AMENDED AND RESTATED
                                                REVOLVING LOANS AND
                                       FOREIGN EXCHANGE FACILITIES AGREEMENT


         AGREEMENT  made as of July 15,  1997 by and  between  Mestek,  Inc.,  a
Pennsylvania  corporation  having a principal place of business at 260 North Elm
Street,   Westfield,   Massachusetts  01085  (hereinafter  referred  to  as  the
"Borrower"),  and BankBoston,  N.A., a national  banking  association,  having a
principal place of business at 100 Federal Street, Boston,  Massachusetts 02110,
successor  by merger to BayBank,  N.A.  (hereinafter  referred to as the "Bank")
amends and  restates in its  entirety an Amended and  Restated  Loan,  Letter of
Credit  Facility and Foreign  Exchange  Facilities  Agreement  originally  dated
September 27, 1996.

         In consideration of the mutual covenants herein contained, it is agreed
as follows:


         1.       DEFINITIONS AND ACCOUNTING TERMS.

                  1.1.  Defined Terms. As used in this Agreement,  the following
         terms have the  following  meanings  (terms  defined in the singular to
         have the same meaning when used in the plural and vice versa):

                  "Affiliate"  means any Person (1) which directly or indirectly
         controls,  or is  controlled  by, or is under  common  control with the
         Borrower or a Subsidiary; (2) which directly or indirectly beneficially
         owns or holds five percent (5%) or more of any class of voting stock of
         the Borrower or any Subsidiary; or (3) five percent (5%) or more of the
         voting stock of which is directly or indirectly  beneficially  owned or
         held by the  Borrower or a  Subsidiary.  The term  "control"  means the
         possession, directly or indirectly, of the power to direct or cause the
         direction of the management and policies of a Person,  whether  through
         the ownership of voting securities, by contract, or otherwise.

                  "Agreement" means this Amended and Restated Revolving Loans
         and Foreign Exchange Facilities Agreement, as amended,
         supplemented, or modified from time to time.

                  "Base  Loan"  means any Loan when and to the  extent  that the
         interest rate therefor is determined by reference to the Base Rate.


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                  "Base  Rate"  means the  greater of (i) that rate of  interest
         announced  from  time to time by the  Bank at its  head  office  at 100
         Federal Street, Boston Massachusetts 02110 as its "Base Rate", and (ii)
         the  Federal  Funds  Effective  Rate plus  one-half  percent  per annum
         (rounded upwards, if needed to the nearest 1/8th of one percent,  which
         rate is not  necessarily  the  lowest  rate  charged by the Bank to its
         customers.

                  "Business Day" means any day other than a Saturday, Sunday, or
         other day on which commercial banks in Massachusetts  are authorized or
         required to close under the laws of The  Commonwealth of  Massachusetts
         and,  (i) if the  applicable  day  relates  to a Canadian  LIBOR  Loan,
         Canadian  LIBOR Interest  Period,  or notice with respect to a Canadian
         LIBOR Loan, a day on which dealings in United States or Canadian Dollar
         deposits  are  also  carried  on in  the  London  and  Toronto,  Canada
         interbank market and banks are open for business in London and Toronto,
         Canada,  or (ii) if the  applicable  day relates to a Eurodollar  Loan,
         Eurodollar  Interest  Period,  or notice with  respect to a  Eurodollar
         Loan, a day on which dealings in United States Dollar deposits are also
         carried on in the  interbank  Eurodollar  market and banks are open for
         business.

                  "Canadian  Commitment" shall have the meaning assigned to such
         term in Section 2.1 A.

                  "Canadian LIBOR Interest Rate" means,  for each Canadian LIBOR
         Loan, the rate per annum  (rounded  upward,  if necessary,  to the next
         higher 1/100 of 1%)  determined by the Bank to be equal to the quotient
         of (x) the London  Interbank  Offered Rate for such Canadian LIBOR Loan
         for   such   Interest   Period   utilizing   reasonable   extrapolation
         methodology, if necessary,  depending upon the Interest Period selected
         by the  Borrower  divided  by (y) one  minus the  Eurocurrency  Reserve
         Requirement, if any, for such Interest Period.

                  "Canadian  LIBOR  Loan"  means any Loan when and to the extent
         that the  interest  rate  therefor is  determined  by  reference to the
         Canadian LIBOR Interest Rate.

                  "Canadian  Loan  Facility"  means  the  $5,000,000  (Canadian)
         revolving line of credit facility, administered for the Borrower by the
         Nassau Branch, denominated in Canadian Dollars.




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                  "Canadian  Revolving Note" shall have the meaning  assigned to
         such term in Section 2.4.2.

                  "Capitalization"  means,  as of the date of any  determination
         thereof,  the sum of (i) Consolidated Funded Debt and (ii) Consolidated
         Net Worth.

                  "Capital  Lease" or  "Capitalized  Lease"  means any lease the
         obligation  for  rentals  with  respect to which have been or should be
         capitalized on the balance sheet of the lessee in accordance with GAAP.

                  "Capitalized   Rentals"   means,   as  of  the   date  of  any
         determination,  the amount at which the  aggregate  Rentals  due and to
         become due under all  Capitalized  Leases of which the  Borrower or any
         Subsidiary  is a  lessee  would  be  reflected  as a  liability  on the
         consolidated balance sheet of the Borrower and its Subsidiaries.

                  "Code"  means the Internal  Revenue  Code of 1986,  as amended
         from time to time and the  regulations  and  published  interpretations
         thereof.

                  "Commitment" shall have the meaning set forth in Section 2.1
         below.

                  "Commonly  Controlled Entity" means an entity,  whether or not
         incorporated,  which is under common  control with the Borrower  within
         the meaning of Section 414(b) or 414(c) of the Code.

                  "Consolidated   Current  Assets"  and  "Consolidated   Current
         Liabilities"  means such assets and liabilities of the Borrower and its
         Subsidiaries  on  a  consolidated  basis  as  shall  be  determined  in
         accordance   with  GAAP  to  constitute   current  assets  and  current
         liabilities respectively.

                  "Consolidated  Net  Income"  for any  period  means  the gross
         revenues of the Borrower and its  Subsidiaries for such period less all
         expenses  and  other  proper  charges   (including  taxes  on  income),
         determined on a consolidated basis in accordance with GAAP consistently
         applied  and  after  eliminating  earnings  or losses  attributable  to
         outstanding Minority Interests, but excluding in any event:

                  (a) any gains or losses on the sale or other
           disposition of investments or fixed or capital assets, and

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<PAGE>



                  any taxes on such excluded gains and any tax deductions or
                  credits on account of such excluded losses;

                 (b) the proceeds of any life insurance policy;

                           (c) net earnings and losses of any Subsidiary accrued
                  prior to the date it became a Subsidiary;

                           (d) net earnings and losses of any corporation (other
                  than a Subsidiary), substantially all the assets of which have
                  been   acquired  in  any   manner,   realized  by  such  other
                  corporation prior to the date of such acquisition;

                           (e) net earnings and losses of any corporation (other
                  than a  Subsidiary)  with which the  Borrower or a  Subsidiary
                  shall have  consolidated  or which  shall have  merged into or
                  with the  Borrower or a  Subsidiary  prior to the date of such
                  consolidation or merger;

                           (f) net earnings of any business entity (other than a
                  Subsidiary)  in which the  Borrower or any  Subsidiary  has an
                  ownership interest unless such net earnings have been actually
                  received by the Borrower or the Subsidiary in the form of cash
                  distributions;

                           (g) any portion of the net earnings of any Subsidiary
                  which for any reason is  unavailable  for payment of dividends
                  to the Borrower or any other Subsidiary;

                           (h)   earnings   resulting   from  any   reappraisal,
                  revaluation or write-up of assets;

                           (i) any  deferred or other  credit  representing  any
                  excess  of  the  equity  in any  Subsidiary  at  the  date  of
                  acquisition   thereof   over  the  amount   invested  in  such
                  Subsidiary;

                           (j) any  gain  arising  from the  acquisition  of any
                  Securities of the Borrower or any Subsidiary; and

                           (k) any reversal of any contingency  reserve,  except
                  to the extent  that  provision  for such  contingency  reserve
                  shall have been made from income arising during such period.

                  "Consolidated  Net Tangible  Assets" means,  as of the date of
         any  determination  thereof,  the  total  amount  of all  assets of the
         Borrower and its Subsidiaries (less depreciation, depletion and

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<PAGE>



         other properly  deductible  valuation reserves) after deducting (i) all
         items which in accordance  with GAAP would be included on the liability
         side of a  consolidated  balance  sheet,  except  capital  stock  (less
         treasury  stock),  surplus and retained  earnings,  deferred  taxes and
         funded  debt,  and  (ii)  goodwill,  patents,  tradenames,  trademarks,
         copyrights,  franchises,  experimental  expense,  organization expense,
         unamortized  debt  discount  and  expense,  deferred  assets other than
         prepaid  insurance  and  prepaid  taxes,  the  excess of cost of shares
         acquired over book value of the related assets and such other assets as
         are properly classified as "intangible assets" in accordance with GAAP.

                  "Consolidated  Net  Worth"  means,  as  of  the  date  of  any
         determination  thereof, the aggregate amount of the capital stock (less
         treasury stock),  surplus and retained earnings of the Borrower and its
         Subsidiaries  after deducting Minority Interests to the extent included
         in the capital stock  accounts of the Borrower,  all as determined on a
         consolidated basis by the Borrower and its Subsidiaries.

                  "Consolidated Tangible Net Worth" means, as of the date of any
         determination  thereof, the aggregate amount of the capital stock (less
         treasury stock),  surplus and retained earnings of the Borrower and its
         Subsidiaries  after deducting Minority Interests to the extent included
         in the capital stock  accounts of the Borrower,  all as determined on a
         consolidated  basis by the  Borrower  and its  Subsidiaries,  and after
         deducting  goodwill,  patents,  tradenames,   trademarks,   copyrights,
         franchises,  experimental expense,  organization  expense,  unamortized
         debt discount and expense, deferred assets other than prepaid insurance
         and  prepaid  taxes,  the excess of cost of shares  acquired  over book
         value of the  related  assets  and such  other  assets as are  properly
         classified as "intangible assets" in accordance with GAAP.

                  "Current Debt" of any person means all  Indebtedness for money
         borrowed other than Funded Debt.

                  "Default"  means any of the  events  specified  in  Section 9,
         whether or not any requirement  for the giving of notice,  the lapse of
         time, or both, or any other condition, has been satisfied.

                  "Dollars"  and the sign "$" mean  lawful  money of the  United
         States of America,  except where followed by the word "Canadian"  which
         shall mean lawful money of the Dominion of Canada.


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<PAGE>



                  "ERISA" means the Employment Retirement Income Security Act of
         1974, as amended from time to time, and the  regulations  and published
         interpretations thereof.

                  "Event  of  Default"  means  any of the  events  specified  in
         Section 9, provided that any requirement for the giving of notice,  the
         lapse of time, or both, or any other condition, has been satisfied.

                  "Eurocurrency  Reserve  Requirement" means, for any Eurodollar
         or Canadian  LIBOR Loan,  for any Eurodollar or Canadian LIBOR Interest
         Period  therefor,   the  daily  average  of  the  stated  maximum  rate
         (expressed  as a decimal) at which  reserves  (including  any marginal,
         supplemental,  or  emergency  reserves),  if any,  are  required  to be
         maintained during such Eurodollar or Canadian LIBOR Interest Period, as
         the case may be, under  Regulation D by the Bank against  "Eurocurrency
         Liabilities" (as such term is used in Regulation D) but without benefit
         or credit of proration,  exemptions, or offsets that might otherwise be
         available  to the Bank from time to time under  Regulation  D.  Without
         limiting  the  effect  of  the  foregoing,   the  Eurocurrency  Reserve
         Requirement  shall reflect any other reserves required to be maintained
         by the Bank  against (1) any  category  of  liabilities  that  includes
         deposits  by  reference  to which  the  Eurodollar  or  Canadian  LIBOR
         Interest Rate for Eurodollar or Canadian  LIBOR Loans,  as the case may
         be, is to be determined;  or (2) any category of extension of credit or
         other assets that includes Eurodollar or Canadian LIBOR Loans, it being
         understood  that  as of the  date of this  Agreement  the  Eurocurrency
         Reserve Requirement percentage is zero (0).

                  "Eurodollar  Interest Rate" means,  for each Eurodollar  Loan,
         for any applicable  Eurodollar Interest Period, the quotient of (x) the
         rate of interest per annum  determined by the Bank to be the prevailing
         rate at which deposits in United States Dollars are offered to the Bank
         by banks  in the  interbank  Eurodollar  market  in which it  regularly
         participates  (rounded upward, if necessary,  to the next highest 1/100
         of 1%)on or about 10:00 a.m. (Boston,  Massachusetts time) two Business
         Days before the first day of the applicable Eurodollar Interest Period,
         in an  amount  approximately  equal  to the  principal  amount  of such
         Eurodollar  Loan  for the  period  of time  approximately  equal to the
         applicable  Eurodollar  Interest  Period,  divided by (y) one minus the
         Eurocurrency Reserve Requirement, if any, for such Interest Period.


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<PAGE>



                  "Eurodollar  Loan"  means any Loan when and to the extent that
         the interest rate therefor is determined by reference to the Eurodollar
         Interest Rate.

                  "Federal  Funds  Effective   Rate"  means,   for  any  day,  a
         fluctuating  interest  rate per annum equal to the weighted  average of
         the rates on overnight  Federal funds  transactions with members of the
         Federal Reserve System, arranged by Federal funds brokers, as published
         for such  day (or,  if such  day is not a  Business  Day,  for the next
         preceding Business Day) by the Federal Reserve Bank of New York, or, if
         such rate is not so published  for any day that is a Business  Day, the
         average of the quotations for such day on such transactions received by
         the Bank from  three  Federal  funds  brokers  of  recognized  standing
         selected by the Bank.

                  "Foreign  Exchange   Facility"  or  "FX  Facility"  means  the
         facility or facilities described in Section 2.18 below.

                  "Funded  Debt" of any Person  means (i) all  Indebtedness  for
         borrowed  money  or which  has been  incurred  in  connection  with the
         acquisition  of assets in each case  having a final  maturity of one or
         more  than  one  year  from the date of  origin  thereof  (or  which is
         renewable  or  extendable  at the option of the obligor for a period or
         periods of more than one year from the date of origin),  excluding  all
         payments  in respect  thereof  that are  required to be made within one
         year from the date of any determination of Funded Debt,  whether or not
         included in Consolidated Current Liabilities;  and (ii) all Capitalized
         Rentals.  "Consolidated" when used as a prefix to any Funded Debt shall
         mean the  aggregate  amount of such Funded Debt of the Borrower and its
         Subsidiaries on a consolidated basis eliminating intercompany items.

