<PAGE>   1

                                                                    EXHIBIT 4(j)
================================================================================








                                 CHEMFIRST INC.





                                   $15,000,000
        6.50% Series 1998-A Senior Notes, Tranche A, due October 30, 2003





                                   $5,000,000
        6.75% Series 1998-A Senior Notes, Tranche B, due October 30, 2005






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


                             NOTE PURCHASE AGREEMENT

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





                          Dated as of October 15, 1998






================================================================================





<PAGE>   2



                                TABLE OF CONTENTS

<TABLE>
<CAPTION>




SECTION                                                      HEADING                                            PAGE
<S>                        <C>                                                                                  <C>
SECTION 1.                 AUTHORIZATION OF NOTES.................................................................1


SECTION 2.                 SALE AND PURCHASE OF NOTES.............................................................1

       Section 2.1.        Series A Notes.........................................................................1
       Section 2.2.        Additional Series of Notes.............................................................2

SECTION 3.                 CLOSING................................................................................2


SECTION 4.                 CONDITIONS TO CLOSING..................................................................3

       Section 4.1.        Representations and Warranties.........................................................3
       Section 4.2.        Performance; No Default................................................................3
       Section 4.3.        Compliance Certificates................................................................3
       Section 4.4.        Opinions of Counsel....................................................................3
       Section 4.5.        Purchase Permitted By Applicable Law, etc..............................................4
       Section 4.6.        Related Transactions...................................................................4
       Section 4.7.        Payment of Special Counsel Fees........................................................4
       Section 4.8.        Private Placement Number...............................................................4
       Section 4.9.        Changes in Corporate Structure.........................................................4
       Section 4.10.       Proceedings and Documents..............................................................4
       Section 4.11.       Conditions to Issuance of Additional Notes.............................................5

SECTION 5.                 REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................................5

       Section 5.1.        Organization; Power and Authority......................................................5
       Section 5.2.        Authorization, etc.....................................................................5
       Section 5.3.        Disclosure.............................................................................5
       Section 5.4.        Organization and Ownership of Shares of Restricted 
                               Subsidiaries; Affiliates and Investments...........................................6
       Section 5.5.        Financial Statements...................................................................7
       Section 5.6.        Compliance with Laws, Other Instruments, etc...........................................7
       Section 5.7.        Governmental Authorizations, etc.......................................................7
       Section 5.8.        Litigation; Observance of Agreements, Statutes and Orders..............................7
       Section 5.9.        Taxes..................................................................................7
       Section 5.10.       Title to Property; Leases..............................................................8
       Section 5.11.       Licenses, Permits, etc.................................................................8
       Section 5.12.       Compliance with ERISA..................................................................8
       Section 5.13.       Private Offering by the Company........................................................9
       Section 5.14.       Use of Proceeds; Margin Regulations....................................................9
       Section 5.15.       Existing Debt; Future Liens...........................................................10
       Section 5.16.       Foreign Assets Control Regulations, etc...............................................10
       Section 5.17.       Status under Certain Statutes.........................................................10
</TABLE>



                                      -i-


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<TABLE>

<S>                        <C>                                                                                 <C>
       Section 5.18.       Environmental Matters.................................................................10
       Section 5.19.       Computer 2000 Compliant...............................................................11

SECTION 6.                 REPRESENTATIONS OF THE PURCHASER......................................................11

       Section 6.1.        Purchase for Investment...............................................................11
       Section 6.2.        Source of Funds.......................................................................11

SECTION 7.                 INFORMATION AS TO COMPANY.............................................................13

       Section 7.1.        Financial and Business Information....................................................13
       Section 7.2.        Officer's Certificate.................................................................16
       Section 7.3.        Inspection............................................................................16

SECTION 8.                 PREPAYMENT OF THE SERIES A NOTES......................................................17

       Section 8.1.        Required Prepayments..................................................................17
       Section 8.2.        Optional Prepayments with Make-Whole Amount...........................................17
       Section 8.3         Allocation of Partial Prepayments.....................................................17
       Section 8.4.        Maturity; Surrender, etc..............................................................17
       Section 8.5.        Purchase of Notes.....................................................................18
       Section 8.6.        Make-Whole Amount for Series A Notes..................................................18

SECTION 9.                 AFFIRMATIVE COVENANTS.................................................................19

       Section 9.1.        Compliance with Law...................................................................19
       Section 9.2.        Insurance.............................................................................20
       Section 9.3.        Maintenance of Properties.............................................................20
       Section 9.4.        Payment of Taxes and Claims...........................................................20
       Section 9.5.        Corporate Existence, etc..............................................................20

SECTION 10.                NEGATIVE COVENANTS....................................................................20

       Section 10.1.       Transactions with Affiliates..........................................................21
       Section 10.2.       Consolidated Net Worth................................................................21
       Section 10.3.       Limitations on Debt...................................................................21
       Section 10.4.       Limitations on Priority Debt..........................................................21
       Section 10.5.       Limitation on Liens...................................................................21
       Section 10.6.       Sales of Assets.......................................................................23
       Section 10.7.       Merger, Consolidation and Sale of Stock...............................................24
       Section 10.8.       Non-Significant Subsidiaries..........................................................25
       Section 10.8.       Designation of Restricted and Unrestricted Subsidiaries...............................25
       Section 10.9.       Nature of Business....................................................................25

SECTION 11.                EVENTS OF DEFAULT.....................................................................25


SECTION 12.                REMEDIES ON DEFAULT, ETC..............................................................27

       Section 12.1.       Acceleration..........................................................................27
</TABLE>


                                      -ii-

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<TABLE>


<S>                        <C>                                                                                  <C>
       Section 12.2.       Other Remedies........................................................................28
       Section 12.3.       Rescission............................................................................28
       Section 12.4.       No Waivers or Election of Remedies, Expenses, etc.....................................28

SECTION 13.                REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.........................................29

       Section 13.1.       Registration of Notes.................................................................29
       Section 13.2.       Transfer and Exchange of Notes........................................................29
       Section 13.3.       Replacement of Notes..................................................................29

SECTION 14.                PAYMENTS ON NOTES.....................................................................30

       Section 14.1.       Place of Payment......................................................................30
       Section 14.2.       Home Office Payment...................................................................30

SECTION 15.                EXPENSES, ETC.........................................................................30

       Section 15.1.       Transaction Expenses..................................................................30
       Section 15.2.       Survival..............................................................................31

SECTION 16.                SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT..........................31


SECTION 17.                AMENDMENT AND WAIVER..................................................................31

       Section 17.1.       Requirements..........................................................................31
       Section 17.2.       Solicitation of Holders of Notes......................................................32
       Section 17.3.       Binding Effect, etc...................................................................32
       Section 17.4.       Notes Held by Company, etc............................................................33

SECTION 18.                NOTICES...............................................................................33


SECTION 19.                REPRODUCTION OF DOCUMENTS.............................................................33


SECTION 20.                CONFIDENTIAL INFORMATION..............................................................34


SECTION 21.                SUBSTITUTION OF PURCHASER.............................................................35


SECTION 22.                MISCELLANEOUS.........................................................................35

       Section 22.1.       Successors and Assigns................................................................35
       Section 22.2.       Payments Due on Non-Business Days.....................................................35
       Section 22.3.       Severability..........................................................................35
       Section 22.4.       Construction..........................................................................35
       Section 22.5.       Counterparts..........................................................................36
       Section 22.6.       Governing Law.........................................................................36

Signature........................................................................................................37
</TABLE>





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<PAGE>   5



SCHEDULE A                 --     INFORMATION RELATING TO PURCHASERs

SCHEDULE B                 --     DEFINED TERMs

SCHEDULE 5.4               --     Subsidiaries, Affiliates and Directors and 
                                  Executive Officers of the Company

SCHEDULE 5.5               --     Financial Statements

SCHEDULE 5.11              --     Licenses, Patents, etc.

SCHEDULE 5.15              --     Existing Debt

SCHEDULE 10.5              --     Existing Liens

EXHIBIT 1                  --     Form of 6.50% Series 1998-A Senior Note, 
                                  Tranche A, due October 30, 2003

EXHIBIT 2                  --     Form of 6.75% Series 1998-A Senior Note, 
                                  Tranche B, due October 30, 2005

EXHIBIT 4.4(a)             --     Form of Opinion of Special Counsel for the 
                                  Company

EXHIBIT 4.4(b)             --     Form of Opinion of Special Counsel for the 
                                  Purchasers

EXHIBIT S                  --     Form of Supplement to Note Purchase Agreement


                                      -iv-

<PAGE>   6





                                 CHEMFIRST INC.
                                700 NORTH STREET
                         JACKSON, MISSISSIPPI 39202-3095



        6.50% Series 1998-A Senior Notes, Tranche A, due October 30, 2003


        6.75% Series 1998-A Senior Notes, Tranche B, due October 30, 2005

                                                                October 15, 1998

TO THE PURCHASERS LISTED IN THE ATTACHED SCHEDULE A:

Ladies and Gentlemen:

         CHEMFIRST INC., a Mississippi corporation (the "Company"), agrees with
the Purchasers named on Schedule A (the "Purchasers") to this Note Purchaser
Agreement (this or the "Agreement") as follows:

SECTION 1.           AUTHORIZATION OF NOTES.

         The Company will authorize the issue and sale of (i) $15,000,000
aggregate principal amount of its 6.50% Series 1998-A Senior Notes, Tranche A,
due October 30, 2003 (the "Tranche A Notes"), (ii) $5,000,000 aggregate
principal amount of its 6.75% Series 1998-A Senior Notes, Tranche B, due October
30, 2005 (the "Tranche B Notes", and together with the Tranche A Notes, the
"Series A Notes"). The Series A Notes together with each Series of Additional
Notes which may from time to time be issued pursuant to the provisions of
Section 2.2 are collectively referred to as the "Notes" (such term shall also
include any such notes issued in substitution therefor pursuant to Section 13 of
this Agreement or the Other Agreements (as hereinafter defined)). The Tranche A
Notes and the Tranche B Notes shall be substantially in the forms set out in
Exhibits 1 and 2, respectively, with such changes therefrom, if any, as may be
approved by you and the Company. Certain capitalized terms used in this
Agreement are defined in Schedule B; references to a "Schedule" or an "Exhibit"
are, unless otherwise specified, to a Schedule or an Exhibit attached to this
Agreement.

SECTION 2.           SALE AND PURCHASE OF NOTES.

         Section 2.1. Series A Notes. Subject to the terms and conditions of
this Agreement, the Company will issue and sell to the Purchasers and the
Purchasers will purchase from the Company, at the Closing provided for in
Section 3, Series A Notes of the Tranche and in the principal amount specified
opposite such Purchaser's name in Schedule A at the purchase price of 100% of
the principal amount thereof. The Purchasers' obligation hereunder, and the
obligations of the Additional Purchasers under the Supplements, are several and
not joint obligations, and the Purchasers shall have no obligation under any
Supplement and no liability to any Person for the performance or nonperformance
by any Additional Purchaser thereunder.





<PAGE>   7

         Section 2.2. Additional Series of Notes. The Company may, from time to
time, in its sole discretion but subject to the terms hereof, issue and sell one
or more additional Series of its unsecured promissory notes under the provisions
of this Agreement pursuant to a supplement (a "Supplement") substantially in
the form of Exhibit S. Each additional Series of Notes (the "Additional Notes")
issued pursuant to a Supplement shall be subject to the following terms and
conditions:

                   (i) each Series of Additional Notes, when so issued, shall be
         differentiated from all previous series by sequential alphabetical
         designation inscribed thereon;

                  (ii) Additional Notes of the same Series may consist of more
         than one different and separate tranches and may differ with respect to
         outstanding principal amounts, maturity dates, interest rates and
         premiums, if any, and price and terms of redemption or payment prior to
         maturity, but all such different and separate tranches of the same
         Series shall vote as a single class and constitute one Series;

                 (iii) each Series of Additional Notes shall be dated the date
         of issue, bear interest at such rate or rates, mature on such date or
         dates, be subject to such mandatory and optional prepayment on the
         dates and at the premiums, if any, have such additional or different
         conditions precedent to closing, such representations and warranties
         and such additional covenants as shall be specified in the Supplement
         under which such Additional Notes are issued, provided, that any such
         additional covenants shall inure to the benefit of all holders of Notes
         so long as any Additional Notes issued pursuant to such Supplement
         remain outstanding;

                  (iv) each Series of Additional Notes issued under this
         Agreement shall be in substantially the form of Exhibit 1 to Exhibit S
         hereto with such variations, omissions and insertions as are necessary
         or permitted hereunder;

                   (v) the minimum principal amount of any Note issued under a
         Supplement shall be $100,000, except as may be necessary to evidence
         the outstanding amount of any Note originally issued in a denomination
         of $100,000 or more;

                  (vi) all Additional Notes shall constitute Senior Debt of the
         Company and shall rank pari passu with all other outstanding Notes; and

                 (vii) no Additional Notes shall be issued hereunder if at the
         time of issuance thereof and after giving effect to the application of
         the proceeds thereof, any Default or Event of Default shall have
         occurred and be continuing.

SECTION 3.           CLOSING.

         The sale and purchase of the Series A Notes to be purchased by the
Purchasers shall occur at the offices of Chapman and Cutler, 111 West Monroe
Street, Chicago, Illinois 60603, at 11:00 A.M. Chicago time, at a closing (the
"Closing") on November 10, 1998 or on such other Business Day thereafter on or
prior to November 15, 1998 as may be agreed upon by the 

                                      -2-

<PAGE>   8



Company and the Purchasers. At the Closing, the Company will deliver to each
Purchaser the Notes to be purchased by such Purchaser in the form of a single
Note (or such greater number of Notes in denominations of at least $100,000 as
such Purchaser may request) dated the date of the Closing and registered in such
Purchaser's name (or in the name of such Purchaser's nominee), against delivery
by such Purchaser to the Company or its order of immediately available funds in
the amount of the purchase price therefor by wire transfer of immediately
available funds for the benefit of the Company to its account at Bank of America
National Trust and Savings Association, Account No. 8188300511 (ABA #071000039).
If, at the Closing, the Company shall fail to tender such Notes to any Purchaser
as provided above in this Section 3, or any of the conditions specified in
Section 4 shall not have been fulfilled to any Purchaser's satisfaction, such
Purchaser shall, at its election, be relieved of all further obligations under
this Agreement, without thereby waiving any rights such Purchaser may have by
reason of such failure or such nonfulfillment.

SECTION 4.           CONDITIONS TO CLOSING.

         The obligation of each Purchaser to purchase and pay for the Notes to
be sold to such Purchaser at the Closing is subject to the fulfillment to such
Purchaser's satisfaction, prior to or at the Closing, of the following
conditions:

         Section 4.1. Representations and Warranties. The representations and
warranties of the Company in this Agreement shall be correct when made and at
the time of the Closing.

         Section 4.2. Performance; No Default. The Company shall have performed
and complied with all agreements and conditions contained in this Agreement
required to be performed or complied with by it prior to or at the Closing, and
after giving effect to the issue and sale of the Notes (and the application of
the proceeds thereof as contemplated by Section 5.14), no Default or Event of
Default shall have occurred and be continuing. Neither the Company nor any
Restricted Subsidiary shall have entered into any transaction since the date of
the Memorandum that would have been prohibited by the covenants contained in
Section 10 hereof had such covenants applied since such date.

         Section 4.3. Compliance Certificates.

         (a) Officer's Certificate. The Company shall have delivered to such
Purchaser an Officer's Certificate, dated the date of the Closing, certifying
that the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.

