<PAGE>   1
                                                                 Exhibit 10.16

                             NEENAH FOUNDRY COMPANY



                               NFC CASTINGS, INC.

                                   $50,000,000

                                Credit Agreement

                           Dated as of April 30, 1997,
                          as Amended and Restated as of
                               September 12, 1997






                              CHASE SECURITIES INC.
                                   AS ARRANGER

                            THE CHASE MANHATTAN BANK
                             AS ADMINISTRATIVE AGENT




<PAGE>   2



                              TABLE OF CONTENTS


<TABLE>
<CAPTION>

                                                                                   Page
<S>                                                                                 <C> 

                                    ARTICLE I

                                   Definitions

SECTION 1.01.   Definitions....................................................       1
SECTION 1.02.   Terms Generally................................................      17

                                   ARTICLE II

                                   The Credits
SECTION 2.01.   Commitments....................................................      17
SECTION 2.02.   Loans..........................................................      17
SECTION 2.03.   Borrowing Procedure............................................      19
SECTION 2.04.   Evidence of Debt; Repayment of Loans...........................      19
SECTION 2.05.   Fees...........................................................      20
SECTION 2.06.   Interest of Loans..............................................      20
SECTION 2.07.   Default Interest...............................................      21
SECTION 2.08.   Alternate Rate of Interest.....................................      21
SECTION 2.09.   Termination and Reduction of Commitments.......................      21
SECTION 2.10.   Conversion and Continuation of Borrowings......................      21
SECTION 2.11.   [Intentionally Omitted]........................................      22
SECTION 2.12.   Optional Prepayment............................................      22
SECTION 2.13.   Mandatory Prepayments..........................................      23
SECTION 2.14.   Reserve Requirements; Change in Circumstances..................      24
SECTION 2.15.   Change in Legality.............................................      25
SECTION 2.16.   Indemnity......................................................      25
SECTION 2.17.   Pro Rata Treatment.............................................      25
SECTION 2.18.   Sharing of Setoffs.............................................      26
SECTION 2.19.   Payments.......................................................      26
SECTION 2.20.   Taxes..........................................................      26
SECTION 2.21.   Assignment of Commitments Under Certain Circumstances;
                 Duty to Mitigate.............................................       27
SECTION 2.22.   Letters of Credit..............................................      28
</TABLE>



<PAGE>   3

                                   ARTICLE III

                         Representations and Warranties
<TABLE>
<CAPTION>
<S>                                                                                 <C> 
SECTION 3.01.   Organization; Powers...........................................      31
SECTION 3.02.   Authorization..................................................      31
SECTION 3.03.   Enforceability.................................................      31
SECTION 3.04.   Governmental Approvals.........................................      31
SECTION 3.05.   Financial Statements...........................................      31
SECTION 3.06.   No Material Adverse Change.....................................      32
SECTION 3.07.   Title to Properties; Possession Under Leases...................      32
SECTION 3.08.   Subsidiaries...................................................      32
SECTION 3.09.   Litigation; Compliance with Laws...............................      32
SECTION 3.10.   Agreements.....................................................      33
SECTION 3.11.   Federal Reserve Regulations....................................      33
SECTION 3.12.   Investment Company Act; Public Utility Holding Company Act.....      33
SECTION 3.13.   Use of Proceeds................................................      33
SECTION 3.14.   Tax Returns....................................................      33
SECTION 3.15.   No Material Misstatements......................................      33
SECTION 3.16.   ERISA..........................................................      34
SECTION 3.17.   Environmental Matters..........................................      34
SECTION 3.18.   Insurance......................................................      34
SECTION 3.19.   Security Documents.............................................      34
SECTION 3.20.   Location of Real Property and Leased Premises..................      35
SECTION 3.21.   Labor Matters..................................................      35
SECTION 3.22.   Solvency.......................................................      35


                                   ARTICLE IV

                              Conditions of Lending

SECTION 4.01.   All Credit Events..............................................       36
SECTION 4.02.   First Credit Event.............................................       36


                                    ARTICLE V

                              Affirmative Covenants

SECTION 5.01.   Existence; Business and Properties.............................       38
SECTION 5.02.   Insurance......................................................       39
SECTION 5.03.   Obligations and Taxes..........................................       40
SECTION 5.04    Financial Statements, Reports, etc.............................       40
SECTION 5.05.   Litigation and Other Notices...................................       41
SECTION 5.06.   Maintaining Records; Access to Properties and Inspections......       41
SECTION 5.07.   Use of Proceeds................................................       41
SECTION 5.08.   Compliance with Environmental Laws.............................       41
SECTION 5.09.   Preparation of Environmental Reports...........................       41
SECTION 5.10.   [Intentionally Omitted]........................................       42
</TABLE>


<PAGE>   4




<TABLE>
<S>                                                                                 <C> 
SECTION 5.11.    Further Assurances............................................       42


                                   ARTICLE VI

                               Negative Covenants

SECTION 6.01.    Indebtedness..................................................       42
SECTION 6.02.    Liens.........................................................       43
SECTION 6.03.    Sale and Lease-Back Transactions..............................       44
SECTION 6.04.    Investments, Loans and Advances...............................       45
SECTION 6.05.    Mergers, Consolidations, Sales of Assets and Acquisitions.....       45
SECTION 6.06.    Dividends and Distributions; Restrictions on Ability of
                   Subsidiaries to Pay Dividends...............................       46
SECTION 6.07.    Transactions with Affiliates..................................       47
SECTION 6.08.    Business of Borrower and Subsidiaries.........................       47
SECTION 6.09.    Other Indebtedness and Agreements.............................       47
SECTION 6.10.    Capital Expenditures..........................................       48
SECTION 6.11.    Consolidated Leverage Ratio...................................       48
SECTION 6.12.    Consolidated Net Worth........................................       48
SECTION 6.13.    Consolidated Interest Coverage Ratio..........................       48
SECTION 6.14.    Fiscal Year...................................................       48



                                   ARTICLE VII

                 Events of Default.............................................       48


                                  ARTICLE VIII

                 The Administrative Agent and the Collateral Agent.............       50


                                          ARTICLE IX

                                        Miscellaneous
SECTION 9.01.    Notices.......................................................       52
SECTION 9.02.    Survival of Agreement.........................................       53
SECTION 9.03.    Binding Effect................................................       53
SECTION 9.04.    Successors and Assigns........................................       53
SECTION 9.05.    Expenses; Indemnity...........................................       55
SECTION 9.06.    Right of Setoff...............................................       56
SECTION 9.07.    Applicable Law................................................       56
SECTION 9.08.    Waivers; Amendment............................................       57
SECTION 9.09.    Interest Rate Limitation......................................       57
SECTION 9.10.    Entire Agreement..............................................       57
SECTION 9.11.    WAIVER OF JURY TRIAL..........................................       57
SECTION 9.12.    Severability..................................................       58
</TABLE>


<PAGE>   5

<TABLE>
<CAPTION>
<S>                                                                                  <C>
SECTION 9.13.    Counterparts..................................................       58
SECTION 9.14.    Headings......................................................       58
SECTION 9.15.    Jurisdiction; Consent to Service of Process...................       58
SECTION 9.16.    Confidentiality...............................................       58
SECTION 9.17.    Termination...................................................       59
</TABLE>


SCHEDULES:

Schedule 1.01(a)  --  Subsidiary Guarantors
Schedule 2.01     --  Lenders and Commitments
Schedule 3.07(d)  --  Contractual Rights Regarding Mortgaged Property
Schedule 3.08     --  Subsidiaries
Schedule 3.09(a)  --  Litigation
Schedule 3.09(c)  --  Certificates of Occupancy
Schedule 3.10     --  Agreements and Instruments
Schedule 3.17     --  Environmental Matters
Schedule 3.18     --  Insurance
Schedule 3.19(d)  --  Filing Offices-- Mortgages
Schedule 3.20(a)  --  Mortgaged Properties
Schedule 3.20(b)  --  Leased Properties
Schedule 6.01     --  Existing Indebtedness
Schedule 6.02     --  Existing Liens
Schedule 6.07     --  Transactions with Affiliates

EXHIBITS:

Exhibit A     --     Form of Administrative Questionnaire
Exhibit B     --     Form of Assignment and Acceptance
Exhibit C     --     Form of Borrowing Request
Exhibit D     --     Form of Indemnity, Subrogation and Contribution Agreement
Exhibit E     --     Form of Mortgages
Exhibit F     --     Form of Parent Guarantee Agreement
Exhibit G     --     Form of Pledge Agreement
Exhibit H     --     Form of Security Agreement
Exhibit I     --     Form of Subsidiary Guarantee Agreement
Exhibit J     --     Form of Opinion of Kirkland & Ellis


<PAGE>   6








                               CREDIT AGREEMENT dated as of April 30, 1997,
                     amended and restated as of September 12, 1997, among NEENAH
                     FOUNDRY COMPANY (formerly known as Neenah Corporation), a
                     Wisconsin corporation (the "Borrower"), NFC CASTINGS, INC.,
                     a Delaware corporation ("Holdings"), the Lenders (as
                     defined in Article I), and THE CHASE MANHATTAN BANK, a New
                     York banking corporation, as issuing bank (in such
                     capacity, the "Issuing Bank"), as administrative agent (in
                     such capacity, the "Administrative Agent") and as
                     collateral agent (in such capacity, the "Collateral Agent")
                     for the Lenders.


         Holdings and the Borrower have requested the Lenders to extend credit
to the Borrower in the form of Loans at any time and from time to time prior to
the Maturity Date, in an aggregate principal amount at any time outstanding not
in excess of $50,000,000. Holdings and the Borrower have requested the Issuing
Bank to issue letters of credit, in an aggregate face amount at any time
outstanding not in excess of $15,000,000, to support payment obligations
incurred in the ordinary course of business by the Borrower and its
Subsidiaries. The proceeds of the Loans are to be used solely for general
corporate purposes in the ordinary course of the Borrower's business, including
acquisitions of other businesses subject to the terms and conditions set forth
herein.

         The Lenders are willing to extend such credit to the Borrower and the
Issuing Bank is willing to issue letters of credit for the account of the
Borrower on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:


                                    ARTICLE I

                                   Definitions


     SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
shall have the meanings specified below:

     "ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.

     "ABR Loan" shall mean any Loan  bearing  interest at a rate  determined  by
reference  to the  Alternate  Base Rate in  accordance  with the  provisions  of
Article II.

     "Account"  shall mean any right to payment  for goods sold or for  services
rendered, whether or not it has been earned by performance.

     "ACP Holdings" shall mean ACP Holding Company, a Delaware corporation.

     "ACP Merger" shall have the meaning assigned to such term in the definition
of the term "Change in Control".

     "ACP  Products"  shall  mean  ACP  Products,  L.L.C.,  a  Delaware  limited
liability company.


<PAGE>   7

     "Adjusted LIBO Rate" shall mean,  with respect to any Eurodollar  Borrowing
for any  Interest  Period,  an  interest  rate per annum  (rounded  upwards,  if
necessary,  to the next 1/16 of 1%) equal to the product of (a) the LIBO Rate in
effect for such Interest Period and (b) Statutory Reserves.

     "Administrative Agent Fees" shall have the meaning assigned to such term in
Section 2.05(b).

     "Administrative  Questionnaire" shall mean an Administrative  Questionnaire
in the form of Exhibit A.

     "Affiliate"  shall  mean,  when used with  respect to a  specified  person,
another person that directly,  or indirectly through one or more intermediaries,
Controls  or is  Controlled  by or is  under  common  Control  with  the  person
specified.

     "Aggregate Credit Exposure" shall mean the aggregate amount of the Lenders'
Credit Exposures.

     "Alternate  Base Rate" shall mean,  for any day, a rate per annum  (rounded
upwards, if necessary,  to the next 1/16 of 1%) equal to the greatest of (a) the
Prime  Rate in effect  on such  day,  (b) the Base CD Rate in effect on such day
plus 1% and (c) the Federal Funds  Effective Rate in effect on such day plus 1/2
of 1%. If for any reason the  Administrative  Agent shall have determined (which
determination  shall be conclusive  absent  manifest error) that it is unable to
ascertain the Base CD Rate or the Federal Funds  Effective  Rate or both for any
reason, including the inability or failure of the Administrative Agent to obtain
sufficient  quotations in accordance  with the terms of the definition  thereof,
the Alternate Base Rate shall be determined without regard to clause (b) or (c),
or both, of the preceding  sentence,  as  appropriate,  until the  circumstances
giving rise to such inability no longer exist.  Any change in the Alternate Base
Rate due to a change in the Prime Rate,  the Base CD Rate or the  Federal  Funds
Effective  Rate shall be effective on the  effective  date of such change in the
Prime Rate, the Base CD Rate or the Federal Funds Effective Rate,  respectively.
The term  "Prime  Rate"  shall  mean the rate of  interest  per  annum  publicly
announced  from time to time by the  Administrative  Agent as its prime  rate in
effect at its principal  office in New York City;  each change in the Prime Rate
shall be  effective  on the date such  change  is  publicly  announced  as being
effective.  The term "Base CD Rate" shall mean the sum of (a) the product of (i)
the  Three-Month  Secondary  CD Rate and  (ii)  Statutory  Reserves  and (b) the
Assessment Rate.

     "Amendment  Agreement"  shall  mean  the  Amendment  Agreement  dated as of
September  12, 1997 among the Borrower,  Holdings,  the  Continuing  Lenders (as
defined  therein)  and  the  Departing   Lenders  (as  defined   therein),   the
Administrative Agent, the Collateral Agent and the Issuing Bank.

     "Applicable  Percentage" shall mean, for any day, with respect to any Loan,
or with  respect to the  Commitment  Fees,  as the case may be,  the  applicable
percentage set forth below under the caption "Eurodollar Spread",  "ABR Spread",
or "Fee  Percentage",  as the case may be, based upon the Consolidated  Leverage
Ratio as of the relevant date of determination:


<PAGE>   8

<TABLE>
<CAPTION>
===========================================================================================================
  Consolidated Leverage                  Eurodollar                                           Fee
       Ratio                               Spread                  ABR Spread              Percentage
-----------------------------------------------------------------------------------------------------------
<S>                                        <C>                      <C>                     <C> 
Category 1                                  2.50%                     1.50%                   .50%
----------
Equal to or greater than 4.50
to 1.00

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

Category 2                                  2.25%                     1.25%                   .50%
----------

Equal to or greater than 4.00
to 1.00, but less than 4.50 to
1.00

-----------------------------------------------------------------------------------------------------------
Category 3                                  2.00%                     1.00%                   .50%
----------

Equal to or greater than 3.50
to 1.00, but less than 4.00 to
1.00

-----------------------------------------------------------------------------------------------------------
Category 4                                  1.75%                     .75%                   .375%
----------

Equal to or greater than 3.00
to 1.00, but less than 3.50 to
1.00

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

Category 5                                  1.50%                     .50%                   .375%
----------

Less than 3.00 to 1.00
===========================================================================================================
</TABLE>


         Each change in the Applicable Percentage resulting from a change in the
Consolidated Leverage Ratio shall be effective with respect to all Loans,
Commitments and Letters of Credit outstanding on and after the date of delivery
to the Administrative Agent of the financial statements and certificates
required by Section 5.04(a) or (b) indicating such change until the date
immediately preceding the next date of delivery of such financial statements and
certificates indicating another such change. Notwithstanding the foregoing, (a)
at any time during which the Borrower has failed to deliver the financial
statements and certificates required by Section 5.04(a) or (b), or (b) at any
time after the occurrence and during the continuance of an Event of Default, the
Consolidated Leverage Ratio shall be deemed to be in Category 1 for purposes of
determining the Applicable Percentage.

         "Approved Fund" shall mean, with respect to any Lender that is a fund
that invests in bank loans, any other fund that invests in bank loans and is
managed by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.

         "Assessment Rate" shall mean for any date the annual rate (rounded
upwards, if necessary, to the next 1/100 of 1%) most recently estimated by the
Administrative Agent as the then current net annual assessment rate that will be
employed in determining amounts payable by







<PAGE>   9
the Administrative  Agent to the Federal Deposit Insurance  Corporation (or
any successor  thereto) for insurance by such Corporation (or such successor) of
time deposits made in dollars at the Administrative Agent's domestic offices.

     "Asset Sale" shall mean the sale,  transfer or other disposition (by way of
merger or  otherwise) by the Borrower or any of the  Subsidiaries  to any person
other than the Borrower or any Subsidiary  Guarantor of (a) any capital stock of
any of the  Subsidiaries  (other than directors'  qualifying  shares) or (b) any
other  assets  of  the  Borrower  or any of the  Subsidiaries  (other  than  (i)
inventory,  excess,  damaged,  obsolete  or worn out  assets,  scrap,  Permitted
Investments and licenses of patterns  developed for customers of the Borrower or
any  Subsidiary,  in each case  disposed of in the ordinary  course of business,
(ii) assets transferred for an aggregate purchase price not exceeding $3,000,000
in any fiscal year of the Borrower in connection with the replacement or upgrade
of a tangible asset of the Borrower or any Subsidiary  Guarantor within 180 days
of such  transfer  or (iii)  dispositions  resulting  in  Casualty  Proceeds  or
Condemnation  Proceeds),  provided  that neither (x) any asset sale or series of
related  asset sales  described in clause (b) above having a value not in excess
of  $100,000  nor (y) any Equity  Issuance  shall be deemed an "Asset  Sale" for
purposes of this Agreement.

     "Assignment and Acceptance" shall mean an assignment and acceptance entered
into by a Lender and an assignee,  and accepted by the Administrative  Agent, in
the  form  of  Exhibit  B or  such  other  form  as  shall  be  approved  by the
Administrative Agent.

     "Board" shall mean the Board of Governors of the Federal  Reserve System of
the United States of America.

     "Borrower Tax Amount" shall mean, with respect to any fiscal  quarter,  the
amount paid by  Holdings,  the  Borrower  and the  Subsidiaries  to ACP Holdings
pursuant to the Tax Sharing  Agreement,  which  amount shall not be greater than
the amount of taxes that would be required to be paid in cash by  Holdings,  the
Borrower and the Subsidiaries on a consolidated basis if Holdings,  the Borrower
and the  Subsidiaries  were not  consolidated  with ACP  Holdings  and its other
subsidiaries for tax purposes.

     "Borrowing"  shall  mean a group  of Loans  of a  single  Type  made by the
Lenders on a single date and as to which a single Interest Period is in effect.

     "Borrowing Request" shall mean a request by the Borrower in accordance with
the terms of Section 2.03 and substantially in the form of Exhibit C.

     "Business  Day" shall mean any day other than a Saturday,  Sunday or day on
which  banks in New York  City  are  authorized  or  required  by law to  close;
provided, however, that when used in connection with a Eurodollar Loan, the term
"Business  Day"  shall  also  exclude  any day on which  banks  are not open for
dealings in dollar deposits in the London interbank market.

     "Capital  Lease  Obligations"  of any person shall mean the  obligations of
such  person  to pay  rent  or  other  amounts  under  any  lease  of (or  other
arrangement  conveying  the  right  to use)  real  or  personal  property,  or a
combination  thereof,  which  obligations  are  required  to be  classified  and
accounted  for as capital  leases on a balance  sheet of such person under GAAP,
and the  amount of such  obligations  shall be the  capitalized  amount  thereof
determined in accordance with GAAP.

     "Capital  Stock" of any  Person  shall mean any and all  shares,  interests
(including  membership and economic  interests in a limited liability  company),
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such 




<PAGE>   10
Person,  including any Preferred  Stock,  but excluding any debt securities
convertible into such equity prior to such conversion.

     "Casualty" shall have the meaning set forth in each of the Mortgages.

     "Casualty  Proceeds"  shall  have  the  meaning  set  forth  in each of the
Mortgages.

     A "Change in Control"  shall be deemed to have occurred if (a) prior to the
earlier to occur of the first fully distributed  public offering of Voting Stock
of  Holdings  (or,  in the  event (i)  Holdings  shall  merge  with and into ACP
Holdings or the Borrower in a transaction permitted by Section 6.05 (a "Holdings
Merger"),  ACP Holdings, or (ii) following a Holdings Merger, ACP Holdings shall
merge with and into ACP Products or the Borrower in a  transaction  permitted by
Section 6.05 (an "ACP Holdings  Merger"),  ACP Products),  the Permitted Holders
shall  cease to own  directly  or  indirectly  (including  by way of  direct  or
indirect  ownership of economic  interests in ACP Products),  beneficially or of
record,  shares  representing at least 51% on a fully diluted,  as if converted,
basis of the  aggregate  ordinary  voting  power  represented  by the issued and
outstanding Voting Stock of Holdings (or, in the event of (i) a Holdings Merger,
ACP Holdings, or (ii) an ACP Holdings Merger, ACP Products), (b) after the first
fully distributed  public offering of Voting Stock of Holdings (or, in the event
of (i) a Holdings  Merger,  ACP Holdings,  or (ii) an ACP Holdings  Merger,  ACP
Products),  the  Permitted  Holders  shall cease to own  directly or  indirectly
(including by way of direct or indirect  ownership of economic  interests in ACP
Products),  beneficially  or of record,  shares  representing  at least 25% on a
fully diluted,  as if converted,  basis of the aggregate  ordinary  voting power
represented by the issued and  outstanding  Voting Stock of Holdings (or, in the
event of (i) a Holdings  Merger,  ACP Holdings,  or (ii) an ACP Holdings Merger,
ACP Products),  (c) after the first fully distributed  public offering of Voting
Stock of Holdings (or, in the event of (i) a Holdings Merger,  ACP Holdings,  or
(ii) an ACP Holdings  Merger,  ACP  Products),  any person or group  (within the
meaning of Rule 13d-5 of the Securities Exchange Act of 1934 as in effect on the
date hereof) other than the Permitted  Holders shall own directly or indirectly,
beneficially  or of record,  a percentage of the issued and  outstanding  Voting
Stock of Holdings (or, in the event of (i) a Holdings Merger,  ACP Holdings,  or
(ii) an ACP Holdings Merger, ACP Products) on a fully diluted,  as if converted,
basis  having  ordinary  voting  power in excess of the  percentage  then owned,
directly or  indirectly  (including  by way of direct or indirect  ownership  of
economic  interests in ACP  Products),  beneficially  and of record,  on a fully
diluted, as if converted, basis, by the Permitted Holders; (d) a majority of the
seats (except in the case of any vacancy for 30 days or less  resulting from the
death or  resignation  of any  director of  Holdings  (or, in the event of (i) a
Holdings Merger, ACP Holdings, or (ii) an ACP Holdings Merger, ACP Products)) on
the board of directors of Holdings  (or, in the event of (i) a Holdings  Merger,
ACP Holdings, or (ii) an ACP Holdings Merger, ACP Products) shall at any time be
occupied by persons who were neither (i)  nominated by the board of directors of
Holdings,  ACP Holdings or ACP Products,  as the case may be, nor (ii) appointed
by directors so nominated;  (e) any change in control (or similar event, however
denominated)  with  respect  to  Holdings  (or,  in the event of (i) a  Holdings
Merger,  ACP  Holdings,  or (ii) an ACP Holdings  Merger,  ACP  Products) or the
Borrower  shall  occur under and as defined in any  indenture  or  agreement  in
respect of  Indebtedness  to which any such person or any Subsidiary is a party;
or (f) Holdings (or in the event of (i) a Holdings Merger, ACP Holdings, or (ii)
an ACP Holdings  Merger,  ACP Products) shall cease to own,  beneficially and of
record, 100% of the issued and outstanding Capital Stock of the Borrower.

     "Citicorp" shall mean Citicorp, a Delaware corporation.

     "Code" shall mean the Internal  Revenue Code of 1986,  as amended from time
to time.

     "Collateral"  shall mean all the  "Collateral"  as defined in any  Security
Document and shall also include the Mortgaged Properties.



<PAGE>   11


     "Commitment"  shall mean,  with respect to each Lender,  the  commitment of
such Lender to make Loans  hereunder  as set forth on Schedule  2.01,  or in the
Assignment and Acceptance  pursuant to which such Lender assumed its Commitment,
as  applicable,  as the same may be (a)  reduced  from time to time  pursuant to
Section  2.09  and (b)  reduced  or  increased  from  time to time  pursuant  to
assignments by or to such Lender pursuant to Section 9.04.

     "Commitment Fee" shall have the  meaning  assigned to such term in Section
2.05(a).

     "Condemnation" shall have the meaning set forth in each of the Mortgages.

     "Condemnation Proceeds"  shall have the  meaning  set forth in each of the
Mortgages.

     "Confidential Information   Memorandum"   shall  mean  the   Confidential
Information Memorandum of the Borrower dated August 1997.

     "Consolidated  Capital Expenditures" shall mean, for any period, the sum
of (a)  the  aggregate of all expenditures (whether paid in cash or 
other consideration or accrued as a liability) by the Borrower or any 
of the Subsidiaries during such period that, in accordance with GAAP, are or
should be included in "additions to property, plant and  equipment" or
similar items reflected in the consolidated statement of cash flows of the
Borrower and the Subsidiaries for such period (including the amount of 
assets leased in connection with any Capital Lease Obligation), and (b)
to the extent not included pursuant to clause (a) above, the aggregate 
of all expenditures (whether paid in cash or other consideration or accrued
as a liability) by the Borrower or any Subsidiary to acquire, by purchase or
otherwise, the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any person (other than expenditures for
Permitted Acquisitions);  provided, however,  that, for purposes of Section
6.10 only, to the extent the Borrower or a Subsidiary uses, within 180 days of
the receipt thereof, the proceeds of the disposition  of assets described in 
clause (b)(i), (ii) or (iii) of the definition of the term  "Asset  Sale"
or Condemnation Proceeds to purchase, construct, repair, lease or replace
any property, plant or equipment, the amount of the related Consolidated 
Capital Expenditure shall be reduced by the amount of such proceeds.

