of the applications, Letter of Credit
Accommodations, Supplemental Letter of Credit Accommodations, or documents,
drafts or acceptances under any of the foregoing, or any letters of credit
included in the Collateral. Lender may take such actions either in its own name
or in any Borrower's name.




                                      -26-

<PAGE>



         (k) Any rights, remedies, duties or obligations granted or undertaken
by any Borrower to any issuer or correspondent in any application for any Letter
of Credit Accommodation, or any other agreement in favor of any issuer or
correspondent relating to any Letter of Credit Accommodation or any Supplemental
Letter of Credit Accommodations, shall be deemed to have been granted or
undertaken by such Borrower to Lender. Any duties or obligations undertaken by
Lender to any issuer or correspondent in any application for any Letter of
Credit Accommodation or Supplemental Letter of Credit Accommodations, or any
other agreement by Lender in favor of any issuer or correspondent relating to
any Letter of Credit Accommodation or Supplemental Letter of Credit
Accommodations, shall be deemed to have been undertaken by Borrowers to Lender
and to apply in all respects to Borrowers.

         2.3 Term Loan. Subject to the terms and conditions contained herein,
Lender is making the Term Loan to Central in the original principal amount of
$12,600,000. The Term Loan is (a) evidenced by the Term Note duly executed and
delivered by Central to Lender concurrently herewith, (b) to be repaid, together
with interest and other amounts, in accordance with this Agreement, the Term
Note and the other Financing Agreements, and (c) secured by all of the
Collateral.

         2.4 Equipment Purchase Term Loans.

         (a) Subject to and upon the terms and conditions contained herein,
Lender shall make Equipment Purchase Term Loans to any Borrower, from time to
time, at the request of such Borrower, or Central on behalf of such Borrower, of
up to eighty (80%) percent of the Hard Costs of new Eligible Equipment to be
purchased by such Borrower after the date hereof with the proceeds of such
Equipment Purchase Term Loan. Each Equipment Purchase Term Loan shall be in an
amount not less than $500,000. All of the proceeds of each Equipment Purchase
Term Loan shall be used solely for the payment of the purchase price of the
Eligible Equipment specified in the notice required to be delivered to Lender
pursuant to Section 2.4(d)(i) below.

         (b) Except in Lender's discretion, the outstanding aggregate principal
amount of the Equipment Purchase Term Loans shall not exceed, at any time, the
lower of (i) the aggregate amount of the above percentage of the Hard Costs of
all Eligible Equipment purchased by Borrowers pursuant hereto or (ii)
$18,000,000. If at any time the outstanding aggregate principal amount of all
Equipment Purchase Term Loans shall exceed eighty (80%) percent of the Hard
Costs of all Eligible Equipment purchased by Borrower with the proceeds of
Equipment Purchase Term Loans, Borrowers shall remain liable therefor, and
Lender may, at its option, create a reserve against amounts otherwise available
to Borrowers pursuant to the formulas set forth in Section 2.1 of this
Agreement, in an amount equal to the entire amount of such excess(es) or
Borrowers shall, upon the demand by Lender, which may be made at any time and
from time to time, repay to Lender the entire amount of such excess(es).




                                      -27-

<PAGE>



         (c) Each Equipment Purchase Term Loan shall be (i) evidenced by an
Equipment Purchase Term Note executed and delivered by Borrowers to Lender
concurrently with each Equipment Purchase Term Loan, (ii) repaid, together with
interest and other amounts payable thereunder, in accordance with the provisions
of the applicable Equipment Purchase Term Note, this Agreement and the other
Financing Agreements, and (iii) secured by all of the Collateral.

         (d) In addition to the other conditions precedent to any Loan set forth
in this Agreement, the making of each Equipment Purchase Term Loan shall be
subject to the satisfaction of each of the following additional conditions
precedent, as determined by Lender:

                  (i) Lender shall have received from Borrowers not less than
ten (10) Business Days prior written notice of the proposed Equipment Purchase
Term Loan, which notice shall specify the following: (A) the proposed date and
amount of the Equipment Purchase Term Loan, (B) a list and description of the
Eligible Equipment (by model, make, manufacturer, serial no. and/or such other
identifying information as may be appropriate, as determined by Lender), (C) the
Hard Costs and the total purchase price for the Eligible Equipment to be
purchased with the proceeds of such Equipment Purchase Term Loan (and the terms
of payment of such purchase price), and (D) such other information and documents
as Lender may from time to time require related thereto;

                  (ii) upon any Borrower acquiring any rights in the Equipment,
Lender shall have a valid and perfected first security interest in and lien upon
the Eligible Equipment to be purchased with the proceeds of the Equipment
Purchase Term Loan and the Eligible Equipment shall be free and clear of all
other liens, security interests, claims or other encumbrances, and Borrowers
shall have delivered to Lender such evidence thereof, as Lender may from time to
time, require;

                  (iii) the amount of the Equipment Purchase Term Loan shall not
exceed (80%) percent of the Hard Costs of the Eligible Equipment to be purchased
by Borrower with the proceeds of such Equipment Purchase Term Loan;

                  (iv) Lender shall have received copies, or upon Lender's
request, the originals, of all agreements, documents and instruments relating to
the sale of the Eligible Equipment to any Borrower, including, without
limitation, any purchase orders, invoices, bills of sale or similar documents;

                  (v) Borrowers shall duly authorize, execute and deliver to
Lender a single original Equipment Purchase Term Note in the form annexed hereto
as Exhibit C, as completed to reflect the date and amount of each such loan and
with the number of monthly installments of principal payable thereunder and the
amount of each such monthly installment completed in accordance with Sections
2.4(e) and 2.4(f) below, as the case may be, which note shall evidence a valid
and legally enforceable indebtedness of Borrowers unconditionally owing to
Lender, without offset, defense or counterclaim of any kind, nature or
description whatsoever; and

                                      -28-

<PAGE>


                  (vi) no Event of Default, or act, condition or event which
with notice or passage of time or both would constitute an Event of Default,
shall exist or have occurred and be continuing.

         (e) The principal amount of each Equipment Purchase Term Loan shall be
payable (subject to earlier payment to the extent required hereunder or under
the Equipment Purchase Term Note) in forty-eight (48) equal, consecutive monthly
installments of principal, each in an amount calculated as set forth below,
commencing on the first day of the second month after the date of the making of
such loan, together with interest and other amounts as provided herein and in
the Equipment Purchase Term Note with respect to such loan.

         (f) The amount of each monthly installment of principal in respect of
each Equipment Purchase Term Loan (other than the last installment which shall
be in an amount equal to the entire unpaid balance of the Equipment Purchase
Term Note) shall equal: (i) the principal amount of the proposed Equipment
Purchase Term Loan divided by (ii) forty-eight (48).

         2.5 Availability Reserves. All Revolving Loans otherwise available to
Borrowers pursuant to the lending formulas and subject to the Maximum Credit and
other applicable limits hereunder shall be subject to Lender's continuing right
as provided herein to establish and revise Availability Reserves.

         2.6 Joint and Several Liability. Each Borrower and Guarantor shall be
liable for all amounts due to Lender under this Agreement, regardless of which
Borrower actually receives the Loans or other extensions of credit hereunder or
the amount of such Loans received or the manner in which Lender accounts for
such Loans, Letter of Credit Accommodations, Supplemental Letter of Credit
Accommodations, or other extensions of credit on its books and records. The
Obligations with respect to Loans made to a Borrower, and the Obligations
arising as a result of the joint and several liability of a Borrower hereunder,
with respect to Loans made to the other Borrowers hereunder, shall be separate
and distinct obligations, but all such other Obligations shall be primary
obligations of all Borrowers. The Obligations arising as a result of the joint
and several liability of a Borrower hereunder with respect to Loans, Letter of
Credit Accommodations, Supplemental Letter of Credit Accommodations, or other
extensions of credit made to the other Borrowers hereunder shall, to the fullest
extent permitted by law, be unconditional irrespective of (a) the validity or
enforceability, avoidance or subordination of the Obligations of the other
Borrowers or of any promissory note or other document evidencing all or any part
of the Obligations of the other Borrowers, (b) the absence of any attempt to
collect the Obligations from the other Borrowers, Guarantors or any other
security therefor, or the absence of any other action to enforce the same, (c)
the waiver, consent, extension, forbearance or granting of any indulgence by
Lender with respect to any provisions of any instrument evidencing the
Obligations of the other Borrowers, or any part thereof, or any other agreement




                                      -29-

<PAGE>

now or hereafter executed by the other Borrowers and delivered to Lender, (d)
the failure by Lender to take any steps to perfect and maintain its security
interest in, or to preserve its rights and maintain its security or collateral
for the Obligations of the other Borrowers, (e) the election of Lender in any
proceeding instituted under the Bankruptcy Code, of the application of Section
1111(b)(2) of the Bankruptcy Code, (f) any borrowings or grant or a security
interest by the other Borrowers, as debtor-in-possession under Section 364 of
the Bankruptcy Code, (g) the disallowance of all or any portion of the claim(s)
of Lender for the repayment of the Obligations of the other Borrowers under
Section 502 of the Bankruptcy Code, or (h) any other circumstances which might
constitute a legal or equitable discharge or defense of a guarantor or of the
other Borrowers. With respect to the Obligations arising as a result of the
joint and several liability of a Borrower hereunder with respect to Loans,
Letter of Credit Accommodations, Supplemental Letter of Credit Accommodations,
or other extensions of credit made to the other Borrowers hereunder, each
Borrower waives, until the Obligations shall have been paid in full and this
Agreement shall have been terminated, any right to enforce any right of
subrogation or any remedy which Lender now has or may hereafter have against
Borrowers, any endorser or any guarantor of all or any part of the Obligations,
and any benefit of, and any right to participate in, any security or collateral
given to Lender. Upon any Event of Default, Lender may proceed directly and at
once, without notice (except to the extent notice is required hereunder or under
any applicable law), against any Borrower or Guarantor to collect and recover
the full amount, or any portion of the Obligations, without first proceeding
against the other Borrowers or any other Person, or against any security or
collateral for the Obligations. Each Borrower and Guarantor consents and agrees
that Lender shall be under no obligation to marshall any assets in favor of
Borrower(s) or against or in payment of any or all of the Obligations.


SECTION 3. INTEREST AND FEES
           -----------------

         3.1 Interest.

         (a) Borrowers shall pay to Lender interest on the outstanding principal
amount of the Loans at the Interest Rate. All interest accruing hereunder on and
after the date of any Event of Default and while such Event of Default is
continuing or on and after the termination or non-renewal hereof shall be
payable on demand.

         (b) Borrowers may, or Central on behalf of Borrowers may, from time to
time request that Prime Rate Loans be converted to Eurodollar Rate Loans or that
any existing Eurodollar Rate Loans continue for an additional Interest Period.
Such request from or on behalf of a Borrower shall specify the amount of the
Prime Rate Loans to be converted to Eurodollar Rate Loans or which Eurodollar
Rate Loans shall be continued as Eurodollar Rate Loans as provided in this
Agreement (subject, in each case, to the limits set forth below) and the
Interest Period to be applicable to such Eurodollar Rate Loans. Subject to the
terms and conditions contained herein, not later than three (3) Business Days
after receipt by Lender of such a request from or on behalf of a Borrower, such



                                      -30-

<PAGE>


Prime Rate Loans shall be converted to Eurodollar Rate Loans or such Eurodollar
Rate Loans shall continue, as the case may be; provided, that, (i) no Event of
Default, or act, condition or event which with notice or passage of time or both
would constitute an Event of Default, exists or has occurred and is continuing,
(ii) no party hereto shall have sent any notice of termination or non-renewal of
this Agreement, (iii) such Borrower (or central on behalf of such Borrower)
shall have complied with such customary procedures as are established by Lender
and specified by Lender to such Borrower from time to time for requests by or on
behalf of a Borrower for Eurodollar Rate Loans, (iv) no more than four (4)
Interest Periods may be in effect at any one time, (v) the aggregate amount of
the Eurodollar Rate Loans must be in an amount not less than $5,000,000 or an
integral multiple of $1,000,000 in excess thereof, (vi) the maximum amount of
the Eurodollar Rate Loans at any time requested by or on behalf of a Borrower
shall not exceed the amount equal to (A) the principal amount of the Term Loans
to such Borrower (if any), which it is anticipated will be outstanding as of the
last day of the applicable Interest Period plus (B) ninety (90%) percent of the
lowest principal amount of the Revolving Loans, which it is anticipated will be
outstanding during the applicable Interest Period, in each case as determined by
Lender, but with no obligation of Lender to make such Revolving Loans and (vii)
Lender shall have determined that the Interest Period or Adjusted Eurodollar
Rate is available to Lender through the Reference Bank and can be readily
determined as of the date of the request for such Eurodollar Rate Loan by such
Borrower. Any request by any Borrower, or Central on behalf of any Borrower, to
convert Prime Rate Loans to Eurodollar Rate Loans or to continue any existing
Eurodollar Rate Loans shall be irrevocable until the end of the applicable
Interest Period. Notwithstanding anything to the contrary contained herein,
Lender and the Reference Bank shall not be required to purchase United States
Dollar deposits in the London interbank market or other applicable Eurodollar
Rate market to fund any Eurodollar Rate Loans, but the provisions hereof shall
be deemed to apply as if Lender and the Reference Bank had purchased such
deposits to fund the Eurodollar Rate Loans.

         (c) Any Eurodollar Rate Loans shall automatically convert to a
Eurodollar Rate Loan with an Interest Period of approximately one (1) month upon
the last day of the applicable Interest Period, unless Lender has received and
approved a request from any Borrower, or Central on behalf of any Borrower, to
convert such Eurodollar Rate Loan to a Prime Rate Loan at least three (3)
Business Days prior to such last day. Any Eurodollar Rate Loans shall, at
Lender's option, upon notice by Lender to Central, convert to Prime Rate Loans
in the event that this Agreement shall terminate or not be renewed. If at any
time the Eurodollar Rate Loans outstanding to a Borrower exceed the sum of the
then outstanding principal amount of the Term Loans plus the Revolving Loans
then available to such Borrower under Section 2 hereof, then Lender may convert
an amount of Eurodollar Rate Loans to Prime Rate Loans in the smallest amount
that will reduce the outstanding principal amount of Eurodollar Rate Loans to
the nearest integral multiple of $1,000,000 that will eliminate such excess.
Borrowers shall pay to Lender, upon demand by Lender (or Lender may, at its
option, charge any loan account of any Borrower) any amounts required to
compensate Lender, the Reference Bank or any Participant with Lender for any
loss, cost or expense incurred by such person, as a result of the conversion of
Eurodollar Rate Loans to Prime Rate Loans pursuant to any of the foregoing.



                                      -31-

<PAGE>


         (d) Interest shall be payable by Borrowers to Lender monthly in arrears
not later than the first day of each calendar month and shall be calculated on
the basis of a three hundred sixty (360) day year and actual days elapsed. The
interest rate on non-contingent Obligations (other than Eurodollar Rate Loans)
shall increase or decrease by an amount equal to each increase or decrease in
the Prime Rate effective on the first day of the month after any change in such
Prime Rate is announced based on the Prime Rate in effect on the last day of the
month in which any such change occurs. In no event shall charges constituting
interest payable by Borrowers to Lender exceed the maximum amount or the rate
permitted under any applicable law or regulation, and if any such part or
provision of this Agreement is in contravention of any such law or regulation,
such part or provision shall be deemed amended to conform thereto.

         3.2 Closing Fee. Borrowers shall pay to Lender as a closing fee the
amount of $366,300, which shall be fully earned as of the date hereof, of which
$122,100 shall be payable by Borrowers on the date hereof, $122,100 shall be
payable on the date one hundred eighty (180) days after the date hereof and
$122,100 shall be payable on the first anniversary of the date hereof, provided,
that, the entire amount of such fee shall become immediately due and payable,
without notice or demand, at Lender's option, upon the occurrence of an Event or
Default or upon the termination or non-renewal hereof.

         3.3 Servicing Fee. Borrowers shall pay to Lender monthly a servicing
fee in an amount equal to $2,500 in respect of Lender's services for each month
(or part thereof) while this Agreement remains in effect and for so long
thereafter as any of the Obligations are outstanding, which fee shall be fully
earned as of and payable in advance on the date hereof and on the first day of
each month hereafter.

         3.4 Unused Line Fee. Borrowers shall pay to Lender monthly an unused
line fee at a rate equal to one-quarter (1/4%) percent per annum calculated upon
the amount by which the Revolving Loan Limit exceeds the average daily principal
balance of the outstanding Revolving Loans and Letter of Credit Accommodations
during the immediately preceding month (or part thereof) while this Agreement is
in effect and for so long thereafter as any of the Obligations are outstanding,
which fee shall be payable on the first day of each month in arrears.

         3.5 Changes in Laws and Increased Costs of Loans.

         (a) Notwithstanding anything to the contrary contained herein, all
Eurodollar Rate Loans shall, upon notice by Lender to Borrowers, convert to
Prime Rate Loans in the event that (i) any change in applicable law or
regulation (or the interpretation or administration thereof) shall either (A)
make it unlawful for Lender, the Reference Bank or any Participant to make or
maintain Eurodollar Rate Loans or to comply with the terms hereof in connection




                                      -32-

<PAGE>

with the Eurodollar Rate Loans, or (B) shall result in the increase in the costs
to Lender, the Reference Bank or any Participant of making or maintaining any
Eurodollar Rate Loans by an amount deemed by Lender to be material, or (C)
reduce the amounts received or receivable by Lender in respect thereof, by an
amount deemed by Lender to be material or (ii) the cost to Lender, the Reference
Bank or any Participant of making or maintaining any Eurodollar Rate Loans shall
otherwise increase by an amount deemed by Lender to be material. The calculation
of the increase in costs or the reduction of amounts received or receivable
shall not include the effect of any changes to the Reserve Percentage (as such
term is defined in Section 1.2 hereof) to the extent such amount already
includes the effect of such changes pursuant to the calculation of the Adjusted
Eurodollar Rate. Borrowers shall pay to Lender, upon demand by Lender (or Lender
may, at its option, charge any loan account of any Borrower) any amounts
required to compensate Lender, the Reference Bank or any Participant with Lender
for any loss (including loss of anticipated profits), cost or expense incurred
by such person as a result of the foregoing, including, without limitation, any
such loss, cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such person to make or maintain the
Eurodollar Rate Loans or any portion thereof. A certificate of Lender setting
forth the basis for the determination of such amount necessary to compensate
Lender as aforesaid shall be delivered to Borrowers and shall be conclusive,
absent manifest error.

         (b) If any payments or prepayments in respect of the Eurodollar Rate
Loans are received by Lender other than on the last day of the applicable
Interest Period (whether pursuant to acceleration, upon maturity or otherwise),
including any payments pursuant to the application of collections under Section
6.3 hereof or any other payments made with the proceeds of Collateral, Borrowers
shall pay to Lender upon demand by Lender (or Lender may, at its option, charge
any loan account of any Borrower) any amounts required to compensate Lender, the
Reference Bank or any Participant with Lender for any additional loss (including
loss of anticipated profits), cost or expense incurred by such person as a
result of such prepayment or payment, including, without limitation, any loss,
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such person to make or maintain such
Eurodollar Rate Loans or any portion thereof.