         (b) Secretary's Certificate. The Company shall have delivered to such
Purchaser a certificate certifying as to the resolutions attached hereto and
other corporate proceedings relating to the authorization, execution and
delivery of the Notes and this Agreement.

         Section 4.4. Opinions of Counsel. Such Purchaser shall have received
opinions in form and substance satisfactory to such Purchaser, dated the date of
the Closing (a) from J. Steve Chustz, General Counsel of the Company, covering
the matters set forth in Exhibit 4.4(a) and covering such other matters incident
to the transactions contemplated hereby as such Purchaser 


                                      -3-

<PAGE>   9


or such Purchaser's counsel may reasonably request (and the Company hereby
instructs its counsel to deliver such opinion to each Purchaser) and (b) from
Chapman and Cutler, special counsel for the Purchasers in connection with such
transactions, substantially in the form set forth in Exhibit 4.4(b) and covering
such other matters incident to such transactions as such Purchaser may
reasonably request.

         Section 4.5. Purchase Permitted By Applicable Law, etc. On the date of
the Closing, the purchase of Notes shall (a) be permitted by the laws and
regulations of each jurisdiction to which any Purchaser is subject, without
recourse to provisions (such as Section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by insurance companies without restriction
as to the character of the particular investment, (b) not violate any applicable
law or regulation (including, without limitation, Regulation U, T or X of the
Board of Governors of the Federal Reserve System) and (c) not subject any
Purchaser to any tax, penalty or liability under or pursuant to any applicable
law or regulation, which law or regulation was not in effect on the date hereof.
If requested by any Purchaser, such Purchaser shall have received an Officer's
Certificate certifying as to such matters of fact as such Purchaser may
reasonably specify to enable such Purchaser to determine whether such purchase
is so permitted.

         Section 4.6. Related Transactions. The Company shall have consummated
the sale of the entire principal amount of the Notes scheduled to be sold on the
date of Closing pursuant to this Agreement.

         Section 4.7. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Company shall have paid, on or before the
Closing, the fees, charges and disbursements of the Purchasers' special counsel
referred to in Section 4.4 to the extent reflected in a statement of such
counsel rendered to the Company at least one Business Day prior to the Closing.

         Section 4.8. Private Placement Number. A Private Placement Number
issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for each Tranche of the Series A Notes.

         Section 4.9. Changes in Corporate Structure. The Company shall not have
changed its jurisdiction of incorporation or been a party to any merger or
consolidation and shall not have succeeded to all or any substantial part of the
liabilities of any other entity, at any time following the date of the most
recent financial statements referred to in Schedule 5.5.

        Section 4.10. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to the Purchasers and their special counsel, and the Purchasers and
their special counsel shall have received all such counterpart originals or
certified or other copies of such documents as the Purchasers or their special
counsel may reasonably request.

                                      -4-


<PAGE>   10


        Section 4.11. Conditions to Issuance of Additional Notes. The
obligations of the Additional Purchasers to purchase such Additional Notes shall
be subject to the following conditions precedent, in addition to the conditions
specified in the Supplement pursuant to which such Additional Notes may be
issued:

                   (a) Compliance Certificate. A duly authorized Senior
         Financial Officer shall execute and deliver to each Additional
         Purchaser an Officer's Certificate dated the date of issue of such
         Series of Additional Notes stating that such officer has reviewed the
         provisions of this Agreement (including any Supplements hereto) and
         setting forth the information and computations (in sufficient detail)
         required in order to establish whether the Company is in compliance
         with the requirements of Section 10.3 on such date.

                   (b) Execution and Delivery of Supplement. The Company and
         each such Additional Purchaser shall execute and deliver a Supplement
         substantially in the form of Exhibit S hereto.

                   (c) Representations of Additional Purchasers. Each Additional
         Purchaser shall have confirmed in the Supplement that the
         representations set forth in Section 6 are true with respect to such
         Additional Purchaser on and as of the date of issue of the Additional
         Notes.

SECTION 5.           REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         The Company represents and warrants to each Purchaser that:

         Section 5.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement and the Series A
Notes and to perform the provisions hereof and thereof.

         Section 5.2. Authorization, etc. This Agreement and the Series A Notes
have been duly authorized by all necessary corporate action on the part of the
Company and this Agreement constitutes, and upon execution and delivery thereof
each Note will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

         Section 5.3. Disclosure. The Company, through its agents, NationsBanc
Montgomery Securities and ABN AMRO Incorporated, has delivered to each Purchaser
a copy of a Private 


                                      -5-

<PAGE>   11


Placement Memorandum, dated August, 1998 (the "Memorandum"), relating to the
transactions contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal properties
of the Company and its Restricted Subsidiaries. This Agreement, the Memorandum,
the documents, certificates or other writings delivered to the Purchasers by or
on behalf of the Company in connection with the transactions contemplated hereby
and the financial statements listed in Schedule 5.5, taken as a whole, do not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Since June 30, 1998, there has been no
change in the financial condition, operations, business or properties of the
Company or any Restricted Subsidiary except changes that individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
There is no fact known to the Company that could reasonably be expected to have
a Material Adverse Effect that has not been set forth herein or in the
Memorandum or in the other documents, certificates and other writings for the
Company (including the Press Release dated October 22, 1998 relating to the
earnings of the Company for the Fiscal Period ending September 30, 1998
delivered to the Purchasers by or on behalf of the Company specifically for use
in connection with the transactions contemplated hereby.

         Section 5.4. Organization and Ownership of Shares of Restricted
Subsidiaries; Affiliates and Investments. (a) Schedule 5.4 contains (except as
noted therein) complete and correct lists (i) of the Company's Restricted and
Unrestricted Subsidiaries, and showing, as to each Subsidiary, the correct name
thereof, the jurisdiction of its organization, and the percentage of shares of
each class of its capital stock or similar equity interests outstanding owned by
the Company and each other Subsidiary, (ii) of the Company's Affiliates, other
than Unrestricted Subsidiaries, (iii) of the Company's directors and executive
officers and (iv) the Investments existing at the Closing, other than
Investments in Subsidiaries and Affiliates.

         (b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).

         (c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has the corporate or other power and
authority to own or hold under lease the properties it purports to own or hold
under lease and to transact the business it transacts and proposes to transact.

         (d) No Subsidiary is a party to, or otherwise subject to, any legal
restriction or any agreement (other than customary limitations imposed by
corporate law statutes) restricting the ability of such Subsidiary to pay
dividends out of profits or make any other similar distributions of profits to
the Company or any of its Subsidiaries that owns outstanding shares of capital
stock or similar equity interests of such Subsidiary.







                                      -6-

<PAGE>   12

         Section 5.5. Financial Statements. The Company has delivered to each
Purchaser copies of the financial statements of the Company and its Subsidiaries
listed on Schedule 5.5. All of said financial statements (including in each case
the related schedules and notes) fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of the
respective dates specified in such financial statements and the consolidated
results of their operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP consistently applied
throughout the periods involved except as set forth in the notes thereto
(subject, in the case of any interim financial statements, to normal, recurring
year-end adjustments).

         Section 5.6. Compliance with Laws, Other Instruments, etc. The
execution, delivery and performance by the Company of this Agreement and the
Series A Notes will not (a) contravene, result in any breach of, or constitute a
default under, or result in the creation of any Lien in respect of any property
of the Company or any Restricted Subsidiary under, any indenture, mortgage, deed
of trust, loan, purchase or credit agreement, lease, corporate charter or
by-laws, or any other agreement or instrument to which the Company or any
Restricted Subsidiary is bound or by which the Company or any Restricted
Subsidiary or any of their respective properties may be bound or affected, (b)
conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree, or ruling of any court, arbitrator or
Governmental Authority applicable to the Company or any Restricted Subsidiary or
(c) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Restricted Subsidiary
which could reasonably be expected to have a Material Adverse Effect.

         Section 5.7. Governmental Authorizations, etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Series A Notes.

         Section 5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits or proceedings pending or, to the knowledge of
the Company, threatened against or affecting the Company or any Subsidiary or
any property of the Company or any Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

         (b) Neither the Company nor any Subsidiary is in default under any term
of any agreement or instrument to which it is a party or by which it is bound,
or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

         Section 5.9. Taxes. The Company and its Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and 



                                      -7-

<PAGE>   13


payable and before they have become delinquent, except for any taxes and
assessments (a) the amount of which is not individually or in the aggregate
Material or (b) the amount, applicability or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which the Company or a Subsidiary, as the case may be, has established adequate
reserves in accordance with GAAP. The Company knows of no basis for any other
tax or assessment that could reasonably be expected to have a Material Adverse
Effect. The charges, accruals and reserves on the books of the Company and its
Subsidiaries in respect of Federal, state or other taxes for all fiscal periods
are adequate. The Federal income tax liabilities of the Company and its
Subsidiaries have been determined by the Internal Revenue Service and paid for
all fiscal years up to and including the fiscal year ended June 30, 1988.

        Section 5.10. Title to Property; Leases. The Company and its
Subsidiaries have good and sufficient title to their respective properties which
the Company and its Subsidiaries own or purport to own that individually or in
the aggregate are Material, including all such properties reflected in the most
recent audited balance sheet referred to in Section 5.5 or purported to have
been acquired by the Company or any Restricted Subsidiary after said date
(except as sold or otherwise disposed of in the ordinary course of business), in
each case free and clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and subsisting and are
in full force and effect in all material respects.

         Section 5.11. Licenses, Permits, etc. Except as disclosed in Schedule
5.11,

         (a) the Company and its Restricted Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents, copyrights, service
marks, trademarks and trade names, or rights thereto, that individually or in
the aggregate are Material, without known conflict with the rights of others;

         (b) to the best knowledge of the Company, no product of the Company or
any Restricted Subsidiary infringes in any Material respect any license, permit,
franchise, authorization, patent, copyright, service mark, trademark, trade name
or other right owned by any other Person; and

         (c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its Restricted
Subsidiaries with respect to any patent, copyright, service mark, trademark,
trade name or other right owned or used by the Company or any of its Restricted
Subsidiaries.

        Section 5.12. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in 









                                      -8-
<PAGE>   14



either case pursuant to Title I or IV of ERISA or to such penalty or excise tax
provisions or to Section 401(a)(29) or 412 of the Code, other than such
liabilities or Liens as would not be individually or in the aggregate Material.

         (b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities, or such deficit, if any, did not exceed
5% of Consolidated Net Worth. The terms "benefit liabilities" has the meaning
specified in section 4001 of ERISA and the terms "current value" and "present
value" have the meaning specified in section 3 of ERISA.

         (c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.

         (d) The expected post-retirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Restricted Subsidiaries is not Material or has
otherwise been disclosed in the most recent audited consolidated financial
statements of the Company and its Subsidiaries.

         (e) The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is subject to
the prohibitions of section 406 of ERISA or in connection with which a tax could
be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation
by the Company in the first sentence of this Section 5.12(e) is made in reliance
upon and subject to the accuracy of each Purchaser's representation in Section
6.2 as to the sources of the funds used to pay the purchase price of the Notes
to be purchased by such Purchaser.

        Section 5.13. Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Series A Notes or any similar
securities for sale to, or solicited any offer to buy any of the same from, or
otherwise approached or negotiated in respect thereof with, any Person other
than the Purchasers and not more than 60 other Institutional Investors, each of
which has been offered the Series A Notes at a private sale for investment.
Neither the Company nor anyone acting on its behalf has taken, or will take, any
action that would subject the issuance or sale of the Series A Notes to the
registration requirements of Section 5 of the Securities Act.

        Section 5.14. Use of Proceeds; Margin Regulations. The Company will
apply the proceeds of the sale of the Series A Notes to repay outstanding
indebtedness, repurchase shares of capital stock of the Company and for general
corporate purposes. No part of the proceeds from the sale of the Series A Notes
hereunder will be used, directly or indirectly, for the purpose of buying or
carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System (12 CFR 207), or for the purpose of
buying or carrying 





                                      -9-
<PAGE>   15


or trading in any securities under such circumstances as to involve the Company
in a violation of Regulation X of said Board (12 CFR 224) or to involve any
broker or dealer in a violation of Regulation T of said Board (12 CFR 220).
Margin stock does not constitute more than 5% of the value of the consolidated
assets of the Company and its Subsidiaries and the Company does not have any
present intention that margin stock will constitute more than 5% of the value of
such assets. As used in this Section, the terms "margin stock" and "purpose of
buying or carrying" shall have the meanings assigned to them in said Regulation
U.

        Section 5.15. Existing Debt; Future Liens. (a) Except as described
therein, Schedule 5.15 sets forth a complete and correct list of all outstanding
Debt of the Company and its Restricted Subsidiaries as of June 30, 1998, since
which date there has been no Material change in the amounts, interest rates,
sinking funds, installment payments or maturities of the Debt of the Company or
its Restricted Subsidiaries. Neither the Company nor any Restricted Subsidiary
is in default and no waiver of default is currently in effect, in the payment of
any principal or interest on any Debt of the Company or such Restricted
Subsidiary and no event or condition exists with respect to any Debt of the
Company or any Restricted Subsidiary (exceeding such amount) that would permit
(or that with notice or the lapse of time, or both, would permit) one or more
Persons to cause such Debt to become due and payable before its stated maturity
or before its regularly scheduled dates of payment.

         (b) Neither the Company nor any Restricted Subsidiary has agreed or
consented to cause or permit in the future (upon the happening of a contingency
or otherwise) any of its property, whether now owned or hereafter acquired, to
be subject to a Lien not permitted by Section 10.5.

        Section 5.16. Foreign Assets Control Regulations, etc. Neither the sale
of the Series A Notes by the Company hereunder nor its use of the proceeds
thereof will violate the Trading with the Enemy Act, as amended, or any of the
foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto.

        Section 5.17. Status under Certain Statutes. Neither the Company nor any
Subsidiary is an "investment company" registered or required to be registered
under the Investment Company Act of 1940, as amended, or is subject to
regulation under the Public Utility Holding Company Act of 1935, as amended, the
ICC Termination Act of 1995 or the Federal Power Act, as amended.

        Section 5.18. Environmental Matters. Neither the Company nor any
Restricted Subsidiary has knowledge of any claim or has received any notice of
any claim, and no proceeding has been instituted asserting any claim against the
Company or any of its Restricted Subsidiaries or any of their respective real
properties now owned, leased or operated by any of them or other assets, and
neither the Company nor any Restricted Subsidiary has any knowledge of any
proceeding which has been instituted asserting any claim against the Company or
any of its Restricted Subsidiaries for any real properties formerly owned,
leased or operated by any them, alleging any damage to the environment or
violation of any Environmental Laws, except, 






                                      -10-
<PAGE>   16



in each case, such as could not reasonably be expected to result in a Material
Adverse Effect. Except as otherwise disclosed to the Purchasers in writing:

                   (a) neither the Company nor any Restricted Subsidiary has
         knowledge of any facts which would give rise to any claim, public or
         private, of violation of Environmental Laws or damage to the
         environment emanating from, occurring on or in any way related to real
         properties now or formerly owned, leased or operated by any of them or
         to other assets or their use, except, in each case, such as could not
         reasonably be expected to result in a Material Adverse Effect;

                   (b) neither the Company nor any of its Restricted
         Subsidiaries has stored any Hazardous Materials on real properties now
         or formerly owned, leased or operated by any of them and or has
         disposed of any Hazardous Materials in a manner contrary to any
         Environmental Laws in each case in any manner that could reasonably be
         expected to result in a Material Adverse Effect; and

                   (c) all buildings on all real properties now owned, leased or
         operated by the Company or any of its Restricted Subsidiaries are in
         compliance with applicable Environmental Laws, except where failure to
         comply could not reasonably be expected to result in a Material Adverse
         Effect.