     "Consolidated  EBITDA" shall mean, for any period, Consolidated Net Income
for such period, plus, to the extent deducted in computing such Consolidated Net
Income, (a) the sum of (i) all Federal, state, local and foreign taxes,  (ii)
Consolidated Net Interest Expense and (iii) depreciation, depletion,
amortization of intangibles and other non-cash charges or non-cash losses
(including non-cash transaction expenses and the amortization of debt
discounts), minus, to the extent added in computing such Consolidated Net
Income, (b) any non-cash income or non-cash gains, all as determined on a
consolidated basis with respect to the Borrower and the Subsidiaries in
accordance with GAAP.

     "Consolidated Interest Coverage Ratio" shall mean, for any period, the
ratio for such period of (a) Consolidated EBITDA to (b) Consolidated Net
Interest Expense determined in each case for the period of four consecutive
fiscal quarters ending on the last day of such period; provided, however, that
for purposes of determining the Consolidated Interest Coverage Ratio for the
four-fiscal-quarter periods ending on the last day of the fiscal year ending
September 30, 1997 (the "1997 Fiscal Year"), and the last day of the first
quarter of the fiscal year ending on September 30, 1998, (the "1998 Fiscal
Year"), Consolidated EBITDA and Consolidated Net Interest Expense shall be
deemed to be (i) in the case of the four-fiscal-quarter period ending on the
last day of the last quarter of the 1997 Fiscal Year, Consolidated EBITDA and
Consolidated Net Interest Expense for the two-fiscal-quarter period ending on
such date, multiplied by 2 and (ii) in the case of the four-fiscal-quarter
period ending on the last day of the first quarter of the 1998 Fiscal Year,
Consolidated   



<PAGE>   12

EBITDA   and   Consolidated   Net   Interest   Expense   for  the
three-fiscal-quarter period ending on such date, multiplied by 1-1/3.


     "Consolidated  Leverage Ratio" shall mean, as of any date of determination,
the ratio of (a) Net Debt on such date to (b) Consolidated EBITDA for the period
of four consecutive  fiscal  quarters  ending  on  such  date  (including  the
Consolidated  EBITDA for such four fiscal  quarters of any  Subsidiary  acquired
during such four fiscal quarters  constituting a Permitted  Acquisition pursuant
to Section  6.04(g));  provided,  however,  that for purposes of determining the
Consolidated  Leverage Ratio for the  four-fiscal-quarter  periods ending on the
last day of the fiscal  year  ending on  September  30,  1997 (the "1997  Fiscal
Year"),  and the last day of the first  quarter  of the  fiscal  year  ending on
September 30, 1998 (the "1998 Fiscal Year"), Consolidated EBITDA shall be deemed
to be (i) in the case of the  four-fiscal-quarter  period ending on the last day
of the 1997 Fiscal Year,  Consolidated EBITDA for the two-fiscal-quarter  period
ending  on  such   date,   multiplied   by  2  and  (ii)  in  the  case  of  the
four-fiscal-quarter  period  ending on the last day of the first  quarter of the
1998 Fiscal Year, Consolidated EBITDA for the three-fiscal-quarter period ending
on such date, multiplied by 1-1/3.

     "Consolidated Net Income" shall mean, for any period, net income or loss of
the Borrower and the Subsidiaries  for such period  determined on a consolidated
basis in  accordance  with GAAP;  provided  that there shall be excluded (a) the
income of any person in which any other  person  (other than the Borrower or any
of the Subsidiaries or any director holding qualifying shares in accordance with
applicable  law) has a joint  interest,  except to the  extent of the  amount of
dividends  or other  distributions  actually  paid to the Borrower or any wholly
owned Subsidiary by such person during such period,  (b) the income (or loss) of
any person  accrued prior to the date it becomes a Subsidiary of the Borrower or
is merged into or consolidated  with the Borrower or any of the  Subsidiaries or
the date  that  person's  assets  are  acquired  by the  Borrower  or any of the
Subsidiaries  (except, in the case of any Subsidiary acquired during such period
constituting a Permitted  Acquisition  pursuant to Section 6.04(g),  which shall
not be excluded for purposes of determining  Consolidated EBITDA for purposes of
the  Consolidated  Leverage Ratio only), (c) the income of any Subsidiary of the
Borrower to the extent that the  declaration  or payment of dividends or similar
distributions  by the  Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any  agreement,  instrument,  judgment,
decree,  order,  statute,  rule or  governmental  regulation  applicable to that
Subsidiary,  (d) any after tax gains or losses  attributable  to sales of assets
out of the  ordinary  course of business  and (e) (to the extent not included in
clauses  (a)  through (d) above) any  non-cash  extraordinary  gains or non-cash
extraordinary losses.

     "Consolidated  Net Interest  Expense" shall mean,  for any period,  (a) the
gross  interest  expense of the  Borrower and the  Subsidiaries  for such period
determined  on a  consolidated  basis in  accordance  with GAAP,  including  the
portion of any payments or accruals  with respect to Capital  Lease  Obligations
that are allocable to interest  expense in accordance  with GAAP,  but excluding
(i) the  amortization  of debt discounts and (ii) the  amortization  of all fees
(including fees with respect to Interest Rate Protection  Agreements) payable in
connection  with the  incurrence  of  Indebtedness  to the  extent  included  in
interest  expense in accordance  with GAAP less the total interest income of the
Borrower and its Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP. For purposes of the foregoing,  gross interest  expense
shall be determined  after giving effect to any net payments made or received by
the  Borrower  or any  Subsidiary  with  respect  to  Interest  Rate  Protection
Agreements.

     "Consolidated Net Worth" shall mean, as of any date of  determination,  the
consolidated  stockholder's  equity of the Borrower and the Subsidiaries at such
date, as determined on a consolidated  basis in accordance with GAAP;  provided,
however,  that  common  stock or  preferred  stock (a) with  respect to which no
payments that would violate Section 6.06 are required to be 



<PAGE>   13

made and (b) that is  redeemable  not earlier  than April 30, 2009 shall be
included regardless of its classification under GAAP.

     "Control" shall mean the possession,  directly or indirectly,  of the power
to direct or cause the  direction  of the  management  or  policies of a person,
whether  through the ownership of voting  securities,  by contract or otherwise,
and the terms  "Controlling"  and "Controlled"  shall have meanings  correlative
thereto.

     "Credit  Event"  shall have the  meaning  assigned  to such term in Section
4.01.

     "Credit  Exposure"  shall mean, with respect to any Lender at any time, the
aggregate principal amount at such time of all outstanding Loans of such Lender,
plus the aggregate amount at such time of such Lender's L/C Exposure.

     "CVC" shall mean Citicorp Venture Capital, Ltd., a New York corporation.

     "Default"  shall mean any event or condition  which upon  notice,  lapse of
time or both would constitute an Event of Default.

     "dollars" or "$" shall mean lawful money of the United States of America.

     "Domestic  Subsidiaries"  shall  mean  all  Subsidiaries   incorporated  or
organized  under the laws of the United States of America,  any State thereof or
the District of Columbia.

     "Earn-Out  Obligation" shall mean any unsecured contingent liability of the
Borrower or any Subsidiary  owed to any seller in connection  with any Permitted
Acquisition  permitted  pursuant  to  Section  6.04(g)  by the  Borrower  or any
Subsidiary  that (a)  constitutes  a  portion  of the  purchase  price  for such
Permitted  Acquisition  but is not an amount  certain on the date of  incurrence
thereof and is not subject to any right of acceleration by such seller or (b) is
only  payable  upon the  achievement  of  performance  standards by the property
acquired  in  such  Permitted  Acquisition  and in an  amount  based  upon  such
achievement.

     "Environment"  shall  mean  ambient  air,  surface  water  and  groundwater
(including  potable water,  navigable  water and wetlands),  the land surface or
subsurface  strata,  the workplace or as otherwise  defined in any Environmental
Law.

     "Environmental Claim" shall mean any written accusation, allegation, notice
of violation,  claim, demand,  order,  directive,  cost recovery action or other
cause of action by, or on behalf of, any  Governmental  Authority  or any person
for  damages,   injunctive  or  equitable  relief,  personal  injury  (including
sickness,  disease or death),  Remedial  Action  costs,  tangible or  intangible
property damage,  natural resource  damages,  nuisance,  pollution,  any adverse
effect  on the  environment  caused by any  Hazardous  Material,  or for  fines,
penalties or  restrictions,  resulting from or based upon (a) the existence,  or
the continuation of the existence, of a Release (including sudden or non-sudden,
accidental or non-accidental  Releases), (b) exposure to any Hazardous Material,
(c) the presence, use, handling, transportation,  storage, treatment or disposal
of any  Hazardous  Material or (d) the  violation  or alleged  violation  of any
Environmental Law or Environmental Permit.

     "Environmental  Law" shall mean any and all  applicable  present and future
treaties,  laws,  rules,  regulations,   codes,  ordinances,   orders,  decrees,
judgments,  injunctions,  notices or binding agreements  issued,  promulgated or
entered  into  by  any  Governmental  Authority,  relating  in  any  way  to the
environment,  preservation or reclamation of natural resources,  the management,
Release or threatened  Release of any Hazardous Material or to health and safety
matters,  including the Comprehensive  Environmental Response,  Compensation and
Liability   Act  of  1980, 


<PAGE>   14


as amended by the Superfund  Amendments and Reauthorization Act of 1986, 42
U.S.C.  ss.ss. 9601 et seq.  (collectively  "CERCLA"),  the Solid Waste Disposal
Act,  as amended  by the  Resource  Conservation  and  Recovery  Act of 1976 and
Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. ss.ss. 6901 et seq., the
Federal Water Pollution  Control Act, as amended by the Clean Water Act of 1977,
33 U.S.C.  ss.ss.  1251 et seq., the Clean Air Act of 1970, as amended 42 U.S.C.
ss.ss. 7401 et seq., the Toxic Substances Control Act of 1976, 15 U.S.C.  ss.ss.
2601 et seq.,  the  Occupational  Safety and Health Act of 1970, as amended,  29
U.S.C.  ss.ss. 651 et seq., the Emergency  Planning and Community  Right-to-Know
Act of 1986, 42 U.S.C.  ss.ss.  11001 et seq.,  the Safe  Drinking  Water Act of
1974, as amended,  42 U.S.C.  ss.ss.  300(f) et seq.,  the  Hazardous  Materials
Transportation  Act,  49  U.S.C.  ss.ss.  5101  et  seq.,  and  any  similar  or
implementing  state or local law, and all amendments or regulations  promulgated
under any of the foregoing.

     "Environmental  Permit"  shall mean any  permit,  approval,  authorization,
certificate,  license,  variance,  filing or permission  required by or from any
Governmental Authority pursuant to any Environmental Law.

     "Equity  Issuance"  shall mean any issuance or sale by Holdings (or, in the
event of (i) a Holdings  Merger,  ACP Holdings,  or (ii) an ACP Holdings Merger,
ACP Products),  the Borrower or any Subsidiary of any shares of capital stock or
other equity  securities of any such person or any obligations  convertible into
or exchangeable for, or giving any person a right,  option or warrant to acquire
such securities or such convertible or exchangeable obligations,  except in each
case  for (a) any  issuance  or sale to  Holdings  (or,  in the  event  of (i) a
Holdings Merger,  ACP Holdings,  or (ii) an ACP Holdings Merger,  ACP Products),
the  Borrower  or any  Subsidiary,  (b) any  issuance of  directors'  qualifying
shares, (c) sales or issuances of common stock to management or key employees of
Holdings (or, in the event of (i) a Holdings  Merger,  ACP Holdings,  or (ii) an
ACP Holdings  Merger,  ACP Products),  the Borrower or any Subsidiary  under any
employee  stock option or stock  purchase plan in existence from time to time to
the extent that the  proceeds  from all sales and  issuances  described  in this
clause (c) shall not exceed in the aggregate  $1,000,000 in any fiscal year, (d)
any  issuance  of  Capital  Stock  the  proceeds  of  which  are   substantially
concurrently used to make Permitted Acquisitions pursuant to Section 6.04(g) and
(e) any  issuance  of  Capital  Stock the  proceeds  of which are  substantially
concurrently used to make Consolidated Capital Expenditures  pursuant to Section
6.10.

     "ERISA" shall mean the Employee  Retirement Income Security Act of 1974, as
the same may be amended from time to time.

     "ERISA  Affiliate"  shall  mean  any  trade  or  business  (whether  or not
incorporated) that, together with the Borrower,  is treated as a single employer
under  Section  414(b) or (c) of the Code, or solely for purposes of Section 302
of ERISA and  Section  412 of the Code,  is treated as a single  employer  under
Section 414 of the Code.

     "ERISA Event" shall mean (a) any "reportable  event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice  period is waived);  (b) the existence
with respect to any Plan of an "accumulated  funding  deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing  pursuant to Section  412(d) of the Code or Section 303(d) of ERISA of an
application  for a waiver of the minimum  funding  standard  with respect to any
Plan; (d) the  incurrence by the Borrower or any of its ERISA  Affiliates of any
liability  under Title IV of ERISA with respect to the  termination of any Plan;
(e) the receipt by the Borrower or any ERISA  Affiliate  from the PBGC or a plan
administrator  of any notice  relating to an intention to terminate  any Plan or
Plans or to appoint a trustee to administer  any Plan; (f) the incurrence by the
Borrower or any of its ERISA  Affiliates  of any  liability  with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice,  or the receipt by
any  Multiemployer  Plan from the Borrower or 



<PAGE>   15

any ERISA Affiliate of any notice,  concerning the imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of ERISA.

     "Eurodollar  Borrowing"  shall mean a  Borrowing  comprised  of  Eurodollar
Loans.

     "Eurodollar Loan" shall mean any Loan bearing interest at a rate determined
by reference to the Adjusted  LIBO Rate in  accordance  with the  provisions  of
Article II.

     "Event of Default" shall have the meaning  assigned to such term in Article
VII.

     "Excluded Taxes" shall mean, with respect to the Administrative  Agent, any
Lender,  the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder,  (a) income or franchise
taxes  imposed  on (or  measured  by) its net  income  by the  United  States of
America,  or by the  jurisdiction  under  the laws of which  such  recipient  is
organized  or in which its  principal  office is located  or, in the case of any
Lender,  in which its  applicable  lending  office is  located,  (b) any  branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other  jurisdiction  in which the Borrower is located and (c) in the case
of a Foreign  Lender  (other  than an  assignee  pursuant  to a  request  by the
Borrower under Section 2.21(a)),  any withholding tax that is imposed on amounts
payable to such Foreign  Lender at the time such Foreign  Lender becomes a party
to this Agreement (or  designates a new lending  office) or is  attributable  to
such  Foreign  Lender's  failure to comply with Section  2.20(e),  except to the
extent that such Foreign Lender (or its assignor,  if any) was entitled,  at the
time  of  designation  of a new  lending  office  (or  assignment),  to  receive
additional  amounts  from the  Borrower  with  respect to such  withholding  tax
pursuant to Section 2.20(a).

     "Federal  Funds  Effective  Rate" shall  mean,  for any day,  the  weighted
average of the rates on overnight Federal funds transactions with members of the
Federal  Reserve System  arranged by Federal funds brokers,  as published on the
next  succeeding  Business Day by the Federal  Reserve Bank of New York,  or, if
such rate is not so published for any day that is a Business Day, the average of
the quotations for the day for such transactions  received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.

     "Fee  Letter"  shall mean the Fee Letter  dated  July 28,  1997,  among the
Borrower and The Chase Manhattan Bank.

     "Fees" shall mean the Commitment Fees, the Administrative Agent's Fees, the
L/C Participation Fees and the Issuing Bank Fees.

     "Financial  Officer"  of any  corporation  shall  mean the chief  financial
officer,   principal  accounting  officer,   Treasurer  or  Controller  of  such
corporation.

     "Foreign  Lender" shall mean any Lender that is organized under the laws of
a jurisdiction other than that in which the Borrower is located. For purposes of
this  definition,  the United  States of  America,  each State  thereof  and the
District of Columbia shall be deemed to constitute a single jurisdiction.

     "Foreign  Subsidiary"  shall  mean any  Subsidiary  that is not a  Domestic
Subsidiary.

     "GAAP" shall mean generally  accepted  accounting  principles  applied on a
consistent basis.

     "Governmental  Authority" shall mean any Federal,  state,  local or foreign
court or governmental agency, authority, instrumentality or regulatory body.




<PAGE>   16

                                      


     "Guarantee"  of or by any person shall mean any  obligation,  contingent or
otherwise,  of such  person  guaranteeing  or  having  the  economic  effect  of
guaranteeing any Indebtedness of any other person (the "primary obligor") in any
manner,  whether  directly or  indirectly,  and including any obligation of such
person,  direct or indirect,  (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such  Indebtedness or to purchase (or to advance
or supply  funds for the  purchase  of) any  security  for the  payment  of such
Indebtedness,  (b) to purchase or lease property, securities or services for the
purpose  of  assuring  the owner of such  Indebtedness  of the  payment  of such
Indebtedness  or (c) to maintain  working  capital,  equity capital or any other
financial  statement  condition  or  liquidity  of the primary  obligor so as to
enable the primary obligor to pay such Indebtedness; provided, however, that the
term "Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business.

     "Guarantee  Agreements"  shall mean the Parent Guarantee  Agreement and the
Subsidiary Guarantee Agreement.

     "Guarantors" shall mean Holdings and the Subsidiary Guarantors.

     "Hazardous Materials" shall mean all explosive or radioactive substances or
wastes,  hazardous or toxic substances or wastes,  pollutants,  solid, liquid or
gaseous  wastes,  including  petroleum  or  petroleum  distillates,  asbestos or
asbestos   containing   materials,   polychlorinated   biphenyls   ("PCBs")   or
PCB-containing  materials or equipment,  radon gas, infectious or medical wastes
and all other  substances  or wastes of any  nature  regulated  pursuant  to any
Environmental Law.

     "Holdings  Merger"  shall  have the  meaning  assigned  to such term in the
definition of the term "Change in Control".

     "Indebtedness"  of any person  shall  mean,  without  duplication,  (a) all
obligations  of such person for  borrowed  money or with  respect to deposits or
advances of any kind,  (b) all  obligations  of such person  evidenced by bonds,
debentures,  notes or similar  instruments,  (c) all  obligations of such person
upon which  interest  charges are  customarily  paid  (excluding  trade accounts
payable and accrued  obligations  incurred in the ordinary  course of business),
(d) all  obligations  of such  person  under  conditional  sale or  other  title
retention  agreements  relating to property or assets  purchased by such person,
(e) all  obligations  of such person issued or assumed as the deferred  purchase
price of  property  or  services  (excluding  trade  accounts  payable,  accrued
obligations  incurred  in the  ordinary  course of  business  and any  unaccrued
Earn-Out  Obligation),  (f) all  Indebtedness of others of the type described in
clauses (a) through  (e) and (g) through (j) of this  definition  secured by (or
for which the holder of such  Indebtedness has an existing right,  contingent or
otherwise,  to be secured  by) any Lien on  property  owned or  acquired by such
person,  whether or not the obligations  secured thereby have been assumed,  (g)
all Guarantees by such person of Indebtedness  of others,  (h) all Capital Lease
Obligations  of such person,  (i) all  obligations  of such person in respect of
interest rate protection  agreements,  foreign currency  exchange  agreements or
other interest or exchange rate hedging  arrangements and (j) all obligations of
such  person as an account  party in  respect of letters of credit and  bankers'
acceptances.  The  Indebtedness of any person shall include the  Indebtedness of
any partnership in which such person is a general partner.

     "Indemnified Taxes" shall mean Taxes other than Excluded Taxes.

     "Indemnity,   Subrogation  and  Contribution   Agreement"  shall  mean  the
Indemnity, Subrogation and Contribution Agreement, as amended and restated as of
the date hereof, substantially in the form of Exhibit D, among the Borrower, the
Subsidiary Guarantors and the Collateral Agent.



<PAGE>   17




     "Interest  Payment Date" shall mean, with respect to any Loan, the last day
of the Interest Period  applicable to the Borrowing of which such Loan is a part
and, in the case of a Eurodollar  Borrowing with an Interest Period of more than
three months'  duration,  each day that would have been an Interest Payment Date
had successive  Interest  Periods of three months'  duration been  applicable to
such Borrowing,  and, in addition,  the date of any prepayment of such Borrowing
or conversion of such Borrowing to a Borrowing of a different Type.

     "Interest Period" shall mean (a) as to any Eurodollar Borrowing, the period
commencing  on the  date  of  such  Borrowing  and  ending  on  the  numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day)  in the  calendar  month  that is 1, 2, 3 or 6  months  thereafter,  as the
Borrower may elect and (b) as to any ABR Borrowing, the period commencing on the
date of such  Borrowing  and ending on the  earliest of (i) the next  succeeding
March 31, June 30, September 30 or December 31, (ii) the Maturity Date and (iii)
the date such  Borrowing  is  converted  to a Borrowing  of a different  Type in
accordance  with  Section 2.10 or repaid or prepaid in  accordance  with Section
2.12 or 2.13; provided,  however, that if any Interest Period would end on a day
other than a Business Day,  such  Interest  Period shall be extended to the next
succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such
next  succeeding  Business Day would fall in the next calendar  month,  in which
case such Interest Period shall end on the next preceding Business Day. Interest
shall  accrue  from and  including  the first day of an  Interest  Period to but
excluding the last day of such Interest Period.

     "Interest  Rate  Protection  Agreement"  shall mean any interest  rate swap
agreement,  interest  rate cap  agreement,  interest  rate collar  agreement  or
similar  agreement  or  arrangement  designed  to protect  the  Borrower  or any
Subsidiary  against  fluctuations  in interest  rates,  and not entered into for
speculation.

     "Investors" shall mean CVC and certain other investors.

     "Issuing Bank Fees" shall have the meaning assigned to such term in Section
2.05(c).

     "L/C  Commitment"  shall mean the  commitment  of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.22.

     "L/C Disbursement" shall mean a payment or disbursement made by the Issuing
Bank pursuant to a Letter of Credit.

     "L/C Exposure" shall mean at any time the sum of (a) the aggregate  undrawn
amount of all outstanding  Letters of Credit at such time plus (b) the aggregate
principal amount of all L/C  Disbursements  that have not yet been reimbursed at
such time.  The L/C  Exposure  of any Lender at any time shall mean its Pro Rata
Percentage of the aggregate L/C Exposure at such time.

     "L/C  Participation  Fee" shall have the  meaning  assigned to such term in
Section 2.05(c).

     "Lenders" shall mean (a) the financial institutions listed on Schedule 2.01
(other than any such financial  institution that has ceased to be a party hereto
pursuant to an Assignment and Acceptance) and (b) any financial institution that
has become a party hereto pursuant to an Assignment and Acceptance.

         "Letter of Credit" shall mean any letter of credit issued pursuant to
Section 2.22.

     "LIBO Rate" shall mean,  with respect to any  Eurodollar  Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Dow Jones Service (or on
any  successor  or  substitute  page of such  service,  or any  successor  to or
substitute  for such  service,  providing  rate  quotations  comparable to those
currently  provided on such page of the Telerate  Service,  as 


<PAGE>   18

determined  by the  Administrative  Agent from time to time for purposes of
providing  quotations of interest  rates  applicable  to dollar  deposits in the
London interbank market) at approximately  11:00 a.m., London time, two Business
Days prior to the commencement of such Interest  Period,  as the rate for dollar
deposits with a maturity  comparable to such Interest Period.  In the event that
such rate is not so available at such time for any reason,  the "LIBO Rate" with
respect to such Eurodollar  Borrowing for such Interest Period shall be the rate
at  which  dollar  deposits  approximately  equal  in  principal  amount  to the
Administrative  Agent's portion of such Eurodollar  Borrowing and for a maturity
comparable to such Interest Period are offered to the principal London office of
the Administrative Agent in immediately  available funds in the London interbank
market at approximately  11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.

     "Lien" shall mean,  with respect to any asset,  (a) any  mortgage,  deed of
trust,  lien,  pledge,  encumbrance,  charge or security  interest in or on such
asset,  (b) the  interest  of a vendor or a lessor  under any  conditional  sale
agreement,  capital lease or title  retention  agreement (or any financing lease
having  substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities,  any purchase  option,  call or
similar right of a third party with respect to such securities.

     "Loan  Documents"  shall mean this  Agreement,  the Letters of Credit,  the
Guarantee Agreements, the Security Documents and the Indemnity,  Subrogation and
Contribution Agreement.

     "Loan Parties" shall mean the Borrower and the Guarantors.

     "Loans"  shall mean the loans made by the Lenders to the Borrower  pursuant
to Section 2.01. Each Loan shall be a Eurodollar Loan or an ABR Loan.

     "Management Investors" shall mean the officers,  directors and employees of
ACP  Holdings,  ACP  Products,  Holdings,  the Borrower or a  Subsidiary  of the
Borrower who acquire Voting Stock of ACP Holdings, ACP Products, Holdings or the
Borrower on or after the Original Closing Date.

     "Margin  Stock" shall have the meaning  assigned to such term in Regulation
U.

     "Material Adverse Effect" shall mean (a) a materially adverse effect on the
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and the Subsidiaries,  taken as a whole, (b) material impairment of
the  ability of the  Borrower  or any other  Loan  Party to  perform  any of its
obligations  under  any Loan  Document  to which it is or will be a party or (c)
material  impairment of the rights of or benefits available to the Lenders under
any Loan Document.