SECTION 4. CONDITIONS PRECEDENT
           --------------------

         4.1 Conditions Precedent to Initial Loans and Letter of Credit
Accommodations and Supplemental Letter of Credit Accommodations. Each of the
following is a condition precedent to Lender making the initial Loans and
arranging for the initial Letter of Credit Accommodations and Supplemental
Letter of Credit Accommodations hereunder:

         (a) Lender shall have received, in form and substance satisfactory to
Lender, all releases, terminations and such other documents as Lender may
request to evidence and effectuate the termination by First Union National Bank
(as successor by merger to CoreStates Bank, N.A. and First Fidelity Bank,
National Association) of all of its financing arrangements with Borrowers and




                                      -33-

<PAGE>


Guarantors (other than the financing arrangements of First Union National Bank
with respect to the Alabama State Bond Letter of Credit and the Calhoun County
Bond Letter of Credit pursuant to the First Union Letter of Credit Documents)
and the termination and release by it of any interest in and to any assets and
properties of Borrowers and Guarantors (other than the Real Property and
Equipment of Castings located in Anniston, Alabama), duly authorized, executed
and delivered by it, including, but not limited to, (i) UCC termination
statements for all UCC financing statements previously filed by it or its
predecessors, as secured party, and Borrowers or Guarantors, as debtor, and (ii)
satisfactions and discharges of any mortgages, deeds of trust or deeds to secure
debt previously executed and delivered by Borrowers or Guarantors in favor of
First Union National Bank, in form acceptable for recording in the appropriate
governmental office;

         (b) Lender shall have received, in form and substance satisfactory to
Lender, all releases, terminations and such other documents as Lender may
request to evidence and effectuate the termination by the Existing Lenders of
their financing arrangements with Borrowers and Guarantors and the termination
and release by the Existing Lenders of any interest in and to any assets and
properties of Borrowers and Guarantors, duly authorized, executed and delivered
by them, including, but not limited to, (i) UCC termination statements for all
UCC financing statements previously filed by them or on their behalf, as secured
party, and Borrowers or Guarantors, as debtor, and (ii) satisfactions and
discharges of any mortgages, deeds of trust or deeds to secure debt previously
executed and delivered by Borrowers or Guarantors in favor of the Existing
Lenders, in form acceptable for recording in the appropriate governmental
office;

         (c) Lender shall have received, in form and substance satisfactory to
Lender, the Agency and Participation Agreement between Lender and First Union
National Bank, as acknowledged and agreed to by Borrowers and Guarantors, duly
authorized, executed and delivered by First Union National Bank, Borrowers and
Guarantors;

         (d) Lender shall have received, in form and substance satisfactory to
Lender, an amendment to the Mortgage and Security Agreement, dated as of
November 1, 1995, by the Calhoun County Economic Development Council and
Castings in favor of First Union National Bank, as successor by merger to First
Fidelity Bank, National Association;

         (e) Lender shall have received a Borrowing Base Certificate setting
forth the Loans available to Borrowers as of the date hereof as completed in a
manner satisfactory to Lender and duly authorized, executed and delivered on
behalf of Borrowers;

         (f) all requisite corporate action and proceedings in connection with
this Agreement and the other Financing Agreements shall be satisfactory in form
and substance to Lender, and Lender shall have received all information and
copies of all documents, including, without limitation, records of requisite
corporate action and proceedings which Lender may have requested in connection
therewith, such documents where requested by Lender or its counsel to be
certified by appropriate corporate officers or governmental authorities;

                                      -34-

<PAGE>


         (g) no Material Adverse Effect shall have occurred since the date of
Lender's latest field examination;

         (h) Lender shall have completed a field review of the Records and such
other information with respect to the Collateral as Lender may require to
determine the amount of Revolving Loans available to Borrowers, the results of
which shall be satisfactory to Lender, not more than seven (7) Business Days
prior to the date hereof;

         (i) Lender shall have received, in form and substance satisfactory to
Lender, a subordination agreement between CSC Finance and Lender, as
acknowledged by Borrowers and Guarantors, providing for, among other things, the
subordination in right of payment of all indebtedness owed by Borrowers or
Guarantors to CSC Finance to the right of Lender to receive the prior and final
payment and satisfaction in full of all of the Obligations and related matters,
duly authorized, executed and delivered by CSC Finance, Borrowers and
Guarantors;

         (j) Lender shall have received, in form and substance satisfactory to
Lender, all consents, waivers, acknowledgments and other agreements from third
persons which Lender may deem necessary or desirable in order to permit, protect
and perfect its security interests in and liens upon the Collateral or to
effectuate the provisions or purposes of this Agreement and the other Financing
Agreements, including, without limitation, Collateral Access Agreements (except
as Lender may otherwise agree in writing) and the estoppel and consent agreement
from the Huntsville Bondholder and the Industrial Development Board of the City
of Huntsville, Alabama with respect to the Mortgage on the Real Property and
related assets of CPVC in Madison, Alabama;

         (k) Lender shall have received evidence of insurance and loss payee
endorsements required hereunder and under the other Financing Agreements, in
form and substance satisfactory to Lender, and certificates of insurance
policies and/or endorsements naming Lender as additional loss payee;

         (l) the sum of the amount of the cash and Cash Equivalents of CSC
Finance and CSC Investment which are free and clear of any pledge, lien,
security interest, claim or other encumbrance and are available to CSC Finance
and CSC Investment without condition or restriction plus the amount of the
Excess Availability as determined by Lender, shall be not less than $7,500,000
as of the date hereof, and the amount of the Excess Availability as determined
by Lender shall be not less than $2,500,000 (calculating Excess Availability for
purposes of this Section 4.1(1) to include the cash and Cash Equivalents of
Borrowers in the calculation of Loans available under Section 2.1 whether or not
such cash or Cash Equivalents constitute Eligible Cash Collateral), in each case
after giving effect to the initial Loans made or to be made in connection with
the initial transactions hereunder;



                                      -35-

<PAGE>




         (m) Lender shall have received evidence, in form and substance
satisfactory to Lender, of the amount of the unrestricted cash and Cash
Equivalents of CSC Investment and CSC Finance (which satisfy the criteria set
forth above) and Borrowers;

         (n) Lender shall have received, in form and substance satisfactory to
Lender, a valid and effective title insurance policy issued by a company and
agent acceptable to Lender (i) insuring the priority, amount and sufficiency of
the Mortgages, (ii) insuring against matters that would be disclosed by surveys
as to the parcels of the Real Property on which the mills of Borrowers are
located (except as Lender may otherwise agree in writing) and (iii) containing
any legally available endorsements, assurances or affirmative coverage requested
by Lender for protection of its interests;

         (o) the principal operating accounts and cash management services of
Borrowers and Guarantors shall be maintained with First Union National Bank;

         (p) Lender shall have received, in form and substance satisfactory to
Lender, such opinion letters of counsel(s) to Borrowers and Guarantors with
respect to the Financing Agreements and such other matters as Lender may
reasonably request;

         (q) Lender shall have received, in form and substance satisfactory to
Lender, partial releases and such other documents as Lender may request to
evidence and effectuate the release by the Huntsville Bondholder of any interest
in and to any assets and properties of any Borrower and Guarantor other than the
Real Property and related Equipment of CPVC located in Madison, Alabama; and

         (r) the other Financing Agreements and all instruments and documents
hereunder and thereunder shall have been duly executed and delivered to Lender,
in form and substance satisfactory to Lender.

         4.2 Conditions Precedent to All Loans and Letter of Credit
Accommodations. Each of the following is an additional condition precedent to
Lender making Loans and/or providing Letter of Credit Accommodations or
Supplemental Letter of Credit Accommodations to Borrowers, including the initial
Loans and Letter of Credit Accommodations and Supplemental Letter of Credit
Accommodations and any future Loans and Letter of Credit Accommodations or
Supplemental Letter of Credit Accommodations:

         (a) all representations and warranties contained herein and in the
other Financing Agreements shall be true and correct in all material respects
with the same effect as though such representations and warranties had been made
on and as of the date of the making of each such Loan or providing each such
Letter of Credit Accommodation or Supplemental Letter of Credit Accommodations
and after giving effect thereto; and

         (b) no Event of Default or act, condition or event which, with notice
or passage of time or both, would constitute an Event of Default shall exist or
have occurred and be continuing on and as of the date of the making of such Loan
or providing such Letter of Credit Accommodation or Supplemental Letter of
Credit Accommodations and after giving effect thereto.




                                      -36-

<PAGE>



SECTION 5. GRANT OF SECURITY INTEREST
           --------------------------

         5.1 To secure payment and performance of all Obligations, each Borrower
hereby grants to Lender a continuing security interest in, a lien upon, and a
right of set off against, and hereby assigns to Lender as security, the
following property and interests in property, whether now owned or hereafter
acquired or existing, and wherever located (which property and interests in
property, together with all other collateral security for the Obligations
granted to or otherwise held or acquired by Lender are referred to herein
collectively, as the "Collateral"):

         (a) Accounts;

         (b) all present and future contract rights, general intangibles
(including, but not limited to, tax and duty refunds, registered and
unregistered patents, trademarks, service marks, copyrights, trade names,
applications for the foregoing, trade secrets, goodwill, processes, drawings,
blueprints, customer lists, licenses, whether as licensor or licensee, choses in
action and other claims and existing and future leasehold interests in
equipment, real estate and fixtures), chattel paper, documents, instruments,
investment property, letters of credit, bankers' acceptances and guaranties;

         (c) all present and future monies, securities and other investment
property, credit balances, deposits, deposit accounts and other property of such
Borrower now or hereafter held or received by or in transit to Lender or its
affiliates or at any other depository or other institution from or for the
account of such Borrower, whether for safekeeping, pledge, custody,
transmission, collection or otherwise, and all present and future liens,
security interests, rights, remedies, title and interest in, to and in respect
of Accounts and other Collateral, including, without limitation, (i) rights and
remedies under or relating to guaranties, contracts of suretyship, letters of
credit and credit and other insurance related to the Collateral, (ii) rights of
stoppage in transit, replevin, repossession, reclamation and other rights and
remedies of an unpaid vendor, lienor or secured party, (iii) goods described in
invoices, documents, contracts or instruments with respect to, or otherwise
representing or evidencing, Accounts or other Collateral, including, without
limitation, returned, repossessed and reclaimed goods, and (iv) deposits by and
property of account debtors or other persons securing the obligations of account
debtors;

         (d) Inventory;

         (e) Equipment;




                                      -37-

<PAGE>

         (f) Real Property; 

         (g) Records; and

         (h) all products and proceeds of the foregoing, in any form, including,
without limitation, insurance proceeds and all claims against third parties for
loss or damage to or destruction of any or all of the foregoing.

         5.2 Notwithstanding anything to the contrary set forth in Section 5.1
above, the types or items of Collateral described in such Section shall not
include any rights or interests in any contract, lease, permit, license, charter
or license agreement covering real or personal property, as such, if under the
terms of such contract, lease, permit, license, charter or license agreement, or
applicable law with respect thereto, the valid grant of a security interest or
lien therein to Lender is prohibited and such prohibition has not been or is not
waived or the consent of the other party to such contract, lease, permit,
license, charter or license agreement has not been or is not otherwise obtained
or under applicable law such prohibition cannot be waived; provided, that, the
foregoing exclusion shall in no way be construed (a) to apply to the license of
any trademarks or intellectual property by any Borrower or Guarantor to any
other Borrower or Guarantor or by CSC Finance or CSC Investment to any Borrower
or Guarantor, (b) to apply if any such prohibition is unenforceable under
Section 9-318 of the UCC or other applicable law or (c) so as to limit, impair
or otherwise affect Lender's unconditional continuing security interests in and
liens upon any rights or interests of any Borrower in or to monies due or to
become due under any such contract, lease, permit, license, charter or license
agreement (including any Accounts).

         5.3 Notwithstanding anything to the contrary contained in Section 5.1
above, the types or items of Collateral described in such Section shall not
include any Equipment which is, or at the time of any Borrower's acquisition
thereof shall be, subject to a purchase money mortgage or other purchase money
lien or security interest (including capitalized or finance leases) permitted
under Section 9.8 hereof if: (a) the valid grant of a security interest or lien
to Lender in such item of Equipment is prohibited by the terms of the agreement
between Borrower and the holder of such purchase money mortgage or other
purchase money lien or security interest or under applicable law and such
prohibition has not been or is not waived, or the consent of the holder of the
purchase money mortgage or other purchase money lien or security interest has
not been or is not otherwise obtained, or under applicable law such prohibition
cannot be waived and (b) the purchase money mortgage or other purchase money
lien or security interest on such item of Equipment is or shall become valid and
perfected.


SECTION 6. COLLECTION AND ADMINISTRATION
           -----------------------------

         6.1 Borrowers' Loan Accounts. Lender shall maintain one or more loan
account(s) on its books in which shall be recorded (a) all Loans and other
Obligations and the Collateral, (b) all payments made by or on behalf of
Borrowers and (c) all other appropriate debits and credits as provided in this
Agreement, including, without limitation, fees, charges, costs, expenses and
interest. All entries in the loan account(s) shall be made in accordance with
Lender's customary practices as in effect from time to time.




                                      -38-

<PAGE>


         6.2 Statements. Lender shall render to Central each month a statement
setting forth the balance in the loan account(s) of Borrowers maintained by
Lender for Borrowers pursuant to the provisions of this Agreement, including
principal, interest, fees, costs and expenses. Each such statement shall be
subject to subsequent adjustment by Lender but shall, absent manifest errors or
omissions, be considered correct and deemed accepted by Borrowers and
presumptively binding upon Borrowers as an account stated except to the extent
that Lender receives a written notice from Borrowers of any specific exceptions
of Borrowers thereto within sixty (60) days after the date such statement has
been mailed by Lender. Until such time as Lender shall have rendered to Central
a written statement as provided above, the balance in the loan account(s) of
Borrowers shall be presumptive evidence of the amounts due and owing to Lender
by Borrowers.

         6.3 Collection of Accounts.

         (a) Each Borrower shall establish and maintain, at its expense, blocked
accounts or lockboxes and related blocked accounts (in either case, "Blocked
Accounts"), as Lender may specify, with such banks as are acceptable to Lender
into which such Borrower shall promptly deposit and direct its account debtors
to directly remit all payments on Accounts and all payments constituting
proceeds of Inventory or other Collateral in the identical form in which such
payments are made, whether by cash, check or other manner. The banks at which
the Blocked Accounts are established shall enter into an agreement, in form and
substance satisfactory to Lender, providing that all items received or deposited
in the Blocked Accounts are the property of Lender, that the depository bank has
no lien upon, or right to setoff against, the Blocked Accounts, the items
received for deposit therein, or the funds from time to time on deposit therein
and that the depository bank will wire, or otherwise transfer, in immediately
available funds, on a daily basis, at such time as Lender shall direct, all
funds received or deposited into the Blocked Accounts to such bank account of
Lender as Lender may from time to time designate for such purpose ("Payment
Account"). Lender shall instruct the depository banks at which the Blocked
Accounts are maintained to transfer the funds on deposit in the Blocked Account
for any Borrower to such operating bank account of such Borrower as such
Borrower may specify in writing to Lender until such time as Lender shall notify
the depository bank otherwise. Lender may notify the depository banks at which
the Blocked Accounts are maintained that the Blocked Account Agreements are
effective and may instruct such banks to transfer all funds received or
deposited into the Blocked Accounts to the Payment Account at any time that
either: (i) an Event of Default, or act, condition or event which with notice or
passage of time or both would constitute an Event of Default, shall exist or
have occurred, or (ii) Borrowers shall have failed to deliver any Borrowing Base
Certificate in accordance with the terms hereof, or (iii) upon Lender's good
faith behalf that any information contained in any Borrowing Base Certificate is
incomplete, inaccurate or misleading, or (iv) the sum of the amount of cash and


                                      -39-

<PAGE>

Cash Equivalent of CSC Finance and CSC Investment which are free and clear of
any pledge, lien, security interest, claim or other encumbrance and are
available to CSC Finance and CSC Investment without condition or restriction,
plus the amount of the Excess Availability, shall be less than $4,745,000 for
any three (3) consecutive day period prior to October 31, 1998, and $7,500,000
for any three (3) consecutive day period on and after November 1, 1998 or (v)
the Excess Availability shall be less than $2,500,000. Each Borrower agrees that
all payment made to such Blocked Accounts or other funds received and collected
by Lender, whether on the Accounts or as proceeds of Inventory or other
Collateral or otherwise shall be the property of Lender. In the event that
Lender shall so instruct the depository banks at which the Blocked Accounts are
maintained, if at any time thereafter none of the events or circumstances set
forth in clauses (i), (ii), (iii), (iv) and (v) above shall exist for a period
of ten (10) or more consecutive Business Days, upon the written request of
Central, Lender shall instruct the depository banks to thereafter transfer the
funds on deposit in the Blocked Accounts to such operating bank account of such
Borrower as such Borrower may specify in writing to Lender until such time as
Lender shall notify the depository bank otherwise.

         (b) For purposes of calculating the amount of the Revolving Loans
available to Borrowers, to the extent such payments are to be applied to the
Revolving Loans hereunder, such payments will be applied (conditional upon final
collection) to the Obligations on the Business Day of receipt by Lender of
immediately available funds in the Payment Account, provided such payments and
notice thereof are received in accordance with Lender's usual and customary
practices as in effect from time to time and within sufficient time to credit
such Borrower's loan account on such day, and if not, then on the next Business
Day. For purposes of calculating interest on the Obligations, such payments or
other funds received will be applied (conditional upon final collection) to the
Obligations one (1) Business Day following the date of receipt of immediately
available funds by Lender in the Payment Account (the "Collection Period"),
provided such payments and notice thereof are received in accordance with
Lender's usual and customary practices as in effect from time to time and within
sufficient time to credit Borrower's loan account on such day, and if not, then
on the next Business Day. In the event that Lenders shall not receive such
payments or other funds in the Payment Account pursuant to Section 6.3(a) above,
Lender shall be entitled to charge Borrowers an administrative fee equivalent to
the collection day charges Lender would have received for the Collection Period
had it received such payments or other funds.

         (c) Borrowers and all of their affiliates, Subsidiaries, shareholders,
directors, employees or agents shall, acting as trustee for Lender, receive, as
the property of Lender, any monies, checks, notes, drafts or any other payment
relating to and/or proceeds of Accounts or other Collateral which come into
their possession or under their control and immediately upon receipt thereof, to
the extent required under this Section 6.3 shall deposit or cause the same to be
deposited in the Blocked Accounts, or remit the same or cause the same to be
remitted, in kind, to Lender. In no event shall the same be commingled with any
Borrower's other funds. Borrowers agree to reimburse Lender on demand for any
amounts owed or paid to any bank at which a Blocked Account is established or
any other bank or person involved in the transfer of funds to or from the

                                      -40-

<PAGE>

Blocked Accounts arising out of Lender's payments to or indemnification of such
bank or person. The obligation of Borrowers to reimburse Lender for such amounts
pursuant to this Section 6.3 shall survive the termination or non-renewal of
this Agreement.

         6.4 Payments. All Obligations shall be payable to the Lender as
provided in Section 6.3 to such account or place as Lender may designate from
time to time. Lender may apply payments received or collected from Borrowers or
for the account of Borrowers (including, without limitation, the monetary
proceeds of collections or of realization upon any Collateral) to such of the
Obligations, whether or not then due, in such order and manner as Lender
determines. At Lender's option, all principal, interest, fees, costs, expenses
and other charges provided for in this Agreement or the other Financing
Agreements may be charged directly to the loan account(s) of Borrowers.
Borrowers shall make all payments to Lender on the Obligations free and clear
of, and without deduction or withholding for or on account of, any setoff,
counterclaim, defense, duties, taxes, levies, imposts, fees, deductions,
withholding, restrictions or conditions of any kind. If after receipt of any
payment of, or proceeds of Collateral applied to the payment of, any of the
Obligations, Lender is required to surrender or return such payment or proceeds
to any Person for any reason, then the Obligations intended to be satisfied by
such payment or proceeds shall be reinstated and continue and this Agreement
shall continue in full force and effect as if such payment or proceeds had not
been received by Lender. Borrowers shall be liable to pay to Lender, and do
hereby indemnify and hold Lender harmless for, the amount of any payments or
proceeds surrendered or returned. This Section 6.4 shall remain effective
notwithstanding any contrary action which may be taken by Lender in reliance
upon such payment or proceeds. This Section 6.4 shall survive the payment of the
Obligations and the termination or non-renewal of this Agreement.