         Section 5.19. Computer 2000 Compliant. The Company and its Restricted
Subsidiaries have implemented measures to have all critical business and
computer systems year 2000 compliant in a timely manner and the advent of the
year 2000 and its impact on said internal business and computer systems are not
expected to have a Material Adverse Effect.

SECTION 6.           REPRESENTATIONS OF THE PURCHASER.

         Section 6.1. Purchase for Investment. Each Purchaser represents that
such Purchaser is purchasing the Series A Notes for its own account or for one
or more separate accounts maintained by it or for the account of one or more
pension or trust funds and not with a view to the distribution thereof, provided
that the disposition of its or their property shall at all times be within its
or their control. Each Purchaser understands that the Series A Notes have not
been registered under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Series A Notes.

         Section 6.2. Source of Funds. Each Purchaser represents that at least
one of the following statements is an accurate representation as to each source
of funds (a "Source") to be used by such Purchaser to pay the purchase price of
the Series A Notes to be purchased by such Purchaser hereunder:

                   (a) if such Purchaser is an insurance company, the Source is
         an "insurance company general account" within the meaning of Department
         of Labor Prohibited Transaction Exemption 95-60 (issued July 12, 1995)
         and there is no "employee benefit 






                                      -11-
<PAGE>   17



         plan" (within the meaning of Section 3(3) of ERISA or Section
         4975(e)(1) of the Code), treating as a single plan, all plans
         maintained by the same employer or employee organization, with respect
         to which the amount of the general account reserves and liabilities for
         all contracts held by or on behalf of such plan, exceed ten percent
         (10%) of the total reserves and liabilities of such general account
         (exclusive of separate account liabilities) plus surplus, as set forth
         in the NAIC Annual Statement filed with your such Purchaser's state of
         domicile; or

                   (b) the Source is either (i) an insurance company pooled
         separate account, within the meaning of Prohibited Transaction
         Exemption ("PTE") 90-1 (issued January 29, 1990), or (ii) a bank
         collective investment fund, within the meaning of the PTE 91-38 (issued
         July 12, 1991) and, except as such Purchaser has disclosed to the
         Company in writing pursuant to this paragraph (b), no employee benefit
         plan or group of plans maintained by the same employer or employee
         organization beneficially owns more than 10% of all assets allocated to
         such pooled separate account or collective investment fund; or

                   (c) the Source constitutes assets of an "investment fund"
         (within the meaning of Part V of the QPAM Exemption) managed by a
         "qualified professional asset manager" or "QPAM" (within the meaning of
         Part V of the QPAM Exemption), no employee benefit plan's assets that
         are included in such investment fund, when combined with the assets of
         all other employee benefit plans established or maintained by the same
         employer or by an affiliate (within the meaning of Section V(c)(1) of
         the QPAM Exemption) of such employer or by the same employee
         organization and managed by such QPAM, exceed 20% of the total client
         assets managed by such QPAM, the conditions of Part l(c) and (g) of the
         QPAM Exemption are satisfied, neither the QPAM nor a person controlling
         or controlled by the QPAM (applying the definition of "control" in
         Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
         Company and (i) the identity of such QPAM and (ii) the names of all
         employee benefit plans whose assets are included in such investment
         fund have been disclosed to the Company in writing pursuant to this
         paragraph (c); or

                   (d) the Source is a governmental plan; or

                   (e) the Source is one or more employee benefit plans, or a
         separate account or trust fund comprised of one or more employee
         benefit plans, each of which has been identified to the Company in
         writing pursuant to this paragraph (e); or

                   (f) the Source does not include assets of any employee
         benefit plan, other than a plan exempt from the coverage of ERISA.

         The Company shall deliver a certificate on the date of the Closing,
with respect to any Purchaser, on the date of the issuance of any Additional
Notes, with respect to any Additional Purchasers and on or prior to the date of
any transfer of any Notes, with respect to any subsequent holder of such Notes,
which certificate shall either state that (i) it is neither a "party in
interest" (as defined in Title I, Section 3(14) of ERISA) nor a "disqualified
person" (as 






                                      -12-
<PAGE>   18


defined in Section 4975(e)(2) of the Code), with respect to any plan identified
pursuant to paragraphs (b) or (e) above, or (ii) with respect to any plan,
identified pursuant to paragraph (c) above, neither it nor any "affiliate" (as
defined in Section V(c) of the QPAM Exemption) has at this time, and during the
immediately preceding one year has exercised the authority to appoint or
terminate said QPAM as manager of the assets of any plan identified in writing
pursuant to paragraph (c) above or to negotiate the terms of said QPAM's
management agreement on behalf of any such identified plans.

         As used in this Section 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.

SECTION 7.           INFORMATION AS TO COMPANY.

         Section 7.1. Financial and Business Information. The Company shall
deliver to each holder of Notes that is an Institutional Investor:

                   (a) Quarterly Statements -- within 60 days after the end of
         each quarterly fiscal period in each fiscal year of the Company (other
         than the last quarterly fiscal period of each such fiscal year),
         duplicate copies of:

                            (i) a consolidated balance sheet of the Company and
                  its Subsidiaries as at the end of such quarter, and

                           (ii) consolidated statements of income, changes in
                  shareholders' equity and cash flows of the Company and its
                  Subsidiaries for such quarter and (in the case of the second
                  and third quarters) for the portion of the fiscal year ending
                  with such quarter,

         setting forth in each case in comparative form the figures for the
         corresponding periods in the previous fiscal year, all in reasonable
         detail, prepared in accordance with GAAP applicable to quarterly
         financial statements generally, and certified by a Senior Financial
         Officer as fairly presenting, in all material respects, the financial
         position of the companies being reported on and their results of
         operations and cash flows, subject to changes resulting from normal,
         recurring year-end adjustments, provided that delivery within the time
         period specified above of copies of the Company's Quarterly Report on
         Form 10-Q prepared in compliance with the requirements therefor and
         filed with the Securities and Exchange Commission shall be deemed to
         satisfy the requirements of this Section 7.1(a);

                   (b) Annual Statements -- within 105 days after the end of 
         each fiscal year of the Company, duplicate copies of,

                            (i) a consolidated balance sheet of the Company and
                  its Subsidiaries, as at the end of such year, and










                                      -13-
<PAGE>   19

                           (ii) consolidated statements of income, changes in
                  shareholders' equity and cash flows of the Company and its
                  Subsidiaries, for such year,

         setting forth in each case in comparative form the figures for the
         previous fiscal year, all in reasonable detail, prepared in accordance
         with GAAP, and accompanied by

                  (A) an opinion thereon of independent certified public
         accountants of recognized national standing, which opinion shall state
         that such financial statements present fairly, in all material
         respects, the financial position of the companies being reported upon
         and their results of operations and cash flows and have been prepared
         in conformity with GAAP, and that the examination of such accountants
         in connection with such financial statements has been made in
         accordance with generally accepted auditing standards, and that such
         audit provides a reasonable basis for such opinion in the
         circumstances, and

                   (B) at any time the Company is not subject to the reporting
         requirement of the Exchange Act, a certificate of such accountants
         stating that they have reviewed this Agreement and stating further
         whether, in making their audit, they have become aware of any condition
         or event that then constitutes a Default or an Event of Default, and,
         if they are aware that any such condition or event then exists,
         specifying the nature and period of the existence thereof (it being
         understood that such accountants shall not be liable, directly or
         indirectly, for any failure to obtain knowledge of any Default or Event
         of Default unless such accountants should have obtained knowledge
         thereof in making an audit in accordance with generally accepted
         auditing standards or did not make such an audit),

         provided that the delivery within the time period specified above of
         the Company's Annual Report on Form 10-K for such fiscal year (together
         with the Company's annual report to shareholders, if any, prepared
         pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance
         with the requirements therefor and filed with the Securities and
         Exchange Commission shall be deemed to satisfy the requirements of this
         Section 7.1(b);

                   (c) SEC and Other Reports -- promptly upon their becoming
         available, one copy of (i) each financial statement, report, notice or
         proxy statement sent by the Company or any Restricted Subsidiary to
         public securities holders generally, and (ii) each regular or periodic
         report, each registration statement (without exhibits except as
         expressly requested by such holder), and each prospectus and all
         amendments thereto filed by the Company or any Restricted Subsidiary
         with the Securities and Exchange Commission and of all press releases
         and other statements made available generally by the Company or any
         Restricted Subsidiary to the public concerning developments that are
         Material;

                   (d) Notice of Default or Event of Default -- promptly, and in
         any event within five days after a Responsible Officer obtains actual
         knowledge of any Default or Event of Default or that any Person has
         given any notice or taken any action with respect to a claimed default
         hereunder or that any Person has given any notice or taken any action





                                      -14-
<PAGE>   20


         with respect to a claimed default of the type referred to in Section
         11(f), a written notice specifying the nature and period of existence
         thereof and what action the Company is taking or proposes to take with
         respect thereto;

                   (e) ERISA Matters -- promptly, and in any event within five
         days after a Responsible Officer becoming aware of any of the
         following, a written notice setting forth the nature thereof and the
         action, if any, that the Company or an ERISA Affiliate proposes to take
         with respect thereto:

                            (i) with respect to any Plan, any reportable event,
                  as defined in section 4043(b) of ERISA and the regulations
                  thereunder, for which notice thereof has not been waived
                  pursuant to such regulations as in effect on the date hereof;
                  or

                           (ii) the taking by the PBGC of steps to institute, or
                  the threatening by the PBGC of the institution of, proceedings
                  under section 4042 of ERISA for the termination of, or the
                  appointment of a trustee to administer, any Plan, or the
                  receipt by the Company or any ERISA Affiliate of a notice from
                  a Multiemployer Plan that such action has been taken by the
                  PBGC with respect to such Multiemployer Plan; or

                          (iii) any event, transaction or condition that could
                  result in the incurrence of any liability by the Company or
                  any ERISA Affiliate pursuant to Title I or IV of ERISA or the
                  penalty or excise tax provisions of the Code relating to
                  employee benefit plans, or in the imposition of any Lien on
                  any of the rights, properties or assets of the Company or any
                  ERISA Affiliate pursuant to Title I or IV of ERISA or such
                  penalty or excise tax provisions, if such liability or Lien,
                  taken together with any other such liabilities or Liens then
                  existing, could reasonably be expected to have a Material
                  Adverse Effect;

                   (f) Notices from Governmental Authority -- promptly, and in
         any event within 30 days of receipt thereof, copies of any notice to
         the Company or any Restricted Subsidiary from any Federal or state
         Governmental Authority relating to any order, ruling, statute or other
         law or regulation that could reasonably be expected to have a Material
         Adverse Effect;

                  (g) Supplements -- promptly and in any event within 10
         Business Days after the execution and delivery of any Supplement, a
         copy thereof; and

                   (h) Requested Information -- with reasonable promptness, such
         other data and information relating to the business, operations,
         affairs, financial condition, assets or properties of the Company or
         any of its Subsidiaries or relating to the ability of the Company to
         perform its obligations hereunder and under the Notes as from time to
         time may be reasonably requested by any such holder of Notes that is an
         Institutional Investor.






                                      -15-
<PAGE>   21



         Notwithstanding the foregoing, in the event that one or more
Unrestricted Subsidiaries shall either (i) own more than 10% of the total
consolidated assets of the Company and its Subsidiaries, or (ii) account for
more than 10% of the consolidated gross revenues of the Company and its
Subsidiaries, determined in each case in accordance with GAAP, then, within the
respective periods provided in Sections 7.1(a) and (b), above, the Company shall
deliver to each holder of Notes that is an Institutional Investor, financial
statements of the character and for the dates and periods as in said Sections
7.1(a) and (b) covering the group of Unrestricted Subsidiaries (on a
consolidated basis), together with a consolidating statement reflecting
eliminations or adjustments required to reconcile the financial statements of
such group of Unrestricted Subsidiaries to the financial statements delivered
pursuant to Sections 7.1(a) and (b).

         Section 7.2. Officer's Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:

                   (a) Covenant Compliance -- the information (including
         detailed calculations) required in order to establish whether the
         Company was in compliance with the requirements of Section 10.2 through
         Section 10.9 hereof, inclusive, during the quarterly or annual period
         covered by the statements then being furnished (including with respect
         to each such Section, where applicable, the calculations of the maximum
         or minimum amount, ratio or percentage, as the case may be, permissible
         under the terms of such Sections, and the calculation of the amount,
         ratio or percentage then in existence); and

                   (b) Event of Default -- a statement that such officer has
         reviewed the relevant terms hereof and has made, or caused to be made,
         under his or her supervision, a review of the transactions and
         conditions of the Company and its Restricted Subsidiaries from the
         beginning of the quarterly or annual period covered by the statements
         then being furnished to the date of the certificate and that such
         review shall not have disclosed the existence during such period of any
         condition or event that constitutes a Default or an Event of Default
         or, if any such condition or event existed or exists (including,
         without limitation, any such event or condition resulting from the
         failure of the Company or any Restricted Subsidiary to comply with any
         Environmental Law), specifying the nature and period of existence
         thereof and what action the Company shall have taken or proposes to
         take with respect thereto.

         Section 7.3. Inspection. The Company shall permit the representatives
of each holder of Notes that is an Institutional Investor:

                   (a) No Default -- if no Default or Event of Default then
         exists, at the expense of such holder and upon reasonable prior notice
         to the Company, to visit the principal executive office of the Company,
         to discuss the affairs, finances and accounts of the Company and its
         Restricted Subsidiaries with the Company's officers and (with the
         consent of the Company, which consent will not be unreasonably
         withheld) its independent public accountants, and (with the consent of
         the Company, which consent will not be unreasonably withheld) to visit
         the other offices and properties of the 





                                      -16-
<PAGE>   22


         Company and each Restricted Subsidiary, all at such reasonable times
         and as often as may be reasonably requested in writing; and

                   (b) Default -- if a Default or Event of Default then exists,
         at the expense of the Company, to visit and inspect any of the offices
         or properties of the Company or any Restricted Subsidiary, to examine
         all their respective books of account, records, reports and other
         papers, to make copies and extracts therefrom, and (with the consent of
         the Company, which consent will not be unreasonably withheld) to
         discuss their respective affairs, finances and accounts with their
         respective officers and independent public accountants at the Company's
         executive offices, all at such times and as often as may be requested.

SECTION 8.           PREPAYMENT OF THE SERIES A NOTES.

         Section 8.1. Required Prepayments. There shall be no principal
prepayments on any Tranche of the Series A Notes. The entire principal amount of
each Tranche of Series A Notes shall become due and payable on its respective
maturity date.

         Section 8.2. Optional Prepayments with Make-Whole Amount. The Company
may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of (but if in part then in a minimum principal amount
of $1,000,000), the outstanding Notes of any Series on any interest payment date
for the Notes of such Series at 100% of the principal amount so prepaid, and
accrued interest thereon to the date of prepayment, plus the Make-Whole Amount
determined for the prepayment date with respect to such principal amount of each
Note of the applicable Series then outstanding. The Company will give each
holder of Notes of the Series to be prepaid written notice of each optional
prepayment under this Section 8.2 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall specify
such date, the aggregate principal amount of the Notes and each Series of Notes
to be prepaid on such date, the principal amount of each Note held by such
holder to be prepaid (determined in accordance with Section 8.3), and the
interest to be paid on the prepayment date with respect to such principal amount
being prepaid, and shall be accompanied by a certificate of a Senior Financial
Officer as to the estimated Make-Whole Amount due in connection with such
prepayment (calculated as if the date of such notice were the date of the
prepayment), setting forth the details of such computation. Two Business Days
prior to such prepayment, the Company shall deliver to each holder of Notes of
the Series to be prepaid a certificate of a Senior Financial Officer specifying
the calculation of such Make-Whole Amount as of the specified prepayment date.

         Section 8.3. Allocation of Partial Prepayments. In the case of each
partial prepayment of the Notes pursuant to the provisions of Section 8.2, the
principal amount of the Notes of the Series to be prepaid shall be allocated
among all of the Notes of such Series at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid principal amounts thereof. All
regularly scheduled partial prepayments made with respect to any Additional
Series of Notes pursuant to any Supplement shall be allocated as therein
provided.




                                      -17-
<PAGE>   23


         Section 8.4. Maturity; Surrender, etc. In the case of each prepayment
of Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full
shall be surrendered to the Company and cancelled and shall not be reissued, and
no Note shall be issued in lieu of any prepaid principal amount of any Note.

         Section 8.5. Purchase of Notes. The Company will not and will not
permit any Restricted Subsidiary or any Affiliate to purchase, redeem, prepay or
otherwise acquire, directly or indirectly, any of the outstanding Notes except
upon the payment or prepayment of the Notes in accordance with the terms of this
Agreement (including any Supplement hereto) and the Notes. The Company will
promptly cancel all Notes acquired by it or any Restricted Subsidiary or any
Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to
any provision of this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.

         Section 8.6. Make-Whole Amount for Series A Notes. The term "Make-Whole
Amount" means, with respect to a Series A Note of any Tranche, an amount equal
to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of the Series A Note of such
Tranche over the amount of such Called Principal, provided that the Make-Whole
Amount may in no event be less than zero. For the purposes of determining the
Make-Whole Amount, the following terms have the following meanings:

                  "Called Principal" means, with respect to a Series A Note of
         any Tranche, the principal of such Series A Note that is to be prepaid
         pursuant to Section 8.2 or has become or is declared to be immediately
         due and payable pursuant to Section 12.1, as the context requires.

                  "Discounted Value" means, with respect to the Called Principal
         of a Series A Note of any Tranche, the amount obtained by discounting
         all Remaining Scheduled Payments with respect to such Called Principal
         from their respective scheduled due dates to the Settlement Date with
         respect to such Called Principal, in accordance with accepted financial
         practice and at a discount factor (applied on the same periodic basis
         as that on which interest on such Series A Note is payable) equal to
         the Reinvestment Yield with respect to such Called Principal.

                  "Reinvestment Yield" means, with respect to the Called
         Principal of a Series A Note of any Tranche, 0.50% over the yield to
         maturity implied by (i) the ask yields reported, as of 10:00 A.M. (New
         York City time) on the second Business Day preceding the Settlement
         Date with respect to such Called Principal, on the display designated
         as "PX-1" on the Bloomberg Financial Market Services Screen (or such
         other display as may replace Page PX-1 on Bloomberg Financial Market
         Services Screen) for actively traded U.S. Treasury securities having a
         maturity equal to the Remaining Average Life of 







                                      -18-
<PAGE>   24


         such Called Principal as of such Settlement Date, or (ii) if such
         yields are not reported as of such time or the yields reported as of
         such time are not ascertainable, the Treasury Constant Maturity Series
         Yields reported, for the latest day for which such yields have been so
         reported as of the second Business Day preceding the Settlement Date
         with respect to such Called Principal, in Federal Reserve Statistical
         Release H. 15 (519) (or any comparable successor publication) for
         actively traded U.S. Treasury securities having a constant maturity
         equal to the Remaining Average Life of such Called Principal as of such
         Settlement Date. Such implied yield will be determined, if necessary,
         by (a) converting U.S. Treasury bill quotations to bond-equivalent
         yields in accordance with accepted financial practice and (b)
         interpolating linearly between (1) the actively traded U.S. Treasury
         security with the maturity closest to and greater than the Remaining
         Average Life and (2) the actively traded U.S. Treasury security with
         the maturity closest to and less than the Remaining Average Life.

                  "Remaining Average Life" means, with respect to any Called
         Principal, the number of years (calculated to the nearest one-twelfth
         year) obtained by dividing (i) such Called Principal into (ii) the sum
         of the products obtained by multiplying (a) the principal component of
         each Remaining Scheduled Payment with respect to such Called Principal
         by (b) the number of years (calculated to the nearest one-twelfth year)
         that will elapse between the Settlement Date with respect to such
         Called Principal and the scheduled due date of such Remaining Scheduled
         Payment.

                  "Remaining Scheduled Payments" means, with respect to the
         Called Principal of a Series A Note of any Tranche, all payments of
         such Called Principal and interest thereon that would be due after the
         Settlement Date with respect to such Called Principal if no payment of
         such Called Principal were made prior to its scheduled due date,
         provided that if such Settlement Date is not a date on which interest
         payments are due to be made under the terms of such Series A Note, then
         the amount of the next succeeding scheduled interest payment will be
         reduced by the amount of interest accrued to such Settlement Date and
         required to be paid on such Settlement Date pursuant to Section 8.2 or
         12.1.

                  "Settlement Date" means, with respect to the Called Principal
         of a Series A Note of any Tranche, the date on which such Called
         Principal is to be prepaid pursuant to Section 8.2 or has become or is
         declared to be immediately due and payable pursuant to Section 12.1, as
         the context requires.

SECTION 9.           AFFIRMATIVE COVENANTS.

         The Company covenants that so long as any of the Notes are outstanding:

         Section 9.1. Compliance with Law. The Company will, and will cause each
of its Subsidiaries to, comply with all laws, ordinances or governmental rules
or regulations to which each of them is subject, including, without limitation,
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their 





                                      -19-
<PAGE>   25


respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

         Section 9.2. Insurance. The Company will, and will cause each of its
Restricted Subsidiaries to, maintain, with financially sound and reputable
insurers, insurance with respect to their respective properties and businesses
against such casualties and contingencies, of such types, on such terms and in
such amounts (including deductibles, co-insurance and self-insurance, if
adequate reserves are maintained with respect thereto) as is customary in the
case of entities of established reputations engaged in the same or a similar
business and similarly situated.

         Section 9.3. Maintenance of Properties. The Company will, and will
cause each of its Restricted Subsidiaries to, maintain and keep, or cause to be
maintained and kept, their respective properties in good repair, working order
and condition (other than ordinary wear and tear), so that the business carried
on in connection therewith may be properly conducted at all times, provided that
this Section shall not prevent the Company or any Restricted Subsidiary from
discontinuing the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

         Section 9.4. Payment of Taxes and Claims. The Company will, and will
cause each of its Subsidiaries to, file all tax returns required to be filed in
any jurisdiction and to pay and discharge all taxes shown to be due and payable
on such returns and all other taxes, assessments, governmental charges, or
levies imposed on them or any of their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent and all claims for which sums have become due and
payable that have or might become a Lien on properties or assets of the Company
or any Subsidiary, provided that neither the Company nor any Subsidiary need pay
any such tax or assessment or claims if (i) the amount, applicability or
validity thereof is contested by the Company or such Restricted Subsidiary on a
timely basis in good faith and in appropriate proceedings, and the Company or a
Subsidiary has established adequate reserves therefor in accordance with GAAP on
the books of the Company or such Subsidiary or (ii) the nonpayment of all such
taxes and assessments in the aggregate could not reasonably be expected to have
a Material Adverse Effect.

         Section 9.5. Corporate Existence, etc. Subject to Sections 10.6 and
10.7, the Company will at all times preserve and keep in full force and effect
its corporate existence and the Company will at all times preserve and keep in
full force and effect the corporate existence of each of its Restricted
Subsidiaries (unless merged into the Company or a Restricted Subsidiary) and all
rights and franchises of the Company and its Restricted Subsidiaries unless, in
the good faith judgment of the Company, the termination of or failure to
preserve and keep in full force and effect such corporate existence, right or
franchise could not, individually or in the aggregate, have a Material Adverse
Effect.







                                      -20-
<PAGE>   26

SECTION 10.          NEGATIVE COVENANTS.

         The Company covenants that so long as any of the Notes are outstanding:

         Section 10.1. Transactions with Affiliates. The Company will not and
will not permit any Restricted Subsidiary to enter into directly or indirectly
any transaction or Material group of related transactions (including without
limitation the purchase, lease, sale or exchange of properties of any kind or
the rendering of any service) with any Affiliate, except in the ordinary course
and pursuant to the reasonable requirements of the Company's or such Restricted
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Company or such Restricted Subsidiary than would be obtainable in a
comparable arm's-length transaction with a Person not an Affiliate.

         Section 10.2. Consolidated Net Worth. The Company will not at any time
permit Consolidated Net Worth to be less than:

                  (a) for the fiscal year ending on December 31, 1998, the sum
         of (i) $215,000,000 plus (ii) 25% of Consolidated Net Income (but only
         if a positive number) for the 3 or 6 month period, as the case may be,
         beginning on July 1, 1998 and ending as of the end of each completed
         fiscal quarter of such fiscal year; and

                  (b) for each fiscal year thereafter, the sum of (i) the amount
         of Consolidated Net Worth required to be maintained as of the end of
         the immediately preceding fiscal year, plus (ii) 25% of Consolidated
         Net Income (but only if a positive number) for the 3, 6, 9 or 12 month
         period, as the case may be, beginning on the first day of such fiscal
         year and ending as of the end of each completed fiscal quarter of such
         fiscal year.

         Section 10.3. Limitations on Debt. The Company will not at any time
permit Consolidated Debt to exceed 50% of Consolidated Total Capitalization.

         Section 10.4. Limitations on Priority Debt. The Company will not, and
will not permit any Restricted Subsidiary to, create, assume or incur or in any
manner be or become liable in respect of any Priority Debt, unless at the time
of issuance thereof and after giving effect thereto and to the application of
the proceeds thereof, Priority Debt shall not exceed 20% of Consolidated Net
Worth.

         Any corporation which becomes a Restricted Subsidiary after the date of
this Agreement shall, for all purposes of this Section 10.4, be deemed to have
created, assumed or incurred, at the time it becomes a Restricted Subsidiary,
all Priority Debt of such corporation existing immediately after it becomes a
Restricted Subsidiary.

         Section 10.5. Limitation on Liens. The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly create,
incur, assume or permit to exist (upon the happening of a contingency or
otherwise) any Lien on or with respect to any property or asset (including,
without limitation, any document or instrument in respect of goods or accounts
receivable) of the Company or any such Restricted Subsidiary, whether now owned
or held or 








                                      -21-
<PAGE>   27


hereafter acquired, or any income or profits therefrom, or assign or otherwise
convey any right to receive income or profits (unless it makes, or causes to be
made, effective provision whereby the Notes will be equally and ratably secured
with any and all other obligations thereby secured so long as such other Debt
shall be so secured, such security to be pursuant to an agreement reasonably
satisfactory in the good faith judgment of the holders of more than 50% in
aggregate principal amount of the Notes of all Series then outstanding and, in
any such case, the Notes shall have the benefit, to the fullest extent that, and
with such priority as, the holders of the Notes may be entitled under applicable
law, of an equitable Lien on such property), except:

                   (a) Liens for property taxes and assessments or governmental
         charges or levies and Liens securing claims or demands of mechanics and
         materialmen, provided payment thereof is not at the time required by
         Section 9.4;

                   (b) Liens incidental to the normal conduct of business of the
         Company or any Restricted Subsidiary or to secure claims for labor,
         materials or supplies in respect of obligations not overdue or in
         connection with the ownership of its property (including Liens in
         connection with worker's compensation, unemployment insurance and other
         like laws, warehousemen's and attorney's liens and statutory landlords'
         liens) which are not incurred in connection with the incurrence of Debt
         or the borrowing of money and which do not in the aggregate Materially
         impair the use of such property in the operation of the business of the
         Company and its Restricted Subsidiaries, taken as a whole, or the value
         of such property for the purpose of such business;

                   (c) Liens created by or resulting from any litigation or
         legal proceeding which is currently being contested in good faith by
         appropriate proceedings or which result from a final, nonappealable
         judgment which is satisfied, or whose satisfaction is assured by the
         posting of a bond or other collateral, within 60 days after such
         judgment becomes final and nonappealable;

                   (d) Liens of carriers, warehousemen, mechanics and
         materialmen, and other like Liens, in existence less than 60 days (or
         in the case of any Lien with respect to which the underlying claim
         shall currently be contested by the Company or such Restricted
         Subsidiary in good faith by appropriate proceedings, the period of time
         during which such Lien is being contested) from the date of creation
         thereof in respect of obligations not overdue or deposits to obtain the
         release of such Liens;

                   (e) Liens securing Debt of a Restricted Subsidiary to the
         Company or to another Restricted Subsidiary;

                   (f) Liens existing as of the date of Closing and reflected in
         Schedule 10.5;

                   (g) minor survey exceptions or minor encumbrances, easements
         or reservations, or rights of others for rights-of-way, utilities and
         other similar purposes, or zoning or other restrictions as to the use
         of real properties, which are necessary for the conduct of the
         activities of the Company and its Restricted Subsidiaries or which
         customarily exist on real properties of corporations engaged in similar
         activities and 





                                      -22-
<PAGE>   28


         similarly situated and which do not in any event Materially detract
         from the value of such real property;

                   (h) leases or subleases granted to any Person by the Company
         or any Restricted Subsidiary, as lessor or sublessor, on any property
         owned or leased by the Company or any Restricted Subsidiary, provided
         that in each case such lease or sublease shall not Materially detract
         from the value of the property leased or subleased;

                   (i) Liens incurred after the date of Closing given to secure
         the payment of the purchase price incurred in connection with the
         acquisition or construction of property (other than accounts receivable
         or inventory) useful and intended to be used in carrying on the
         business of the Company or a Restricted Subsidiary, including Liens
         existing on such property at the time of acquisition or construction
         thereof, or Liens incurred within 180 days of such acquisition or the
         completion of such construction, provided that (i) the Lien shall
         attach solely to the property acquired, purchased or constructed, (ii)
         at the time of acquisition or construction of such property, the
         aggregate amount remaining unpaid on all Debt secured by Liens on such
         property, whether or not assumed by the Company or a Restricted
         Subsidiary, shall not exceed an amount equal to the lesser of the total
         purchase price or fair market value at the time of acquisition or
         construction of such property (as determined in good faith by one or
         more officers to whom authority to enter into the transaction has been
         delegated by the Board of Directors of the Company), and (iii) the
         aggregate principal amount of all Debt secured by such Liens shall be
         permitted by the limitations set forth in Section 10.3;

                   (j) any extensions, renewals or replacements of any Lien
         permitted by the preceding subparagraphs (e), (f) or (i) of this
         Section 10.5, provided that (i) no additional property shall be
         encumbered by such Liens, (ii) the unpaid principal amount of the Debt
         secured thereby shall not be increased on or after the date of any
         extension, renewal or replacement, (iii) the weighted average life to
         maturity of the Debt secured by such Liens shall not be reduced, and
         (iv) at such time and immediately after giving effect thereto, no
         Default or Event of Default shall have occurred and be continuing; and

                   (k) in addition to the Liens permitted by the preceding
         subparagraphs (a) through (j), inclusive, of this Section 10.5, Liens
         securing Priority Debt of the Company or any Restricted Subsidiary,
         provided that such Priority Debt shall be permitted by the applicable
         limitations set forth in Section 10.4.