     "Maturity Date" shall mean April 30, 2002.

     "Merger  Agreement"  shall mean the  Agreement  and Plan of  Reorganization
dated as of November 20, 1996, by and among  Holdings,  the Borrower and Neenah,
as the same may be amended, restated, modified or supplemented from time to time
prior to the date hereof or in accordance with Section 6.09(a).

         "Mortgaged Properties" shall mean the owned real properties of the Loan
Parties specified on Schedule 3.20(a).


<PAGE>   19


     "Mortgages" shall mean the mortgages,  deeds of trust, leasehold mortgages,
assignments  of leases and rents,  modifications  and other  security  documents
delivered pursuant to clause (i) of Section 4.02(j) or pursuant to Section 5.11,
each substantially in the form of Exhibit E.

     "Multiemployer  Plan" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA.

     "Net  Debt"  shall  mean,  at any date  and  without  duplication,  (a) the
aggregate  amount of all  Indebtedness of the Borrower and the Subsidiaries on a
consolidated basis at such date (other than any Indebtedness described in clause
(i) or (j) of the definition of the term "Indebtedness") minus (b) the aggregate
amount of all  marketable  securities  on the  Borrower's  balance sheet on such
date.

     "Obligations"  shall mean all obligations  defined as  "Obligations" in the
Guarantee Agreements and the Security Documents.


     "Original Closing Date" shall mean April 30, 1997.

     "Other Taxes" shall mean any and all present or future stamp or documentary
taxes or any other excise or property  taxes,  charges or similar levies arising
from any payment made hereunder or from the  execution,  delivery or enforcement
of, or otherwise with respect to, this Agreement.

     "Parent Guarantee Agreement" shall mean the Parent Guarantee Agreement,  as
amended and restated as of the date hereof, substantially in the form of Exhibit
F, made by  Holdings  in favor of the  Collateral  Agent for the  benefit of the
Secured Parties.

     "PBGC" shall mean the Pension Benefit Guaranty  Corporation referred to and
defined in ERISA.

     "Perfection    Certificate"   shall   mean   the   Perfection   Certificate
substantially in the form of Annex 2 to the Security Agreement.

     "Permitted  Acquisitions"  shall mean acquisitions of not less than 100% of
the outstanding capital stock of any corporation,  a division of any corporation
or any similar business unit (or of substantially all the assets and business of
any of the foregoing)  engaged in a Related Business (each, an "Acquisition") so
long  as (i) in the  case  of each  such  Acquisition  of  capital  stock,  such
Acquisition  was not  preceded by an  unsolicited  tender offer for such capital
stock  by  Holdings  or  any of its  Affiliates  and  (ii)  in the  case  of all
Acquisitions,   the  aggregate  principal  amount  of  the  Loans  at  any  time
outstanding used to finance the cash  consideration  paid in connection with all
such  Acquisitions,  to  refinance  Indebtedness  in  connection  with  all such
Acquisitions  and to pay related fees and expenses,  taken as a whole,  does not
exceed the excess of (a) $40,000,000 over (b) the aggregate  principal amount of
outstanding Loans used to finance Consolidated Capital Expenditures  pursuant to
Section 6.10(d).

     "Permitted  Holders"  shall mean (i) CVC and its  Affiliates  and Permitted
Transferees and (ii) the Management Investors and their Permitted Transferees.

<PAGE>   20


     "Permitted Investments" shall mean:

         (a) direct obligations of, or obligations the principal of and interest
    on which are unconditionally guaranteed by, the United States of America (or
    by any agency thereof to the extent such  obligations are backed by the full
    faith and credit of the United  States of  America),  in each case  maturing
    within one year from the date of acquisition thereof;

         (b)  investments in commercial  paper maturing within 270 days from the
    date of acquisition  thereof and having,  at such date of  acquisition,  the
    highest credit rating  obtainable  from Standard & Poor's Ratings Service or
    from Moody's Investors Service, Inc.;

         (c) investments in certificates  of deposit,  banker's  acceptances and
    time deposits maturing within one year from the date of acquisition  thereof
    issued or guaranteed by or placed with,  and money market  deposit  accounts
    issued or offered by, any domestic  office of any commercial  bank organized
    under the laws of the United States of America or any State thereof that has
    a  combined  capital  and  surplus  and  undivided  profits of not less than
    $250,000,000;

         (d) other  investment  instruments  approved in writing by the Required
    Lenders and offered by financial  institutions which have a combined capital
    and surplus and undivided profits of not less than $250,000,000; and

         (e) shares of funds  registered  under the  Investment  Company  Act of
    1940, as amended,  that have assets of at least $100,000,000 and invest only
    in  obligations  described  in clauses (a) through (d) above,  to the extent
    that such shares are rated by Moody's Investors Service,  Inc. or Standard &
    Poor's Ratings Service in one of the two highest rating categories  assigned
    by such agency for shares of such nature.

    "Permitted  Transferee" shall mean (a) with respect to CVC (i) Citicorp, any
direct or  indirect  wholly  owned  subsidiary  of  Citicorp,  and any  officer,
director  or  employee  of CVC,  Citicorp  or any  wholly  owned  subsidiary  of
Citicorp,  (ii) any  spouse or lineal  descendant  (including  by  adoption  and
stepchildren)  of the officers,  directors  and employees  referred to in clause
(a)(i) above or (iii) any trust,  corporation or partnership 100% in interest of
the beneficiaries,  stockholders or partners of which consists of one or more of
the persons described in clause (a)(i) or (ii) above and (b) with respect to any
officer or employee of ACP Products,  ACP Holdings,  Holdings, the Borrower or a
Subsidiary,  (i) any spouse or lineal  descendant  (including  by  adoption  and
stepchildren)  of such  officer or employee and (ii) any trust,  corporation  or
partnership 100% in interest of the  beneficiaries,  stockholders or partners of
which  consists of such  officer or  employee,  any of the persons  described in
clause (b)(i) above or any combination thereof.

    "Person" shall mean any natural person,  corporation,  business trust, joint
venture,  association,  company,  partnership  or  government,  or any agency or
political subdivision thereof.

    "Plan"  shall  mean  any  employee   pension  benefit  plan  (other  than  a
Multiemployer  Plan)  subject to the  provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA  Affiliate is (or, if such plan were  terminated,  would under Section
4069 of ERISA be deemed to be) an  "employer"  as  defined  in  Section  3(5) of
ERISA.

    "Pledge Agreement" shall mean the Pledge Agreement,  as amended and restated
as of the  date  hereof,  substantially  in the form of  Exhibit  G,  among  the
Borrower,  Holdings, the Subsidiaries party thereto and the Collateral Agent for
the benefit of the Secured Parties.


<PAGE>   21


    "Preferred Stock" as applied to the Capital Stock of any corporation,  shall
mean  Capital  Stock  of any  class or  classes  (however  designated)  which is
preferred as to the payment of dividends,  or as to the  distribution  of assets
upon  any  voluntary  or   involuntary   liquidation   or  dissolution  of  such
corporation,   over  shares  of  Capital  Stock  of  any  other  class  of  such
corporation.

    "Pro Rata Percentage" of any Lender at any time shall mean the percentage of
the Total Commitment represented by such Lender's Commitment.

    "Register" shall have the meaning given such term in Section 9.04(d).

    "Regulation G" shall mean  Regulation G of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

    "Regulation U" shall mean  Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

    "Regulation X" shall mean  Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

    "Related  Business"  shall  mean  any  business  of  the  Borrower  and  its
Subsidiaries  as  conducted  on the  Original  Closing  Date or the  Restatement
Closing Date and any business related, ancillary or complementary thereto.

    "Release"  shall mean any spilling,  leaking,  pumping,  pouring,  emitting,
emptying,  discharging,   injecting,  escaping,  leaching,  dumping,  disposing,
depositing,  dispersing,  emanating or migrating of any  Hazardous  Material in,
into, onto or through the environment.

    "Remedial  Action" shall mean (a) "remedial  action" as such term is defined
in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions required by any
Governmental Authority or voluntarily undertaken to: (i) cleanup, remove, treat,
abate or in any other way address  any  Hazardous  Material in the  environment;
(ii) prevent the Release or threat of Release,  or minimize the further  Release
of any  Hazardous  Material  so it does not  migrate or  endanger or threaten to
endanger public health, welfare or the environment; or (iii) perform studies and
investigations in connection with, or as a precondition to, (i) or (ii) above.

    "Required  Lenders"  shall mean,  at any time,  Lenders  having  Loans,  L/C
Exposure and unused  Commitments  representing at least a majority of the sum of
all Loans outstanding, L/C Exposure and unused Commitments at such time.

    "Responsible Officer" of any corporation shall mean any executive officer or
Financial  Officer of such corporation and any other officer or similar official
thereof   responsible  for  the   administration  of  the  obligations  of  such
corporation in respect of this Agreement.

    "Restatement Closing Date" shall mean September 12, 1997.

    "Secured  Parties"  shall  have the  meaning  assigned  to such  term in the
Security Agreement.

    "Security  Agreement"  shall mean the  Security  Agreement,  as amended  and
restated as of the date hereof,  substantially in the form of Exhibit H, between
the Borrower,  the  Subsidiaries  party thereto and the Collateral Agent for the
benefit of the Secured Parties.

<PAGE>   22


    "Security Documents" shall mean the Mortgages,  the Security Agreement,  the
Pledge  Agreement  and each of the  security  agreements,  mortgages  and  other
instruments  and  documents  executed  and  delivered  pursuant  to  any  of the
foregoing or pursuant to Section 5.12.

    "Senior  Subordinated  Notes" shall mean (a) the 11.125% Senior Subordinated
Notes  due 2007 of the  Borrower,  issued  on the  Original  Closing  Date in an
aggregate  principal  amount of $150,000,000 and (b) the 11.125% Series C Senior
Subordinated  Notes  due 2007 of the  Borrower  issued  on July 1,  1997,  in an
aggregate principal amount of $45,000,000.

    "Statutory  Reserves"  shall mean a fraction  (expressed as a decimal),  the
numerator of which is the number one and the  denominator of which is the number
one minus the  aggregate  of the  maximum  reserve  percentages  (including  any
marginal,  special,  emergency or supplemental  reserves) expressed as a decimal
established by the Board and any other banking  authority,  domestic or foreign,
to  which  the  Administrative  Agent  or  any  Lender  (including  any  branch,
Affiliate,  or other  fronting  office  making or holding a Loan) is subject (a)
with respect to the Base CD Rate, for new negotiable  nonpersonal  time deposits
in dollars of over $100,000 with maturities approximately equal to three months,
and (b) with respect to the Adjusted LIBO Rate, for Eurocurrency Liabilities (as
defined in Regulation D of the Board).  Such reserve  percentages  shall include
those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to
constitute   Eurocurrency   Liabilities  and  to  be  subject  to  such  reserve
requirements  without benefit of or credit for proration,  exemptions or offsets
that may be available  from time to time to any Lender under such  Regulation D.
Statutory  Reserves shall be adjusted  automatically  on and as of the effective
date of any change in any reserve percentage.

    "subsidiary"  shall mean, with respect to any person (herein  referred to as
the  "parent"),  any  corporation,  partnership,  association  or other business
entity (a) of which securities or other ownership  interests  representing  more
than 50% of the  equity or more than 50% of the  ordinary  voting  power or more
than 50% of the general partnership interests are, at the time any determination
is  being  made,  owned,  controlled  or held,  or (b) that is,  at the time any
determination  is  made,  otherwise  Controlled,  by the  parent  or one or more
subsidiaries of the parent or by the parent and one or more  subsidiaries of the
parent.

    "Subsidiary" shall mean any subsidiary of the Borrower.

    "Subsidiary   Guarantee  Agreement"  shall  mean  the  Subsidiary  Guarantee
Agreement,  as amended and restated as of the date hereof,  substantially in the
form of Exhibit I, made by the Subsidiary  Guarantors in favor of the Collateral
Agent for the benefit of the Secured Parties.

    "Subsidiary  Guarantor"  shall  mean  each  Subsidiary  listed  on  Schedule
1.01(a),  and each other  Subsidiary  that is or becomes a party to a Subsidiary
Guarantee Agreement.

    "Taxes"  shall mean any and all present or future  taxes,  levies,  imposts,
duties,  deductions,   charges  or  withholdings  imposed  by  any  Governmental
Authority.

    "Tax Sharing Agreement" shall mean the Tax Sharing Agreement,  substantially
in the form of Exhibit K, among ACP Holdings,  Holdings and ACP Holdings'  other
direct and indirect subsidiaries.

    "Three-Month  Secondary  CD Rate" shall  mean,  for any day,  the  secondary
market rate for three-month  certificates of deposit reported as being in effect
on such day (or,  if such day shall not be a Business  Day,  the next  preceding
Business Day) by the Board through the public information  telephone line of the
Federal Reserve Bank of New York (which rate will,  under the current  practices
of the Board,  be published in Federal  Reserve  Statistical  Release  H.15(519)
during the week  following  such day), or, if such rate shall not be so reported
on such day or such 




<PAGE>   23

next preceding  Business Day, the average of the secondary market quotations
for three-month  certificates of deposit of major money center banks in New York
City received at approximately  10:00 a.m., New York City time, on such day (or,
if such day shall not be a Business Day, on the next preceding  Business Day) by
the  Administrative  Agent from three New York City  negotiable  certificate  of
deposit dealers of recognized standing selected by it.

    "Total  Commitment"  shall mean, at any time,  the  aggregate  amount of the
Commitments, as in effect at such time.

    "Transactions" shall have the meaning assigned to such term in Section 3.02.

    "Type",  when used in respect of any Loan or  Borrowing,  shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined.  For purposes hereof, the term "Rate" shall include the
Adjusted LIBO Rate and the Alternate Base Rate.

    "Voting  Stock" of a corporation  shall mean all classes of Capital Stock of
such corporation then outstanding and normally  entitled to vote in the election
of directors.

    "wholly  owned  Subsidiary"  of any person shall mean a  subsidiary  of such
person of which securities  (except for directors'  qualifying  shares) or other
ownership  interests  representing  100% of the  equity or 100% of the  ordinary
voting power or 100% of the general  partnership  interests are, at the time any
determination is being made, owned,  controlled or held by such person or one or
more wholly owned  subsidiaries of such person or by such person and one or more
wholly owned subsidiaries of such person.

    "Withdrawal  Liability"  shall mean liability to a  Multiemployer  Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.

    SECTION 1.02. Terms  Generally.  The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require,  any pronoun  shall  include the  corresponding  masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be  followed by the phrase  "without  limitation".  All  references
herein to Articles,  Sections, Exhibits and Schedules shall be deemed references
to Articles  and Sections of, and  Exhibits  and  Schedules  to, this  Agreement
unless the  context  shall  otherwise  require.  Except as  otherwise  expressly
provided herein,  (a) any reference in this Agreement to any Loan Document shall
mean such document as amended, restated, supplemented or otherwise modified from
time to time and (b) all terms of an  accounting  or  financial  nature shall be
construed in  accordance  with GAAP,  as in effect from time to time;  provided,
however,  that  for  purposes  of  determining  compliance  with  the  covenants
contained in Article VI, except as otherwise  provided  herein,  all  accounting
terms herein shall be interpreted  and all accounting  determinations  hereunder
shall be made in accordance with GAAP as in effect on the date of this Agreement
and applied on a basis  consistent  with the  application  used in the financial
statements  referred  to in Section  3.05(a)  (except  to the  extent  that such
financial statements accounted for inventory on a last-in-first-out basis).






<PAGE>   24


                                   ARTICLE II

                                   The Credits


    SECTION 2.01.  Commitments.  Subject to the terms and conditions and relying
upon the  representations  and warranties  herein set forth, each Lender agrees,
severally and not jointly,  to make Loans to the Borrower,  at any time and from
time to time on or after the date hereof,  and until the earlier of the Maturity
Date and the termination of the Commitment of such Lender in accordance with the
terms hereof, in an aggregate principal amount at any time outstanding that will
not result in such Lender's Credit Exposure exceeding such Lender's  Commitment.
Within the limits set forth in the preceding  sentence and subject to the terms,
conditions and  limitations  set forth herein,  the Borrower may borrow,  pay or
prepay and reborrow Loans.

    SECTION 2.02. Loans. (a) Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
applicable Commitments; provided, however, that the failure of any Lender to
make any Loan shall not in itself relieve any other Lender of its obligation to
lend hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to make any Loan required to be
made by such other Lender). Except for Loans deemed made pursuant to Section
2.02(f), the Loans comprising any Borrowing shall be in an aggregate principal
amount that is (i) an integral multiple of $500,000 and not less than $1,000,000
in the case of Eurodollar Loans, (ii) an integral multiple of $100,000 and not
less than $500,000 in the case of ABR Loans or (iii) in the case of ABR Loans,
equal to the remaining available balance of the applicable Commitments.

    (b) Subject to Sections  2.08 and 2.15,  each  Borrowing  shall be comprised
entirely of ABR Loans or Eurodollar  Loans as the Borrower may request  pursuant
to Section  2.03.  Each  Lender may at its option  make any  Eurodollar  Loan by
causing any domestic or foreign  branch or Affiliate of such Lender to make such
Loan;  provided that any exercise of such option shall not affect the obligation
of the  Borrower  to  repay  such  Loan in  accordance  with  the  terms of this
Agreement. Borrowings of more than one Type may be outstanding at the same time;
provided,  however,  that the  Borrower  shall not be  entitled  to request  any
Borrowing that, if made, would result in more than seven  Eurodollar  Borrowings
outstanding  hereunder at any time.  For purposes of the  foregoing,  Borrowings
having different  Interest  Periods,  regardless of whether they commence on the
same date, shall be considered separate Borrowings.

    (c) Except  with  respect to Loans made  pursuant to Section  2.02(f),  each
Lender  shall make each Loan to be made by it  hereunder  on the  proposed  date
thereof by wire transfer of immediately  available  funds to such account in New
York City as the  Administrative  Agent may designate not later than 11:00 a.m.,
New York City time, and the Administrative Agent shall by 12:00 (noon), New York
City time,  credit  the  amounts  so  received  to an account in the name of the
Borrower,  maintained  with  the  Administrative  Agent  and  designated  by the
Borrower in the applicable  Borrowing Request or, if a Borrowing shall not occur
on such date because any condition  precedent  herein  specified  shall not have
been met, return the amounts so received to the respective Lenders.

    (d) Unless the Administrative Agent shall have received notice from a Lender
prior to the date of any Borrowing  that such Lender will not make  available to
the  Administrative   Agent  such  Lender's  portion  of  such  Borrowing,   the
Administrative Agent may assume that such Lender has made such portion available
to the  Administrative  Agent on the date of such  Borrowing in accordance  with
paragraph  (c) above and the  Administrative  Agent may, in  reliance  upon such
assumption,  make available to the Borrower on such date a corresponding amount.
If the  Administrative  Agent shall have so made funds  available  then,  to the
extent  that such  Lender  shall not have made  such  portion  available  to the
Administrative  Agent, such Lender and the 


<PAGE>   25


Borrower severally agree to repay to the  Administrative  Agent forthwith on
demand such  corresponding  amount together with interest thereon,  for each day
from the date such amount is made  available to the Borrower until the date such
amount is repaid to the Administrative Agent at (i) in the case of the Borrower,
the interest rate applicable at the time to the Loans  comprising such Borrowing
(in lieu of interest which would otherwise become due to such Lender pursuant to
Section  2.06) and (ii) in the case of such  Lender,  a rate  determined  by the
Administrative  Agent to represent  its cost of overnight  or  short-term  funds
(which  determination shall be conclusive absent manifest error). If such Lender
shall repay to the Administrative  Agent such corresponding  amount, such amount
shall  constitute  such Lender's Loan as part of such  Borrowing for purposes of
this Agreement.

    (e)  Notwithstanding  any other  provision of this  Agreement,  the Borrower
shall not be  entitled to request a  Borrowing  pursuant  to which the  Interest
Period requested with respect thereto would end after the Maturity Date.

    (f) If the  Issuing  Bank  shall not have  received  from the  Borrower  the
payment required to be made by Section 2.22(e) within the time specified in such
Section,  the Issuing Bank will promptly notify the Administrative  Agent of the
L/C Disbursement and the  Administrative  Agent will promptly notify each Lender
of such L/C Disbursement and its Pro Rata Percentage thereof.  Each Lender shall
pay by wire transfer of immediately  available funds to the Administrative Agent
not later than 2:00 p.m.,  New York City time,  on such date (or, if such Lender
shall have received such notice later than 12:00 (noon),  New York City time, on
any day,  not later than 10:00  a.m.,  New York City  time,  on the  immediately
following Business Day), an amount equal to such Lender's Pro Rata Percentage of
such L/C  Disbursement  (it being understood that such amount shall be deemed to
constitute  an ABR Loan of such Lender and such payment  shall be deemed to have
reduced the L/C Exposure), and the Administrative Agent will promptly pay to the
Issuing  Bank  amounts so received by it from the  Lenders.  The  Administrative
Agent will promptly pay to the Issuing Bank any amounts  received by it from the
Borrower pursuant to Section 2.22(e) prior to the time that any Lender makes any
payment  pursuant  to this  paragraph  (f);  any such  amounts  received  by the
Administrative  Agent thereafter will be promptly remitted by the Administrative
Agent to the Lenders that shall have made such payments and to the Issuing Bank,
as their  interests  may appear.  If any Lender shall not have made its Pro Rata
Percentage of such L/C  Disbursement  available to the  Administrative  Agent as
provided above, such Lender and the Borrower  severally agree to pay interest on
such amount, for each day from and including the date such amount is required to
be paid in accordance  with this paragraph to but excluding the date such amount
is paid, to the Administrative  Agent for the account of the Issuing Bank at (i)
in the  case of the  Borrower,  a rate per  annum  equal  to the  interest  rate
applicable to Loans pursuant to Section 2.06(a) (in lieu of interest which would
otherwise  become due to such Lender pursuant to Section 2.06),  and (ii) in the
case of such Lender,  for the first such day, the Federal Funds  Effective Rate,
and for each day thereafter, the Alternate Base Rate.

    SECTION 2.03.  Borrowing  Procedure.  In order to request a Borrowing (other
than a deemed Borrowing  pursuant to Section  2.02(f),  as to which this Section
2.03 shall not  apply),  the  Borrower  shall hand  deliver or  telecopy  to the
Administrative  Agent a duly  completed  Borrowing  Request (a) in the case of a
Eurodollar  Borrowing,  not later than  11:00  a.m.,  New York City time,  three
Business  Days  before  a  proposed  Borrowing,  and  (b) in the  case of an ABR
Borrowing, not later than 11:00 a.m., New York City time, on the Business Day of
a proposed  Borrowing.  Each Borrowing  Request shall be  irrevocable,  shall be
signed  by or on  behalf  of  the  Borrower  and  shall  specify  the  following
information:  (i) whether such  Borrowing is to be a Eurodollar  Borrowing or an
ABR Borrowing;  (ii) the date of such Borrowing (which shall be a Business Day),
(iii) the number and  location of the account to which funds are to be disbursed
(which  shall be an  account  that  complies  with the  requirements  of Section
2.02(c)); (iv) the amount of such Borrowing;  and (v) if such Borrowing is to be
a Eurodollar  Borrowing,  the Interest  Period with respect  thereto;  provided,
however,  that,  notwithstanding  any contrary  specification  in any  Borrowing
Request,  


<PAGE>   26

each requested  Borrowing  shall comply with the  requirements  set forth in
Section  2.02.  If no election as to the Type of  Borrowing  is specified in any
such notice,  then the  requested  Borrowing  shall be an ABR  Borrowing.  If no
Interest  Period with  respect to any  Eurodollar  Borrowing is specified in any
such  notice,  then the  Borrower  shall be deemed to have  selected an Interest
Period of one month's duration.  The Administrative  Agent shall promptly advise
the  applicable  Lenders of any notice given  pursuant to this Section 2.03 (and
the contents thereof), and of each Lender's portion of the requested Borrowing.

    SECTION 2.04. Evidence of Debt;  Repayment of Loans. (a) The Borrower hereby
unconditionally  promises to pay to the Administrative  Agent for the account of
each Lender the  principal  amount of the then unpaid  principal  amount of each
Loan on the Maturity Date.

    (b) Each Lender  shall  maintain in  accordance  with its usual  practice an
account or accounts  evidencing the  indebtedness of the Borrower to such Lender
resulting  from each Loan made by such Lender from time to time,  including  the
amounts of principal and interest payable and paid such Lender from time to time
under this Agreement.

    (c) The Administrative Agent shall maintain accounts in which it will record
(i) the amount of each Loan made  hereunder,  the Type  thereof and the Interest
Period applicable thereto,  (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender  hereunder
and (iii) the amount of any sum received by the  Administrative  Agent hereunder
from the Borrower or any Guarantor and each Lender's share thereof.

    (d) The entries made in the accounts  maintained  pursuant to paragraphs (b)
and (c) above shall be prima facie  evidence of the existence and amounts of the
obligations therein recorded;  provided, however, that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the  obligations  of the Borrower to repay the Loans in
accordance with their terms.

    (e) Notwithstanding any other provision of this Agreement,  in the event any
Lender shall  request and receive a  promissory  note payable to such Lender and
its  registered  assigns,  the interests  represented  by such note shall at all
times (including after any assignment of all or part of such interests  pursuant
to Section 9.04) be represented by one or more  promissory  notes payable to the
payee named therein or its registered assigns.