         6.5 Authorization to Make Loans. Lender is authorized to make the Loans
and provide the Letter of Credit Accommodations and Supplemental Letter of
Credit Accommodations based upon telephonic or other instructions received from
anyone purporting to be an officer of any Borrower or other authorized person
or, at the discretion of Lender, if such Loans are necessary to satisfy any
Obligations. All requests for Loans, Letter of Credit Accommodations or
Supplemental Letter of Credit Accommodations hereunder shall specify the date on
which the requested advance is to be made or Letter of Credit Accommodations and
Supplemental Letter of Credit Accommodations established (which day shall be a
Business Day) and the amount of the requested Loan. Requests received after
11:00 a.m. New York City time on any day shall be deemed to have been made as of
the opening of business on the immediately following Business Day. All Loans,
Letter of Credit Accommodations and Supplemental Letter of Credit Accommodations
under this Agreement shall be conclusively presumed to have been made to, and at
the request of and for the benefit of, Borrowers when deposited to the credit of
any Borrower or otherwise disbursed or established in accordance with the
instructions of any Borrower or in accordance with the terms and conditions of
this Agreement.




                                      -41-

<PAGE>



         6.6 Appointment of Agent for Requesting Loans, Letter of Credit
Accommodations, Supplemental Letter of Credit Accommodation and Receipt of Loans
and Statements.

         (a) Each Borrower hereby irrevocably appoints and constitutes Central
as its agent to request and receive Loans, Letter of Credit Accommodations and
the Supplemental Letter of Credit Accommodations pursuant to the Agreement and
the other Financing Agreements from Lender in the name or on behalf of each
Borrower. Lender may disburse the Loans to such bank account of a Borrower or
otherwise make such Loans to a Borrower and provide such Letter of Credit
Accommodations or Supplemental Letter of Credit Accommodations to Borrowers as
Central may designate or direct, without notice to any Borrower, Guarantor or
any other person at any time obligated on or in respect of the Obligations.

         (b) Central hereby accepts the appointment by each Borrower as the
agent of each Borrower pursuant to Section 6.6(a) hereof. Central shall ensure
that the disbursement of any Loans to any Borrower requested by or paid to
Central or the issuance of any Letter of Credit Accommodations or Supplemental
Letter of Credit Accommodations for any Borrower hereunder shall be paid to or
for the account of such Borrower.

         (c) Each Borrower hereby irrevocably appoints and constitutes Central
as its agent to receive statements of account and all other notices from Lender
with respect to the Obligations or otherwise under or in connection with this
Agreement and the other Financing Agreements.

         (d) No purported termination of the appointment of Central as agent as
aforesaid shall be effective, except after ten (10) days prior written notice to
Lender.

         6.7 Use of Proceeds. Borrowers shall use the initial proceeds of the
Loans provided by Lender to Borrowers hereunder only for: (a) payments to each
of the persons listed in the disbursement direction letter furnished by
Borrowers to Lender on or about the date hereof, and (b) costs, expenses and
fees in connection with the preparation, negotiation, execution and delivery of
this Agreement and the other Financing Agreements. All other Loans made or
Letter of Credit Accommodations and Supplemental Letter of Credit Accommodations
provided by Lender to Borrowers pursuant to the provisions hereof shall be used
by Borrowers only for general operating, working capital and other proper
corporate purposes of Borrowers not otherwise prohibited by the terms hereof.
None of the proceeds will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin security or for the purposes of reducing or
retiring any indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of the Loans to
be considered a "purpose credit" within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System, as amended.





                                      -42-

<PAGE>



SECTION 7. COLLATERAL REPORTING AND COVENANTS
           ----------------------------------

         7.1   Collateral Reporting.

         (a) Borrowers shall provide Lender with the following documents in a
form satisfactory to Lender:

                  (i) on a weekly basis or more frequently at Borrowers' option
or as Lender may request, a weekly collateral report setting forth Borrowers'
calculation of the Revolving Loans and Letter of Credit Accommodations available
to Borrowers pursuant to the terms and conditions contained herein as of the
last Business Day of the immediately preceding week as to the Accounts and
Eligible Cash Collateral and as of the last day of the preceding month as to
Inventory, duly completed, together with all schedules required pursuant to the
terms of the weekly collateral report (including a schedule of all Accounts
created, collections received and credit memos issued for each day of the
immediately preceding week) and on a monthly (but in no event later than the
fifth (5th) Business Day of the end of the immediately preceding month) or more
frequently at Borrowers' option or as Lender may request, a Borrowing Base
Certificate setting forth Borrowers' calculation of the Revolving Loans and
Letter of Credit Accommodations available to Borrowers pursuant to the terms and
conditions contained herein as of the last Business Day of the immediately
preceding month based on the detailed aged account receivable trial balance of
Borrowers as to the Accounts and based on the month end perpetual inventory
records of Borrowers as to the Inventory, duly completed and executed by the
chief financial officer of Central or other appropriate financial officer of
Central acceptable to Lender; provided, that, without limiting any other rights
of Lender, upon Lender's request, Borrowers shall provide Lender on a daily
basis with a schedule of Accounts, collections received and credits issued and
on a weekly basis with an inventory report in the event that at any time either:
(A) an Event of Default or act, condition or event which with notice or passage
of time or both would constitute an Event of Default, shall exist or have
occurred, or (B) Borrowers shall have failed to deliver any Borrowing Base
Certificate in accordance with the terms hereof, or (C) upon Lender's good faith
belief, any information contained in any Borrowing Base Certificate is
incomplete, inaccurate or misleading, or (D) the sum of the amount of the cash
and Cash Equivalents of CSC Finance and CSC Investment which are free and clear
of any pledge, lien, security interest, claim or other encumbrance and are
available to CSC Finance and CSC Investment without condition of restriction,
plus the amount of the Excess Availability as determined by Lender, shall be
less than $4,745,000 for any three (3) consecutive day period prior to October
31, 1998 and $7,500,000 for any three (3) consecutive day period on and after
November 1, 1998 or (E) the Excess Availability shall be less than $2,500,000;

                  (ii) on a monthly basis or more frequently as Lender may
request, (A) perpetual inventory reports, (B) inventory reports by category, (C)
agings of accounts payable, (D) agings of accounts receivable, (E) a list of any
chattel paper or instruments payable to any Borrower or Guarantor received in
the immediately preceding month, (F) evidence of the cash and Cash Equivalents
of Borrowers, CSC Finance and CSC Investment, and (G) a report of named coverage
changes under any international credit insurance policy maintained by Borrowers
from the last day of the immediately preceding month;




                                      -43-

<PAGE>

                  (iii) upon Lender's request, (A) copies of customer statements
and credit memos, remittances advices and reports, and copies of deposit slips
and bank statements, (B) copies of shipping and delivery documents, and (C)
copies of purchase orders, invoices and delivery of documents for Inventory and
Equipment acquired by Borrower;

                  (iv) such other reports as to the Collateral as Lender shall
request from time to time.

         (b) Nothing contained in any Borrowing Base Certificate shall be deemed
to limit, impair or otherwise affect the rights of Lender contained herein and
in the event of any conflict or inconsistency between the calculation of the
Revolving Loans and Letter of Credit Accommodations available to Borrowers as
set forth in any Borrowing Base Certificate and as determined by Lender, the
determination of Lender shall govern and be conclusive and binding upon
Borrowers unless a specific objection is made by Central thereto within thirty
(30) days. Without limiting the foregoing, Borrowers shall furnish to Lender any
information which Lender may reasonably request regarding the determination and
calculation of any of the amounts set forth in the Borrowing Base Certificate.
If any Borrower's records or reports of the Collateral are prepared or
maintained by an accounting service, contractor, shipper or other agent, each
Borrower hereby irrevocably authorizes such service, contractor, shipper or
agent to deliver such records, reports and related documents to Lender and to
follow Lender's instructions with respect to further services at any time that
an Event of Default exists or has occurred.

         7.2 Accounts Covenants.

         (a) Each Borrower shall notify Lender promptly of: (i) any material
delay in such Borrower's performance of any of its obligations to any account
debtor or the assertion of any claims, offsets, defenses or counterclaims by any
account debtor, or any disputes with account debtors, or any settlement,
adjustment or compromise thereof in any case involving amounts in excess of
$25,000 in respect of any individual sale transaction with any one account
debtor giving rise to an Account, or in excess of $100,000 in the aggregate in
respect of any series of sales transactions with any one account debtor giving
rise to Accounts, (ii) all material adverse information relating to the
financial condition of any material account debtor and (iii) any event or
circumstance which, to such Borrower's knowledge would cause Lender to consider
any then existing Accounts as no longer constituting Eligible Accounts. No
credit, discount, allowance or extension or agreement for any of the foregoing
shall be granted to any account debtor without Lender's consent, except in the
ordinary course of such Borrower's business in accordance with practices and
policies previously disclosed in writing to Lender. So long as no Event of
Default exists or has occurred and is continuing, each Borrower shall settle,
adjust or compromise any claim, offset, counterclaim or dispute with any account

                                      -44-

<PAGE>


debtor. At any time that an Event of Default exists or has occurred and is
continuing, Lender shall, at its option, have the exclusive right to settle,
adjust or compromise any claim, offset, counterclaim or dispute with account
debtors or grant any credits, discounts or allowances.

         (b) Each Borrower shall promptly report to Lender any return of
Inventory by any one account debtor if the Inventory so returned in such case
has a Value in excess of $100,000 or any returns of Inventory by account debtors
if the Inventory so returned in such cases has a Value in the aggregate in
excess of $500,000. At any time that Inventory is returned, reclaimed or
repossessed, the Account (or portion thereof) which arose from such returned,
reclaimed or repossessed Inventory shall not be deemed an Eligible Account from
the date of such return. In the event any account debtor returns Inventory when
an Event of Default exists or has occurred and is continuing, such Borrower
shall, upon Lender's request, (i) hold the returned Inventory in trust for
Lender, (ii) segregate all returned Inventory from all of its other property,
(iii) dispose of the returned Inventory solely according to Lender's
instructions, and (iv) not issue any credits, discounts or allowances with
respect thereto without Lender's prior written consent.

         (c) With respect to each Account: (i) the amounts shown on any invoice
delivered to Lender or schedule thereof delivered to Lender shall be true and
complete, (ii) no payments shall be made thereon except payments immediately
delivered to Lender to the extent required pursuant to the terms of this
Agreement, (iii) no credit, discount, allowance or extension or agreement for
any of the foregoing shall be granted to any account debtor except as reported
to Lender in accordance with this Agreement and except for credits, discounts,
allowances or extensions made or given in the ordinary course of business of
Borrowers in accordance with practices and policies previously disclosed to
Lender, (iv) there shall be no setoffs, deductions, contras, defenses,
counterclaims or disputes existing or asserted with respect thereto except as
reported to Lender in accordance with the terms of this Agreement, (v) none of
the transactions giving rise thereto will violate any applicable State or
Federal laws or regulations, all documentation relating thereto will be legally
sufficient under such laws and regulations and all such documentation will be
legally enforceable in accordance with its terms.

         (d) Lender shall have the right at any time or times, in Lender's name
or in the name of a nominee of Lender at any time on or after an Event of
Default and in the name of a nominee of Lender or such other person as is
acceptable to Borrowers and Lender at any time prior to an Event of Default, to
verify the validity, amount or any other matter relating to any Account or other
Collateral, by mail, telephone, facsimile transmission or otherwise.

         (e) Each Borrower shall deliver or cause to be delivered to Lender,
with appropriate endorsement and assignment, with full recourse to such
Borrower, all chattel paper and instruments with a face amount in excess of
$75,000, or upon Lender's request, or on and after an Event of Default and for
so long as the same is continuing, any chattel paper and instruments (regardless
of the face amount), which such Borrower now owns or may at any time acquire
immediately upon such Borrower's receipt thereof, except as Lender may otherwise
agree in writing.


                                      -45-

<PAGE>


         (f) Lender may, at any time or times that an Event of Default exists or
has occurred and is continuing, (i) notify any or all account debtors that the
Accounts have been assigned to Lender and that Lender has a security interest
therein and Lender may direct any or all accounts debtors to make payment of
Accounts directly to Lender, (ii) extend the time of payment of, compromise,
settle or adjust for cash, credit, return of merchandise or otherwise, and upon
any terms or conditions, any and all Accounts or other obligations included in
the Collateral and thereby discharge or release the account debtor or any other
party or parties in any way liable for payment thereof without affecting any of
the Obligations, (iii) demand, collect or enforce payment of any Accounts or
such other obligations, but without any duty to do so, and Lender shall not be
liable for its failure to collect or enforce the payment thereof nor for the
negligence of its agents or attorneys with respect thereto and (iv) take
whatever other action Lender may deem necessary or desirable for the protection
of its interests. At any time that an Event of Default exists or has occurred
and is continuing, at Lender's request, all invoices and statements sent to any
account debtor shall state that the Accounts and such other obligations have
been assigned to Lender and are payable directly and only to Lender and each
Borrower shall deliver to Lender such originals of documents evidencing the sale
and delivery of goods or the performance of services giving rise to any Accounts
as Lender may require.

         7.3 Inventory Covenants. With respect to the Inventory: (a) each
Borrower shall at all times maintain inventory records reasonably satisfactory
to Lender, keeping correct and accurate records itemizing and describing the
kind, type, quality and quantity of Inventory, the cost therefor and daily
withdrawals therefrom and additions thereto; (b) each Borrower shall conduct a
physical count of the Inventory at least once each year, but at any time or
times as Lender may request on or after an Event of Default, and promptly
following such physical inventory shall supply Lender with a report in the form
and with such specificity as may be reasonably satisfactory to Lender concerning
such physical count; (c) each Borrower shall not remove any Inventory from the
locations set forth or permitted herein, without the prior written consent of
Lender, except for sales of Inventory in the ordinary course of such Borrower's
business and except to move Inventory directly from one location set forth or
permitted herein to another such location; (d) upon Lender's request, each
Borrower shall, at its expense, no more than once in any twelve (12) month
period, but at any time or times as Lender may request on or after an Event of
Default exists or has occurred, deliver or cause to be delivered to Lender
written reports or appraisals as to the Inventory in form, scope and methodology
acceptable to Lender and by an appraiser acceptable to Lender, addressed to
Lender and upon which Lender is expressly permitted to rely; (e) each Borrower
shall produce, use, store and maintain the Inventory, with all reasonable care
and caution and in accordance with applicable standards of any insurance and in
conformity with applicable laws (including, but not limited to, the requirements
of the Federal Fair Labor Standards Act of 1938, as amended and all rules,
regulations and orders related thereto); (f) each Borrower assumes all
responsibility and liability arising from or relating to the production, use,
sale or



                                      -46-

<PAGE>



other disposition of the Inventory; (g) each Borrower shall not sell Inventory
to any customer on approval, or any other basis which entitles the customer to
return or may obligate such Borrower to repurchase such Inventory except for the
rights of return given to customers of such Borrower in the ordinary course of
the business of such Borrower in accordance with current practices as of the
date hereof; (h) each Borrower shall keep the Inventory in good and marketable
condition; and (i) each Borrower shall not acquire or accept any Inventory on
consignment or approval except to the extent such Inventory is specifically
identified by such Borrower to Lender in any report with respect to Inventory
provided by Borrower to Lender and is not included as Eligible Inventory in any
Borrowing Base Certificate or otherwise.

         7.4 Equipment Covenants. With respect to the Equipment: (a) upon
Lender's request, each Borrower shall, at its expense, no more than once in any
twelve (12) month period, but at any time or times as Lender may request on or
after an Event of Default, deliver or cause to be delivered to Lender written
reports or appraisals as to the Equipment and Real Property in form, scope and
methodology acceptable to Lender and by an appraiser acceptable to Lender
addressed to Lender and on which Lender is expressly permitted to rely; (b) each
Borrower shall keep the Equipment in good order, repair, running and marketable
condition (ordinary wear and tear excepted); (c) each Borrower shall use the
Equipment with all reasonable care and caution and in accordance with applicable
standards of any insurance and in conformity with all applicable laws; (d) the
Equipment is and shall be used in Borrowers' businesses and not for personal,
family, household or farming use; (e) each Borrower shall not remove any
Equipment from the locations set forth or permitted herein, except to the extent
necessary to have any Equipment repaired or maintained in the ordinary course of
the business of such Borrower or to move Equipment directly from one location
set forth or permitted herein to another such location and except for the
movement of motor vehicles used by or for the benefit of such Borrower in the
ordinary course of business; (f) the Equipment is now and shall remain personal
property and each Borrower shall not permit any of the Equipment to be or become
a part of or affixed to real property; and (g) each Borrower assumes all
responsibility and liability arising from the use of the Equipment.

         7.5 Power of Attorney. Each Borrower hereby irrevocably designates and
appoints Lender (and all persons designated by Lender) as such Borrower's true
and lawful attorney-in-fact, and authorizes Lender, in such Borrower's or
Lender's name, to: (a) at any time an Event of Default exists or has occurred
(i) demand payment on Accounts or other proceeds of Inventory or other
Collateral, (ii) enforce payment of Accounts by legal proceedings or otherwise,
(iii) exercise all of such Borrower's rights and remedies to collect any Account
or other Collateral, (iv) sell or assign any Account upon such terms, for such
amount and at such time or times as the Lender deems advisable, (v) settle,
adjust, compromise, extend or renew an Account, (vi) discharge and release any
Account, (vii) prepare, file and sign such Borrower's name on any proof of claim
in bankruptcy or other similar document against an account debtor, (viii) notify
the post office authorities to change the address for delivery of such
Borrower's mail to an address designated by Lender, and open and dispose of all
mail addressed to such Borrower, and (ix) do all acts and things which are
necessary, in Lender's determination, to fulfill such Borrower's obligations
under this Agreement and the other Financing Agreements and (b) at any time to




                                      -47-

<PAGE>

(i) take control in any manner of any item of payment or proceeds thereof
deposited or received for credit to the Blocked Accounts (subject to Section
6.3(a) hereof) or constituting part of the Collateral or otherwise received by
Lender, (ii) have access to any lockbox or postal box into which any Borrower's
customers remittances are sent and the contents thereof (subject to Section
6.3(a) hereof), (iii) endorse any Borrower's name upon any items of payment or
proceeds thereof deposited or received for credit to the Blocked Accounts
(subject to Section 6.3(a) hereof) or constituting part of the Collateral or
otherwise received by Lender and transfer the same to, or deposit the same in
the account of Lender for application to the Obligations, (iv) endorse such
Borrower's name upon any chattel paper, document, instrument, invoice, or
similar document or agreement relating to any Account or any goods pertaining
thereto or any other Collateral, (v) sign such Borrower's name on any
verification of Accounts and notices thereof to account debtors and (vi) execute
in such Borrower's name and file any UCC financing statements or amendments
thereto. Each Borrower hereby releases Lender and its officers, employees and
designees from any liabilities arising from any act or acts under this power of
attorney and in furtherance thereof, whether of omission or commission, except
as a result of Lender's own gross negligence or wilful misconduct as determined
pursuant to a final non-appealable order of a court of competent jurisdiction.