        Section 10.6. Sales of Assets. The Company will not, and will not permit
any Restricted Subsidiary to, sell, lease or otherwise dispose of any
substantial part (as defined below) of the assets of the Company and its
Restricted Subsidiaries; provided, however, that the Company or any Restricted
Subsidiary may sell, lease or otherwise dispose of assets constituting a
substantial part of the assets of the Company and its Restricted Subsidiaries
(including any assets sold pursuant to asset securitization transactions) if, at
such time and after giving effect thereto, no Default or Event of Default shall
have occurred and be continuing and an amount equal to the net proceeds received
from such sale, lease or other disposition shall be used:




                                      -23-
<PAGE>   29


                   (1) within one year of such sale, lease or disposition, to
         acquire property, plant and equipment used or useful in carrying on the
         business of the Company and its Restricted Subsidiaries (or the Company
         or any Restricted Subsidiary shall be unconditionally committed to
         acquire such property) and having a value at least equal to the value
         of such assets sold, leased or otherwise disposed of; or

                   (2) to prepay or retire Senior Debt of the Company and/or its
         Restricted Subsidiaries, in which case the Notes will be prepaid,
         ratably in accordance with the unpaid principal amount of such Senior
         Debt, in compliance with Section 8.2.

         As used in this Section 10.6, a sale, lease or other disposition of
assets shall be deemed to be a "substantial part" of the assets of the Company
and its Restricted Subsidiaries 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
Company and its Restricted Subsidiaries (other than in transactions in the
ordinary course of business, Excluded Dispositions and Excluded Sale and
Leaseback Transactions) (i) during any fiscal year of the Company, exceeds 15%
of the book value of Consolidated Total Assets, determined as of the end of the
fiscal year immediately preceding such sale, lease or other disposition, or (ii)
during the period beginning on the date of Closing and ending on the date of
such sale, lease or other disposition, exceeds 30% of the book value of
Consolidated Total Assets, determined as of the end of the fiscal year
immediately preceding such sale, lease or other disposition.

        Section 10.7. Merger, Consolidation and Sale of Stock. The Company will
not, and will not permit any Restricted Subsidiary to, consolidate with or be a
party to a merger with any other corporation; provided, however, that:

                   (1) any Restricted Subsidiary may merge or consolidate with
         or into the Company or any other Person, so long as in any merger or
         consolidation involving the Company, the Company shall be the surviving
         or continuing corporation and in any merger involving a Restricted
         Subsidiary, such Restricted Subsidiary or another Restricted Subsidiary
         is the surviving or continuing entity; and

                   (2) the Company may consolidate or merge with any other
         Person if (i) either (x) the Company shall be the surviving or
         continuing corporation, or (y) if the surviving or continuing entity is
         other than the Company, (A) such entity is organized under the laws of
         the United States or any jurisdiction thereof, (B) such entity
         expressly assumes, by written agreement satisfactory in scope and form
         to the holders of more than 50% in aggregate principal amount of the
         outstanding Notes, all obligations of the Company under the Notes and
         this Agreement (C) such entity would be permitted to incur at least
         $1.00 of additional Priority Debt under the limitations of Section 10.4
         and (D) such entity shall cause to be delivered to each holder of Notes
         an opinion of independent counsel to the effect that all agreements or
         instruments effecting such assumption are enforceable in accordance
         with their terms and comply with the provisions of this Section 10.7
         and otherwise satisfactory in scope and form to the holders of more
         than 50% in aggregate principal amount of the outstanding Notes, and
         (ii) at the time of such consolidation or 







                                      -24-
<PAGE>   30


         merger and after giving effect thereto, no Default or Event of Default
         shall have occurred and be continuing.

        Section 10.8. Non-Significant Subsidiaries. The Company will not and
will not permit the Non-Significant Subsidiaries to account for more than 25% of
Consolidated Total Assets or more than 25% of Consolidated Total Revenue.

        Section 10.9. Designation of Restricted and Unrestricted Subsidiaries.
(a) The Board of Directors of the Company may designate any Unrestricted
Subsidiary as a Restricted Subsidiary and may designate any Restricted
Subsidiary as an Unrestricted Subsidiary, provided that (i) at such time and
immediately after giving effect thereto (x) the Company would be permitted to
incur at least $1.00 of additional Priority Debt under the limitations of
Section 10.4, and (y) no Default or Event of Default shall have occurred and be
continuing, and (ii) the designation of such Subsidiary as Restricted or
Unrestricted shall not be changed pursuant to this Section 10.9 on more than two
occasions, provided further that First Chemical Corporation, Quality Chemicals,
Inc. and EKC Technologies, Inc. shall at all times be designated as Restricted
Subsidiaries. The Company shall, within 10 days after the designation of any
Subsidiary as Restricted or Unrestricted, give written notice of such action to
each holder of a Note.

         (b) The Company acknowledges and agrees that if, after the date hereof,
any Person becomes a Restricted Subsidiary, all Debt, leases and other
obligations and all Liens and Investments of such Person existing as of the date
such Person becomes a Restricted Subsidiary shall be deemed, for all purposes of
this Agreement, to have been incurred, entered into, made or created at the same
time such Person so becomes a Restricted Subsidiary.

       Section 10.10. Nature of Business. Neither the Company nor any Restricted
Subsidiary will engage in any business if, as a result, the general nature of
the business, taken on a consolidated basis, which would then be engaged in by
the Company and its Restricted Subsidiaries would be substantially changed from
the general nature of the business engaged in by the Company and its Restricted
Subsidiaries on the date of this Agreement.

SECTION 11.          EVENTS OF DEFAULT.

         An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:

                   (a) the Company defaults in the payment of any principal or
         Make-Whole Amount, if any, on any Note when the same becomes due and
         payable, whether at maturity or at a date fixed for prepayment or by
         declaration or otherwise; or

                   (b) the Company defaults in the payment of any interest on
         any Note for more than five Business Days after the same becomes due
         and payable; or

                   (c) the Company defaults in the performance of or compliance
         with any term contained in Section 10; or




                                      -25-
<PAGE>   31

                   (d) the Company defaults in the performance of or compliance
         with any term contained herein or in any Supplement (other than those
         referred to in paragraphs (a), (b) and (c) of this Section 11) and such
         default is not remedied within 30 days after the earlier of (i) a
         Responsible Officer obtaining actual knowledge of such default and (ii)
         the Company receiving written notice of such default from any holder of
         a Note (any such written notice to be identified as a "notice of
         default" and to refer specifically to this paragraph (d) of Section
         11); or

                   (e) any representation or warranty made in writing by or on
         behalf of the Company or by any officer of the Company in this
         Agreement or any Supplement or in any writing furnished in connection
         with the transactions contemplated hereby or thereby proves to have
         been false or incorrect in any material respect on the date as of which
         made; or

                   (f) (i) the Company or any Significant Subsidiary is in
         default in the performance of or compliance with any term (including
         default in the payment of any principal of, premium or make-whole
         amount or interest) of any evidence of any Debt in an aggregate
         outstanding principal amount exceeding 5% of Consolidated Net Worth or
         of any mortgage, indenture or other agreement relating thereto or any
         other condition exists, and as a consequence of such default or
         condition such Debt has become, or has been declared (or one or more
         Persons are entitled to declare such Debt to be), due and payable
         before its stated maturity or before its regularly scheduled dates of
         payment, or (ii) as a consequence of the occurrence or continuation of
         any event or condition (other than the passage of time or the right of
         the holder of Debt to convert such Debt into equity interests), (x) the
         Company or any Significant Subsidiary has become obligated to purchase
         or repay Debt before its regular maturity or before its regularly
         scheduled dates of payment in an aggregate outstanding principal amount
         of at least exceeding 5% of Consolidated Net Worth, or (y) one or more
         Persons have the right to require the Company or any Significant
         Subsidiary so to purchase or repay such Debt; or

                   (g) the Company or any of its Significant Subsidiaries (i) is
         generally not paying, or admits in writing its inability to pay, its
         debts as they become due, (ii) files, or consents by answer or
         otherwise to the filing against it of, a petition for relief or
         reorganization or arrangement or any other petition in bankruptcy, for
         liquidation or to take advantage of any bankruptcy, insolvency,
         reorganization, moratorium or other similar law of any jurisdiction,
         (iii) makes an assignment for the benefit of its creditors, (iv)
         consents to the appointment of a custodian, receiver, trustee or other
         officer with similar powers with respect to it or with respect to any
         substantial part of its property, (v) is adjudicated as insolvent or to
         be liquidated, or (vi) takes corporate action for the purpose of any of
         the foregoing; or

                   (h) a court or governmental authority of competent
         jurisdiction enters an order appointing, without consent by the Company
         or any of its Significant Subsidiaries, a custodian, receiver, trustee
         or other officer with similar powers with respect to it or with respect
         to any substantial part of its property, or constituting an order for
         relief or approving a petition for relief or reorganization or any
         other petition in bankruptcy or for 








                                      -26-
<PAGE>   32


         liquidation or to take advantage of any bankruptcy or insolvency law of
         any jurisdiction, or ordering the dissolution, winding-up or
         liquidation of the Company or any of its Significant Subsidiaries, or
         any such petition shall be filed against the Company or any of its
         Significant Subsidiaries and such petition shall not be dismissed
         within 60 days; or

                   (i) a final judgment or judgments for the payment of money
         aggregating in excess of 5% of Consolidated Net Worth are rendered
         against one or more of the Company or any of its Significant
         Subsidiaries and which judgments are not, within 60 days after entry
         thereof, bonded, discharged or stayed pending appeal, or are not
         discharged within 60 days after the expiration of such stay; or

                   (j) if (i) any Plan shall fail to satisfy the minimum funding
         standards of ERISA or the Code for any plan year or part thereof or a
         waiver of such standards or extension of any amortization period is
         sought or granted under section 412 of the Code, (ii) a notice of
         intent to terminate any Plan shall have been or is reasonably expected
         to be filed with the PBGC or the PBGC shall have instituted proceedings
         under ERISA section 4042 to terminate or appoint a trustee to
         administer any Plan or the PBGC shall have notified the Company or any
         ERISA Affiliate that a Plan may become a subject of any such
         proceedings, (iii) the aggregate "amount of unfunded benefit
         liabilities" (within the meaning of section 4001(a)(18) of ERISA) under
         all Plans, determined in accordance with Title IV of ERISA, shall
         exceed 5% of Consolidated Net Worth, (iv) the Company or any ERISA
         Affiliate shall have incurred or is reasonably expected to incur any
         liability pursuant to Title I or IV of ERISA or the penalty or excise
         tax provisions of the Code relating to employee benefit plans, (v) the
         Company or any ERISA Affiliate withdraws from any Multiemployer Plan,
         or (vi) the Company or any Restricted Subsidiary establishes or amends
         any employee welfare benefit plan that provides post-employment welfare
         benefits in a manner that would increase the liability of the Company
         or any Restricted Subsidiary thereunder; and any such event or events
         described in clauses (i) through (vi) above, either individually or
         together with any other such event or events, could reasonably be
         expected to have a Material Adverse Effect.

As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.

SECTION 12.          REMEDIES ON DEFAULT, ETC.

        Section 12.1. Acceleration. (a) If an Event of Default with respect to
the Company described in paragraph (g) or (h) of Section 11 (other than an Event
of Default described in clause (i) of paragraph (g) or described in clause (vi)
of paragraph (g) by virtue of the fact that such clause encompasses clause (i)
of paragraph (g)) has occurred, all the Notes of every Series then outstanding
shall automatically become immediately due and payable.

         (b) If any other Event of Default has occurred and is continuing, any
holder or holders of more than 50% in aggregate principal amount of the Notes of
all Series at the time outstanding may at any time at its or their option, by
notice or notices to the Company, declare all the Notes then outstanding to be
immediately due and payable.




                                      -27-
<PAGE>   33


         (c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing with respect to any Series of Notes,
any holder or holders of Notes of such Series at the time outstanding affected
by such Event of Default may at any time, at its or their option, by notice or
notices to the Company, declare all the Notes of such Series held by it or them
to be immediately due and payable.

         Upon any Note becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Note will forthwith mature and the entire
unpaid principal amount of such Note, plus (x) all accrued and unpaid interest
thereon and (y) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for), and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.

        Section 12.2. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the holder of
any Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.

        Section 12.3. Rescission. At any time after any Notes of any Series have
been declared due and payable pursuant to clause (b) or (c) of Section 12.1, the
holders of more than 50% in aggregate principal amount of the Notes of all
Series then outstanding, by written notice to the Company, may rescind and annul
any such declaration and its consequences if (a) the Company has paid all
overdue interest on the Notes of such Series, all principal of and Make-Whole
Amount, if any, on any Notes of such Series that are due and payable and are
unpaid other than by reason of such declaration, and all interest on such
overdue principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes of such Series, at
the Default Rate, (b) all Events of Default and Defaults, other than non-payment
of amounts that have become due solely by reason of such declaration, have been
cured or have been waived pursuant to Section 17, and (c) no judgment or decree
has been entered for the payment of any monies due pursuant hereto or to any
Note. No rescission and annulment under this Section 12.3 will extend to or
affect any subsequent Event of Default or Default or impair any right consequent
thereon.

        Section 12.4. No Waivers or Election of Remedies, Expenses, etc. No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or 









                                      -28-
<PAGE>   34


hereafter available at law, in equity, by statute or otherwise. Without limiting
the obligations of the Company under Section 15, the Company will pay to the
holder of each Note on demand such further amount as shall be sufficient to
cover all costs and expenses of such holder incurred in any enforcement or
collection under this Section 12, including, without limitation, reasonable
attorneys' fees, expenses and disbursements.

SECTION 13.          REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.

        Section 13.1. Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.

        Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note
at the principal executive office of the Company for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or its attorney duly authorized in writing and
accompanied by the address for notices of each transferee of such Note or part
thereof), the Company shall execute and deliver, at the Company's expense
(except as provided below), one or more new Notes (as requested by the holder
thereof) of an identical Series (and of an identical tranche if such Series has
separate tranches) in exchange therefor, in an aggregate principal amount equal
to the unpaid principal amount of the surrendered Note. Each such new Note shall
be payable to such Person as such holder may request and shall be substantially
in the form of the Note of such Series originally issued hereunder or pursuant
to any Supplement. Each such new Note shall be dated and bear interest from the
date to which interest shall have been paid on the surrendered Note or dated the
date of the surrendered Note if no interest shall have been paid thereon. The
Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than $100,000, provided that
if necessary to enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than $100,000. Any
transferee, by its acceptance of a Note registered in its name (or the name of
its nominee), shall be deemed to have made the representation set forth in
Section 6.2, provided that such holder may (in reliance upon information
provided by the Company, which shall not be unreasonably withheld) make a
representation to the effect that the purchase by such holder of any Note will
not constitute a non-exempt prohibited transaction under Section 406(a) of
ERISA.

        Section 13.3. Replacement of Notes. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and








                                      -29-
<PAGE>   35

                   (a) in the case of loss, theft or destruction, of indemnity
         reasonably satisfactory to it (provided that if the holder of such Note
         is, or is a nominee for, an original Purchaser or another holder of a
         Note with a minimum net worth of at least $10,000,000, such Person's
         own unsecured agreement of indemnity shall be deemed to be
         satisfactory), or

                   (b) in the case of mutilation, upon surrender and
         cancellation thereof,

the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note of an identical Series (and of an identical tranche if such Series has
separate tranches), dated and bearing interest from the date to which interest
shall have been paid on such lost, stolen, destroyed or mutilated Note or dated
the date of such lost, stolen, destroyed or mutilated Note if no interest shall
have been paid thereon.

SECTION 14.          PAYMENTS ON NOTES.

        Section 14.1. Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in Chicago, Illinois at the principal office of Bank of
America in such jurisdiction. The Company may at any time, by notice to each
holder of a Note, change the place of payment of the Notes so long as such place
of payment shall be either the principal office of the Company in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.