    SECTION 2.05.  Fees. (a) The Borrower agrees to pay to each Lender,  through
the Administrative Agent, on the last day of March, June, September and December
in each year and on each  date on which  any  Commitment  of such  Lender  shall
expire or be  terminated as provided  herein,  a commitment  fee (a  "Commitment
Fee")  equal to the  Applicable  Percentage  set forth  under the  heading  "Fee
Percentage" in the definition of the term  "Applicable  Percentage" per annum in
effect from time to time on the average daily unused  amount of the  Commitments
of such Lender during the preceding quarter (or other period commencing with the
date of  acceptance  by the Borrower of the  Commitment of such Lender or ending
with the Maturity Date or the date on which the  Commitment of such Lender shall
expire or be terminated).  All Commitment Fees shall be computed on the basis of
the actual number of days elapsed in a year of 360 days.  The Commitment Fee due
to each  Lender  shall  commence  to  accrue  on the date of  acceptance  by the
Borrower of the  Commitment of such Lender and shall cease to accrue on the date
on which the Commitment of such Lender shall expire or be terminated as provided
herein.  For purposes of this Section  2.05,  the unused  amount of any Lender's
Commitment on any date shall equal such  Lender's  Commitment on such date minus
such Lender's outstanding Loans and L/C Exposure on such date.


<PAGE>   27


    (b) The  Borrower  agrees to pay to the  Administrative  Agent,  for its own
account, the administrative fees set forth in the Fee Letter at the times and in
the amounts specified therein (the "Administrative Agent Fees").


    (c)  The  Borrower   agrees  to  pay  (i)  to  each   Lender,   through  the
Administrative  Agent, on the last day of March, June, September and December of
each  year and on the date on  which  the  Commitment  of such  Lender  shall be
terminated as provided herein, a fee (an "L/C Participation  Fee") calculated on
such Lender's Pro Rata  Percentage  of the average daily  aggregate L/C Exposure
(excluding the portion thereof  attributable to unreimbursed L/C  Disbursements)
during the preceding  quarter (or shorter period commencing with the date hereof
or ending with the Maturity Date or the date on which all Letters of Credit have
been canceled or have expired and the Commitments of all Lenders shall have been
terminated) at a rate equal to the Applicable  Percentage from time to time used
to determine  the interest  rate on  Borrowings  comprised of  Eurodollar  Loans
pursuant  to Section  2.06,  and (ii) to the Issuing  Bank with  respect to each
Letter of Credit the standard fronting, issuance and drawing fees specified from
time  to  time  by  the  Issuing  Bank  (the  "Issuing  Bank  Fees").   All  L/C
Participation  Fees and Issuing  Bank Fees shall be computed on the basis of the
actual number of days elapsed in a year of 360 days.

    (d) All Fees shall be paid on the dates due, in immediately available funds,
to the Administrative Agent for distribution,  if and as appropriate,  among the
Lenders, except that the Issuing Bank Fees shall be paid directly to the Issuing
Bank. Once paid, none of the Fees shall be refundable under any circumstances.

    SECTION 2.06.  Interest on Loans.  (a) Subject to the  provisions of Section
2.07, the Loans  comprising each ABR Borrowing shall bear interest  (computed on
the basis of the actual  number of days  elapsed over a year of 365 or 366 days,
as the case may be, when the  Alternate  Base Rate is determined by reference to
the  Prime  Rate and over a year of 360 days at all  other  times) at a rate per
annum equal to the Alternate Base Rate plus the Applicable  Percentage in effect
from time to time.

    (b) Subject to the  provisions of Section 2.07,  the Loans  comprising  each
Eurodollar  Borrowing  shall bear interest  (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Percentage in effect from time to time.

    (c)  Interest on each Loan shall be payable on the  Interest  Payment  Dates
applicable  to such Loan except as  otherwise  provided in this  Agreement.  The
applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest Period or
day within an Interest  Period,  as the case may be, shall be  determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.

    SECTION 2.07. Default Interest. If the Borrower shall default in the payment
of the  principal  of or interest on any Loan or any other  amount  becoming due
hereunder,  by acceleration or otherwise,  or under any other Loan Document, the
Borrower shall on demand from time to time pay interest, to the extent permitted
by law, on such  defaulted  amount to but excluding  the date of actual  payment
(after as well as before judgment) (a) in the case of overdue principal,  at the
rate  otherwise  applicable to such Loan pursuant to Section 2.06 plus 2.00% per
annum and (b) in all other cases,  at a rate per annum (computed on the basis of
the actual  number of days elapsed  over a year of 365 or 366 days,  as the case
may be, when  determined  by  reference to the Prime Rate and over a year of 360
days at all other times) equal to the sum of the Alternate Base Rate plus 2.00%.

    SECTION  2.08.  Alternate  Rate  of  Interest.  In the  event,  and on  each
occasion,  that on the day two Business  Days prior to the  commencement  of any
Interest Period for a Eurodollar  


<PAGE>   28


Borrowing the Administrative  Agent shall have determined in good faith that
dollar deposits in the principal  amounts of the Loans comprising such Borrowing
are not generally available in the London interbank market, or that the rates at
which such dollar  deposits  are being  offered will not  adequately  and fairly
reflect  the cost to any Lender of making or  maintaining  its  Eurodollar  Loan
during  such  Interest  Period,  or  that  reasonable  means  do not  exist  for
ascertaining the Adjusted LIBO Rate, the Administrative  Agent shall, as soon as
practicable  thereafter,  but, in any event,  prior to the  commencement  of any
Interest  Period,  give written or telecopy notice of such  determination to the
Borrower  and the  Lenders.  In the event of any such  determination,  until the
Administrative  Agent shall have  advised the  Borrower and the Lenders that the
circumstances  giving  rise to such notice no longer  exist,  any request by the
Borrower  for a Eurodollar  Borrowing  pursuant to Section 2.03 or 2.10 shall be
deemed  to be a  request  for  an  ABR  Borrowing.  Each  determination  by  the
Administrative Agent hereunder shall be conclusive absent manifest error.

    SECTION 2.09. Termination and Reduction of Commitments.  (a) The Commitments
and the L/C Commitment shall automatically terminate on the Maturity Date.

    (b) Upon at least three Business Days' prior irrevocable written or telecopy
notice  to the  Administrative  Agent,  the  Borrower  may at any  time in whole
permanently terminate,  or from time to time in part permanently reduce, in each
case, without premium or penalty, the Commitments;  provided,  however, that (i)
each partial  reduction of the Commitments  shall be in an integral  multiple of
$500,000 and in a minimum  amount of  $1,000,000  and (ii) the Total  Commitment
shall  not be  reduced  to an  amount  that is less  than the  Aggregate  Credit
Exposure at the time.

    (c) Each reduction in the Commitments  hereunder shall be made ratably among
the Lenders in accordance with their respective Commitments.  The Borrower shall
pay to the Administrative  Agent for the account of the Lenders,  on the date of
each termination or reduction,  the unpaid  Commitment Fees on the amount of the
Commitments  so terminated or reduced  accrued to but excluding the date of such
termination or reduction.

    SECTION 2.10. Conversion and Continuation of Borrowings.  The Borrower shall
have the right at any time upon prior irrevocable  notice to the  Administrative
Agent (a) not later than 11:00 a.m.,  New York City time, on the Business Day of
conversion,  to convert any Eurodollar Borrowing into an ABR Borrowing,  (b) not
later  than  10:00  a.m.,  New York City  time,  three  Business  Days  prior to
conversion  or  continuation,  to convert any ABR  Borrowing  into a  Eurodollar
Borrowing or to continue any Eurodollar  Borrowing as a Eurodollar Borrowing for
an additional  Interest Period, and (c) not later than 10:00 a.m., New York City
time,  three Business Days prior to conversion,  to convert the Interest  Period
with respect to any Eurodollar Borrowing to another permissible Interest Period,
subject in each case to the following:

         (i) each  conversion or  continuation  shall be made pro rata among the
    Lenders in accordance  with the  respective  principal  amounts of the Loans
    comprising the converted or continued Borrowing;

         (ii) if less than all the outstanding principal amount of any Borrowing
    shall be converted or continued, then each resulting Borrowing shall satisfy
    the  limitations  specified in Sections  2.02(a) and 2.02(b)  regarding  the
    principal amount and maximum number of Borrowings of the relevant Type;

         (iii)  each  conversion  shall  be  effected  by  each  Lender  and the
    Administrative  Agent by  recording  for the  account of such Lender the new
    Loan of such Lender resulting from such conversion and reducing the Loan (or
    portion  thereof) of such Lender being converted by an equivalent  principal
    amount;  accrued  and unpaid  interest  on any  

  

<PAGE>   29

    Eurodollar  Loan (or portion  thereof) being converted shall be paid by
    the Borrower at the time of conversion;

         (iv) if any Eurodollar  Borrowing is converted at a time other than the
    end of the Interest Period applicable thereto,  the Borrower shall pay, upon
    demand, any amounts due to the Lenders pursuant to Section 2.16;

         (v) any  portion of a  Borrowing  maturing  or required to be repaid in
    less than one month may not be  converted  into or continued as a Eurodollar
    Borrowing;

         (vi) any portion of a  Eurodollar  Borrowing  that cannot be  converted
    into or  continued as a  Eurodollar  Borrowing by reason of the  immediately
    preceding clause shall be automatically converted at the end of the Interest
    Period in effect for such Borrowing into an ABR Borrowing; and


         (vii) upon notice to the Borrower from the  Administrative  Agent given
    at the request of the Required Lenders,  after the occurrence and during the
    continuance  of a Default or Event of Default,  no  outstanding  Loan may be
    converted into, or continued as, a Eurodollar Loan.

    Each notice  pursuant to this  Section 2.10 shall be  irrevocable  and shall
refer to this Agreement and specify (i) the identity and amount of the Borrowing
that the  Borrower  requests  be  converted  or  continued,  (ii)  whether  such
Borrowing is to be converted to or continued as a Eurodollar Borrowing or an ABR
Borrowing,  (iii)  if  such  notice  requests  a  conversion,  the  date of such
conversion  (which shall be a Business Day) and (iv) if such  Borrowing is to be
converted to or continued as a Eurodollar  Borrowing,  the Interest  Period with
respect  thereto.  If no Interest  Period is  specified  in any such notice with
respect to any  conversion to or  continuation  as a Eurodollar  Borrowing,  the
Borrower  shall be deemed to have  selected  an  Interest  Period of one month's
duration.  The Administrative Agent shall advise the Lenders of any notice given
pursuant to this Section 2.10 and of each  Lender's  portion of any converted or
continued  Borrowing.  If the Borrower shall not have given notice in accordance
with this  Section  2.10 to continue any  Borrowing  into a subsequent  Interest
Period  (and shall not  otherwise  have  given  notice in  accordance  with this
Section 2.10 to convert such Borrowing), such Borrowing shall, at the end of the
Interest Period applicable thereto (unless repaid pursuant to the terms hereof),
automatically be continued into a new Interest Period as an ABR Borrowing.

    SECTION 2.11. [Intentionally Omitted.]

    SECTION 2.12. Optional Prepayment.  (a) The Borrower shall have the right at
any time and from time to time to  prepay  any  Borrowing,  in whole or in part,
upon at least  three  Business  Days'  prior  written  or  telecopy  notice  (or
telephone  notice promptly  confirmed by written or telecopy notice) in the case
of Eurodollar  Loans, or prior written or telecopy  notice (or telephone  notice
promptly  confirmed  by written or  telecopy  notice) on or prior to the date of
prepayment in the case of ABR Loans,  to the  Administrative  Agent before 11:00
a.m., New York City time; provided,  however, that each partial prepayment shall
be in an amount  that is an  integral  multiple  of  $500,000  and not less than
$1,000,000.

    (b) Each notice of  prepayment  shall  specify the  prepayment  date and the
principal amount of each Borrowing (or portion thereof) to be prepaid,  shall be
irrevocable and shall commit the Borrower to prepay such Borrowing by the amount
stated therein on the date stated therein.  All prepayments of Eurodollar  Loans
under this Section 2.12 shall be subject to Section 2.16 but  otherwise  without
premium or penalty.  All  prepayments  of ABR Loans shall be without  premium or
penalty. All prepayments under this Section 2.12 shall be accompanied by accrued
but  unpaid  interest  on the  principal  amount  being  prepaid  to the date of
payment.


<PAGE>   30



    SECTION 2.13. Mandatory Prepayments.  (a) In the event of any termination of
all the  Commitments,  the  Borrower  shall repay or prepay all its  outstanding
Borrowings  on the  date  of  such  termination.  In the  event  of any  partial
reduction of the Commitments, then (i) at or prior to the effective date of such
reduction, the Administrative Agent shall notify the Borrower and the Lenders of
the  Aggregate  Credit  Exposure  after  giving  effect  thereto and (ii) if the
Aggregate  Credit Exposure would exceed the Total Commitment after giving effect
to such reduction or  termination,  then the Borrower shall, on the date of such
reduction or termination,  first,  prepay  Borrowings in an amount sufficient to
eliminate such excess and second,  to the extent of any remaining  excess (after
the prepayment of Loans),  replace  outstanding Letters of Credit and/or deposit
an amount in cash in a cash collateral  account  established with the Collateral
Agent for the benefit of the Secured Parties.

    (b) In the event that there shall occur any  Casualty or  Condemnation  and,
pursuant to the  applicable  Mortgage,  the  Casualty  Proceeds or  Condemnation
Proceeds,  as the case may be, are required to be used to prepay the Loans, then
the Borrower  shall apply an amount equal to 100% of such  Casualty  Proceeds or
Condemnation  Proceeds,  as the case may be, to prepay  outstanding Loans and/or
cash collateralizing Letters of Credit in accordance with Section 2.13(a).


    (c) The Borrower shall deliver to the  Administrative  Agent, at the time of
each  prepayment  required  under this Section 2.13, a  certificate  signed by a
Financial  Officer  of the  Borrower  setting  forth in  reasonable  detail  the
calculation of the amount of such  prepayment.  Each notice of prepayment  shall
specify  the  prepayment  date,  the Type of each  Loan  being  prepaid  and the
principal  amount  of  each  Loan  (or  portion  thereof)  to  be  prepaid.  All
prepayments  of  Borrowings  under this Section 2.13 shall be subject to Section
2.16, but shall otherwise be without premium or penalty.

    (d) Amounts to be applied pursuant to this Section 2.13 to the prepayment of
Loans shall be applied,  as applicable,  first to reduce  outstanding ABR Loans.
Any amounts  remaining after each such  application  shall, at the option of the
Borrower,  be applied to prepay  Eurodollar  Loans  immediately  and/or shall be
deposited in the Prepayment Account (as defined below). The Administrative Agent
shall apply any cash  deposited in the Prepayment  Account to prepay  Eurodollar
Loans on the last day of their respective Interest Periods (or, at the direction
of the  Borrower,  on any earlier  date) until all  outstanding  Loans have been
prepaid or until all the  allocable  cash on deposit  with respect to such Loans
has been  exhausted.  For  purposes  of this  Agreement,  the  term  "Prepayment
Account"   shall  mean  an  account   established   by  the  Borrower  with  the
Administrative  Agent  and  over  which  the  Administrative  Agent  shall  have
exclusive dominion and control,  including the exclusive right of withdrawal for
application  in accordance  with this paragraph  (d). The  Administrative  Agent
will,  at  the  request  of the  Borrower,  invest  amounts  on  deposit  in the
Prepayment Account in Permitted Investments that mature prior to the last day of
the applicable  Interest Periods of the Eurodollar  Borrowings to be prepaid, as
the case may be; provided,  however, that (i) the Administrative Agent shall not
be required to make any investment that, in its sole judgment,  would require or
cause the  Administrative  Agent to be in, or would result in any,  violation of
any law,  statute,  rule or regulation and (ii) the  Administrative  Agent shall
have no obligation to invest amounts on deposit in the Prepayment  Account if an
Event of Default  shall have  occurred and be  continuing.  The  Borrower  shall
indemnify the Administrative Agent for any losses relating to the investments so
that the amount available to prepay Eurodollar Borrowings on the last day of the
applicable  Interest  Period is not less than the  amount  that  would have been
available had no investments been made pursuant thereto. Other than any interest
earned on such  investments,  the  Prepayment  Account shall not bear  interest.
Interest  or profits,  if any, on such  investments  shall be  deposited  in the
Prepayment  Account and  reinvested  and  disbursed as specified  above.  If the
maturity  of the  Loans  has been  accelerated  pursuant  to  Article  VII,  the
Administrative  Agent may, in its sole discretion,  apply all amounts on deposit
in the Prepayment Account to satisfy any of the Obligations. The Borrower hereby
grants



<PAGE>   31


to the Administrative  Agent, for its benefit and the benefit of the Issuing
Bank and the Lenders,  a security  interest in the Prepayment  Account to secure
the Obligations.

    SECTION  2.14.   Reserve   Requirements;   Change  in   Circumstances.   (a)
Notwithstanding any other provision of this Agreement, if after the date of this
Agreement any change in applicable law or regulation or in the interpretation or
administration   thereof  by  any  Governmental   Authority   charged  with  the
interpretation  or  administration  thereof  (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender or the Issuing
Bank of the principal of or interest on any Eurodollar  Loan made by such Lender
or any Fees or other amounts payable hereunder (other than changes in respect of
taxes  imposed on the overall  net income of such Lender or the Issuing  Bank by
the  jurisdiction  in which such  Lender or the Issuing  Bank has its  principal
office or lending  office or by any political  subdivision  or taxing  authority
therein),  or shall  impose,  modify or deem  applicable  any  reserve,  special
deposit or similar  requirement  against  assets  of,  deposits  with or for the
account of or credit extended by any Lender or the Issuing Bank (except any such
reserve  requirement  which is  reflected  in the  Adjusted  LIBO Rate) or shall
impose on such Lender or the  Issuing  Bank or the London  interbank  market any
other condition affecting this Agreement or Eurodollar Loans made by such Lender
or any Letter of Credit or participation  therein,  and the result of any of the
foregoing  shall be to increase  the cost to such Lender or the Issuing  Bank of
making or maintaining  any Eurodollar Loan or increase the cost to any Lender of
issuing or  maintaining  any Letter of Credit or  purchasing  or  maintaining  a
participation  therein or to reduce the amount of any sum received or receivable
by such Lender or the Issuing Bank hereunder (whether of principal,  interest or
otherwise) by an amount  reasonably deemed by such Lender or the Issuing Bank to
be material,  then the Borrower  will pay to such Lender or the Issuing Bank, as
the  case  may be,  upon  demand  such  additional  amount  or  amounts  as will
compensate  such  Lender  or the  Issuing  Bank,  as the case  may be,  for such
additional costs incurred or reduction suffered.

    (b) If any  Lender  or the  Issuing  Bank  shall  have  determined  that the
adoption  after  the date  hereof of any law,  rule,  regulation,  agreement  or
guideline regarding capital adequacy, or any change after the date hereof in any
such law,  rule,  regulation,  agreement or guideline  (whether such law,  rule,
regulation, agreement or guideline has been adopted) or in the interpretation or
administration   thereof  by  any  Governmental   Authority   charged  with  the
interpretation  or administration  thereof,  or compliance by any Lender (or any
lending  office of such  Lender)  or the  Issuing  Bank or any  Lender's  or the
Issuing Bank's holding company with any request or directive  regarding  capital
adequacy (whether or not having the force of law) of any Governmental  Authority
has or would have the effect of reducing the rate of return on such  Lender's or
the Issuing  Bank's  capital or on the  capital of such  Lender's or the Issuing
Bank's holding company,  if any, as a consequence of this Agreement or the Loans
made or  participations  in Letters of Credit  purchased by such Lender pursuant
hereto or the Letters of Credit issued by the Issuing Bank pursuant  hereto to a
level below that which such Lender or the Issuing  Bank or such  Lender's or the
Issuing Bank's holding  company could have achieved but for such  applicability,
adoption,  change or compliance  (taking into consideration such Lender's or the
Issuing Bank's  policies and the policies of such Lender's or the Issuing Bank's
holding company with respect to capital adequacy) by an amount reasonably deemed
by such Lender or the Issuing  Bank to be  material,  then from time to time the
Borrower  shall pay to such Lender or the Issuing Bank, as the case may be, such
additional  amount or amounts as will compensate such Lender or the Issuing Bank
or such Lender's or the Issuing  Bank's  holding  company for any such reduction
suffered.

    (c) A  certificate  of a Lender or the Issuing Bank setting forth the amount
or amounts reasonably  determined by such Lender or Issuing Bank to be necessary
to  compensate  such  Lender or the  Issuing  Bank or its  holding  company,  as
applicable, as specified in paragraph (a) or (b) above shall be delivered to the
Borrower and shall be conclusive  absent manifest error. The  



<PAGE>   32


Borrower  shall pay such Lender or the Issuing Bank the amount shown as
due on any such certificate  delivered by it within 10 days after its receipt of
the same.

    (d) Failure or delay on the part of any Lender or the Issuing Bank to demand
compensation  for any  increased  costs or  reduction  in  amounts  received  or
receivable  or reduction in return on capital  shall not  constitute a waiver of
such  Lender's or the Issuing  Bank's  right to demand  such  compensation.  The
protection  of this  Section  shall be  available to each Lender and the Issuing
Bank regardless of any possible  contention of the invalidity or inapplicability
of the law, rule, regulation,  agreement, guideline or other change or condition
that shall have occurred or been imposed.

    SECTION 2.15. Change in Legality. (a) Notwithstanding any other provision of
this Agreement,  if, after the date hereof,  any change in any law or regulation
or in the interpretation  thereof by any Governmental Authority charged with the
administration or  interpretation  thereof shall make it unlawful for any Lender
to make or maintain any Eurodollar  Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written notice
to the Borrower and to the Administrative Agent:

         (i) such Lender may declare that  Eurodollar  Loans will not thereafter
    (for the duration of such unlawfulness) be made by such Lender hereunder (or
    be  continued  for  additional  Interest  Periods  and ABR  Loans  will  not
    thereafter  (for  such  duration)  be  converted  into  Eurodollar   Loans),
    whereupon  any  request  for a  Eurodollar  Borrowing  (or to convert an ABR
    Borrowing  to a Eurodollar  Borrowing or to continue a Eurodollar  Borrowing
    for an additional  Interest Period) shall, as to such Lender only, be deemed
    a request  for an ABR Loan (or a request to continue an ABR Loan as such for
    an additional  Interest  Period or to convert a Eurodollar  Loan into an ABR
    Loan, as the case may be),  unless such  declaration  shall be  subsequently
    withdrawn; and

         (ii) such Lender may require that all outstanding Eurodollar Loans made
    by it be converted to ABR Loans,  in which event all such  Eurodollar  Loans
    shall be  automatically  converted to ABR Loans as of the effective  date of
    such notice as provided in paragraph (b) below.

In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.

    (b) For  purposes  of this  Section  2.15,  a notice to the  Borrower by any
Lender  shall be effective as to each  Eurodollar  Loan made by such Lender,  if
lawful,  on the last day of the Interest  Period  currently  applicable  to such
Eurodollar  Loan;  in all other cases such notice shall be effective on the date
of receipt by the Borrower.

    SECTION 2.16.  Indemnity.  The Borrower shall  indemnify each Lender against
any loss or expense  that such Lender may sustain or incur as a  consequence  of
(a) any event,  other than a default by such  Lender in the  performance  of its
obligations  hereunder,  which  results in (i) such  Lender  receiving  or being
deemed to receive any amount on account of the principal of any Eurodollar  Loan
prior to the end of the Interest Period in effect therefor,  (ii) the conversion
of any Eurodollar  Loan to an ABR Loan, or the conversion of the Interest Period
with respect to any Eurodollar  Loan, in each case other than on the last day of
the Interest Period in effect therefor,  or (iii) any Eurodollar Loan to be made
by  such  Lender  (including  any  Eurodollar  Loan  to be  made  pursuant  to a
conversion  or  continuation  under Section 2.10) not being made after notice of
such Loan  shall have been given by the  Borrower  hereunder  (any of the events
referred  to in this  



<PAGE>   33

clause (a) being called a "Breakage Event") or (b) any default in the making
of any payment or prepayment  required to be made hereunder.  In the case of any
Breakage  Event,  such loss shall  include  an amount  equal to the  excess,  as
reasonably determined by such Lender, of (i) its cost of obtaining funds for the
Eurodollar  Loan that is the subject of such Breakage  Event for the period from
the date of such Breakage Event to the last day of the Interest Period in effect
(or that  would  have been in  effect)  for such  Loan  over (ii) the  amount of
interest  likely to be realized by such Lender in redeploying the funds released
or not utilized by reason of such Breakage Event for such period.  A certificate
of any Lender  setting forth any amount or amounts which such Lender is entitled
to receive  pursuant to this Section 2.16 shall be delivered to the Borrower and
shall be conclusive absent manifest error.

         SECTION 2.17. Pro Rata Treatment. Except as required under Sections
2.14, 2.15 or 2.20, each Borrowing, each payment or prepayment of principal of
any Borrowing, each payment of interest on the Loans, each payment of the
Commitment Fees, each reduction of the Commitments and each conversion of any
Borrowing to or continuation of any Borrowing as a Borrowing of any Type shall
be allocated pro rata among the Lenders in accordance with their respective
Commitments (or, if such Commitments shall have expired or been terminated, in
accordance with the respective principal amounts of their outstanding Loans).
Each Lender agrees that in computing such Lender's portion of any Borrowing to
be made hereunder, the Administrative Agent may, in its discretion, round each
Lender's percentage of such Borrowing to the next higher or lower whole dollar
amount.

         SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower or any other Loan Party, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any
Loan or Loans or L/C Disbursement as a result of which the unpaid principal
portion of its Loans or participations in L/C Disbursements shall be
proportionately less than the unpaid principal portion of the Loans or
participations in L/C Disbursements of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and shall
promptly pay to such other Lender the purchase price for, a participation in the
Loans or L/C Exposure, as the case may be of such other Lender, so that the
aggregate unpaid principal amount of the Loans and L/C Exposure and
participations in Loans and L/C Exposure held by each Lender shall be in the
same proportion to the aggregate unpaid principal amount of all Loans and L/C
Exposure then outstanding as the principal amount of its Loans and L/C Exposure
prior to such exercise of banker's lien, setoff or counterclaim or other event
was to the principal amount of all Loans and L/C Exposure outstanding prior to
such exercise of banker's lien, setoff or counterclaim or other event; provided,
however, that if any such purchase or purchases or adjustments shall be made
pursuant to this Section 2.18 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. The Borrower and Holdings expressly
consent to the foregoing arrangements and agree that any Lender holding a
participation in a Loan or L/C Disbursement deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by the Borrower and Holdings to such Lender
by reason thereof as fully as if such Lender had made a Loan directly to the
Borrower in the amount of such participation.

         SECTION 2.19. Payments. (a) The Borrower shall make each payment
(including principal of or interest on any Borrowing or any L/C Disbursement or
any Fees or other amounts) hereunder and under any other Loan Document not later
than 1:00 p.m., New York City time, on the date when due in immediately
available dollars, without setoff, defense or counterclaim. Each such payment
(other than Issuing Bank Fees, which shall be paid directly to the Issuing 


<PAGE>   34

Bank) shall be made to the Administrative Agent at its offices at 270 Park
Avenue, New York, New York by wire transfer.

         (b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest or Fees, if applicable.

         SECTION 2.20. Taxes. (a) Any and all payments by or on account of any
obligation of the Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that, if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or
Issuing Bank (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.

         (b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

         (c) The Borrower shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of the Borrower hereunder (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Borrower by a Lender or the Issuing Bank,
or by the Administrative Agent on its own behalf or on behalf of a Lender or the
Issuing Bank, shall be conclusive absent manifest error.

         (d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

         (e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the Code and the law of the jurisdiction in
which the Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Borrower as will
permit such payments to be made without withholding or at a reduced rate.

         SECTION 2.21. Assignment of Commitments Under Certain Circumstances;
Duty to Mitigate. (a) In the event (i) any Lender or the Issuing Bank delivers a
certificate requesting compensation pursuant to Section 2.14, (ii) any Lender or
the Issuing Bank delivers a notice described in Section 2.15 or (iii) the
Borrower is required to pay any additional amount to any Lender or the Issuing
Bank or any Governmental Authority on account of any Lender or the 
<PAGE>   35

Issuing Bank pursuant to Section 2.20, the Borrower may, at its sole expense and
effort (including with respect to the processing and recordation fee referred to
in Section 9.04(b)), upon notice to such Lender or the Issuing Bank and the
Administrative Agent, require such Lender or the Issuing Bank to transfer and
assign, without recourse (in accordance with and subject to the restrictions
contained in Section 9.04), all of its interests, rights and obligations under
this Agreement to an assignee that shall assume such assigned obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that (x) such assignment shall not conflict with any law, rule or regulation or
order of any court or other Governmental Authority having jurisdiction, (y) the
Borrower shall have received the prior written consent of the Administrative
Agent (and, if a Commitment is being assigned, of the Issuing Bank), which
consent shall not unreasonably be withheld, and (z) the Borrower or such
assignee shall have paid to the affected Lender or the Issuing Bank in
immediately available funds an amount equal to the sum of the principal of and
interest accrued to the date of such payment on the outstanding Loans or L/C
Disbursements of such Lender or the Issuing Bank, respectively, plus all Fees   
and other amounts accrued for the account of such Lender or the Issuing Bank
hereunder (including any amounts under Section 2.14 and Section 2.16); provided
further that, if prior to any such transfer and assignment the circumstances or
event that resulted in such Lender's or the Issuing Bank's claim for
compensation under Section 2.14 or notice under Section 2.15 or the amounts paid
pursuant to Section 2.20, as the case may be, cease to cause such Lender or the
Issuing Bank to suffer increased costs or reductions in amounts received or
receivable or reduction in return on capital, or cease to have the consequences
specified in Section 2.15, or cease to result in amounts being payable under
Section 2.20, as the case may be (including as a result of any action taken by
such Lender or the Issuing Bank pursuant to paragraph (b) below), or if such
Lender or the Issuing Bank shall waive its right to claim further compensation
under Section 2.14 in respect of such circumstances or event or shall withdraw
its notice under Section 2.15 or shall waive its right to further payments under
Section 2.20 in respect of such circumstances or event, as the case may be, then
such Lender or the Issuing Bank shall not thereafter be required to make any
such transfer and assignment hereunder.

         (b) If (i) any Lender or the Issuing Bank shall request compensation
under Section 2.14, (ii) any Lender or the Issuing Bank delivers a notice
described in Section 2.15 or (iii) the Borrower is required to pay any
additional amount to any Lender or the Issuing Bank or any Governmental
Authority on account of any Lender or the Issuing Bank, pursuant to Section
2.20, then such Lender or the Issuing Bank shall use reasonable efforts (which
shall not require such Lender or the Issuing Bank to incur an unreimbursed loss
or unreimbursed cost or expense or otherwise take any action inconsistent with
its internal policies or legal or regulatory restrictions or suffer any
disadvantage or burden deemed by it to be significant) (x) to file any
certificate or document reasonably requested in writing by the Borrower or (y)
to assign its rights and delegate and transfer its obligations hereunder to
another of its offices, branches or affiliates, if such filing or assignment
would reduce its claims for compensation under Section 2.14 or enable it to
withdraw its notice pursuant to Section 2.15 or would reduce amounts payable
pursuant to Section 2.20, as the case may be, in the future. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender or the
Issuing Bank in connection with any such filing or assignment, delegation and
transfer.

         SECTION 2.22. Letters of Credit. (a) General. The Borrower may request
the issuance of a Letter of Credit for its own account or the account of any
Subsidiary Guarantor, in a form reasonably acceptable to the Administrative
Agent and the Issuing Bank, at any time and from time to time while the
Commitments remain in effect. This Section shall not be construed to impose an
obligation upon the Issuing Bank to issue any Letter of Credit that is
inconsistent with the terms and conditions of this Agreement.

         (b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. In order to request the issuance of a Letter of 


<PAGE>   36

Credit (or to amend, renew or extend an existing Letter of Credit), the Borrower
shall hand deliver or telecopy to the Issuing Bank and the Administrative Agent
(reasonably in advance of the requested date of issuance, amendment, renewal or
extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, the date of
issuance, amendment, renewal or extension, the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) below), the amount of
such Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare such Letter of Credit. A
Letter of Credit shall be issued, amended, renewed or extended only if, and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrower
shall be deemed to represent and warrant that, after giving effect to such
issuance, amendment, renewal or extension (A) the L/C Exposure shall not exceed
$15,000,000 and (B) the Aggregate Credit Exposure shall not exceed the Total
Commitment. 

         (c) Expiration Date. Each Letter of Credit shall expire at the close of
business on the earlier of the date one year after the date of the issuance of
such Letter of Credit and the date that is five Business Days prior to the
Maturity Date, unless such Letter of Credit expires by its terms on an earlier
date.

         (d) Participations. By the issuance of a Letter of Credit and without
any further action on the part of the Issuing Bank or the Lenders, the Issuing
Bank hereby grants to each Lender, and each such Lender hereby acquires from the
Issuing Bank, a participation in such Letter of Credit equal to such Lender's
Pro Rata Percentage of the aggregate amount available to be drawn under such
Letter of Credit, effective upon the issuance of such Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Administrative Agent, for the account
of the Issuing Bank, such Lender's Pro Rata Percentage of each L/C Disbursement
made by the Issuing Bank and not reimbursed by the Borrower (or, if applicable,
another party pursuant to its obligations under any other Loan Document)
forthwith on the date due as provided in Section 2.02(f). Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including the
occurrence and continuance of a Default or an Event of Default, and that each
such payment shall be made without any offset, abatement, withholding or
reduction whatsoever.

         (e) Reimbursement. If the Issuing Bank shall make any L/C Disbursement
in respect of a Letter of Credit, the Borrower shall pay or cause to be paid to
the Administrative Agent an amount equal to such L/C Disbursement not later than
2:00 p.m. on the Business Day the Borrower shall have received notice from the
Issuing Bank that payment of such draft will be made, or, if the Borrower shall
have received such notice later than 10:00 a.m., New York City time, on any
Business Day, not later than 10:00 a.m., New York City time, on the immediately
following Business Day.

         (f) Obligations Absolute. The Borrower's obligations to reimburse L/C
Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:

                 (i) any lack of validity or enforceability of any Letter of
Credit or any Loan Document, or any term or provision therein;

                (ii)  any  amendment or waiver of or any consent to departure 
from all or any of the  provisions  of any Letter of Credit or any Loan
Document; 


<PAGE>   37

               (iii) the existence of any claim, setoff, defense or other right
         that the Borrower, any other party guaranteeing, or otherwise obligated
         with, the Borrower, any Subsidiary or other Affiliate thereof or any
         other person may at any time have against the beneficiary under any
         Letter of Credit, the Issuing Bank, the Administrative Agent or any
         Lender or any other person, whether in connection with this Agreement,
         any other Loan Document or any other related or unrelated agreement or
         transaction;

                (iv) any draft or other document presented under a Letter of
         Credit proving to be forged, fraudulent, invalid or insufficient in any
         respect or any statement therein being untrue or inaccurate in any
         respect;

                 (v) payment by the Issuing Bank under a Letter of Credit
         against presentation of a draft or other document that does not comply
         with the terms of such Letter of Credit; and

                (vi) any other act or omission to act or delay of any kind of
         the Issuing Bank, the Lenders, the Administrative Agent or any other
         person or any other event or circumstance whatsoever, whether or not
         similar to any of the foregoing, that might, but for the provisions of
         this Section, constitute a legal or equitable discharge of the
         Borrower's obligations hereunder.

         Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional obligation of the
Borrower hereunder to reimburse L/C Disbursements will not be excused by the
gross negligence or wilful misconduct of the Issuing Bank. However, the
foregoing shall not be construed to excuse the Issuing Bank from liability to
the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
the Issuing Bank's gross negligence or wilful misconduct in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof; it is understood that the Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary and, in
making any payment under any Letter of Credit (i) the Issuing Bank's exclusive
reliance on the documents presented to it under such Letter of Credit as to any
and all matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be insufficient
in any respect, if such document on its face appears to be in order, and whether
or not any other statement or any other document presented pursuant to such
Letter of Credit proves to be forged or invalid or any statement therein proves
to be inaccurate or untrue in any respect whatsoever and (ii) any noncompliance
in any immaterial respect of the documents presented under such Letter of Credit
with the terms thereof shall, in each case, be deemed not to constitute wilful
misconduct or gross negligence of the Issuing Bank.

         (g) Disbursement Procedures. The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall as promptly as possible
give telephonic notification, confirmed by telecopy, to the Administrative Agent
and the Borrower of such demand for payment and whether the Issuing Bank has
made or will make an L/C Disbursement thereunder; provided that any failure to
give or delay in giving such notice shall not relieve the Borrower of its
obligation to reimburse the Issuing Bank and the Lenders with respect to any
such L/C Disbursement. The Administrative Agent shall promptly give each Lender
notice thereof.

         (h) Interim Interest. If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the Borrower shall 
reimburse such L/C Disbursement in full on such date, the unpaid amount thereof
shall bear interest for the account of the Issuing Bank, for each 

<PAGE>   38

day from and including the date of such L/C Disbursement, to but excluding the
earlier of the  date of payment by the Borrower or the date on which interest
shall commence to accrue thereon as provided in Section 2.02(f), at the rate per
annum that would apply to such amount if such amount were an ABR Loan.

         (i) Resignation or Removal of the Issuing Bank. The Issuing Bank may
resign at any time by giving 180 days' prior written notice to the
Administrative Agent, the Lenders and the Borrower, and may be removed at any
time by the Borrower by notice to the Issuing Bank, the Administrative Agent and
the Lenders. Subject to the next succeeding paragraph, upon the acceptance of
any appointment as the Issuing Bank hereunder by a Lender that shall agree to
serve as successor Issuing Bank, such successor shall succeed to and become
vested with all the interests, rights and obligations of the retiring Issuing
Bank and the retiring Issuing Bank shall be discharged from its obligations to
issue additional Letters of Credit hereunder, without affecting its rights and
obligations with respect to Letters of Credit previously issued by it. At the
time such removal or resignation shall become effective, the Borrower shall pay
all accrued and unpaid fees pursuant to Section 2.05(c)(ii). The acceptance of
any appointment as the Issuing Bank hereunder by a successor Lender shall be
evidenced by an agreement entered into by such successor, in a form satisfactory
to the Borrower and the Administrative Agent, and, from and after the effective
date of such agreement, (i) such successor Lender shall have all the rights and
obligations of the previous Issuing Bank under this Agreement and the other Loan
Documents and (ii) references herein and in the other Loan Documents to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the resignation or removal of the Issuing Bank
hereunder, the retiring Issuing Bank shall remain a party hereto and shall
continue to have all the rights and obligations of an Issuing Bank under this
Agreement and the other Loan Documents with respect to Letters of Credit issued
by it prior to such resignation or removal, but shall not be required to issue
additional Letters of Credit.

         (j) Cash Collateralization. If any Event of Default shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from the
Administrative Agent or the Required Lenders thereof and of the amount to be
deposited, deposit in an account with the Collateral Agent, for the benefit of
the Lenders, an amount in cash equal to the L/C Exposure as of such date. Such
deposit shall be held by the Collateral Agent as collateral for the payment and
performance of the Obligations. The Collateral Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account. Other than any interest earned on the investment of such deposits in
Permitted Investments, which investments shall be made at the option and sole
discretion of the Collateral Agent, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall (i) automatically be applied by the
Administrative Agent to reimburse the Issuing Bank for L/C Disbursements for
which it has not been reimbursed, (ii) be held for the satisfaction of the
reimbursement obligations of the Borrower for the L/C Exposure at such time and
(iii) if the maturity of the Loans has been accelerated, be applied to satisfy
the Obligations. If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default have been cured
or waived.




<PAGE>   39


                                 ARTICLE III

                        Representations and Warranties


         Each of Holdings and the Borrower represents and warrants to the
Administrative Agent, the Collateral Agent, the Issuing Bank and each of the
Lenders that:

         SECTION 3.01. Organization; Powers. Each of Holdings, the Borrower and
each of the Subsidiaries (a) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, (b)
has all requisite power and authority to own its property and assets and to
carry on its business as now conducted and as proposed to be conducted, (c) is
qualified to do business in, and is in good standing in, every jurisdiction
where such qualification is required, except where the failure so to qualify
could not reasonably be expected to result in a Material Adverse Effect, and (d)
has the corporate power and authority to execute, deliver and perform its
obligations under each of the Loan Documents and each other agreement or
instrument contemplated hereby to which it is or will be a party and, in the
case of the Borrower, to borrow hereunder.

         SECTION 3.02. Authorization. The execution, delivery and performance by
each Loan Party of each of the Loan Documents and the borrowings hereunder and
the other transactions contemplated hereby (collectively, the "Transactions")
(a) have been duly authorized by all requisite corporate and, if required,
stockholder action and (b) will not (i) violate (A) any provision of law,
statute, rule or regulation, or of the certificate or articles of incorporation
or other constitutive documents or by-laws of Holdings, the Borrower or any
Subsidiary, (B) any order of any Governmental Authority or (C) any provision of
any material indenture, agreement or other instrument to which Holdings, the
Borrower or any Subsidiary is a party or by which any of them or any of their
property is or may be bound, (ii) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a default under, or
give rise to any right to accelerate or to require the prepayment, repurchase or
redemption of any obligation under any such indenture, agreement or other
instrument or (iii) result in the creation or imposition of any Lien upon or
with respect to any property or assets now owned or hereafter acquired by
Holdings, the Borrower or any Subsidiary (other than any Lien created hereunder
or under the Security Documents).

         SECTION 3.03. Enforceability. This Agreement has been duly executed and
delivered by Holdings and the Borrower and constitutes, and each other Loan
Document when executed and delivered by the each Loan party thereto will
constitute, a legal, valid and binding obligation of such Loan Party enforceable
against such Loan Party in accordance with its terms, subject to the effects of
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws
affecting creditors' rights generally and equitable principles of general
applicability (regardless of whether such enforceability is considered in a
proceeding at law or in equity).

         SECTION 3.04. Governmental Approvals. No action, consent or approval
of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions, except for
(a) the filing of Uniform Commercial Code financing statements and filings with
the United States Patent and Trademark Office and the United States Copyright
Office, (b) recordation of the Mortgages and (c) such as have been made or
obtained and are in full force and effect.

         SECTION 3.05. Financial Statements. (a) The Borrower has heretofore
furnished to the Lenders the consolidated balance sheets and statements of
income and cash flows of Neenah as of and for the fiscal year ended March 31,
1997, audited by and accompanied by the opinion of Ernst & Young LLP,
independent public accountants. Such financial statements present fairly the

<PAGE>   40

financial condition and results of operations and cash flows of Neenah and its
consolidated Subsidiaries as of such dates and for such periods. Such balance
sheets and the notes thereto disclose all material liabilities, direct or
contingent, of Neenah and its consolidated Subsidiaries as of the dates thereof.
Such financial statements were prepared in accordance with GAAP applied on a
consistent basis.

         (b) The Borrower has heretofore delivered to the Lenders its unaudited
pro forma statements of income for the period of April 1, 1997 through and
including June 30, 1997. Such pro forma financial statements have been prepared
in good faith by the Borrower, based on the assumptions used to prepare the pro
forma financial information contained in the Confidential Information Memorandum
(which assumptions are believed by the Borrower on the Restatement Closing Date
to be reasonable), is based on the best information available to the Borrower as
of the date of delivery thereof.

         SECTION 3.06. No Material Adverse Change. There has been no material
adverse change in the business, assets, operations, prospects, condition,
financial or otherwise, or material agreements of the Borrower and the
Subsidiaries, taken as a whole, since March 31, 1997.

         SECTION 3.07. Title to Properties; Possession Under Leases. (a) Each of
Holdings, the Borrower and the Subsidiaries has good and marketable title to, or
valid leasehold interests in, all its material properties and assets (including
all Mortgaged Property), except for minor defects in title that do not interfere
with its ability to conduct its business as currently conducted or to utilize
such properties and assets for their intended purposes. All such material
properties and assets are free and clear of Liens, other than Liens expressly
permitted by Section 6.02.

         (b) Each of Holdings, the Borrower and the Subsidiaries has complied
with all obligations under all material leases to which it is a party and all
such leases are in full force and effect. Each of Holdings, the Borrower and the
Subsidiaries enjoys peaceful and undisturbed possession under all such material
leases.

         (c) Neither Holdings nor the Borrower has received any notice of, nor
has any knowledge of, any pending or contemplated condemnation proceeding
materially and adversely affecting the Mortgaged Properties or any sale or
disposition thereof in lieu of condemnation.

         (d) Except as set forth on Schedule 3.07(d), none of Holdings, the
Borrower or any of the Subsidiaries is obligated under any right of first
refusal, option or other contractual right to sell, assign or otherwise dispose
of any Mortgaged Property or any interest therein.

         SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the
Restatement Closing Date a list of all Subsidiaries and the percentage ownership
interest of the Borrower therein. The shares of capital stock or other ownership
interests so indicated on Schedule 3.08 are fully paid and non-assessable and
are owned by the Borrower, directly or indirectly, free and clear of all Liens
(other than Liens in favor of the Collateral Agent, created under the Security
Documents). Holdings owns 100% of the issued and outstanding capital stock of
the Borrower, free and clear of all Liens (other than Liens in favor of the
Collateral Agent, created under the Security Documents).

         SECTION 3.09. Litigation; Compliance with Laws. (a) Except as set forth
on Schedule 3.09, there are not any actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending or, to the
knowledge of Holdings or the Borrower, threatened against or affecting Holdings
or the Borrower or any Subsidiary or any business, property or rights of any
such person (i) that involve any Loan Document or the Transactions or (ii) as to
which there is a reasonable possibility of an adverse determination and that, if
adversely 


<PAGE>   41

determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect. 

         (b) None of Holdings, the Borrower or any of the Subsidiaries or any of
their respective material properties or assets is in violation of, nor will the
continued operation of their material properties and assets as currently
conducted violate, any law, rule or regulation (including any zoning, building,
Environmental Law, ordinance, code or approval or any building permits) or any
restrictions of record or agreements affecting the Mortgaged Property, or is in
default with respect to any judgment, writ, injunction, decree or order of any
Governmental Authority, where such violation or default could reasonably be
expected to result in a Material Adverse Effect.

         (c) Except as set forth on Schedule 3.09(c), certificates of occupancy
and permits to the extent required by law are in effect for each Mortgaged
Property as currently constructed, and true and complete copies of such
certificates of occupancy have been delivered to the Collateral Agent as
mortgagee with respect to each Mortgaged Property.

         SECTION 3.10.  Agreements.  (a) Except as set forth on  Schedule 3.10, 
none of Holdings,  the Borrower or any of the Subsidiaries is a party to any 
agreement or  instrument or subject to any  corporate  restriction  that has
resulted or could  reasonably be expected to result in a Material Adverse
Effect. 

         (b) None of Holdings, the Borrower or any of the Subsidiaries is in
default in any manner under any provision of any indenture or other agreement or
instrument evidencing Indebtedness, or any other material agreement or
instrument to which it is a party or by which it or any of its properties or
assets are or may be bound, where such default could reasonably be expected to
result in a Material Adverse Effect.

         SECTION 3.11.  Federal Reserve  Regulations.  (a)  None of Holdings, 
the Borrower or any of the Subsidiaries is engaged  principally,  or as one of
its important activities, in the business of extending credit for the purpose
of buying or carrying Margin Stock. 

         (b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board, including Regulation G, U
or X.

         SECTION 3.12. Investment Company Act; Public Utility Holding Company
Act. None of Holdings, the Borrower or any Subsidiary is (a) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.

         SECTION 3.13. Use of Proceeds. The Borrower will use the proceeds of
the Loans and will request the issuance of Letters of Credit only for the
purposes specified in the preamble to this Agreement.

         SECTION 3.14. Tax Returns. Each of the Holdings, the Borrower and the
Subsidiaries has filed or caused to be filed all Federal, material state,
material local and material foreign tax returns or materials required to have
been filed by it and has paid or caused to be paid all taxes shown on such
returns to be due and payable by it and all assessments received by it, except
taxes that are being contested in good faith by appropriate proceedings and for
which Holdings, the Borrower or such Subsidiary, as applicable, shall have set
aside on its books adequate reserves.

         SECTION 3.15. No Material Misstatements. None of (a) the Confidential
Information Memorandum or (b) any other information, report, financial
statement, exhibit or schedule 
<PAGE>   42

furnished by or on behalf of Holdings or the Borrower to the Administrative
Agent or any Lender in connection with the negotiation of any Loan Document or
included therein or delivered pursuant thereto contained, contains or will
contain any material misstatement of fact or omitted, omits or will omit to
state any material fact necessary to make the   statements therein, in the light
of the circumstances under which they were, are or will be made, not misleading;
provided that to the extent any such information, report, financial statement,
exhibit or schedule was based upon or constitutes a forecast or projection, each
of Holdings and the Borrower represents only that it acted in good faith and
utilized reasonable assumptions and due care in the preparation of such
information, report, financial statement, exhibit or schedule.

         SECTION 3.16. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under all Plans in the aggregate (based on the assumptions
used for purposes of Statement of Financial Accounting Standards No. 87) did
not, as of the date of the most recent financial statements reflecting such
amounts, exceed by more than $2,000,000 the fair market value of the assets of
such Plan, and the present value of all accumulated benefit obligations of all
underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed by more than
$4,000,000 the fair market value of the assets of all such underfunded Plans.

         SECTION 3.17. Environmental Matters. Except as set forth in Schedule
3.17: 

         (a) The properties owned or operated by Holdings, the Borrower and the
Subsidiaries (the "Properties") do not contain any Hazardous Materials in
amounts or concentrations which (i) constitute, or constituted a violation of,
(ii) require Remedial Action under, or (iii) could give rise to liability under,
Environmental Laws, which violations, Remedial Actions and liabilities, in the
aggregate, could reasonably be expected to result in a Material Adverse Effect;

         (b) The Properties and all operations of the Borrower and the
Subsidiaries are in compliance, and in the last seven years have been in
compliance, with all Environmental Laws and all necessary Environmental Permits
have been obtained and are in effect, except to the extent that such
non-compliance or failure to obtain any necessary permits, in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect;

         (c) There have been no Releases or threatened Releases at, from, under
or proximate to the Properties or otherwise in connection with the operations of
the Borrower or the Subsidiaries, which Releases or threatened Releases, in the
aggregate, could reasonably be expected to result in a Material Adverse Effect;

         (d) None of Holdings, the Borrower or any of the Subsidiaries has
received any notice of an Environmental Claim in connection with the Properties
or the operations of the Borrower or the Subsidiaries or with regard to any
person whose liabilities for environmental matters Holdings, the Borrower or the
Subsidiaries has retained or assumed, in whole or in part, contractually, by
operation of law or otherwise, which, in the aggregate, could reasonably be
expected to result in a Material Adverse Effect, nor do Holdings, the Borrower
or the Subsidiaries have reason to believe that any such notice will be received
or is being threatened; and

         (e) Hazardous Materials have not been transported from the Properties,
nor have Hazardous Materials been generated, treated, stored or disposed of at,
on or under any of the Properties in a manner that could reasonably be expected
to give rise to liability under any Environmental Law, nor have the Borrower or
the Subsidiaries retained or assumed any liability, contractually, by operation
of law or otherwise, with respect to the generation, treatment, storage or
disposal of Hazardous Materials, which transportation, generation, treatment,
storage 
<PAGE>   43

or disposal, or retained or assumed liabilities, in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.

         SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete and
correct description of all insurance maintained by the Borrower or by the
Borrower for its Subsidiaries as of the Restatement Closing Date. As of such
date, such insurance is in full force and effect and all premiums have been duly
paid. The Borrower and its Subsidiaries have insurance in such amounts and
covering such risks and liabilities as are in accordance with normal industry
practice.

         SECTION 3.19. Security Documents. (a) The Pledge Agreement is effective
to create in favor of the Collateral Agent, for the ratable benefit of the
Secured Parties, a legal, valid and enforceable security interest in the
Collateral (as defined in the Pledge Agreement) and, for so long as the
Collateral Agent continues to hold such Collateral, the Pledge Agreement shall
constitute a fully perfected first priority Lien on, and security interest in,
all right, title and interest of the pledgors thereunder in such Collateral, in
each case prior and superior in right to any other person.

         (b) The Security Agreement is effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid
and enforceable security interest in the Collateral (as defined in the Security
Agreement) and, when financing statements in appropriate form are filed in the
offices specified on Schedule 6 to the Perfection Certificate, the Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the grantors thereunder in such Collateral
(other than the Intellectual Property, as defined in the Security Agreement), in
each case prior and superior in right to any other person, other than with
respect to Liens expressly permitted by Section 6.02.

         (c) Assuming the Security Agreement has been filed in the United States
Patent and Trademark Office and the United States Copyright Office, the Security
Agreement constitutes a fully perfected Lien on, and security interest in, all
right, title and interest of the grantors thereunder in the Intellectual
Property (as defined in the Security Agreement), in each case prior and superior
in right to any other person (it being understood that subsequent recordings in
the United States Patent and Trademark Office and the United States Copyright
Office may be necessary to perfect a lien on registered trademarks, trademark
applications and copyrights acquired by the grantors after the date hereof).

         (d) The Mortgages are effective to create in favor of the Collateral
Agent, for the ratable benefit of the Secured Parties, a legal, valid and
enforceable Lien on all of the Loan Parties' right, title and interest in and to
the Mortgaged Property thereunder and the proceeds thereof, and assuming the
Mortgages have been filed in the offices specified on Schedule 3.19(d), the
Mortgages constitute a fully perfected Lien on, and security interest in, all
right, title and interest of the Loan Parties in such Mortgaged Property and the
proceeds thereof, in each case prior and superior in right to any other person,
other than with respect to the rights of persons pursuant to Liens expressly
permitted by Section 6.02.

         SECTION 3.20. Location of Real Property and Leased Premises. (a)
Schedule 3.20(a) lists completely and correctly as of the Restatement Closing
Date all real property owned by the Borrower and the Subsidiaries and the
addresses thereof. The Borrower and the Subsidiaries own in fee all the real
property set forth on Schedule 3.20(a).

         (b) Schedule 3.20(b) lists completely and correctly as of the
Restatement Closing Date all real property leased by the Borrower and the
Subsidiaries and the addresses thereof. The 

<PAGE>   44

Borrower and such Subsidiaries have valid leasehold interests in all the real
property set forth on Schedule 3.20(b) 

         SECTION 3.21. Labor Matters. As of the Restatement Closing Date, there
are no strikes, lockouts or slowdowns against Holdings, the Borrower or any
Subsidiary pending or, to the knowledge of Holdings or the Borrower, threatened.
The hours worked by and payments made to employees of Holdings, the Borrower and
the Subsidiaries have not been in material violation of the Fair Labor Standards
Act or any other applicable Federal, state, local or foreign law dealing with
such matters. All payments due from Holdings, the Borrower or any Subsidiary, or
for which any claim may be made against Holdings, the Borrower or any
Subsidiary, on account of wages and employee health and welfare insurance and
other benefits, have been paid or accrued as a liability on the books of
Holdings, the Borrower or such Subsidiary. The consummation of the Transactions
will not give rise to any right of termination or right of renegotiation on the
part of any union under any collective bargaining agreement to which Holdings,
the Borrower or any Subsidiary is bound.

         SECTION 3.22. Solvency. (a) Immediately after the consummation of the
Transactions to occur on the Restatement Closing Date and immediately following
the making of each Loan made on the Restatement Closing Date and after giving
effect to the application of the proceeds of such Loans, (i) the fair value of
the assets of each Loan Party, at a fair valuation, will exceed its debts and
liabilities, subordinated, contingent or otherwise; (ii) the present fair
saleable value of the property of each Loan Party will be greater than the
amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (iii) each Loan Party will be
able to pay its debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities become absolute and matured; and (iv) each Loan Party
will not have unreasonably small capital with which to conduct the business in
which it is engaged as such business is now conducted and is proposed to be
conducted following the Restatement Closing Date.


                                  ARTICLE IV

                            Conditions of Lending


         The obligations of the Lenders to make Loans and of the Issuing Bank to
issue Letters of Credit hereunder are subject to the satisfaction of the
following conditions:

         SECTION 4.01. All Credit Events. On the date of each Borrowing,
including on the date of each issuance of a Letter of Credit (each such event
being called a "Credit Event"):

         (a) The Administrative Agent shall have received a notice of such
Borrowing as required by Section 2.03 (or such notice shall have been deemed
given in accordance with Section 2.03) or, in the case of the issuance of a
Letter of Credit, the Issuing Bank and the Administrative Agent shall have
received a notice requesting the issuance of such Letter of Credit as required
by Section 2.22(b).

         (b) Except in the case of a Borrowing that does not increase the
aggregate principal amount of Loans outstanding of any Lender, the
representations and warranties set forth in Article III hereof shall be true and
correct in all material respects on and as of the date of such Credit Event with
the same effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.

         (c)  No Event of Default or Default shall have occurred and be
continuing. 


<PAGE>   45

Each Credit Event shall be deemed to constitute a representation and warranty by
the Borrower and Holdings on the date of such Credit Event as to the matters
specified in paragraphs (b) (except as aforesaid) and (c) of this Section 4.01.

         SECTION 4.02. First Credit Event. On the Restatement Closing Date:

                  (a) The Administrative Agent shall have received, on behalf of
         itself, the Lenders and the Issuing Bank, a favorable written opinion
         of Kirkland & Ellis, counsel for Holdings and the Borrower,
         substantially to the effect set forth in Exhibit J, (i) dated the
         Restatement Closing Date, (ii) addressed to the Issuing Bank, the
         Administrative Agent and the Lenders, and (iii) covering such other
         matters relating to the Loan Documents and the Transactions as the
         Administrative Agent shall reasonably request, and Holdings and the
         Borrower hereby request such counsel to deliver such opinions.

                  (b) All legal matters incident to this Agreement, the
         Borrowings and extensions of credit hereunder and the other Loan
         Documents shall be satisfactory to the Lenders, to the Issuing Bank and
         to Cravath, Swaine & Moore, counsel for the Administrative Agent.

                  (c) The Administrative Agent shall have received (i) a
         certificate of the Secretary or Assistant Secretary of each Loan Party
         dated the Restatement Closing Date and certifying (A) that attached
         thereto is a true and complete copy of resolutions duly adopted by the
         Board of Directors of such Loan Party authorizing the execution,
         delivery and performance of the Loan Documents to which such person is
         a party and, in the case of the Borrower, the borrowings hereunder, and
         that such resolutions have not been modified, rescinded or amended and
         are in full force and effect, (B) that the certificate or articles of
         incorporation and by-laws of such Loan Party have not been amended
         since the July 1, 1997, (C) as to the incumbency and specimen signature
         of each officer executing any Loan Document or any other document
         delivered in connection herewith on behalf of such Loan Party; (ii) a
         certificate of another officer as to the incumbency and specimen
         signature of the Secretary or Assistant Secretary executing the
         certificate pursuant to (i) above; and (iii) such other documents as
         the Lenders, the Issuing Bank or Cravath, Swaine & Moore, counsel for
         the Administrative Agent, may reasonably request.

                  (d) The Administrative Agent shall have received a
         certificate, dated the Restatement Closing Date and signed by a
         Financial Officer of the Borrower, confirming compliance with the
         conditions precedent set forth in paragraphs (b) and (c) of Section
         4.01.

                  (e) The Administrative Agent shall have received all Fees and
         other amounts due and payable on or prior to the Restatement Closing
         Date, including, to the extent invoiced, reimbursement or payment of
         all out-of-pocket expenses required to be reimbursed or paid by the
         Borrower hereunder or under any other Loan Document.

                  (f) The Pledge Agreement shall have been duly executed by the
         parties thereto and delivered to the Collateral Agent and shall be in
         full force and effect, and all the outstanding Capital Stock of the
         Borrower and the Subsidiaries shall have been duly and validly pledged
         thereunder to the Collateral Agent for the ratable benefit of the
         Secured Parties and certificates representing such shares, accompanied
         by instruments of transfer and stock powers endorsed in blank, shall be
         in the actual possession of the Collateral Agent; provided that, to the
         extent to do so would cause adverse tax consequence to the Borrower,
         (i) neither the Borrower nor any Domestic Subsidiary shall be required
         to pledge more than 65% of the capital stock of any Foreign Subsidiary
         and (ii) no Foreign Subsidiary shall be required to pledge the capital
         stock of any of its Foreign Subsidiaries.


<PAGE>   46

                  (g) The Security Agreement shall have been duly executed by
         the Loan Parties party thereto and shall have been delivered to the
         Collateral Agent and shall be in full force and effect on such date and
         each document (including each Uniform Commercial Code financing
         statement) required by law or reasonably requested by the
         Administrative Agent to be filed, registered or recorded in order to
         create in favor of the Collateral Agent for the benefit of the Secured
         Parties a valid, legal and perfected first-priority security interest
         in and lien on the Collateral (subject to any Lien expressly permitted
         by Section 6.02) described in such agreement shall have been delivered
         to the Collateral Agent.

                  (h) The Collateral Agent shall have received the results of a
         search of the Uniform Commercial Code (or equivalent filings) filings
         made with respect to the Loan Parties in the states (or other
         jurisdictions) in which the chief executive office of each such person
         is located, any offices of such persons in which records have been kept
         relating to Accounts and the other jurisdictions in which Uniform
         Commercial Code filings (or equivalent filings) are to be made pursuant
         to the preceding paragraph, together with copies of the financing
         statements (or similar documents) disclosed by such search, and
         accompanied by evidence satisfactory to the Collateral Agent that the
         Liens indicated in any such financing statement (or similar document)
         would be permitted under Section 6.02 or have been released.

                  (i) The Collateral Agent shall have received a Perfection
         Certificate with respect to the Loan Parties dated the Restatement
         Closing Date and duly executed by a Responsible Officer of the
         Borrower.

                  (j) Each of the Security Documents, in form and substance
         satisfactory to the Lenders, relating to each of the Mortgaged
         Properties shall have been duly executed by the parties thereto and
         delivered to the Collateral Agent and shall be in full force and
         effect, (ii) each of such Mortgaged Properties shall not be subject to
         any Lien other than those permitted under Section 6.02, (iii) each of
         such Security Documents shall have been filed and recorded in the
         recording office as specified on Schedule 3.19(d) (or a lender's marked
         and redated title commitment for title insurance, in form and substance
         acceptable to the Collateral Agent, insuring such Security Document as
         a first lien on such Mortgaged Property (subject to any Lien permitted
         by Section 6.02) shall have been received by the Collateral Agent) and,
         in connection therewith, the Collateral Agent shall have received
         evidence satisfactory to it of the title company's agreement to record
         or file such Security Documents, as applicable, and (iv) the Collateral
         Agent shall have received such other documents, including a policy or
         policies of title insurance issued by a nationally recognized title
         insurance company, together with such endorsements, coinsurance and
         reinsurance as may be requested by the Collateral Agent and the
         Lenders, insuring the Mortgages as valid first liens on the Mortgaged
         Properties, free of Liens other than those permitted under Section
         6.02, together with such surveys, abstracts, appraisals and legal
         opinions required to be furnished pursuant to the terms of the
         Mortgages or as reasonably requested by the Collateral Agent or the
         Lenders.

                  (k) Each of the Parent Guarantee Agreement, the Subsidiary
         Guarantee Agreement, the Indemnity, Subrogation and Contribution
         Agreement and the Tax Sharing Agreement shall have been duly executed
         by the parties thereto, shall have been delivered to the Collateral
         Agent and shall be in full force and effect.

<PAGE>   47



                                  ARTICLE V

                            Affirmative Covenants

                                       
         Each of Holdings and the Borrower covenants and agrees with each Lender
that until the Commitments have been terminated and the principal of and
interest on each Loan, all Fees and all other expenses or amounts payable under
any Loan Document (other than wholly contingent indemnification obligations)
shall have been paid in full and all Letters of Credit have been canceled or
have expired and all amounts drawn thereunder have been reimbursed in full or
cash collateralized to the satisfaction of the Administrative Agent and the
Issuing Bank, unless the Required Lenders shall otherwise consent in writing,
each of Holdings and the Borrower will, and will cause each of the Subsidiaries
to:

         SECTION 5.01.  Existence;  Businesses and Properties.  (a)  Do or cause
to be done all things  necessary to preserve,  renew and keep in full force and
effect its legal existence, except as otherwise expressly permitted under
Section 6.05. 

         (b) Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect in all material respects the
rights, licenses, permits, franchises, authorizations, patents, copyrights,
trademarks and trade names material to the conduct of its business; maintain and
operate such business in substantially the manner in which it is presently
conducted and operated; comply in all material respects with all applicable
laws, rules, regulations (including any zoning, building, Environmental Law,
ordinance, code or approval or any building permits or any restrictions of
record or agreements affecting the Mortgaged Properties) and decrees and orders
of any Governmental Authority, whether now in effect or hereafter enacted,
except where such non-compliance could not reasonably be expected to result in a
Material Adverse Effect; and, except in the case of sales of assets permitted
pursuant to Section 6.05, at all times maintain and preserve all property
material to the conduct of such business and keep, in all material respects,
such property in good repair, working order and condition, normal wear and tear
excepted, and from time to time make, or cause to be made, all needful and
proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times.

         SECTION 5.02. Insurance. In the case of the Borrower and each
Subsidiary: 

                  (a) Keep its insurable properties adequately insured at all
         times by financially sound and reputable insurers; and maintain such
         other insurance, to such extent and against such risks, including fire
         and other risks insured against by extended coverage, in each case as
         is customary with companies in the same or similar businesses operating
         in the same or similar locations, including public liability insurance
         against claims for personal injury or death or property damage
         occurring upon, in, about or in connection with the use of any
         properties owned, occupied or controlled by it; and maintain such other
         insurance as may be required by law.

                  (b) Cause all such policies to be endorsed or otherwise
         amended to include a "standard" or "New York" lender's loss payable
         endorsement, in form and substance satisfactory to the Administrative
         Agent and the Collateral Agent, which endorsement shall provide that,
         from and after the Closing Date, if the insurance carrier shall have
         received written notice from the Administrative Agent or the Collateral
         Agent of the occurrence of an Event of Default, the insurance carrier
         shall, during the continuance of such Event of Default, pay all
         proceeds otherwise payable to the Borrower or the Loan Parties under
         such policies directly to the Collateral Agent; cause all such policies
         to provide that neither the Borrower, the Administrative Agent, the
         Collateral Agent nor any 


<PAGE>   48

         other party shall be a coinsurer thereunder and to contain a
         "Replacement Cost Endorsement", without any deduction for
         depreciation, and such other provisions as the Administrative Agent or
         the Collateral Agent may reasonably require from time to time to
         protect their interests; deliver original or certified copies of all
         such policies to the Collateral Agent; cause each such policy to
         provide that it shall not be canceled, modified or not renewed (i) by
         reason of nonpayment of premium upon not less than 10 days' prior
         written notice thereof by the insurer to the Administrative Agent and
         the Collateral Agent (giving the Administrative Agent and the
         Collateral Agent the right to cure defaults in the payment of
         premiums) or (ii) for any other reason upon not less than 30 days'
         prior written notice thereof by the insurer to the Administrative
         Agent and the Collateral Agent; deliver to the Administrative Agent
         and the Collateral Agent, prior to the cancellation, modification or
         nonrenewal of any such policy of insurance, a copy of a renewal or
         replacement policy (or other evidence of renewal of a policy
         previously delivered to the Administrative Agent and the Collateral
         Agent) together with evidence satisfactory to the Administrative Agent
         and the Collateral Agent of payment of the premium therefor.

                  (c) If at any time the area in which the Premises (as defined
         in the Mortgages) are located is designated (i) a "flood hazard area"
         in any Flood Insurance Rate Map published by the Federal Emergency
         Management Agency (or any successor agency), obtain flood insurance in
         such total amount as the Administrative Agent, the Collateral Agent or
         the Required Lenders may from time to time require, and otherwise
         comply with the National Flood Insurance Program as set forth in the
         Flood Disaster Protection Act of 1973, as it may be amended from time
         to time, or (ii) a "Zone 1" area, obtain earthquake insurance in such
         total amount as the Administrative Agent, the Collateral Agent or the
         Required Lenders may from time to time require.

                  (d) With respect to any Mortgaged Property, carry and maintain
         comprehensive general liability insurance including the "broad form CGL
         endorsement" and coverage on an occurrence basis against claims made
         for personal injury (including bodily injury, death and property
         damage) and umbrella liability insurance against any and all claims, in
         no event for a combined single limit of less than $25,000,000, naming
         the Collateral Agent as an additional insured, on forms satisfactory to
         the Collateral Agent.

                  (e) Notify the Administrative Agent and the Collateral Agent
         immediately whenever any separate insurance concurrent in form or
         contributing in the event of loss with that required to be maintained
         under this Section 5.02 is taken out by the Borrower; and promptly
         deliver to the Administrative Agent and the Collateral Agent a
         duplicate original copy of such policy or policies.

         SECTION 5.03. Obligations and Taxes. Pay its Indebtedness and other
obligations promptly and in accordance with their terms and pay and discharge
promptly when due all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property,
before the same shall become delinquent or in default, as well as all lawful
claims for labor, materials and supplies or otherwise that, if unpaid, might
give rise to a Lien upon such properties or any part thereof; provided, however,
that such payment and discharge shall not be required with respect to any such
tax, assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings and the Borrower
shall have set aside on its books adequate reserves with respect thereto in
accordance with GAAP and such contest operates to suspend collection of the
contested obligation, tax, assessment or charge and enforcement of a Lien and,
in the case of a Mortgaged Property, there is no risk of forfeiture of such
property.

<PAGE>   49


         SECTION 5.04. Financial Statements, Reports, etc. In the case of the
Borrower, furnish to the Administrative Agent and each Lender: 

                  (a) within 90 days after the end of each fiscal year, its
         consolidated balance sheet and related statements of operations,
         stockholders' equity and cash flows showing the financial condition of
         the Borrower and its consolidated Subsidiaries as of the close of such
         fiscal year and the results of its operations and the operations of
         such Subsidiaries during such year, all audited by Ernst & Young LLP or
         other independent public accountants of recognized national standing
         acceptable to the Required Lenders and accompanied by an opinion of
         such accountants (which shall not be qualified in any material respect)
         to the effect that such consolidated financial statements fairly
         present the financial condition and results of operations of the
         Borrower and its consolidated Subsidiaries on a consolidated basis in
         accordance with GAAP consistently applied;

                  (b) within 45 days after the end of each of the first three
         fiscal quarters of each fiscal year, its consolidated balance sheet and
         related statements of operations, stockholders' equity and cash flows
         showing the financial condition of the Borrower and its consolidated
         Subsidiaries as of the close of such fiscal quarter and the results of
         its operations and the operations of such Subsidiaries during such
         fiscal quarter and the then elapsed portion of the fiscal year, all
         certified by one of its Financial Officers as fairly presenting in all
         material respects the financial condition and results of operations of
         the Borrower and its consolidated Subsidiaries on a consolidated basis
         in accordance with GAAP consistently applied, subject to normal
         year-end audit adjustments;

                  (c) concurrently with any delivery of financial statements
         under sub-paragraph (a) or (b) above, a letter of the accounting firm
         or certificate of the Financial Officer reporting on or certifying such
         statements (which letter, when furnished by an accounting firm, may be
         limited to accounting matters and disclaim responsibility for legal
         interpretations) reporting that they are unaware that any Event of
         Default has occurred, in the case of the accounting firm, or certifying
         that no Event of Default or Default has occurred, in the case of the
         Financial Officer, or, if such an Event of Default or Default has
         occurred, specifying the nature and extent thereof and any corrective
         action taken or proposed to be taken with respect thereto;

                  (d) promptly after the same become publicly available, copies
         of all periodic and other reports, proxy statements and other materials
         filed by the Borrower or any Subsidiary with the Securities and
         Exchange Commission, or any Governmental Authority succeeding to any or
         all of the functions of said Commission, or with any national
         securities exchange, or distributed to its shareholders, as the case
         may be; and

                  (e) prior to the beginning of each fiscal year, a copy of the
         budget for its consolidated balance sheet and related statements of
         income and cash flows for each quarter of such fiscal year; and

                  (f) promptly, from time to time, such other information
         regarding the operations, business affairs and financial condition of
         the Borrower or any Subsidiary, or compliance with the terms of any
         Loan Document, as the Administrative Agent or any Lender may reasonably
         request.


<PAGE>   50

         SECTION 5.05.  Litigation and Other Notices.  Furnish to the
Administrative  Agent, the Issuing Bank and each Lender prompt written notice
of the following:

                  (a) the occurrence of any Event of Default or Default,
         specifying the nature and extent thereof and the corrective action (if
         any) taken or proposed to be taken with respect thereto;

                  (b) the filing or commencement of, or any threat or notice of
         intention of any person to file or commence, any action, suit or
         proceeding, whether at law or in equity or by or before any
         Governmental Authority, against the Borrower or any Affiliate thereof
         that could reasonably be expected to result in a Material Adverse
         Effect; and

                  (c) the occurrence of any ERISA Event that, alone or together
         with any other ERISA Events that have occurred, could reasonably be
         expected to result in liability of the Borrower and its Subsidiaries in
         an aggregate amount exceeding $1,000,000; and

                  (d) any development that has resulted in, or could reasonably
be expected to result in, a Material Adverse Effect.

         SECTION 5.06. Maintaining Records; Access to Properties and
Inspections. Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all requirements of law are made of
all dealings and transactions in relation to its business and activities. Each
Loan Party will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender to visit
and inspect the financial records and the properties of Holdings, the Borrower
or any Subsidiary at reasonable times and upon reasonable notice and as often as
reasonably requested and to make extracts from and copies of such financial
records, and permit any representatives designated by the Administrative Agent
or any Lender to discuss the affairs, finances and condition of Holdings, the
Borrower or any Subsidiary with the officers thereof and independent accountants
therefor; provided, however, that, unless a Default or Event of Default shall
have occurred and be continuing, in no event shall the Administrative Agent or
any Lender or any of their respective designees contact any customer or supplier
of the Borrower or any Subsidiary regarding this Agreement and the Indebtedness
hereunder without the prior consent of the Borrower.

         SECTION  5.07.  Use of Proceeds.  Use the proceeds of the Loans and
request the issuance of Letters of Credit only for the purposes set forth in
the preamble to this Agreement. 

         SECTION 5.08. Compliance with Environmental Laws. Except for any
non-compliance that could not reasonably be expected to result in a Material
Adverse Effect, comply, and cause all lessees and other persons occupying its
Properties to comply, with all Environmental Laws and Environmental Permits
applicable to its operations and Properties; obtain and renew all Environmental
Permits necessary for its operations and Properties; and conduct any Remedial
Action in accordance with Environmental Laws; provided, however, that none of
Holdings, the Borrower or any of the Subsidiaries shall be required to undertake
any Remedial Action to the extent that its obligation to do so is being
contested in good faith and by proper proceedings and appropriate reserves are
being maintained with respect to such circumstances.

         SECTION 5.09. Preparation of Environmental Reports. If a Default caused
by reason of a breach of Section 3.17 or 5.08 shall have occurred and be
continuing, at the request of the Required Lenders through the Administrative
Agent, provide to the Lenders within 45 days after such request, at the expense
of the Borrower, an environmental site assessment report for the Properties
which are the subject of such default prepared by an environmental consulting
firm acceptable to the Administrative Agent and indicating the presence or
absence of Hazardous 

<PAGE>   51

Materials and the estimated cost of any compliance or Remedial Action in
connection with such Properties. 

         SECTION 5.10.   [Intentionally Omitted.]