         7.6 Right to Cure. If Lender, in its good faith judgment, deems it
necessary to preserve, protect, insure or maintain the Collateral or the rights
of Lender with respect thereto or the rights and remedies of Lender under this
Agreement and the other Financing Agreements, Lender may, at its option after
not less than three (3) days prior notice to Central, (a) discharge taxes,
liens, security interests or other encumbrances at any time levied on or
existing with respect to the Collateral and (b) pay any amount, incur any
expense or perform any act which, in Lender's good faith judgment, is necessary
or appropriate to preserve, protect, insure or maintain the Collateral and the
rights of Lender with respect thereto, provided, that, such three (3) days prior
notice shall not be required in the event that, under the circumstances at such
time, in the good faith determination of Lender, it is necessary or desirable
for Lender to take any such action earlier in order to preserve or protect any
of the Collateral, its value or the rights and interests of Lender therein.
Lender may add any amounts so expended to the Obligations and charge any
Borrower's account therefor, such amounts to be repayable by Borrowers on
demand. Lender shall be under no obligation to effect such cure, payment or
bonding and shall not, by doing so, be deemed to have assumed any obligation or
liability of Borrowers. Any payment made or other action taken by Lender under
this Section shall be without prejudice to any right to assert an Event of
Default hereunder and to proceed accordingly.

         7.7 Access to Premises. From time to time as requested by Lender, at
the cost and expense of Borrowers (subject to Section 9.17 hereof), (a) Lender
or its designee shall have complete access to all premises of Borrowers and
Guarantors during normal business hours and after reasonable notice to Central,
or at any time and without notice to Central if an Event of Default exists or
has occurred and is continuing, for the purposes of inspecting, verifying and
auditing the Collateral and all of such Borrower's or Guarantor's books and



                                      -48-

<PAGE>



records, including, without limitation, the Records, and (b) each Borrower and
Guarantor shall promptly furnish to Lender such copies of such books and records
or extracts therefrom as Lender may request, and (c) Lender or its designee may
use during normal business hours such of each Borrower's or Guarantor's
personnel, equipment, supplies and premises as may be reasonably necessary for
the foregoing and if an Event of Default exists or has occurred and is
continuing for the collection of Accounts and realization of other Collateral.


SECTION 8. REPRESENTATIONS AND WARRANTIES
           ------------------------------

         Borrowers and Guarantors hereby jointly and severally represent and
warrant to Lender the following (which shall survive the execution and delivery
of this Agreement), the truth and accuracy of which are a continuing condition
of the making of Loans and providing Letter of Credit Accommodations and
Supplemental Letter of Credit Accommodations by Lender to Borrowers:

         8.1 Corporate Existence, Power and Authority; Subsidiaries. Each
Borrower and Guarantor is a corporation duly organized and in good standing
under the laws of its state of incorporation and is duly qualified as a foreign
corporation and in good standing in all states or other jurisdictions where the
nature and extent of the business transacted by it or the ownership of assets
makes such qualification necessary where the failure to so qualify would have a
Material Adverse Effect. The execution, delivery and performance of this
Agreement, the other Financing Agreements and the transactions contemplated
hereunder and thereunder are all within each Borrower's and Guarantor's
corporate powers, have been duly authorized and are not in contravention of law
or the terms of such Borrower's or Guarantor's certificate of incorporation,
by-laws, or other organizational documentation, or any indenture, agreement or
undertaking to which such Borrower or Guarantor is a party or by which such
Borrower or its property are bound. This Agreement and the other Financing
Agreements constitute legal, valid and binding obligations of Borrowers and
Guarantors enforceable in accordance with their respective terms. Borrowers and
Guarantors do not have any Subsidiaries except as set forth on the Information
Certificate.

         8.2 Financial Statements; No Material Adverse Change. All financial
statements relating to Borrowers and Guarantors which have been or may hereafter
be delivered by Borrowers or Guarantors to Lender have been prepared in
accordance with GAAP and fairly present the financial condition and the results
of operation of Borrowers and Guarantors as at the dates and for the periods set
forth therein, (subject, in the case of interim financial statements, to the
absence of footnotes and year-end adjustments). Except as disclosed in any
interim financial statements furnished by Borrowers and Guarantors to Lender
prior to the date of this Agreement (including the financial statements of CSC
as of July 31, 1998 and the September 15, 1998 draft of the Form 10Q of CSC for
the quarter ended July 31, 1998), there has been no material adverse change in
the assets, liabilities, properties and condition, financial or otherwise, of
Borrowers or Guarantors, since the date of the most recent audited financial
statements furnished by Borrowers or Guarantors to Lender prior to the date of
this Agreement.

                                      -49-

<PAGE>


         8.3 Chief Executive Office; Collateral Locations. The chief executive
office of each Borrower and Guarantor and each Subsidiary of any Borrower or
Guarantor and each Borrower's Records concerning Accounts are located only at
the address set forth below and its only other places of business and the only
other locations of Collateral, if any, are the addresses set forth in the
Information Certificate, subject to the right of each Borrower and Guarantor and
Subsidiary to establish new locations in accordance with Section 9.2 below. The
Information Certificate correctly identifies any of such locations which are not
owned by Borrowers and sets forth the owners and/or operators thereof and to the
best of each Borrower's knowledge, the holders of any mortgages on such
locations.

         8.4 Priority of Liens; Title to Properties. The security interests and
liens granted to Lender under this Agreement and the other Financing Agreements
constitute valid and perfected first priority liens and security interests in
and upon the Collateral subject only to the liens indicated on Schedule 8.4
hereto and the other liens permitted under Section 9.8 hereof. Each Borrower and
Guarantor has good and marketable title to all of its properties and assets
subject to no liens, mortgages, pledges, security interests, encumbrances or
charges of any kind, except those granted to Lender and such others as are
specifically listed on Schedule 8.4 hereto or permitted under Section 9.8
hereof.

         8.5 Tax Returns. Each Borrower and Guarantor has filed, or caused to be
filed, in a timely manner, all tax returns (or all extensions with respect
thereto), reports and declarations which are required to be filed by it where
the failure to file would have a Material Adverse Effect. All information in
such tax returns, reports and declarations is complete and accurate in all
material respects. Each Borrower and Guarantor, and each Subsidiary of any
Borrower or Guarantor, has paid or caused to be paid all taxes due and payable
or claimed due and payable in any assessment received by it, except taxes the
validity of which are being contested in good faith by appropriate proceedings
diligently pursued and available to such Borrower, Guarantor or Subsidiary and
with respect to which adequate reserves have been set aside on its books.
Adequate provision has been made for the payment of all accrued and unpaid
Federal, State, county, local, foreign and other taxes whether or not yet due
and payable and whether or not disputed.

         8.6 Litigation. Except as set forth on the Information Certificate,
there is no present investigation by any governmental agency pending, or to the
best of each Borrower's and Guarantor's knowledge threatened, against or
affecting Borrowers, Guarantors, their assets or businesses and there is no
action, suit, proceeding or claim by any Person pending, or to the best of each
Borrower's knowledge threatened, against any Borrower or Guarantor or its assets
or goodwill, or against or affecting any transactions contemplated by this
Agreement, which if adversely determined against such Borrower or Guarantor
would have a Material Adverse Effect.




                                      -50-

<PAGE>



         8.7 Compliance with Other Agreements and Applicable Laws. Each Borrower
and Guarantor is not in default in any respect under, or in violation of any of
the terms of, any agreement, contract, instrument, lease or other commitment to
which it is a party or by which it or any of its assets are bound, where such
default or violation would have a Material Adverse Effect. Each Borrower and
Guarantor is in compliance in all respects with all applicable provisions of
laws, rules, regulations, licenses, permits, approvals and orders of any
foreign, Federal, State or local governmental authority, where the failure to so
comply would have a Material Adverse Effect.

         8.8 Bank Accounts. All of the deposit accounts, investment accounts or
other accounts in the name of or used by any Borrower or Guarantor, or any
Subsidiary of any Borrower or Guarantor, maintained at any bank or other
financial institution are set forth on Schedule 8.8 hereto, subject to the right
of Borrowers, Guarantors, or any Subsidiary to establish new accounts in
accordance with Section 9.13 hereof.

         8.9 Environmental Compliance.

         (a) Except as set forth on Schedule 8.9 hereto, each Borrower and
Guarantor has not generated, used, stored, treated, transported, manufactured,
handled, produced or disposed of any Hazardous Materials, on or off its premises
(whether or not owned by it) in any manner which at any time violates any
applicable Environmental Law or any license, permit, certificate, approval or
similar authorization thereunder, and the operations of each Borrower and
Guarantor comply in all respects with all Environmental Laws and all licenses,
permits, certificates, approvals and similar authorizations thereunder.

         (b) Except as set forth on Schedule 8.9 hereto, there has been no
investigation, proceeding, complaint, order, directive, claim, citation or
notice by any governmental authority or any other person nor is any pending, or
to the best of each Borrower's and Guarantor's knowledge threatened, with
respect to any non-compliance with or violation of the requirements of any
Environmental Law by any Borrower or Guarantor nor has there been any release,
spill or discharge, overtly threatened or actual, of any Hazardous Material on
any properties of any Borrower, or to the best of each of Borrower's and
Guarantor's knowledge, releases, spills or discharges from any properties at
which any Borrower or Guarantor has transported, stored or disposed of any
Hazardous Materials which would have a Material Adverse Effect.

         (c) Except as set forth on Schedule 8.9 hereto, each Borrower and
Guarantor has no liability (contingent or otherwise) in connection with a
release, spill or discharge, threatened or actual, of any Hazardous Materials or
the generation, use, storage, treatment, transportation, manufacture, handling,
production or disposal of any Hazardous Materials.

         (d) Each Borrower and Guarantor has all licenses, permits,
certificates, approvals or similar authorizations required to be obtained or
filed in connection with the operations of such Borrower and Guarantor under any
Environmental Law, in each case where the failure to obtain or file any such

                                      -51-

<PAGE>

licenses, permits, certificates, approvals or similar authorizations would have
a Material Adverse Effect. All of such licenses, permits, certificates,
approvals or similar authorizations of each Borrower and Guarantor are valid and
in full force and effect.

         8.10 Employee Benefits.

         (a) Each Borrower and Guarantor has not engaged in any transaction in
connection with which such Borrower and Guarantor or any of its ERISA Affiliates
could be subject to either a civil penalty assessed pursuant to Section 502(i)
of ERISA or a tax imposed by Section 4975 of the Code, including any accumulated
funding deficiency described in Section 8.10(c) hereof and any deficiency with
respect to vested accrued benefits described in Section 8.10(d) hereof.

         (b) No liability to the Pension Benefit Guaranty Corporation has been
or is expected by any Borrower or Guarantor to be incurred with respect to any
employee benefit plan of such Borrower or any of its ERISA Affiliates. There has
been no reportable event (within the meaning of Section 4043(b) of ERISA) or any
other event or condition with respect to any employee benefit plan of any
Borrower or Guarantor or any of its ERISA Affiliates which presents a risk of
termination of any such plan by the Pension Benefit Guaranty Corporation.

         (c) Full payment has been made of all amounts which each Borrower,
Guarantor or any of its ERISA Affiliates is required under Section 302 of ERISA
and Section 412 of the Code to have paid under the terms of each employee
benefit plan as contributions to such plan as of the last day of the most recent
fiscal year of such plan ended prior to the date hereof, and no accumulated
funding deficiency (as defined in Section 302 of ERISA and Section 412 of the
Code), whether or not waived, exists with respect to any employee benefit plan,
including any penalty or tax described in Section 8.10(a) hereof and any
deficiency with respect to vested accrued benefits described in Section 8.10(d)
hereof.

         (d) The current value of all vested accrued benefits under all employee
pension benefit plans maintained by each Borrower and Guarantor that are subject
to Title IV of ERISA does not exceed the current value of the assets of such
plans allocable to such vested accrued benefits, including any penalty or tax
described in Section 8.10(a) hereof and any accumulated funding deficiency
described in Section 8.10(d) hereof. The terms "current value" and "accrued
benefit" have the meanings specified in ERISA.

         (e) Neither any Borrower nor Guarantor nor any of its ERISA Affiliates
is or has ever been obligated to contribute to any "multiemployer plan" (as such
term is defined in Section 4001(a)(3) of ERISA) that is subject to Title IV of
ERISA except for the multiemployer plan for employees at the sprinkler plant of
Central in Lansdale, Pennsylvania maintained by the International Association of
Machinists.




                                      -52-

<PAGE>



         8.11 Interrelated Businesses. CSC is the direct and beneficial owner
and holder of all of the issued and outstanding shares of Capital Stock of
Central and CSC Finance. Central is the direct and beneficial owner and holder
of all of the issued and outstanding shares of Capital Stock of CPVC and
Castings. CSC Finance is the direct and beneficial owner and holder of all of
the issued and outstanding shares of Capital Stock of CSC Investment. Borrowers
and Guarantors make up a related organization of various entities constituting a
single economic and business enterprise so that Borrowers and Guarantors share
an identity of interests such that any benefit received by any one of them
benefits the others. Borrowers and Guarantors render services to or for the
benefit of the other Borrowers and Guarantors, make loans and advances and
provide other financial accommodations to or for the benefit of the other
Borrowers and Guarantors (including inter alia, the payment by Borrowers and
Guarantors of creditors of the other Borrowers or Guarantors and guarantees by
Borrowers and Guarantors of indebtedness of the other Borrowers and Guarantors
and provide administrative, marketing, payroll and management services to or for
the benefit of the other Borrowers and Guarantors). Borrowers and Guarantors
have centralized accounting and legal service, common officers and directors and
are identified to creditors as a single economic and business enterprise.

         8.12 Accuracy and Completeness of Information. All information
furnished by or on behalf of any Borrower or Guarantor in writing to Lender in
connection with this Agreement or any of the other Financing Agreements or any
transaction contemplated hereby or thereby, including, without limitation, all
information on the Information Certificate is true and correct in all material
respects on the date as of which such information is dated or certified and does
not omit any material fact necessary in order to make such information not
misleading. No event or circumstance has occurred which has had or could
reasonably be expected to have a material adverse affect on the businesses,
assets or prospects of any Borrower or Guarantor, which has not been fully and
accurately disclosed to Lender in writing.

         8.13 Survival of Warranties; Cumulative. All representations and
warranties contained in this Agreement or any of the other Financing Agreements
shall survive the execution and delivery of this Agreement and shall be deemed
to have been made again to Lender on the date of each additional borrowing or
other credit accommodation hereunder and shall be conclusively presumed to have
been relied on by Lender regardless of any investigation made or information
possessed by Lender. The representations and warranties set forth herein shall
be cumulative and in addition to any other representations or warranties which
any Borrower or Guarantor shall now or hereafter give, or cause to be given, to
Lender.


SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS
           ----------------------------------

         9.1 Maintenance of Existence. Each Borrower and Guarantor shall at all
times preserve, renew and keep in full, force and effect its corporate existence
and rights and franchises with respect thereto and maintain in full force and
effect all permits, licenses, trademarks, tradenames, approvals, authorizations,
leases and contracts necessary to carry on its business as presently or proposed

                                      -53-

<PAGE>

to be conducted. Each Borrower and Guarantor shall give Lender thirty (30) days
prior written notice of any proposed change in its corporate name, which notice
shall set forth the new name and such Borrower or Guarantor shall deliver to
Lender a copy of the amendment to the Certificate of Incorporation of such
Borrower or Guarantor providing for the name change certified by the Secretary
of State of the jurisdiction of incorporation of such Borrower or Guarantor as
soon as it is available.

         9.2 New Collateral Locations. Each Borrower and Guarantor may open any
new location within the United States so long as such Borrower or Guarantor (a)
gives Lender thirty (30) days prior written notice of the intended opening of
any such new location; except, that Borrowers and Guarantors shall not be
required to give such prior written notice to Lender of a new location of
Borrowers or Guarantors, provided, that, each of the following conditions is
satisfied: (i) no Event of Default, or act, condition or event which with notice
or passage of time or both would constitute an Event of Default, shall exist or
have occurred, (ii) the total amount of Inventory located at all such new
locations shall not exceed $100,000 in the aggregate (provided, that, if
Borrowers have provided evidence to Lender that such new location is in a
jurisdiction in which the security interest or lien of Lender is perfected, the
amount of Inventory at such location shall not be considered for purposes of
such limit), and (iii) Borrowers and Guarantors shall include such new locations
in the next monthly report of locations to be provided by Borrowers and
Guarantors to Lender in accordance with and to the extent required under Section
9.6 hereof, and (b) executes and delivers, or causes to be executed and
delivered, to Lender such agreements, documents, and instruments as Lender may
deem reasonably necessary or desirable to protect its interests in the
Collateral at such location, including, without limitation, UCC financing
statements.

         9.3 Compliance with Laws, Regulations, Etc.

         (a) Each Borrower or Guarantor shall, and shall cause any Subsidiary
to, at all times, comply in all respects with all laws, rules, regulations,
licenses, permits, approvals and orders applicable to it and duly observe all
requirements of any Federal, State or local governmental authority, including
ERISA, the Occupational Safety and Health Act of 1970, as amended, the Fair
Labor Standards Act of 1938, as amended, and all statutes, rules, regulations,
orders, permits and stipulations relating to environmental pollution and
employee health and safety, including all of the Environmental Laws, where the
failure to so comply would have a Material Adverse Effect.

         (b) Each Borrower or Guarantor shall, and shall cause any Subsidiary
to, establish and maintain, at its expense, a system to assure and monitor its
continued compliance in all material respects with all Environmental Laws in all
of its operations. Each Borrower and Guarantor shall, and shall cause any
Subsidiary to, take appropriate action in a timely manner to respond to any
material non-compliance with any Environmental Laws. Borrowers shall report
within a reasonable time to Lender on such response taken by any Borrower or
Guarantor pursuant to the preceding sentence.




                                      -54-

<PAGE>



         (c) Each Borrower and Guarantor shall give both oral and written notice
to Lender immediately upon such Borrower's or Guarantor's receipt of any notice
of, or it otherwise obtaining knowledge of, (i) the occurrence of any event
involving the release, spill or discharge, threatened or actual, of any
Hazardous Material where the occurrence of such event would have a Material
Adverse Effect or (ii) any formal investigation, proceeding, complaint, order,
directive, claims, citation or notice from any Person with respect to: (A)
non-compliance with or violation of any Environmental Law by such Borrower or
Guarantor, (B) the release, spill or discharge, threatened or actual, of a
reportable quantity of any Hazardous Material or (C) the generation, use,
storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Materials not in compliance with all Environmental
Laws where such failure to so comply would have a Material Adverse Effect or (D)
any other environmental, health or safety matter, which affects any Borrower or
Guarantor or its business, operations or assets or any properties at which any
Borrower or Guarantor transported, stored or disposed of any Hazardous Materials
in any way that has or would have a Material Adverse Effect.

         (d) Without limiting the generality of the foregoing, whenever Lender
reasonably determines that there is non-compliance, or any condition which
requires any action by or on behalf of any Borrower or Guarantor in order to
avoid any non-compliance with any Environmental Law, each Borrower and Guarantor
shall, at Lender's request and at the expense of such Borrower and Guarantor,
(i) cause an independent environmental engineer acceptable to Lender to conduct
such tests of the site where such non-compliance or alleged non-compliance with
such Environmental Laws has occurred as to such non-compliance and prepare and
deliver to Lender a report as to such non-compliance setting forth the results
of such tests, a proposed plan for responding to any environmental problems
described therein, and an estimate of the costs thereof and (ii) provide to
Lender a supplemental report of such engineer whenever the scope of such
non-compliance, or the response thereto or the estimated costs thereof, shall
change in any material respect.

         (e) Each Borrower and Guarantor shall indemnify and hold harmless
Lender, its directors, officers, employees, agents, invitees, representatives,
successors and assigns, from and against any and all losses, claims, damages,
liabilities, costs, and expenses (including reasonable attorneys' fees and legal
expenses) directly or indirectly arising out of or attributable to the use,
generation, manufacture, reproduction, storage, release, threatened release,
spill, discharge, disposal or presence of a Hazardous Material, including the
costs of any required or necessary repair, cleanup or other remedial work with
respect to any property of such Borrower or Guarantor and the preparation and
implementation of any closure, remedial or other required plans.

         (f) All indemnifications in this Section 9.3 shall survive the payment
of the Obligations and the termination or non-renewal of this Agreement.

         9.4 Payment of Taxes and Claims. Each Borrower and Guarantor shall, and
shall cause any Subsidiary to, duly pay and shall cause any Subsidiary to,
discharge all taxes, assessments, contributions and governmental charges upon or

                                      -55-

<PAGE>

against it or its properties or assets, except for taxes the validity of which
are being contested in good faith by appropriate proceedings diligently pursued
and available to such Borrower, Guarantor or Subsidiary and with respect to
which adequate reserves have been set aside on its books. Borrowers and
Guarantors shall be liable for any tax or penalties imposed on Lender as a
result of the financing arrangements provided for herein and each Borrower and
Guarantor agrees to indemnify and hold Lender harmless with respect to the
foregoing, and to repay to Lender on demand the amount thereof, and until paid
by Borrowers such amount shall be added and deemed part of the Loans; provided,
that, nothing contained herein shall be construed to require Borrowers or
Guarantors to pay any income or franchise taxes attributable to the income of
Lender from any amounts charged or paid hereunder to Lender. The foregoing
indemnity shall survive the payment of the Obligations and the termination or
non-renewal of this Agreement.

         9.5 Insurance.

         (a) Each Borrower and Guarantor shall, and shall cause any Subsidiary
to, at all times, maintain with financially sound and reputable insurers
insurance with respect to the Collateral against loss or damage and all other
insurance of the kinds and in the amounts customarily insured against or carried
by corporations of established reputation engaged in the same or similar
businesses and similarly situated. Said policies of insurance shall be
satisfactory to Lender as to form, amount and insurer. Each Borrower and
Guarantor shall furnish certificates, policies or endorsements to Lender as
Lender shall require as proof of such insurance, and, if any Borrower or
Guarantor fails to do so, Lender is authorized, but not required, to obtain such
insurance at the expense of Borrowers and Guarantors. All policies shall provide
for at least thirty (30) days prior written notice to Lender of any cancellation
or reduction of coverage (except for cancellation as a result of the failure to
pay premiums, in which case at least such policies shall provide for ten (10)
days prior written notice) and that Lender may act as attorney for Borrowers and
Guarantors in obtaining, and at any time an Event of Default exists or has
occurred and is continuing, adjusting, settling, amending and canceling such
insurance. Each Borrower and Guarantor shall cause Lender to be named as a loss
payee and an additional insured (but without any liability for any premiums)
under such insurance policies and each Borrower and Guarantor shall obtain
non-contributory lender's loss payable endorsements to all insurance policies in
form and substance satisfactory to Lender. Such lender's loss payable
endorsements shall specify that the proceeds of such insurance shall be payable
to Lender as its interests may appear and further specify that Lender shall be
paid regardless of any act or omission by any Borrower or Guarantor or any of
its affiliates. At its option, Lender may apply any insurance proceeds received
by Lender at any time to the cost of repairs or replacement of Collateral and/or
to payment of the Obligations, whether or not then due, in any order and in such
manner as Lender may determine or hold such proceeds as cash collateral for the
Obligations, except that notwithstanding anything to the contrary contained
herein, if any of the Equipment or any portion of any building, structure or
improvement on the Real Property of a Borrower is lost, physically damaged or
destroyed, upon the written request of Central, Lender shall release the net



                                      -56-

<PAGE>



cash proceeds from insurance received by Lender pursuant to this Section 9.5 to
Central as a result of such loss, damage or destruction to the extent necessary
for the repair, refurbishing or replacement of such Equipment or building,
structure or improvement, provided, that, all of the following conditions are
satisfied: (i) no Event of Default or act, condition or event which with notice
or passage of time or both would constitute an Event of Default shall exist or
have occurred and be continuing, (ii) the amount of the insurance proceeds are
sufficient, in Lender's determination, to effect such repair, refurbishing or
replacement in a satisfactory manner, (iii) such proceeds shall be used first to
repair, refurbish or replace the Collateral so lost, damaged or destroyed (free
and clear of any security interests, liens, claims or encumbrances), (iv) the
insurance carrier shall have waived any right of subrogation against Borrower
and Guarantors under its policy, (v) the casualty resulted in a payment of
$250,000 in insurance proceeds or less, (vi) such repair, refurbishing or
replacement shall be commenced as soon as reasonably practicable and shall be
diligently pursued to satisfactory completion, and (vii) the repair,
refurbishing or replacement to which the proceeds are applied shall cause the
Equipment, building, structure or improvement so lost, damaged, destroyed to be
of at least equal value and substantially the same character as prior to such
loss, damage or destruction.

         9.6 Financial Statements and Other Information.

         (a) Each Borrower and Guarantor shall keep proper books and records in
which true and complete entries shall be made of all dealings or transactions of
or in relation to the Collateral and the businesses of Borrowers, Guarantors and
their Subsidiaries (if any) in accordance with GAAP and Borrowers and Guarantors
shall furnish or cause to be furnished to Lender: (i) within thirty-five (35)
days after the end of each fiscal month (other than a month which is at the end
of a fiscal quarter or fiscal year of CSC, in which case within sixty (60) days
after the end thereof), monthly unaudited consolidated financial statements
(including in each case balance sheets, statements of income and loss and
statements of cash flows), and unaudited consolidating financial statements
(including in each case balance sheets and statements of income and loss), all
in reasonable detail, fairly presenting the financial position and the results
of the operations of Central and its Subsidiaries as of the end of and through
such fiscal month (subject to lack of footnotes and year-end adjustments) and
(ii) within one hundred twenty (120) days after the end of each fiscal year,
audited consolidated financial statements of Central and its Subsidiaries
(including in each case balance sheets, statements of income and loss statements
of cash flows and statements of shareholders' equity) and the unaudited
consolidating financial statements used to prepare such audited financial
statements (including in each case balance sheets and statements of income and
loss), and as to the consolidated financial statements the accompanying notes
thereto, all in reasonable detail, fairly presenting the financial position and
the results of the operations of Central and its Subsidiaries as of the end of
and for such fiscal year, together with the opinion of independent certified
public accountants, which accountants shall be an independent accounting firm
selected by Central and reasonably acceptable to Lender, that such financial
statements have been prepared in accordance with GAAP, and present fairly the
results of operations and financial condition of Central and its Subsidiaries as
of the end of and for the fiscal year then ended.

                                      -57-

<PAGE>


         (b) Borrowers and Guarantors shall promptly notify Lender in writing of
the details of (i) any loss, damage, investigation, action, suit, proceeding or
claim relating to the Collateral or any other property which is security for the
Obligations or which would result in any material adverse change in any
Borrower's or Guarantor's business, properties, assets, goodwill or condition,
financial or otherwise and (ii) the occurrence of any Event of Default or act,
condition or event which, with the passage of time or giving of notice or both,
would constitute an Event of Default.

         (c) Borrowers and Guarantors shall promptly after the sending or filing
thereof furnish or cause to be furnished to Lender copies of all reports which
any Borrower or Guarantor sends to its stockholders generally and copies of all
reports and registration statements which any Borrower or Guarantor files with
the Securities and Exchange Commission, any national securities exchange or the
National Association of Securities Dealers, Inc.

         (d) Borrowers shall promptly notify Lender in writing in the event that
at any time after the delivery of a Borrowing Base Certificate by Borrowers to
Lender but prior to the delivery of the next Borrowing Base Certificate to be
delivered by Borrowers to Lender in accordance with the terms hereof: (i) the
amount of Revolving Loans and Letter of Credit Accommodations available to
Borrower pursuant to the terms and conditions contained herein (calculated
without regard to the then outstanding Revolving Loans and Letter of Credit
Accommodations) is less than eighty (80%) percent of the amount of Revolving
Loans and Letter of Credit Accommodations available to Borrowers pursuant to the
terms and conditions contained herein (calculated without regard to the then
outstanding Revolving Loans and Letter of Credit Accommodations) as set forth in
the most recent Borrowing Base Certificate previously delivered by Borrower to
Lender pursuant to Section 7.1 hereof, (ii) the Revolving Loans made by Lender
to Borrower and/or Letter of Credit Accommodations outstanding at such time
exceed the amount of the Revolving Loans and Letter of Credit Accommodations
then available to Borrower under the terms hereof as a result of any decrease in
the amount of Revolving Loans and Letter of Credit Accommodations then available
and the amount of such excess, or (iii) the sum of the amount of the cash and
Cash Equivalents of CSC Finance and CSC Investment which are free and clear of
any pledge, lien, security interest, claim or other encumbrance and are
available to CSC Finance and CSC Investment without condition or restriction,
plus the amount of the Excess Availability shall be less than $4,745,000 for any
three (3) consecutive day period prior to October 31, 1998 and $7,500,000 for
any three (3) consecutive day period on and after November 1, 1998 or (iv) the
Excess Availability shall be less than $2,500,000.

         (e) Borrowers and Guarantors shall furnish or cause to be furnished to
Lender such budgets, forecasts, projections and other information respecting the
Collateral and the businesses of Borrowers and Guarantors as Lender may, from
time to time, reasonably request. Lender is hereby authorized to deliver a copy


                                      -58-

<PAGE>
of any financial statement or any other information relating to the businesses
of Borrowers and Guarantors to any court or other government agency or to any
Participant or assignee or prospective Participant or assignee. Each Borrower
and Guarantor hereby irrevocably authorizes and directs all accountants or
auditors to deliver to Lender, at Borrowers' expense, copies of the financial
statements of Borrowers or Guarantors and any management letters prepared by
such accountants or auditors on behalf of Borrowers or Guarantors. Each Borrower
and Guarantor hereby authorizes and directs (and CSC shall cause CSC Investment
and CSC Finance to authorize and direct) any depository bank or other financial
institution at which any cash or Cash Equivalents of Borrowers or Guarantors
constituting Eligible Cash Collateral are maintained (and any cash or Cash
Equivalents of CSC Investment and CSC Finance are maintained) to provide
directly to Lender such information with respect to the accounts in which such
cash or Cash Equivalents are held and with respect to the cash or Cash
Equivalents therein as Lender may request and Borrowers and Guarantors shall
(and CSC shall cause CSC Investment and CSC Finance to) so notify such banks or
other financial institutions promptly upon Lender's request. Any documents,
schedules, invoices or other papers delivered to Lender may be destroyed by
Lender one (1) year after the same are delivered to Lender, except as otherwise
designated by Central to Lender in writing.

         (f) Without limiting the rights of Lender under any other provisions of
this Agreement, as soon as available, but in any event not later than ten (10)
days after the end of each calendar month, Borrowers and Guarantors shall
deliver to Lender, in form and substance satisfactory to Lender, in each case
certified by the chief financial officer of Central as true and correct: (i) a
statement confirming the payment of rent and other amounts due to owners and
lessors of Real Property used by Borrowers and Guarantors in the immediately
preceding month, subject to year-end or periodic adjustments, and (ii) the
addresses of all locations of Borrowers and Guarantors opened and existing
locations closed or sold, in each case since the date of the most recent
certificate delivered to Lender containing the information required under this
subsection (ii), or if no such certificate has been delivered, then since the
date hereof, other than locations at which less than $25,000 of Inventory is
located so long as the aggregate amount of Inventory at all of such locations
does not exceed $100,000 and (iii) a report of the outstanding principal amount
of indebtedness incurred by Borrowers or Guarantors permitted under Section
9.9(k), together with such other information with respect thereto as Lender may
request.

         9.7 Sale of Assets, Consolidation, Merger, Dissolution, Etc. Each
Borrower and Guarantor shall not, directly or indirectly, and shall not permit
any Subsidiary to, (a) merge into or with or consolidate with any other Person
or permit any other Person to merge into or with or consolidate with it except,
that, any Borrower or Guarantors may merge with and into or consolidate with any
of other Borrower or Guarantor, provided, that, each of the following conditions
is satisfied as determined by Lender: (i) Lender shall have received not less
than five (5) days prior written notice of the intention of such Borrower or
Guarantor to so merge or consolidate and such information with respect thereto
as Lender may request, (ii) as of the effective date of the merger or
consolidation and after giving effect thereto, no Event of Default or act,

                                      -59-

<PAGE>

condition or event which with notice or passage of time or both would constitute
an Event of Default, shall exist or have occurred, (iii) Lender shall have
received true, correct and complete copies of all agreements, documents and
instruments relating to such merger, including, but not limited to, the
certificate or certificates of merger as filed with each appropriate Secretary
of State, (iv) the surviving entity shall immediately upon the effectiveness of
the merger expressly confirm in writing pursuant to an agreement, in form and
substance satisfactory to Lender, its continuing liability in respect of the
Obligations and Financing Agreements and execute and deliver such other
agreements, documents and instruments as Lender may reasonably request in
connection therewith, (v) the surviving entity shall, immediately before and
immediately after giving effect to such transaction or series of transactions
have an Adjusted Tangible Net Worth (including, without limitation, any
indebtedness incurred or anticipated to be incurred in connection with or in
respect of such transaction or series of transactions) equal to or greater than
the Adjusted Tangible Net Worth of each of the entities involved in such merger
immediately prior to such transaction or series of transactions, and (vi) each
Guarantor shall ratify and confirm that its guarantees of the Obligations shall
apply to the Obligations as assumed by such surviving entity; or (b) sell,
assign, lease, transfer, abandon or otherwise dispose of any Capital Stock or
indebtedness to any other Person or any of its assets to any other Person,
except for (i) sales of Inventory in the ordinary course of business, (ii) the
remarketing of the Huntsville Bonds in accordance with Section 9.16 hereof,
(iii) the disposition of worn-out or obsolete Equipment or Equipment no longer
used in the businesses of Borrower so long as (A) any proceeds are paid to
Lender and (B) such sales do not involve Equipment having an aggregate fair
market value in excess of $500,000 for all such Equipment disposed of in any
fiscal year of Borrower (provided, that, either simultaneously with or prior to
such sale, Borrower may replace such Equipment with other Equipment of equal or
greater utility and value prior to such Equipment becoming worn out or obsolete
or no longer used in the business of Borrower and free from any lien, security
interest or other encumbrance of any other person in which case the sale of such
Equipment shall not be included in the dollar limit provided for in this clause
(B)), (iv) the issuance and sale of Capital Stock of CSC consisting of common
stock pursuant to the existing stock option plans of CSC as in effect on the
date hereof and (v) the issuance and sale of Capital Stock of CSC consisting of
common stock (provided, that, the terms of such issuance and sale shall not
include any restrictions or limitations with respect to any Borrower or
Guarantor) or (c) form or acquire any Subsidiaries; or (d) wind up, liquidate or
dissolve; or (e) agree to do any of the foregoing.

         9.8 Encumbrances. Each Borrower and Guarantor shall not, and shall not
permit any Subsidiary to, create, incur, assume or suffer to exist any security
interest, mortgage, pledge, lien, charge or other encumbrance of any nature
whatsoever on any of its assets or properties, including, without limitation,
the Collateral, except:

         (a) liens and security interests of Lender;

         (b) liens securing the payment of taxes, either not yet overdue or the
validity of which are being contested in good faith by appropriate proceedings
diligently pursued and available to such Borrower or Guarantor and with respect
to which adequate reserves have been set aside on its books;

                                      -60-

<PAGE>


         (c) non-consensual statutory liens (other than liens securing the
payment of taxes) arising in the ordinary course of such Borrower's or
Guarantor's business to the extent: (i) such liens secure indebtedness which is
not overdue or (ii) such liens secure indebtedness relating to claims or
liabilities which (A) are fully insured and being defended at the sole cost and
expense and at the sole risk of the insurer or (B) are being contested in good
faith by appropriate proceedings diligently pursued and available to such
Borrower or Guarantor, in each case under clause (i) or (ii) above prior to the
commencement of foreclosure or other similar proceedings and with respect to
which adequate reserves have been set aside on its books;

               (d) zoning restrictions, easements, licenses, covenants and other
restrictions affecting the use of real property which do not interfere in any
material respect with the use of such real property or ordinary conduct of the
business of any Borrower or Guarantor as presently conducted thereon or
materially impair the value of the real property which may be subject thereto;

         (e) purchase money security interests in Equipment (including capital
leases) and purchase money mortgages on real estate not to exceed $5,000,000 in
the aggregate at any time outstanding so long as such security interests and
mortgages do not apply to any property of Borrowers or Guarantors other than the
Equipment or real estate so acquired, and the indebtedness secured thereby does
not exceed the cost of the Equipment or real estate so acquired, as the case may
be;

         (f) the mortgage and lien upon, and security interest in, the Real
Property of Castings located in Anniston, Alabama and the other assets of
Castings (as in effect on the date hereof) described on Schedule 9.8(f) hereof
pursuant to the First Union Letter of Credit Documents (as in effect on the date
hereof) to secure the contingent reimbursement obligations of Castings to First
Union National Bank pursuant to such agreements to the extent permitted under
Section 9.9 hereof;

         (g) the pledge or deposit by Central of funds to be held in the Omega
trust account established in connection with any settlement of the CPSC Action
and the Omega Litigation, provided, that, (i) Borrowers shall give written
notice to Lender of the establishment of such account and such information with
respect thereto as Lender may request, and (ii) Lender shall receive monthly
reports of all amounts paid into such account and all other amounts paid in
respect of and in accordance with the terms of any settlement of the CPSC Action
and the Omega Litigation;

         (h) the security interests in and liens upon the assets of Borrowers
consisting of Accounts and Inventory arising after the date hereof in favor of
First Union National Bank to secure the indebtedness of Castings to First Union
National Bank arising under the Swap Agreement, as in effect on the date hereof,

                                      -61-

<PAGE>

provided, that, (i) Lender shall have received true, correct and complete copies
of all agreements, documents and instruments evidencing or otherwise related to
such indebtedness, as duly authorized, executed and delivered by the parties
thereto, (ii) the security interests and liens on the assets of Borrowers in
favor of First Union National Bank to secure such indebtedness shall be junior
and subordinate to the security interests and liens of Lender on such assets on
terms and conditions acceptable to Lender, and (iii) Lender shall have received,
in form and substance satisfactory to Lender, an intercreditor agreement between
Lender and First Union National Bank, as acknowledged and agreed to by
Borrowers, duly authorized, executed and delivered by First Union National Bank
and Borrowers, providing for, inter alia, the parties' relative rights and
priorities with respect to the assets of Borrowers; and

         (i) the security interests and liens set forth on Schedule 8.4 hereto.

         9.9 Indebtedness. Each Borrower and Guarantor shall not, and shall not
permit any Subsidiary to, incur, create, assume, become or be liable in any
manner with respect to, or permit to exist, any obligations or indebtedness,
except:

         (a) the Obligations;

         (b) trade obligations in the ordinary course of business to be paid by
such Borrower or Guarantor in accordance with its customary practices and normal
accruals in the ordinary course of business not yet due and payable, or in
either case as to such trade obligations or normal accruals with respect to
which such Borrower or Guarantor is contesting in good faith the amount or
validity thereof by appropriate proceedings diligently pursued and available to
such Borrower or Guarantor and with respect to which adequate reserves have been
set aside on its books;

         (c) purchase money indebtedness (including capital leases) to the
extent not incurred or secured by liens (including capital leases) in violation
of any other provision of this Agreement;

         (d) indebtedness of Castings evidenced by or arising under the Lease
Agreement, dated as of November 1, 1995, between the Calhoun County Economic
Development Council, as lessor, and Castings, as lessee, with respect to the
Real Property and certain Equipment of Castings in Anniston, Alabama as in
effect on the date hereof; provided, that:

                  (i) the aggregate amount required to be paid by Castings
pursuant to such Lease Agreement shall not exceed the currently outstanding
principal amount of the Calhoun County Bonds (plus an amount equal to three (3)
months interests thereon) as of the date hereof which is $2,753,437.50, less the
aggregate amount of all repayments, repurchases or redemptions, whether optional
or mandatory in respect thereof, plus interest thereon at the rate provided for
in the Calhoun County Bonds as in effect on the date hereof,




                                      -62-

<PAGE>



                  (ii) such indebtedness is not secured by any assets or
properties of any Borrower or Guarantor, provided, that, the rights of Castings
to the possession of the Real Property in Anniston, Alabama and certain of the
fixtures and equipment located thereon which are leased by Castings pursuant to
such Lease Agreement are subject to the rights of the Calhoun County Economic
Development Council and the Calhoun County Bond Trustee (as assignee of the
Calhoun County Economic Development Council) to take possession thereof under
the terms of such Lease Agreement in the event the Calhoun County Bond Trustee
does not receive payments in respect of the Calhoun County Bonds under the
Calhoun County Bond Letter of Credit,

                  (iii) Borrowers and Guarantors shall not, directly or
indirectly, make any payments in respect of such indebtedness, except, that,
Castings may make regularly scheduled payments of rent when due in accordance
with the terms of such Lease Agreement as in effect on the date hereof,

                  (iv) Borrowers and Guarantors shall not, directly or
indirectly, (A) amend, modify, alter or change any terms of such indebtedness or
any of the Calhoun County Bond Agreements, except that Castings may, after prior
written notice to Lender, amend, modify, alter or change the terms thereof so as
to extend the maturity thereof or defer the timing of any payments in respect
thereof, or to forgive or cancel any portion of such indebtedness other than
pursuant to payments thereof, or to reduce the interest rate or any fees in
connection therewith, or (B) redeem, retire, defease, purchase or otherwise
acquire such indebtedness, or set aside or otherwise deposit or invest any sums
for such purpose, and

                  (v) Borrowers and Guarantors shall furnish to Lender all
notices, demands or other materials concerning such indebtedness either received
by any Borrower or Guarantor or on its behalf, promptly after receipt thereof,
or sent by any Borrower or Guarantor or on its behalf, concurrently with the
sending thereof, as the case may be;

         (e) indebtedness of Castings evidenced by or arising under the Alabama
State Bond Agreements as in effect on the date hereof; provided, that:

                  (i) the principal amount of such indebtedness (plus the amount
equal to three (3) months interest thereon) shall not exceed $7,335,000, less
the aggregate amount of all repayments, repurchases or redemptions, whether
optional or mandatory in respect thereof, plus interest thereon at the rate
provided for in the Alabama State Bonds as in effect on the date hereof,

                  (ii) such indebtedness is not secured by any assets or
properties of any Borrower or Guarantor,

                  (iii) Borrowers and Guarantors shall not, directly or
indirectly, make any payments in respect of such indebtedness, except, that,
Castings may make payments of principal or interest when due in accordance with
the terms of the Alabama State Bond Agreements as in effect on the date hereof,

                                      -63-

<PAGE>


                  (iv) Borrowers and Guarantors shall not, directly or
indirectly, (A) amend, modify, alter or change any terms of such indebtedness or
any of the Alabama State Bond Agreements, except that Castings may, after prior
written notice to Lender, amend, modify, alter or change the terms thereof so as
to extend the maturity thereof or defer the timing of any payments in respect
thereof, or to forgive or cancel any portion of such indebtedness other than
pursuant to payments thereof, or to reduce the interest rate or any fees in
connection therewith, or (B) redeem, retire, defease, purchase or otherwise
acquire such indebtedness, or set aside or otherwise deposit or invest any sums
for such purpose, and

                  (v) Borrowers and Guarantors shall furnish to Lender all
notices, demands or other materials concerning such indebtedness either received
by any Borrower or Guarantor or on its behalf, promptly after receipt thereof,
or sent by any Borrower or Guarantor or on its behalf, concurrently with the
sending thereof, as the case may be;

         (f) indebtedness of CPVC evidenced by or arising under the Lease
Agreement, dated as of December 1, 1997, between the Industrial Development
Board of the City of Huntsville, Alabama, as lessor, and CPVC, as lessee, with
respect to the Real Property and certain Equipment of CPVC in Madison, Alabama
as in effect on the date hereof; provided, that:

                  (i) the aggregate amount required to be paid by CPVC pursuant
to such Lease Agreement shall not exceed the currently outstanding principal
amount of the Huntsville Bonds as of the date hereof which is $7,500,000, less
the aggregate amount of all repayments, repurchases or redemptions, whether
optional or mandatory in respect thereof, plus interest thereon at the rate
provided for in the Huntsville Bonds as in effect on the date hereof,

                  (ii) such indebtedness is not secured by any assets or
properties of any Borrower or Guarantor; provided, that, the rights of CPVC to
possession of the Real Property in Madison, Alabama and certain of the fixtures
and equipment located thereon, which are leased by CPVC pursuant to such Lease
Agreement are subject to the rights of the Huntsville Bondholder to take
possession thereof under the terms of such Lease Agreement;

                  (iii) Borrowers and Guarantors shall not, directly or
indirectly, make any payments in respect of such indebtedness, except, that,
CPVC may make regularly scheduled payments of rent when due in accordance with
the terms such Lease Agreement as in effect on the date hereof,

                  (iv) Borrowers and Guarantors shall not, directly or
indirectly, (A) amend, modify, alter or change any terms of such indebtedness or
any of the Huntsville Bond Agreements, except that CPVC may, after prior written
notice to Lender, amend, modify, alter or change the terms thereof so as to
extend the maturity thereof or defer the timing of any payments in respect
thereof, or to forgive or cancel any portion of such indebtedness other than

                                      -64-

<PAGE>


pursuant to payments thereof, or to reduce the interest rate or any fees in
connection therewith, or (B) redeem, retire, defease, purchase or otherwise
acquire such indebtedness, or set aside or otherwise deposit or invest any sums
for such purpose, and

                  (v) Borrowers and Guarantors shall furnish to Lender all
notices, demands or other materials concerning such indebtedness either received
by any Borrower or Guarantor or on its behalf, promptly after receipt thereof,
or sent by any Borrower or Guarantor or on its behalf, concurrently with the
sending thereof, as the case may be;

         (g) the contingent reimbursement obligations of Castings to First Union
National Bank (as successor by merger to First Fidelity Bank, National
Association) in respect of the Calhoun County Bond Letter of Credit and the
Alabama State Bond Letter of Credit pursuant to the First Union Letter of Credit
Documents (as in effect on the date hereof), provided, that, (i) Borrowers and
Guarantors shall not, directly or indirectly, (A) amend, modify, alter or change
the terms of such indebtedness, the Letters of Credit, the First Union
Reimbursement Agreement or any of the other First Union Letter of Credit
Agreements, except as otherwise required by Lender pursuant to the letter
agreement, dated of even date herewith, by and among Borrowers, Guarantors and
Lender with respect to the execution and delivery by Castings of a mortgage in
favor of Lender with respect to Real Property and Equipment of Castings located
in Anniston, Alabama or (B) redeem, retire, defease, purchase or otherwise
acquire such indebtedness, or set aside or otherwise deposit or invest any sums
for such purpose, and (ii) Borrowers and Guarantors shall furnish to Lender all
notices or demands in connection with such indebtedness, either received by any
Borrower or Guarantor or on its behalf, promptly after the receipt thereof, or
sent by any Borrower or Guarantor or on its behalf, concurrently with the
sending thereof, as the case may be;

         (h) unsecured indebtedness of a Borrower to another Borrower or
Guarantor pursuant to intercompany loans permitted under Section 9.10 hereof;

         (i) unsecured indebtedness of Central to CSC Finance evidenced by the
Demand Note, dated December 21, 1994, issued by Central payable to CSC Finance,
provided, that,

                  (i) the principal amount of such indebtedness shall not exceed
$11,750,000, less the aggregate amount of all repayments, repurchases or
redemptions, whether optional or mandatory in respect thereof, plus interest
thereon at the rate provided for in the Demand Note as in effect on the date
hereof,

                  (ii) such indebtedness of Central is subject and subordinate
in right of payment to the right of Lender to receive the prior final payment
and satisfaction in full of all of the Obligations,

                  (iii) Central shall not, directly or indirectly, make, or be
required to make, any payments in respect of such indebtedness, except, that,
Central may make payments of principal or interest when due in accordance with

                                      -65-

<PAGE>

the terms of the Demand Note as in effect on the date hereof, provided, that,
each of the following conditions is satisfied as determined by Lender: (A) as of
the date of any such payment and after giving effect thereto, the Excess
Availability of Borrowers for each of the immediately preceding thirty (30)
consecutive days shall have been not less than $2,500,000, (B) as of the date of
any such payment and after giving effect thereto, the Excess Availability of
Borrowers shall be not less than $2,500,000, (C) the Consolidated Net Income of
Central in the fiscal quarter ending immediately prior to the date of any such
payment shall be not less than $500,000, (D) as of the date of any such payment
and after giving effect thereto, no Event of Default or act, condition or event
which with notice or passage of time or both would constitute an Event of
Default, shall exist or have occurred and (E) in no event shall the aggregate
amount of all such payments in any fiscal year of Central, together with the
aggregate amount of all payments by Central to CSC Finance in respect of
royalties or otherwise under the Trademark License Agreement between Central and
CSC Finance in such fiscal year, exceed $2,000,000 in the aggregate;

                  (iv) Borrowers and Guarantors shall not, directly or
indirectly, (A) amend, modify, alter or change any terms of such indebtedness or
any agreement, document or instrument related thereto, except that Central may,
after prior written notice to Lender, amend, modify, alter or change the terms
thereof so as to extend the maturity thereof or defer the timing of any payments
in respect thereof, or to forgive or cancel any portion of such indebtedness
other than pursuant to payments thereof, or (B) redeem, retire, defease,
purchase or otherwise acquire such indebtedness, or set aside or otherwise
deposit or invest any sums for such purpose, and

                  (v) Borrowers and Guarantors shall furnish to Lender all
notices, demands or other materials concerning such indebtedness either received
by any of them or on its or their behalf, promptly after receipt thereof, or
sent by any of them or on its or their behalf, concurrently with the sending
thereof, as the case may be;

         (j) indebtedness of Borrowers under interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements, interest rate
exchange agreements and similar contractual arrangements entered into for the
purpose of protecting a Person against fluctuations in interest rates; provided,
that, (i) such arrangements are with banks or other financial institutions that
have combined capital and surplus and undivided profits of not less than
$100,000,000 and are not for speculative purposes and (ii) such indebtedness
shall be unsecured, except that such indebtedness of Castings to First Union
arising pursuant to the Swap Agreement as in effect on the date hereof may be
secured to the extent permitted under Section 9.8(h) above;

         (k) unsecured indebtedness of any Borrower or Guarantor for borrowed
money arising after the date hereof; provided, that, as to each and all of such
indebtedness: (i) such indebtedness shall be included in the next monthly report
to be delivered to Lender pursuant to Section 9.6(f) after the date such
indebtedness is incurred, (ii) upon Lender's request, Lender shall have received
true, correct and complete copies of all agreements, documents and instruments

                                      -66-

<PAGE>

evidencing or otherwise related to such indebtedness, as duly authorized,
executed and delivered by the parties thereto, (iii) such indebtedness shall be
incurred by such Borrower or Guarantor at commercially reasonable rates and
terms in a bona fide arms' length transaction, (iv) such indebtedness shall not
at any time include terms and conditions which in any manner adversely affect
Lender or any rights of Lender as determined in good faith by Lender and
confirmed by Lender to Central in writing or which are more restrictive or
burdensome than the terms or conditions of any other indebtedness of such
Borrower or Guarantor as in effect on the date hereof (other than the
Obligations), (v) as of the date such indebtedness is incurred and after giving
effect thereto, no Event of Default or act, condition or event which with notice
or passage of time or both would constitute an Event of Default shall exist or
have occurred, (vi) the aggregate amount of such indebtedness shall not exceed
$6,000,000, (vii) such indebtedness is at all times unsecured, and (viii)
Borrowers and Guarantors shall furnish to Lender all notices or demands in
connection with such indebtedness either received by any Borrower and Guarantor
or on its behalf promptly after the receipt thereof, or sent by any Borrower or
Guarantor or on its behalf, concurrently with the sending thereof, as the case
may be; and

         (l) the indebtedness set forth on Schedule 9.9 hereof; provided, that,
(i) Borrowers and Guarantors may only make regularly scheduled payments of
principal and interest in respect of such indebtedness in accordance with the
terms of the agreement or instrument evidencing or giving rise to such
indebtedness as in effect on the date hereof, (ii) Borrowers and Guarantors
shall not, directly or indirectly, (A) amend, modify, alter or change the terms
of such indebtedness or any agreement, document or instrument related thereto as
in effect on the date hereof, or (B) redeem, retire, defease, purchase or
otherwise acquire such indebtedness, or set aside or otherwise deposit or invest
any sums for such purpose, and (iii) Borrowers shall furnish to Lender all
notices or demands in connection with such indebtedness either received by any
Borrower or Guarantor or on its or their behalf, promptly after the receipt
thereof, or sent by any Borrower or Guarantor or on its or their behalf,
concurrently with the sending thereof, as the case may be.

         9.10 Loans, Investments, Guarantees, Etc. Each Borrower and Guarantor
shall not, and shall not permit any Subsidiary to, directly or indirectly, make
any loans or advance money or property to any person, or invest in (by capital
contribution, dividend or otherwise) or purchase or repurchase the stock or
indebtedness or all or a substantial part of the assets or property of any
person, or guarantee, assume, endorse, or otherwise become responsible for
(directly or indirectly) the indebtedness, performance, obligations or dividends
of any Person or agree to do any of the foregoing, except:

         (a) the endorsement of instruments for collection or deposit in the
ordinary course of business;

         (b) investments in Cash Equivalents, provided, that, as to any of the
foregoing, unless waived in writing by Lender, each Borrower and Guarantor shall
take such actions as are deemed necessary by Lender to perfect the security
interest of Lender in such investments;

                                      -67-

<PAGE>


         (c) loans or capital contributions by a Borrower or Guarantor to
another Borrower after the date hereof; provided, that, as to any such loans or
capital contributions, (i) as of the date of any such loan or capital
contribution and after giving effect thereto, no Event of Default, or act,
condition or event which with notice or passage of time or both would constitute
an Event of Default, shall exist or have occurred and be continuing and (ii) in
the case of loans, the indebtedness of a Borrower arising pursuant to such loans
by another Borrower or Guarantor shall not be evidenced by any promissory note
or other instrument, unless the original of such note is promptly delivered to
Lender upon the issuance thereof, duly indorsed and assigned to Lender by the
Borrower or Guarantor who has made such loan;

         (d) loans or advances by a Borrower or Guarantor to any of its
employees, after the date hereof, not to exceed the principal amount of $500,000
in the aggregate at any time outstanding in the ordinary course of such
Borrower's or Guarantor's business for reasonable and necessary work-related
travel and other ordinary business expenses to be incurred by such employees in
connection with their employment with such Borrower or Guarantor; provided,
that, (i) the indebtedness of any such employee to such Borrower or Guarantor
arising pursuant to such loan is not, and shall not be, evidenced by any
promissory note or other instrument, unless the original of such note or
instrument is promptly delivered to Lender upon the issuance thereof, duly
indorsed and assigned by such Borrower or Guarantor to Lender, and (ii) as of
the date of any such loan and after giving effect thereto, no Event of Default
shall exist or have occurred;

         (e) the loan by CSC Finance to Central in the amount of $11,750,000
giving rise to the indebtedness permitted under Section 9.9(i) hereof;

         (f) the guarantees by CSC and Central in favor of First Union National
Bank of the reimbursement obligations of Castings under the First Union Letter
of Credit Documents permitted under Section 9.9 hereof as set forth in the
Guaranty and Suretyship Agreements, dated as of November 1, 1995, by each of CSC
and Central in favor of First Union National Bank as in effect on the date
hereof, provided, that, as to such guarantees, (i) such Borrower and Guarantor
shall not, directly or indirectly, (A) amend, modify, alter or change the terms
of such guarantees or any agreement, document or instrument related thereto, or
(B) redeem, retire, defease, purchase or otherwise acquire the obligations
arising pursuant to such guarantees, or set aside or otherwise deposit or invest
any sums for such purpose, and (ii) Borrowers and Guarantors shall furnish to
Lender all notices or demands in connection with such loans, advances or
guarantees or other indebtedness subject to such guarantees either received by
any Borrower or Guarantor or on its behalf, promptly after the receipt thereof,
or sent by any Borrower or Guarantor or on its behalf, concurrently with the
sending thereof, as the case may be;




                                      -68-

<PAGE>



         (g) the guarantees by CSC, Central, Castings and CPVC in favor of
Huntsville Bondholder of the obligations of the Industrial Development Board of
the City of Huntsville, Alabama evidenced by the Huntsville Bonds and the
obligations of CPVC pursuant to the Lease Agreement, dated as of December 1,
1997, between the Industrial Development Board of the City of Huntsville, as
lessor, and CPVC, as lessee, with respect to the Real Property and certain
Equipment of CPVC located in Madison, Alabama as set forth in the Guaranty
Agreement, dated as of December 1, 1997, by CSC, Central, Castings and CPVC in
favor of the Huntsville Bondholder as in effect on the date hereof, provided,
that, as to such guarantees, (i) Borrowers and such Guarantor shall not,
directly or indirectly, (A) amend, modify, alter or change the terms of such
guarantees or any agreement, document or instrument related thereto, or (B)
redeem, retire, defease, purchase or otherwise acquire the obligations arising
pursuant to such guarantees, or set aside or otherwise deposit or invest any
sums for such purpose, and (ii) Borrowers and Guarantors shall furnish to Lender
all notices or demands in connection with such loans, advances or guarantees or
other indebtedness subject to such guarantees either received by any Borrower or
Guarantor or on its behalf, promptly after the receipt thereof, or sent by any
Borrower or Guarantor or on its behalf, concurrently with the sending thereof,
as the case may be; and

         (h) the loans, advances and guarantees set forth on Schedule 9.10
hereto; provided, that, as to such loans, advances and guarantees, (i) such
Borrower or Guarantor shall not, directly or indirectly, (A) amend, modify,
alter or change the terms of such loans, advances or guarantees or any
agreement, document or instrument related thereto, or (B) as to such guarantees,
redeem, retire, defease, purchase or otherwise acquire the obligations arising
pursuant to such guarantees, or set aside or otherwise deposit or invest any
sums for such purpose, and (ii) Borrowers and Guarantors shall furnish to Lender
all notices or demands in connection with such loans, advances or guarantees or
other indebtedness subject to such guarantees either received by any Borrower or
Guarantor or on its behalf, promptly after the receipt thereof, or sent by any
Borrower or Guarantor or on its behalf, concurrently with the sending thereof,
as the case may be.