                  "GAAP"  means   generally   accepted   accounting   principles
         consistently  applied, in accordance with financial reporting standards
         from  time to time in  effect  among  nationally  recognized  certified
         public accounting firms in the United States,  including the statements
         and interpretations of the United States Financial Accounting Standards
         Board and any successor entity.

                  "Indebtedness"   of  any  Person   means  and   includes   all
         obligations  of such  Person  which in  accordance  with GAAP  shall be
         classified  on a balance  sheet of such Person as  liabilities  of such
         Person,  and in any event  shall  include all (i)  obligations  of such
         Person for borrowed money or which has been incurred in connection with
         the acquisition of property or assets,  (ii) obligations secured by any
         lien or other charge upon property or assets owned by such Person, even
         though such Person

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<PAGE>



         has not assumed or become  liable for the payment of such  obligations,
         (iii)  obligations  created or arising  under any  conditional  sale or
         other title  retention  agreement with respect to property  acquired by
         such Person,  notwithstanding  the fact that the rights and remedies of
         the seller,  lender,  or lessor  under such  agreement  in the event of
         default  are  limited to  repossession  or sale of  property,  (iv) all
         guaranties of payment or performance  of any  obligations of others for
         borrowed  money,  or accrued as liabilities in accordance with GAAP, or
         as  shown  on  Borrower's  financial  statements,  and (v)  Capitalized
         Rentals  under any  Capitalized  Lease.  For purpose of  computing  the
         "Indebtedness"  of any Person  there shall be excluded  any  particular
         Indebtedness to the extent that, upon or prior to the maturity thereof,
         there shall have been deposited with the proper depository in trust the
         necessary funds (or evidences of such Indebtedness, if permitted by the
         instrument  creating such Indebtedness) for the payment,  redemption or
         satisfaction  of such  Indebtedness;  and  thereafter  such  funds  and
         evidences of  Indebtedness  so  deposited  shall not be included in any
         computation of the assets of such Person.

                  "Insolvent" The Borrower, its Subsidiaries or any other person
         shall be considered to be "Insolvent"  when any of the following events
         shall have occurred whereby the Borrower or any of its Subsidiaries (a)
         shall  generally  not pay, or shall be unable to pay, or shall admit in
         writing its inability to pay its debts as such debts become due; or (b)
         shall make an assignment  for the benefit of creditors,  or petition or
         apply to any tribunal for the appointment of a custodian,  receiver, or
         trustee  for it or a  substantial  part  of its  assets;  or (c)  shall
         commence  any   proceeding   under  any   bankruptcy,   reorganization,
         arrangement,  readjustment of debt, dissolution,  or liquidation law or
         statute of any jurisdiction, whether now or hereafter in effect; or (d)
         shall  have  had any such  petition  or  application  filed or any such
         proceeding commenced against it in which an order for relief is entered
         or  an   adjudication   or  appointment  is  made,  and  which  remains
         undismissed for a period of ninety (90) days or more; or (e) shall take
         any  corporate  action  indicating  its  consent  to,  approval  of, or
         acquiescence in any such petition,  application,  proceeding,  or order
         for relief or the appointment of a custodian,  receiver, or trustee for
         all or any substantial part of its properties;  or (f) shall suffer any
         such   custodianship,   receivership,   or   trusteeship   to  continue
         undischarged for a period of ninety (90) days or more.

                  "Interest Charges" for any period means all interest
         (including the imputed interest factor in respect of Capitalized

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         Leases)  and all  amortization  of debt  discount  and  expense  on any
         particular  Indebtedness  for which such  calculations  are being made.
         Computations of Interest  Charges on a proforma basis for  Indebtedness
         having a  variable  interest  rate shall be  calculated  at the rate in
         effect on the day of any determination.

                  "Interest Period" means

         (i) with respect to any Canadian LIBOR Loan,  the period  commencing on
         the  Business  Day such loan is made and ending,  as the  Borrower  may
         select,  pursuant to Section 2.2, on the  corresponding day which is no
         more than 30, 60, 90, 180 or 360 days  thereafter  provided that all of
         the foregoing  provisions  relating to Interest  Periods are subject to
         the following:

                           (a)  No  Interest   Period  may  extend   beyond  the
                  Termination Date without prior approval by the Bank;

                           (b) If an Interest  Period would end on a day that is
                  not a Business Day, such Interest  Period shall be extended to
                  the next  Business Day unless such  Business Day would fall in
                  the next calendar  month,  in which event such Interest Period
                  shall end on the immediately preceding Business Day; or

         (ii) with respect to any Eurodollar Loan, the period  commencing on the
         Business Day such loan is made and ending,  as the Borrower may select,
         pursuant to Section 2.2, on the corresponding day which is no more than
         twelve months thereafter provided that all of the foregoing  provisions
         relating to Interest Periods are subject to the following:

                           (a) No Eurodollar  Interest  Period may extend beyond
                  the Termination Date without prior approval by the Bank;

                           (b) If an Interest  Period would end on a day that is
                  not a Business Day, such Interest  Period shall be extended to
                  the next  Business Day unless such  Business Day would fall in
                  the next calendar  month,  in which event such Interest Period
                  shall end on the immediately preceding Business Day;

                           (c) If an  Interest  Period is other than the typical
                  Eurodollar  market  interest  period of 7, 14, 21, 30, 60, 90,
                  180,  270 or 360 days,  the Bank will  nonetheless  facilitate
                  such  Borrower-requested  atypical Interest Period,  utilizing
                  reasonable extrapolation methodology to establish the

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                  Eurodollar Interest Rate for such Eurodollar Interest
                  Period.

                  "Lending  Office" means,  with respect to Revolving Loans, the
         Bank's office at 1350 Main Street,  Springfield,  Massachusetts  01103,
         and with respect to Canadian LIBOR Loans,  the principal  office of the
         Nassau Branch.

                  "Letter of  Credit"  means any  documentary,  standby or other
         type of  Letter of Credit  issued  by the Bank for the  account  of the
         Borrower or any Subsidiary as provided in Section 2.14 below.

                  "Letter of Credit  Facility"  means the  credit  accommodation
         facility for the issuance of Letters of Credit being made  available to
         the Borrower or any of its Subsidiaries pursuant to Section 2.14 below.

                  "Lien" means any  mortgage,  deed of trust,  pledge,  security
         interest, hypothecation,  assignment, deposit arrangement, encumbrance,
         lien (statutory or other), or preference,  priority,  or other security
         agreement or preferential  arrangement,  charge,  or encumbrance of any
         kind  or  nature  whatsoever   (including,   without  limitation,   any
         conditional  sale or other title  retention  agreement,  any  financing
         lease  having  substantially  the same  economic  effect  as any of the
         foregoing,  and the filing of any financing statement under the Uniform
         Commercial  Code or comparable law of any  jurisdiction to evidence any
         of the foregoing).

                  "Loan"  means a  Eurodollar  or Base  Rate  Revolving  Line of
         Credit Loan or Loans, a Canadian LIBOR Revolving Line of Credit Loan or
         Loans or any outstanding  reimbursement obligation under (i) the Letter
         of Credit  Facility  described  in  Section  2.14  below or (ii) the FX
         Facility (as  evidenced by the Back-Up  Foreign  Exchange  Demand Note)
         described in Section 2.18 below.

                  "Loan  Documents"  means this Agreement,  the Notes, and other
         documents related to the transactions discussed in this Agreement.

                  "London  Interbank  Offered  Rate"  applicable to any Interest
         Period for a Canadian  LIBOR Loan means the rate of interest  per annum
         (rounded upward,  if necessary,  to the next higher 1/100 of 1%) quoted
         on the  applicable  page  of the  Daily  Telerate  Financing  Reporting
         Service as the Canadian LIBOR Rate or Reuter's Canadian LIBOR page (or,
         if such  reporting  services  are no longer  provided,  at the Canadian
         LIBOR Rate published in comparable

                                                        10

<PAGE>



         financial  reporting  services)  offered for  deposits  in  immediately
         available  Canadian  Dollars  for a period  of time  comparable  to the
         specified  Interest Period, at 11:00 a.m. (London time) on the Business
         Day which is two Business Days  preceding the first Business Day of the
         requested LIBOR Loan for such Interest Period.

                  "Minority Interests" means any shares of stock of any class of
         a Subsidiary  (other than directors'  qualifying  shares as required by
         law)  that  are not  owned  by the  Borrower  and or one or more of its
         Subsidiaries.  Minority  Interests shall be valued by valuing  Minority
         Interests  constituting preferred stock at the voluntary or involuntary
         value of such  preferred  stock,  whichever is greater,  and by valuing
         Minority  Interests  constituting  common  stock at the  book  value of
         capital and surplus  applicable  thereto  adjusted,  if  necessary,  to
         reflect any changes from the book value of such common  stock  required
         by the  foregoing  method of valuing  minority  interests  in preferred
         stock.

                  "Multiemployer Plan" means a Plan described in
         Section 4001(a)(3) of ERISA.

                  "Nassau Branch" means the Bank's affiliate, The First
         National Bank of Boston, Nassau Branch, a full service branch of
         BankBoston, N.A. located at Charlotte House, Nassau, Bahamas.

                  "Net Income Available for Fixed Charges" means, as of the date
         of any determination  thereof,  the sum of the following for the twelve
         (12) full consecutive  calendar months immediately  preceding such date
         of determination:

                  (a) Consolidated Net Income for such period;
                                      PLUS
                           (b)  Income  taxes and  excess  profit  taxes paid or
                  accrued by the  Borrower  and its  Subsidiaries  on account of
                  such Consolidated Net Income during such periods; PLUS
                           (c) The sum of (i)  Interest  Charges  in  respect of
                  Consolidated  Funded Debt  during said period  (whether or not
                  paid or payable but only to the extent  deducted in  computing
                  Consolidated   Net  Income  for  such  period)  and  (ii)  the
                  aggregate  rentals paid by the  Borrower and its  Subsidiaries
                  under all leases (other than  Capitalized  Leases) during such
                  period.

                  "Notes" mean the Revolving Note, the Canadian Revolving
         Note, the Backup Foreign Exchange Facility Note and any other

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         notes executed by the Borrower in favor of the Bank from time to
         time.

                  "Notice  of  Selection  of  Interest  Period"  shall  have the
         meaning assigned to it in Section 2.2 below.

                  "Obligation" and  "Obligations"  means any and all liabilities
         and obligations of the Borrower or any of its  Subsidiaries to the Bank
         of  every  kind  and  description,  direct  or  indirect,  absolute  or
         contingent, primary or secondary, due or to become due, now existing or
         hereafter arising, regardless of how they arise or by what agreement or
         instrument they may be evidenced or whether  evidenced by any agreement
         or instrument, and includes (i) obligations to perform acts and refrain
         from  taking  action  as  well  as  obligations  to  pay  money,   (ii)
         reimbursement  obligations  of the Borrower or any of its  Subsidiaries
         pursuant to any  documentation  executed in conjunction with or related
         to the  issuance  by the  Bank of any  Letters  of  Credit  or  Foreign
         Exchange Facilities, and (iii) guaranty obligations.

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

                  "Person"  means  an  individual,   partnership,   corporation,
         business trust, joint stock company, trust, unincorporated association,
         joint  venture,  governmental  authority,  or other  entity of whatever
         nature.

                  "Plan"  means any pension plan which is covered by Title IV of
         ERISA and in respect  of which the  Borrower  or a Commonly  Controlled
         Entity is an "employer" as defined in Section 3(5) of ERISA.

                  "Principal  Office"  means the  Bank's  office at 100  Federal
         Street, Boston, Massachusetts 02110.

                  "Pro  Forma  Fixed  Charges"  shall mean as of the date of any
         determination  thereof  the sum of (i)  Interest  Charges in respect of
         Consolidated  Funded Debt  (other than Funded Debt then  proposed to be
         retired)  for  the  twelve  full  consecutive  calendar  months  period
         immediately  preceding such date of  determination,  plus (ii) Interest
         Charges on all Funded  Debt then  proposed  to be issued for the twelve
         full consecutive calendar months after such date of determination, plus
         (iii) the maximum aggregate Rentals payable during any period of twelve
         full consecutive  calendar months after such date of determination  and
         prior to July 15,

                                                        12

<PAGE>



         1998  under  all  long-term  Leases  under  which  the  Borrower  or  a
         Subsidiary is then lessee.

                  "Prohibited  Transaction"  means any  transaction set forth in
         Section 406 of ERISA or Section 4975 of the Code.

                  "Regulation D" means Regulation D of the Board of Governors of
         the  Federal  Reserve  System as amended or  supplemented  from time to
         time.

                  "Rentals"  means and  includes all fixed rents  (including  as
         such all  payments  which the lessee is obligated to make to the lessor
         on termination  of the lease or surrender the property)  payable by the
         Borrower or a Subsidiary, as lessee or sublessee under lease of real or
         personal property, but shall be exclusive of any amounts required to be
         paid by the  Borrower or a  Subsidiary  (whether or not  designated  as
         rents  or  additional  rents)  on  account  of  maintenance,   repairs,
         insurance,  taxes and similar charges.  Fixed rents under any so-called
         "percentage lease" shall be computed solely on the basis of the minimum
         rents,  if any,  required to be paid by the lessee  regardless of sales
         volume or gross revenues.

                  "Reportable Event" means any of the events set forth in
         Section 4043 of ERISA.

                  "Restricted Payment(s) shall have the meaning assigned to
         such term in Section 7.8

                  "Revolving  Line of  Credit  Loan(s)",  "Revolving  Loans"  or
         "Revolving  Credit  Loan(s)"  shall have the  meaning  assigned to such
         terms in Section  2.1.  and shall  refer to Loans  other than  Canadian
         LIBOR Loans,  issued  hereunder  pursuant to the Revolving  Note or the
         Letter of Credit Facility.

                  "Revolving  Note" shall have the meaning assigned to such term
         in Section 2.4.

                  "Security"  shall have the same  meaning as in Section 2(1) of
         the Securities Act of 1933, as amended.

                  "Subsidiary(ies)"  means, as to the Borrower, a corporation of
         which  more than 80% (by  number  of  votes) of shares of stock  having
         ordinary  voting  power  (other  than stock  having  such power only by
         reason of the  happening of a  contingency)  to elect a majority of the
         board of directors  or other  managers of such  corporation  are at the
         time owned, or the management of which is

                                                        13

<PAGE>



         otherwise  controlled,  directly  or  indirectly  through  one or  more
         intermediaries,  or  both,  by the  Borrower  and/or  by  one  or  more
         Subsidiaries.

                  "Termination  Date" means April 30, 1998, but if the Revolving
         Line of Credit or  Canadian  Revolving  Line of Credit is  extended  or
         renewed,  at the Bank's discretion,  the Termination Date shall be that
         date set forth by the Bank as of the  extension  or  renewal as the new
         Termination Date, or as otherwise determined by the Bank.

                  "$3,000,000  FX Facility"  shall have the meaning  assigned to
         that term in Section 2.18.