        Section 14.2. Home Office Payment. So long as any Purchaser or any
Purchaser's nominee shall be the holder of any Note, and notwithstanding
anything contained in Section 14.1 or in such Note to the contrary, the Company
will pay all sums becoming due on such Note for principal, Make-Whole Amount, if
any, and interest by the method and at the address specified for such purpose in
Schedule A hereto or Schedule A attached to any Supplement, or by such other
method or at such other address as such Purchaser shall have from time to time
specified to the Company in writing for such purpose, without the presentation
or surrender of such Note or the making of any notation thereon, except that
upon written request of the Company made concurrently with or reasonably
promptly after payment or prepayment in full of any Note, such Purchaser shall
surrender such Note for cancellation, reasonably promptly after any such
request, to the Company at its principal executive office or at the place of
payment most recently designated by the Company pursuant to Section 14.1. Prior
to any sale or other disposition of any Note held by such Purchaser or such
Purchaser's nominee such Purchaser will, at its election, either endorse thereon
the amount of principal paid thereon and the last date to which interest has
been paid thereon or surrender such Note to the Company in exchange for a new
Note or Notes pursuant to Section 13.2. The Company will afford the benefits of
this Section 14.2 to any Institutional Investor that is the direct or indirect
transferee of any Note.

SECTION 15.          EXPENSES, ETC.

        Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including 







                                      -30-
<PAGE>   36


reasonable attorneys' fees of a special counsel and, if reasonably required,
local or other counsel) incurred by each Purchaser and each other holder of a
Note in connection with such transactions and in connection with any amendments,
waivers or consents under or in respect of this Agreement or the Notes (whether
or not such amendment, waiver or consent becomes effective), including, without
limitation: (a) the costs and expenses incurred in enforcing or defending (or
determining whether or how to enforce or defend) any rights under this Agreement
or the Notes or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement or the Notes, or
by reason of being a holder of any Note, and (b) the costs and expenses,
including financial advisors' fees, incurred in connection with the insolvency
or bankruptcy of the Company or any Subsidiary or in connection with any
work-out or restructuring of the transactions contemplated hereby and by the
Notes. The Company will pay, and will save each Purchaser and each other holder
of a Note harmless from, all claims in respect of any fees, costs or expenses,
if any, of brokers and finders (other than those retained by the Purchasers).

        Section 15.2. Survival. The obligations of the Company under this
Section 15 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement, any Supplement or the
Notes, and the termination of this Agreement or any Supplement.

SECTION 16.      SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.

         All representations and warranties contained herein or in any
Supplement shall survive the execution and delivery of this Agreement, such
Supplement and the Notes, the purchase or transfer by any Purchaser or any
Additional Purchaser of any Note or portion thereof or interest therein, and may
be relied upon by any subsequent holder of a Note, regardless of any
investigation made at any time by or on behalf of any Purchaser or any
Additional Purchaser or any other holder of a Note. All statements contained in
any certificate or other instrument delivered by or on behalf of the Company
pursuant to this Agreement or any Supplement shall be deemed representations and
warranties of the Company under this Agreement. Subject to the preceding
sentence, this Agreement (including every Supplement) and the Notes embody the
entire agreement and understanding between the Purchasers and the Additional
Purchasers and the Company and supersede all prior agreements and understandings
relating to the subject matter hereof.

SECTION 17.      AMENDMENT AND WAIVER.

        Section 17.1. Requirements. (a) This Agreement (including any Supplement
hereto) and the Notes may be amended, and the observance of any term hereof or
of the Notes may be waived (either retroactively or prospectively), with (and
only with) the written consent of the Company and the holders of Notes holding
more than 50% in aggregate principal amount of the Notes at the time
outstanding, except that (a) no amendment or waiver of any of the provisions of
Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it is used
therein), will be effective as to any Purchaser unless consented to by such
Purchaser in writing, and (b) no such amendment or waiver may, without the
unanimous written consent of all of the holders of Notes of all Series







                                      -31-
<PAGE>   37

at the time outstanding, (i) subject to the provisions of Section 12 relating to
acceleration or rescission, change the amount or time of any prepayment or
payment of principal of, or reduce the rate or change the time of payment or
method of computation of interest or of the Make-Whole Amount on, the Notes of
such Series, (ii) change the percentage of the principal amount of the Notes the
holders of which are required to consent to any such amendment or waiver, or
(iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20. For purposes of this
Section 17.1, any amendment to Section 11 which gives the holders of Notes of
any Series greater rights than the holders of Notes of any other Series with
respect to any Default or Event of Default shall require the consent of more
than 50% in aggregate principal amount of the Notes of each Series.

         (b) Supplements. Notwithstanding anything to the contrary contained
herein, the Company may enter into any Supplement providing for the issuance of
one or more Series of Additional Notes consistent with Sections 2.2 and 4.11
hereof without obtaining the consent of any holder of any other Series of Notes.

        Section 17.2.    Solicitation of Holders of Notes.

         (a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.

         (b) Payment. The Company will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes of any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.

        Section 17.3. Binding Effect, etc. Any amendment or waiver consented to
as provided in this Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term "this Agreement" and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.






                                      -32-
<PAGE>   38

        Section 17.4. Notes Held by Company, etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company, any Restricted Subsidiary or any of its
Affiliates shall be deemed not to be outstanding.

SECTION 18.          NOTICES.

         All notices and communications provided for hereunder shall be in
writing and sent (a) by telefacsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:

                   (i) if to a Purchaser or such Purchaser's nominee, to such
         Purchaser or it at the address specified for such communications in
         Schedule A, or at such other address as such Purchaser or it shall have
         specified to the Company in writing,

                  (ii) if to any other holder of any Note, to such holder at
         such address as such other holder shall have specified to the Company
         in writing, or

                 (iii) if to the Company, to the Company at its address set
         forth at the beginning hereof to the attention of Chief Financial
         Officer, or at such other address as the Company shall have specified
         to the holder of each Note in writing.

Notices under this Section 18 will be deemed given only when actually received.

SECTION 19.          REPRODUCTION OF DOCUMENTS.

         This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by any holder of Notes at the time such Notes
were issued (except the Notes themselves), and (c) financial statements,
certificates and other information previously or hereafter furnished to any
holder of Notes, may be reproduced by such holder by any photographic,
photostatic, microfilm, microcard, miniature photographic or other similar
process and such holder may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by a Purchaser in the
regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence. This
Section 19 shall not prohibit the Company or any other holder of Notes from
contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.






                                      -33-
<PAGE>   39

SECTION 20.          CONFIDENTIAL INFORMATION.

         For the purposes of this Section 20, "Confidential Information" means
information delivered to any Purchaser by or on behalf of the Company or any
Restricted Subsidiary in connection with the transactions contemplated by or
otherwise pursuant to this Agreement that is proprietary in nature and that was
clearly marked or labeled or otherwise adequately identified when received by
such Purchaser as being confidential information of the Company or such
Restricted Subsidiary, provided that such term does not include information that
(a) was publicly known or otherwise known to such Purchaser prior to the time of
such disclosure, (b) subsequently becomes publicly known through no act or
omission by such Purchaser or any Person acting on its behalf, (c) otherwise
becomes known to such Purchaser other than through disclosure by the Company or
any Restricted Subsidiary or (d) constitutes financial statements delivered to
such Purchaser under Section 7.1 that are otherwise publicly available. Each
Purchaser will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by such Purchaser in good faith to protect
confidential information of third parties delivered to such Purchaser, provided
that such Purchaser may deliver or disclose Confidential Information to (i) such
Purchaser's directors, trustees, officers, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by such Purchaser's Notes), (ii)
such Purchaser's financial advisors and other professional advisors who agree to
hold confidential the Confidential Information substantially in accordance with
the terms of this Section 20, (iii) any other holder of any Note, (iv) any
Institutional Investor to which such Purchaser sells or offers to sell such Note
or any part thereof or any participation therein (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 20), (v) any Person from which such Purchaser offers
to purchase any security of the Company (if such Person has agreed in writing
prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 20), (vi) any federal or state regulatory authority
having jurisdiction over such Purchaser, (vii) the National Association of
Insurance Commissioners or any similar organization, or any nationally
recognized rating agency that requires access to information about such
Purchaser's investment portfolio or (viii) any other Person to which such
delivery or disclosure may be necessary or appropriate (w) to effect compliance
with any law, rule, regulation or order applicable to such Purchaser, (x) in
response to any subpoena or other legal process, (y) in connection with any
litigation to which such Purchaser is a party or (z) if an Event of Default has
occurred and is continuing, to the extent such Purchaser may reasonably
determine such delivery and disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies under such
Purchaser's Notes and this Agreement. Each holder of a Note, by its acceptance
of a Note, will be deemed to have agreed to be bound by and to be entitled to
the benefits of this Section 20 as though it were a party to this Agreement. On
reasonable request by the Company in connection with the delivery to any holder
of a Note of information required to be delivered to such holder under this
Agreement or requested by such holder (other than a holder that is a party to
this Agreement or its nominee), such holder will enter into an agreement with
the Company embodying the provisions of this Section 20.



                                      -34-
<PAGE>   40

SECTION 21.          SUBSTITUTION OF PURCHASER.

         Each Purchaser shall have the right to substitute any one of such
Purchaser's Affiliates as the purchaser of the Notes that such Purchaser has
agreed to purchase hereunder, by written notice to the Company, which notice
shall be signed by both such Purchaser and such Affiliate, shall contain such
Affiliate's agreement to be bound by this Agreement and shall contain a
confirmation by such Affiliate of the accuracy with respect to it of the
representations set forth in Section 6. Upon receipt of such notice, wherever
the word "Purchaser" is used in this Agreement (other than in this Section 21),
such word shall be deemed to refer to such Affiliate in lieu of such Purchaser.
In the event that such Affiliate is so substituted as a purchaser hereunder and
such Affiliate thereafter transfers to such Purchaser all of the Notes then held
by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "Purchaser" is used in this Agreement (other than in this
Section 21), such word shall no longer be deemed to refer to such Affiliate, but
shall refer to such Purchaser, and such Purchaser shall have all the rights of
an original holder of the Notes under this Agreement.

SECTION 22.          MISCELLANEOUS.

        Section 22.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement (including all covenants and other agreements
contained in any Supplement) by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.

        Section 22.2. Payments Due on Non-Business Days. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of principal
of or Make-Whole Amount or interest on any Note that is due on a date other than
a Business Day shall be made on the next succeeding Business Day without
including the additional days elapsed in the computation of the interest payable
on such next succeeding Business Day.

        Section 22.3. Severability. Any provision of this Agreement that 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 hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.

        Section 22.4. Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.

         Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, the same shall be done in accordance with GAAP, to







                                      -35-
<PAGE>   41


the extent applicable, except where such principles are inconsistent with the
express requirements of this Agreement.

        Section 22.5. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original but all of which together
shall constitute one instrument. Each counterpart may consist of a number of
copies hereof, each signed by less than all, but together signed by all, of the
parties hereto.

        Section 22.6. Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of Illinois excluding choice-of-law principles of the law
of such State that would require the application of the laws of a jurisdiction
other than such State.

                                    * * * * *



                                      -36-
<PAGE>   42



         The execution hereof by the Purchasers shall constitute a contract
among the Company and the Purchasers for the uses and purposes hereinabove set
forth. This Agreement may be executed in any number of counterparts, each
executed counterpart constituting an original but all together only one
agreement.





                                              CHEMFIRST INC.



                                              By: /s/ Max P. Bowman
                                                  Printed Name:  Max P. Bowman
                                                  Its: Treasurer

ChemFirst Inc.
700 North Street
Jackson, Mississippi  39202-3095




                                      -37-
<PAGE>   43



         Accepted as of the first date written above.


                                     STATE FARM LIFE INSURANCE COMPANY



                                     By: /s/ Donald E. Heltner
                                        Name:  Donald E. Heltner
                                        Title: Vice President - Taxable Fixed
                                                 Income

                                     By: /s/ Lyle Triebwasser
                                         Name:   Lyle Triebwasser
                                         Title:  Senior Investment Officer




                                     NATIONWIDE LIFE INSURANCE COMPANY



                                     By: /s/ Mark W. Poeppelman
                                         Name:  Mark W. Poeppelman
                                         Title:  Authorized Signatory





                                      -38-
<PAGE>   44





                       INFORMATION RELATING TO PURCHASERS

                                                        PRINCIPAL AMOUNT OF
  NAME AND ADDRESS                                           TRANCHE A
   OF PURCHASERS                                       NOTES TO BE PURCHASED

STATE FARM LIFE INSURANCE COMPANY                            $10,000,000
One State Farm Plaza
Bloomington, Illinois  61710

Payments

All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
ChemFirst, Inc., Series A, Tranche A, 6.50% Senior Notes due 2003, PPN 16361 A*
7, principal, premium or interest) to:

         The Chase Manhattan Bank
         ABA #021000021
         SSG Private Income Processing
         A/C #900-9-000200

         for Credit to:    Account Number G 06893
                           Ref. PPN #16361 A* 7
                           Rate:  6.50%
                           Maturity Date:  2003

Notices

All notices with respect to payment, and written confirmation of each such
payment, to be addressed to:

         State Farm Life Insurance Company
         One State Farm Plaza
         Bloomington, Illinois  61710
         Attention:  Investment Accounting Dept. D-3

Address for all other communications:

         State Farm Life Insurance Company
         One State Farm Plaza
         Bloomington, Illinois  61710
         Attention:  Investment Department E-10

Name of Nominee in which Notes are to be issued:  None

Taxpayer I.D. Number:  37-0533090



                                   SCHEDULE A
                          (to Note Purchase Agreement)

<PAGE>   45





                                                            PRINCIPAL AMOUNT OF
 NAME AND ADDRESS                                                TRANCHE A
  OF PURCHASERS                                            NOTES TO BE PURCHASED

NATIONWIDE LIFE INSURANCE COMPANY                                $5,000,000
One Nationwide Plaza (1-33-07)
Columbus, Ohio  43215-2220
Attention:  Corporate Fixed-Income Securities
Telefacsimile:  (614) 249-4553
Confirmation:  (614) 249-7882

Payments

All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
ChemFirst, Inc., Series A, Tranche A, 6.50% Senior Notes due 2003, PPN 16361A A*
7, principal, premium or interest) to:

         The Bank of New York
         ABA #021-000-018
         BNF:  IOC566
         F/A/O Nationwide Life Insurance Company
         Attention:  P&I Department

Notices

All notices of payment on or in respect of the Notes and written confirmation of
each such payment to:

         Nationwide Life Insurance Company
         c/o The Bank of New York
         P. O. Box 19266
         Newark, New Jersey  07195
         Attention:  P&I Department

         With a copy to:

         Nationwide Life Insurance Company
         One Nationwide Plaza (1-32-05)
         Columbus, Ohio  43215-2220
         Attention:  Investment Accounting

All notices and communications other than those in respect to payments to be
addressed as first provided above.

Name of Nominee in which Notes are to be issued:  None

Taxpayer I.D. Number:  31-4156830

                                      A-2

<PAGE>   46





                                                         PRINCIPAL AMOUNT OF
  NAME AND ADDRESS                                           TRANCHE B
   OF PURCHASERS                                        NOTES TO BE PURCHASED

STATE FARM LIFE INSURANCE COMPANY                            $5,000,000
One State Farm Plaza
Bloomington, Illinois  61710

Payments

All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
ChemFirst, Inc., Series A, Tranche B, 6.75% Senior Notes due 2005, PPN 16361A A@
5, principal, premium or interest) to:

         The Chase Manhattan Bank
         ABA #021000021
         SSG Private Income Processing
         A/C #900-9-000200

         for Credit to:    Account Number G 06893
                           Ref. PPN #16361A A@ 5
                           Rate:  6.50%
                           Maturity Date:  2003

Notices

All notices with respect to payment, and written confirmation of each such
payment, to be addressed to:

         State Farm Life Insurance Company
         One State Farm Plaza
         Bloomington, Illinois  61710
         Attention:  Investment Accounting Dept. D-3

Address for all other communications:

         State Farm Life Insurance Company
         One State Farm Plaza
         Bloomington, Illinois  61710
         Attention:  Investment Department E-10

Name of Nominee in which Notes are to be issued:  None

Taxpayer I.D. Number:  37-0533090


                                      A-3
<PAGE>   47






                                  DEFINED TERMS

         As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:

         "Additional Notes" is defined in Section 2.2.

         "Additional Purchasers" means purchasers of Additional Notes.

         "Adjusted Consolidated Net Worth" means, as of the date of any
determination thereof, Consolidated Net Worth less the total amount of all
Restricted Investments in excess of 10% of Consolidated Net Worth as of such
date of determination.

         "Affiliate" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any other Person who, to the knowledge of the
Company, beneficially owns or holds, directly or indirectly, 10% or more of any
class of voting or equity interests of such first Person or any other Person of
which such first Person, to the knowledge of the Company, beneficially owns or
holds, in the aggregate, directly or indirectly, 10% or more of any class of
voting or equity interests. As used in this definition, "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. Unless the context
otherwise clearly requires, any reference to an "Affiliate" is a reference to an
Affiliate of the Company.

         "Business Day" means (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in Chicago, Illinois or Jackson, Mississippi are
required or authorized to be closed.

         "Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.

         "Capital Lease Obligation" means, with respect to any Person and a
Capital Lease, the amount of the obligation of such Person, as the lessee under
the Capital Lease, which would appear as a liability on a balance sheet of such
Person in accordance with GAAP.

         "Closing" is defined in Section 3.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.






                                   SCHEDULE B
                          (to Note Purchase Agreement)



<PAGE>   48


         "Company" means ChemFirst Inc., a Mississippi corporation.

         "Confidential Information" is defined in Section 20.

         "Consolidated Debt" means, as of the date of any determination thereof,
all Debt of the Company and its Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP.

         "Consolidated Net Income" means for any period the consolidated net
income (or loss) of the Company and its Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided, however, that any gain or
loss on the sale, lease, transfer or disposition of any portion of the capital
stock or assets of FirstMiss Steel, Inc. by the Company shall be excluded from
the determination of Consolidated Net Income.

         "Consolidated Net Worth" means, at any time,

                   (a) the sum of (i) the par value (or value stated on the
         books of the corporation) of the capital stock of the Company and its
         Restricted Subsidiaries plus (ii) the amount of the paid-in capital and
         retained earnings of the Company and its Restricted Subsidiaries, in
         each case as such amounts would be shown on a consolidated balance
         sheet of the Company and its Restricted Subsidiaries as of such time
         prepared in accordance with GAAP, minus

                   (b) to the extent included in clause (a), all amounts
         properly attributable to (i) minority interests, if any, in the stock
         and surplus of Restricted Subsidiaries and (ii) Treasury Stock.

         "Consolidated Total Assets" means, as of the date of any determination
thereof, the total amount of all assets of the Company and its Restricted
Subsidiaries, determined on a consolidated basis in accordance with GAAP.

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

         "Debt" means, with respect to any Person, without duplication,

                   (a) its liabilities for borrowed money;

                   (b) its liabilities for the deferred purchase price of
         property acquired by such Person (excluding accounts payable arising in
         the ordinary course of business but including, without limitation, all
         liabilities created or arising under any conditional sale or other
         title retention agreement with respect to any such property);

                   (c) its Capital Lease Obligations;


                                      B-2
<PAGE>   49

                   (d) all liabilities for borrowed money secured by any Lien
         with respect to any property owned by such Person (whether or not it
         has assumed or otherwise become liable for such liabilities); and

                   (e) Guarantees of such Person with respect to liabilities of
         a type described in any of clauses (a) through (d) hereof.

         Debt of any Person shall include all obligations of such Person of the
character described in clauses (a) through (e) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.

         "Consolidated Total Revenue" means, as of the date of any determination
thereof, the total amount of all revenue of the Company and its Restricted
Subsidiaries, determined on a consolidated basis in accordance with GAAP.

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

         "Default Rate" means that rate of interest that is the greater of (i)
2% per annum above the rate of interest stated in clause (a) of the first
paragraph of any Note or (ii) 2% per annum over the rate of interest publicly
announced by Bank of America, NT & SA in Chicago, Illinois as its "base" or
"prime" rate.

         "Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.

         "ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.

         "Event of Default" is defined in Section 11.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Excluded Disposition" means any sale, lease, transfer or other
disposition of the capital stock or assets of FirstMiss Steel, Inc.

         "Excluded Sale and Leaseback Transaction" shall mean any sale or
transfer of property owned by the Company or any Restricted Subsidiary to any
Person within 180 days following 


                                      B-3
<PAGE>   50


the acquisition or construction of such property by the Company or any
Restricted Subsidiary if the Company or a Restricted Subsidiary shall
concurrently with such sale or transfer lease such property, as lessee.

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

         "Governmental Authority" means

                   (a) the government of

                           (i) the United States of America or any State or
                  other political subdivision thereof, or

                           (ii) any jurisdiction in which the Company or any
                  Restricted Subsidiary conducts all or any part of its
                  business, or which asserts jurisdiction over any properties of
                  the Company or any Restricted Subsidiary, or

                   (b) any entity exercising executive, legislative, judicial,
         regulatory or administrative functions of, or pertaining to, any such
         government.

         "Guaranty" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:

                   (a) to purchase such indebtedness or obligation or any
         property constituting security therefor;

                   (b) to advance or supply funds (i) for the purchase or
         payment of such indebtedness or obligation, or (ii) to maintain any
         working capital or other balance sheet condition or any income
         statement condition of any other Person or otherwise to advance or make
         available funds for the purchase or payment of such indebtedness or
         obligation;

                   (c) to lease properties or to purchase properties or services
         primarily for the purpose of assuring the owner of such indebtedness or
         obligation of the ability of any other Person to make payment of the
         indebtedness or obligation; or

                   (d) otherwise to assure the owner of such indebtedness or
         obligation against loss in respect thereof.

In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.




                                      B-4

<PAGE>   51

         "Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).

         "holder" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
13.1.

         "Institutional Investor" means (a) any original purchaser of a Note and
(b) any bank, trust company, savings and loan association or other financial
institution, any pension plan, any investment company, any insurance company,
any broker or dealer, or any other similar financial institution or entity,
regardless of legal form.

         "Investments" shall mean all investments, in cash or by delivery of
property made, directly or indirectly in any Person, whether by acquisition of
shares of capital stock, indebtedness or other obligations or securities or by
loan, advance, capital contribution or otherwise; provided, however, that
"Investments" shall not mean or include routine investments in property or
assets to be used or consumed in the ordinary course of business.

         "Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).

         "Make-Whole Amount" shall have the meaning (i) set forth in Section 8.6
with respect to any Series A Note, and (ii) set forth in the applicable
Supplement with respect to any other Series of Notes.

         "Material" means material in relation to the business, operations,
affairs, financial condition, assets or properties of the Company and its
Restricted Subsidiaries taken as a whole.

         "Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Restricted Subsidiaries, taken as a whole, or (b) the ability of
the Company to perform its obligations under this Agreement and the Notes, or
(c) the validity or enforceability of this Agreement or the Notes.

         "Memorandum" is defined in Section 5.3.

         "Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).



                                      B-5
<PAGE>   52

         "Non-Significant Subsidiary" means any Restricted Subsidiary that is
not a Significant Subsidiary.

         "Notes" is defined in Section 1.

         "Officer's Certificate" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.

         "PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.

         "Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.

         "Plan" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.

         "Priority Debt" means (without duplication), as of the date of any
determination thereof, (i) all unsecured Debt of Restricted Subsidiaries (other
than Debt owing to the Company or another Restricted Subsidiary), and (ii) all
Debt of the Company and its Restricted Subsidiaries secured by Liens other than
permitted by subparagraphs (a) through (j), inclusive, of Section 10.5.

         "property" or "properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.

         "QPAM Exemption" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.

         "Responsible Officer" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this agreement.

         "Restricted Investments" means all Investments, other than the
following:

                   (a) Investments by the Company and its Restricted
         Subsidiaries in and to Restricted Subsidiaries, including any
         Investment in a corporation which, after giving effect to such
         Investment, will become a Restricted Subsidiary;

                   (b) Investments in commercial paper maturing in 270 days or
         less from the date of issuance which, at the time of acquisition by the
         Company or any Restricted Subsidiary, are accorded one of the highest
         two ratings by Standard & Poor's Rating 



                                      B-6

<PAGE>   53


         Group, a division of McGraw-Hill, Inc. or by Moody's Investors
         Services, Inc. or other nationally recognized credit rating agency of
         similar standing;

                   (c) Investments in direct obligations of the United States of
         America or any agency or instrumentality of the United States of
         America, the payment or guarantee of which constitutes a full faith and
         credit obligation of the United States of America, in either case, or
         direct obligations of Canada or any province thereof, maturing within
         one year from the date of acquisition thereof which, at the time of
         acquisition by the Company or any Restricted Subsidiary, are accorded
         one of the highest three ratings by Standard & Poor's Rating Group, a
         division of McGraw-Hill, Inc. or by Moody's Investors Services, Inc. or
         other nationally recognized credit rating agency of similar standing or
         a Canadian credit rating agency of an internationally recognized
         similar standing;

                   (d) Investments in certificates of deposit or bankers
         acceptances maturing within one year from the date of issuance thereof,
         issued by any bank or trust company organized under the laws of the
         United States or any state thereof, whose long-term certificates of
         deposit are, at the time of acquisition thereof by the Company or a
         Restricted Subsidiary, accorded one of the highest three ratings by
         Standard & Poor's Rating Group, a division of McGraw-Hill, Inc. or by
         Moody's Investors Services, Inc. or other nationally recognized credit
         rating agency of similar standing;

                   (e) Investments in tax-exempt obligations maturing within one
         year from the date of issuance which, at the time of acquisition by the
         Company or any Restricted Subsidiary, are accorded one of the highest
         two ratings by Standard & Poor's Rating Group, a division of
         McGraw-Hill, Inc. or by Moody's Investors Services, Inc. or other
         nationally recognized credit rating agency of similar standing;

                   (f) Investments in assets arising from the sale of goods and
         services in the ordinary course of business of the Company and its
         Restricted Subsidiaries;

                   (g) Investments by the Company and its Restricted
         Subsidiaries in property, plant and equipment of the Company and its
         Restricted Subsidiaries to be used in the ordinary course of business;

                   (h) Investments in cash equivalents or money market
         instrument programs which are classified as current assets of the
         Company or any Restricted Subsidiary in accordance with GAAP;

                   (i) Investments in repurchase agreements having a term of not
         more than 90 days;

                   (j) Investments of the Company and its Restricted
         Subsidiaries existing as of the date of Closing and described on
         Schedule 5.4; and



                                      B-7

<PAGE>   54


                   (k) Investments in capital stock of the Company and its
         Restricted Subsidiaries constituting Treasury Stock.

         In valuing any Investments for the purpose of applying the limitations
set forth in this Agreement, such Investments shall be taken at the original
cost thereof, without allowance for any subsequent write-offs or appreciation or
depreciation therein, but less any amount repaid or recovered on account of
capital or principal.

         "Restricted Subsidiary" means any Subsidiary which (i) at least a
majority of the voting securities of such Subsidiary are owned by the Company
and/or one or more Wholly-Owned Restricted Subsidiaries, and (ii) the Company
has designated as a Restricted Subsidiary on Schedule 5.4 or by written notice
given to the holders of all Notes in accordance with Section 10.9.

         "Securities Act" means the Securities Act of 1933, as amended from time
to time.

         "Senior Debt" means, as of the date of any determination thereof, all
Consolidated Debt, other than Subordinated Debt.

         "Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.

         "Series A Notes" is defined in Section 1.

         "Significant Subsidiary" means at any time any Restricted Subsidiary
that would at such time constitute a "significant subsidiary" (as such term is
defined in Regulation SX of the Securities and Exchange Commission as in effect
on the date of the Closing) of the Company.

         "Subordinated Debt" means, as of the date of any determination thereof,
all unsecured Debt of the Company which shall contain or have applicable thereto
subordination provisions providing for the subordination thereof to other Debt
of the Company (including, without limitation, the Notes).

         "Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.

         "Supplement" is defined in Section 2.2.



                                      B-8

<PAGE>   55

         "Treasury Stock" of any Person means any shares of capital stock of
such Person that were issued and outstanding shares of capital stock and have
been subsequently repurchased by such Person and constitute authorized but
unissued, or issued but not outstanding, shares of capital stock of such Person.

         "Unrestricted Subsidiary" means any Subsidiary which is not a
Restricted Subsidiary.

         "Wholly-Owned Restricted Subsidiary" means, at any time, any Restricted
Subsidiary one hundred percent (100%) of all of the equity interests (except
directors' qualifying shares) and voting interests of which are owned by any one
or more of the Company and the Company's other Wholly-Owned Restricted
Subsidiaries at such time.



                                      B-9
<PAGE>   56
                                  SCHEDULE 5.4

                                 CHEMFIRST INC.
                             RESTRICTED SUBSIDIARIES

<TABLE>
<CAPTION>

              COMPANY NAME                            JURISDICTION OF                 PERCENT OWNERSHIP
                                                       ORGANIZATION         (IF OTHER THAN 100% DIRECT OWNERSHIP BY 
                                                                                         CHEMFIRST INC.)
<S>                                                  <C>                  <C>
Burmar Chemical, Inc.                                  California             100% by EKC Technology, Inc.

Callidus Technologies Inc.                             Oklahoma

CALLIDUS TECHNOLOGIES Benelux N.V.                     Belgium                 99% by Callidus Technologies Inc.
                                                                                1% by Callidus Technologies International, Inc.

Callidus Technologies France, S.A.R.L.                 France                  98% by Callidus Technologies International, Inc.
                                                                                2% by Callidus Technologies Inc.

Callidus Technologies (Germany) GmbH                   Germany                 90% by Callidus Technologies International, Inc.
                                                                               10% by Callidus Technologies Inc.

Callidus Technologies International, Inc.              Delaware               100% by Callidus Technologies Inc.

Callidus Technologies Italy, S.r.l.                    Italy                   99% by Callidus Technologies International, Inc.
                                                                                1% by Callidus Technologies Inc.

CALLIDUS TECHNOLOGIES UK LIMITED                       Great Britain           99% by Callidus Technologies International, Inc.
                                                                                1% by Callidus Technologies Inc.

CEM Investment, Inc.                                   Mississippi            *

ChemFirst Texas, Inc.                                  Texas

Dew Resources, Inc.                                    Mississippi

EKC Technology, Inc.                                   California              95% by FCC Acquisition Corporation
                                                                                5% by Baikowski Chimie, S.A.

EKC Technology International, Inc.                     California             100% by EKC Technology, Inc.

EKC Technology Limited                                 Scotland               99.98% by EKC Technology, Inc.
                                                                                .02% by First Chemical Corporation

EKC Technology K K                                     Japan                  100% by EKC Technology International, Inc.

FCC Acquisition Corporation                            California             100% by First Chemical Corporation

FEC Marketing, Inc.                                    Texas

First Chemical Corporation                             Mississippi

First Chemical Holdings, Inc.                          Mississippi            100% by First Chemical Corporation

First Chemical Texas, L.P.                             Delaware                99% by First Chemical Holdings, Inc. (ltd partner)
                                                                                1% by FT Chemical, Inc. (gen partner)

First Energy Corporation                               Mississippi

FirstMiss, Inc.                                        Iowa

FirstMiss Steel, Inc.                                  Pennsylvania           100% by FRM Industries, Inc.

FRM, Inc.                                              Mississippi

FRM Industries, Inc.                                   Delaware

FRM International, Inc.                                U.S. Virgin Islands

FT Chemical, Inc.                                      Texas                  100% by First Chemical Corporation

Industrial Insulations of Texas, Inc.                  Texas

Maxadyne Corporation                                   California

Maxadyne Corporation of Louisiana                      Louisiana

Micropel, Inc.                                         California             100% by EKC Technology, Inc.

Mycosil, Inc.                                          California             100% by EKC Technology, Inc.

Plasma Energy Corporation                              North Carolina

Plasma Energy Technologies Corporation                 North Carolina         100% by Plasma Energy Corporation

Plasma Processing Corporation                          Delaware

Quality Chemicals, Inc.                                Pennsylvania           100% by First Chemical Corporation

Star Corrosion & Refractory, Inc.                      Louisiana              100% by Maxadyne Corporation of Louisiana

SCE Technologies, Inc.                                 Delaware

TriQuest, L.P.                                         Delaware               99.9% by CEM Investment, Inc. (ltd partner)
                                                                                .1% by ChemFirst Texas, Inc. (gen partner)

TriQuest Japan K K                                     Japan                  100% by TriQuest, L.P.
</TABLE>


*We anticipate issuing 12.5% stock to employees of TriQuest LP in near future
which will leave ChemFirst Inc. ownership at 87.5%.

                                  SCHEDULE 5.4
                          (to Note Purchase Agreement)
<PAGE>   57





                                  SCHEDULE 5.4

                                 CHEMFIRST INC.
                            AFFILIATES OF THE COMPANY

<TABLE>
<CAPTION>


                                 NO. OF CEM SHARES
<S>                              <C>
Goldman Sachs                          1,950,000(1)

FRI Group                              2,560,630(2)
</TABLE>




(1)According to a Form 13G filed with the Securities and Exchange Commission by
the Goldman Sachs Group, L.P. and Goldman Sachs & Company ("Goldman Sachs"), 85
Broad Street, New York, New York, 10005, Goldman Sachs owned as of December 31
1997, an aggregate of 1,950,000 shares of Common Stock of the Company.

(2)According to a Form 13G filed with the Securities and Exchange Commission by
Franklin Resources, Inc., Charles B. Johnson, Rupert H. Johnson, Jr. (777
Mariners Island Boulevard, San Mateo, California 94404) (collectively, "FRI")
and Franklin Mutual Advisers, Inc. (51 John F. Kennedy Parkway, Short Hills, New
Jersey 07078) ("FMAI") (hereinafter, FRI and FMAI are collectively referred to
as the "FRI Group"), the FRI Group beneficially owned 2,560,630 shares of Common
Stock of the Company.






                                     5.4-2


<PAGE>   58





                                  SCHEDULE 5.4

               DIRECTORS AND EXECUTIVE OFFICERS OF CHEMFIRST INC.


<TABLE>

<S>                                                                           <C>
Chairman of the Board and Chief Executive Officer                             J. Kelley Williams*
President and Chief Operating Officer                                         R. Michael Summerford*
Vice President Health, Safety and Environmental Affairs                       Daniel P. Anderson*
Vice President Human Resources                                                William B. Kemp*
General Counsel                                                               J. Steve Chustz*
Corporate Secretary                                                           James L. McArthur*
Corporate Controller                                                          Troy B. Browning
Treasurer                                                                     Max P. Bowman
Advisor to the Chairman                                                       Charles R. Gibson
Assistant Secretary                                                           Janet B. Shealy
</TABLE>

*Executive Officers



DIRECTORS:

Richard P. Anderson
Paul A. Becker
James W. Crook
Michael J. Ferris
James E. Fligg
Robert P. Guyton
Paul W. Murrill
William A. Percy
Dan F. Smith
Leland R. Speed
R. Gerald Turner
J. Kelley Williams




                                     5.4-3

<PAGE>   59

                                  SCHEDULE 5.4


                                 CHEMFIRST INC.
                             SCHEDULE OF INVESTMENTS
                               AS OF JUNE 30, 1998

<TABLE>
<CAPTION>

CORPORATE
<S>                                                        <C>             <C>
     Investment -- Primex Ltd.                             $    500,000
     Investment -- country club membership                 $     54,000
     Investment -- Baikowski International                 $    500,000
     Investment -- miscellaneous stocks                    $      3,922
     Note Receivable -- Getchell Gold                      $ 28,031,014     LIBOR rate, due 9/2000(1)
     Note Receivable -- Florida Land Sale                  $  1,375,000     3 year balloon due 2/2000; 6.5%

FIRSTMISS STEEL NOTE

     Note Receivable -- Sunbelt                            $    367,807     5 year

PLASMA PROCESSING CORPORATION

     Note Receivable -- Phillips                           $  2,163,342     5 year

EKC

     Investment -- Paradigm Tech Stock                     $      4,417
                                                           ------------
            1162 shares

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

  TOTAL INVESTMENTS AS OF 06/30/98                         $ 32,999,502
-----------------------------------------------------------------------

</TABLE>


(1) As of October 31, 1998, balance of Note Receivable -- Getchell Gold is
$28,485,042





                                     5.4-4


<PAGE>   60



                                  SCHEDULE 5.5


                                 CHEMFIRST INC.
                              FINANCIAL STATEMENTS





See 10Q at Tab VII of the information memorandum.



<PAGE>   61







                                  SCHEDULE 5.11


                                 CHEMFIRST INC.
                                     PATENTS



None







<PAGE>   62





                                  SCHEDULE 5.15

                                 CHEMFIRST INC.
                                  EXISTING DEBT
                                  JUNE 30, 1998

CHEMFIRST INC.

<TABLE>
<CAPTION>

          BANK                            INTEREST RATE            BALANCE
    <S>                                     <C>                    <C>
    Bank of America                         5.875%              $  6,000,000
    Bank of America                         5.875%              $  5,000,000
    Bank of America                         5.875%              $ 18,000,000
    Bank of America                         5.875%              $  6,000,000
    Bank of America                         5.9375%             $ 20,000,000
                                                                ------------
          TOTAL BORROWINGS                                      $ 55,000,000(1)

    Convertible Subordinated Debentures payable to one 
    employee with an outstanding principal balance as of 
    June 30, 1998, of                                           $    299,983

    6.25% note due year 2002 payable to Baikowski
    International Corporation with an outstanding principal 
    balance as of June 30, 1998, of                             $  3,825,403

QUALITY CHEMICALS, INC.

    Pennsylvania Industrial Development Association
    3% due Year 2000                                            $     31,818

FIRSTMISS STEEL, INC.
    Johnstown Area Economic Development Authority 
    Pennsylvania Industrial Development Association 
    Outstanding balance of funded debt                          $  1,232,544(2)
    ------------------------------------------------------------------------

          TOTAL DEBT AS OF JUNE 30, 1998                        $ 60,389,748

    ------------------------------------------------------------------------
</TABLE>

EKC TECHNOLOGY, K.K.

On November 9, 1998, EKC Technology, K.K. (100% owned by EKC Technology Inc.)
borrowed 358,000,000 JPY from ABN AMRO at an interest rate of 1.15% p.a.
(equivalent to $3,130,465.20). Borrowing matures on October 27, 1999.

(1) Outstanding debt as of November 5, 1998 through the credit facility is
    $58,000,000 

(2) Outstanding balance of funded debt for FirstMiss Steel as of September 30, 
    1998 is $1,083,902.







<PAGE>   63





                                  SCHEDULE 10.5


                                 CHEMFIRST INC.
                                 EXISTING LIENS
                                  JUNE 30, 1998


Subsidiary:              FirstMiss Steel, Inc.

Collateral:              Building and improvements

Secured Party:           Johnstown Area Economic Development Authority
                         Pennsylvania Industrial Development Association

Outstanding balance of funded debt as of June 30, 1998:  $239,415 and $993,095, 
                                                         respectively




<PAGE>   64






                                 CHEMFIRST INC.



                         6.50% SERIES 1998-A SENIOR NOTE

                         TRANCHE A, DUE OCTOBER 30, 2003

No. RA-A2                                                     November 10, 1998
$5,000,000                                                      PPN 16361A A* 7

         FOR VALUE RECEIVED, the undersigned, CHEMFIRST INC. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Mississippi, hereby promises to pay to NATIONWIDE LIFE INSURANCE COMPANY, or
registered assigns, the principal sum of FIVE MILLION DOLLARS on October 30,
2003, with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance thereof at the rate of 6.50% per annum from
the date hereof, payable semiannually, on the 30th day of April and October in
each year, commencing on the first of such dates after the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any
Make-Whole Amount (as defined in the Note Purchase Agreement referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 8.50% or (ii) 2% over the rate of interest publicly announced by Bank of
America, NT & SA from time to time in Chicago, Illinois as its "base" or "prime"
rate.

         Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal offices of Bank of America, NT & SA, in Chicago,
Illinois, or at such other place as the Company shall have designated by written
notice to the holder of this Note as provided in the Note Purchase Agreement
referred to below.

         This Note is one of a series of Senior Notes (the "Notes") issued or to
be issued pursuant to the Note Purchase Agreement, dated as of October 15, 1998
(as from time to time amended and supplemented, the "Note Purchase Agreement"),
between the Company, the Purchasers named therein and Additional Purchasers of
Notes from time to time issued pursuant to any Supplement to this Note Purchase
Agreement. This Note and the holder hereof are entitled equally and ratably with
the holders of all other Notes of all Series from time to time outstanding under
the Note Purchase Agreement to all the benefits provided for thereby or referred
to therein. Each holder of this Note will be deemed, by its acceptance hereof,
to have made the representation set forth in Section 6.2 of the Note Purchase
Agreement, provided that such holder may (in reliance upon information provided
by the Company, which shall not be unreasonably withheld) make a representation
to the effect that the purchase by such holder of any Note will not constitute a
non-exempt prohibited transaction under Section 406(a) of ERISA.

         This Note is registered with the Company and, as provided in the Note
Purchase Agreement, upon surrender of this Note for registration of transfer,
duly endorsed, or 









<PAGE>   65

accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
of an identical Series and Tranche for a like principal amount will be issued
to, and registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.

         This Note is not subject to regularly scheduled prepayments of
principal. This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement, but not otherwise.

         If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.

         This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.


                                             CHEMFIRST INC.



                                             By: /s/ Max P. Bowman
                                                Name: Max P. Bowman
                                                Its: Treasurer





<PAGE>   66




                                 CHEMFIRST INC.



                        6.50% SERIES 1998-A SENIOR NOTE*

                         TRANCHE A, DUE OCTOBER 30, 2003

No. RA-A1                                                     November 10, 1998
$10,000,000                                                     PPN 16361A A* 7

         FOR VALUE RECEIVED, the undersigned, CHEMFIRST INC. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Mississippi, hereby promises to pay to STATE FARM LIFE INSURANCE COMPANY, or
registered assigns, the principal sum of TEN MILLION DOLLARS on October 30,
2003, with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance thereof at the rate of 6.50% per annum from
the date hereof, payable semiannually, on the 30th day of April and October in
each year, commencing on the first of such dates after the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any
Make-Whole Amount (as defined in the Note Purchase Agreement referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 8.50% or (ii) 2% over the rate of interest publicly announced by Bank of
America, NT & SA from time to time in Chicago, Illinois as its "base" or "prime"
rate.

         Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal offices of Bank of America, NT & SA, in Chicago,
Illinois, or at such other place as the Company shall have designated by written
notice to the holder of this Note as provided in the Note Purchase Agreement
referred to below.

         This Note is one of a series of Senior Notes (the "Notes") issued or to
be issued pursuant to the Note Purchase Agreement, dated as of October 15, 1998
(as from time to time amended and supplemented, the "Note Purchase Agreement"),
between the Company, the Purchasers named therein and Additional Purchasers of
Notes from time to time issued pursuant to any Supplement to this Note Purchase
Agreement. This Note and the holder hereof are entitled equally and ratably with
the holders of all other Notes of all Series from time to time outstanding under
the Note Purchase Agreement to all the benefits provided for thereby or referred
to therein. Each holder of this Note will be deemed, by its acceptance hereof,
to have made the representation set forth in Section 6.2 of the Note Purchase
Agreement, provided that such holder may (in reliance upon information provided
by the Company, which shall not be unreasonably withheld) make a representation
to the effect that the purchase by such holder of any Note will not constitute a
non-exempt prohibited transaction under Section 406(a) of ERISA.

         This Note is registered with the Company and, as provided in the Note
Purchase Agreement, upon surrender of this Note for registration of transfer,
duly endorsed, or 






<PAGE>   67


accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
of an identical Series and Tranche for a like principal amount will be issued
to, and registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.

         This Note is not subject to regularly scheduled prepayments of
principal. This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement, but not otherwise.

         If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.

         This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.


                                        CHEMFIRST INC.



                                        By: /s/ Max P. Bowman
                                           Name: Max P. Bowman
                                           Its: Treasurer




<PAGE>   68





                                 CHEMFIRST INC.



                         6.75% SERIES 1998-A SENIOR NOTE

                         TRANCHE B, DUE OCTOBER 30, 2005

No. RA-B1                                                     November 10, 1998
$5,000,000                                                      PPN 16361A A@ 5

         FOR VALUE RECEIVED, the undersigned, CHEMFIRST INC. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Mississippi, hereby promises to pay to STATE FARM INSURANCE COMPANY, or
registered assigns, the principal sum of FIVE MILLION DOLLARS on October 30,
2005, with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance thereof at the rate of 6.75% per annum from
the date hereof, payable semiannually, on the 30th day of April and October in
each year, commencing on the first of such dates after the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any
Make-Whole Amount (as defined in the Note Purchase Agreement referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 8.75% or (ii) 2% over the rate of interest publicly announced by Bank of
America, NT & SA from time to time in Chicago, Illinois as its "base" or "prime"
rate.

         Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at Bank of America, NT & SA, in Chicago, Illinois, or at such other
place as the Company shall have designated by written notice to the holder of
this Note as provided in the Note Purchase Agreement referred to below.

         This Note is one of a series of Senior Notes (the "Notes") issued or to
be issued pursuant to the Note Purchase Agreement, dated as of October 15, 1998
(as from time to time amended and supplemented, the "Note Purchase Agreement"),
between the Company, the Purchasers named therein and Additional Purchasers of
Notes from time to time issued pursuant to any Supplement to this Note Purchase
Agreement. This Note and the holder hereof are entitled equally and ratably with
the holders of all other Notes of all Series from time to time outstanding under
the Note Purchase Agreement to all the benefits provided for thereby or referred
to therein. Each holder of this Note will be deemed, by its acceptance hereof,
to have made the representation set forth in Section 6.2 of the Note Purchase
Agreement, provided that such holder may (in reliance upon information provided
by the Company, which shall not be unreasonably withheld) make a representation
to the effect that the purchase by such holder of any Note will not constitute a
non-exempt prohibited transaction under Section 406(a) of ERISA.

         This Note is registered with the Company and, as provided in the Note
Purchase Agreement, upon surrender of this Note for registration of transfer,
duly endorsed, or 







<PAGE>   69


accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
of an identical Series and Tranche for a like principal amount will be issued
to, and registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.

         This Note is not subject to regularly scheduled prepayments of
principal. This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement, but not otherwise.

         If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.

         This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.


                                      CHEMFIRST INC.



                                      By: /s/ Max P. Bowman
                                         Name: Max P. Bowman
                                         Its: Treasurer