         9.11 Dividends and Redemptions. Each Borrower and Guarantor shall not,
and shall not permit any Subsidiary to, directly or indirectly, declare or pay
any dividends on account of any class of Capital Stock of such Borrower,
Guarantor or Subsidiary now or hereafter outstanding, or set aside or otherwise
deposit or invest any sums for such purpose, or redeem, retire, defease,
purchase or otherwise acquire any shares of any class of Capital Stock (or set
aside or otherwise deposit or invest any sums for such purpose) for any
consideration other than common stock or apply or set apart any sum, or make any
other distribution (by reduction of capital or otherwise) in respect of any such
shares or agree to do any of the foregoing, except that any Subsidiary of a
Borrower may declare and pay dividends to such Borrower.

         9.12 Transactions with Affiliates. Each Borrower and Guarantor shall
not, and shall not permit any Subsidiary to, directly or indirectly,




                                      -69-

<PAGE>



         (a) purchase, acquire or lease any property from, or sell, transfer or
lease any property to, any officer, director, agent or other person affiliated
with any Borrower or Guarantor, except (i) in the ordinary course of and
pursuant to the reasonable requirements of such Borrower's or Guarantor's
business and upon fair and reasonable terms no less favorable to such Borrower
or Guarantor than such Borrower or Guarantor would obtain in a comparable arm's
length transaction with an unaffiliated person and (ii) the payments by Central
to CSC Finance of royalties for the licensing of certain trademarks by CSC
Finance to Central and its Subsidiaries, provided, that, Central shall not make
and shall not be required to make any such payments, unless each of following
conditions is satisfied as determined by Lender: (A) as of the date of any such
payment and after giving effect thereto, the Excess Availability of Borrowers
for each of the immediately preceding thirty (30) consecutive days shall have
been not less than $2,500,000, (B) as of the date of any such payment and after
giving effect thereto, the Excess Availability of Borrowers shall be not less
than $2,500,000, (C) as of the date of any such payment and after giving effect
thereto, no Event of Default, or act, condition or event which with notice or
passage of time or both would constitute an Event of Default, shall exist or
have occurred, (D) the Consolidated Net Income of Central in the fiscal quarter
ending immediately prior to the date of any such payment shall be not less than
$500,000, and (E) in no event shall the aggregate amount of all such payments in
any fiscal year of Central, together with the aggregate amount of all payments
by Central to CSC Finance in respect of royalties or otherwise under the
Trademark License Agreement between Central and CSC Finance in such fiscal year,
exceed $2,000,000 in the aggregate;

         (b) make any payments of management, consulting or other fees for
management or similar services, any payments of sales commissions or other fees
for marketing goods or services, any payments of taxes under any tax sharing
arrangements or any payments of any indebtedness owing to any other Borrower,
Guarantor, officer, employee, shareholder, director or other person affiliated
with any Borrower or Guarantor except (i) reasonable compensation to officers,
employees and directors for services rendered to Borrowers and Guarantors in the
ordinary course of business, (ii) payments by any Borrower to the other
Borrowers with respect to intercompany loans permitted hereunder, (iii) payments
by Central to CSC Finance in respect of indebtedness of Central to CSC Finance
permitted under Section 9.9(i) hereof, to the extent such payments are permitted
under such Section, (iv) payment of management fees by Borrowers to CSC not to
exceed $500,000 in any fiscal year, provided, that, no payment thereof shall be
made at any time an Event of Default or act, condition or event which with
notice or passage of time or both would constitute an Event of Default shall
exist or have occurred, (v) payments by Borrowers and Guarantors to each other
or to CSC for actual and necessary reasonable out-of-pocket administrative and
operating expenses of CSC for the businesses of Borrowers and Guarantors as
presently conducted in the ordinary course of business, and for actual and
necessary reasonable out-of-pocket legal and accounting, insurance, marketing,
payroll and similar types of services paid for by CSC on behalf of Borrowers in
the ordinary course of their respective businesses or as the same may be
directly attributable to Borrowers; provided, that, (A) CSC shall not conduct
any business except to hold the Capital Stock of Central, CSC Finance and
Spraysafe Automatic Sprinklers Limited and any activities incidental thereto or
to participate in the management of the businesses of Borrowers consistent with


                                      -70-

<PAGE>

current practices as of the date hereof and (B) CSC shall not own or hold any
assets or properties, except for the Capital Stock of Central, CSC Finance and
Spraysafe Automatic Sprinklers Limited that it owns and holds as of the date
hereof and other assets necessary to the conduct of its business as described
above, (vi) payments by Borrowers to CSC pursuant to the tax sharing
arrangements among Borrowers and CSC (as in effect on the date hereof);
provided, that, (A) such Borrower is included in the consolidated Federal income
tax return filed by CSC as to which such Borrower is making such payments, (B)
the payments in any year shall not exceed the Federal income tax liability that
such Borrower would have been liable for if such Borrower were not part of such
consolidated federal income tax return filed by CSC, (C) such payments shall be
made by such Borrower no earlier than ten (10) days prior to the date on which
CSC is required to make its payments to the Internal Revenue Service, and (D) in
the event that such Borrower also joins with CSC in filing any combined or
consolidated (or similar) State or local income tax returns, then the making of
payments to CSC shall be allowed in a manner as similar as possible to that
provided herein with respect to Federal income taxes.

         9.13 Additional Bank Accounts. Each Borrower and Guarantor shall not,
and shall not permit any Subsidiary to, directly or indirectly, open, establish
or maintain any deposit account, investment account or any other account with
any bank or other financial institution, other than the Blocked Accounts and the
accounts set forth in Schedule 8.8 hereto, except: (a) as to any new or
additional Blocked Accounts and other such new or additional accounts which
contain any Collateral or proceeds thereof, with the prior written consent of
Lender and subject to such conditions thereto as Lender may establish and (b) as
to any accounts used by such Borrower, Guarantor or Subsidiary to make payments
of payroll, taxes or other obligations to third parties, after prior written
notice to Lender and (c) any trust account established at a bank acceptable to
Lender in connection with the settlement of the CPSC Action, after prior written
notice to Lender.

         9.14 Compliance with ERISA.

         (a) Each Borrower and Guarantor shall not, and shall not permit any
Subsidiary to, with respect to any "employee benefit plans" maintained by such
Borrower or Guarantor or any of its ERISA Affiliates: (i) terminate any of such
employee benefit plans so as to incur any liability to the Pension Benefit
Guaranty Corporation established pursuant to ERISA, (ii) allow or suffer to
exist any prohibited transaction involving any of such employee benefit plans or
any trust created thereunder which would subject such Borrower or Guarantor or
such ERISA Affiliate to a tax or penalty or other liability on prohibited
transactions imposed under Section 4975 of the Code or ERISA, (iii) fail to pay
to any such employee benefit plan any contribution which it is obligated to pay
under Section 302 of ERISA, Section 412 of the Code or the terms of such plan,
(iv) allow or suffer to exist any accumulated funding deficiency, whether or not
waived, with respect to any such employee benefit plan, (v) allow or suffer to
exist any occurrence of a reportable event or any other event or condition which
presents a material risk of termination by the Pension Benefit Guaranty
Corporation of any such employee benefit plan that is a single employer plan,

                                      -71-

<PAGE>


which termination could result in any liability to the Pension Benefit Guaranty
Corporation or (vi) incur any withdrawal liability with respect to any
multiemployer pension plan.

         (b) As used in this Section 9.14, the terms "employee benefit plans",
"accumulated funding deficiency" and "reportable event" shall have the
respective meanings assigned to them in ERISA, and the term "prohibited
transaction" shall have the meaning assigned to it in Section 4975 of the Code
and ERISA.

         9.15 Adjusted Tangible Net Worth. The Adjusted Tangible Net Worth of
CSC and its Subsidiaries shall be not less than the amount set forth below at
all times during the period indicated:


                       Period                                   Amount
                       ------                                   ------

(i)      From the date hereof through                        $24,000,000
         and including January 31, 1999

(ii)     From February 1, 1999 through                       $26,000,000
         and including October 31, 1999

(iii)    From November 1, 1999 through                       $28,000,000 
         and including April 30, 2000

(iv)     From May 1, 2000 through and                        $30,000,000
         including October 31, 2000

(v)      From November 1, 2000 and at                        $32,000,000
         all times thereafter


         9.16 Remarketing of Huntsville Bonds. CPVC shall enter into a legally
binding written commitment with a person who is not an Affiliate to purchase the
Huntsville Bonds on or before November 15, 1998 and the closing of such purchase
and sale of the Huntsville Bonds shall occur by no later than December 31, 1998,
which commitment and sale shall in each case be on terms and conditions
acceptable to Lender.

         9.17 Costs and Expenses. Borrowers and Guarantors shall pay to Lender
on demand all reasonable costs, expenses, filing fees and taxes paid or payable
in connection with the preparation, negotiation, execution, delivery, recording,
administration, collection, liquidation, enforcement and defense of the
Obligations, Lender's rights in the Collateral, this Agreement, the other
Financing Agreements and all other documents related hereto or thereto,
including any amendments, supplements or consents which may hereafter be
contemplated (whether or not executed) or entered into in respect hereof and
thereof, including, but not limited to: (a) all costs and expenses of filing or
recording (including Uniform Commercial Code financing statement filing taxes
and fees, documentary taxes, intangibles taxes and mortgage recording taxes and
fees, if applicable); (b) all title insurance and other insurance premiums,
appraisal fees and search fees; (c) costs and expenses of remitting loan
proceeds, collecting checks and other items of payment, and establishing and

                                      -72-

<PAGE>

maintaining the Blocked Accounts, together with Lender's customary charges and
fees with respect thereto; (d) charges, fees or expenses charged by any bank or
issuer in connection with the Letter of Credit Accommodations and the
Supplemental Letter of Credit Accommodations; (e) costs and expenses of
preserving and protecting the Collateral; (f) costs and expenses paid or
incurred in connection with obtaining payment of the Obligations, enforcing the
security interests and liens of Lender, selling or otherwise realizing upon the
Collateral, and otherwise enforcing the provisions of this Agreement and the
other Financing Agreements or defending any claims made or threatened against
Lender arising out of the transactions contemplated hereby and thereby
(including, without limitation, preparations for and consultations concerning
any such matters); (g) all out-of-pocket expenses and costs heretofore and from
time to time hereafter incurred by Lender during the course of periodic field
examinations of the Collateral and the operations of Borrowers and Guarantors,
plus a per diem charge at the rate of $650 per person per day for Lender's
examiners in the field and office, provided, that, the maximum amount payable by
Borrowers in respect of such per diem charge in any calendar year shall not
exceed $25,000, so long as no act, condition or event which with notice or
passage of time or both would constitute an Event of Default shall exist or have
occurred in any such calendar year; and (g) the reasonable fees and
disbursements of counsel (including legal assistants) to Lender and any
Participant in connection with any of the foregoing.

         9.18 After Acquired Real Property. If any Borrower hereafter acquires
any Real Property, fixtures or any other property that is of the kind or nature
described in the Mortgages and such Real Property, fixtures or other property at
any one location has a fair market value in an amount equal to or greater than
$500,000 (or if an Event of Default, or act, condition or event which with
notice or passage of time or both would constitute an Event of Default exists,
then regardless of the fair market value of such assets), without limiting any
other rights of Lender, or duties or obligations of such Borrower, upon Lender's
request, such Borrower shall execute and deliver to Lender a mortgage, deed of
trust or deed to secure debt, as Lender may determine, in form and substance
substantially similar to the Mortgages and as to any provisions relating to
specific state laws satisfactory to Lender and in form appropriate for recording
in the real estate records of the jurisdiction in which such Real Property or
other property is located granting to Lender a first priority lien and mortgage
on and security interest in such Real Property, fixtures or other property
(subject only to such liens and encumbrances as such Borrower would otherwise be
permitted to incur hereunder or under the Mortgages or as otherwise consented to
in writing by Lender) and such other agreements, documents and instruments as
Lender may require in connection therewith.

         9.19 Further Assurances. At the request of Lender at any time and from
time to time, each Borrower and Guarantor shall, at its expense, duly execute
and deliver, or cause to be duly executed and delivered, such further
agreements, documents and instruments, and do or cause to be done such further
acts as may be reasonably necessary to evidence, perfect, maintain and enforce
the security interests and the priority thereof in the Collateral and to
otherwise effectuate the provisions or purposes of this Agreement or any of the
other Financing Agreements. Lender may at any time and from time to time request
a certificate from an officer of Borrowers representing that all conditions

                                      -73-

<PAGE>

precedent to the making of Loans and providing Letter of Credit Accommodations
and Supplemental Letter of Credit Accommodations contained herein are satisfied.
In the event of such request by Lender, Lender may, at its option, cease to make
any further Loans or provide further Letter of Credit Accommodations and
Supplemental Letter of Credit Accommodations until Lender has received such
certificate and, in addition, Lender has determined that such conditions are
satisfied. Where permitted by law, each Borrower and Guarantor hereby authorizes
Lender to execute and file one or more UCC financing statements signed only by
Lender.


SECTION 10. EVENTS OF DEFAULT AND REMEDIES
            ------------------------------

         10.1 Events of Default. The occurrence or existence of any one or more
of the following events are referred to herein individually as an "Event of
Default", and collectively as "Events of Default":

         (a) (i) any Borrower or Guarantor fails to pay any of the Obligations
within three (3) days after the same becomes due and payable or (ii) any
Borrower or Guarantor fails to perform any of the covenants contained in
Sections 9.1, 9.2, 9.3, 9.4, 9.6, 9.13, 9.14, 9.15, or 9.16 of this Agreement
and such failure shall continue for ten (10) days; provided, that, such ten (10)
day period shall not apply in the case of: (A) any failure to observe any such
covenant which is not capable of being cured at all or within such ten (10) day
period or which has been the subject of a prior failure within a six (6) month
period or (B) an intentional breach of any Borrower or Guarantor of any such
covenant or (iii) any Borrower or Guarantor fails to perform any of the terms,
covenants, conditions or provisions contained in this Agreement or any of the
other Financing Agreements other than those described in Sections 10.1(a)(i) and
10.1(a)(ii) above;

         (b) any representation, warranty or statement of fact made by any
Borrower to Lender in this Agreement, the other Financing Agreements or any
other agreement, schedule, confirmatory assignment or otherwise shall when made
or deemed made be false or misleading in any material respect;

         (c) any Guarantor revokes, terminates or fails to perform any of the
terms, covenants, conditions or provisions of any guarantee, endorsement or
other agreement of such party in favor of Lender;

         (d) any judgment for the payment of money is rendered against any
Borrower or Guarantor in excess of $500,000 in any one case or in excess of
$1,000,000 in the aggregate and shall remain undischarged or unvacated for a
period in excess of thirty (30) days or execution shall at any time not be
effectively stayed, or any judgment other than for the payment of money, or
injunction, attachment, garnishment or execution is rendered against any
Borrower or Guarantor or any of their assets;




                                      -74-

<PAGE>



         (e) any Borrower or Guarantor dissolves or suspends or discontinues
doing business;

         (f) any Borrower or Guarantor becomes insolvent (however defined or
evidenced), makes an assignment for the benefit of creditors, makes or sends
notice of a bulk transfer or calls a meeting of its creditors or principal
creditors;

         (g) a case or proceeding under the bankruptcy laws of the United States
of America now or hereafter in effect or under any insolvency, reorganization,
receivership, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction now or hereafter in effect (whether at law or in equity) is
filed against any Borrower or Guarantor or all or any part of its properties and
such petition or application is not dismissed within sixty (60) days after the
date of its filing or any Borrower or Guarantor shall file any answer admitting
or not contesting such petition or application or indicates its consent to,
acquiescence in or approval of, any such action or proceeding or the relief
requested is granted sooner;

         (h) a case or proceeding under the bankruptcy laws of the United States
of America now or hereafter in effect or under any insolvency, reorganization,
receivership, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction now or hereafter in effect (whether at a law or equity) is
filed by any Borrower or Guarantor or for all or any part of its property; or

         (i) any default by any Borrower or Guarantor under any agreement,
document or instrument relating to any indebtedness for borrowed money owing to
any person other than Lender, or any capitalized lease obligations, contingent
indebtedness in connection with any guarantee, letter of credit, indemnity or
similar type of instrument in favor of any person other than Lender, in any case
in an amount in excess of $500,000 (including any of the Calhoun County Bond
Agreements, the Alabama State Bond Agreements or the Huntsville Bond
Agreements), which default continues for more than the applicable cure period,
if any, with respect thereto, or any default by any Borrower or Guarantor under
any contract, lease, license or other obligation to any person other than
Lender, which default continues for more than the applicable cure period, if
any, with respect thereto;

         (j) any Change of Control;

         (k) the indictment or threatened indictment of any Borrower or
Guarantor under any criminal statute, or commencement or threatened commencement
of criminal or civil proceedings against any Borrower or Guarantor, pursuant to
which statute or proceedings the penalties or remedies sought or available
include forfeiture of more than $500,000 of any of the property of such Borrower
or Guarantor (provided, that, the foregoing shall not apply to any forfeiture of
the existing Inventory of Central consisting of Omega TM fire sprinkler
products);




                                      -75-

<PAGE>



         (l) there shall be a Material Adverse Effect after the date hereof; or

         (m) there shall be an event of default under any of the other Financing
Agreements.

         10.2 Remedies.

         (a) At any time an Event of Default exists or has occurred and is
continuing, Lender shall have all rights and remedies provided in this
Agreement, the other Financing Agreements, the Uniform Commercial Code and other
applicable law, all of which rights and remedies may be exercised without notice
to or consent by Borrowers or any Guarantors, except as such notice or consent
is expressly provided for hereunder or required by applicable law. All rights,
remedies and powers granted to Lender hereunder, under any of the other
Financing Agreements, the Uniform Commercial Code or other applicable law, are
cumulative, not exclusive and enforceable, in Lender's discretion,
alternatively, successively, or concurrently on any one or more occasions, and
shall include, without limitation, the right to apply to a court of equity for
an injunction to restrain a breach or threatened breach by any Borrower or
Guarantor of this Agreement or any of the other Financing Agreements. Lender
may, at any time or times, proceed directly against any Borrowers or any
Guarantor to collect the Obligations without prior recourse to the Collateral.

         (b) Without limiting the foregoing, at any time an Event of Default
exists or has occurred and is continuing, Lender may, in its discretion and
without limitation, (i) accelerate the payment of all Obligations and demand
immediate payment thereof to Lender (provided, that, upon the occurrence of any
Event of Default described in Sections 10.1(g) and 10.1(h), all Obligations
shall automatically become immediately due and payable), (ii) with or without
judicial process or the aid or assistance of others, enter upon any premises on
or in which any of the Collateral may be located and take possession of the
Collateral or complete processing, manufacturing and repair of all or any
portion of the Collateral, (iii) require Borrowers, at Borrowers' expense, to
assemble and make available to Lender any part or all of the Collateral at any
place and time designated by Lender, (iv) collect, foreclose, receive,
appropriate, setoff and realize upon any and all Collateral, (v) remove any or
all of the Collateral from any premises on or in which the same may be located
for the purpose of effecting the sale, foreclosure or other disposition thereof
or for any other purpose, (vi) sell, lease, transfer, assign, deliver or
otherwise dispose of any and all Collateral (including, without limitation,
entering into contracts with respect thereto, public or private sales at any
exchange, broker's board, at any office of Lender or elsewhere) at such prices
or terms as Lender may deem reasonable, for cash, upon credit or for future
delivery, with the Lender having the right to purchase the whole or any part of
the Collateral at any such public sale, all of the foregoing being free from any
right or equity of redemption of Borrowers, which right or equity of redemption
is hereby expressly waived and released by Borrowers and/or (vii) terminate this
Agreement. If any of the Collateral is sold or leased by Lender upon credit
terms or for future delivery, the Obligations shall not be reduced as a result
thereof until payment therefor is finally collected by Lender. If notice of
disposition of Collateral is required by law, five (5) days prior notice by


                                      -76-

<PAGE>

Lender to Borrowers and Guarantors designating the time and place of any public
sale or the time after which any private sale or other intended disposition of
Collateral is to be made, shall be deemed to be reasonable notice thereof and
each Borrower waives any other notice. In the event Lender institutes an action
to recover any Collateral or seeks recovery of any Collateral by way of
prejudgment remedy, each Borrower and Guarantor waives the posting of any bond
which might otherwise be required.

         (c) Lender may apply the cash proceeds of Collateral actually received
by Lender from any sale, lease, foreclosure or other disposition of the
Collateral to payment of the Obligations, in whole or in part and in such order
as Lender may elect, whether or not then due. Each Borrower and Guarantor shall
remain liable to Lender for the payment of any deficiency with interest at the
highest rate provided for herein and all costs and expenses of collection or
enforcement, including attorneys' fees and legal expenses.

         (d) Without limiting the foregoing, upon the occurrence of an Event of
Default, or an act, condition or event which, with notice or passage of time or
both would constitute an Event of Default, Lender may, at its option, without
notice, (i) cease making Loans or arranging for Letter of Credit Accommodations
and Supplemental Letter of Credit Accommodations or reduce the lending formulas
or amounts of Revolving Loans and Letter of Credit Accommodations available to
Borrowers and/or (ii) terminate any provision of this Agreement providing for
any future Loans, Letter of Credit Accommodations or Supplemental Letter of
Credit Accommodations to be made by Lender to Borrowers.


SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW       
            ------------------------------------------------------------

         11.1 Confession of Judgment.

         (a) Each Borrower and Guarantor, to the extent permitted by law, and
without the further consent of or notice to any Borrower or Guarantor, hereby
irrevocably and unconditionally authorizes the Prothonotary, Clerk of Court, or
any attorney of any court of record in the Commonwealth of Pennsylvania, or any
other jurisdiction, as attorney for such Borrower or Guarantor to appear for
such Borrower or Guarantor in such court and confess judgment against such
Borrower or Guarantor and in favor of Lender, at any time on or after an Event
of Default exists or has occurred, for all or any portion of the Obligations
(including, but not limited to, principal, interest, fees, reasonable costs and
expenses and including attorneys' fees and legal expenses not to exceed five
(5%) percent of the outstanding and unpaid Obligations), for which this
Agreement or a verified copy hereof shall be sufficient warrant. The authority
to enter judgment shall not be exhausted by one exercise hereof, but, to the
extent permitted by law, shall continue from time to time until final payment
and satisfaction in full of all of the Obligations. The foregoing right and
remedy is in addition to and not in lieu of any other right or remedy available
to Lender under this Agreement, the other Financing Agreements, applicable law
or otherwise.

                                      -77-

<PAGE>


         (b) Each Borrower and Guarantor, being fully aware of its right to
notice and a hearing concerning the validity of any and all claims that may be
asserted against such Borrower or Guarantor by Lender before a judgment can be
entered hereunder or before execution may be levied on such judgment against any
and all property of such Borrower or Guarantor, hereby waives each of these
rights and agrees and consents to judgment being entered by confession in
accordance with the terms hereof and execution being levied on such judgment
against any and all property of such Borrower or Guarantor, in each case without
first giving notice and the opportunity to be heard on the validity of the claim
or claims upon which such judgment is entered.

         11.2 Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver.

         (a) The validity, interpretation and enforcement of this Agreement and
the other Financing Agreements (other than the Mortgages to the extent provided
therein) and any dispute arising out of the relationship between the parties
hereto, whether in contract, tort, equity or otherwise, shall be governed by the
internal laws of the State of New York (without giving effect to principles of
conflicts of law).

         (b) Borrowers, Guarantors and Lender irrevocably consent and submit to
the non-exclusive jurisdiction of the Supreme Court of the State of New York in
New York County and the United States District Court for the Southern District
of New York and waive any objection based on venue or forum non conveniens with
respect to any action instituted therein arising under this Agreement or any of
the other Financing Agreements or in any way connected with or related or
incidental to the dealings of the parties hereto in respect of this Agreement or
any of the other Financing Agreements or the transactions related hereto or
thereto, in each case whether now existing or hereafter arising, and whether in
contract, tort, equity or otherwise, and agree that any dispute with respect to
any such matters shall be heard only in the courts described above (except that
Lender shall have the right to bring any action or proceeding against any
Borrower or Guarantor or its property in the courts of any other jurisdiction
which Lender deems necessary or appropriate in order to realize on the
Collateral or to otherwise enforce its rights against any Borrower or Guarantor
or its property).

         (c) Each Borrower and Guarantor hereby waives personal service of any
and all process upon it and consents that all such service of process may be
made by certified mail (return receipt requested) directed to its address set
forth on the signature pages hereof and service so made shall be deemed to be
completed five (5) days after the same shall have been so deposited in the U.S.
mails, or, at Lender's option, by service upon any Borrower or Guarantor in any
other manner provided under the rules of any such courts. Within thirty (30)
days after such service, such Borrower or Guarantor shall appear and respond to
such process, failing which such Borrower shall be deemed in default and
judgment may be entered by Lender against such Borrower or Guarantor for the
amount of the claim and other relief requested.

                                      -78-

<PAGE>


         (d) BORROWERS, GUARANTORS AND LENDER EACH HEREBY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER
THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN
RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE
TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE.
BORROWERS, GUARANTORS AND LENDER EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY AND THAT BORROWERS, GUARANTORS OR LENDER MAY FILE AN ORIGINAL COUNTERPART
OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

         (e) Lender shall not have any liability to Borrowers or Guarantors
(whether in tort, contract, equity or otherwise) for losses suffered by
Borrowers or Guarantors in connection with, arising out of, or in any way
related to the transactions or relationships contemplated by this Agreement, or
any act, omission or event occurring in connection herewith, unless it is
determined by a final and non-appealable judgment or court order binding on
Lender, that the losses were the result of acts or omissions constituting gross
negligence or willful misconduct. In any such litigation, Lender shall be
entitled to the benefit of the rebuttable presumption that it acted in good
faith and with the exercise of ordinary care in the performance by it of the
terms of this Agreement.

         11.3 Waiver of Notices. Each Borrower or Guarantor hereby expressly
waives demand, presentment, protest and notice of protest and notice of dishonor
with respect to any and all instruments and commercial paper, included in or
evidencing any of the Obligations or the Collateral, and any and all other
demands and notices, of any kind or nature whatsoever with respect to the
Obligations, the Collateral and this Agreement, except such as are expressly
provided for herein. No notice to or demand on any Borrower or Guarantor which
Lender may elect to give shall entitle Borrowers or Guarantor to any other or
further notice or demand in the same, similar or other circumstances.

         11.4 Amendments and Waivers. Neither this Agreement nor any provision
hereof shall be amended, modified, waived or discharged orally or by course of
conduct, but only by a written agreement signed by an authorized officer of
Lender, and as to amendments, as also signed by an authorized officer of
Borrowers. Lender shall not, by any act, delay, omission or otherwise be deemed
to have expressly or impliedly waived any of its rights, powers and/or remedies
unless such waiver shall be in writing and signed by an authorized officer of



                                      -79-

<PAGE>



Lender. Any such waiver shall be enforceable only to the extent specifically set
forth therein. A waiver by Lender of any right, power and/or remedy on any one
occasion shall not be construed as a bar to or waiver of any such right, power
and/or remedy which Lender would otherwise have on any future occasion, whether
similar in kind or otherwise. Any waiver in writing signed by a duly authorized
officer of Lender of an Event of Default arising under this Agreement or any of
the other Financing Agreements shall constitute a waiver of the same Event of
Default under any of the other Financing Agreements.

         11.5 Waiver of Counterclaims. Each Borrower and Guarantor waives all
rights to interpose any claims, deductions, setoffs or counterclaims of any
nature (other than compulsory counterclaims) in any action or proceeding with
respect to this Agreement, the Obligations, the Collateral or any matter arising
therefrom or relating hereto or thereto.

         11.6 Indemnification. Each Borrower and Guarantor shall indemnify and
hold Lender, and its directors, agents, employees and counsel, harmless from and
against any and all losses, claims, damages, liabilities, costs or expenses
imposed on, incurred by or asserted against any of them in connection with any
litigation, investigation, claim or proceeding commenced or threatened related
to the negotiation, preparation, execution, delivery, enforcement, performance
or administration of this Agreement, any other Financing Agreements, or any
undertaking or proceeding related to any of the transactions contemplated hereby
or any act, omission, event or transaction related or attendant thereto,
including, without limitation, amounts paid in settlement, court costs, and the
reasonable fees and expenses of counsel except for any losses, claims, damages,
liabilities, costs or expenses resulting from Lender's gross negligence or
willful misconduct as determined pursuant to a final non-appealable order of a
court of competent jurisdiction. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in this Section may be unenforceable
because it violates any law or public policy, Borrowers and Guarantors shall pay
the maximum portion which it is permitted to pay under applicable law to Lender
in satisfaction of indemnified matters under this Section 11.6. The foregoing
indemnity shall survive the payment of the Obligations and the termination or
non-renewal of this Agreement.


SECTION 12. TERM OF AGREEMENT; MISCELLANEOUS
            --------------------------------

         12.1 Term.

         (a) This Agreement and the other Financing Agreements shall become
effective as of the date set forth on the first page hereof and shall continue
in full force and effect for a term ending on March 31, 2001 (the "Renewal
Date"), and from year to year thereafter, unless sooner terminated pursuant to
the terms hereof; provided, that, this Agreement and all other Financing
Agreements must be terminated simultaneously. Upon the effective date of
termination or non-renewal of the Financing Agreements, Borrowers shall pay to
Lender, in full, all outstanding and unpaid Obligations and shall furnish cash
collateral to Lender, in such amounts as Lender determines are reasonably
necessary to secure Lender from loss, cost, damage or expense, including

                                      -80-

<PAGE>

reasonable attorneys' fees and legal expenses, in connection with any contingent
Obligations, including issued and outstanding Letter of Credit Accommodations
and Supplemental Letter of Credit Accommodations and checks or other payments
provisionally credited to the Obligations and/or as to which Lender has not yet
received final and indefeasible payment. Such payments in respect of the
Obligations and cash collateral shall be remitted by wire transfer in Federal
funds to such bank account of Lender, may, in its discretion, designate in
writing to Central for such purpose. Interest shall be due until and including
the next business day, if the amounts so paid by Borrowers to the bank account
designated by Lender are received in such bank account later than 1:00 p.m., New
York City time.

         (b) No termination of this Agreement or the other Financing Agreements
shall relieve or discharge any Borrower or Guarantor of its respective duties,
obligations and covenants under this Agreement or the other Financing Agreements
until all Obligations have been fully and finally discharged and paid, and the
continuing security interest of Lender in the Collateral and the rights and
remedies of Lender hereunder, under the other Financing Agreements and
applicable law, shall remain in effect until all such Obligations have been
fully and finally discharged and paid. Upon the receipt by Lender of payment in
full in cash or other immediately available funds of all of the Obligations
(which are not contingent) and cash collateral in such amounts and on such terms
as Lender shall deem reasonably acceptable for all contingent Obligations, upon
Central's request and at the expense of Borrowers, except as otherwise required
by applicable law, Lender shall execute and deliver to Central UCC-3 termination
statements and such other release documents with respect to the Collateral as
may be reasonably requested by Central, in form and substance satisfactory to
Lender, to effectuate the termination of the security interests granted by
Borrowers to Lender herein and in the other Financing Agreements.

         (c) In the event this Agreement is terminated prior to the end of the
then current term or renewal term of this Agreement for any reason, in view of
the impracticality and extreme difficulty of ascertaining actual damages and by
mutual agreement of the parties as to a reasonable calculation of Lender's lost
profits as a result thereof, Borrowers agree to pay to Lender upon the effective
date of such termination, an early termination fee in the amount set forth below
if such termination is effective in the period indicated:



                      Amount                                   Period
                      ------                                   ------

           (i)  2% of the Maximum Credit          From the date hereof to and
                                                  including March 31, 2000.

          (ii)  1% of the Maximum Credit          From April 1, 2000 to and
                                                  including March 30, 2001.

Such early termination fee shall be presumed to be the amount of damages
sustained by Lender as a result of such early termination and each Borrower and
Guarantor agrees that it is reasonable under the circumstances currently

                                      -81-

<PAGE>

existing. In addition, Lender shall be entitled to such early termination fee
upon the occurrence of any Event of Default described in Sections 10.1(g) and
10.1(h) hereof, even if Lender does not exercise its right to terminate this
Agreement, but elects, at its option, to provide financing to any Borrower or
permit the use of cash collateral under the United States Bankruptcy Code. The
early termination fee provided for in this Section 12.1 shall be deemed included
in the Obligations.

         (d) Notwithstanding anything to the contrary contained in Section
12.1(c) above, in the event of the termination of this Agreement by Borrowers
prior to the end of the then current term or renewal term of this Agreement and
the full and final repayment of all of the Obligations and the receipt by Lender
of cash collateral all as provided in Section 12.1(c) with the proceeds of
initial loans and advances by First Union National Bank to Borrowers pursuant to
a revolving credit facility provided by First Union National Bank to Borrowers
to replace the financing arrangements provided for herein, and as to which
Lender shall not be acting on behalf of First Union National Bank, Borrowers
shall not be required to pay the early termination fee provided for above.

         (e) Notwithstanding anything to the contrary contained in Section
12.1(c) above, in the event of the termination of this Agreement by Borrowers
prior to the end of the then current term or renewal term of this Agreement and
the full and final repayment of all of the Obligations and the receipt by Lender
of cash collateral all as provided in Section 12.1(a), if such termination and
payments occur within thirty (30) days after the effective date of the sale of
all or substantially all of the assets and properties of Lender to a person who
is not an affiliate of Lender, First Union National Bank or First Union
Corporation and no Event of Default shall exist or have occurred, Borrowers
shall not be required to pay the early termination fee provided for above.

         12.2 Notices. All notices, requests and demands hereunder shall be in
writing and (a) made to Lender at its address set forth below and to Borrowers
and Guarantors at their chief executive office of Central set forth below or to
such other address as either party may designate by written notice to the other
in accordance with this provision, and (b) deemed to have been given or made: if
delivered in person, immediately upon delivery; if by facsimile transmission,
immediately after sending and upon confirmation of receipt by facsimile
transmission from the addressee; if by nationally recognized overnight courier
service with instructions to deliver the next Business Day, one (1) Business Day
after sending; and if by certified mail, return receipt requested, five (5) days
after mailing.

         12.3 Partial Invalidity. If any provision of this Agreement is held to
be invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Agreement as a whole, but this Agreement shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.




                                      -82-

<PAGE>



         12.4 Successors. This Agreement, the other Financing Agreements and any
other document referred to herein or therein shall be binding upon and inure to
the benefit of and be enforceable by Lender, Borrowers, Guarantors and their
respective successors and assigns, except that Borrowers and Guarantors may not
assign their rights under this Agreement, the other Financing Agreements and any
other document referred to herein or therein without the prior written consent
of Lender. Lender may, after notice to any Borrower, assign its rights and
delegate its obligations under this Agreement and the other Financing Agreements
and further may assign, or sell participations in, all or any part of the Loans,
the Letter of Credit Accommodations or any other interest herein, in which
event, the assignee or Participant shall have, to the extent of such assignment
or participation, the same rights and benefits as it would have if it were the
Lender hereunder, except as otherwise provided by the terms of such assignment
or participation.

         12.5 Participant's Security Interest. If a Participant shall at any
time participate with Lender in the Loans or other Obligations, each Borrower
and Guarantor hereby grants to such Participant and such Participant shall have
and is hereby given, a continuing lien on and security interest in any money,
securities and other property of such Borrower in the custody or possession of
the Participant, including the right of setoff, to the extent of the
Participant's participation in the Obligations, and such Participant shall be
deemed to have the same right of setoff to the extent of its participation in
the Obligations, as it would have if it were a direct lender.

         12.6 Entire Agreement. This Agreement, the other Financing Agreements,
any supplements hereto or thereto, and any instruments or documents delivered or
to be delivered in connection herewith or therewith represent the entire
agreement and understanding concerning the subject matter hereof and thereof
between the parties hereto, and supersede all other prior agreements,
understandings, negotiations and discussions, representations, warranties,
commitments, proposals, offers and contracts concerning the subject matter
hereof, whether oral or written. In the event of any inconsistency between the
terms of this Agreement and any schedule or exhibit hereto, the terms of this
Agreement shall govern.



                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]



                                      -83-

<PAGE>



         IN WITNESS WHEREOF, Lender, Borrowers and Guarantors have caused these
presents to be duly executed as of the day and year first above written.


LENDER                                           BORROWERS

CONGRESS FINANCIAL CORPORATION                   CENTRAL SPRINKLER COMPANY

By:   /s/ Josephone Naws                         By: /s/ Albert T. Sobol   
   ------------------------------------             ----------------------------

Title: FVP                                       Title: Executive Vice President
      ---------------------------------                 ------------------------

Address:                                         Chief Executive Office:
--------                                         -----------------------

1133 Avenue of the Americas                      451 North Cannon Avenue
New York, New York  10036                        Lansdale, Pennsylvania 19446

                                                 CENTRAL CASTINGS CORPORATION

                                                 By: /s/ Albert T. Sobol
                                                    ----------------------------

                                                 Title: Executive Vice President
                                                       -------------------------

                                                 Chief Executive Office:
                                                 -----------------------

                                                 2660 Old Gadsden Highway
                                                 Anniston, Alabama 36206

                                                 CENTRAL CPVC CORPORATION

                                                 By:  /s/ Albert T. Sobol 
                                                    ----------------------------

                                                 Title: Executive Vice President
                                                       -------------------------

                                                 Chief Executive Office:
                                                 -----------------------

                                                 245 Swancott Road
                                                 Madison, Alabama 35750



                     [SIGNATURES CONTINUE ON FOLLOWING PAGE]


                                      -84-

<PAGE>


                     [SIGNATURES CONTINUED FROM PRIOR PAGE]


                                               CENTRAL SPRINKLER CORPORATION

                                               By: /s/ Albert T. Sobol 
                                                  ----------------------------

                                               Title: Executive Vice President
                                                     -------------------------

                                               Chief Executive Office:
                                               -----------------------

                                               451 North Cannon Avenue
                                               Lansdale, Pennsylvania 19446

                                               CENTRAL SPRINKLER EXPORT
                                                 CORPORATION

                                               By: /s/ Albert T. Sobol    
                                                  ----------------------------

                                               Title: Executive Vice President 
                                                      -------------------------

                                               Chief Executive Office:
                                               -----------------------

                                               451 North Cannon Avenue
                                               Lansdale, Pennsylvania 19446





                                      -85-