                  "$3,000,000  Back-up Foreign Exchange Facility Note shall have
         the meaning assigned to that term in Section 2.18.

                  1.2. "Accounting Terms". All accounting terms not specifically
         defined  herein shall be construed in accordance  with GAAP  consistent
         with  those  applied in the  preparation  of the  financial  statements
         referred to in Section 5.3, and all financial data  submitted  pursuant
         to this Agreement shall be prepared in accordance with such principles.

         2.       AMOUNT AND TERMS OF LOAN.

                  2.1.  Revolving Line of Credit.  The Bank agrees, on the terms
         and conditions  hereinafter  set forth,  to make loans (the  "Revolving
         Line of Credit Loans" or "Revolving Loans")(including commitments under
         the Letter of Credit Facility) to the Borrower from time to time during
         the period from the date of this  Agreement up to but not including the
         Termination  Date  in an  aggregate  principal  amount  not  to  exceed
         outstanding,  at any time, Fifty Million Dollars  ($50,000,000.00) (the
         "Commitment"). Each Revolving Line of Credit Loan which is a Eurodollar
         Loan and which shall not utilize the  Commitment in full shall be in an
         amount not less than Five Hundred  Thousand  Dollars  ($500,000.00)  or
         multiples of One Hundred  Thousand  Dollars  ($100,000.00)  thereabove.
         Base Loans may be in any amount within the limits of the Commitment and
         within such limits, the Borrower may borrow,  repay pursuant to Section
         2.7, and reborrow  under this Section 2.1. On such terms and conditions
         as are contained  herein,  the Loans may be  outstanding as either Base
         Loans  or  Eurodollar  Loans.  Each  type of  Loan  shall  be made  and
         maintained at the Bank's Lending Office for such type of Loan.


                                                        14

<PAGE>



                  2.1A  Canadian  Revolving  Line of Credit  Facility.  The Bank
         agrees,  on the terms and conditions  hereinafter set forth and through
         its  Nassau  Branch,  to make loans (the  "Canadian  Revolving  Line of
         Credit  Loans" or "Canadian  LIBOR Loans") to the Borrower from time to
         time  during the period from the date of this  Agreement  up to but not
         including the Termination Date in an aggregate  principal amount not to
         exceed outstanding,  at any time, Five Million Dollars  ($5,000,000.00)
         Canadian (the "Canadian  Commitment").  Each Canadian Revolving Line of
         Credit Loan which is a Canadian  LIBOR Loan and which shall not utilize
         the  Canadian  Commitment  in full  shall be in an amount not less than
         Five Hundred  Thousand Dollars  ($500,000.00)  Canadian or multiples of
         One Hundred Thousand Dollars ($100,000.00) Canadian thereabove.  Within
         the limits of the Canadian  Commitment  the Borrower may borrow,  repay
         pursuant to Section  2.7, and reborrow  under this Section  2.1A.  Each
         Canadian  LIBOR Loan shall be made and  maintained at the Bank's Nassau
         Branch.

                  2.2.  Notice and Manner of Borrowing; Conversion and
         Renewals.

                           2.2.1.  Revolving  Loans. The Borrower may elect from
                  time to time to initiate a Revolving Loan, to convert all or a
                  part of a Base Loan into a  Eurodollar  Loan and vice versa or
                  to renew all or part of a  Revolving  Loan by giving  the Bank
                  written,   telefax  or  telegraphic   notice  (effective  upon
                  receipt) at least one (1) Business  Day before the  initiation
                  of or  conversion  into a  Base  Loan,  or at  least  two  (2)
                  Business Days before the  initiation  of,  conversion  into or
                  renewal of a  Eurodollar  Loan,  specifying  (1) the  initial,
                  renewal or  conversion  date of the  Revolving  Loan;  (2) the
                  amount of the  Revolving  Loan to be  provided,  converted  or
                  renewed; (3) in the case of conversions,  a specification that
                  the  Revolving  Loan is to be converted  from a Base Loan to a
                  Eurodollar  Loan or vice versa, as the case may be; and (4) in
                  the case of initiations  of,  renewals of or a conversion into
                  Eurodollar   Loans,   the  duration  of  the  Interest  Period
                  applicable  thereto;  provided that (a) the minimum  principal
                  amount of each Revolving Loan outstanding after an initiation,
                  a renewal or conversion  shall be One Hundred Thousand Dollars
                  ($100,000.00)  in the case of Base  Loans,  and  Five  Hundred
                  Thousand Dollars ($500,000.00) or One Hundred Thousand Dollars
                  ($100,000.00)  multiples  thereabove in the case of Eurodollar
                  Loans;  and (b)  Eurodollar  Loans can be renewed or converted
                  only  as of the  last  day of the  Interest  Period  for  such
                  Revolving Loan. In the absence of Borrower specifying the type
                  of loan,

                                                        15

<PAGE>



                  advances  made  pursuant  to any cash  management  arrangement
                  between the Bank and the Borrower will be made as Base Loans.

                           2.2.2.  Canadian LIBOR Loans.  The Borrower may elect
                  from time to time to  initiate a Canadian  LIBOR  Loan,  or to
                  renew all or part of a Canadian  LIBOR Loan by giving the Bank
                  written,   telefax  or  telegraphic   notice  (effective  upon
                  receipt) at least two (2) Business Days before the  initiation
                  of or renewal of a Canadian  LIBOR  Loan,  specifying  (1) the
                  initial or renewal  date of the Canadian  LIBOR Loan;  (2) the
                  amount of the  Canadian  LIBOR Loan to be provided or renewed;
                  and (3) in the case of  initiations of or renewals of Canadian
                  LIBOR Loans,  the duration of the Interest  Period  applicable
                  thereto;  provided  that (a) the minimum  principal  amount of
                  each Canadian LIBOR Loan outstanding  after an initiation or a
                  renewal shall be Five Hundred Thousand  Dollars  ($500,000.00)
                  Canadian  or  One  Hundred  Thousand   Dollars   ($100,000.00)
                  Canadian  multiples  thereabove for Canadian LIBOR Loans;  and
                  (b)  Canadian  LIBOR Loans can be renewed  only as of the last
                  day of the Interest Period for such Canadian LIBOR Loan.

                  Any notice (a "Notice of Selection of Interest  Period") given
         under  this  Section  2.2 shall be  irrevocable  and shall be given not
         later  than  10:00  a.m.  (EST) on the day  which is not less  than the
         number of Business Days specified above for such Notice of Selection of
         Interest  Period,  and  specifying  (i)  the  effective  date  for  the
         applicable  Interest  Period  and (ii)  the  duration,  subject  to the
         limitations  set forth in this  Agreement,  of the applicable  Interest
         Period.  If the  Borrower  shall  fail to give the Bank the  Notice  of
         Selection of Interest  Period as  specified  above for the renewal of a
         Canadian LIBOR or Eurodollar Loan, as the case may be, prior to the end
         of the Interest Period with respect thereto,  in the case of a Canadian
         LIBOR Loan shall be deemed to be  renewed as a 30-day  Interest  Period
         Canadian  LIBOR Loan,  and, in the case of a renewal or conversion of a
         Eurodollar Loan,  shall be deemed to automatically  convert into a Base
         Loan on the last day of the Interest Period for such Loan.

                  2.3. Interest.  The Borrower shall pay interest to the Bank on
         the  outstanding  and unpaid  principal  amount of the Loans made under
         this Agreement at a rate per annum as follows:

                           (1) For a Base Loan at a rate  equal to the Base Rate
                           less one and three-quarters percent (1.75%);


                                                        16

<PAGE>




                           (2)  For  a  Eurodollar  Loan   (applicable  only  to
                           Revolving  Loans) at a rate  equal to the  Eurodollar
                           Interest  Rate plus an amount  expressed  in terms of
                           "basis  points"  or  whole or  fractional  percentage
                           points quoted by an authorized  representative of the
                           Bank,  based upon the Interest Period selected by the
                           Borrower,  the  amount  of the  requested  Eurodollar
                           Loan,  the  market  conditions  and  the  date of the
                           request,  and confirmed in writing to Borrower on the
                           Business  Day  following  Borrower's  request  for  a
                           Eurodollar  Loan or conversion to a Eurodollar  Loan;
                           and

                           3) For a  Canadian  LIBOR  Loan  (applicable  only to
                           Canadian LIBOR Loans) at a rate equal to the Canadian
                           LIBOR Interest Rate plus an amount expressed in terms
                           of "basis  points" or whole or fractional  percentage
                           points quoted by an authorized  representative of the
                           Bank,  based upon the Interest Period selected by the
                           Borrower,  the amount of the requested Canadian LIBOR
                           Loan,  the  market  conditions  and  the  date of the
                           request,  and confirmed in writing to Borrower on the
                           Business  Day  following  Borrower's  request  for  a
                           Canadian LIBOR Loan or conversion to a Canadian LIBOR
                           Loan.

                  Any  change  in the  interest  rate  based  on the  Base  Rate
         resulting  from a change in the Base Rate shall be  effective as of the
         opening of  business  on the day on which such  change in the Base Rate
         becomes effective.

                  Interest on each Base Loan shall be calculated on the basis of
         a year of 360  days  for the  actual  number  of days  elapsed  for any
         payment period.  Interest on each Eurodollar or Canadian LIBOR Loan, as
         the case may be, shall be calculated on the basis of a year of 360 days
         for the actual number of days elapsed for the Interest Period.

                  Interest on the Loans shall be paid in  immediately  available
         funds at the Principal  Office or the Lending Office for the account of
         the applicable Lending Office as follows:

                           (1) For each  Base  Loan,  on the  first  day of each
                  month,  commencing  the first  such day after such Loan and at
                  maturity for such Loan, and


                                                        17

<PAGE>



                           (2) For each Canadian  LIBOR or  Eurodollar  Loan, as
                  the case may be,  on the last day of the  applicable  Interest
                  Period with  respect  thereto  and, in the case of an Interest
                  Period greater than one month,  at one-month  intervals  after
                  the first day of such Interest Period.

                  Any  principal  amount  not  paid  when due (at  maturity,  by
         acceleration or otherwise) shall bear interest thereafter until paid in
         full, payable on demand, at a rate per annum equal to:

                           (a) For each  Base  Loan at a rate  equal to the Base
                  Rate plus one percent (1%); and

                           (b) For each Canadian  LIBOR or  Eurodollar  Loan, as
                  the case may be, at a rate  equal to the  applicable  Canadian
                  LIBOR or  Eurodollar  Interest  rate Loan, as the case may be,
                  plus three  percent  (3%) from the time of an Event of Default
                  until the end of the then current  Interest  Period  therefor,
                  and  thereafter  at a rate  equal  to the Base  Rate  plus one
                  percent (1%).

                  2.4.  The Notes.

                           2.4.1.  The Revolving  Line of Credit.  All Revolving
                  Line of Credit  Loans made by the Bank  under  this  Agreement
                  shall be evidenced  by, and repaid with interest in accordance
                  with, a single promissory $50,000,000 Revolving Line of Credit
                  Note (the "Revolving  Note") of the Borrower in  substantially
                  the form of Exhibit A, duly completed,  dated the date of this
                  Agreement,  and payable to the Bank,  such  Revolving  Note to
                  represent  the   obligation  of  the  Borrower  to  repay  the
                  Revolving Line of Credit Loans. The Bank is hereby  authorized
                  by the  Borrower  to endorse on the  schedule  attached to the
                  Revolving  Note the amount and type of each  Revolving Line of
                  Credit Loan and each renewal and payment of  principal  amount
                  received by the Bank for the account of the applicable Lending
                  Office on account of the Revolving Line of Credit Loans, which
                  endorsement  shall,  in the  absence  of  manifest  error,  be
                  conclusive as to the outstanding balance of the Revolving Line
                  of Credit Loans made by the Bank; provided,  however, that the
                  failure to make such  notation  with respect to any  Revolving
                  Line of Credit  Loan or renewal or payment  shall not limit or
                  otherwise  affect the  obligations  of the Borrower under this
                  Agreement or the Revolving Note.


                                                        18

<PAGE>



                           On  and  after  the  Termination   Date,  the  unpaid
                  principal  amount  of the  Revolving  Note  shall be repaid ON
                  DEMAND.

                           2.4.2.  The Canadian  Revolving  Line of Credit.  All
                  Canadian Revolving Line of Credit Loans made by the Bank under
                  this Agreement shall be evidenced by, and repaid with interest
                  in accordance with, a single  promissory  $5,000,000  Canadian
                  Revolving Line of Credit Note (the "Canadian  Revolving Note")
                  of the Borrower in  substantially  the form of Exhibit B, duly
                  completed,  dated the date of this  Agreement,  and payable to
                  the  Bank,  such  Canadian  Revolving  Note to  represent  the
                  obligation  of the  Borrower to repay the  Canadian  Revolving
                  Line of Credit  Loans.  The Bank is hereby  authorized  by the
                  Borrower to endorse on the  schedule  attached to the Canadian
                  Revolving Note the amount and type of each Canadian  Revolving
                  Line of Credit Loan and each renewal,  conversion, and payment
                  of  principal  amount  received by the Bank for the account of
                  the  applicable  Lending  Office on  account  of the  Canadian
                  Revolving Line of Credit Loans,  which  endorsement  shall, in
                  the  absence  of  manifest  error,  be  conclusive  as to  the
                  outstanding  balance of the Canadian  Revolving Line of Credit
                  Loans made by the Bank; provided, however, that the failure to
                  make such notation with respect to any Canadian Revolving Line
                  of Credit Loan or renewal,  conversion,  or payment  shall not
                  limit or  otherwise  affect the  obligations  of the  Borrower
                  under this Agreement or the Canadian Revolving Note.

                           On  and  after  the  Termination   Date,  the  unpaid
                  principal  amount  of the  Canadian  Revolving  Note  shall be
                  repaid ON DEMAND.

                  2.5. Cross Default. A material default in any of the terms and
         conditions  of (i) any other  obligation  of the  Borrower  to the Bank
         (including,   without  limitation,  any  guaranty  obligations  or  any
         reimbursement   obligations   arising  out  of  the  Letter  of  Credit
         Facility),  shall  constitute  a default  in the  Revolving  Note,  the
         Canadian  Revolving  Note, the Foreign  Exchange  Facility Note and any
         other  obligations  of the  Borrower to the Bank  whether  evidenced by
         notes or otherwise or (ii) the  obligations  of the Borrower  under any
         Indebtedness  to any other  institutional  lender  shall  constitute  a
         default hereunder.  A default in any of the terms and conditions of the
         Revolving,  the Canadian Revolving Note, the Letter of Credit Facility,
         the Back-up  Foreign  Exchange  Note or the Foreign  Exchange  Facility
         shall  constitute a default of this  Agreement  and any default of this
         Agreement shall

                                                        19

<PAGE>



         constitute a default of the  Revolving  Note,  the  Canadian  Revolving
         Note, the Letter of Credit Facility,  the Back-up Foreign Exchange Note
         and the Foreign Exchange Facility.