         SECTION 5.11. Further Assurances. Execute any and all further
documents, financing statements, agreements and instruments, and take all
further action (including filing Uniform Commercial Code and other financing
statements, mortgages and deeds of trust) that may be required under applicable
law, or that the Required Lenders, the Administrative Agent or the Collateral
Agent may reasonably request, in order to effectuate the transactions
contemplated by the Loan Documents and in order to grant, preserve, protect and
perfect the validity and first priority of the security interests created or
intended to be created by the Security Documents. The Borrower will cause any
subsequently acquired or organized Domestic Subsidiary to execute a Subsidiary
Guarantee Agreement, Indemnity Subrogation and Contribution Agreement and each
applicable Security Document in favor of the Collateral Agent. In addition, from
time to time, the Borrower will, at its cost and expense, promptly secure the
Obligations by pledging or creating, or causing to be pledged or created,
perfected security interests with respect to such of its assets and properties
as the Administrative Agent or the Required Lenders shall designate (it being
understood that it is the intent of the parties that the Obligations shall be
secured by, among other things, substantially all the assets of the Borrower
(including real and other properties acquired subsequent to the Closing Date)).
Such security interests and Liens will be created under the Security Documents
and other security agreements, mortgages, deeds of trust and other instruments
and documents in form and substance satisfactory to the Collateral Agent, and
the Borrower shall deliver or cause to be delivered to the Lenders all such
instruments and documents (including legal opinions, title insurance policies
and lien searches) as the Collateral Agent shall reasonably request to evidence
compliance with this Section. The Borrower agrees to provide such evidence as
the Collateral Agent shall reasonably request as to the perfection and priority
status of each such security interest and Lien.


                                 ARTICLE VI

                             Negative Covenants

                                      

         Each of Holdings and the Borrower covenants and agrees with each Lender
that, until the Commitments have been terminated and the principal of and
interest on each Loan, all Fees and all other expenses or amounts payable under
any Loan Document (other than wholly contingent indemnification obligations)
have been paid in full and all Letters of Credit have been canceled or have
expired and all amounts drawn thereunder have been reimbursed in full or cash
collateralized to the satisfaction of the Administrative Agent and the Issuing
Bank, unless the Required Lenders shall otherwise consent in writing, neither
Holdings nor the Borrower will, nor will they cause or permit any of the
Subsidiaries to:

         SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist
any Indebtedness, except: 

                  (a) Indebtedness for borrowed money existing on the
         Restatement Closing Date and set forth in Schedule 6.01; 

                  (b) Indebtedness created hereunder and under the other Loan
         Documents; 

                  (c) the Senior Subordinated Notes (or the notes exchanged
         therefor pursuant to and in accordance with Section 6.09(c));
<PAGE>   52

                  (d) Earn-Out Obligations in an aggregate principal amount at
         any time outstanding not exceeding $15,000,000; 

                  (e) Indebtedness consisting of purchase money Indebtedness or
         Capital Lease Obligations incurred in the ordinary course of business
         after the Original Closing Date to finance Consolidated Capital
         Expenditures; provided that (i) a description of the assets financed
         thereby shall have been furnished to the Administrative Agent for any
         assets for which the purchase price is greater than $1,000,000 and (ii)
         the aggregate principal amount of any Indebtedness or Capital Lease
         Obligations incurred pursuant to this paragraph (d) outstanding at any
         time shall not exceed $5,000,000;

                  (f) intercompany loans and advances permitted by Section
         6.04(c); 

                  (g) Indebtedness of the Borrower or any Subsidiary to
         Holdings; provided that such Indebtedness (i) is subordinated to the
         prior payment in full of the Obligations on terms satisfactory to the
         Administrative Agent and (ii) is evidenced by an intercompany note
         pledged by Holdings to the Collateral Agent pursuant to the Pledge
         Agreement for the benefit of the Secured Parties;

                  (h) ordinary course Interest Rate Protection Agreements and
         ordinary course, non-speculative foreign exchange and commodity
         protection agreements;

                  (i) Indebtedness arising out of judgments or awards (other
         than any judgment that is described in clause (i) of Article VII and
         constitutes a Default or Event of Default thereunder) in respect of
         which the Borrower shall in good faith be prosecuting an appeal or
         proceedings for review and in respect of which it shall have secured a
         subsisting stay of execution pending such appeal or proceedings for
         review, provided the Borrower shall have set aside on its books
         adequate reserves, in accordance with GAAP, with respect to such
         judgment or award;

                  (j)  Indebtedness under performance bonds in an aggregate
         principal amount at any time outstanding not exceeding $2,000,000; and 

                  (k) additional unsecured Indebtedness in an aggregate amount
         at any time outstanding not exceeding $20,000,000.

         SECTION 6.02. Liens. Create, incur, assume or permit to exist any Lien
on any property or assets (including stock or other securities of any person,
including any Subsidiary) now owned or hereafter acquired by it or on any income
or revenues or rights in respect of any thereof, except:

                  (a) Liens on property or assets of the Borrower and its
         Subsidiaries existing on the Restatement Closing Date and set forth in
         Schedule 6.02; provided that such Liens shall secure only those
         obligations which they secure on the date hereof;

                  (b) any Lien created under the Loan Documents;

                  (c) any Lien existing on any property or asset prior to the
         acquisition thereof by the Borrower or any Subsidiary; provided that
         (i) such Lien is not created in contemplation of or in connection with
         such acquisition (except as permitted pursuant to Section 6.02(i)),
         (ii) such Lien does not apply to any other property or assets of the
         Borrower or any Subsidiary and (iii) such Lien does not (A) materially
         interfere with the use, occupancy and operation of any Mortgaged
         Property, (B) materially reduce the fair 
<PAGE>   53

         market value of such Mortgaged Property but for such Lien or
         (C) result in any material increase in the cost of operating,
         occupying or owning or leasing such Mortgaged Property;

                  (d) Liens for taxes not yet due or which are being contested
         in compliance with Section 5.03; 

                  (e) carriers', warehousemen's, mechanics', materialmen's,
         repairmen's or other like Liens arising, in the case of such other like
         Liens, in the ordinary course of business and securing obligations that
         are not due and payable or which are being contested in compliance with
         Section 5.03;

                  (f) pledges and deposits made in the ordinary course of
         business in compliance with workmen's compensation, unemployment
         insurance and other social security laws or regulations;

                  (g) deposits to secure the performance of bids, trade
         contracts (other than for Indebtedness), leases (other than Capital
         Lease Obligations), statutory obligations, surety and appeal bonds,
         performance bonds and other obligations of a like nature incurred in
         the ordinary course of business;

                  (h) zoning restrictions, easements, rights-of-way,
         restrictions on use of real property and other similar encumbrances
         incurred, in the case of such other similar encumbrances, in the
         ordinary course of business which, in the aggregate, are not
         substantial in amount and do not materially detract from the value of
         the property subject thereto or interfere with the ordinary conduct of
         the business of the Borrower or any of its Subsidiaries;

                  (i) purchase money security interests in real property,
         improvements thereto or equipment hereafter acquired (or, in the case
         of improvements, constructed) by the Borrower or any Subsidiary;
         provided that (i) such security interests secure Indebtedness permitted
         by Section 6.01(e), (ii) such security interests are incurred, and the
         Indebtedness secured thereby is created, within 90 days after such
         acquisition (or construction), (iii) the Indebtedness secured thereby
         does not exceed 85% of the lesser of the cost or the fair market value
         of such real property, improvements or equipment at the time of such
         acquisition (or construction) (or if such Indebtedness exceeds such 85%
         limit, such Indebtedness is non-recourse to Holdings, the Borrower and
         the Subsidiaries) and (iv) such security interests do not apply to any
         other property or assets of the Borrower or any Subsidiary;

                  (j) any Lien disclosed on the marked and redated title
         insurance commitments delivered to the Collateral Agent on the Original
         Closing Date;

                  (k) Liens arising out of judgments or awards (other than any
         judgment that is described in clause (i) of Article VII and constitutes
         a Default or Event of Default thereunder) in respect of which the
         Borrower shall in good faith be prosecuting an appeal or proceedings
         for review and in respect of which it shall have secured a subsisting
         stay of execution pending such appeal or proceedings for review,
         provided the Borrower shall have set aside on its books adequate
         reserves, in accordance with GAAP, with respect to such judgment or
         award; and

                  (l) additional Liens on property or assets securing
         obligations (other than Indebtedness for borrowed money) not exceeding
         $500,000 at any time, provided that, to the extent any such Lien
         applies to any Collateral (as defined in any such Security 
<PAGE>   54

         Document), such Lien does not have priority over the Liens
         created under the Security Documents.

         SECTION 6.03. Sale and Lease-Back Transactions. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred.

         SECTION 6.04. Investments, Loans and Advances. Purchase, hold or
acquire any capital stock, evidences of indebtedness or other securities of,
make or permit to exist any loans or advances to, or make or permit to exist any
investment or any other interest in, any other person, except:

                  (a) investments by the Borrower existing on the Restatement
         Closing Date in the capital stock of the Subsidiaries and additional
         investments by Holdings in the Capital Stock of the Borrower or by the
         Borrower in the Capital Stock of the Subsidiary Guarantors;

                  (b) Permitted Investments;

                  (c) investments, loans or advances made by any Loan Party to
         the Borrower or any Subsidiary, provided that any such loans or
         advances are evidenced by an intercompany note pledged to the
         Collateral Agent pursuant to the Pledge Agreement for the benefit of
         the Secured Parties;

                  (d) investments consisting of non-cash consideration received
         in connection with a sale of assets permitted by Section 6.05(b);

                  (e) loans and advances to employees and officers of the
         Borrower or any of the Subsidiaries for travel, entertainment and
         relocation expenses in the ordinary course of business in an aggregate
         principal amount outstanding at any one time not to exceed $250,000;

                  (f) loans and advances in an aggregate principal amount
         outstanding at any one time not to exceed $250,000 to management and
         other employees of the Borrower, the proceeds of which are used in
         their entirety to purchase capital stock of Holdings and other
         investments pursuant to retirement savings programs;

                  (g) the Borrower may make any Permitted Acquisition; provided
         that (i) the aggregate purchase price of all such Permitted
         Acquisitions consummated after the Restatement Closing Date does not
         exceed $65,000,000 and (ii) the Borrower shall have delivered to the
         Administrative Agent a certificate certifying that at the time of and
         immediately after giving effect to such Permitted Acquisition, (A) no
         Event of Default or Default shall have occurred and be continuing and
         (B) the Borrower shall be in compliance on a pro forma basis (including
         as adjusted to reduce or exclude any identified costs that will be
         reduced or will cease to be incurred after such Permitted Acquisition)
         with the covenants set forth in Sections 6.11, 6.12 and 6.13, in each
         case as of the last day of the most recent fiscal quarter adjusted to
         give effect (as if such event had occurred on the first day of the four
         fiscal quarter period ended on such last day) to such Permitted
         Acquisition and the financing therefor, and the adjustments and
         calculations set forth in such certificate shall be based on
         assumptions and otherwise in form and substance satisfactory to the
         Administrative Agent;

<PAGE>   55


                  (h) Consolidated Capital Expenditures permitted pursuant to
         Section 6.10; 

                  (i) Accounts; and

                  (j) ordinary course Interest Rate Protection Agreements and
         ordinary course, non-speculative foreign exchange and commodity
         protection agreements.

         SECTION 6.05. Mergers, Consolidations, Sales of Assets and
Acquisitions. (a) Merge into or consolidate with any other person, or permit any
other person to merge into or consolidate with it, or sell, transfer, lease or
otherwise dispose of (in one transaction or in a series of transactions) all or
any substantial part of its assets (whether now owned or hereafter acquired) or
any capital stock of any Subsidiary, or purchase, lease or otherwise acquire (in
one transaction or a series of transactions) all or any substantial part of the
assets of any other person, except that (i) the Borrower and any Subsidiary may
purchase and sell inventory and scrap, obsolete, excess and worn out assets in
the ordinary course of business, (ii) if at the time thereof and immediately
after giving effect thereto no Event of Default or Default shall have occurred
and be continuing (w) any wholly owned Subsidiary may merge into the Borrower in
a transaction in which the Borrower is the surviving corporation, (x) any wholly
owned Subsidiary may merge into or consolidate with any other wholly owned
Domestic Subsidiary in a transaction in which the surviving entity is a wholly
owned Domestic Subsidiary and no person other than the Borrower or a wholly
owned Domestic Subsidiary receives any consideration, (y) Holdings may merge
into ACP Holdings or the Borrower in a transaction in which the Borrower is the
surviving corporation (in the case of any such merger of Holdings into the
Borrower) so long as concurrently with any merger of Holdings with and into the
Borrower, or any merger of Holdings with and into ACP Holdings in which Holdings
is not the surviving corporation, ACP Holdings assumes all the obligations of
Holdings under this Agreement and the other Loan Documents (including entering
into a supplement to the Pledge Agreement to pledge 100% of the Capital Stock of
the Borrower to the Collateral Agent for the benefit of the Secured Parties) and
(z) following any merger described in clause (y), ACP Holdings may merge into
ACP Products or the Borrower in a transaction in which the Borrower is the
surviving corporation (in the case of any such merger of ACP Holdings into the
Borrower) so long as concurrently with any merger of ACP Holdings with and into
the Borrower, or any merger of ACP Holdings with and into ACP Products in which
ACP Holdings is not the surviving corporation, ACP Products assumes all the
obligations of ACP Holdings under this Agreement and the other Loan Documents
(including entering into a supplement to the Pledge Agreement to pledge 100% of
the Capital Stock of the Borrower to the Collateral Agent for the benefit of the
Secured Parties), (iii) the Borrower and any Subsidiary may make Permitted
Acquisitions permitted by Section 6.04(g), (iv) the Borrower and any Subsidiary
may make Consolidated Capital Expenditures permitted by Section 6.10 and (v) the
Borrower and any Subsidiary may engage in any Asset Sale of capital stock or
other assets acquired pursuant to a Permitted Acquisition permitted pursuant to
Section 6.04(g).

         (b) Neither the Borrower nor any Subsidiary shall engage in any Asset
Sale otherwise permitted under paragraph (a) above unless (i) such Asset Sale is
for consideration at least 85% of which is cash, (ii) such consideration is at
least equal to the fair market value (as determined in good faith by the
Borrower's board of directors) of the assets being sold, transferred, leased or
disposed of and (iii) the fair market value (as determined in good faith by the
Borrower's board of directors) of all assets sold, transferred, leased or
disposed of pursuant to this paragraph (b) (except for assets sold, transferred,
leased or disposed of pursuant to Section 6.05(a)(v)) shall not exceed (i)
$2,000,000 in any fiscal year or (ii) $10,000,000 in the aggregate.
         SECTION 6.06. Dividends and Distributions; Restrictions on Ability of
Subsidiaries to Pay Dividends. (a) Declare or pay, directly or indirectly, any
dividend or make any other distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, with respect to
any shares of its Capital Stock or directly or indirectly redeem, purchase,
retire or otherwise acquire for value (or permit any Subsidiary to purchase or

<PAGE>   56

acquire) any shares of any class of its Capital Stock or set aside any amount
for any such purpose; provided, however, that

                  (i) any Subsidiary may declare and pay dividends or make
         other distributions to the Borrower; 

                  (ii) the Borrower may declare and pay dividends or make other
         distributions to Holdings (A) to pay the Borrower Tax Amount required
         to be paid by Holdings and (B) to fund payments to be made by Holdings
         as permitted by clause (iv) below in an aggregate amount not to exceed
         the amounts of such payments;

                  (iii) so long as no Default or Event of Default shall have
         occurred and be continuing, the Borrower may declare and pay dividends
         or make other distributions to Holdings to pay the actual operating
         costs of Holdings and ACP Holdings in an aggregate amount not exceeding
         $250,000 in any fiscal year of the Borrower;

                  (iv) Holdings may, or Holdings may declare and pay dividends
         or make other distributions to ACP Holdings to permit ACP Holdings or
         ACP Products to, purchase, redeem, retire or otherwise acquire (A)
         shares of its Capital Stock, or options or warrants to purchase shares
         of its Capital Stock, held by officers, directors or employees of
         Holdings, the Borrower or any Subsidiary pursuant to a compensation
         plan or arrangement in connection with the death, disability or
         termination of employment of any such officer, director or employee or
         (B) shares of its capital stock owned by any officer, director or
         employee of Holdings, the Borrower or any Subsidiary pursuant to the
         exercise of options or warrants to purchase such Capital Stock by such
         officer, director or employee or to pay taxes incurred in connection
         with such exercise of options or warrants in an aggregate amount for
         all such transactions described in clauses (A) and (B) not exceeding
         the sum of (x) $2,000,000 plus (y) the proceeds of any substantially
         concurrent issuance of Capital Stock of ACP Products, ACP Holdings or
         Holdings to any officer, director or employee of Holdings, the Borrower
         or any Subsidiary;

                  (v) Holdings may declare and pay dividends or make other
         distributions to ACP Holdings to pay the Borrower Tax Amount required
         to be paid by ACP Holdings; and

                  (vi) so long as no Default or Event of Default shall have
         occurred and be continuing, Holdings may declare and pay dividends or
         make other distributions to ACP Holdings, out of the proceeds of
         dividends or distributions received by Holdings pursuant to clause
         (iii) above, to pay ACP Holdings' actual operating costs.

         (b) Permit its subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such subsidiary to (i) pay any dividends or
make any other distributions on its capital stock or any other interest or (ii)
make or repay any loans or advances to the Borrower or the parent of such
subsidiary.

         SECTION 6.07. Transactions with Affiliates. Except as set forth on
Schedule 6.07, sell or transfer any property or assets to, or purchase or
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except that the Borrower or any
Subsidiary may engage in (a) any of the foregoing transactions in the ordinary
course of business at prices and on terms and conditions not less favorable to
the Borrower or such Subsidiary than could be obtained on an arm's-length basis
from unrelated third parties, (b) the transactions permitted pursuant to
Sections 6.05 and 6.06, and (c) the Transactions.

         SECTION 6.08. Business of Borrower and Subsidiaries.  Engage at any
time in any business or business activity other than Related Businesses. 

<PAGE>   57


         SECTION 6.09. Other Indebtedness and Agreements. (a) Permit any waiver,
supplement, modification, amendment, determination or release of (i) the Merger
Agreement or the Tax Sharing Agreement or (ii) any indenture, instrument or
agreement pursuant to which any Indebtedness or preferred stock of the Borrower
or any Subsidiary is outstanding in an aggregate outstanding principal amount in
excess of $1,000,000, or modify its charter or by-laws, in each case to the
extent that any such waiver, supplement, modification, amendment, termination or
release would be adverse to the Lenders in any material respect.

         (b) (i) Make any distribution, whether in cash, property, securities or
a combination thereof, other than regular scheduled payments of principal and
interest as and when due (to the extent not prohibited by applicable
subordination provisions), in respect of, or pay, or offer or commit to pay, or
directly or indirectly redeem, repurchase, retire or otherwise acquire for
consideration, or set apart any sum for the aforesaid purposes, any Indebtedness
for borrowed money of the Borrower or any Subsidiary in an outstanding principal
amount exceeding $1,000,000 or (ii) pay in cash any amount in respect of such
Indebtedness that may at the obligor's option be paid in kind or in other
securities.

         (c) Notwithstanding anything contained in this Section 6.09 to the
contrary, the Borrower shall be permitted to exchange the Senior Subordinated
Notes for substantially identical notes in accordance with the Exchange and
Registration Rights Agreements with respect thereto.

         SECTION 6.10. Capital Expenditures. Permit the aggregate amount of
Consolidated Capital Expenditures (other than Consolidated Capital Expenditures
for patterns and Permitted Acquisitions permitted by Section 6.04(g)) made by
the Borrower and the Subsidiaries, taken as a whole, in any fiscal year to
exceed the sum of (a) $10,000,000, (b) the proceeds of any Equity Issuance made
during such fiscal year and substantially concurrently used to fund Consolidated
Capital Expenditures, and (c) other Consolidated Capital Expenditures not
covered by clauses (a) and (b) above financed by Loans, so long as the aggregate
principal  amount of such Loans at any time outstanding used to finance all such
Consolidated Capital Expenditures pursuant to this clause (c) does not exceed
the excess of (A) $40,000,000 over (B) the aggregate principal amount of
outstanding Loans used to finance Permitted Acquisitions pursuant to Section
6.04(g); provided, however, that the amount of Consolidated Capital Expenditures
in any fiscal year of the Borrower permitted to be incurred pursuant to clause
(a) above shall be increased by an amount equal to the amount of unused
Consolidated Capital Expenditures permitted to be incurred pursuant to clause
(a) above for the immediately preceding fiscal year of the Borrower (without
giving effect to this proviso).

         SECTION 6.11. Consolidated Leverage Ratio. Permit the  Consolidated 
Leverage Ratio as of the end of any fiscal  quarter  falling in any period set
forth below to be in excess of the ratio set forth below for such period. 


<TABLE>
<CAPTION>
                                  Period                                      Ratio
                                  ------                                      -----
         <S>                                                            <C>
         July 1, 1997 through September 30, 1999                         6.00 to 1.00
         October 1, 1999 through September 30, 2000                      5.75 to 1.00
         Thereafter                                                      5.50 to 1.00

</TABLE>


         SECTION 6.12. Permit Consolidated Net Worth (a) on the Original Closing
Date, to be less than $35,000,000 or (b) on the last day of any fiscal quarter
thereafter, to be less than the sum of (i) $35,000,000 plus (ii) 50% of the
cumulative amount of positive Consolidated Net Income for each fiscal year
ending after the Original Closing Date.



<PAGE>   58


         SECTION 6.13. Consolidated Interest Coverage Ratio.  Permit the
Consolidated Interest Coverage Ratio as of the end of any fiscal quarter to be
less than 1.50 to 1.00. 

         SECTION 6.14. Fiscal Year.  Permit the fiscal year of the Borrower to
end on a day other than September 30. 


                                 ARTICLE VII

                              Events of Default


         In case of the happening of any of the following events ("Events of
Default"):

                  (a) any representation or warranty made or deemed made in or
         in connection with any Loan Document or the borrowings or issuances of
         Letters of Credit hereunder, or any representation, warranty, statement
         or information contained in any report, certificate, financial
         statement or other instrument furnished in connection with or pursuant
         to any Loan Document, shall prove to have been false or misleading in
         any material respect when so made, deemed made or furnished;

                  (b) default shall be made in the payment of any principal of
         any Loan or the reimbursement with respect to any L/C Disbursement when
         and as the same shall become due and payable, whether at the due date
         thereof or at a date fixed for prepayment thereof or by acceleration
         thereof or otherwise;

                  (c) default shall be made in the payment of any interest on
         any Loan or any Fee or L/C Disbursement or any other amount (other than
         an amount referred to in (b) above) due under any Loan Document, when
         and as the same shall become due and payable, and such default shall
         continue unremedied for a period of five Business Days;

                  (d) default shall be made in the due observance or performance
         by Holdings, the Borrower or any Subsidiary of any covenant, condition
         or agreement contained in Section 5.01(a), 5.05 or 5.07 or in Article
         VI;

                  (e) default shall be made in the due observance or performance
         by Holdings, the Borrower or any Subsidiary of any covenant, condition
         or agreement contained in any Loan Document (other than those specified
         in (b), (c) or (d) above) and such default shall continue unremedied
         for a period of 30 days after notice thereof from the Administrative
         Agent or any Lender to the Borrower;

                  (f) Holdings, the Borrower or any Subsidiary shall (i) fail to
         pay any principal or interest, regardless of amount, due in respect of
         any Indebtedness in a principal amount in excess of $1,750,000, when
         and as the same shall become due and payable, or (ii) fail to observe
         or perform any other term, covenant, condition or agreement contained
         in any agreement or instrument evidencing or governing any such
         Indebtedness if the effect of any failure referred to in this clause
         (ii) is to cause, or to permit the holder or holders of such
         Indebtedness or a trustee on its or their behalf (with or without the
         giving of notice, the lapse of time or both) to cause, such
         Indebtedness to become due prior to its stated maturity;

                  (g) an involuntary proceeding shall be commenced or an
         involuntary petition shall be filed in a court of competent
         jurisdiction seeking (i) relief in respect of Holdings, the Borrower or
         any Subsidiary, or of a substantial part of the property or assets of

<PAGE>   59

         Holdings, the Borrower or a Subsidiary, under Title 11 of the United
         States Code, as now constituted or hereafter amended, or any other
         Federal, state or foreign bankruptcy, insolvency, receivership or
         similar law, (ii) the appointment of a receiver, trustee, custodian,
         sequestrator, conservator or similar official for Holdings, the
         Borrower or any Subsidiary or for a substantial part of the property or
         assets of Holdings, the Borrower or a Subsidiary or (iii) the
         winding-up or liquidation of Holdings, the Borrower or any Subsidiary;
         and such proceeding or petition shall continue undismissed for 60 days
         or an order or decree approving or ordering any of the foregoing shall
         be entered;

                  (h) Holdings, the Borrower or any Subsidiary shall (i)
         voluntarily commence any proceeding or file any petition seeking relief
         under Title 11 of the United States Code, as now constituted or
         hereafter amended, or any other Federal, state or foreign bankruptcy,
         insolvency, receivership or similar law, (ii) consent to the
         institution of, or fail to contest in a timely and appropriate manner,
         any proceeding or the filing of any petition described in (g) above,
         (iii) apply for or consent to the appointment of a receiver, trustee,
         custodian, sequestrator, conservator or similar official for Holdings,
         the Borrower or any Subsidiary or for a substantial part of the
         property or assets of Holdings, the Borrower or any Subsidiary, (iv)
         file an answer admitting the material allegations of a petition filed
         against it in any such proceeding, (v) make a general assignment for
         the benefit of creditors, (vi) become unable, admit in writing its
         inability or fail generally to pay its debts as they become due or
         (vii) take any action for the purpose of effecting any of the
         foregoing;

                  (i) one or more judgments for the payment of money in an
         aggregate amount in excess of $1,750,000, which amount is not covered
         by insurance (provided that in the event such a judgment is covered by
         insurance, the Administrative Agent is provided with satisfactory
         evidence that the insurance provider will provide the coverage relating
         thereto) shall be rendered against Holdings, the Borrower, any
         Subsidiary or any combination thereof and the same shall remain
         undischarged for a period of 30 consecutive days during which execution
         shall not be effectively stayed, or any action shall be legally taken
         by a judgment creditor to levy upon assets or properties of Holdings,
         the Borrower or any Subsidiary to enforce any such judgment;

                  (j) an ERISA Event shall have occurred that, in the opinion of
         the Required Lenders, when taken together with all other ERISA Events
         that have occurred, could reasonably be expected to result in liability
         of the Borrower and its Subsidiaries in an aggregate amount exceeding
         (i) $1,000,000 in any year or (ii) $5,000,000 for all periods; or

                  (k) any security interest purported to be created by any
         Security Document shall cease to be, or shall be asserted by the
         Borrower or any other Loan Party not to be, a valid, perfected, first
         priority (except as otherwise expressly provided in this Agreement or
         such Security Document) security interest in the securities, assets or
         properties covered thereby, except to the extent that any such loss of
         perfection or priority results from the failure of the Collateral Agent
         to maintain possession of certificates representing securities pledged
         under the Pledge Agreement or to continue previously filed financing
         statements prior to the expiration thereof and except to the extent
         that such loss is covered by a lender's title insurance policy and the
         related insurer promptly after such loss shall have acknowledged in
         writing that such loss is covered by such title insurance policy; or

                  (l) there shall have occurred a Change in Control;

then, and in every such event (other than an event with respect to the Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the 

<PAGE>   60

Administrative Agent may, and at the request of the Required Lenders shall,
by notice to the Borrower, take either or both of the following actions, at the
same or different times: (i) terminate forthwith the Commitments and (ii)
declare the Loans then outstanding, if any, to be forthwith due and payable in
whole or in part, whereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and any unpaid accrued Fees and
all other liabilities of the Borrower accrued hereunder and under any other Loan
Document, shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by the Borrower, anything contained herein or in any other Loan Document
to the contrary notwithstanding; and in any event with respect to the Borrower
described in paragraph (g) or (h) above, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrower accrued hereunder and under any other Loan Document, shall
automatically become due and payable, without presentment, demand, protest or
any other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding.