                  2.6.  Use of  Proceeds.  The  proceeds of the Loans  hereunder
         shall be used by the Borrower  (i) to  refinance  or retire  previously
         incurred debt, and (ii) for working capital and  acquisition  purposes.
         The Borrower  will not,  directly or  indirectly,  use any part of such
         proceeds  for the purpose of  purchasing  or carrying  any margin stock
         within the meaning of  Regulation  U of the Board of  Governors  of the
         Federal  Reserve  System or to  extend  credit  to any  Person  for the
         purpose of  purchasing  or carrying any such margin  stock,  or for any
         purpose which violates,  or is inconsistent with,  Regulation X of such
         Board of Governors.

                  2.7.  Method of Payment.  The Borrower shall make each payment
         or permitted prepayment under this Agreement,  under the Revolving Note
         or the $3,000,000 Back-up Foreign Exchange Facility Note not later than
         11:00 a.m.  (Boston  time) on the date when due in lawful  money of the
         United States to the Bank at its Principal Office or Lending Office for
         the account of the applicable  Lending Office in immediately  available
         funds.

                  The Borrower  shall make each payment or permitted  prepayment
         under this Agreement,  under the Canadian Revolving Note not later than
         11:00 a.m.  (Boston  time) on the date when due in lawful  money of the
         Dominion  of Canada to the Bank at its  Principal  Office or the Nassau
         Branch, for the account of the applicable Lending Office in immediately
         available funds.

                  The Borrower hereby  authorizes the Bank, if and to the extent
         payment is not made when due under this Agreement,  under the Revolving
         Note or under the Canadian  Revolving  Note to charge from time to time
         against  any account of the  Borrower  with the Bank any amount so due.
         Whenever  any  payment  to be made  under  this  Agreement,  under  the
         Revolving Note or under the Canadian  Revolving Note shall be stated to
         be due on a day other than a Business  Day,  such payment shall be made
         on the next  succeeding  Business Day, and such extension of time shall
         in such case be included in the  computation of the payment of interest
         except,  in the case of a  Eurodollar  or Canadian  LIBOR Loan,  if the
         result of such  extension  would be to extend such payment into another
         calendar month, such payment shall be made on the immediately preceding
         Business Day.


                                                        20

<PAGE>



                  2.8. Prepayment.  The Borrower may, with respect to Base Loans
         only,  upon at least one (1) Business Day's notice to the Bank,  prepay
         the  Revolving  Note in whole or in part with  accrued  interest to the
         date of such prepayment on the amount  prepaid.  Eurodollar or Canadian
         LIBOR Loans may not be prepaid. If for any reason the Bank is obligated
         to accept a prepayment of any  Eurodollar or Canadian LIBOR Loan on any
         day other than the last day of the Interest  Period  applicable to such
         Loan, the Borrower shall pay to the Bank an amount computed pursuant to
         the following formula:

                                            L = (R-T) x P x D
                                                        360

         where:

                  L = the  amount  payable  to  the  Bank;  R =  the  applicable
                  interest rate on such Loan; T = the  effective  rate per annum
                  at which any readily
                           marketable  bond or other  obligation  of the  United
                           States,  selected  at  the  Bank's  sole  discretion,
                           maturing  on  or  near  the  last  day  of  the  then
                           applicable  Interest  Period  of  such  Loan  and  in
                           approximately  the same  amount as such Loan,  can be
                           purchased  by the Bank on the day of such  payment of
                           principal;
                  P =      the amount of principal prepaid;
                  D =      the number of days remaining in the applicable
                           Interest Period for such Loan, as of the date of such
                           prepayment.

         The Borrower shall pay such amount ("L") upon  presentation by the Bank
         of a statement  setting forth in  reasonable  detail the amount and the
         Bank's  calculation  thereof pursuant hereto,  which statement shall be
         deemed correct absent manifest error. No amount shall be payable by the
         Borrower  pursuant to this  Section 2.8 if T is equal to or higher than
         R.

                  2.9. Late Payment. Any payment on the Loans received more than
         fifteen (15) days after its due date shall be subject to an  additional
         charge of five percent (5.00%) of the periodic installment due.

                  2.10.  Illegality.  Notwithstanding any other provision in
         this Agreement, if the Bank determines that any applicable law,
         rule, or regulation, or any change therein, or any change in the
         interpretation or administration thereof by any governmental

                                                        21

<PAGE>



         authority,   central  bank,  or  comparable  agency  charged  with  the
         interpretation or administration thereof, or compliance by the Bank (or
         its  Lending  Office)  with any  request or  directive  (whether or not
         having  the  force  of law) of any such  authority,  central  bank,  or
         comparable agency shall make it unlawful or impossible for the Bank (or
         its Lending  Office) to (1) maintain  this credit  facility,  then upon
         notice  to  the  Borrower  by  the  Bank  this  credit  facility  shall
         terminate;  or (2) maintain or fund Eurodollar or Canadian LIBOR Loans,
         as the case may be,  then upon  notice to the  Borrower by the Bank the
         outstanding principal amount of the Eurodollar or Canadian LIBOR Loans,
         together with interest accrued  thereon,  and any other amounts payable
         to the Bank under this Agreement shall be repaid or converted to a Base
         Loan  (a)  immediately  upon  demand  of the  Bank  if such  change  or
         compliance  with such  request,  in the judgment of the Bank,  requires
         immediate  repayment;  or (b) at the  expiration  of the last  Interest
         Period  to  expire  before  the  effective  date of any such  change or
         request.

                  2.11.  Disaster.  Notwithstanding anything to the contrary
         herein, if the Bank determines (which determination shall be
         conclusive) that:

                           (1)  Quotations  of interest  rates for the  relevant
                  deposits  referred  to in  the  definition  of  Eurodollar  or
                  Canadian  LIBOR  Interest  Rate are not being  provided in the
                  relevant  amounts or for the relative  maturities for purposes
                  of  determining  the  rate  of  interest  on a  Eurodollar  or
                  Canadian LIBOR Loan as provided in this Agreement; or

                           (2) The relevant rates of interest referred to in the
                  definition of Eurodollar or Canadian LIBOR Interest Rate, upon
                  the basis of which the rate of  interest  for any such type of
                  loan is to be determined do not  accurately  cover the cost to
                  the Bank of making or maintaining such type of Loans;

         then the Bank shall  forthwith  give  notice  thereof to the  Borrower,
         whereupon (a) the obligation of the Bank to make Eurodollar or Canadian
         LIBOR Loans shall be  suspended  until the Bank  notifies  the Borrower
         that the circumstances  giving rise to such suspension no longer exist;
         and (b) the Borrower  shall repay in full, or convert to a Base Loan in
         full,  the then  outstanding  principal  amount of each  Eurodollar  or
         Canadian LIBOR Loan together with accrued interest thereon, on the last
         day of the then current Interest Period applicable to such Loan.


                                                        22

<PAGE>



                  2.12. Additional Costs; Regulatory Changes;  Capital Adequacy.
         The  Borrower  shall pay to the Bank from time to time such  amounts as
         the Bank may  reasonably  determine to be necessary to  compensate  the
         Bank for any costs  incurred by the Bank which the Bank  determines are
         attributable  to its making or maintaining  any Loans  hereunder or its
         obligation  to make any such Loans  hereunder,  or any reduction in any
         amount receivable by the Bank under this Agreement,  the Revolving Note
         or the  Canadian  Revolving  Note in  respect of any such Loans or such
         obligation   (such   increases  in  costs  and  reductions  in  amounts
         receivable being herein called "Additional Costs"),  resulting from any
         change  after  the  date of this  Agreement  in  U.S.  federal,  state,
         municipal,  or foreign laws or regulations (including Regulation D), or
         the  adoption  or  making  after  such  date  of  any  interpretations,
         directives,  or requirements applying to a class of banks including the
         Bank of or under any U.S.  federal,  state,  municipal,  or any foreign
         laws or  regulations  (whether  or not  having the force of law) by any
         court  or   governmental  or  monetary   authority   charged  with  the
         interpretation or administration thereof ("Regulatory  Change");  which
         (1) changes  the basis of  taxation of any amounts  payable to the Bank
         under this Agreement, the Revolving Note or the Canadian Revolving Note
         in  respect  of any of such  Loans  (other  than  taxes  imposed on the
         overall net income of the Bank or of its Lending Office for any of such
         Loans by the  jurisdiction  where the Principal  Office or such Lending
         Office is located);  or (2) imposes or modifies  any  reserve,  special
         deposit,  compulsory  loan,  or similar  requirements  relating  to any
         extensions  of credit or other assets of, or any deposits with or other
         liabilities  of, the Bank  (including any of such Loans or any deposits
         referred to in the  definition of Eurodollar or Canadian LIBOR Interest
         Rate); or (3) requires an increase in the amount of capital required or
         expected to be  maintained  by the Bank or any entity  controlling  the
         Bank, or (4) imposes any other condition affecting this Agreement,  the
         Revolving  Note  or  the  Canadian  Revolving  Note  (or  any  of  such
         extensions of credit or liabilities). The Bank will notify the Borrower
         of any event  occurring  after the date of this  Agreement  which  will
         entitle  the Bank to  compensation  pursuant  to this  Section  2.12 as
         promptly  as  practicable   after  it  obtains  knowledge  thereof  and
         determines to request such compensation. The provisions of this Section
         2.12 however shall not be applied (a) retrospectively or (b) during any
         Eurodollar  or  Canadian  LIBOR  Interest   Period  in  effect  when  a
         Regulatory Change resulting in Additional Costs occurs.

                  Determinations by the Bank for purposes of this Section 2.12
         of the effect of any Regulatory Change on its costs of making or

                                                        23

<PAGE>



         maintaining  Loans after the date of  notification  of such  Regulatory
         Change by the Bank to the  Borrower or on amounts  receivable  by it in
         respect of Loans, and of the additional  amounts required to compensate
         the Bank in  respect  of any  Additional  Costs,  shall be  conclusive,
         provided that such determinations are made on a reasonable basis.

                  2.13. Funding Loss Indemnification.  The Borrower shall pay to
         the Bank, upon the request of the Bank, such amount or amounts as shall
         be sufficient (in the reasonable  opinion of the Bank) to compensate it
         for any loss, cost, or expense incurred as a result of:

                  (1)      Any payment of a Eurodollar or Canadian LIBOR Loan on
                           a date other than the last day of the Interest Period
                           for  such  Loan   including,   but  not  limited  to,
                           acceleration  of the  Loans by the Bank  pursuant  to
                           Section 9; or

                  (2)      Any failure by the Borrower to borrow or convert,  as
                           the case may be, a Eurodollar or Canadian  LIBOR Loan
                           on the date for borrowing or conversion,  as the case
                           may be,  specified in the relevant  notice  provision
                           under Sections 2.2.

                  2.14.  Letter  of  Credit  Facility.  So  long  as no  Default
         hereunder has occurred,  the Bank shall make  available to the Borrower
         and its  Subsidiaries  a credit  facility  within the  Commitment  (the
         "Letter  of Credit  Facility")  whereby  the Bank  will  issue up to an
         aggregate  of Ten  Million  Dollars  ($10,000,000.00)  against  amounts
         available  under the Revolving Line of Credit  Facility,  of letters of
         credit  (a  "Letter  of  Credit")  for  the  Borrower's  or  one of its
         Subsidiaries' account with an expiration date on any specific Letter of
         Credit no later than the Termination  Date,  unless the Bank chooses to
         issue a Letter  of Credit to expire  after the  Termination  Date.  The
         individual  Letters of Credit  shall be issued in  accordance  with the
         Bank's  customary   practices  at  the  time  of  issuance,   utilizing
         documentation prevailing at such times and, if drawn upon, amounts paid
         thereon will be repaid upon demand by the Borrower (and, if applicable,
         its  Subsidiary  for whose  account the Letter of Credit was issued) in
         full reimbursement to the Bank of all such amounts drawn upon under any
         or all  Letters  of  Credit,  pursuant  hereto,  or to such  additional
         reimbursement  obligations  as may be  contained  in any  documentation
         executed  by the  Borrower  in  conjunction  with the  issuance of such
         Letter(s) of Credit.


                                                        24

<PAGE>



                  To the extent repayment of such amounts as are reimbursable to
         the Bank for such drawings against Letters of Credit is not immediately
         made, the amount of such drawings shall be charged as Revolving Line of
         Credit  Loans.  The  amount of  outstanding  commitments  under  issued
         Letters of Credit plus the aggregate amounts drawn under any Letters of
         Credit and not  reimbursed  by the  Borrower  to the Bank shall  reduce
         availability under the Revolving Line of Credit Facility.

                    This Letter of Credit  Facility  will be made  available  to
         those  Subsidiaries of Borrower  listed in the attached  Exhibit "C" as
         well as to Borrower and Borrower's reimbursement  obligations described
         herein  shall  apply  regardless  of  whether  Borrower  or  one of its
         Subsidiaries is the account party of a particular Letter of Credit.

                  2.15.  Letter of Credit  Fees.  Whenever a Letter of Credit is
         issued,  extended  or  renewed  for  the  Borrower's  (or  one  of  its
         Subsidiaries')  account,  a per  annum  fee of  three  quarters  of one
         percent  (.75%)  of the face  amount of the  Letter of Credit  shall be
         charged  (the  "Letter  of  Credit  Fee")  together  with an  issuance,
         extension  or renewal fee of Two  Hundred  Dollars  ($200.00)  covering
         document  preparation costs. An amendment fee of Forty Dollars ($40.00)
         per  amendment and a drawing fee equal to the greater of (i) one eighth
         of one percent (.125%) of the amount drawn or (ii) Seventy Five Dollars
         ($75.00),   payable  if  a  draw  occurs,  constitute  additional  fees
         associated  with the  Letters  of  Credit.  If a Letter  of  Credit  is
         returned  to the Bank  prior to  twelve  (12)  months  from its date of
         issue, the Bank will refund to the Borrower the pro rata portion of the
         Letter of Credit Fee for that period of time during which the Letter of
         Credit is no longer in effect.

                  2.16.  Uniform  Customs and Practice.  The Uniform Customs and
         Practice for Documentary Credits (1993 Revision), International Chamber
         of Commerce  Publication No. 500, and any subsequent  revisions thereof
         approved by a Congress  of the  International  Chamber of Commerce  and
         adhered to by the Bank (the "Uniform  Customs and Practice"),  shall be
         binding on the  Borrower  and the Bank  except to the extent  otherwise
         provided  herein,  in any  Letter  of  Credit  or in any  other  credit
         document.  Anything in the Uniform Customs and Practice to the contrary
         notwithstanding:

                           (a) Neither the Borrower nor any  beneficiary  of any
                  Letter of Credit shall be deemed an agent of the Bank.


                                                        25

<PAGE>



                           (b) With  respect to each  Letter of Credit,  neither
                  the Bank nor its  correspondents  shall be responsible  for or
                  shall have any duty to ascertain:

                                    (i)  the genuineness of any signature;

                                    (ii)  the validity, form, sufficiency,
                           accuracy, genuineness or legal effect of any
                           endorsements;

                                    (iii)  delay in giving,  or failure to give,
                           notice of arrival,  notice of refusal of documents or
                           of discrepancies in respect of which the Bank refuses
                           the documents or any other notice, demand or protest;

                                    (iv)  the  performance  by  any  beneficiary
                           under any  Letter  of  Credit  of such  beneficiary's
                           obligations to the Borrower;

                                    (v) inaccuracy in any notice received by the
                           Bank;

                                    (vi)  the   validity,   form,   sufficiency,
                           accuracy,   genuineness   or  legal   effect  of  any
                           instrument,  draft,  certificate  or  other  document
                           required  by such  Letter of  Credit to be  presented
                           before  payment of a draft,  or the office held by or
                           the authority of any Person signing any of same; or

                                    (vii) failure of any  instrument to bear any
                           reference  or  adequate  reference  to such Letter of
                           Credit,  or  failure of any Person to note the amount
                           of any  instrument  on the  reverse of such Letter of
                           Credit or to  surrender  such  Letter of Credit or to
                           forward  documents  in the  manner  required  by such
                           Letter of Credit;

                           (c) the  occurrence of any of the events  referred to
                  in the  Uniform  Customs  and  Practice  or in  the  preceding
                  clauses of this  Section  2.16 shall not affect or prevent the
                  vesting of any of the Bank's rights or powers hereunder or the
                  Borrower's  obligation to make  reimbursement  of amounts paid
                  under any Letter of Credit or any draft accepted thereunder.

                           (d) The  Borrower  will  promptly  examine  (i)  each
                  Letter of Credit (and any  amendments  thereof)  sent to it by
                  the Bank and (ii) all instruments and documents delivered to

                                                        26

<PAGE>



                  it from time to time by the Bank. The Borrower will notify the
                  Bank of any claim of noncompliance by notice actually received
                  within  three  Business  Days  after  receipt  of  any  of the
                  foregoing documents, the Borrower being conclusively deemed to
                  have  waived  any  such  claims   against  the  Bank  and  its
                  correspondents  unless  such  notice is given.  The Bank shall
                  have no obligation or  responsibility  to send any such Letter
                  of Credit or any such instrument or document to the Borrower.

                           (e)  In  the  event  of  any  conflict   between  the
                  provisions  of this  Agreement  and the  Uniform  Customs  and
                  Practice, the provisions of this Agreement shall govern.

                  2.17.  Subrogation.  Upon any  payment  by the Bank  under any
         Letter  of  Credit  and  until  the  reimbursement  of the  Bank by the
         Borrower (and appropriate Subsidiary) with respect to such payment, the
         Bank shall be entitled to be subrogated  to, and to acquire and retain,
         the  rights  which the  Person to whom  such  payment  is made may have
         against the  Borrower,  all for the benefit of the Bank.  The  Borrower
         will use all commercially reasonable efforts to take such action as the
         Bank may reasonably request, including requiring the beneficiary of any
         Letter of Credit to execute such  documents as the Bank may  reasonably
         request,  to assure and confirm to the Bank such  subrogation  and such
         rights,  including the rights,  if any, of the beneficiary to whom such
         payment is made in accounts receivable,  inventory and other properties
         and assets of any obligor.

                  2.18.  $3,000,000.00 Foreign Exchange Line. In addition to the
         Revolving Line of Credit and the Letter of Credit Facility  established
         hereby,  the Bank  hereby  establishes  a line of credit in  Borrower's
         favor in the amount of $3,000,000.00 (the  "$3,000,000.00 FX Facility")
         or as otherwise  may be  determined by the Bank from time to time which
         line of credit may be used for the purchases of such foreign currencies
         as may be  hereafter  agreed to by the Bank  pursuant to  contracts  or
         other  agreements to purchase such currency from the Bank (as principal
         or agent) (the "Foreign  Exchange  Contracts") with settlement dates up
         to the Termination Date; it being understood, however, that the Foreign
         Exchange  Line is intended  for  contracts  necessary  for  payments to
         suppliers  or  payments  from  customers  rather  than for  speculative
         purposes.  In the event that the Bank is required  to advance  funds on
         account  of its  obligation  (as  Borrower's  principal  or  agent)  to
         purchase  foreign  currency,  the Bank may  charge  Borrower's  account
         therefor and such charges shall be deemed to be advances made under the
         Revolving Line of Credit.

                                                        27

<PAGE>




                  To the extent  there is  insufficient  availability  under the
         Commitment,  the reimbursement obligations resulting from such drawings
         shall be  evidenced  by and  subject  to the terms of a single,  master
         back-up  demand  note  (the  "$3,000,000.00  Back-Up  Foreign  Exchange
         Facility Note") in the form attached hereto as Exhibit "D".

         3.  CONDITIONS  PRECEDENT.  The  obligation  of the  Bank to (i) make a
Revolving  Line of Credit Loan,  (ii) make a Canadian  Revolving  Line of Credit
Loan,(iii)  issue a Letter of Credit  or (iv) make a Foreign  Exchange  Facility
Loan or  transaction  shall be subject to the condition  precedent that the Bank
shall  have  received  on or  before  the  day of such  transaction  each of the
following, in form and substance satisfactory to the Bank and its counsel:

                  3.1.  Execution of Notes.  The Notes duly executed by the
         Borrower.

                  3.2.  Evidence  of  Borrower's  Authority  and  Incumbency  of
         Representatives. Certified (as of the date of this Agreement) copies of
         all corporate  action taken by the Borrower,  including  resolutions of
         its  Board of  Directors,  authorizing  the  execution,  delivery,  and
         performance of the Loan Documents to which it is a party and each other
         document to be delivered  pursuant to this  Agreement  together  with a
         certificate  (dated as of the date of this  Agreement)  of the Clerk or
         Secretary of the Borrower  certifying the names and true  signatures of
         the officers of the Borrower  authorized to sign the Loan  Documents to
         which it is a party  and the other  documents  to be  delivered  by the
         Borrower under this Agreement.

                  3.3. Opinion. A favorable opinion of counsel for the Borrower,
         dated as of the date of this  Agreement  and, if requested by the Bank,
         as of the date of the Loan,  in such form as is  acceptable to the Bank
         and as to such other matters as the Bank may reasonable request.

                  3.4.  Officer's  Certificate,  etc. The  following  statements
         shall be true and the Bank shall have received a certificate  signed by
         a duly  authorized  officer  of the  Borrower  dated  the  date of this
         Agreement  and, if  requested  by the Bank,  as of the date of the Loan
         stating that:

                               a)  The representations and warranties contained
                           in Section 5 of this Agreement are correct on and as

                                                        28

<PAGE>



                           of the date of the Loan as though made on and as of
                           such date; and

                                    b)  No  Default  or  Event  of  Default  has
                           occurred and is continuing,  or would result from the
                           making of the Loan.

                  3.5.  Other  Related  Documents.  The Bank shall have received
         such other approvals,  opinions,  certificates or documents as the Bank
         may reasonably request.

         4.       PROMISE TO PAY.  Borrower promises to pay:

                  4.1. Obligations. All Obligations of the Borrower to the Bank,
         including,  but not limited to, the Obligations  evidenced by the Notes
         of even  date  with  interest  at the rate set  forth or in the  manner
         determined in accordance with this Agreement and the Notes.

                  4.2. Taxes.  Any and all taxes,  charges and expenses of every
         kind or description  which are the binding and legal obligations of the
         Borrower,  paid or incurred by the Bank (after  notice to the Borrower)
         with  respect  to the  loans or  financial  accommodations  made or the
         collection or realization upon the same, together with interest thereon
         at the highest rate specified in Section 2.3 above.

         5.       REPRESENTATIONS AND WARRANTIES OF THE BORROWER.  To induce
the Bank to enter into this Agreement, the Borrower represents and
warrants as follows:

                  5.1. Corporate Existence; Authority; Standing. The Borrower is
         a corporation  duly  organized,  validly  existing and in good standing
         under the laws of The Commonwealth of  Pennsylvania.  Borrower has full
         corporate  power to own its  properties and conduct its business as now
         conducted, and to enter into and perform this Agreement. Borrower is in
         good  standing  in each  jurisdiction  in which the  failure to qualify
         would have a material,  adverse  effect upon its  financial  condition,
         business or properties.  The execution and delivery of this  Agreement,
         the Notes  and all  related  documents  has been  duly  authorized  and
         evidence valid and binding obligations of the Borrower.

                  5.2.  Legally  Enforceable  Agreement.  This Agreement is, and
         each of the other Loan Documents  when  delivered  under this Agreement
         will be,  legal,  valid,  and binding  obligations  of the  Borrower in
         accordance with their respective terms, except to the

                                                        29

<PAGE>



         extent that such  enforcement may be limited by applicable  bankruptcy,
         insolvency,   and  other  similar  laws  affecting   creditors'  rights
         generally.

                  5.3. Financial  Statements.  The balance sheet of the Borrower
         and any of its  Subsidiaries  and the related  statements of income and
         retained  earnings  and  cash  flow  of  the  Borrower  and  any of its
         Subsidiaries  for the  fiscal  year then  ended,  and the  accompanying
         footnotes,  together  with  any  interim  financial  statements  of the
         Borrower  and  any of its  Subsidiaries,  copies  of  which  have  been
         furnished to the Bank,  are complete and correct and fairly present the
         financial  condition of the Borrower and any of its  Subsidiaries as at
         such dates and the results of the operations of the Borrower and any of
         its  Subsidiaries  for the periods covered by such  statements,  all in
         accordance  with  GAAP   consistently   applied  (subject  to  year-end
         adjustments in the case of the interim financial statements), and there
         has been no material  adverse  change in the  condition  (financial  or
         otherwise),  business,  or operations of the Borrower or any Subsidiary
         since the presentation to the Bank of the most recently dated financial
         statements,  nor are  there  any  liabilities  of the  Borrower  or any
         Subsidiary,  fixed  or  contingent,  which  are  material  but  are not
         reflected in such financial  statements or in the notes thereto,  other
         than  liabilities  arising  in the  ordinary  course  of  business.  No
         information, exhibit or report furnished by the Borrower to the Bank in
         connection  with  the  negotiation  of  this  Agreement  contained  any
         material  misstatement  of fact or omitted to state a material  fact or
         any  fact  necessary  to  make  the  statement  contained  therein  not
         materially misleading.

                  5.4. Labor Disputes and Acts of God.  Neither the business nor
         the  properties of the Borrower or any  Subsidiary  are affected by any
         fire,  explosion,  accident,  strike,  lockout or other labor  dispute,
         drought, storm, hail, earthquake,  embargo, act of God or of the public
         enemy,  or  other  casualty  (whether  or not  covered  by  insurance),
         materially  and adversely  affecting such business or properties or the
         operation or financial condition of the Borrower.

                  5.5. Other Agreements. Neither the Borrower nor any Subsidiary
         is a party to any indenture,  loan or credit agreement, or to any lease
         or  other  agreement  or  instrument,  or  subject  to any  charter  or
         corporate restriction which could have a material adverse effect on the
         business, properties,  assets, operations, or conditions,  financial or
         otherwise,  of the  Borrower or any  Subsidiary,  or the ability of the
         Borrower to carry out its

                                                        30

<PAGE>



         obligations  under the Loan  Documents to which it is a party.  Neither
         the Borrower nor any  Subsidiary is in default in any material  respect
         in  the  performance,   observance,   or  fulfillment  of  any  of  the
         obligations,  covenants,  or  conditions  contained in any agreement or
         instrument material to its business to which it is a party.

                  5.6.  Litigation.  There is no pending or threatened action or
         proceeding against or affecting the Borrower or any of its Subsidiaries
         before any court, governmental agency, or arbitrator, which may, in any
         one case or in the aggregate, materially adversely affect the financial
         condition,  operations,  properties, or business of the Borrower or the
         ability of the  Borrower  to  perform  its  obligations  under the Loan
         Documents to which it is a party.

                  5.7. No Defaults.  The  Borrower and each of its  Subsidiaries
         have  satisfied  all  judgments,  and  neither  the  Borrower  nor  any
         Subsidiary  is  in  default  with  respect  to  any   judgment,   writ,
         injunction,  decree,  rule or regulation of any court,  arbitrator,  or
         Federal, state, municipal, or other governmental authority, commission,
         board, bureau, agency, or instrumentality, domestic or foreign.

                  5.8. Subsidiaries.  Set forth in Exhibit "C" is a complete and
         accurate  list  of  the  Subsidiaries  of  the  Borrower,  showing  the
         jurisdiction of incorporation  of each. All of the outstanding  capital
         stock of any  Subsidiary  which is owned by Borrower  has been  validly
         issued, is fully paid and  nonassessable,  and is owned by the Borrower
         free and clear of all Liens.

                  5.9. ERISA.  The Borrower and each of its  Subsidiaries are to
         the best of its knowledge in  compliance in all material  respects with
         all applicable  provisions of ERISA.  Neither a Reportable  Event nor a
         Prohibited  Transaction  has occurred and is continuing with respect to
         any Plan;  no notice of intent to terminate a Plan has been filed,  nor
         has any Plan been terminated,  the effect of either of which would have
         a material  adverse effect upon the Borrower;  no  circumstances  exist
         which constitute grounds entitling the PBGC to institute proceedings to
         terminate, or appoint a trustee to administer, a Plan, nor has the PBGC
         instituted any such proceedings;  neither the Borrower nor any Commonly
         Controlled  Entity  has  completely  or  partially   withdrawn  from  a
         Multiemployer  Plan such that Borrower has any  outstanding  withdrawal
         liability;  the Borrower and each Commonly  Controlled  Entity have met
         their minimum funding requirements

                                                        31

<PAGE>



         under ERISA with respect to all of their Plans and the present value of
         all vested  benefits  under  each Plan does not exceed the fair  market
         value of all Plan assets  allocable to such benefits,  as determined on
         the most recent  valuation date of the Plan and in accordance  with the
         provisions  of  ERISA;  and  neither  the  Borrower  nor  any  Commonly
         Controlled  Entity has incurred any  outstanding  liability to the PBGC
         under ERISA.

                  5.10.  Operation  of  Business.  The  Borrower and each of its
         Subsidiaries  possess  all  licenses,  permits,  franchises,   patents,
         copyrights,  trademarks, and trade names, or rights thereto, to conduct
         their  respective  businesses  substantially  as now  conducted  and as
         presently  proposed to be  conducted,  and the  Borrower and any of its
         Subsidiaries  are not in  violation  of any valid rights of others with
         respect to any of the  foregoing  that  would  have a material  adverse
         effect on Borrower.

                  5.11.  Taxes. The Borrower and each of its  Subsidiaries  have
         filed all tax returns (Federal,  state, and local) required to be filed
         and have paid all taxes,  assessments,  and  governmental  charges  and
         levies thereon to be due,  including interest and penalties unless such
         taxes are being  contested  in good faith by  appropriate  action  with
         adequate reserves established on Borrower's financial statements.

                  5.12. Debt. Set forth in the financial  statements referred to
         in this  Agreement,  to the extent  required by GAAP, is a complete and
         correct list of all credit agreements, indentures, purchase agreements,
         guaranties,  Capital Leases,  and other  investments,  agreements,  and
         arrangements   presently  in  effect   providing  for  or  relating  to
         extensions of credit  (including  agreements and  arrangements  for the
         issuance of letters of credit or for  acceptance  financing) in respect
         of which the Borrower or any  Subsidiary  is in any manner  directly or
         contingently  obligated;  and the maximum  principal or face amounts of
         the  credit  in  question,  which  are  outstanding  and  which  can be
         outstanding, are correctly stated, and all Liens of any nature given or
         agreed to be given as security  therefor  are  correctly  described  or
         indicated in such financial statements.

                  5.13.  Environment.  To the best of Borrower's knowledge,  the
         Borrower and each of its  Subsidiaries  have duly  complied  with,  and
         their businesses,  operations, assets, equipment, property, leaseholds,
         or other  facilities  are in  compliance  with,  the  provisions of all
         Federal, state, and local environmental, health, and safety laws, codes
         and ordinances,  and all rules and regulations  promulgated thereunder.
         The Borrower and any

                                                        32

<PAGE>



         Subsidiary  have been issued (or have  applications  pending)  and will
         maintain all required  Federal,  state,  and local  permits,  licenses,
         certificates,   and  approvals  relating  to  (1)  air  emissions;  (2)
         discharges to surface water or groundwater;  (3) noise  emissions;  (4)
         solid or  liquid  waste  disposal;  (5) the use,  generation,  storage,
         transportation,  or disposal of toxic or hazardous substances or wastes
         (intended  hereby and  hereafter to include any and all such  materials
         listed in any Federal, state, or local law, code or ordinance,  and all
         rules  and   regulations   promulgated   thereunder   as  hazardous  or
         potentially hazardous);  or (6) other environmental,  health, or safety
         matters.  Neither the Borrower nor any Subsidiary  has received  notice
         of,  nor  knows of, or  suspects,  facts  which  might  constitute  any
         material  violations  of any Federal,  state,  or local  environmental,
         health,  or  safety  laws,  codes  or  ordinances,  and  any  rules  or
         regulations  promulgated  thereunder  with  respect to its  businesses,
         operations,   assets,   equipment,   property,   leaseholds,  or  other
         facilities.  Except in  accordance  with a valid  governmental  permit,
         license,  certificate,  or approval, there has been no emission, spill,
         release,  or  discharge  into or upon (1) the air;  (2)  soils,  or any
         improvements located thereon; (3) surface water or groundwater;  or (4)
         the sewer, septic system or waste treatment, storage or disposal system
         servicing the premises,  of any toxic or hazardous substances or wastes
         at or from the premises;  and  accordingly the premises of the Borrower
         and any of its  Subsidiaries  are free of all such  toxic or  hazardous
         substances or wastes.  There has been no complaint,  order,  directive,
         claim,  citation, or notice by any governmental authority or any person
         or entity with respect to (1) air emissions;  (2) spills  releases,  or
         discharges to soils or  improvements  located  thereon,  surface water,
         groundwater or the sewer, septic system or waste treatment,  storage or
         disposal systems servicing the premises; (3) noise emissions; (4) solid
         or  liquid  waste   disposal;   (5)  the  use,   generation,   storage,
         transportation,  or disposal of toxic or hazardous substances or waste;
         or (6) other  environmental,  health,  or safety matters  affecting the
         Borrower or its  business,  operations,  assets,  equipment,  property,
         leaseholds,  or other  facilities.  Neither the Borrower nor any of its
         Subsidiaries have any indebtedness,  obligation, or liability, absolute
         or  contingent,  matured or not  matured,  with respect to the storage,
         treatment,  cleanup, or disposal of any solid wastes, hazardous wastes,
         or other toxic or hazardous  substances  (including  without limitation
         any such  indebtedness,  obligation,  or liability  with respect to any
         current regulation,  law, or statute regarding such storage, treatment,
         cleanup, or disposal).


                                                        33

<PAGE>



         6.       AFFIRMATIVE COVENANTS.  So long as any Loan shall remain
unpaid or any credit accommodation or commitment remains in effect
hereunder, the Borrower will:

                  6.1.  Maintenance of Existence.  Except as otherwise permitted
         herein,  preserve and maintain,  and cause each  Subsidiary to preserve
         and  maintain,  its  corporate  existence  and  good  standing  in  the
         jurisdiction of its  incorporation,  and qualify and remain  qualified,
         and cause any Subsidiary to qualify and remain qualified,  as a foreign
         corporation  in  each  jurisdiction  in  which  such  qualification  is
         required.

                  6.2.  Maintenance of Records.  Keep, and cause each Subsidiary
         to keep,  adequate  records  and books of  account,  in which  complete
         entries  will be made in  accordance  with GAAP  consistently  applied,
         reflecting  all financial  transactions  of the Borrower and any of its
         Subsidiaries.

                  6.3. Maintenance of Properties.  Maintain,  preserve and keep,
         and will cause each  Subsidiary  to maintain,  preserve  and keep,  its
         properties  which  are used or useful in the  conduct  of its  business
         (whether  owned in fee or a  leasehold  interest)  in good  repair  and
         working  order and from time to time will make all  necessary  repairs,
         replacements,   renewals  and  additions  so  that  at  all  times  the
         efficiency thereof shall be maintained.

                  6.4.  Conduct  of  Business.  Except  as  otherwise  permitted
         herein,  continue,  and cause each Subsidiary to continue, to engage in
         an efficient  and  economical  manner in a business of the same general
         type as conducted by it on the date of this Agreement.

                  6.5.  Maintenance  of Insurance.  Maintain and will cause each
         Subsidiary to maintain,  insurance  coverage by  financially  sound and
         reputable  insurers in such forms and amounts and against such risks as
         are customary for corporations of established reputation engaged in the
         same or a similar business and owning and operating similar properties.

                  6.6. Compliance With Laws. Promptly pay and discharge and will
         cause each Subsidiary promptly to pay and discharge,  all lawful taxes,
         assessments  and  governmental  charges  or  levies  imposed  upon  the
         Borrower or such Subsidiary, respectively, or upon or in respect of all
         or any  part  of the  property  or  business  of the  Borrower  or such
         Subsidiary,  all trade  accounts  payable in accordance  with usual and
         customary  business terms, and all claims for work, labor or materials,
         which if unpaid might become

                                                        34

<PAGE>



         a lien or charge upon any property of the Borrower or such  Subsidiary;
         provided the Borrower or such  Subsidiary  shall not be required to pay
         any such tax, assessment, charge, levy, account payable or claim if (i)
         the validity,  applicability  or amount  thereof is being  contested in
         good faith by appropriate actions or proceedings which will prevent the
         forfeiture  or sale of any property of the Borrower or such  Subsidiary
         or any  material  interference  with the use thereof by the Borrower or
         such  Subsidiary,  and (ii) the Borrower or such  Subsidiary  shall set
         aside on its books,  reserves  deemed by it to be adequate with respect
         thereto.  The  Borrower  will  promptly  comply  and  will  cause  each
         Subsidiary to comply with all laws,  ordinances or  governmental  rules
         and regulations to which it is subject,  including without  limitation,
         the  Occupational  Safety and Heath Act of 1970,  ERISA,  the Americans
         with Disabilities Act and all laws, ordinances,  governmental rules and
         regulations  relating to  environmental  protection  in all  applicable
         jurisdictions,  the violation of which would  materially  and adversely
         affect the properties, business, prospects, profits or condition of the
         Borrower  and its  Subsidiaries  or would  result in any lien or charge
         upon any property of the Borrower or any Subsidiary.

                  6.7. Right of Inspection. At any reasonable time and from time
         to time,  permit  the Bank or any agent or  representative  thereof  to
         examine and make copies of and abstracts  from the records and books of
         account  of,  and  visit  the  properties  of,  the  Borrower  and  any
         Subsidiary,  and to discuss the affairs,  finances, and accounts of the
         Borrower and any Subsidiary with any of their  respective  officers and
         directors and the Borrower's independent accountants.

                  6.8. Environment.  Be and remain, and cause each Subsidiary to
         be and remain, in compliance with the provisions of all federal, state,
         and local environmental, health, and safety laws, codes and ordinances,
         and all  rules  and  regulations  issued  thereunder;  notify  the Bank
         immediately  of any notice of a hazardous  discharge  or  environmental
         complaint  received  from any  governmental  agency or any other party;
         notify  the  Bank  immediately  of  any  hazardous  discharge  from  or
         affecting  its  premises;  immediately  contain and remove the same, in
         compliance with all applicable  laws;  promptly pay any fine or penalty
         assessed in connection therewith,  except such assessments as are being
         contested in good faith,  against  which  adequate  reserves  have been
         established;  permit the Bank to inspect the premises, to conduct tests
         thereon,  and  to  inspect  all  books,  correspondence,   and  records
         pertaining  thereto;  and at the Bank's request,  and at the Borrower's
         expense, provide a report of a

                                                        35

<PAGE>



         qualified  environmental  engineer mutually  acceptable to the Bank and
         the Borrower, satisfactory in scope, form, and content to the Bank, and
         such other and further assurances  reasonably  satisfactory to the Bank
         that the condition has been corrected.

                  6.9. Place of Business. Promptly notify the Bank in writing of
         any addition to, change in, or  discontinuance of its place of business
         as shown in this  subsection.  The  Borrower  has its  chief  executive
         office and  principal  place of business  only at 260 North Elm Street,
         Westfield, Massachusetts.

                  6.10.  Principal  Depositary.  Conduct its  principal  banking
         business with the Bank, including maintaining the Bank as its principal
         depository  for its funds,  including  deposits  for payroll  taxes and
         income taxes, savings,  certificates of deposit, general demand deposit
         account, and such other accounts as may be permitted.

         7. NEGATIVE  COVENANTS.  So long as any Loan shall remain unpaid or any
credit  accommodation  or commitment  remains in effect  hereunder,  neither the
Borrower nor any Subsidiary will:

                  7.1.  Liens.  Create,  incur,  assume,  or suffer to exist, or
         permit any Subsidiary to create, incur, assume, or suffer to exist, any
         Lien  upon or with  respect  to any of its  properties,  now  owned  or
         hereafter acquired, except:

                       7.1.1. Liens in favor of the Bank;

                           7.1.2.  Liens  for  taxes  or  assessments  or  other
                  government charges or levies if not yet due and payable or, if
                  due and payable,  if they are being contested in good faith by
                  appropriate proceedings and for which appropriate reserves are
                  maintained;

                           7.1.3.  Liens  imposed  by law,  such as  mechanics',
                  materialmen's,   landlords',   warehousemen's,  and  carriers'
                  Liens, and other similar Liens,  securing obligations incurred
                  in the ordinary  course of business which are not past due for
                  more than  fifteen  (15) days or which are being  contested in
                  good   faith  by   appropriate   proceedings   and  for  which
                  appropriate reserves have been established;

                    7.1.4. Liens under workers' compensation,
               unemployment insurance, Social Security, or similar
                                  legislation;


                                                        36

<PAGE>



                           7.1.5.  Liens,  deposits,  or  pledges  to secure the
                  performance of bids, tenders,  contracts (other than contracts
                  for the payment of money),  leases  (permitted under the terms
                  of this Agreement),  public or statutory obligations,  surety,
                  stay, appeal,  indemnity,  performance or other similar bonds,
                  or other similar obligations arising in the ordinary course of
                  business;

                           7.1.6.  Judgment and other  similar  Liens arising in
                  connection with court  proceedings,  provided the execution or
                  other enforcement of such Liens is effectively  stayed and the
                  claims secured  thereby are being  actively  contested in good
                  faith and by appropriate proceedings;

                           7.1.7. Easements,  rights-of-way,  restrictions,  and
                  other similar  encumbrances  which,  in the aggregate,  do not
                  materially  interfere with the occupation,  use, and enjoyment
                  by the  Borrower or any  Subsidiary  of the property or assets
                  encumbered  thereby in the normal  course of its  business  or
                  materially  impair the value of the property  subject thereto;
                  and

                           7.1.8. Liens securing  obligations of a Subsidiary to
                  the Borrower or another Subsidiary.

                           7.1.9.  Liens  which the  Borrower  grants or assumes
                  pursuant to or by reason of any merger,  stock  acquisition or
                  asset acquisition otherwise permitted hereby.

                  7.2. Indebtedness.  Create, incur, assume, or suffer to exist,
         or permit any Subsidiary to create,  incur, assume, or suffer to exist,
         any Indebtedness, except:

                 7.2.1. Indebtedness of the Borrower under this
                             Agreement or the Note;

                           7.2.2.  Indebtedness  of up to Forty Million  Dollars
                  ($40,000,000)  excluding  current  liabilities  except for the
                  current portion of long-term debt, and other than Indebtedness
                  to the Bank;

                           7.2.3.  Indebtedness of the Borrower subordinated on
                  terms satisfactory to the Bank to the Borrower's obligations
                  under this Agreement and the Note; and

                           7.2.4.  Accounts payable to trade creditors for goods
                  or services which are not aged more than one hundred and

                                                        37

<PAGE>



                  twenty (120) days from the billing date and current  operating
                  liabilities (other than for borrowed money) which are not more
                  than sixty (60) days past due,  in each case  incurred  in the
                  ordinary course of business, as presently conducted,  and paid
                  within the specified time,  unless contested in good faith and
                  by appropriate proceedings.

                           7.2.5.  Indebtedness  which Borrower assumes or which
                  is  otherwise  includable  as a  liability  on  its  financial
                  statements  pursuant  to or by  reason  of any  merger,  stock
                  acquisition or asset acquisition otherwise permitted hereby.

                  7.3.  Mergers, Etc.

                           (a) (i)  consolidate  with or be a party  to a merger
                  with any other  corporation,  or (ii) sell, lease or otherwise
                  dispose  of all or any  substantial  part of the assets of the
                  Borrower and its Subsidiaries, provided, however that:

                           (1) any Subsidiary  may merge or consolidate  with or
                           into the Borrower or any  wholly-owned  Subsidiary so
                           long as in any merger or consolidation  involving the
                           Borrower,  the  Borrower  shall be the  surviving  or
                           continuing corporation;

                           (2) the  Borrower may  consolidate  or merge with any
                           other  corporation  if (i) the Borrower  shall be the
                           surviving or continuing corporation, (ii) at the time
                           of such  consolidation  or merger  and  after  giving
                           effect  thereto no Default or Event of Default  shall
                           have  occurred  and be  continuing,  and (iii)  after
                           giving  effect to such  consolidation  or merger  the
                           Borrower   on  a   consolidated   basis  is  in  full
                           compliance  with the  covenants  set forth in Section
                           8.2 below.

                           (3) any  Subsidiary  may  sell,  lease  or  otherwise
                           dispose of all or any substantial  part of its assets
                           to the Borrower or any wholly-owned Subsidiary.

                           (b) permit any Subsidiary to issue or sell any shares
                  of stock of any class (including as "stock" for the purpose of
                  this Section 7.3 any  warrants,  rights or options to purchase
                  or otherwise  acquire stock or other  Securities  exchangeable
                  for or convertible  into stock) of Borrower or such Subsidiary
                  to any Person other than the Borrower,  a Subsidiary or to the
                  management-employees  of Borrower or a Subsidiary,  except for
                  the purpose of qualifying directors,

                                                        38

<PAGE>



                  or  except  in  satisfaction   of  the  validly   pre-existing
                  preemptive rights of minority  shareholders in connection with
                  the  simultaneous  issuance of stock to the Borrower  and/or a
                  Subsidiary   whereby  the  Borrower   and/or  such  Subsidiary
                  maintain their proportionate interest in such Subsidiary.

                           (c) sell, transfer or otherwise dispose of any shares
                  of stock in any Subsidiary (except to qualifying  directors or
                  other   Subsidiaries   or   the   management-employees   of  a
                  Subsidiary) or any  Indebtedness of any  Subsidiary,  and will
                  not permit  any  Subsidiary  to sell,  transfer  or  otherwise
                  dispose  of  (except  to the  Borrower,  a  Subsidiary  or the
                  management-employees  of a Subsidiary)  any shares of stock or
                  any Indebtedness of any other Subsidiary,  without the consent
                  of the  Bank,  which  will  not be  unreasonably  withheld  or
                  delayed unless:

                           (1)  simultaneously  with  such  sale,  transfer,  or
                           disposition, all shares of stock and all Indebtedness
                           of such  Subsidiary at the time owned by the Borrower
                           and  by  every  other   Subsidiary   shall  be  sold,
                           transferred or disposed of as an entirety;

                           (2) the Board of Directors of the Borrower shall have
                           determined,  as evidenced  by a  resolution  thereof,
                           that the retention of such stock and  Indebtedness is
                           no longer in the best interest of the Borrower;

                           (3) such stock and Indebtedness is sold,  transferred
                           or  otherwise  disposed  of to a  Person,  for a cash
                           consideration  and on terms reasonably  deemed by the
                           Board of Directors to be adequate and satisfactory;

                           (4) the  Subsidiary  being disposed of shall not have
                           any  continuing  investment  in the  Borrower  or any
                           other  Subsidiary not being  simultaneously  disposed
                           of; and

                           (5) such sale or other disposition does not involve a
                           substantial  part  (as  hereinafter  defined)  of the
                           assets of the Borrower and its Subsidiaries.

                  As used in this Section 7.3 a sale, lease or other disposition
         of assets shall be deemed to be a  "substantial  part" of the assets of
         the  Borrower and its  Subsidiaries  only (i) if the book value of such
         assets when added to the book value of all other assets sold, leased or
         otherwise disposed of by the

                                                        39

<PAGE>



         Borrower and its  Subsidiaries  (other than in the  ordinary  course of
         business)  during  the  same  fiscal  year,  exceeds  33  1/3%  of  the
         Consolidated  Net Tangible Assets of the Borrower and its  Subsidiaries
         determined as of the end of the immediately  preceding  fiscal year and
         (ii) the  proceeds  of such sale,  lease or other  disposition  are not
         reinvested  in the  purchase of assets of  comparable  value.  Sales or
         other realization on (i) delinquent  receivables and (ii) land held for
         investment or disposal  purposes as of the date of this Agreement shall
         not be  included  in any  computation  of sales  or other  dispositions
         hereunder.

                  7.4.  Leases.

                           (a) become obligated,  as lessee, to any Person other
                  than the  Borrower or a Subsidiary  or an Affiliate  under any
                  long-term  Lease unless at the time of entering  into any such
                  long-term Lease and after giving effect  thereto,  the average
                  of the Net Income  Available  for Fixed Charges for any two of
                  the three  immediately  preceding fiscal years shall have been
                  at least 250% of the  average of the Pro Forma  Fixed  Charges
                  for such two fiscal years and Net Income  Available  for Fixed
                  Charges for such two fiscal years and Net Income Available for
                  Fixed Charges for the immediately  preceding fiscal year shall
                  have been at least 250% of Pro Forma  Fixed  Charges  for such
                  fiscal year.

                           (b) enter into any  arrangement  whereby the Borrower
                  or any Subsidiary shall sell or transfer any property owned by
                  the  Borrower or any  Subsidiary  to any Person other than the
                  Borrower  or  a  Subsidiary  and  thereupon  the  Borrower  or
                  Subsidiary shall lease or intend to lease, as lessee, the same
                  or substantially the same property.

                  7.5. No Loans or Investments. Make any loans to or investments
         in any  individual  or entity,  other than in normal course of business
         without the prior approval of the Bank,  which will not be unreasonably
         withheld;  except loans to or investments  (i) in EAFCO,  Inc., (ii) in
         H.B.  Smith  Company,  Inc.,  (iii) in joint  ventures  to a maximum to
         $10,000,000.00 in the aggregate and (iv) as otherwise  permitted herein
         or reasonably approved by the Bank.

                  7.6.  Guaranties, Etc.  Assume, guaranty, endorse, or
         otherwise be or become directly or contingently responsible or
         liable, or permit any Subsidiary to assume, guaranty, endorse, or
         otherwise be or become directly or contingently responsible or

                                                        40

<PAGE>



         liable  (including,  but not limited to, an  agreement  to purchase any
         obligation,  stock, assets, goods, or services, or to supply or advance
         any funds, assets, goods, or services of any person, or an agreement to
         maintain or cause such Person to maintain a minimum  working capital or
         net worth,  or  otherwise  to assure the  creditors  of any such Person
         against  loss) for  obligations  of any Person,  except  guaranties  by
         endorsement  of  negotiable  instruments  for deposit or  collection or
         similar transactions in the ordinary course of business,  guaranties of
         obligations of a Subsidiary or Affiliate, or guaranties for the benefit
         of the Bank.

                  7.7. Transactions With Affiliates. Enter into any transaction,
         including,  without  limitation,  the  purchase,  sale,  or exchange of
         property or the rendering of any service, with any Affiliate, or permit
         any  Subsidiary  to enter  into  any  transaction,  including,  without
         limitation,  the  purchase,  sale,  or  exchange  of  property  or  the
         rendering of any service,  with any  Affiliate,  except in the ordinary
         course of and pursuant to the reasonable requirements of the Borrower's
         or such  Subsidiary's  business and upon fair and  reasonable  terms no
         less favorable to the Borrower or such  Subsidiary than would obtain in
         a comparable arm's-length transaction with a Person not an Affiliate.

                  7.8.  Dividends.

                           (a) declare or pay any  dividends,  either in cash or
                  property,  on any  shares  of its  capital  stock of any class
                  (except  dividends or other  distributions  payable  solely in
                  shares of capital stock of the Borrower); or

                           (b)   directly   or   indirectly,   or  through   any
                  Subsidiary,  purchase,  redeem  or  retire  any  shares of its
                  capital stock of any class or any warrants,  rights or options
                  to purchase or acquire any shares of its capital  stock (other
                  than  in  exchange  for  or out of  the  net  proceeds  to the
                  Borrower from the  substantially  concurrent  issue or sale of
                  other  shares of capital  stock of the  Borrower or  warrants,
                  rights or options  to  purchase  or acquire  any shares of its
                  capital stock); or

                           (c) make any other  payment or  distribution,  either
                  directly or indirectly or through any  Subsidiary,  in respect
                  of its capital stock;

(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options, and all

                                                        41

<PAGE>



such other distributions being herein collectively called "Restricted  Payments"
and individually,  a "Restricted Payment")),  if after giving effect thereto the
aggregate  amount of  Restricted  Payments made during the period from and after
December  31,  1990 to and  including  the date of the making of the  Restricted
Payment  in  question,  would  exceed  50% of  Consolidated  Net Income for such
period,  computed  on a  cumulative  basis for said  entire  period  (or if such
Consolidated Net Income is a deficit figure, then minus 100% of such deficit).

                           (d)  declare  any  dividend   which   constitutes   a
                  Restricted Payment payable more than sixty (60) days after the
                  date of declaration thereof.

                  For  the  purposes  of this  Section  7.8  the  amount  of any
Restricted  Payment  declared,  paid or  distributed in property of the Borrower
shall be deemed to be the  greater  of the book value or fair  market  value (as
determined  in good faith by the Board of  Directors  of the  Borrower)  of such
property at the time of the making of the Restricted Payment in question.

         8. FINANCIAL  COVENANTS.  The following financial covenants may, at the
Bank's discretion,  be altered,  amended,  or revised,  prior to the Termination
Date,  to reflect or address  changes in Borrower's  Capitalization  and capital
structure, including its Funded Debt. So long as any Loan shall remain unpaid or
any credit accommodation or commitment remains in effect hereunder:

                  8.1.  Reporting Requirements.  The Borrower and any of its
         Subsidiaries will furnish to the Bank:

                           8.1.1. Quarterly Statements. As soon as available and
                  in any event  within 45 days  after the end of each  quarterly
                  fiscal period (except the last) of each fiscal year, duplicate
                  copies of:

                                    (1) consolidated and  consolidating  balance
                           sheets of the Borrower and its Subsidiaries as of the
                           close of such quarter  setting  forth in  comparative
                           form the amount for the  corresponding  period of the
                           preceding fiscal year,

                                    (2)    consolidated    and     consolidating
                           statements  of income and  retained  earnings  of the
                           Borrower  and its  Subsidiaries  for  such  quarterly
                           period,  setting forth in comparative form the amount
                           for the corresponding  period of the preceding fiscal
                           year, and


                                                        42

<PAGE>



                                    (3) consolidated  statements of cash flow of
                           the Borrower and its  Subsidiaries  of the portion of
                           the fiscal  year ending  with such  quarter,  setting
                           forth  in   comparative   form  the  amount  for  the
                           corresponding period of the preceding fiscal year,

         all in reasonable detail and certified as complete and correct,
by an authorized financial officer of the Borrower.

                           8.1.2. Annual Statements. As soon as available and in
                  any event  within 105 days after the close of each fiscal year
                  of the Borrower, duplicate copies of:

                                    (1)  consolidated   balance  sheets  of  the
                           Borrower and its Subsidiaries as of the close of such
                           fiscal year, and

                                    (2)  consolidated  statements  of income and
                           retained  earnings  and cash flow of the Borrower and
                           its Subsidiaries for such fiscal year,

                  in  each  case   setting   forth  in   comparative   form  the
                  consolidated  figures for the  preceding  fiscal year,  all in
                  reasonable  detail and  accompanied by an opinion thereon of a
                  firm of independent public accountants of recognized  national
                  standing  selected  by the  Borrower  to the  effect  that the
                  consolidated   financial  statements  have  been  prepared  in
                  accordance with GAAP consistently  applied (except for changes
                  in application in which such  accountants  concur) and present
                  fairly  the  financial  condition  of  the  Borrower  and  its
                  Subsidiaries  and that the examination of such  accountants in
                  connection  with such  financial  statements  has been made in
                  accordance  with  generally  accepted  auditing  standards and
                  accordingly, includes such tests of the accounting records and
                  such other auditing procedures as were considered necessary in
                  the circumstances; and

                           (3) a consolidating statement of the Borrower and its
                  Subsidiaries  prepared  by  the  Borrower  in  support  of the
                  consolidated  statements  referred  to in clauses  (1) and (2)
                  above.

                  The financial  statements delivered pursuant to paragraphs (a)
         and (b)  above  shall  set forth  the  amounts  charged  in each of the
         periods involved for depreciation, interest expense and Rentals payable
         under long-term leases;

                                                        43

<PAGE>



                           8.1.3.  Audit Reports. Promptly upon receipt thereof,
                  one copy of each interim or special audit made by
                  independent accountants of the books of the Borrower or any
                  Subsidiary;

                           8.1.4.  SEC and Other  Reports.  Promptly  upon their
                  becoming  available,  one  copy of each  financial  statement,
                  report,  notice or proxy  statement  sent by the  Borrower  to
                  stockholders generally and of each regular or periodic report,
                  and any  registration  statement  or  prospectus  filed by the
                  Borrower or any Subsidiary with any securities exchange or the
                  Securities  and Exchange  Commission or any successor  agency,
                  and  copies  of any  orders  in any  proceedings  to which the
                  Borrower or any of its Subsidiaries is a party,  issued by any
                  governmental  agency,  Federal or state,  having  jurisdiction
                  over the Borrower or any of its Subsidiaries;

                  8.1.5. Requested Information. With reasonable
           promptness, such other data and information as the Bank may
                               reasonably request;

                           8.1.6.  Officers'  Certificates.  Within the  periods
                  provided in Sections  8.1.1 and 8.1.2 above,  a certificate of
                  an authorized  financial  officer of the Borrower stating that
                  he has reviewed the  provisions of this  Agreement and setting
                  forth:  (i) the  information and  computations  (in sufficient
                  detail)  required in order to  establish  whether the Borrower
                  was in  compliance  with the  requirements  of  Section  8.2.1
                  through 8.2.4,  inclusive, at the end of the period covered by
                  the  financial  statements  then  being  furnished,  and  (ii)
                  whether  there  existed  as of  the  date  of  such  financial
                  statements and whether,  to the best of his  knowledge,  there
                  exists on the date of the  certificate  or existed at any time
                  during the period  covered by such  financial  statements  any
                  Default  or Event of Default  and,  if any such  condition  or
                  event exists on the date of the  certificate,  specifying  the
                  nature  and  period of  existence  thereof  and the action the
                  Borrower is taking and proposes to take with respect thereto;

                           8.1.7. Accountant's  Certificates.  Within the period
                  provided  in  Sections  8.1.2  above,  a  certificate  of  the
                  accountants  who  render  an  opinion  with  respect  to  such
                  financial  statements,  stating that they have  reviewed  this
                  Agreement and stating further,  whether in making their audit,
                  such accountants have become aware of any Default or

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                  Event of Default  under any of the terms or provisions of this
                  Agreement  insofar as any such terms or provisions  pertain to
                  or involve accounting  matters or  determinations,  and if any
                  such condition or event then exists, specifying the nature and
                  period of existence thereof;

                           8.1.8.  Notice  of  litigation.  Promptly  after  the
                  commencement  thereof,  notice  of  all  actions,  suits,  and
                  proceedings  before  any  court  or  governmental  department,
                  commission,   board,   bureau,   agency,  or  instrumentality,
                  domestic or foreign, affecting the Borrower or any Subsidiary,
                  which,  if  determined  adversely  to  the  Borrower  or  such
                  Subsidiary,  could  have  a  material  adverse  effect  on the
                  financial condition, properties, or operations of the Borrower
                  or such Subsidiary;

                           8.1.9.  Notice of Defaults and Events of Default.  As
                  soon as possible  and in any event  within five (5) days after
                  the occurrence of each Default or Event of Default,  a written
                  notice  setting  forth the details of such Default or Event of
                  Default  and the action  which is  proposed to be taken by the
                  Borrower with respect thereto;

                           8.1.10.  ERISA reports.  As soon as possible,  and in
                  any event within thirty (30) days after the Borrower  knows or
                  has  reason  to  know  that  any   circumstances   exist  that
                  constitute grounds entitling the PBGC to institute proceedings
                  to  terminate  a Plan  subject  to ERISA  with  respect to the
                  Borrower or any Commonly  Controlled  Entity, and promptly but
                  in any event  within two (2)  Business  Days of receipt by the
                  Borrower or any Commonly  Controlled Entity of notice that the
                  PBGC  intends  to  terminate  a Plan or  appoint a trustee  to
                  administer the same, and promptly but in any event within five
                  (5)  Business  Days of the  Receipt of notice  concerning  the
                  imposition  of  withdrawal  liability (in excess of $10,000.00
                  with  respect  to  the  Borrower  or any  Commonly  Controlled
                  Entity, the Borrower will deliver to the Bank a certificate of
                  the chief financial  officer of the Borrower setting forth all
                  relevant details and the action which the Borrower proposes to
                  take with respect thereto;

                           8.1.11.  Reports to other  creditors.  Promptly after
                  the  furnishing  thereof,  copies of any  statement  or report
                  furnished  to any  other  party  pursuant  to the terms of any
                  indenture,   loan,   credit,  or  similar  agreement  and  not
                  otherwise required to be furnished to the Bank pursuant to any
                  other clause of this Section; and

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                  8.2.  Financial  Covenants.  For  purposes  of  the  following
         financial  covenants the Borrower and its Subsidiaries shall be treated
         on a consolidated basis, and all ratios, except as otherwise specified,
         will be tested on a quarterly basis:

                           8.2.1.  Debt to Tangible Net Worth;  Leverage  Ratio.
                  The ratio of the Borrower's  total  Indebtedness and all other
                  liabilities  to its  Consolidated  Tangible Net Worth shall be
                  maintained at or less than 3.00 to 1.00:

                           8.2.2.  Current Ratio. The ratio of combined tangible
                  Consolidated  Current  Assets of the  Borrower to the combined
                  Current  Liabilities of the Borrower shall at all times be not
                  less than 1.35 to 1.00.

                           8.2.3.  Minimum  Consolidated Net Worth. At all times
                  the Borrower will maintain Consolidated Net Worth at an amount
                  not less than $75,000,000.00.

                           8.2.4.  Working Capital.  At all times Borrower's
                  Consolidated Current Assets shall exceed its Consolidated
                  Current Liabilities by $30,000,000.00.

         9.       EVENTS OF DEFAULT.  If any of the following events shall
occur:

                  9.1.  The  Borrower  shall  fail to pay the  principal  of, or
         interest on, the Notes or any other payment  Obligations of Borrower to
         the Bank,  or any amount of a commitment  or other fee, as and when due
         and payable;

                  9.2. Any representation or warranty made or deemed made by the
         Borrower in this  Agreement or which is  contained in any  certificate,
         document,  opinion,  or financial or other  statement  furnished at any
         time under or in connection  with any Loan Document shall prove to have
         been incorrect, incomplete, or misleading in any material respect on or
         as of the date made or deemed made;

                  9.3. The Borrower shall fail, after thirty (30) days of notice
         thereof,  to  perform  or  observe  any term,  covenant,  or  agreement
         contained herein (other than failure under Section 9.1 or 9.2 above for
         which no notice is required);

                  9.4.  Dissolution, merger or consolidation of the Borrower
         (other than as permitted in this Agreement);


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<PAGE>



                  9.5. The Borrower or any of its Subsidiaries  shall, after the
         expiration of any applicable  notice or grace periods,  (a) fail to pay
         any  Indebtedness for borrowed money to Persons other than the Bank, or
         any  interest  or  premium  thereon,  when due  (whether  by  scheduled
         maturity, required prepayment,  acceleration, demand, or otherwise), or
         (b) fail to perform or observe any term, covenant,  or condition on its
         part to be performed  or observed  under any  agreement  or  instrument
         relating to any such  Indebtedness,  when  required to be  performed or
         observed,  if the  effect of such  failure  to perform or observe is to
         accelerate, or to permit the acceleration of after the giving of notice
         or passage of time, or both, the maturity of such Indebtedness, whether
         or not such failure to perform or observe shall be waived by the holder
         of such Indebtedness;  or any such Indebtedness shall be declared to be
         due and payable,  or required to be prepaid  (other than by a regularly
         scheduled required prepayment), prior to the stated maturity thereof;

                  9.6.  The  Borrower or any of its  Subsidiaries  shall  become
         Insolvent  (and,  in the  case  of  Insolvency  of a  Subsidiary,  such
         Insolvency has a material adverse effect upon Borrower);

                  9.7. One or more judgments, decrees, or orders for the payment
         of money in excess of One Hundred Thousand Dollars ($100,000.00) in the
         aggregate  shall  be  rendered  against  the  Borrower  or  any  of its
         Subsidiaries,  and such  judgments,  decrees,  or orders shall continue
         unsatisfied and in effect for a period of ninety (90)  consecutive days
         without  being  vacated,  discharged,  satisfied,  or  stayed or bonded
         pending appeal;

                  9.8. This Agreement  shall at any time after its execution and
         delivery  and for any  reason  cease to be in full  force and effect or
         shall be declared  null and void,  or the  validity  or  enforceability
         thereof shall be contested by the Borrower,  or the Borrower shall deny
         it has any further liability or obligation under this Agreement;

                  9.9.  Any of the  following  events  shall occur or exist with
         respect to the Borrower and any Commonly Controlled Entity under ERISA:
         any Reportable Event shall occur;  complete or partial  withdrawal from
         any  Multiemployer  Plan shall take place;  any Prohibited  Transaction
         shall occur; a notice of intent to terminate a Plan shall be filed,  or
         a  Plan  shall  be  terminated;  or  circumstances  shall  exist  which
         constitute  grounds  entitling  the PBGC to  institute  proceedings  to
         terminate a Plan, or the PBGC shall institute such proceedings;  and in
         each case  above,  such  event or  condition,  together  with all other
         events or

                                                        47

<PAGE>



         conditions,  if any, could subject the Borrower to any tax, penalty, or
         other liability which in the aggregate may exceed One Hundred  Thousand
         Dollars ($100,000.00);

then, and in any such event,  the Bank may,  notwithstanding  any time or credit
allowed by any instrument  evidencing a liability,  without notice or demand (i)
refuse  to make any  additional  advances  or Loans,  and/or  (ii)  declare  any
outstanding  Notes,  all interest  thereon,  and all other amounts payable under
this Agreement to be forthwith due and payable,  whereupon such Notes,  all such
interest,  and all such amounts  shall become and be forthwith  due and payable.
Upon the occurrence and during the continuance of any Event of Default, the Bank
is hereby  authorized  at any time and from  time to time,  without  notice,  to
exercise  any or all of its rights and  remedies  provided in this  Agreement or
otherwise permitted by law, including all rights of set-off.

         10.  DEPOSITS.  Any and all deposits or other sums at any time credited
by or due from the Bank to Borrower,  and any  securities  or other  property of
Borrower  being held by the Bank or on account of Borrower,  may at all times be
held and treated as collateral  for any and all  obligations  of the Borrower to
the Bank, whether direct or indirect,  absolute or contingent,  due or to become
due,  now  existing or  hereafter  arising.  The Bank may apply or set-off  such
deposits or other sums against any obligations at any time,  whether or not said
obligations  or other  security held by the Bank is considered by the Bank to be
adequate.  The  Bank,  on or  after  an  Event  of  Default,  may  sell any such
securities or other property held as collateral for the repayment or performance
of such obligations in a commercially reasonable manner.

         11. WAIVERS.  The Borrower waives demand,  notice,  protest,  notice of
acceptance of this  Agreement,  notice of loans made,  credit  extended,  or any
action  taken in  reliance  hereon,  and all  other  demands  and  notice of any
description.  With respect to liabilities, the Borrower assents to any extension
or postponement  of the time of payment or any other  indulgence to the addition
or  release  of any party or person  primarily  or  secondarily  liable,  to the
acceptance of partial payments thereon and the settlement  thereof,  all in such
manner  and at such  time or times as the Bank may deem  advisable.  No delay or
omission  on the part of the Bank in  exercising  any right  shall  operate as a
waiver of such right or any other right.  A waiver on any one occasion shall not
be  construed  as a bar to or waiver of any right on any  future  occasion.  All
rights  and  remedies  of the  Bank,  whether  evidenced  hereby or by any other
instrument  or papers,  shall be cumulative  and may be exercised  singularly or
concurrently.


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<PAGE>



         12.  MISCELLANEOUS

                  12.1.   Amendments,    Etc.   No   amendment,    modification,
         termination,  or waiver of any  provision of any Loan Document to which
         the Borrower is a party,  nor consent to any  departure by the Borrower
         from any Loan  Document  to which it is a party,  shall in any event be
         effective  unless the same shall be in writing  and signed by the Bank,
         and then such waiver or consent shall be effective only in the specific
         instance and for the specific purpose for which given.

                  12.2.  Notices,  Etc.  All  notices  and other  communications
         provided for under this Agreement and under the other Loan Documents to
         which  the  Borrower  is  a  party  shall  be  in  writing   (including
         telegraphic,   telex,  and  facsimile   transmissions)  and  mailed  or
         transmitted  or delivered,  if to the  Borrower,  at its address at 260
         North Elm Street,  Westfield,  Massachusetts 01085, Attention:  John E.
         Reed, Chairman, and if to the Bank, at its address at 1350 Main Street,
         Springfield,  Massachusetts 01103,  Attention: M. Dale Janes, Executive
         Vice  President,  with a copy to BankBoston,  N.A. 100 Federal  Street,
         Boston,  Massachusetts 02110, Attention: Senior Lending Officer; or, as
         to each party,  at such other  address as shall be  designated  by such
         party in a written  notice to the other party  complying as to delivery
         with the terms of this Section. Except as is otherwise provided in this
         Agreement,  all such notices and communications shall be effective when
         deposited in the mails or delivered to the telegraph company,  or sent,
         answerback received, respectively, addressed as aforesaid.

                  12.3. Survival.  All representations,  warranties,  covenants,
         and  agreements  contained  herein  shall  survive  the  execution  and
         delivery  of this  Agreement,  the Note  and any  other  agreements  or
         documents required for this transaction.

                  12.4.  Successors and Assigns. This Agreement shall be binding
         upon and inure to the  benefit of the  Borrower  and the Bank and their
         respective  successors  and  assigns,  except that the Borrower may not
         assign or transfer any of its rights  under any Loan  Document to which
         the Borrower is a party without the prior written consent of the Bank.

                  12.5. Costs,  Expenses,  and Taxes. The Borrower agrees to pay
         on demand all  reasonable  costs and expenses,  incurred by the Bank in
         connection  with the  preparation,  execution,  delivery,  filing,  and
         administration   of  the  Loan   Documents,   and  of  any   amendment,
         modification, or supplement to the Loan Documents,

                                                        49

<PAGE>



         including,  without  limitation,  the reasonable fees and out-of-pocket
         expenses of counsel for the Bank incurred in  connection  with advising
         the Bank as to its rights and responsibilities  hereunder. The Borrower
         also agrees to pay all such costs and expenses,  including court costs,
         incurred in connection with  enforcement of the Loan Documents,  or any
         amendment, modification, or supplement thereto, whether by negotiation,
         legal proceedings,  or otherwise.  In addition,  the Borrower shall pay
         any and all stamp and other taxes and fees payable or  determined to be
         payable  in  connection  with  the  execution,  delivery,  filing,  and
         recording of any of the Loan  Documents  and the other  documents to be
         delivered  under  any such Loan  Documents,  and agree to hold the Bank
         harmless  from and against any and all  liabilities  with respect to or
         resulting  from any delay in paying or  omission  to pay such taxes and
         fees. This provision shall survive termination of this Agreement.

                  12.6.  Integration.  This  Agreement  and the  Loan  Documents
         contain  the entire  agreement  between  the  parties  relating  to the
         subject  matter  hereof and  supersede  all oral  statements  and prior
         writings with respect thereto.

                  12.7.  Indemnity.   The  Borrower  hereby  agrees  to  defend,
         indemnify,  and hold the Bank  harmless  from and  against  any and all
         claims, damages,  judgments,  penalties, costs, and expenses (including
         attorney  fees and  court  costs  now or  thereafter  arising  from the
         aforesaid  enforcement of this clause)  arising  directly or indirectly
         from the  activities of the Borrower and any of its  Subsidiaries,  its
         predecessors  in  interest,  or  third  parties  with  whom  it  has  a
         contractual    relationship   (with   respect   to   that   contractual
         relationship),  or arising directly or indirectly from the violation of
         any  environmental  protection,  health,  or safety law,  whether  such
         claims are  asserted by any  governmental  agency or any other  person.
         This indemnity shall survive termination of this Agreement.

                  12.8.  Governing Law.  This Agreement and the Notes shall be
         governed by, and construed in accordance with, the laws of The
         Commonwealth of Massachusetts.

                  12.9.  Severability  of  Provision.  Any provision of any Loan
         Document  which is  prohibited  or  unenforceable  in any  jurisdiction
         shall,  as to such  jurisdiction,  be ineffective to the extent of such
         prohibition  or  unenforceability  without  invalidating  the remaining
         provisions   of  such  Loan  Document  or  affecting  the  validity  or
         enforceability of such provision in any other jurisdiction.

                                                        50

<PAGE>



                  12.10. Captions, Counterparts and Modifications.  The captions
         of this  Agreement  are for  convenience  only and shall not affect the
         construction   hereof.  This  Agreement  may  be  executed  in  several
         counterparts, each of which shall be deemed an original, but may not be
         terminated or modified orally.

                  12.11.  Jury Trial  Waiver.  THE BANK AND THE BORROWER  HEREBY
         WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING,  CLAIM, OR COUNTERCLAIM,
         WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY,  ARISING OUT OF OR IN
         ANY WAY RELATED TO THIS AGREEMENT OR THE LOAN DOCUMENTS.  NO OFFICER OF
         THE BANK HAS AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS PROVISION.


         IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
to this Agreement the day and year first above written.

In the presence of:

                                Mestek, Inc.



                                By   /S/STEPHEN M. SHEA
                                 Stephen M. Shea
                                Its Senior Vice President - Finance


                                BankBoston, N.A.



                             By /S/KATHI L. DONAHUE
                                 Kathi L.Donahue
                               Its Vice President


                                                        51