                                 ARTICLE VIII

              The Administrative Agent and the Collateral Agent

         In order to expedite the transactions contemplated by this Agreement,
The Chase Manhattan Bank is hereby appointed to act as Administrative Agent and
Collateral Agent on behalf of the Lenders and the Issuing Bank (for purposes of
this Article VIII, the Administrative Agent and the Collateral Agent are
referred to collectively as the "Agents"). Each of the Lenders and each assignee
of any such Lender, hereby irrevocably authorizes the Agents to take such
actions on behalf of such Lender or assignee or the Issuing Bank and to exercise
such powers as are specifically delegated to the Agents by the terms and
provisions hereof and of the other Loan Documents, together with such actions
and powers as are reasonably incidental thereto. The Administrative Agent is
hereby expressly authorized by the Lenders and the Issuing Bank, without hereby
limiting any implied authority, (a) to receive on behalf of the Lenders and the
Issuing Bank all payments of principal of and interest on the Loans, all
payments in respect of L/C Disbursements and all other amounts due to the
Lenders hereunder, and promptly to distribute to each Lender or the Issuing Bank
its proper share of each payment so received; (b) to give notice on behalf of
each of the Lenders to the Borrower of any Event of Default specified in this
Agreement of which the Administrative Agent has actual knowledge acquired in
connection with its agency hereunder; and (c) to distribute to each Lender
copies of all notices, financial statements and other materials delivered by the
Borrower or any other Loan Party pursuant to this Agreement or the other Loan
Documents as received by the Administrative Agent. Without limiting the
generality of the foregoing, the Agents are hereby expressly authorized to
execute any and all documents (including releases) with respect to the
Collateral and the rights of the Secured Parties with respect thereto, as
contemplated by and in accordance with the provisions of this Agreement and the
Security Documents.

         Neither the Agents nor any of their respective directors, officers,
employees or agents shall be liable as such for any action taken or omitted by
any of them except for its or his own gross negligence or wilful misconduct, or
be responsible for any statement, warranty or representation herein or the
contents of any document delivered in connection herewith, or be required to
ascertain or to make any inquiry concerning the performance or observance by the
Borrower or any other Loan Party of any of the terms, conditions, covenants or
agreements contained in any Loan Document. The Agents shall not be responsible
to the Lenders for the due execution, genuineness, validity, enforceability or
effectiveness of this Agreement or any other Loan Documents, instruments or
agreements. The Agents shall in all cases be fully protected in 
<PAGE>   61

acting, or refraining from acting, in accordance with written instructions
signed by the Required Lenders and, except as otherwise specifically provided
herein, such instructions and any action or inaction pursuant thereto shall be
binding on all the Lenders. Each Agent shall, in the absence of knowledge to the
contrary, be entitled to rely on any instrument or document believed by it in
good faith to be genuine and correct and to have been signed or sent by the
proper person or persons. Neither the Agents nor any of their respective
directors, officers, employees or agents shall have any responsibility in
their capacity as such to the Borrower or any other Loan Party on account of the
failure of or delay in performance or breach by any Lender or the Issuing Bank
of any of its obligations hereunder or to any Lender or the Issuing Bank on
account of the failure of or delay in performance or breach by any other Lender
or the Issuing Bank or the Borrower or any other Loan Party of any of their
respective obligations hereunder or under any other Loan Document or in
connection herewith or therewith. Each of the Agents may execute any and all
duties hereunder by or through agents or employees and shall be entitled to rely
upon the advice of legal counsel selected by it with respect to all matters
arising hereunder and shall not be liable for any action taken or suffered in
good faith by it in accordance with the advice of such counsel.

         The Lenders hereby acknowledge that neither Agent shall be under any
duty to take any discretionary action permitted to be taken by it pursuant to
the provisions of this Agreement unless it shall be requested in writing to do
so by the Required Lenders.

         Subject to the appointment and acceptance of a successor Agent as
provided below, either Agent may resign at any time by notifying the Lenders and
the Borrower. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor, subject to the Borrower's approval, not to be
unreasonably withheld, so long as no Default or Event of Default shall have
occurred and be continuing. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Agent gives notice of its resignation, then the retiring Agent may,
on behalf of the Lenders, appoint a successor Agent which shall be a bank with
an office in New York, New York, having a combined capital and surplus of at
least $500,000,000 or an Affiliate of any such bank. Upon the acceptance of any
appointment as Agent hereunder by a successor bank, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Agent and the retiring Agent shall be discharged from its duties and
obligations hereunder. After the Agent's resignation hereunder, the provisions
of this Article and Section 9.05 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Agent.

         With respect to the Loans made by it hereunder, each Agent in its
individual capacity and not as Agent shall have the same rights and powers as
any other Lender and may exercise the same as though it were not an Agent, and
the Agents and their Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with Holdings, the Borrower or any
Subsidiary or other Affiliate thereof as if it were not an Agent.

         Each Lender agrees (a) to reimburse the Agents, on demand, in the
amount of its pro rata share (based on its Commitments hereunder) of any
expenses incurred for the benefit of the Lenders by the Agents, including
counsel fees and compensation of agents and employees paid for services rendered
on behalf of the Lenders, that shall not have been reimbursed by the Borrower
and (b) to indemnify and hold harmless each Agent and any of its directors,
officers, employees or agents, on demand, in the amount of such pro rata share,
from and against any and all liabilities, taxes, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by or asserted
against it in its capacity as Agent, or any of them in any way relating to or
arising out of this Agreement or any other Loan Document or any action taken or
omitted by it or any of them under this Agreement or any other Loan Document, to
the extent the same shall not have been reimbursed by the Borrower or any other
Loan Party, provided that no Lender shall be liable 

<PAGE>   62

to an Agent or any such other indemnified person for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of such Agent or any of its directors, officers,
employees or agents. Each Lender agrees to reimburse and indemnify the Issuing
Bank to the same extent and subject to the same limitations as provided for the
Agents in the preceding sentence.

         Each Lender acknowledges that it has, independently and without
reliance upon the Agents or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agents or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement or any other Loan Document, any related
agreement or any document furnished hereunder or thereunder.


                                  ARTICLE IX

                                Miscellaneous


         SECTION 9.01. Notices.  Notices and other communications  provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, or sent by telecopy, as follows: 

                  (a) if to the Borrower or Holdings, to it at 2121 Brooks
         Avenue, Neenah, WI 54956, Attention of President or Chief Financial
         Officer (Telecopy No. (414) 729-3633) with copies to (which shall not
         constitute notice to the Borrower) Citicorp Venture Capital, Ltd., 399
         Park Avenue, 14th Floor, Zone 4, New York, NY 10043, Attention of Mr.
         David F. Thomas and Mr. John D. Weber (Telecopy No. (212) 888-2940) and
         Kirkland & Ellis, Citicorp Center, 153 East 53rd Street, New York, NY
         10022, Attention of Kirk A. Radke, Esq. (Telecopy No. (212) 446-4900);

                  (b) if to the Administrative Agent, to The Chase Manhattan
         Bank, Loan and Agency Services Group, One Chase Manhattan Plaza, 8th
         Floor, New York, New York 10081, Attention of Janet Belden (Telecopy
         No. (212) 552-5658), with a copy to The Chase Manhattan Bank, One Chase
         Manhattan Plaza, 5th Floor, New York, New York 10081, Attention of
         James H. Ramage (Telecopy No. (212) 552-5555); and

                  (c) if to a Lender, to it at its address (or telecopy number)
         set forth on Schedule 2.01 or in the Assignment and Acceptance pursuant
         to which such Lender shall have become a party hereto.

All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 9.01.

         SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower or Holdings herein and in
the certificates or other instruments 
<PAGE>   63

prepared or delivered in connection with or pursuant to this Agreement or any
other Loan Document shall be considered to have been relied upon by the Lenders
and the Issuing Bank and shall survive the making by the Lenders of the Loans
and the issuance of Letters of Credit by the Issuing Bank, regardless of any
investigation made by the Lenders or the Issuing Bank or on their behalf, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any Fee or any other amount then due and payable
under this Agreement or any other Loan Document is outstanding and unpaid
(other than wholly-contingent indemnification obligations) or any Letter of
Credit is outstanding and so long as the Commitments have not been terminated.
The provisions of Sections 2.14, 2.16, 2.20 and 9.05 shall remain operative and
in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Commitments, the expiration
of any Letter of Credit, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Administrative Agent, the Collateral Agent, any
Lender or the Issuing Bank.

         SECTION 9.03. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower, Holdings and the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors and
assigns.

         SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the permitted successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Borrower, Holdings, the
Administrative Agent, the Issuing Bank or the Lenders that are contained in this
Agreement shall bind and inure to the benefit of their respective successors and
assigns.

         (b) Each Lender may assign to one or more assignees all or a portion of
its interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided,
however, that (i) except in the case of an assignment to a Lender or an
Affiliate of, or an Approved Fund with respect to, such Lender, (x) the
Borrower, the Administrative Agent and the Issuing Bank must give their prior
written consent to such assignment (which consent shall not be unreasonably
withheld) and (y) the amount of the Commitment of the assigning Lender subject
to each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent) shall
not be less than $5,000,000 (or, if less, the entire remaining amount of such
Lender's Commitment), (ii) the parties to each such assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,500 and (iii) the assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire. Upon acceptance and recording pursuant to paragraph (e) of this
Section 9.04, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five Business Days after the
execution thereof, (A) the assignee thereunder shall be a party hereto and, to
the extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement and (B) the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto but shall continue to be entitled
to the benefits of Sections 2.14, 2.16, 2.20 and 9.05, as well as to any Fees
accrued for its account and not yet paid).

         (c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other 
<PAGE>   64

and the other parties hereto as follows: (i) such assigning Lender warrants that
it is the legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim and that its Commitment, and the outstanding
balances of its Loans, in each case without giving effect to assignments thereof
which have not become effective, are as set forth in such Assignment and
Acceptance, (ii) except as set forth in (i) above, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with
this Agreement, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, any other Loan Document or
any other instrument or document furnished pursuant hereto, or the financial
condition of the Borrower or any Subsidiary or the performance or observance by
the Borrower or any Subsidiary of any of its obligations under this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; (iv) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the most recent financial statements referred to in Section 3.05(a) or delivered
pursuant to Section 5.04 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (v) such assignee will independently and without
reliance upon the Administrative Agent, the Collateral Agent, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (vi) such assignee appoints
and authorizes the Administrative Agent and the Collateral Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Administrative Agent and the Collateral Agent,
respectively, by the terms hereof, together with such powers as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.

         (d) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive and the Borrower, the Administrative Agent, the Issuing Bank, the
Collateral Agent and the Lenders may treat each person whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Bank, the Collateral Agent
and any Lender, at any reasonable time and from time to time upon reasonable
prior notice.

         (e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) above and, if required, the written consent of the Borrower, the Issuing
Bank and the Administrative Agent to such assignment, the Administrative Agent
shall (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Lenders and the Issuing Bank. No assignment shall be effective unless it has
been recorded in the Register as provided in this paragraph (e).

         (f) Each Lender may without the consent of the Borrower, the Issuing
Bank or the Administrative Agent sell participations to one or more banks or
other entities in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to
it); provided, however, that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) the
participating banks or other 
<PAGE>   65

entities shall be entitled to the benefit of the cost protection provisions
contained in Sections 2.14, 2.16 and 2.20 to the same extent as if they were
Lenders and (iv) the Borrower, the Administrative Agent, the Issuing Bank
and the Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, and
such Lender shall retain the sole right to enforce the obligations of the
Borrower relating to the Loans or L/C Disbursements and to approve any
amendment, modification or waiver of any provision of this Agreement (other than
amendments, modifications or waivers decreasing any fees payable hereunder or
the amount of principal of or the rate at which interest is payable on the
Loans, extending any scheduled principal payment date or date fixed for the
payment of interest on the Loans or increasing or extending the Commitments).

         (g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Lender by
or on behalf of the Borrower; provided that, prior to any such disclosure of
information designated by the Borrower as confidential, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information on
terms no less restrictive than those applicable to the Lenders pursuant to
Section 9.16.

         (h) Any Lender may at any time assign all or any portion of its rights
under this Agreement to a Federal Reserve Bank to secure extensions of credit by
such Federal Reserve Bank to such Lender; provided that no such assignment shall
release a Lender from any of its obligations hereunder or substitute any such
Bank for such Lender as a party hereto. In order to facilitate such an
assignment to a Federal Reserve Bank, the Borrower shall, at the request of the
assigning Lender, duly execute and deliver to the assigning Lender a promissory
note or notes evidencing the Loans made to the Borrower by the assigning Lender
hereunder.

         (i) Neither Holdings nor the Borrower shall assign or delegate any of
its rights or duties hereunder without the prior written consent of the
Administrative Agent, the Issuing Bank and each Lender, and any attempted
assignment without such consent shall be null and void.

         (j) In the event that Standard & Poor's Ratings Group, Moody's
Investors Service, Inc., and Thompson's BankWatch (or InsuranceWatch Ratings
Service, in the case of Lenders that are insurance companies (or Best's
Insurance Reports, if such insurance company is not rated by Insurance Watch
Ratings Service)) shall, after the date that any Lender becomes a Lender,
downgrade the long-term certificate deposit ratings of such Lender, and the
resulting ratings shall be below BBB-, Baa3 and C (or BB, in the case of a
Lender that is an insurance company (or B, in the case of an insurance company
not rated by InsuranceWatch Ratings Service)), then the Issuing Bank shall have
the right, but not the obligation, at its own expense, upon notice to such
Lender and the Administrative Agent, to replace (or to request the Borrower to
use its reasonable efforts to replace) such Lender with an assignee (in
accordance with and subject to the restrictions contained in paragraph (b)
above), and such Lender hereby agrees to transfer and assign without recourse
(in accordance with and subject to the restrictions contained in paragraph (b)
above) all its interests, rights and obligations in respect of its Commitment to
such assignee; provided, however, that (i) no such assignment shall conflict
with any law, rule and regulation or order of any Governmental Authority and
(ii) the Issuing Bank or such assignee, as the case may be, shall pay to such
Lender in immediately available funds on the date of such assignment the
principal of and interest accrued to the date of payment on the Loans made by
such Lender hereunder and all other amounts accrued for such Lender's account or
owed to it hereunder.

         SECTION 9.05. Expenses; Indemnity. (a) The Borrower and Holdings agree,
jointly and severally, to pay all out-of-pocket expenses incurred by the
Administrative Agent, the Collateral 
<PAGE>   66

Agent and the Issuing Bank in connection with the syndication of the credit
facilities provided for herein and the preparation and administration of this
Agreement and the other Loan Documents or in connection with any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the
transactions hereby or thereby  contemplated shall be consummated) or incurred
by the Administrative Agent, the Collateral Agent or any Lender in connection
with the enforcement or protection of its rights in connection with this
Agreement and the other Loan Documents or in connection with the Loans made or
Letters of Credit issued hereunder, including the reasonable fees, charges and
disbursements of Cravath, Swaine & Moore, counsel for the Administrative Agent
and the Collateral Agent, and, in connection with any such enforcement or
protection, the reasonable fees, charges and disbursements of any other counsel
for the Administrative Agent, the Collateral Agent or any Lender.

         (b) The Borrower and Holdings agree, jointly and severally, to
indemnify the Administrative Agent, the Collateral Agent, each Lender and the
Issuing Bank, each Affiliate of any of the foregoing persons and each of their
respective directors, officers, employees and agents (each such person being
called an "Indemnitee") against, and to hold each Indemnitee harmless from, any
and all losses, claims, damages, liabilities and related expenses, including
reasonable counsel fees, charges and disbursements, incurred by or asserted
against any Indemnitee arising out of, in any way connected with, or as a result
of (i) the execution or delivery of this Agreement or any other Loan Document or
any agreement or instrument contemplated thereby, the performance by the parties
thereto of their respective obligations thereunder or the consummation of the
Transactions and the other transactions contemplated thereby, (ii) the use of
the proceeds of the Loans or issuance of Letters of Credit, (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, or (iv) any actual or alleged
presence or Release of Hazardous Materials on any property owned or operated by
the Borrower or any of the Subsidiaries, or any Environmental Claim related in
any way to the Borrower or the Subsidiaries; provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or wilful misconduct of any Indemnitee.

         (c) The provisions of this Section 9.05 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the expiration of the Commitments, the expiration
of any Letter of Credit, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Administrative Agent, the Collateral Agent, any
Lender or the Issuing Bank. All amounts due under this Section 9.05 shall be
payable on written demand therefor.

         SECTION 9.06. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, except to the extent prohibited by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Borrower or Holdings against any of and all
the obligations of the Borrower or Holdings now or hereafter existing under this
Agreement and other Loan Documents held by such Lender, irrespective of whether
or not such Lender shall have made any demand under this Agreement or such other
Loan Document and although such obligations may be unmatured. The rights of each
Lender under this Section 9.06 are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.

         SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN
DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK. EACH LETTER OF 

<PAGE>   67

CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH,
THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR
RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS
(1993 REVISION), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500 (THE
"UNIFORM CUSTOMS") AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE
LAWS OF THE STATE OF NEW YORK.

         SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank in
exercising any power or right hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower or any other Loan Party therefrom shall in any event
be effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice or demand on the Borrower or Holdings in
any case shall entitle the Borrower or Holdings to any other or further notice
or demand in similar or other circumstances.

         (b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower, Holdings and the Required Lenders; provided,
however, that no such agreement shall (i) decrease the principal amount of, or
extend the maturity of or any scheduled principal payment date or date for the
payment of any interest on any Loan or any date for reimbursement of an L/C
Disbursement, or waive or excuse any such payment or any part thereof, or
decrease the rate of interest on any Loan or L/C Disbursement, without the prior
written consent of each Lender affected thereby, (ii) change or extend the
Commitment or decrease or extend the date for payment of the Commitment Fees of
any Lender without the prior written consent of such Lender or (iii) amend or
modify the provisions of Section 2.17 or 9.04(i), the provisions of this
Section, the definition of the term "Required Lenders" or release any Guarantor
or all or any substantial part of the Collateral, without the prior written
consent of each Lender; provided further that no such agreement shall amend,
modify or otherwise affect the rights or duties of the Administrative Agent, the
Collateral Agent or the Issuing Bank hereunder or under any other Loan Document
without the prior written consent of the Administrative Agent, the Collateral
Agent or the Issuing Bank.

         SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan or
participation in any L/C Disbursement, together with all fees, charges and other
amounts which are treated as interest on such Loan or participation in such L/C
Disbursement under applicable law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan or participation in
accordance with applicable law, the rate of interest payable in respect of such
Loan or participation hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan or
participation but were not payable as a result of the operation of this Section
9.09 shall be cumulated and the interest and Charges payable to such Lender in
respect of other Loans or participations or periods shall be increased (but not
above the Maximum Rate therefor) until such cumulated amount, together with
interest thereon at the Federal Funds Effective Rate to the date of repayment,
shall have been received by such Lender.

<PAGE>   68


         SECTION 9.10. Entire Agreement. This Agreement, the Fee Letter and the
other Loan Documents constitute the entire contract between the parties relative
to the subject matter hereof. Any other previous agreement among the parties
with respect to the subject matter hereof (including, following the Restatement
Closing Date, the Commitment Letter dated July 28, 1997 among the Administrative
Agent, Chase Securities Inc. and the Borrower) is superseded by this Agreement
and the other Loan Documents and shall be terminated on the Restatement Closing
Date. Nothing in this Agreement or in the other Loan Documents, expressed or
implied, is intended to confer upon any party other than the parties hereto and
thereto any rights, remedies, obligations or liabilities under or by reason of
this Agreement or the other Loan Documents.

         SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.

         SECTION 9.12. Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby (it being understood that
the invalidity of a particular provision in a particular jurisdiction shall not
in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.

         SECTION 9.13. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together shall
constitute a single contract, and shall become effective as provided in Section
9.03. Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.

         SECTION 9.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

         SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) Each of
Holdings and the Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or the other Loan Documents, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any 

<PAGE>   69

other manner provided by law. Nothing in this Agreement shall affect any
right that the Administrative Agent, the Collateral Agent, the Issuing Bank or
any Lender may otherwise have to bring any action or proceeding relating to this
Agreement or the other Loan Documents against the Borrower, Holdings or their
respective properties in the courts of any jurisdiction.

         (b) Each of Holdings and the Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
the other Loan Documents in any New York State or Federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

         (c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

         SECTION 9.16. Confidentiality. The Administrative Agent, the Collateral
Agent, the Issuing Bank and each of the Lenders agrees to keep confidential (and
to use its best efforts to cause its respective agents and representatives to
keep confidential) the Information (as defined below) and all copies thereof,
extracts therefrom and analyses or other materials based thereon, except that
the Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender
shall be permitted to disclose Information (a) to such of its respective
officers, directors, employees, agents, affiliates and representatives as need
to know such Information, (b) to the extent requested by any regulatory
authority, (c) to the extent otherwise required by applicable laws and
regulations or by any subpoena or similar legal process, (d) in connection with
any suit, action or proceeding relating to the enforcement of its rights
hereunder or under the other Loan Documents or (e) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section 9.16 or (ii) becomes available to the Administrative Agent, the
Issuing Bank, any Lender or the Collateral Agent on a nonconfidential basis from
a source other than the Borrower or Holdings. For the purposes of this Section,
"Information" shall mean all financial statements, certificates, reports,
agreements and information (including all analyses, compilations and studies
prepared by the Administrative Agent, the Collateral Agent, the Issuing Bank or
any Lender based on any of the foregoing) heretofore or hereafter received from
the Borrower or Holdings or any of their respective Affiliates and related to
the Borrower or Holdings, any shareholder or Affiliate of the Borrower or
Holdings or any employee, customer or supplier of the Borrower or Holdings,
other than any of the foregoing that were available to the Administrative Agent,
the Collateral Agent, the Issuing Bank or any Lender on a nonconfidential basis
prior to its disclosure thereto by the Borrower or Holdings, and which are in
the case of Information provided after the date hereof, clearly identified at
the time of delivery as confidential. The provisions of this Section 9.16 shall
remain operative and in full force and effect regardless of the expiration and
term of this Agreement.

         SECTION 9.17. Termination. Subject to the last sentence of Section
9.02, this Agreement and the other Loan Documents shall terminate when all the
Obligations have been indefeasibly paid in full, the Lenders have no further
commitment to lend, the L/C Exposure has been reduced to zero and the Issuing
Bank has no further commitment to issue Letters of Credit under this Agreement,
at which time the Collateral Agent shall execute and deliver to the Borrower,
Holdings and the Subsidiary Guarantors all Uniform Commercial Code termination
statements and similar documents which the Borrower, Holdings and the Subsidiary
Guarantors shall reasonably request to evidence such termination.


<PAGE>   70


         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.


                                  NEENAH FOUNDRY COMPANY,
                                  
                                        by
                                           -------------------------
                                           Name:
                                           Title:
                                  
                                  
                                  NFC CASTINGS, INC.,
                                  
                                        by
                                           -------------------------
                                           Name:
                                           Title:
                                  
                                  THE  CHASE  MANHATTAN  BANK,  individually 
                                  and as  Administrative  Agent,  Collateral 
                                  Agent and Issuing Bank,
                                  
                                        by
                                           -------------------------
                                           Name:
                                           Title: