**Execution Copy**

        This CREDIT AGREEMENT is entered into as of December 21,2005, by and among (i) MINRAD, INC., a Delaware corporation (herein, togetherwith its successors and assigns, the "Borrower"), (ii) MINRADINTERNATIONAL, INC., a Delaware corporation (herein, together with itssuccessors and assigns, "Holdings"), and (iii) KEYBANK NATIONALASSOCIATION (herein, together with its successors and assigns, the "Lender").

RECITALS:

        (1) The Borrower has requested that the Lender extend creditto the Borrower to refinance certain of the Borrower's existing indebtedness andto provide working capital and funds for other lawful purposes.

        (2) Subject to and upon the terms and conditions set forthherein, the Lender is willing to extend credit and make available to theBorrower the credit facility provided for herein for the foregoing purposes.

AGREEMENT:

        In consideration of the premises and the mutual covenantscontained herein, the parties hereto agree as follows:

ARTICLE I.DEFINITIONS AND TERMS

        Section 1.01 Certain Defined Terms.As used herein, the following terms shall have the meanings herein specifiedunless the context otherwise requires:

        "Account" means any "account" as such term is now orhereafter defined in the UCC.

        "Account Debtor" means any Person obligated on anAccount.

        "Acquisition" means any transaction or series ofrelated transactions for the purpose of or resulting, directly or indirectly, in(i) the acquisition of all or substantially all of the assets of any Person, orany business or division of any Person, (ii) the acquisition or ownership of inexcess of 50% of the Equity Interest of any Person, or (iii) the acquisition ofanother Person by a merger, consolidation, amalgamation or any other combinationwith such Person. 

        "Additional Security Document" has the meaningprovided in Section 6.10(a).

        "Affiliate" means, with respect to any Person, anyother Person directly or indirectly controlling, controlled by, or under director indirect common control with such Person. A Person shall be deemed to controla second Person if such first Person possesses, directly or indirectly, thepower (i) to vote 10% or more of the securities having ordinary voting power forthe election of directors or managers of such second Person or (ii) to direct orcause the direction of the management and policies of such second Person,whether through the ownership of voting securities, by contract or otherwise.For the avoidance of doubt, any director or officer (or person functioning in asubstantially similar role) of Holdings and/or its Subsidiaries shall be deemedan Affiliate of Holdings and its Subsidiaries. Notwithstanding the foregoing,the Lender shall not be considered an Affiliate of Holdings or any of itsSubsidiaries.

        "Agreement" means this Credit Agreement, as the samemay from time to time be amended, restated, supplemented or otherwise modified.

        "Anti-Terrorism Law" means the USA Patriot Act or anyother law pertaining to the prevention of future acts of terrorism, in each caseas such law may be amended from time to time.

        "Approved Bank" has the meaning provided in subpart(ii) of the definition of "Cash Equivalents."

        "Asset Sale" means the sale, lease, transfer or otherdisposition (including by means of Sale and Lease-Back Transactions, and bymeans of mergers, consolidations, amalgamations and liquidations of acorporation, partnership or limited liability company of the interests thereinof Holdings or any Subsidiary) by Holdings or any Subsidiary to any Person ofany of Holdings' or such Subsidiary's respective assets, *provided* thatthe term Asset Sale specifically excludes any sales, transfers or otherdispositions of inventory, or obsolete, worn-out or excess furniture, fixtures,equipment or other property, real or personal, tangible or intangible, in eachcase in the ordinary course of business.

        "Authorized Officer" means, with respect to any CreditParty or any Subsidiary of a Credit Party, any of the following officers of suchCredit Party or Subsidiary: the Chairman, the President, the Chief ExecutiveOfficer, the Chief Financial Officer, the Treasurer, the Assistant Treasurer orthe Controller, or, such other Person as is authorized in writing to act onbehalf of such Credit Party or such Subsidiary and is acceptable to the Lender.Unless otherwise qualified, all references herein to an Authorized Officer shallrefer to an Authorized Officer of the Borrower.

        "Bankruptcy Code" means Title 11 of the United StatesCode entitled "Bankruptcy," as now or hereafter in effect, or any successorthereto, as hereafter amended.

        "Base Rate" means, for any day, a fluctuating interestrate per annum as shall be in effect from time to time which rate per annumshall at all times be equal to the greater of (i) the rate of interestestablished by KeyBank National Association, from time to time, as its "primerate," whether or not publicly announced, which interest rate may or may not bethe lowest rate charged by it for commercial loans or other extensions ofcredit; or (ii) 1/2 of 1% in excess of the Federal Funds Effective Rate ineffect from time to time, determined one Business Day in arrears.

        "Borrower" has the meaning specified in the firstparagraph of this Agreement.

        "Borrower Guaranteed Obligations" has the meaningprovided in Section 2.10(a).

        "Borrowing" means the incurrence of a Revolving Loanby the Borrower from the Lender.

        "Borrowing Base" means, at any time, the sum of:

(i) 60% of Eligible Accounts Receivable at such time,		plus
(ii) 35% of Eligible Finished Goods at such time, 		plus
(iii) 35% of Eligible Raw Materials at such time, 		plus
(iv) the lesser of (A) 35% of Eligible		Work-In-Process and (B) $500,000, plus

2

(v) the lesser of (A) 50% of Eligible Real Property		and Equipment based on the most current appraisals in form and substance		satisfactory to the Lender at such time and (B) $1,000,000, minus
(vi) Reserves imposed by the Lender at such time.

The Lender may, in its Permitted Discretion, reduce theadvance rate set forth above or reduce one or more of the other elements used incomputing the Borrowing Base. Any such change shall become effective immediatelyupon written notice from the Lender to the Borrower for purposes of calculatingthe Borrowing Base. 

        "Borrowing Base Certificate" means a certificate,signed by an Authorized Officer of the Borrower, substantially in the form of Exhibit D or another form which is acceptable to the Lender in its solediscretion.

        "Business Day" means any day other than Saturday,Sunday or any other day on which commercial banks in Cleveland, Ohio areauthorized or required by law to close.

        "Capital Distribution" means a payment made, liabilityincurred or other consideration given for the purchase, acquisition, repurchase,redemption or retirement of any Equity Interest of Holdings or any of itsSubsidiaries or as a dividend, return of capital or other distribution inrespect of any of Holdings' or such Subsidiary's Equity Interest.

        "Capital Lease" as applied to any Person means anylease of any property (whether real, personal or mixed) by that Person as lesseethat, in conformity with GAAP, should be accounted for as a capital lease on thebalance sheet of that Person.

        "Capitalized Lease Obligations" means all obligationsunder Capital Leases of Holdings or any of its Subsidiaries, withoutduplication, in each case taken at the amount thereof accounted for asliabilities identified as "capital lease obligations" (or any similar words) ona consolidated balance sheet of Holdings and its Subsidiaries prepared inaccordance with GAAP.

        "Cash Dividend" means a Capital Distribution ofHoldings payable in cash to the shareholders of Holdings with respect to anyclass or series of Equity Interest of Holdings.

        "Cash Equivalents" means any of the following:

        (i) securities issued or directly and fully		guaranteed or insured by the United States of America or any agency or		instrumentality thereof (*provided* that the full faith and credit		of the United States of America is pledged in support thereof) having		maturities of not more than one year from the date of acquisition;

        (ii) U.S. dollar denominated time deposits,		certificates of deposit and bankers' acceptances of (x) the Lender, (y)		any domestic commercial bank of recognized standing having capital and		surplus in excess of $500,000,000 or (z) any bank (or the parent company		of such bank) whose short-term commercial paper rating from S&P is at		least A-1, A-2 or the equivalent thereof or from Moody's is at least		P-1, P-2 or the equivalent thereof (any such bank, an "Approved Bank"),		in each case with maturities of not more than 180 days from the date of		acquisition;

3

        (iii) commercial paper issued by the Lender or any		Approved Bank or by the parent company of the Lender or any Approved		Bank and commercial paper issued by, or guaranteed by, any industrial or		financial company with a short-term commercial paper rating of at least		A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent		thereof by Moody's, or guaranteed by any industrial company with a		long-term unsecured debt rating of at least A or A2, or the equivalent		of each thereof, from S&P or Moody's, as the case may be, and in each		case maturing within 180 days after the date of acquisition;

        (iv) fully collateralized repurchase agreements		entered into with the Lender or any Approved Bank having a term of not		more than 30 days and covering securities described in clause (i) above;

        (v) investments in money market funds substantially		all the assets of which are comprised of securities of the types		described in clauses (i) through (iv) above;

        (vi) investments in money market funds access to		which is provided as part of "sweep" accounts maintained with the Lender		or an Approved Bank;

        (vii) investments in industrial development revenue		bonds that (A) "re-set" interest rates not less frequently than		quarterly, (B) are entitled to the benefit of a remarketing arrangement		with an established broker dealer, and (C) are supported by a direct pay		letter of credit covering principal and accrued interest that is issued		by an Approved Bank; and

        (viii) investments in pooled funds or investment		accounts consisting of investments of the nature described in the		foregoing clause (vii).

        "CERCLA" means the Comprehensive EnvironmentalResponse, Compensation, and Liability Act of 1980, as the same may be amendedfrom time to time, 42 U.S.C. § 9601 *et seq.*
        "CFC" has the meaning provided in Section 6.09.

        "Change of Control" means (i) the acquisition of, or,if earlier, the shareholder or director approval of the acquisition of,ownership or voting control, directly or indirectly, beneficially or of record,on or after the Closing Date, by any Person or group (within the meaning of Rule13d-3 of the SEC under the 1934 Act, as then in effect), of Equity Interestsrepresenting more than 20% of the aggregate ordinary Voting Power represented bythe issued and outstanding Equity Interests of Holdings; (ii) the occupation ofa majority of the seats (other than vacant seats) on the board of directors ofHoldings by Persons who were neither (A) nominated by the board of directors ofHoldings nor (B) appointed by directors so nominated; (iii) the failure ofHoldings to own, directly or indirectly, 100% of the outstanding shares of theBorrower; (iv) the failure of the Borrower to own, directly or indirectly, 100%of the outstanding shares of any of its Subsidiaries; or (v) the occurrence of achange in control, or other similar provision, under or with respect to anyMaterial Indebtedness Agreement.

        "Charges" has the meaning provided in Section 10.21.

        "Claims" has the meaning set forth in the definitionof "Environmental Claims."

        "Closing Date" means December 21, 2005.

        "Code" means the Internal Revenue Code of 1986, asamended from time to time, and the regulations promulgated and the rulingsissued thereunder. Section references to the Code are to the Code 

4

as in effectat the Closing Date and any subsequent provisions of the Code, amendatorythereof, supplemental thereto or substituted therefor.

        "Collateral" means the "Collateral" as defined in theSecurity Agreement and includes, for greater certainty, Mortgaged Real Property,together with any other collateral (whether real property or personal property)covered by any Security Document.

        "Collateral Access Agreement" means a landlord'swaiver, mortgagee's waiver or other agreement, each in form and substancesatisfactory to the Lender, between the Lender and any third party (includingany bailee, assignee, customs broker, or other similar Person) in possession ofany Collateral or any landlord of any Credit Party for any real property whereany Collateral is located and providing, among other things, for waiver of Lien,certain notices and opportunity to cure and access to Collateral, as the samemay from time to time be amended, restated or otherwise modified.

        "Collateral Assignment" has the meaning specified inthe Security Agreement.

        "Commercial Letter of Credit" means any letter ofcredit or similar instrument issued for the purpose of providing the primarypayment mechanism in connection with the purchase of materials, goods orservices in the ordinary course of business.

        "Commitment Fee" has the meaning provided in Section2.06(a).

        "Commodities Hedge Agreement" means a commoditiescontract purchased by Holdings or any of its Subsidiaries in the ordinary courseof business, and not for speculative purposes, with respect to raw materialsnecessary to the manufacturing or production of goods in connection with thebusiness of Holdings and its Subsidiaries.

        "Compliance Certificate" has the meaning provided inSection 6.01(c).

        "Confidential Information" has the meaning provided inSection 10.13(b).

        "Consideration" means, in connection with anAcquisition, the aggregate consideration paid, including borrowed funds, cash,the issuance of securities or notes, the assumption or incurring of liabilities(direct or contingent), the payment of consulting fees (excluding any feespayable to any investment banker in connection with such Acquisition) or feesfor a covenant not to compete and any other consideration paid for the purchase.

        "Consolidated Depreciation and Amortization Expense"means, for any period, all depreciation and amortization expenses of Holdingsand its Subsidiaries, all as determined for Holdings and its Subsidiaries on aconsolidated basis in accordance with GAAP.

        "Consolidated EBITDA" means, for any period,Consolidated Net Income for such period, plus (i) the sum of the amountsfor such period included in determining such Consolidated Net Income of(A) Consolidated Interest Expense, (B) Consolidated Income Tax Expense, (C)Consolidated Depreciation and Amortization Expense, and (D) extraordinary andother non-recurring non-cash losses and charges, less (ii) gains on salesof assets and other extraordinary gains and other non-recurring non-cash gains,all as determined for Holdings and its Subsidiaries on a consolidated basis inaccordance with GAAP; *provided, however,* that Consolidated EBITDA for anyTesting Period shall (y) include the EBITDA for any Person or business unit thathas been acquired by Holdings or any of its Subsidiaries for any portion of suchTesting Period prior to the date of acquisition, so long as such EBITDA has beenverified by appropriate audited financial statements or other financialstatements acceptable to the Lender 

5

and (z) exclude the EBITDA for any Person orbusiness unit that has been disposed of by Holdings or any of its Subsidiaries,for the portion of such Testing Period prior to the date of disposition.

        "Consolidated Income Tax Expense" means, for anyperiod, all provisions for taxes based on the net income of Holdings or any ofits Subsidiaries (including, without limitation, any additions to such taxes,and any penalties and interest with respect thereto), all as determined forHoldings and its Subsidiaries on a consolidated basis in accordance with GAAP.

        "Consolidated Interest Expense" means, for any period,total interest expense (including, without limitation, that which is capitalizedand that which is attributable to Capital Leases or Synthetic Leases) ofHoldings and its Subsidiaries on a consolidated basis with respect to alloutstanding Indebtedness of Holdings and its Subsidiaries.

        "Consolidated Net Income" means for any period, thenet income (or loss) of Holdings and its Subsidiaries on a consolidated basisfor such period taken as a single accounting period determined in conformitywith GAAP.

        "Consolidated Net Worth" means at any time, allamounts that, in conformity with GAAP, would be included under the caption"total stockholders' equity" (or any like caption) on a consolidated balancesheet of Holdings at such time.

        "Control Agreements" has the meaning set forth in theSecurity Agreement.

        "Credit Event" means the making of any Borrowing orany LC Issuance.

        "Credit Party" means Holdings, the Borrower or anyother Guarantor.

        "Creditor" means the Lender and the Designated HedgeCreditors, and the respective successors and assigns of each of the foregoing

        "Default" means any event, act or condition that withnotice or lapse of time, or both, would constitute an Event of Default.

        "Default Rate" means a rate equal to 3% above the BaseRate.

        "Designated Hedge Agreement" means any Hedge Agreementto which Holdings or any of its Subsidiaries is a party and as to which theLender or any of its Affiliates is a counterparty.

        "Designated Hedge Creditor" means the Lender orAffiliate of the Lender that participates as a counterparty to any Credit Partypursuant to any Designated Hedge Agreement.

        "Document" means any "document" as such term is now orhereafter defined in the UCC.

        "Dollars," "U.S. Dollars" and the sign "$"each means lawful money of the United States.

        "Domestic Subsidiary" means any Subsidiary organizedunder the laws of the United States of America, any State thereof, or theDistrict of Columbia.

        "EBITDA" means, with respect to any Person for anyperiod, the net income for such Person for such period plus the sum ofthe amounts for such period included in determining such net income in respectof (i) interest expense, (ii) income tax expense, and (iii) depreciation andamortization expense, in each case as determined in accordance with GAAP.

6

        "Eligible Accounts Receivable" means, at any time, theAccounts of the Borrower that the Lender determines in its Permitted Discretionare eligible as the basis for extensions of Revolving Loans hereunder. Withoutlimiting the Lender's Permitted Discretion provided herein, Eligible AccountsReceivable shall not include any Account:

        (a) that is not subject to a first priority perfectedsecurity interest in favor of the Lender;

        (b) that is subject to any Lien other than (i) a Lien infavor of the Lender and (ii) a Permitted Lien which does not have priority overthe Lien in favor of the Lender;

        (c) with respect to which the scheduled due date is more than120 days after the original invoice date, is unpaid more than 120 days, or 125days in the case of Accounts from Account Debtors located in Brazil, after thedate of the original invoice therefor or more than 120 days after the originaldue date, or which has been written of the books of the Borrower or otherwisedesignated as uncollectible;

        (d) that is owing by an Account Debtor for which more than25% of the Accounts owing from such Account Debtor and its Affiliates areineligible hereunder;

        (e) that is owing by an Account Debtor to the extent theaggregate amount of Accounts owing from such Account Debtor and its Affiliatesto the Borrower or any of its Subsidiaries exceeds 25% of the aggregate EligibleAccounts Receivable (for the avoidance of doubt, the Accounts of such AccountDebtor up to 25% shall be Eligible Accounts Receivable);

        (f) with respect to which any covenant, representation, orwarranty contained in this Agreement or in the Security Agreement has beenbreached or is not true;

        (g) which (i) does not arise from the sale of goods orperformance of services in the ordinary course of business, (ii) is notevidenced by an invoice or other documentation reasonably satisfactory to theLender which has been sent to the Account Debtor, (iii) represents a progressbilling, (iv) is contingent upon the Borrower's or any of its Subsidiary'scompletion of any further performance, (v) represents a sale on a bill-and-hold,guaranteed sale, sale-and-return, sale on approval, consignment,cash-on-delivery or any other repurchase or return basis or (vi) relates topayments of interest;

        (h) for which the goods giving rise to such Account have notbeen shipped to the Account Debtor but only to the extent that title has notpassed to the Account Debtor or for which the services giving rise to suchAccount have not been performed by the Borrower or any of its Subsidiaries;

        (i) with respect to which any check or other instrument ofpayment has been returned uncollected for any reason;

        (j) except with respect to Accounts owing by any AccountDebtor arising after such Account Debtor becomes the subject of a bankruptcycase or similar insolvency proceeding, any Account that is owed by an AccountDebtor that has (i) applied for, suffered, or consented to the appointment ofany receiver, custodian, trustee, or liquidator of its assets, (ii) hadpossession of all or a material part of its property taken by any receiver,custodian, trustee or liquidator, (iii) filed, or had filed against it, anyrequest or petition for liquidation, reorganization, arrangement, adjustment ofdebts, adjudication as bankrupt, winding-up, or voluntary or involuntary caseunder any state or federal bankruptcy laws, (iv) admitted in writing itsinability, or is generally unable to, pay its debts as they become due, (v)become insolvent, or (vi) ceased operation of its business;

7

        (k) that is owed by any Account Debtor that has sold all orsubstantially all of its assets, unless upon such sale, the Person that acquiressuch assets expressly assumes in writing the due and punctual payment of theAccount;

        (l) that is owed in any currency other than U.S. Dollars orEuros;

        (m) that is owed by (i) the government (or any department,agency, public corporation, or instrumentality thereof) of any country otherthan the United States unless such Account is backed by a letter of creditacceptable to the Lender that has been assigned to the Lender or under which theLender is the beneficiary, or (ii) the government of the United States, or anydepartment, agency, public corporation, or instrumentality thereof, unless theFederal Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727 et seq.and 41 U.S.C. § 15 et seq.), and any other steps necessary to perfect the Lienof the Lender in such Account have been complied with to the Lender'ssatisfaction;

        (n) that is owed by (i) any Affiliate, employee, officer,director or agent of Holdings or any of its Subsidiaries, (ii) any stockholderof the Borrower or its Subsidiaries or (iii) any stockholder owning 5% or moreof the stock of Holdings;

        (o) that, for any Account Debtor, exceeds a credit limitdetermined by the Lender, to the extent of such excess;

        (p) that is owed by an Account Debtor or any Affiliate ofsuch Account Debtor to which Holdings or any of its Subsidiaries is indebted,but only to the extent of such indebtedness or is subject to any security,deposit, progress payment, retainage or other similar advance made by or for thebenefit of an Account Debtor, in each case to the extent thereof;

        (q) that is subject to any counterclaim, deduction, defense,setoff or dispute;

        (r) that is evidenced by any promissory note, chattel paper,or instrument;

        (s) that is owed by an Account Debtor located in anyjurisdiction which requires filing of a "Notice of Business Activities Report"or other similar report in order to permit the Borrower or any of itsSubsidiaries to seek judicial enforcement in such jurisdiction of payment ofsuch Account, unless the Borrower or any such Subsidiary has filed such reportor qualified to do business in such jurisdiction;

        (t) with respect to which Holdings or any of its Subsidiarieshas made any agreement with the Account Debtor for any reduction thereof, otherthan discounts and adjustments given in the ordinary course of business or anyAccount which is partially paid and the Borrower created a new receivable forthe unpaid portion of such Account; 

        (u) that does not comply in all material respects with therequirements of all applicable laws and regulations, whether Federal, state orlocal, including without limitation the Federal Consumer Credit Protection Act,the Federal Truth in Lending Act and Regulation Z;

        (v) that is for goods that have been sold under a purchaseorder or pursuant to the terms of a contract or other agreement or understanding(written or oral) that indicates or purports that any Person other than theBorrower has or has had an ownership interest in such goods, or which indicatesany party other than the Borrower as payee or remittance party;

        (w) that was created on cash on delivery terms; or

8

        (x) that the Lender determines may not be paid by reason ofthe Account Debtor's inability to pay or which the Lender otherwise determinesin its Permitted Discretion is unacceptable.

        If an Account which was previously an Eligible AccountsReceivable ceases to be an Eligible Accounts Receivable hereunder, the Borrowershall notify the Lender thereof (i) within three Business Days of the date theBorrower has obtained knowledge thereof if any such Account is in excess of$25,000 in the aggregate and (ii) on and at the time of submission to the Lenderof the next Borrowing Base Certificate in all other cases. In determining theamount of an Eligible Accounts Receivable, the face amount of an Account shallbe reduced by, without duplication, to the extent not reflected in such faceamount, (i) the amount of all accrued and actual discounts, claims, credits orcredits pending, promotional program allowances, price adjustments, financecharges or other allowances (including any amount that the Borrower may beobligated to rebate to an Account Debtor pursuant to the terms of any agreementor understanding (written or oral)) and (ii) the aggregate amount of all cashreceived in respect of such Account but not yet applied by Borrower to reducethe amount of such Account.

        "Eligible Finished Goods" means, at any time, EligibleInventory constituting finished goods to be sold by the Borrower in the ordinarycourse of business of the Borrower, excluding Eligible Raw Materials.

        "Eligible Inventory" means, at any time, the Inventoryof the Borrower which the Lender determines in its Permitted Discretion iseligible as the basis for the extension of Revolving Loans, and the issuance ofLetters of Credit hereunder. Without limiting the Lender's discretion providedherein, Eligible Inventory shall not include any Inventory:

        (a) that is not subject to a first priority perfected Lien infavor of the Lender;

        (b) that is subject to any Lien other than (i) a Lien infavor of the Lender and (ii) a Permitted Lien which does not have priority overthe Lien in favor of the Lender;

        (c) that is, in the Lender's reasonable opinion, slow moving,obsolete, unmerchantable, defective, unfit for sale, not salable at pricesapproximating at least the cost of such Inventory in the ordinary course ofbusiness or unacceptable due to age, type, category and/or quantity;

        (d) with respect to which any covenant, representation, orwarranty contained in this Agreement or the Security Agreement has been breachedor is not true and which does not conform to all standards imposed by anyGovernmental Authority;

        (e) in which any Person other than the Borrower shall (i)have any direct or indirect ownership, interest or title to such Inventory or(ii) be indicated on any purchase order or invoice with respect to suchInventory as having or purporting to have an interest therein;

        (f) which constitutes spare or replacement parts,subassemblies, packaging and shipping material, manufacturing supplies, samples,prototypes, displays or display items, bill-and-hold goods, goods that arereturned or marked for return, repossessed goods, defective or damaged goods,goods held on consignment, or goods which are not of a type held for sale in theordinary course of business;

        (g) which is not located in the U.S. or is in transit with acommon carrier from vendors or suppliers;

        (h) that is located in any locations leased by the Borrowerunless the lessor has delivered to the Lender a Collateral Access Agreement;

9

        (i) that is located in any third party warehouse or is in thepossession of a bailee (other than a third party processor) and is not evidencedby a Document, unless such warehouseman or bailee has delivered to the Lender aCollateral Access Agreement and such other documentation as the Lender mayrequire;

        (j) that is being processed offsite at a third party locationor outside processor, or is in transit to or from said third party location oroutside processor;

        (k) that is a discontinued product or component thereof whichis the subject of a consignment by the Borrower as consignor;

        (l) that is perishable;

        (m) that contains or bears any intellectual property rightslicensed by the Borrower unless the Lender is satisfied that it may sell orotherwise dispose of such Inventory without (i) infringing on the rights of suchlicensor, (ii) violating any contract with such licensor, or (iii) incurring anyliability with respect to payment of royalties other than royalties incurredpursuant to the sale of such Inventory under the current licensing agreement;

        (n) that is not reflected in a current perpetual inventoryreport of the Borrower; or

        (o) that the Lender otherwise reasonably determines isunacceptable for any reason whatsoever.

        In the event that Inventory which was previously EligibleInventory ceases to be Eligible Inventory hereunder, the Borrower shall notifythe Lender thereof (i) within three Business Days of the date the Borrower hasobtained knowledge thereof if any such Inventory is in excess of $25,000 in theaggregate and (ii) on and at the time of submission to the Lender of the nextBorrowing Base Certificate in all other cases.

        "Eligible Raw Materials" means, at any time, EligibleInventory constituting raw materials used or consumed by the Borrower in theordinary course of business in the manufacture or production of other inventory,excluding Eligible Finished Goods.

        "Eligible Real Property and Equipment" means theMortgaged Real Property located in Bethlehem, Pennsylvania and all of Borrower'sequipment located thereon.

        "Eligible Work-In-Process" means, at any time,Eligible Inventory constituting work-in-process, excluding Eligible FinishedGoods and Eligible Raw Materials.

        "Environmental Claims" means any and all global,regulatory or judicial actions, suits, demands, demand letters, claims, liens,notices of non-compliance or violation, investigations or proceedings relatingin any way to any Environmental Law or any permit issued under any such law(hereafter "Claims"), including, without limitation, (i) any and allClaims by any Governmental Authority for enforcement, cleanup, removal,response, remedial or other actions or damages pursuant to any applicableEnvironmental Law, and (ii) any and all Claims by any third party seekingdamages, contribution, indemnification, cost recovery, compensation orinjunctive relief resulting from the storage, treatment or Release (as definedin CERCLA) of any Hazardous Materials or arising from alleged injury or threatof injury to health, safety or the environment.

10

        "Environmental Law" means any applicable Federal,state, foreign or local statute, law, rule, regulation, ordinance, code, bindingand enforceable guideline, binding and enforceable written policy and rule ofcommon law now or hereafter in effect and in each case as amended, and anybinding and enforceable judicial or global interpretation thereof, including anyjudicial or global order, consent, decree or judgment issued to or renderedagainst Holdings or any of its Subsidiaries relating to the environment,employee health and safety or Hazardous Materials, including, withoutlimitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C.§ 1251 *et seq.*; the Clean Air Act, 42 U.S.C. § 7401 *et seq.*; theSafe Drinking Water Act, 42 U.S.C. § 300f*et seq.*; the Oil Pollution Actof 1990, 33 U.S.C. § 2701 *et seq.*; the Emergency Planning and theCommunity Right-to-Know Act of 1986, 42 U.S.C. § 11001 *et seq.*, theHazardous Material Transportation Act, 49 U.S.C. § 5101 *et seq.* and theOccupational Safety and Health Act, 29 U.S.C. § 651*et seq.* (to theextent it regulates occupational exposure to Hazardous Materials); and any stateand local or foreign counterparts or equivalents, in each case as amended fromtime to time.

        "Equity Interest" means, with respect to any Person,any and all shares, interests, participations or other equivalents, includingmembership interests (however designated, whether voting or non-voting) ofequity of such Person, including, if such Person is a partnership, partnershipinterests (whether general or limited) or any other interest or participationthat confers on a Person the right to receive a share of the profits and lossesof, or distributions of assets of, such partnership, but in no event will EquityInterest include any debt securities convertible or exchangeable into equityunless and until actually converted or exchanged.

        "ERISA" means the Employee Retirement Income SecurityAct of 1974, as amended from time to time, and the regulations promulgated andrulings issued thereunder. Section references to ERISA are to ERISA, as ineffect at the Closing Date and any subsequent provisions of ERISA, amendatorythereof, supplemental thereto or substituted therefor.

        "ERISA Affiliate" means each Person (as defined inSection 3(9) of ERISA), which together with Holdings or a Subsidiary ofHoldings, would be deemed to be a "single employer" (i) within the meaning ofSection 414(b), (c), (m) or (o) of the Code or Section 4001(a)(14) or 4001(b)(i)of ERISA or (ii) as a result of Holdings or a Subsidiary of Holdings being orhaving been a general partner of such Person.

        "Event of Default" has the meaning provided in Section8.01.

        "Federal Funds Effective Rate" means, for any period,a fluctuating interest rate equal for each day during such period to theweighted average of the rates on overnight Federal Funds transactions withmembers of the Federal Reserve System arranged by Federal Funds brokers, aspublished for such day (or, if such day is not a Business Day, for the nextpreceding Business Day) by the Federal Reserve Bank of New York, or, if suchrate is not so published for any day that is a Business Day, the average of thequotations for such day on such transactions received by the Lender from threeFederal Funds brokers of recognized standing selected by the Lender.

        "Fee Letter" means the Fee Letter dated as of November9, 2005 between the Borrower and the Lender.

        "Fees" means all amounts payable pursuant to, orreferred to in, Section 2.06.

        "Financial Projections" has the meaning provided inSection 5.07(b).

        "Foreign Subsidiary" means any Subsidiary that is nota Domestic Subsidiary.

11

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

        "Governmental Authority" means any nation orgovernment, any state or other political subdivision thereof, any agency,authority, instrumentality, regulatory body, court, global tribunal, centralbank or other entity exercising executive, legislative, judicial, taxing,regulatory or global powers or functions of or pertaining to government.

        "Guarantor" means Holdings and any other person thatexecutes and delivers a Guaranty to the Lender. 

        "Guaranty" means any of the following: (i) theguaranty by the Borrower in Section 2.10, (ii) the guaranty by Holdings inArticle IX and (iii) a guaranty, in form and substance satisfactory to theLender, executed by one of more Persons in favor of the Lender under which suchPersons guarantee payment and performance of the Obligations.

        "Guaranty Obligations" means as to any Person (withoutduplication) any obligation of such Person guaranteeing any Indebtedness ("primaryIndebtedness") of any other Person (the "primary obligor") in anymanner, whether directly or indirectly, including, without limitation, anyobligation of such Person, whether or not contingent, (i) to purchase any suchprimary Indebtedness or any property constituting direct or indirect securitytherefor, (ii) to advance or supply funds for the purchase or payment of anysuch primary Indebtedness or to maintain working capital or equity capital ofthe primary obligor or otherwise to maintain the net worth or solvency of theprimary obligor, (iii) to purchase property, securities or services primarilyfor the purpose of assuring the owner of any such primary Indebtedness of theability of the primary obligor to make payment of such primary Indebtedness, or(iv) otherwise to assure or hold harmless the owner of such primary Indebtednessagainst loss in respect thereof, *provided*, *however*, that thedefinition of Guaranty Obligation shall not include endorsements of instrumentsfor deposit or collection in the ordinary course of business. The amount of anyGuaranty Obligation shall be deemed to be an amount equal to the stated ordeterminable amount of the primary Indebtedness in respect of which suchGuaranty Obligation is made or, if not stated or determinable, the maximumreasonably anticipated liability in respect thereof (assuming such Person isrequired to perform thereunder).

        "Hazardous Materials" means (i) any petrochemical orpetroleum products, radioactive materials, asbestos in any form that is or couldbecome friable, urea formaldehyde foam insulation, transformers or otherequipment that contain dielectric fluid containing levels of polychlorinatedbiphenyls, and radon gas; and (ii) any chemicals, materials or substancesdefined as or included in the definition of "hazardous substances," "hazardouswastes," "hazardous materials," "restricted hazardous materials," "extremelyhazardous wastes," "restrictive hazardous wastes," "toxic substances," "toxicpollutants," "contaminants" or "pollutants," or words of similar meaning andregulatory effect, under any applicable Environmental Law.

        "Hedge Agreement" means (i) any interest rate swapagreement, any interest rate cap agreement, any interest rate collar agreementor other similar interest rate management agreement or arrangement, (ii) anycurrency swap or option agreement, foreign exchange contract, forward currencypurchase agreement or similar currency management agreement or arrangement or(iii) any Commodities Hedge Agreement.

        "Holdings" has the meaning provided in the firstparagraph of this Agreement.

12

        "Indebtedness" of any Person means without duplication(i) all indebtedness of such Person for borrowed money; (ii) all bonds, notes,debentures and similar debt securities of such Person; (iii) the deferredpurchase price of capital assets or services that in accordance with GAAP wouldbe shown on the liability side of the balance sheet of such Person; (iv) theface amount of all letters of credit issued for the account of such Person and,without duplication, all drafts drawn thereunder; (v) all obligations,contingent or otherwise, of such Person in respect of bankers' acceptances; (vi)all indebtedness of a second Person secured by any Lien on any property owned bysuch first Person, whether or not such indebtedness has been assumed; (vii) allCapitalized Lease Obligations of such Person; (viii) the present value,determined on the basis of the implicit interest rate, of all basic rentalobligations under all Synthetic Leases of such Person; (ix) all obligations ofsuch Person with respect to asset securitization financing; (x) all obligationsof such Person to pay a specified purchase price for goods or services whetheror not delivered or accepted, i.e., take-or-pay and similar obligations;****(xi) all net obligations of such Person under Hedge Agreements; (xii) thefull outstanding balance of trade receivables, notes or other instruments soldwith full recourse (and the portion thereof subject to potential recourse, ifsold with limited recourse), other than in any such case any thereof sold solelyfor purposes of collection of delinquent accounts; and (xiii) all GuarantyObligations of such Person; *provided*, *however,* that (y) neithertrade payables, deferred revenue, taxes nor other similar accrued expenses, ineach case arising in the ordinary course of business, shall constituteIndebtedness; and (z) the Indebtedness of any Person shall in any event include(without duplication) the Indebtedness of any other entity (including anygeneral partnership in which such Person is a general partner) to the extentsuch Person is liable thereon as a result of such Person's ownership interest inor other relationship with such entity, except to the extent the terms of suchIndebtedness provide expressly that such Person is not liable thereon.

        "Indemnitees" has the meaning provided in Section10.02.

        "Insolvency Event" means, with respect to any Person,(i) the commencement of a voluntary case by such Person under the BankruptcyCode or the seeking of relief by such Person under any bankruptcy or insolvencyor analogous law in any jurisdiction outside of the United States; (ii) thecommencement of an involuntary case against such Person under the BankruptcyCode and the petition is not controverted within 10 days, or is not dismissedwithin 60 days, after commencement of the case; (iii) a custodian (as defined inthe Bankruptcy Code) is appointed for, or takes charge of, all or substantiallyall of the property of such Person; (iv) such Person commences (including by wayof applying for or consenting to the appointment of, or the taking of possessionby, a rehabilitator, receiver, custodian, trustee, conservator or liquidator(collectively, a "conservator") of such Person or all or any substantialportion of its property) any other proceeding under any reorganization,arrangement, adjustment of debt, relief of debtors, dissolution, insolvency,liquidation, rehabilitation, conservatorship or similar law of any jurisdictionwhether now or hereafter in effect relating to such Person; (v) any suchproceeding of the type set forth in clause (iv) above is commenced against suchPerson to the extent such proceeding is consented to by such Person or remainsundismissed for a period of 60 days; (vi) such Person is adjudicated insolventor bankrupt; (vii) any order of relief or other order approving any such case orproceeding is entered; (viii) such Person suffers any appointment of anyconservator or the like for it or any substantial part of its property thatcontinues undischarged or unstayed for a period of 60 days; (ix) such Personmakes a general assignment for the benefit of creditors or generally does notpay its debts as such debts become due; or (x) any corporate (or similarorganizational) action is taken by such Person for the purpose of effecting anyof the foregoing. 

        "Inventory" means any "inventory" as such term is nowor hereafter defined in the UCC.

        "Investment" means (i) any direct or indirect purchaseor other acquisition by a Person of any Equity Interest of any other Person;(ii) any loan, advance (other than deposits with financial institutionsavailable for withdrawal on demand) or extension of credit to, guarantee orassumption of debt or 

13

purchase or other acquisition of any other Indebtednessof, any Person by any other Person; or (iii) the purchase, acquisition orinvestment of or in any stocks, bonds, mutual funds, notes, debentures or othersecurities, or any deposit account, certificate of deposit or other investmentof any kind.

        "LC Documents" means, with respect to any Letter ofCredit, any documents executed in connection with such Letter of Credit,including the Letter of Credit itself.

        "LC Fee" means any of the fees payable pursuant toSection 2.06(b) or Section 2.06(c) in respect of Letters of Credit.

        "LC Issuance" means the issuance of any Letter ofCredit by the Lender for the account of the Borrower in accordance with theterms of this Agreement, and shall include any amendment thereto that increasesthe Stated Amount thereof or extends the expiry date of such Letter of Credit.

        "LC Outstandings" means, at any time, the sum, withoutduplication, of (i) the aggregate Stated Amount of all outstanding Letters ofCredit and (ii) the aggregate amount of all Unpaid Drawings with respect toLetters of Credit.

        "LC Request" has the meaning provided in Section2.02(b).

        "Leaseholds" of any Person means all the right, titleand interest of such Person as lessee or licensee in, to and under leases orlicenses of land, improvements and/or fixtures.

        "Lender" has the meaning provided in the firstparagraph of this Agreement.

        "Letter of Credit" means any Standby Letter of Creditor Commercial Letter of Credit, in each case issued by the Lender under thisAgreement pursuant to Section 2.02 for the account of the Borrower.

        "Letter of Credit Sublimit" means an amount equal to$250,000. The Letter of Credit Sublimit is part of, and not in addition to, theRevolving Commitment Amount.

        "Lien" means any mortgage, pledge, security interest,hypothecation, encumbrance, lien or charge of any kind (including any agreementto give any of the foregoing, any conditional sale or other title retentionagreement or any lease in the nature thereof).

        "Liquidity" means, at any time, the sum of (i) theunrestricted cash of the Credit Parties at such time maintained in depositaccounts that are subject to Control Agreements and (ii) the excess of (A) thelesser of (1) the Revolving Commitment Amount and (2) the Borrowing Base at suchtime over (B) the Revolving Facility Exposure at such time.

        "Loan Documents" means this Agreement, any Notes, theGuaranty, the Security Documents, the Fee Letter, each Letter of Credit, eachother LC Document and each Designated Hedge Agreement.

        "Margin Stock" has the meaning provided in RegulationU.

        "Material Adverse Effect" means any or all of thefollowing: (i) any material adverse effect on the business, operations,property, assets, liabilities, financial or other condition or prospects ofHoldings or Holdings and its Subsidiaries, taken as a whole; (ii) any materialadverse effect on the ability of the Borrower or any other Credit Party toperform its obligations under any of the Loan Documents to which it is a party;(iii) any material adverse effect on the ability of Holdings and itsSubsidiaries, taken as a whole, to pay their liabilities and obligations as theymature or become due; or (iv) any material adverse 

14

effect on the validity,effectiveness or enforceability, as against any Credit Party, of any of the LoanDocuments to which it is a party.

        "Material Indebtedness" means, as to Holdings or anyof its Subsidiaries, any particular Indebtedness of Holdings or such Subsidiary(including any Guaranty Obligations) in excess of the aggregate principal amountof $50,000.

        "Material Indebtedness Agreement" means any agreementgoverning or evidencing any Material Indebtedness.

        "Maximum Rate" has the meaning provided in Section10.21.

        "Minimum Borrowing Amount" means $100,000 with minimumincrements thereafter of $100,000.

        "Moody's" means Moody's Investors Service, Inc. andits successors.

        "Mortgage" means a mortgage, deed of trust or otherinstrument, substantially in the form of Exhibit G and otherwise in formand substance reasonably satisfactory to the Lender, executed by a Credit Partywith respect to a Mortgaged Real Property, as the same may from time to time beamended, restated or otherwise modified.

        "Mortgaged Real Property" means each of the parcels ofreal property set forth on Schedule 3 , or interests therein, owned orleased by a Credit Party, together with each other parcel of Real Property thatshall become subject to a Mortgage after the Closing Date, in each case togetherwith all of such Credit Party's right, title and interest in the improvementsand buildings thereon and all appurtenances, easements or other rights belongingthereto.

        "Multi-Employer Plan" means a multi-employer plan, asdefined in Section 4001(a)(3) of ERISA to which Holdings or any Subsidiary ofHoldings or any ERISA Affiliate is making or accruing an obligation to makecontributions or has within any of the preceding five plan years made or accruedan obligation to make contributions.

        "Multiple Employer Plan" means an employee benefitplan, other than a Multi-Employer Plan, to which Holdings or any Subsidiary ofHoldings or any ERISA Affiliate, and one or more employers other than Holdingsor a Subsidiary of Holdings or an ERISA Affiliate, is making or accruing anobligation to make contributions or, in the event that any such plan has beenterminated, to which Holdings or a Subsidiary of Holdings or an ERISA Affiliatemade or accrued an obligation to make contributions during any of the five planyears preceding the date of termination of such plan.

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

        "Note" means a Revolving Facility Note.

        "Notice of Borrowing" has the meaning provided inSection 2.03(b).

        "Notice Office" means the office of the Lender at 127Public Square, Cleveland, Ohio 44114, Attention: Paulette Murray (facsimile:(216) 689-5962), or such other office as the Lender may designate in writing tothe Borrower from time to time.

15

        "Obligations" means, collectively, (i) allIndebtedness incurred by the Borrower to the Lender pursuant to this Agreementand includes the principal of, and interest on, any Note; (ii) each extension,renewal or refinancing thereof in whole or in part; (iii) the commitment andother fees, and any prepayment fees payable hereunder; (iv) all obligations andliabilities of Holdings or any of its Subsidiaries now existing or hereafterincurred under, arising out of, or in connection with any Designated HedgeAgreement; (v) every other amount, indemnity, reimbursement obligation or otherliability, now or hereafter owing to the Lender or any Affiliate of the Lenderby any Credit Party, and includes, without limitation, every amount, indemnity,reimbursement obligation or other liability, whether owing by only such CreditParty or by such Credit Party with one or more others in a several, joint orjoint and several capacity, whether owing absolutely or contingently, whethercreated by note, overdraft, guaranty of payment or other contract or byquasi-contract, tort, statute or other operation of law, whether incurreddirectly to the Lender (or any Affiliate thereof) or acquired by the Lender (orany Affiliate thereof) by purchase, pledge or otherwise and whether participatedto or from the Lender (or any Affiliate thereof) in whole or in part (including,but not limited to, interest and fees that accrue after the commencement by oragainst any Credit Party of any insolvency proceeding, regardless of whetherallowed or allowable in such proceeding or subject to an automatic stay underSection 362(a) of the Bankruptcy Code); and (vi) all Related Expenses.

        "Operating Lease" as applied to any Person means anylease of any property (whether real, personal or mixed) by that Person as lesseethat, in conformity with GAAP, is not accounted for as a Capital Lease on thebalance sheet of that Person.

        "Organizational Documents" means, with respect to anyPerson (other than an individual), such Person's Articles (Certificate) ofIncorporation, or equivalent formation documents, and Regulations (Bylaws), orequivalent governing documents, and, in the case of any partnership, includesany partnership agreement, and in the case of a limited liability company,includes any operating agreement, and, in each case, any amendments to any ofthe foregoing.

        "Payment Office" means the office of the Lender at 127Public Square, Cleveland, Ohio 44114, Attention: Paulette Murray (facsimile:(216) 689-5962), or such other office(s), as the Lender may designate to theBorrower in writing from time to time.

        "PBGC" means the Pension Benefit Guaranty Corporationestablished pursuant to Section 4002 of ERISA, or any successor thereto.

        "Perfection Certificate" has the meaning provided inthe Security Agreement.

        "Permitted Creditor Investment" means any securities(whether debt or equity) received by Holdings or any of its Subsidiaries inconnection with the bankruptcy or reorganization of any customer or supplier ofHoldings or any such Subsidiary and in settlement of delinquent obligations of,and other disputes with, customers and suppliers arising in the ordinary courseof business.

        "Permitted Discretion" means the Lender acting in acommercially reasonably manner consistent with its customary business practice.

        "Permitted Lien" means any Lien permitted by Section7.03.

        "Person" means any individual, partnership, jointventure, firm, corporation, limited liability company, association, trust orother enterprise or any government or political subdivision or any agency,department or instrumentality thereof.

16

        "Plan" means any Multi-Employer Plan orSingle-Employer Plan.

        "primary Indebtedness" has the meaning provided in thedefinition of "Guaranty Obligations."

        "primary obligor" has the meaning provided in thedefinition of "Guaranty Obligations."

        "Prohibited Transaction" means a transaction withrespect to a Plan that is prohibited under Section 4975 of the Code or Section406 of ERISA and not exempt under Section 4975 of the Code or Section 408 ofERISA.

        "RCRA" means the Resource Conservation and RecoveryAct, as the same may be amended from time to time, 42 U.S.C. § 6901 *et seq.*
        "Real Property" of any Person shall mean all of theright, title and interest of such Person in and to land, improvements andfixtures, including Leaseholds.

        "Regulation U" means Regulation U of the Board ofGovernors of the Federal Reserve System as from time to time in effect and anysuccessor to all or a portion thereof establishing margin requirements.

        "Regulation Z" means Regulation Z of the Board ofGovernors of the Federal Reserve System as from time to time in effect and anysuccessor to all or a portion thereof establishing margin requirements.

        "Related Expenses" means any and all reasonable costs,liabilities and expenses (including, without limitation, losses, damages,penalties, claims, actions, attorneys' fees, legal expenses, judgments, suits,and disbursements) (i) incurred by, imposed upon, or asserted against, theLender or any Affiliate of the Lender in any attempt by the Lender or anyAffiliate of Lender to (A) obtain, preserve, perfect or enforce any securityinterest evidenced by this Agreement or any Loan Document; (B) obtain payment,performance or observance of any and all of the Obligations and/or any of theLoan Documents (or any provision thereof); or (C) maintain, insure, audit,collect, preserve, repossess or dispose of any of the collateral securing theObligations or any thereof, including, without limitation, costs and expensesfor appraisals, assessments, and audits of the Borrower or any such collateral;or (ii) incidental or related to (i) above, including, without limitation,interest thereupon from the date incurred, imposed, or asserted until paid atthe Default Rate.

        "Related Parties" means, with respect to any Person,such Person's Affiliates and the directors, officers, employees, agents andadvisors of such Person and of such Person's Affiliates.

        "Reportable Event" means an event described in Section4043 of ERISA or the regulations thereunder with respect to a Plan, other thanthose events as to which the notice requirement is waived under subsection .22,..23, .25, .27, .28, .29, .30, .31, .32, .34, .35, .62, .63, .64, .65 or .67 ofPBGC Regulation Section 4043.

        "Reserves" means any and all reserves which the Lenderdeems necessary, in its Permitted Discretion, to maintain (including, withoutlimitation, reserves for accrued and unpaid interest on the Obligations, bankingservices reserves, reserves for rent at locations leased by any Credit Party andfor consignee's, warehousemen's and bailee's charges, reserves for dilution ofAccounts, reserves for rate management transactions, reserves for contingentliabilities of any Credit Party, reserves for uninsured losses of any CreditParty and reserves for taxes, fees, assessments, and other governmental charges)with respect to the Collateral or any Credit Party.

17

        "Restricted Payment" means (i) any CapitalDistribution; or (ii) any amount paid by Holdings or any of its Subsidiaries inrepayment, redemption, retirement, repurchase, direct or indirect, of anySubordinated Indebtedness.

        "Revolving Commitment" means the obligation hereunderof the Lender, during the Revolving Facility Availability Period, to makeRevolving Loans up to an aggregate principal amount outstanding at any timeequal to the Revolving Commitment Amount.

        "Revolving Commitment Amount" means an amount equal to$3,500,000.

        "Revolving Facility Availability Period" means theperiod from the Closing Date until the Revolving Facility Termination Date.

        "Revolving Facility Exposure" means, at any time, thesum of (i) the aggregate principal amount of Revolving Loans outstanding at suchtime and (ii) the LC Outstandings at such time.

        "Revolving Facility Note" means a promissory notesubstantially in the form of Exhibit A.

        "Revolving Facility Termination Date" means theearlier of (i) the Revolving Maturity Date, and (ii) the date that the RevolvingCommitment has been terminated pursuant to Section 8.02.

        "Revolving Loan" means any loan made by the Lenderpursuant to Section 2.01.

        "Revolving Maturity Date" means December 19, 2006.

        "Sale and Lease-Back Transaction" means anyarrangement with any Person providing for the leasing by Holdings or anySubsidiary of Holdings of any property (except for temporary leases for a term,including any renewal thereof, of not more than one year and except for leasesbetween Holdings and a Subsidiary or between Subsidiaries), which property hasbeen or is to be sold or transferred by Holdings or such Subsidiary to suchPerson.

        "S&P" means Standard & Poor's Ratings Group, adivision of McGraw Hill, Inc., and its successors.

        "SEC" means the United States Securities and ExchangeCommission.

        "Security Agreement" has the meaning provided inSection 4.01(iii).

        "Security Documents" means the Security Agreement,each Mortgage, each Collateral Access Agreement, each Additional SecurityDocument, any UCC financing statement, any Control Agreement, any CollateralAssignment, any Perfection Certificate and any document pursuant to which anyLien is granted or perfected by any Credit Party to the Lender as security forany of the Obligations.

        "Single-Employer Plan" means a single employer plan,as defined in Section 4001(a)(15) of ERISA, to which Holdings, any Subsidiary ofHoldings or any ERISA Affiliate is making or accruing an obligation to makecontributions or, in the event that any such plan has been terminated, to whichHoldings, any Subsidiary of Holdings or any ERISA Affiliate made or accrued anobligation to make contributions during any of the five plan years preceding thedate of termination of such plan.

        "Standard Permitted Lien" means any of the following:(i) Liens for taxes not yet delinquent or Liens for taxes, assessments orgovernmental charges being contested in good faith and by appropriate

18

proceedings for which adequate reserves in accordance with GAAP have beenestablished; (ii) Liens in respect of property or assets imposed by law thatwere incurred in the ordinary course of business, such as carriers', suppliers',warehousemen's, materialmen's and mechanics' Liens and other similar Liensarising in the ordinary course of business, that do not in the aggregatematerially detract from the value of such property or assets or materiallyimpair the use thereof in the operation of the business of the Borrower or anyof its Subsidiaries and do not secure any Indebtedness; (iii) Liens created bythis Agreement or the other Loan Documents; (iv) Liens arising from judgments,decrees or attachments in circumstances not constituting an Event of Defaultunder Section 8.01(g); (v) Liens (other than any Lien imposed by ERISA) incurredor deposits made in the ordinary course of business in connection with workerscompensation, unemployment insurance and other types of social security, andmechanic's Liens, carrier's Liens, and other Liens to secure the performance oftenders, statutory obligations, contract bids, government contracts, surety,appeal, customs, performance and return-of-money bonds and other similarobligations, incurred in the ordinary course of business (exclusive ofobligations in respect of the payment for borrowed money), whether pursuant tostatutory requirements, common law or consensual arrangements; (vi) easements,rights-of-way, zoning or other restrictions, charges, encumbrances, defects intitle, prior rights of other persons, and obligations contained in similarinstruments or the Title Policy, in each case that do not secure Indebtednessand do not involve, and are not likely to involve at any future time, eitherindividually or in the aggregate, (A) a substantial and prolonged interruptionor disruption of the business activities of the Borrower and its Subsidiariesconsidered as an entirety, or (B) a Material Adverse Effect; (vii) Liens arisingfrom the rights of lessors under leases (including financing statementsregarding property subject to lease) not in violation of the requirements ofthis Agreement, *provided* that such Liens are only in respect of theproperty subject to, and secure only, the respective lease (and any other leasewith the same or an affiliated lessor); and (viii) rights of consignors ofgoods, whether or not perfected by the filing of a financing statement under theUCC.

        "Standby Letter of Credit" means any standby letter ofcredit issued for the purpose of supporting workers compensation, liabilityinsurance, releases of contract retention obligations, contract performanceguarantee requirements and other bonding obligations or for other lawfulpurposes.

        "Stated Amount" of each Letter of Credit shall meanthe maximum amount available to be drawn thereunder (regardless of whether anyconditions or other requirements for drawing could then be met).

        "Subordinated Indebtedness" means any Indebtednessthat has been subordinated to the prior payment in full of all of theObligations pursuant to a written agreement or written terms acceptable to theLender.

        "Subordinated Obligations" has the meaning provided inSection 9.02(a).

        "Subsidiary" of any Person means (i) any corporationmore than 50% of whose stock of any class or classes having by the terms thereofordinary Voting Power to elect a majority of the directors of such corporation(irrespective of whether or not at the time stock of any class or classes ofsuch corporation shall have or might have Voting Power by reason of thehappening of any contingency) is at the time owned by such Person directly orindirectly through Subsidiaries, and (ii) any partnership, limited liabilitycompany, association, joint venture or other entity in which such Persondirectly or indirectly through Subsidiaries, owns more than 50% of the EquityInterests of such Person at the time or in which such Person, one or more otherSubsidiaries of such Person or such Person and one or more Subsidiaries of suchPerson, directly or indirectly, has the power to direct the policies, managementand affairs thereof. Unless otherwise expressly provided, all references hereinto "Subsidiary" shall mean a Subsidiary of Holdings.

19

        "Synthetic Lease" means any lease (i) that isaccounted for by the lessee as an Operating Lease, and (ii) under which thelessee is intended to be the "owner" of the leased property for federal incometax purposes.

        "Taxes" has the meaning provided in Section 3.02(a).

        "Testing Period" means a single period consisting ofthe four consecutive fiscal quarters of Holdings then last ended (whether or notsuch quarters are all within the same fiscal year), *except* that if aparticular provision of this Agreement indicates that a Testing Period shall beof a different specified duration, such Testing Period shall consist of theparticular fiscal quarter or quarters then last ended that are so indicated insuch provision.

        "Title Company" has the meaning specified in Section6.10(c)(i).

        "Title Policy" has the meaning specified in Section6.10(c)(i).

        "UCC" means the Uniform Commercial Code as in effectfrom time to time. Unless otherwise specified, the UCC shall refer to the UCC asin effect in the State of New York.

        "Unfunded Benefit Liabilities" of any Plan means theamount, if any, of its unfunded benefit liabilities, as defined in Section4001(a)(18) of ERISA.

        "United States" and "U.S*.*" each meansUnited States of America.

        "Unpaid Drawing" means, with respect to any Letter ofCredit, the aggregate amount of the draws made on such Letter of Credit thathave not been reimbursed by the Borrower or converted to a Revolving Loanpursuant to Section 2.02(d), and, in each case, all interest that accruesthereon pursuant to this Agreement.

        "Unused Revolving Commitment" means, at any time, theexcess of (i) the Revolving Commitment Amount at such time over (ii) theRevolving Facility Exposure at such time.

        "USA Patriot Act" means the Uniting and StrengtheningAmerica by Providing Appropriate Tools Required to Intercept and ObstructTerrorism (USA PATRIOT Act) Act of 2001.

        "Voting Power" means, with respect to any Person, theexclusive ability to control, through the ownership of shares of capital stock,partnership interests, membership interests or otherwise, the election ofmembers of the board of directors or other similar governing body of suchPerson, and the holding of a designated percentage of Voting Power of a Personmeans the ownership of shares of capital stock, partnership interests,membership interests or other interests of such Person sufficient to controlexclusively the election of that percentage of the members of the board ofdirectors or similar governing body of such Person.

        Section 1.02 Computation of TimePeriods. In this Agreement in the computation of periods of time from aspecified date to a later specified date, the word "from" means "from andincluding," the words "to" and "until" each means "to but excluding" and theword "through" means "through and including."

        Section 1.03 Accounting Terms.Except as otherwise specifically provided herein, all terms of an accounting orfinancial nature shall be construed in accordance with GAAP, as in effect fromtime to time.

20

        Section 1.04 Terms Generally.The definitions of terms herein shall apply equally to the singular and pluralforms of the terms defined. Whenever the context may require, any pronoun shallinclude the corresponding masculine, feminine and neuter forms. The words"include," "includes" and "including" shall be deemed to be followed by thephrase "without limitation." The word "will" shall be construed to have the samemeaning and effect as the word "shall." Unless the context requires otherwise,(a) any definition of or reference to any agreement, instrument or otherdocument herein shall be construed as referring to such agreement, instrument orother document as from time to time amended, restated, supplemented or otherwisemodified (subject to any restrictions on such amendments, supplements ormodifications set forth herein), (b) any reference herein to any Person shall beconstrued to include such Person's successors and assigns, (c) the words"herein," "hereof" and "hereunder," and words of similar import, shall beconstrued to refer to this Agreement in its entirety and not to any particularprovision hereof, (d) all references herein to Sections, Schedules and Exhibitsshall be construed to refer to Sections of, and Schedules and Exhibits to, thisAgreement, (e) the words "asset" and "property" shall be construed to have thesame meaning and effect and to refer to any and all Real Property, tangible andintangible assets and properties, including cash, securities, accounts andcontract rights, and interests in any of the foregoing, and (f) any reference toa statute, rule or regulation is to that statute, rule or regulation as nowenacted or as the same may from time to time be amended, re-enacted or expresslyreplaced.

ARTICLE II.THE TERMS OF THE CREDIT FACILITY

        Section 2.01 Revolving Facility.During the Revolving Facility Availability Period the Lender agrees, on theterms and conditions set forth in this Agreement, to make a Revolving Loan orRevolving Loans to the Borrower from time to time which Revolving Loans (i) maybe repaid or prepaid and reborrowed in accordance with the provisions hereof;and (ii) shall not be made if, after giving effect to any such Revolving Loan,(A) the Revolving Facility Exposure would exceed the lesser of (x) the RevolvingCommitment Amount or (y) the Borrowing Base, or (B) the Borrower would berequired to prepay Revolving Loans or cash collateralize Letters of Creditpursuant to Section 2.08(b). 

        Section 2.02 Letters of Credit.

        (a) LC Issuances. During the Revolving FacilityAvailability Period, the Borrower may request that the Lender at any time andfrom time to time issue, for the account of the Borrower, and subject to andupon the terms and conditions herein set forth, the Lender agrees to issue fromtime to time Letters of Credit denominated and payable in Dollars and in eachcase in such form as may be approved by the Lender; *provided*, *however*,that notwithstanding the foregoing, no LC Issuance shall be made if, aftergiving effect thereto, (i) the LC Outstandings would exceed the Letter of CreditSublimit, (ii) the Revolving Facility Exposure would exceed the lesser of (x)the Revolving Commitment Amount or (y) the Borrowing Base, or (iii) the Borrowerwould be required to prepay Revolving Loans or cash collateralize Letters ofCredit pursuant to Section 2.08(b). Each Letter of Credit shall have an expirydate (including any renewal periods) occurring not later than the earlier of (y)one year from the date of issuance thereof, or (z) 30 Business Days prior to theRevolving Facility Termination Date. 

        (b) LC Requests. Whenever the Borrower desires that aLetter of Credit be issued for its account, the Borrower shall give the Lenderwritten or telephonic notice (in the case of telephonic notice, promptlyconfirmed in writing if so requested by the Lender) which, if in the form ofwritten notice, shall be substantially in the form of Exhibit B-1 (eachsuch request, a "LC Request"), or transmit by electronic communication,prior to 11:00 A.M. (local time at the Notice Office) at least three BusinessDays (or such shorter period as may be acceptable to the Lender) prior to theproposed date of issuance (which shall be a 

21

Business Day), which LC Requestshall include such supporting documents that the Lender customarily requires inconnection therewith. In the event of any inconsistency between any of the termsor provisions of any LC Document and the terms and provisions of this Agreementrespecting Letters of Credit, the terms and provisions of this Agreement shallcontrol. 

        (c) Applicability of ISP98 and UCP. Unless otherwiseexpressly agreed by the Lender, when a Letter of Credit is issued, (i) the rulesof the "International Standby Practices 1998" published by the Institute ofInternational Banking Law & Practice (or such later version thereof as may be ineffect at the time of issuance) shall apply to each Standby Letter of Credit,and (ii) the rules of the Uniform Customs and Practice for Documentary Credits,as most recently published by the International Chamber of Commerce at the timeof issuance (including the International Chamber of Commerce's decisionpublished by the Commission on Banking Technique and Practice on April 6, 1998regarding the European single currency (euro)) shall apply to each CommercialLetter of Credit.

        (d) Reimbursement Obligations.

        (i) The Borrower hereby agrees to reimburse the		Lender, by making payment directly to the Lender in immediately		available funds at the Payment Office, for any Unpaid Drawing with		respect to any Letter of Credit immediately after, and in any event on		the date on which, the Lender notifies the Borrower of such payment or		disbursement (which notice to the Borrower shall be delivered reasonably		promptly after any such payment or disbursement), such payment to be		made in Dollars, with interest on the amount so paid or disbursed by the		Lender, to the extent not reimbursed prior to 1:00 P.M. (local time at		the Payment Office) on the date of such payment or disbursement, from		and including the date paid or disbursed to but not including the date		the Lender is reimbursed therefor at a rate per annum that shall be the		rate then applicable to Revolving Loans pursuant to Section 2.05(a) or,		if not reimbursed on the date of such payment or disbursement, at the		Default Rate, any such interest also to be payable on demand. If by		11:00 A.M. on the Business Day immediately following notice to it of its		obligation to make reimbursement in respect of an Unpaid Drawing, the		Borrower has not made such reimbursement out of its available cash on		hand or a contemporaneous Borrowing hereunder (if such Borrowing is		otherwise available to the Borrower), (x) the Borrower will in each case		be deemed to have given a Notice of Borrowing for Revolving Loans in an		aggregate principal amount sufficient to reimburse such Unpaid Drawing,		(y) the Lender shall, unless it is legally prohibited from doing so,		make the Revolving Loans contemplated by such deemed Notice of Borrowing		(which Revolving Loans shall be considered made under Section 2.01), and		(z) the proceeds of such Revolving Loans shall be disbursed directly to		the Lender to the extent necessary to effect such reimbursement and		repayment of the Unpaid Drawing, with any excess proceeds to be made		available to the Borrower.

        (ii) Obligations Absolute. The Borrower's		obligation under this Section to reimburse the Lender with respect to		Unpaid Drawings (including, in each case, interest thereon) shall be		absolute and unconditional under any and all circumstances and		irrespective of any setoff, counterclaim or defense to payment that the		Borrower may have or have had against the Lender, including, without		limitation, any defense based upon the failure of any drawing under a		Letter of Credit to conform to the terms of the Letter of Credit or any		non-application or misapplication by the beneficiary of the proceeds of		such drawing; *provided*, *however,* that the Borrower shall		not be obligated to reimburse the Lender for any wrongful payment made		by the Lender under a Letter of Credit as a result of acts or omissions		constituting willful misconduct or gross negligence on the part of the		Lender.

22

        Section 2.03 Notice of Borrowing.

        (a) Time of Notice. Each Borrowing of a Revolving Loanshall be made upon notice in the form provided for below which shall be providedby the Borrower to the Lender at its Notice Office prior to 11:00 A.M. (localtime at its Notice Office) on the proposed date of such Borrowing. 

        (b) Notice of Borrowing. Each request for a Borrowingshall be made by an Authorized Officer of the Borrower by delivering writtennotice of such request substantially in the form of Exhibit B-2 (eachsuch notice, a "Notice of Borrowing") or by telephone (to be confirmedimmediately in writing by delivery by an Authorized Officer of the Borrower of aNotice of Borrowing), and in any event each such request shall be irrevocableand shall specify (i) the aggregate principal amount of the Revolving Loan to bemade pursuant to such Borrowing and (ii) the date of the Borrowing (which shallbe a Business Day). Without in any way limiting the obligation of the Borrowerto confirm in writing any telephonic notice permitted to be given hereunder, theLender may act prior to receipt of written confirmation without liability uponthe basis of such telephonic notice believed by the Lender in good faith to befrom an Authorized Officer of the Borrower entitled to give telephonic noticesunder this Agreement on behalf of the Borrower. In each such case, the Lender'srecord of the terms of such telephonic notice shall be conclusive absentmanifest error.

        (c) Minimum Borrowing Amount. The aggregate principalamount of each Borrowing by the Borrower shall not be less than the MinimumBorrowing Amount. 

        (d) Maximum Borrowings. More than one Borrowing may beincurred by the Borrower on any day.

        Section 2.04 Evidence ofObligations.

        (a) Loan Accounts of the Lender. The Lender shallmaintain in accordance with its usual practice an account or accounts evidencingthe Obligations of the Borrower to the Lender resulting from (i) each RevolvingLoan made by the Lender, including the amounts of principal and interest payableand paid to the Lender from time to time hereunder and (ii) the amount and otherdetails of with respect to each Letter of Credit issued hereunder.

        (b) Effect of Loan Accounts, etc. The entries made inthe accounts maintained pursuant to Section 2.04(a) shall be *prima facie*evidence of the existence and amounts of the Obligations recorded therein; *provided*, that the failure of the Lender to maintain such accounts or anyerror (other than manifest error) therein shall not in any manner affect theobligation of any Credit Party to repay or prepay the Revolving Loans or theother Obligations in accordance with the terms of this Agreement.

        (c) Note. To evidence the Borrower's obligation torepay the Revolving Loans, the Borrower will execute and deliver to the Lender aRevolving Facility Note in the principal amount of the Revolving CommitmentAmount.

        Section 2.05 Interest; DefaultRate.

        (a) Interest on Revolving Loans. The outstandingprincipal amount of each Revolving Loan made by the Lender shall bear interestat the Base Rate plus 2%.

        (b) Default Interest. Notwithstanding the aboveprovisions, if an Event of Default is in existence, (i) all outstanding amountsof principal and, to the extent permitted by law, all overdue interest, inrespect of each Revolving Loan shall bear interest, payable on demand, at a rateper annum equal to the 

23

Default Rate, and (ii) the LC Fees shall be increased byan additional 1% per annum in excess of the LC Fees otherwise applicablethereto. In addition, if any amount (other than amounts as to which theforegoing subparts (i) and (ii) are applicable) payable by the Borrower underthe Loan Documents is not paid when due, such amount shall bear interest,payable on demand, at a rate per annum equal to the Default Rate.

        (c) Accrual and Payment of Interest. Interest shallaccrue from and including the date of any Borrowing to but excluding the date ofany prepayment or repayment thereof and shall be payable by the Borrower: (i)quarterly on the last Business Day of each March, June, September and Decemberand (ii) at maturity (whether by acceleration or otherwise) and after suchmaturity or, in the case of any interest payable pursuant to Section 2.05(b), ondemand.

        (d) Computations of Interest. All computations ofinterest on Revolving Loans and Unpaid Drawings hereunder shall be made on theactual number of days elapsed in a year of 365 days (or 366 days in case of aleap year). 

        Section 2.06 Fees.

        (a) Commitment Fee. The Borrower agrees to pay to theLender as consideration for the Revolving Commitment of the Lender, a commitmentfee (the "Commitment Fee") for the period from the Closing Date to, butnot including, the Revolving Facility Termination Date, computed for each day ata rate per annum equal to (i) 0.50% times (ii) the Unused RevolvingCommitment in effect on such day. The accrued Commitment Fee shall be due andpayable in arrears on the last Business Day of each March, June, September andDecember and on the Revolving Facility Termination Date.

        (b) LC Fees. The Borrower agrees to pay to the Lendera fee in respect of each Letter of Credit issued hereunder in an amount equal to(A) the Base Rate plus 2% times (B) the Stated Amount of such Letter ofCredit. The foregoing fees shall be payable on the date of issuance of suchLetter of Credit.

        (c) Fronting Fees. The Borrower agrees to pay theLender a fee in respect of each Letter of Credit issued by it, payable on thedate of issuance (or any increase in the amount, or renewal or extension)thereof, computed at the rate of 1/4th of 1% per annum on the StatedAmount thereof for the period from the date of issuance (or increase, renewal orextension) to the expiration date thereof (including any extensions of suchexpiration date which may be made at the election of the beneficiary thereof).

        (d) Additional Charges of the Lender. The Borroweragrees to pay the Lender upon each LC Issuance, drawing under, or amendment,extension, renewal or transfer of, a Letter of Credit issued by it such amountas shall at the time of such LC Issuance, drawing under, amendment, extension,renewal or transfer be the processing charge that the Lender is customarilycharging for issuances of, drawings under or amendments, extensions, renewals ortransfers of, letters of credit issued by it.

        (e) Lender Fees. The Borrower shall pay to the Lender,on the Closing Date and thereafter, for its own account, the fees set forth inthe Fee Letter.

        (f) Computations of Fees. All computations of LC Fees,the Commitment Fee and other Fees hereunder shall be made on the actual numberof days elapsed over a year of 360 days.

24

        Section 2.07 Termination andReduction of Revolving Commitment.

        (a) Mandatory Termination of Revolving Commitment. TheRevolving Commitment shall terminate on the Revolving Facility Termination Date.

        (b) Voluntary Termination of the Revolving Commitment.Upon at least three Business Days' prior irrevocable written notice (ortelephonic notice confirmed in writing) to the Lender at its Notice Office, theBorrower shall have the right to terminate in whole the Revolving Commitment, *provided* that (i) all outstanding Revolving Loans and Unpaid Drawings arecontemporaneously prepaid in accordance with Section 2.08 and (ii) either thereare no outstanding Letters of Credit or the Borrower shall contemporaneouslycause all outstanding Letters of Credit to be surrendered for cancellation.

        Section 2.08 Voluntary, Scheduledand Mandatory Prepayments of Revolving Loans.

        (a) Voluntary Prepayments. The Borrower shall have theright to prepay any of the Revolving Loans owing by it, in whole or in part,without premium or penalty from time to time. The Borrower shall give the Lenderat the Notice Office written or telephonic notice (in the case of telephonicnotice, promptly confirmed in writing if so requested by the Lender) of itsintent to prepay the Revolving Loans, the amount of such prepayment and thespecific Borrowing(s) pursuant to which the prepayment is to be made, whichnotice shall be received by the Lender by 11:00 A.M. (local time at the NoticeOffice) on the date of such prepayment, *provided* that each partialprepayment shall be in an aggregate principal amount of at least $100,000 andthereafter in minimum increments of at least $100,000.

        (b) Mandatory Payments. The Revolving Loans shall besubject to mandatory repayment or prepayment (in the case of any partialprepayment conforming to the requirements as to the amounts of partialprepayments set forth in Section 2.08(a) above), and the LC Outstandings shallbe subject to cash collateralization requirements, in accordance with thefollowing provisions:

        (i) Revolving Facility Termination Date. The		entire principal amount of all outstanding Revolving Loans shall be		repaid in full on the Revolving Facility Termination Date.

        (ii) Loans Exceed the Revolving Commitment. If		on any date (after giving effect to any other payments on such date) the		Revolving Facility Exposure exceeds the lesser of (A) the Revolving		Commitment Amount or (ii) the Borrowing Base, *then* the Borrower		shall, on such day, prepay on such date the principal amount of		Revolving Loans and, after Revolving Loans have been paid in full,		Unpaid Drawings, in an aggregate amount at least equal to such excess.

        (iii) LC Outstandings Exceed Letter of Credit		Sublimit. If on any date the LC Outstandings exceed the Letter of		Credit Sublimit, *then* the Borrower shall, on such day, pay to the		Lender an amount in cash equal to such excess and the Lender shall hold		such payment as security for the reimbursement obligations of the		Borrower hereunder in respect of Letters of Credit pursuant to a cash		collateral agreement to be entered into in form and substance reasonably		satisfactory to the Lender and the Borrower (which shall permit certain		investments in Cash Equivalents satisfactory to the Lender and the		Borrower until the proceeds are applied to any Unpaid Drawings or to any		other Obligations in accordance with any such cash collateral		agreement).

        (c) Other Compensation. Any prepayment made pursuantto this Section 2.08 shall be accompanied by any amounts payable in respectthereof under Article III.

25

        Section 2.09 Method and Place ofPayment. 

        (a) Generally. All payments made by the Borrowerhereunder (including any payments made with respect to the Borrower GuaranteedObligations under Section 2.10) under any Note or any other Loan Document, shallbe made without setoff, counterclaim or other defense. 

        (b) Payment of Obligations. Except as specifically setforth elsewhere in this Agreement, all payments under this Agreement withrespect to any of the Obligations shall be made to the Lender on the date whendue and shall be made at the Payment Office in immediately available funds andshall be made in Dollars.

        (c) Timing of Payments. Any payments under thisAgreement that are made later than 11:00 A.M. (local time at the Payment Office)shall be deemed to have been made on the next succeeding Business Day. Wheneverany payment to be made hereunder shall be stated to be due on a day that is nota Business Day, the due date thereof shall be extended to the next succeedingBusiness Day and, with respect to payments of principal, interest shall bepayable during such extension at the applicable rate in effect immediately priorto such extension.

        Section 2.10 Guaranty by theBorrower.

        (a) Borrower Guaranteed Obligations. The Borrowerhereby unconditionally guarantees, for the benefit of the Lender, all of thefollowing (collectively, the "Borrower Guaranteed Obligations"): allamounts, indemnities and reimbursement obligations, direct or indirect,contingent or absolute, of every type or description, and at any time existingowing by any Subsidiary of the Borrower under any Designated Hedge Agreement orany other document or agreement executed and delivered in connection therewithto any Designated Hedge Creditor whether now existing, or hereafter incurred orarising, including any such interest or other amounts incurred or arising duringthe pendency of any bankruptcy, insolvency, reorganization, receivership orsimilar proceeding, regardless of whether allowed or allowable in suchproceeding or subject to an automatic stay under Section 362(a) of theBankruptcy Code. Upon failure by any Credit Party to pay punctually any of theBorrower Guaranteed Obligations, the Borrower shall forthwith on demand by theLender pay the amount not so paid at the place and in the currency and otherwisein the manner specified in this Agreement or any other applicable agreement orinstrument.

        (b) Additional Undertaking. As a separate, additionaland continuing obligation, the Borrower unconditionally and irrevocablyundertakes and agrees, for the benefit of the Lender that, should any BorrowerGuaranteed Obligations not be recoverable from the Borrower underSection 2.10(a) for any reason whatsoever (including, without limitation, byreason of any provision of any Loan Document or any other agreement orinstrument executed in connection therewith being or becoming void,unenforceable, or otherwise invalid under any applicable law) then,notwithstanding any notice or knowledge thereof by the Lender, any of itsrespective Affiliates, or any other person, at any time, the Borrower as sole,original and independent obligor, upon demand by the Lender, will make paymentto the Lender of all such obligations not so recoverable by way of fullindemnity, in such manner as is provided in the Loan Documents or any otherapplicable agreement or instrument.

        (c) Guaranty Unconditional. The obligations of theBorrower under this Section 2.10 shall be unconditional and absolute and,without limiting the generality of the foregoing shall not be released,discharged or otherwise affected by the occurrence, one or more times, of any ofthe following:

        (i) any extension, renewal, settlement, compromise,		waiver or release in respect to the Borrower Guaranteed Obligations		under any agreement or instrument, by operation of law or otherwise;

26

        (ii) any modification or amendment of or supplement		to this Agreement, any Note, any other Loan Document, or any agreement		or instrument evidencing or relating to any Borrower Guaranteed		Obligation;

        (iii) any release, non-perfection or invalidity of		any direct or indirect security for the Borrower Guaranteed Obligations		under any agreement or instrument evidencing or relating to any Borrower		Guaranteed Obligations;

        (iv) any change in the corporate existence, structure		or ownership of any Credit Party or other Subsidiary or any insolvency,		bankruptcy, reorganization or other similar proceeding affecting any		Credit Party or other Subsidiary or its assets or any resulting release		or discharge of any obligation of any Credit Party or other Subsidiary		contained in any agreement or instrument evidencing or relating to any		of the Borrower Guaranteed Obligations;

        (v) the existence of any claim, set-off or other		rights which the Borrower may have at any time against any other Credit		Party, the Lender, any Affiliate of the Lender or any other Person,		whether in connection herewith or any unrelated transactions;

        (vi) any invalidity or unenforceability relating to		or against any other Credit Party for any reason of any agreement or		instrument evidencing or relating to any of the Borrower Guaranteed		Obligations, or any provision of applicable law or regulation purporting		to prohibit the payment by any Credit Party of any of the Borrower		Guaranteed Obligations; or

        (vii) any other act or omission of any kind by any		other Credit Party, the Lender or any other Person or any other		circumstance whatsoever which might, but for the provisions of this		Section 2.10, constitute a legal or equitable discharge of the		Borrower's obligations under this Section other than the irrevocable		payment in full of all Borrower Guaranteed Obligations.

        (d) Borrower Obligations to Remain in Effect; Restoration.The Borrower's obligations under this Section 2.10 shall remain in full forceand effect until the Revolving Commitment shall have terminated, and theprincipal of and interest on any Notes and other Borrower GuaranteedObligations, and all other amounts payable by the Borrower, any other CreditParty or other Subsidiary, under the Loan Documents or any other agreement orinstrument evidencing or relating to any of the Borrower Guaranteed Obligations,shall have been paid in full. If at any time any payment of any of the BorrowerGuaranteed Obligations is rescinded or must be otherwise restored or returnedupon the insolvency, bankruptcy or reorganization of such Credit Party, theBorrower's obligations under this Section 2.10 with respect to such paymentshall be reinstated at such time as though such payment had been due but notmade at such time.

        (e) Waiver of Acceptance, etc. The Borrowerirrevocably waives acceptance hereof, presentment, demand, protest and anynotice not provided for herein, as well as any requirement that at any time anyaction be taken by any person against any other Credit Party or any otherPerson, or against any collateral or guaranty of any other Person.

        (f) Subrogation. Until the indefeasible payment infull of all of the Obligations and the termination of the Revolving Commitmenthereunder, the Borrower shall have no rights, by operation of law or otherwise,upon making any payment under this Section to be subrogated to the rights of thepayee against any other Credit Party with respect to such payment or otherwiseto be reimbursed, indemnified or exonerated by any such Credit Party in respectthereof.

27

        (g) Effect of Stay. In the event that acceleration ofthe time for payment of any amount payable by any Credit Party under any of theBorrower Guaranteed Obligations is stayed upon insolvency, bankruptcy orreorganization of such Credit Party, all such amounts otherwise subject toacceleration under the terms of any applicable agreement or instrumentevidencing or relating to any of the Borrower Guaranteed Obligations shallnonetheless be payable by the Borrower under this Section 2.10 forthwith ondemand by the Lender.

ARTICLE III.****ADDITIONAL AMOUNTS, NET PAYMENTS AND INCREASED COSTS

        Section 3.01 Additional Amounts.

        (a) If the Lender shall have determined that after theClosing Date, the adoption of any applicable law, rule or regulation regardingcapital adequacy, or any change therein, or any change in the interpretation oradministration thereof by any Governmental Authority, central bank or comparableagency charged by law with the interpretation or administration thereof, orcompliance by the Lender or its parent corporation with any request or directiveregarding capital adequacy (whether or not having the force of law) of any suchauthority, central bank, or comparable agency, in each case made subsequent tothe Closing Date, has or would have the effect of reducing by an amountreasonably deemed by the Lender to be material to the rate of return on theLender's or its parent corporation's capital or assets as a consequence of theLender's commitments or obligations hereunder to a level below that which theLender or its parent corporation could have achieved but for such adoption,effectiveness, change or compliance (taking into consideration the Lender's orits parent corporation's policies with respect to capital adequacy), then fromtime to time, within 15 days after demand by the Lender (with a copy to theLender), the Borrower shall pay to the Lender such additional amount or amountsas will compensate the Lender or its parent corporation for such reduction. TheLender, upon determining in good faith that any additional amounts will bepayable pursuant to this Section 3.01(a), will give prompt written noticethereof to the Borrower, which notice shall set forth, in reasonable detail, thebasis of the calculation of such additional amounts, which basis must bereasonable, although the failure to give any such notice shall not release ordiminish any of the Borrower's obligations to pay additional amounts pursuant tothis Section 3.01(a) upon the subsequent receipt of such notice.

        (b) Notwithstanding anything in this Agreement to thecontrary, (i) the Lender shall not be entitled to compensation or payment orreimbursement of other amounts under Section 3.01(a) or Section 3.03 for anyamounts incurred or accruing more than 90 days prior to the giving of notice tothe Borrower of additional costs or other amounts of the nature described insuch Sections, and (ii) the Lender shall not demand compensation for anyreduction referred to in Section 3.01(a) or payment or reimbursement of otheramounts under Section 3.03 if it shall not at the time be the general policy orpractice of the Lender to demand such compensation, payment or reimbursement insimilar circumstances under comparable provisions of other credit agreements.

        Section 3.02 Net Payments. 

        (a) All payments made by the Borrower hereunder, under anyNote or any other Loan Document, including all payments made by the Borrowerpursuant to its guaranty obligations under Section 2.10, will be made free andclear of, and without deduction or withholding for, any present or future taxes,levies, imposts, duties, fees, assessments or other charges of whatever naturenow or hereafter imposed by any jurisdiction or by any political subdivision ortaxing authority thereof or therein with respect to such payments (butexcluding, except as provided in this Section 3.02(a), any tax imposed on ormeasured by the net income or net profits of the Lender and franchise taxesimposed on it pursuant 

28

to the laws of the jurisdiction under which the Lender isorganized or the jurisdiction in which the principal office of the Lender islocated or any subdivision thereof or therein) and all interest, penalties orsimilar liabilities with respect to such non-excluded taxes, levies imposts,duties, fees, assessments or other charges (all such non-excluded taxes, levies,imposts, duties, fees, assessments or other charges being referred tocollectively as "Taxes"). If any Taxes are so levied or imposed, theBorrower agrees to pay the full amount of such Taxes and such additional amounts(including additional amounts to compensate for withholding on amounts paidpursuant to this Section 3.02(a)) as may be necessary so that every payment byit of all amounts due hereunder, under any Note or under any other LoanDocument, after withholding or deduction for or on account of any Taxes will notbe less than the amount provided for herein or in such Note or in such otherLoan Document. The Borrower will indemnify and hold harmless the Lender andreimburse the Lender upon its written request, for the amount of any Taxesimposed on and paid by the Lender. If any amounts are payable in respect ofTaxes pursuant to this Section 3.02(a), the Borrower agrees to reimburse theLender, upon the written request of the Lender, for taxes imposed on or measuredby the net income, profits or franchise of the Lender pursuant to the laws ofthe jurisdiction in which the Lender is organized or in which the principaloffice of the Lender is located or under the laws of any political subdivisionor taxing authority therein, and for any withholding of taxes as the Lendershall determine are payable by, or withheld from, the Lender in respect of suchreimbursement of taxes, which request shall be accompanied by a statement fromthe Lender setting forth, in reasonable detail, the computations used indetermining such amounts. The Borrower will furnish to the Lender within 45 daysafter the date the payment of any Taxes, or any withholding or deduction onaccount thereof, is due pursuant to applicable law certified copies of taxreceipts, or other evidence satisfactory to the Lender, evidencing such paymentby the Borrower. 

        (b) If the Lender, in its sole opinion, determines that ithas finally and irrevocably received or been granted a refund in respect of anyTaxes as to which indemnification has been paid by the Borrower pursuant toSection 3.02(a), it shall promptly remit such refund (including any interestreceived in respect thereof), net of all out-of-pocket costs and expenses to theBorrower; *provided, however,* that the Borrower agrees to promptly returnany such refund (plus interest) to the Lender in the event the Lender isrequired to repay such refund to the relevant taxing authority. The Lender shallprovide the Borrower with a copy of any notice of assessment from the relevanttaxing authority (redacting any unrelated confidential information containedtherein) requiring repayment of such refund. Nothing contained herein shallimpose an obligation on the Lender to apply for any such refund.

        Section 3.03 Increased Costs forLC Issuances. If after the Closing Date, the adoption of any applicable law,rule or regulation, or any change therein, or any change in the interpretationor administration thereof by any Governmental Authority, central bank orcomparable agency charged with the interpretation or administration thereof, orcompliance by the Lender with any request or directive (whether or not havingthe force of law) by any such authority, central bank or comparable agency (ineach case made subsequent to the Closing Date) shall either (i) impose, modifyor make applicable any reserve, deposit, capital adequacy or similar requirementagainst Letters of Credit issued by the Lender's participation therein, or (ii)impose on the Lender any other conditions affecting this Agreement, any Letterof Credit or the Lender's participation therein; and the result of any of theforegoing is to increase the cost to the Lender of issuing, maintaining orparticipating in any Letter of Credit, or to reduce the amount of any sumreceived or receivable by the Lender hereunder (other than any increased cost orreduction in the amount received or receivable resulting from the imposition ofor a change in the rate of taxes or similar charges), then, upon demand to theBorrower by the Lender, the Borrower shall pay to the Lender such additionalamount or amounts as will compensate the Lender for such increased cost orreduction. A certificate submitted to the Borrower by the Lender setting forth,in reasonable detail, the basis for the determination of such additional amountor amounts necessary to compensate the Lender as aforesaid shall be conclusiveand binding on the Borrower absent manifest error, although the failure to

29

deliver any such certificate shall not release ordiminish the Borrower's obligations to pay additional amounts pursuant to thisSection 3.03. 

ARTICLE IV.****CONDITIONS PRECEDENT

        Section 4.01 Conditions Precedentat Closing Date. The obligation of the Lender to make Revolving Loans and toissue Letters of Credit, is subject to the satisfaction of each of the followingconditions on or prior to the Closing Date:

        (i) Credit Agreement. This Agreement shall		have been executed by Holdings, the Borrower and the Lender.

        (ii) Notes. The Borrower shall have executed		and delivered to the Lender a Note evidencing the Revolving Commitment		Amount.

        (iii) Security Agreement. Each Credit Party		shall have duly executed and delivered a Pledge and Security Agreement		(the "Security Agreement"), substantially in the form attached as		Exhibit C, and shall have delivered to the Lender the shares		pledged thereunder, together with any applicable share transfer power		duly executed in blank, and any promissory notes or other instruments		pledged thereunder, together with endorsements thereof in blank, in each		case in form and substance satisfactory to the Lender. Each Credit Party		shall have duly executed and delivered all of the following in		connection therewith, each of which shall be in form and substance		satisfactory to the Lender: (A) the Control Agreements required pursuant		to the terms of the Security Agreement, duly executed by the appropriate		depositary institution, securities intermediary or issuer as the case		may be, (B) the Collateral Assignments required pursuant to the terms of		the Security Agreement, and (C) a Perfection Certificate.

        (iv) Closing Date Mortgages. Each Credit		Party, as appropriate, shall have (A) executed and delivered to the		Lender a Mortgage, in form and substance satisfactory to the Lender,		with respect to each Mortgaged Real Property of such Credit Party owned		as of the Closing Date, and (B) provided to the Lender all of the other		items required to be provided with respect to each such Mortgaged Real		Property pursuant to Section 6.10(c), each of which shall be in form and		substance satisfactory to the Lender.

        (v) Fees and Fee Letters. The Borrower shall		have (A) executed and delivered to the Lender the Fee Letter and shall		have paid to the Lender, for its own account, the fees required to be		paid by it on the Closing Date and (B) paid or caused to be paid all		fees and expenses of the Lender and of special counsel to the Lender		that have been invoiced on or prior to the Closing Date in connection		with the preparation, execution and delivery of this Agreement and the		other Loan Documents and the consummation of the transactions		contemplated hereby and thereby.

        (vi) Corporate Resolutions and Approvals. The		Lender shall have received certified copies of the resolutions of the		Board of Directors of each Credit Party approving the Loan Documents to		which such Credit Party, as the case may be, is or may become a party,		and of all documents evidencing other necessary corporate action and		governmental approvals, if any, with respect to the execution, delivery		and performance by such Credit Party of the Loan Documents to which it		is or may become a party.

30

        (vii) Incumbency Certificates. The Lender		shall have received a certificate of the Secretary or an Assistant		Secretary of each Credit Party certifying the names and true signatures		of the officers of such Credit Party, as the case may be, authorized to		sign the Loan Documents to which such Credit Party is a party and any		other documents to which such Credit Party is a party that may be		executed and delivered in connection herewith.

        (viii) Opinions of Counsel. The Lender shall		have received such opinions of counsel from counsel to the Credit		Parties as the Lender shall request, each of which shall be addressed to		the Lender and dated the Closing Date and in form and substance		satisfactory to the Lender.

        (ix) Recordation of Security Documents, Delivery		of Collateral, Taxes, etc. The Security Documents (or proper notices		or UCC financing statements in respect thereof) shall have been duly		recorded, published and filed in such manner and in such places as is		required by law to establish, perfect, preserve and protect the rights,		Liens and security interests of the parties thereto and their respective		successors and assigns, all Collateral items required to be physically		delivered to the Lender thereunder shall have been so delivered,		accompanied by any appropriate instruments of transfer, and all taxes,		fees and other charges then due and payable in connection with the		execution, delivery, recording, publishing and filing of such		instruments and the issuance of the Obligations and the delivery of any		Notes shall have been paid in full.

        (x) Evidence of Insurance. The Lender shall		have received certificates of insurance naming the Lender as loss payee		or additional insured and other evidence, satisfactory to it, of		compliance with the insurance requirements of this Agreement and the		Security Documents.

        (xi) Search Reports. The Lender shall have		received the results of UCC and other search reports from one or more		commercial search firms acceptable to the Lender, listing all of the		effective financing statements filed against any Credit Party, together		with copies of such financing statements.

        (xii) Corporate Charter and Good Standing		Certificates. The Lender shall have received: (A) an original		certified copy of the Certificate or Articles of Incorporation or		equivalent formation document of each Credit Party and any and all		amendments and restatements thereof, certified as of a recent date by		the relevant Secretary of State; (B) an original good standing		certificate from the Secretary of State of the state of incorporation,		dated as of a recent date, listing all charter documents affecting such		Credit Party and certifying as to the good standing of such Credit		Party; and (C) original certificates of good standing from each other		jurisdiction in which each Credit Party is authorized or qualified to do		business.

        (xiii) Closing Certificate. The Lender shall		have received a certificate substantially in the form of Exhibit F,		dated the Closing Date, of an Authorized Officer of the Borrower to the		effect that, at and as of the Closing Date and both before and after		giving effect to the initial Borrowings hereunder and the application of		the proceeds thereof: (A) no Default or Event of Default has occurred or		is continuing; and (B) all representations and warranties of the Credit		Parties contained herein or in the other Loan Documents are true and		correct in all material respects as of the Closing Date.

        (xiv) Proceedings and Documents. All corporate		and other proceedings and all documents incidental to the transactions		contemplated hereby shall be satisfactory in substance and form to the		Lender and its special counsel and the Lender shall have received all		such counterpart originals or certified or other copies of such		documents as the Lender or its special counsel may reasonably request.

31

        (xv) Material Litigation. The Lender shall be		satisfied that there are no actions, suits, investigations or		proceedings pending or threatened in any court or before any arbitrator		or Governmental Authority (i) that have, or, if determined adversely,		could reasonably be expected to have, a Material Adverse Effect or a		material adverse effect on any of the transactions contemplated hereby,		or (ii) which question the validity or enforceability of any of the Loan		Documents or the ability of any Credit Party to perform their respective		obligations under the Loan Documents.

        (xvi) Financial Information.  The Lender shall		have received (A) the audited consolidated financial statements for the		fiscal year ended December 31, 2004, (B) the unaudited quarterly		financial statements for the Borrower and its Subsidiaries through the		fiscal quarter ended immediately prior to the Closing Date and (C)		financial projections for the fiscal year ending December 31, 2006.

        (xvii) Appraisals. The Lender shall have		received (at the Borrower's expense) and be satisfied with assets		appraisals (including, without limitation, appraisals of the Eligible		Real Property and Equipment).

        (xviii) Account and Inventory Reports. The		Lender shall have received accounts receivable aging and inventory		reports satisfactory to it.

        (xix) Material Adverse Effect. Since December		31, 2004 there shall not have occurred any event or condition that, in		the opinion of the Lender, has had or could reasonably be expected to		have a material adverse effect on the business, operations, property,		condition (financial or otherwise) or prospects of Holdings, the		Borrower or any Subsidiary of Holdings.

        (xx) Existing Indebtedness. On the Closing		Date, after giving effect to the transactions contemplated herein,		Holdings and its Subsidiaries shall have outstanding no Indebtedness		other than (A) the Revolving Loans and (B) Indebtedness permitted under		Section 7.04. All other Indebtedness and agreements in respect thereof		shall be terminated and all Liens securing such Indebtedness shall be		released or arrangements, to the satisfaction of the Lender, shall have		been made for such release.

        (xxi) Minimum Liquidity. The Borrower shall		have provided evidence satisfactory to the Lender that on the Closing		Date and after giving effect to the indebtedness to be incurred in		connection herewith that the Borrower is in compliance with Section		7.07(a). 

        (xxii) Borrowing Base Certificate. The Lender		shall have received an executed Borrowing Base Certificate for the month		ending November 30, 2005.

        (xxiii) Miscellaneous. The Credit Parties		shall have provided to the Lender such other items and shall have		satisfied such other conditions as may be reasonably required by the		Lender.

        Section 4.02 Conditions Precedentto All Credit Events. The obligations of the Lender to make or participatein each Credit Event is subject, at the time thereof, to the satisfaction of thefollowing conditions:

        (a) Notice. The Lender shall have received, asapplicable, (i) a Notice of Borrowing meeting the requirements of Section2.03(b) with respect to any Borrowing or (ii) an LC Request meeting therequirements of Section 2.02(b) with respect to any LC Issuance.

32

        (b) No Default; Representations and Warranties. At thetime of each Credit Event and also after giving effect thereto, (i) there shallexist no Default or Event of Default and (ii) all representations and warrantiesof the Credit Parties contained herein or in the other Loan Documents shall betrue and correct in all material respects with the same effect as though suchrepresentations and warranties had been made on and as of the date of suchCredit Event, except to the extent that such representations and warrantiesexpressly relate to an earlier specified date, in which case suchrepresentations and warranties shall have been true and correct in all materialrespects as of the date when made.

        The acceptance of the benefits of each Credit Event shallconstitute a representation and warranty by the Borrower to the Lender that allof the applicable conditions specified in Section 4.01 and Section 4.02 havebeen satisfied as of the times referred to in such Sections.

ARTICLE V.****REPRESENTATIONS AND WARRANTIES

        In order to induce the Lender to enter into this Agreementand to make the Revolving Loans and to issue the Letters of Credit provided forherein, the Borrower and the Credit Parties each makes the followingrepresentations and warranties to, and agreements with the Lender, all of whichshall survive the execution and delivery of this Agreement and each CreditEvent:

        Section 5.01 Corporate Status.Holdings and each of its Subsidiaries (i) is a duly organized or formed andvalidly existing corporation, partnership or limited liability company, as thecase may be, in good standing or in full force and effect under the laws of thejurisdiction of its formation and has the corporate, partnership or limitedliability company power and authority, as applicable, to own its property andassets and to transact the business in which it is engaged and presentlyproposes to engage, and (ii) has duly qualified and is authorized to do businessin all jurisdictions where it is required to be so qualified or authorizedexcept where the failure to be so qualified would not have a Material AdverseEffect. Schedule 5.01 lists, as of the Closing Date, each Subsidiary ofHoldings, the jurisdiction of organization of such Subsidiary and the direct andindirect ownership interest of Holdings therein.

        Section 5.02 Corporate Power andAuthority. Each Credit Party has the corporate or other organizational powerand authority to execute, deliver and carry out the terms and provisions of theLoan Documents to which it is party and has taken all necessary corporate orother organizational action to authorize the execution, delivery and performanceof the Loan Documents to which it is party. Each Credit Party has duly executedand delivered each Loan Document to which it is party and each Loan Document towhich it is party constitutes the legal, valid and binding agreement andobligation of such Credit Party enforceable in accordance with its terms, exceptto the extent that the enforceability thereof may be limited by applicablebankruptcy, insolvency, reorganization, moratorium or other similar lawsgenerally affecting creditors' rights and by equitable principles (regardless ofwhether enforcement is sought in equity or at law).

        Section 5.03 No Violation.Neither the execution, delivery and performance by any Credit Party of the LoanDocuments to which it is party nor compliance with the terms and provisionsthereof (i) will contravene any provision of any law, statute, rule, regulation,order, writ, injunction or decree of any Governmental Authority applicable tosuch Credit Party or its properties and assets, (ii) will conflict with orresult in any breach of, any of the terms, covenants, conditions or provisionsof, or constitute a default under, or result in the creation or imposition of(or the obligation to create or impose) any Lien (other than the Liens createdpursuant to the Security Documents) upon any of the property or assets of suchCredit Party pursuant to the terms of any promissory note, bond, debenture,indenture, mortgage, deed of trust, credit or loan agreement, or any otheragreement or other instrument, to which such Credit Party is a party

33

or by which it or any of its property or assets arebound or to which it may be subject, or (iii) will violate any provision of theOrganizational Documents of such Credit Party.

        Section 5.04 GovernmentalApprovals. No order, consent, approval, license, authorization, orvalidation of, or filing, recording or registration with, or exemption by, anyGovernmental Authority is required to authorize or is required as a condition to(i) the execution, delivery and performance by any Credit Party of any LoanDocument to which it is a party or any of its obligations thereunder, or (ii)the legality, validity, binding effect or enforceability of any Loan Document towhich any Credit Party is a party, *except* the filing and recording offinancing statements and other documents necessary in order to perfect the Lienscreated by the Security Documents.

        Section 5.05 Litigation. Thereare no actions, suits or proceedings pending or, to the knowledge of any CreditParty, threatened with respect to such Credit Party or any of its Subsidiaries(i) that have had, or could reasonably be expected to have, a Material AdverseEffect, or (ii) that question the validity or enforceability of any of the LoanDocuments, or of any action to be taken by any of the Credit Parties pursuant toany of the Loan Documents.

        Section 5.06 Use of Proceeds;Margin Regulations.

        (a) The proceeds of all Revolving Loans and LC Issuancesshall be utilized to refinance existing senior debt facilities and provideworking capital and funds for general corporate purposes, in each case, notinconsistent with the terms of this Agreement.

        (b) No part of the proceeds of any Credit Event will be useddirectly or indirectly to purchase or carry Margin Stock, or to extend credit toothers for the purpose of purchasing or carrying any Margin Stock, in violationof any of the provisions of Regulations T, U or X of the Board of Governors ofthe Federal Reserve System. No Credit Party is engaged in the business ofextending credit for the purpose of purchasing or carrying any Margin Stock. Atno time would more than 25% of the value of the assets of Holdings or ofHoldings and its consolidated Subsidiaries that are subject to any "arrangement"(as such term is used in Section 221.2(g) of such Regulation U) hereunder berepresented by Margin Stock.

        Section 5.07 Financial Statements.

        (a) TheBorrower has furnished to the Lender complete and correct copies of (i) theaudited consolidated balance sheets of Holdings and its consolidatedSubsidiaries for the fiscal year ended December 31, 2004 and the related auditedconsolidated statements of income, shareholders' equity, and cash flows ofHoldings and its consolidated Subsidiaries for the fiscal year of Holdings thenended, accompanied by the report thereon of Freed Maxick Battaglia, CPAs, PC;and (ii) the condensed consolidated balance sheets of Holdings and itsconsolidated Subsidiaries for the fiscal quarters ended March 31, 2005, June 30,2005 and September 30, 2005 and the related condensed consolidated statements ofincome and of cash flows of Holdings and its consolidated Subsidiaries for eachof the fiscal periods then ended. All such financial statements have beenprepared in accordance with GAAP, consistently applied (except as statedtherein), and fairly present the financial position of Holdings and itsSubsidiaries as of the respective dates indicated and the consolidated resultsof their operations and cash flows for the respective periods indicated, subjectin the case of any such financial statements that are unaudited, to normal auditadjustments, none of which shall be material. Holdings and its Subsidiaries didnot have, as of the date of the latest financial statements referred to above,and will not have as of the Closing Date after giving effect to the incurrenceof Revolving Loans or LC Issuances hereunder, any material or significantcontingent liability or liability for taxes, long-term lease or unusual forwardor long-term commitment that is not reflected in the foregoing financialstatements or the notes thereto in 

34

accordance with GAAP and that in any suchcase is material in relation to the business, operations, properties, assets,financial or other condition or prospects of Holdings and its Subsidiaries.

        (b) The financial projections of Holdings and itsSubsidiaries for the fiscal year 2006 prepared by Holdings and delivered to theLender (the "Financial Projections") were prepared on behalf of Holdingsin good faith after taking into account historical levels of business activityof Holdings and its Subsidiaries, known trends, including general economictrends, and all other information, assumptions and estimates considered bymanagement of Holdings and its Subsidiaries to be pertinent thereto; *provided*,*however*, that no representation or warranty is made as to the impact offuture general economic conditions or as to whether Holdings' projectedconsolidated results as set forth in the Financial Projections will actually berealized, it being recognized by the Lender that such projections as to futureevents are not to be viewed as facts and that actual results for the periodscovered by the Financial Projections may differ materially from the FinancialProjections. No facts are known to Holdings as of the Closing Date which, ifreflected in the Financial Projections, would result in a material adversechange in the assets, liabilities, results of operations or cash flows reflectedtherein. 

        Section 5.08 Solvency. TheBorrower has received consideration that is the reasonable equivalent value ofthe obligations and liabilities that the Borrower has incurred to the Lenderunder the Loan Documents. The Borrower now has capital sufficient to carry onits business and transactions and all business and transactions in which it isabout to engage and is now solvent and able to pay its debts as they mature andthe Borrower, as of the Closing Date, owns property having a value, both at fairvaluation and at present fair salable value, greater than the amount required topay the Borrower's debts; and the Borrower is not entering into the LoanDocuments with the intent to hinder, delay or defraud its creditors. Forpurposes of this Section, "debt" means any liability on a claim, and "claim"means (y) right to payment whether or not such a right is reduced to judgment,liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,undisputed, legal, equitable, secured or unsecured; or (z) right to an equitableremedy for breach of performance if such breach gives rise to a payment, whetheror not such right to an equitable remedy is reduced to judgment, fixed,contingent, matured, unmatured, disputed, undisputed, secured or unsecured.

        Section 5.09 No Material AdverseChange. Since December 31, 2004, there has been no change in the condition,business, affairs or prospects of Holdings and its Subsidiaries taken as awhole, or their properties and assets considered as an entirety, *except*for changes none of which, individually or in the aggregate, has had or couldreasonably be expected to have, a Material Adverse Effect.

        Section 5.10 Tax Returns andPayments. Holdings and each of its Subsidiaries has filed all federal incometax returns and all other tax returns, domestic and foreign, required to befiled by it and has paid all taxes and assessments payable by it that havebecome due, other than those not yet delinquent and except for those contestedin good faith. Holdings and each of its Subsidiaries has established on itsbooks such charges, accruals and reserves in respect of taxes, assessments, feesand other governmental charges for all fiscal periods as are required by GAAP.Neither Holdings nor any of its Subsidiaries knows of any proposed assessmentfor additional federal, foreign or state taxes for any period, or of any basistherefor, which, individually or in the aggregate, taking into account suchcharges, accruals and reserves in respect thereof as Holdings and itsSubsidiaries have made, could reasonably be expected to have a Material AdverseEffect.

        Section 5.11 Title to Properties,etc. Holdings and each of its Subsidiaries has good and marketable title, inthe case of Real Property, and good title (or valid Leaseholds, in the case ofany leased property), in the case of all other property, to all of itsproperties and assets free and clear of Liens other than Permitted Liens. Theinterests of Holdings and its Subsidiaries in the properties reflected in themost recent balance sheet referred to in Section 5.07(a), taken as a whole, weresufficient, in the judgment of

35

Holdings, as of thedate of such balance sheet for purposes of the ownership and operation of thebusinesses conducted by Holdings and its Subsidiaries.

        Section 5.12 Lawful Operations,etc. Holdings and each of its Subsidiaries: (i) hold all necessary foreign,federal, state, local and other governmental licenses, registrations,certifications, permits and authorizations necessary to conduct its business;and (ii) is in full compliance with all requirements imposed by law, regulationor rule, whether foreign, federal, state or local, that are applicable to it,its operations, or its properties and assets, including, without limitation,applicable requirements of Environmental Laws, *except* for any failure toobtain and maintain in effect, or noncompliance that, individually or in theaggregate, could not reasonably be expected to have a Material Adverse Effect.

        Section 5.13 Environmental Matters.

        (a) Holdings and each of its Subsidiaries is in compliancewith all applicable Environmental Laws, except to the extent that any suchfailure to comply (together with any resulting penalties, fines or forfeitures)would not reasonably be expected to have a Material Adverse Effect. Alllicenses, permits, registrations or approvals required for the conduct of thebusiness of Holdings and its Subsidiaries under any Environmental Law have beensecured and Holdings and its Subsidiaries is in substantial compliancetherewith, except for such licenses, permits, registrations or approvals thefailure to secure or to comply therewith is not reasonably likely to have aMaterial Adverse Effect. Neither Holdings nor any of its Subsidiaries hasreceived written notice, or otherwise knows, that it is in any respect innoncompliance with, breach of or default under any applicable writ, order,judgment, injunction, or decree to which Holdings or such Subsidiary is a partyor that would affect the ability of Holdings or such Subsidiary to operate anyReal Property and no event has occurred and is continuing that, with the passageof time or the giving of notice or both, would constitute noncompliance, breachof or default thereunder, except in each such case, such noncompliance, breachesor defaults as would not reasonably be expected to, in the aggregate, have aMaterial Adverse Effect. There are no Environmental Claims pending or, to thebest knowledge of any Credit Party, threatened wherein an unfavorable decision,ruling or finding would reasonably be expected to have a Material AdverseEffect. There are no facts, circumstances, conditions or occurrences on any RealProperty now or at any time owned, leased or operated by Holdings or any of itsSubsidiaries or on any property adjacent to any such Real Property, that areknown by Holdings or any of its Subsidiaries or as to which Holdings or any ofits Subsidiaries has received written notice, that could reasonably be expected:(i) to form the basis of an Environmental Claim against Holdings or any of itsSubsidiaries or any Real Property of Holdings or any of its Subsidiaries; or(ii) to cause such Real Property to be subject to any restrictions on theownership, occupancy, use or transferability of such Real Property under anyEnvironmental Law, except in each such case, such Environmental Claims orrestrictions that individually or in the aggregate could not reasonably beexpected to have a Material Adverse Effect.

        (b) Hazardous Materials have not at any time been (i)generated, used, treated or stored on, or transported to or from, any RealProperty of Holdings or any of its Subsidiaries or (ii) released on any suchReal Property, in each case where such occurrence or event is not in compliancewith Environmental Laws and is reasonably likely to have a Material AdverseEffect.

        Section 5.14 Compliance with ERISA.Compliance by each Credit Party with the provisions hereof and Credit Eventscontemplated hereby will not involve any Prohibited Transaction. Holdings andeach of its Subsidiaries and each ERISA Affiliate (i) has fulfilled allobligations under the minimum funding standards of ERISA and the Code withrespect to each Plan that is not a Multi-Employer Plan or a Multiple EmployerPlan, (ii) has satisfied all contribution obligations in respect of eachMulti-Employer Plan and each Multiple Employer Plan, (iii) is in compliance inall material respects

36

with all other applicableprovisions of ERISA and the Code with respect to each Plan, each Multi-EmployerPlan and each Multiple Employer Plan, and (iv) has not incurred any liabilityunder Title IV of ERISA to the PBGC with respect to any Plan, any Multi-EmployerPlan, any Multiple Employer Plan, or any trust established thereunder. No Planor trust created thereunder has been terminated, and there have been noReportable Events, with respect to any Plan or trust created thereunder or withrespect to any Multi-Employer Plan or Multiple Employer Plan, which terminationor Reportable Event will or could give rise to a material liability of Holdingsor any ERISA Affiliate in respect thereof. Neither Holdings nor any Subsidiaryof Holdings nor any ERISA Affiliate is at the date hereof, or has been at anytime within the five years preceding the date hereof, an employer required tocontribute to any Multi-Employer Plan or Multiple Employer Plan, or a"contributing sponsor" (as such term is defined in Section 4001 of ERISA) in anyMulti-Employer Plan or Multiple Employer Plan. Neither Holdings nor anySubsidiary of Holdings nor any ERISA Affiliate has any contingent liability withrespect to any post-retirement "welfare benefit plan" (as such term is definedin ERISA) except as has been disclosed to the Lender in writing.

        Section 5.15 IntellectualProperty, etc. Holdings and each of its Subsidiaries has obtained or has theright to use all material patents, trademarks, service marks, trade names,copyrights, licenses and other rights with respect to the foregoing necessaryfor the present and planned future conduct of its business, without any knownconflict with the rights of others.

        Section 5.16 Investment CompanyAct, etc. Neither Holdings nor any of its Subsidiaries is subject toregulation with respect to the creation or incurrence of Indebtedness under theInvestment Company Act of 1940, as amended, the Interstate Commerce Act, asamended, the Federal Power Act, as amended, the Public Utility Holding CompanyAct of 1935, as amended, or any applicable state public utility law.

        Section 5.17 Insurance. Adescription of all insurance maintained by or on behalf of Holdings and itsSubsidiaries as of the Closing Date is set forth on Schedule 5.17. As ofthe Closing Date, all premiums in respect of such insurance have been paid. Suchinsurance is provided by insurers and in form and amount and insuring againstrisks, which, in each case, are generally consistent with industry standards andin compliance with the terms of Section 6.03.

        Section 5.18 Burdensome Contracts;Labor Relations. Neither Holdings nor any of its Subsidiaries (a) is subjectto any burdensome contract, agreement, corporate restriction, judgment, decreeor order, (b) is a party to any labor dispute affecting any bargaining unit orother group of employees generally, (c) is subject to any material strike,slowdown, workout or other concerted interruptions of operations by employees ofHoldings or any Subsidiary, whether or not relating to any labor contracts, (d)is subject to any significant pending or, to the knowledge of any Credit Party,threatened, unfair labor practice complaint, before the National Labor RelationsBoard, (e) is subject to any significant pending or, to the knowledge of anyCredit Party, threatened grievance or significant arbitration proceeding arisingout of or under any collective bargaining agreement, (f) is subject to anysignificant pending or, to the knowledge of any Credit Party, threatenedsignificant strike, labor dispute, slowdown or stoppage, or (g) is, to theknowledge of any Credit Party, involved or subject to any union representationorganizing or certification matter with respect to the employees of Holdings orany of its Subsidiaries, *except* (with respect to any matter specified inany of the above clauses) for such matters as, individually or in the aggregate,could not reasonably be expected to have a Material Adverse Effect.

        Section 5.19 Security Interests.Once executed and delivered, each of the Security Documents creates, as securityfor the Secured Obligations (as defined in the Security Agreement), a valid andenforceable, and upon making the filings and recordings referenced in the nextsentence, perfected security interest in and Lien on all of the Collateralsubject thereto from time to time, in favor of

37

theLender, superior to and prior to the rights of all third persons and subject tono other Liens, *except* that the Collateral under the Security Documentsmay be subject to Permitted Liens. No filings or recordings are required inorder to perfect the security interests created under any Security Documentexcept for filings or recordings required in connection with any such SecurityDocument that shall have been made, or for which satisfactory arrangements havebeen made, upon or prior to the execution and delivery thereof. All recording,stamp, intangible or other similar taxes required to be paid by any Person underapplicable legal requirements or other laws applicable to the propertyencumbered by the Security Documents in connection with the execution, delivery,recordation, filing, registration, perfection or enforcement thereof have beenpaid.

        Section 5.20 True and CompleteDisclosure. All information heretofore or contemporaneously furnished by oron behalf of Holdings or any of its Subsidiaries in writing to the Lender forpurposes of or in connection with this Agreement or any transaction contemplatedherein, other than the Financial Projections (as to which representations aremade only as provided in Section 5.07(b)), is, and all other such informationhereafter furnished by or on behalf of such Person in writing to the Lender willbe, true and accurate in all material respects on the date as of which suchinformation is dated or certified and not incomplete by omitting to state anymaterial fact necessary to make such information not misleading at such time inlight of the circumstances under which such information was provided.

        Section 5.21 Defaults. NoDefault or Event of Default exists as of the Closing Date hereunder, nor willany Default or Event of Default begin to exist immediately after the executionand delivery hereof.

        Section 5.22 Anti-Terrorism LawCompliance. Neither Holdings nor any of its Subsidiaries is subject to or inviolation of any law, regulation, or list of any government agency (including,without limitation, the U.S. Office of Foreign Asset Control list, ExecutiveOrder No. 13224 or the USA Patriot Act) that prohibits or limits the conduct ofbusiness with or the receiving of funds, goods or services to or for the benefitof certain Persons specified therein or that prohibits or limits the Lender frommaking any advance or extension of credit to the Borrower or from otherwiseconducting business with Holdings or any of its Subsidiaries.

ARTICLE VI.****AFFIRMATIVE COVENANTS

        The Borrower and the other Credit Parties each herebycovenants and agrees that on the Closing Date and thereafter so long as thisAgreement is in effect and until such time as the Revolving Commitment have beenterminated, no Notes remain outstanding and the Revolving Loans, together withinterest, Fees and all other Obligations incurred hereunder and under the otherLoan Documents, have been paid in full:

        Section 6.01 ReportingRequirements. The Borrower will furnish to the Lender:

        (a) Annual Financial Statements. As soon as availableand in any event within 90 days after the close of each fiscal year of Holdings,the consolidated balance sheets of Holdings and its consolidated Subsidiaries asat the end of such fiscal year and the related consolidated statements ofincome, of stockholders' equity and of cash flows for such fiscal year, in eachcase setting forth comparative figures for the preceding fiscal year, all inreasonable detail and accompanied by the opinion with respect to suchconsolidated financial statements of independent public accountants ofrecognized national standing selected by Holdings, which opinion shall beunqualified and shall (i) state that such accountants audited 

38

such consolidatedfinancial statements in accordance with generally accepted auditing standards,that such accountants believe that such audit provides a reasonable basis fortheir opinion, and that in their opinion such consolidated financial statementspresent fairly, in all material respects, the consolidated financial position ofHoldings and its consolidated Subsidiaries as at the end of such fiscal year andthe consolidated results of their operations and cash flows for such fiscal yearin conformity with generally accepted accounting principles, or (ii) containsuch statements as are customarily included in unqualified reports ofindependent accountants in conformity with the recommendations and requirementsof the American Institute of Certified Public Accountants (or any successororganization).

        (b) Quarterly Financial Statements. As soon asavailable and in any event within 45 days after the close of each of thequarterly accounting periods in each fiscal year of Holdings, the unauditedconsolidated balance sheets of Holdings and its consolidated Subsidiaries as atthe end of such quarterly period and the related unaudited consolidatedstatements of income and of cash flows for such quarterly period and/or for thefiscal year to date, and setting forth, in the case of such unauditedconsolidated statements of income and of cash flows, comparative figures for therelated periods in the prior fiscal year, and which shall be certified on behalfof Holdings by the Chief Financial Officer of Holdings, subject to changesresulting from normal year-end audit adjustments.

        (c) Monthly Reporting. Within 30 days of the end ofeach calendar month (i) a certificate (a "Compliance Certificate"),substantially in the form of Exhibit E, signed by the Chief FinancialOfficer of Holdings to the effect that (x) no Default or Event of Default existsor, if any Default or Event of Default does exist, specifying the nature andextent thereof and the actions Holdings has taken or proposes to take withrespect thereto, (y) the representations and warranties of the Credit Partiesare true and correct in all material respects, except to the extent that anyrelate to an earlier specified date, in which case, such representations shallbe true and correct in all material respects as of the date made, whichcertificate shall set forth the calculations required to establish compliancewith the provision of Section 7.07 and (ii) a Borrowing Base Certificate whichcertificate shall include all information necessary to calculate the BorrowingBase for such period.

        (d) Officer's Compliance Certificates. At the time ofthe delivery of the financial statements provided for in subparts (a) and (b)above, a Compliance Certificate signed by the Chief Financial Officer ofHoldings to the effect that (i) no Default or Event of Default exists or, if anyDefault or Event of Default does exist, specifying the nature and extent thereofand the actions Holdings has taken or proposes to take with respect thereto, and(ii) the representations and warranties of the Credit Parties are true andcorrect in all material respects, except to the extent that any relate to anearlier specified date, in which case, such representations shall be true andcorrect in all material respects as of the date made, which certificate shallset forth the calculations required to establish compliance with the provisionsof Section 7.07.

        (e) Notices. Promptly, and in any event within threeBusiness Days, after Holdings or any of its Subsidiaries obtains knowledgethereof, notice of:

        (i) the occurrence of any event that constitutes a		Default or Event of Default, which notice shall specify the nature		thereof, the period of existence thereof and what action Holdings		proposes to take with respect thereto;

        (ii) the commencement of, or any other material		development concerning, any litigation or governmental or regulatory		proceeding pending against Holdings or any of its Subsidiaries or the		occurrence of any other event, if the same would be reasonably likely to		have a Material Adverse Effect;

39

        (iii) any significant adverse change in Holdings' or		any Subsidiary's relationship with, or any significant event or		circumstance which is in Holdings' reasonable judgment likely to		adversely affect Holdings' or any Subsidiary's relationship with, (A)		any customer (or related group of customers) representing more than 10%		of Holdings' consolidated revenues during its most recent fiscal year,		or (B) any supplier which is material to the operations of Holdings and		its Subsidiaries considered as an entirety;

        (iv) any Lien (other than Liens permitted under		Section 7.03) or claim made or asserted against the Collateral;

        (v) any loss or damage or destruction to any		Collateral in an amount exceeding $250,000 (irrespective of whether		covered by insurance); or

        (vi) any other development, financial or otherwise,		which could reasonably be expected to have a Material Adverse Effect.

        (f) ERISA. Promptly, and in any event within 10 daysafter Holdings or any Subsidiary of Holdings or any ERISA Affiliate knows of theoccurrence of any of the following, Holdings will deliver to the Lender acertificate of an Authorized Officer of Holdings setting forth the full detailsas to such occurrence and the action, if any, that Holdings or such Subsidiaryof Holdings or such ERISA Affiliate is required or proposes to take, togetherwith any notices required or proposed to be given by Holdings or such Subsidiaryof Holdings or the ERISA Affiliate to or filed with the PBGC, a Plan participantor the Plan administrator with respect thereto: (i) that a Reportable Event hasoccurred with respect to any Plan; (ii) the institution of any steps byHoldings, any Subsidiary of Holdings, any ERISA Affiliate, the PBGC or any otherPerson to terminate any Plan or the occurrence of any event or conditiondescribed in Section 4042 of ERISA that constitutes grounds for the terminationof, or the appointment of a trustee to administer, a Plan; (iii) the institutionof any steps by Holdings, any Subsidiary of Holdings or any ERISA Affiliate towithdraw from any Multi-Employer Plan or Multiple Employer Plan, if suchwithdrawal could result in withdrawal liability (as described in Part 1 ofSubtitle E of Title IV of ERISA or in Section 4063 of ERISA) in excess of$25,000; (iv) a Prohibited Transaction in connection with any Plan; (v) that aPlan has Unfunded Benefit Liabilities exceeding $25,000; (vi) the cessation ofoperations at a facility of Holdings, any Subsidiary of Holdings or any ERISAAffiliate in the circumstances described in Section 4062(e) of ERISA; (vii) theconditions for imposition of a lien under Section 302(f) of ERISA shall havebeen met with respect to a Plan; (viii) the adoption of an amendment to a Planrequiring the provision of security to such Plan pursuant to Section 307 ofERISA; (ix) the insolvency of or commencement of reorganization proceedings withrespect to a Multi-Employer Plan; (x) any material increase in the contingentliability of Holdings or any Subsidiary with respect to any post-retirementwelfare liability; or (xi) the taking of any action by, or the threatening ofthe taking of any action by, the Internal Revenue Service, the Department ofLabor or the PBGC with respect to any of the foregoing.

        (g) Environmental Matters. Promptly upon, and in anyevent within 10 Business Days after, an officer of Holdings or any of itsSubsidiaries obtaining knowledge thereof, notice of one or more of the followingenvironmental matters to the extent any of the following could reasonably beexpected to have a Material Adverse Effect: (i) any pending or threatenedEnvironmental Claim against Holdings or any of its Subsidiaries or any RealProperty owned or operated by Holdings or any of its Subsidiaries; (ii) anycondition or occurrence on or arising from any Real Property owned or operatedby Holdings or any of its Subsidiaries that (A) results in noncompliance byHoldings or any of its Subsidiaries with any applicable Environmental Law or (B)would reasonably be expected to form the basis of a Environmental Claim againstHoldings or any of its Subsidiaries or any such Real Property; (iii) anycondition or occurrence on any Real Property owned, leased or operated byHoldings or any of its Subsidiaries that could reasonably be expected to causesuch Real Property to be subject to any restrictions on the ownership,occupancy, 

40

use or transferability by Holdings or any of its Subsidiaries of suchReal Property under any Environmental Law; and (iv) the taking of any removal orremedial action in response to the actual or alleged presence of any HazardousMaterial on any Real Property owned, leased or operated by Holdings or any ofits Subsidiaries as required by any Environmental Law or any governmental orother global agency. All such notices shall describe in reasonable detail thenature of the Environmental Claim, Holdings' or such Subsidiary's responsethereto and the potential exposure in Dollars of Holdings and its Subsidiarieswith respect thereto.

        (h) SEC Reports and Registration Statements. Promptlyafter transmission thereof or other filing with the SEC, copies of allregistration statements (other than the exhibits thereto and any registrationstatement on Form S-8 or its equivalent) and all annual, quarterly or currentreports that Holdings or any of its Subsidiaries files with the SEC on Form10-K, 10-Q or 8-K (or any successor forms).

        (i) Annual, Quarterly and Other Reports. Promptlyafter transmission thereof to its stockholders, copies of all annual, quarterlyand other reports and all proxy statements that Holdings furnishes to itsstockholders generally.

        (j) Auditors' Internal Control Comment Letters, etc.Promptly upon receipt thereof, a copy of each letter or memorandum commenting oninternal accounting controls and/or accounting or financial reporting policiesfollowed by Holdings and/or any of its Subsidiaries which is submitted toHoldings by its independent accountants in connection with any annual or interimaudit made by them of the books of Holdings or any of its Subsidiaries.

        (k) Press Releases. Promptly after the release thereofto any news organization or news distribution organization, copies of any pressreleases and other similar statements intended to be made available generally byHoldings or any of its Subsidiaries to the public concerning materialdevelopments relating to Holdings or any of its Subsidiaries.

        (l) Information Relating to Collateral. At the time ofthe delivery of the annual financial statements provided for in subpart (a)above, a certificate of an Authorized Officer of Holdings (i) setting forth anychanges to the information required pursuant to the Perfection Certificate orconfirming that there has been no change in such information since the date ofthe most recently delivered or updated Perfection Certificate and (ii)certifying that neither Holdings nor any of its Subsidiaries has taken anyactions (and is not aware of any actions so taken) to terminate any UCCfinancing statements or other appropriate filings, recordings or registrations,including all refilings, rerecordings and reregistrations, containing adescription of the Collateral, which have been filed of record in eachgovernmental, municipal or other appropriate office in each jurisdictionidentified pursuant to clause (i) above to the extent necessary to protect andperfect the security interests and Liens under the Security Documents for aperiod of not less than 18 months after the date of such certificate (except asnoted therein with respect to any continuation statements to be filed withinsuch period).

        (m) Other Notices. Promptly after the transmission orreceipt thereof, as applicable, copies of all notices received or sent byHoldings or any Subsidiary to or from the holders of any Material Indebtednessor any trustee with respect thereto.

        (n) Other Information. Within 10 days after a requesttherefor, such other information or documents (financial or otherwise) relatingto Holdings or any of its Subsidiaries as the Lender may reasonably request fromtime to time.

41

        Section 6.02 Books, Records andInspections. Holdings will, and will cause each of its Subsidiaries to, (i)keep proper books of record and account, in which full and correct entries shallbe made of all financial transactions and the assets and business of Holdings orsuch Subsidiary, as the case may be, in accordance with GAAP; and (ii) permitofficers and designated representatives of the Lender to visit and inspect anyof the properties or assets of Holdings and its Subsidiaries in whomsoever'spossession (but only to the extent Holdings or such Subsidiary has the right todo so to the extent in the possession of another Person), to examine the booksof account of Holdings and any of its Subsidiaries, and make copies thereof andtake extracts therefrom, and to discuss the affairs, finances and accounts ofHoldings and of its Subsidiaries with, and be advised as to the same by, its andtheir officers and independent accountants and independent actuaries, if any,all at such reasonable times and intervals and to such reasonable extent as theLender may request.

        Section 6.03 Insurance. 

        (a) Holdings will, and will cause each of its Subsidiariesto, (i) maintain insurance coverage by such insurers and in such forms andamounts and against such risks as are generally consistent with the insurancecoverage maintained by Holdings and its Subsidiaries as of the Closing Date, and(ii) forthwith upon the Lender's written request, furnish to the Lender suchinformation about such insurance as the Lender may from time to time reasonablyrequest, which information shall be prepared in form and detail satisfactory tothe Lender and certified by an Authorized Officer of Holdings.

        (b) Holdings will, and will cause each other Credit Party to,at all times keep its and their respective property that is subject to the Lienof any Security Document insured in favor of the Lender, and all policies orcertificates (or certified copies thereof) with respect to such insurance (andany other insurance maintained by Holdings or any such Credit Party) (i) shallbe endorsed to the Lender's satisfaction for the benefit of the Lender(including, without limitation, by naming the Lender as loss payee (with respectto Collateral) or, to the extent permitted by applicable law, as an additionalinsured), (ii) shall state that such insurance policies shall not be canceledwithout 30 days' prior written notice thereof (or 10 days' prior written noticein the case of cancellation for the non-payment of premiums) by the respectiveinsurer to the Lender, (iii) shall provide that the respective insurersirrevocably waive any and all rights of subrogation with respect to the Lender,and (iv) shall in the case of any such certificates or endorsements in favor ofthe Lender, be delivered to or deposited with the Lender. 

        (c) If Holdings or any other Credit Party shall fail tomaintain any insurance in accordance with this Section, or if Holdings or anysuch Credit Party shall fail to so endorse and deliver or deposit allendorsements or certificates with respect thereto, the Lender shall have theright (but shall be under no obligation) to procure such insurance and Holdingsagrees to reimburse the Lender on demand for all costs and expenses of procuringsuch insurance.

        Section 6.04 Payment of Taxes andClaims. Holdings will pay and discharge, and will cause each of itsSubsidiaries to pay and discharge, all taxes, assessments and governmentalcharges or levies imposed upon it or upon its income or profits, or upon anyproperties belonging to it, prior to the date on which penalties attach thereto,and all lawful claims that, if unpaid, might become a Lien or charge upon anyproperties of Holdings or any of its Subsidiaries;*provided, however,*that neither Holdings nor any of its Subsidiaries shall be required to pay anysuch tax, assessment, charge, levy or claim that is being contested in goodfaith and by proper proceedings if it has maintained adequate reserves withrespect thereto in accordance with GAAP. Without limiting the generality of theforegoing, Holdings will, and will cause each of its Subsidiaries to, pay infull all of its wage obligations to its employees in accordance with the FairLabor Standards Act (29 U.S.C. Sections 206-207) and any comparable provisionsof applicable law, in each case to the extent applicable to Holdings or itsSubsidiaries.

42

        Section 6.05 Corporate Franchises.Holdings will do, and will cause each of its Subsidiaries to do, or cause to bedone, all things necessary to preserve and keep in full force and effect itscorporate existence, rights and authority; *provided, however,* thatnothing in this Section shall be deemed to prohibit any transaction permitted bySection 7.02.

        Section 6.06 Good Repair.Holdings will, and will cause each of its Subsidiaries to, ensure that itsmaterial properties and equipment used or useful in its business in whomsoever'spossession they may be, are kept in good repair, working order and condition,normal wear and tear excepted, and that from time to time there are made in suchproperties and equipment all needful and proper repairs, renewals, replacements,extensions, additions, betterments and improvements thereto, to the extent andin the manner customary for companies in similar businesses.

        Section 6.07 Compliance withStatutes, etc. Holdings will, and will cause each of its Subsidiaries to,comply with all applicable statutes, regulations and orders of, and allapplicable restrictions imposed by, all Governmental Authorities in respect ofthe conduct of its business and the ownership of its property, other than thosethe noncompliance with which would not be reasonably expected to have a MaterialAdverse Effect.

        Section 6.08 Compliance withEnvironmental Laws. Without limitation of the covenants contained in Section6.07:

        (a) Holdings will comply, and will cause each of itsSubsidiaries to comply, with all Environmental Laws applicable to the ownership,lease or use of all Real Property now or hereafter owned, leased or operated byHoldings or any of its Subsidiaries, and will promptly pay or cause to be paidall costs and expenses incurred in connection with such compliance, *except*to the extent that such compliance with Environmental Laws is being contested ingood faith and by appropriate proceedings and for which adequate reserves havebeen established to the extent required by GAAP, and an adverse outcome in suchproceedings is not reasonably expected to have a Material Adverse Effect.

        (b) Holdings will keep or cause to be kept, and will causeeach of its Subsidiaries to keep or cause to be kept, all such Real Propertyfree and clear of any Liens imposed pursuant to such Environmental Laws otherthan Permitted Liens.

        (c) Neither Holdings nor any of its Subsidiaries willgenerate, use, treat, store, release or dispose of, or permit the generation,use, treatment, storage, release or disposal of, Hazardous Materials on any RealProperty now or hereafter owned, leased or operated by Holdings or any of itsSubsidiaries or transport or permit the transportation of Hazardous Materials toor from any such Real Property other than in compliance with applicableEnvironmental Laws and in the ordinary course of business, except for suchnoncompliance as would not be reasonably expected to have a Material AdverseEffect.

        (d) If required to do so under any applicable order of anyGovernmental Authority, Holdings will undertake, and cause each of itsSubsidiaries to undertake, any clean up, removal, remedial or other actionnecessary to remove and clean up any Hazardous Materials from any Real Propertyowned, leased or operated by Holdings or any of its Subsidiaries in accordancewith, in all material respects, the requirements of all applicable EnvironmentalLaws and in accordance with, in all material respects, such orders of allGovernmental Authorities, except to the extent that Holdings or such Subsidiaryis contesting such order in good faith and by appropriate proceedings and forwhich adequate reserves have been established to the extent required by GAAP.

        Section 6.09 Certain Subsidiariesto Execute a Guaranty. If at any time after the Closing Date, Holdings orany Credit Party acquires, creates or has any Subsidiary****(other than aSubsidiary that is

43

a "controlled foreigncorporation" as defined in section 957 of the Code (a "CFC")) that is notalready a party to a Guaranty, then Holdings will promptly, but in any eventwithin 30 days after such occurrence, cause such Subsidiary to deliver to theLender (i) a Guaranty, duly executed by such Subsidiary and (ii) resolutions ofthe Board of Directors or equivalent governing body of such Subsidiary,certified by the Secretary or an Assistant Secretary of such Subsidiary, as dulyadopted and in full force and effect, authorizing the execution and delivery ofsuch Guaranty and the other Loan Documents to which such Subsidiary is or willbe a party, together with such other corporate documentation and an opinion ofcounsel as the Lender may reasonably request, in each case, in form andsubstance satisfactory to the Lender.

        Section 6.10 Additional Security;Real Estate Matters; Further Assurances. 

        (a) Additional Security. Subject to subpart (b) below,if any Credit Party acquires, owns or holds an interest in any Real Property orany personal property that is not at the time included in the Collateral,Holdings will promptly notify the Lender in writing of such event, identifyingthe property or interests in question and referring specifically to the rightsof the Lender under this Section, and Holdings will, or will cause suchSubsidiary to, within 10 Business Days following request by the Lender, grant tothe Lender a Lien on such Real Property or such personal property pursuant tothe terms of such security agreements, assignments, Mortgages or other documentsas the Lender deems appropriate (collectively, the "Additional SecurityDocument") or a joinder in any existing Security Document. Furthermore,Holdings shall cause to be delivered to the Lender such opinions of localcounsel, corporate resolutions, a Perfection Certificate, consents of landlords,Collateral Access Agreements and other related documents as may be reasonablyrequested by the Lender in connection with the execution, delivery and recordingof any such Additional Security Document or joinder, all of which documentsshall be in form and substance reasonably satisfactory to the Lender.

        (b) Foreign Subsidiaries. Notwithstanding anything insubpart (a) above or elsewhere in this Agreement to the contrary, no CreditParty shall be required to pledge (or cause to be pledged) more than 65% of theEquity Interests in any of its CFCs or to cause a CFC to become a party to theSecurity Agreement or any other Security Document, if to do so would subjectHoldings or any of its Subsidiaries to liability for additional United Statesincome taxes by virtue of Section 956 of the Code in an amount the Lenderreasonably deems material.

        (c) Real Estate Matters. The Borrower shall havedelivered to the Lender (x) with respect to each parcel of Real Propertysubjected to a Mortgage as of the Closing Date, and (y) within 30 days of therequest therefor by the Lender, with respect to each parcel of Real Propertyacquired by the Borrower or any Guarantor after the Closing Date that becomessubject to a Mortgage pursuant to Section 6.10(a) above, all of the following:

        (i) an American Land Title Association ( ALTA)		mortgagee title insurance policy or policies, or unconditional		commitments therefor (a "Title Policy") issued by a title		insurance company reasonably satisfactory to the Lender (a "Title		Company"), in an amount not less than the amount reasonably required		therefor by the Lender (taking into account the estimated value of the		property involved), insuring fee simple title to, or a valid leasehold		interest in, such Real Property vested in the applicable Credit Party		and assuring the Lender that the applicable Mortgage creates a valid and		enforceable first priority mortgage lien on the respective Real Property		encumbered thereby, subject only to Permitted Liens and a standard		survey exception, which Title Policy (1) shall include an endorsement		for mechanics' liens, for revolving, "variable rate" and future advances		under this Agreement and for any other matters reasonably requested by		the Lender and (2) shall provide for affirmative insurance and such		reinsurance as the Lender 

44

may reasonably request, all of the foregoing		in form and substance reasonably satisfactory to the Lender;

        (ii) a title report issued by the Title Company with		respect thereto, dated not more than 30 days prior to the date of		execution of the applicable Mortgage and satisfactory in form and		substance to the Lender;

        (iii) copies of all recorded documents listed as		exceptions to title or otherwise referred to in the Title Policy or in		such title report relating to such real Property;

        (iv) evidence, which may be in the form of a letter		or other certification from the Title Company or from an insurance		broker, surveyor, engineer or other provider, as to whether (1) such		Real Property is a Flood Hazard Property, and (2) the community in which		such Flood Hazard Property is located is participating in the National		Flood Insurance Program, and if such Closing Date Mortgaged Property is		a Flood Hazard Property, evidence that the applicable Credit Party has		obtained flood insurance in respect of such Flood Hazard Property to the		extent required under the applicable regulations of the Board of		Governors of the Federal Reserve System;

        (v) a survey, in form and substance reasonably		satisfactory to the Lender, of such Real Property, certified in a manner		satisfactory to the Lender by a licensed professional surveyor		reasonably satisfactory to the Lender;

        (vi) a certificate of Holdings identifying any Phase		I, Phase II or other environmental report received in draft or final		form by any Credit Party during the five-year period prior to the date		of execution of the Mortgage relating to such Real Property and/or the		operations conducted therefrom, or stating that no such draft or final		form reports have been requested or received by any Credit Party (or its		counsel), together with true and correct copies of all such		environmental reports so listed (in draft form, if not finalized); and		all such environmental reports shall be satisfactory in form and		substance to the Lender;

        (vii) an opinion of local counsel admitted to		practice in the jurisdiction in which such Real Property is located,		satisfactory in form and substance to the Lender, as to the validity and		effectiveness of such Mortgage as a lien on such Real Property		encumbered thereby, and covering such other matters of law in connection		with the execution, delivery, recording and enforcement of such Mortgage		as the Lender may reasonably request; 

        (viii) The Lender shall have received appraisals,		satisfactory in form and substance to the Lender, dated not more than 60		days prior to the date of execution of each Mortgage and addressed to		the Lender or accompanied by a separate letter indicating that the		Lender may rely thereon, from one or more nationally recognized		appraisal firms, satisfactory to the Lender, covering (i) the Real		Properties, and (ii) all other tangible property, plant and equipment		owned by Holdings or any of its Subsidiaries, that is to be subjected to		the Lien of the Security Agreement and is located at any plant or		facility owned or leased by Holdings or any of its Subsidiaries in the		United States of America, which appraisals shall set forth (A) the "fair		market value" of such property (*i.e.*, the amount at which such		property would equitably exchange between a willing buyer and a willing		seller, neither being under a compulsion and both having reasonable		knowledge of all relevant facts on the premise that such property will		continue in its present use as part of an ongoing business enterprise),		(B) the "orderly disposal value" of such property (*i.e.*, the		amount which may be realized through a forced sale disposal of such		property when a reasonable time to find a buyer is allowed), and (C) the		"forced liquidation value" of such 

45

property (*i.e.*, the amount		which may be realized through an immediate forced sale disposal of such		property), in each case as determined in accordance with sound appraisal		standards; and

        (ix) Taxes. Holdings shall have paid or caused		to be paid all costs and expenses payable in connection with all of the		actions set forth in this Section 6.10(c), including but not limited to		(A) all mortgage, intangibles or similar taxes or fees, however		characterized, payable in respect of this Agreement, the execution and		delivery of any Notes, any of the Mortgages or any of the other Loan		Documents or the recording of any of the same or any other documents		related thereto; and (B) all expenses and premiums of the Title Company		in connection with the issuance of such policy or policies of title		insurance and to all costs and expenses required for the recording of		the Mortgages or any other Loan Documents or any other related documents		in the appropriate public records.

        (d) Landlord/Mortgagee Waivers. Holdings will promptlyupon request of the Lender obtain, and will maintain in effect, CollateralAccess Agreements on any Real Property on which any items of Collateral arelocated, in form and substance reasonably acceptable to the Lender.

        (e) Further Assurances. Holdings will, and will causeeach of its Subsidiaries to, at the expense of Holdings, make, execute, endorse,acknowledge, file and/or deliver to the Lender from time to time suchconveyances, financing statements, transfer endorsements, powers of attorney,certificates, and other assurances or instruments and take such further stepsrelating to the Collateral covered by any of the Security Documents as theLender may reasonably require. If at any time the Lender determines, based onapplicable law, that all applicable taxes (including, without limitation,mortgage recording taxes or similar charges) were not paid in connection withthe recordation of any mortgage or deed of trust, Holdings shall promptly paythe same upon demand.

        Section 6.11 Most Favored CovenantStatus. If any Credit Party at any time after the Closing Date enters intoor modifies any Material Indebtedness Agreement such that such MaterialIndebtedness Agreement includes affirmative or negative covenants (or any eventsof default or other type of restriction that would have the practical effect ofany affirmative or negative business or financial covenant, including, withoutlimitation, any "put" or mandatory prepayment of such Indebtedness upon theoccurrence of a "change of control") that are applicable to any Credit Party,other than those set forth herein or in any of the other Loan Documents, theBorrower shall promptly so notify the Lender and, if the Lender shall so requestby written notice to the Borrower (after a determination has been made by theLender that such Material Indebtedness Agreement contains any such provisionsthat either individually or in the aggregate are more favorable to the holdersof such Indebtedness than any of the provisions set forth herein), the Borrowerand the Lender shall promptly amend this Agreement to incorporate some or all ofsuch provisions, in the discretion of the Lender, into this Agreement and, tothe extent necessary and reasonably desirable to the Lender, into any of theother Loan Documents, all at the election of the Lender.

        Section 6.12 Senior Debt. TheObligations shall, and the Borrower shall take all necessary action to ensurethat the Obligations shall, at all times rank at least *pari passu* inright of payment (to the fullest extent permitted by law) with all other seniorsecured Indebtedness of the Borrower and each Guarantor.

        Section 6.13 Post-ClosingCovenants.

        (a) Intellectual Property Releases. On or beforeFebruary 15, 2005, the Borrower shall deliver to the Lender executed copies ofintellectual property releases in form and substance satisfactory 

46

to the Lenderfrom Fleet National Bank (now know as Bank of America) and Manufacturers andTraders Trust Company.

        (b) ALTA Survey. On or before February 15, 2005, theBorrower shall deliver to the Lender, an ALTA survey, in form and substancereasonably satisfactory to the Lender, of the Mortgaged Real Property, certifiedin a manner satisfactory to the Lender.

        (c) Zoning Letter. On or before February 15, 2005, theBorrower shall deliver to the Lender a zoning letter in form and substancesatisfactory to the Lender from the city of Bethlehem, Pennsylvania.

ARTICLE VII.NEGATIVE COVENANTS

        The Borrower and the other Credit Parties each herebycovenants and agrees that on the Closing Date and thereafter for so long as thisAgreement is in effect and until such time as the Revolving Commitment have beenterminated, no Notes remain outstanding and the Revolving Loans, together withinterest, Fees and all other Obligations incurred hereunder and under the otherLoan Documents, have been paid in full:

        Section 7.01 Changes in Business.Neither Holdings nor any of its Subsidiaries will engage in any business if, asa result, the general nature of the business, taken on a consolidated basis,which would then be engaged in by Holdings and its Subsidiaries, would besubstantially changed from the general nature of the business engaged in byHoldings and its Subsidiaries on the Closing Date.

        Section 7.02 Consolidation,Merger, Acquisitions, Asset Sales, etc. Holdings will not, and will notpermit any Subsidiary to, (i) wind up, liquidate or dissolve its affairs, (ii)enter into any transaction of merger or consolidation, (iii) make or otherwiseeffect any Acquisition, (iv) sell or otherwise dispose of any of its property orassets outside the ordinary course of business, or otherwise make or otherwiseeffect any Asset Sale, or (v) agree to do any of the foregoing at any futuretime, *except* that, if no Default or Event of Default shall have occurredand be continuing or would result therefrom, each of the following shall bepermitted:

        (a) the merger, consolidation or amalgamation of (i) anySubsidiary of Holdings (other than the Borrower) with or into Holdings, *provided* Holdings is the surviving or continuing or resulting corporation;(ii) any Subsidiary of Holdings (other than the Borrower) with or into anyGuarantor, *provided* that the surviving or continuing or resultingcorporation is a Guarantor; (iii) any Subsidiary of Holdings that is a Guarantorwith or into the Borrower, *provided* the Borrower is the surviving orcontinuing or resulting corporation; or (iv) any Foreign Subsidiary of Holdingswith or into any other Foreign Subsidiary of Holdings; and

        (b) any Asset Sale by (i) Holdings to any Credit Party (otherthan the Borrower), (ii) any Subsidiary of Holdings (other than the Borrower) toany Credit Party; or (iii) any Foreign Subsidiary of Holdings to any otherForeign Subsidiary of Holdings.

        Section 7.03 Liens. Holdingswill not, and will not permit any of its Subsidiaries to, create, incur, assumeor suffer to exist any Lien upon or with respect to any property or assets ofany kind of Holdings or any such Subsidiary whether now owned or hereafteracquired, *except* that the foregoing shall not apply to:

        (a) any Standard Permitted Lien;

47

        (b) Liens in existence on the Closing Date that are listed inSchedule 7.03;

        (c) Liens (i) that are placed upon fixed or capital assets,acquired, constructed or improved by Holdings or any Subsidiary, *provided*that (A) such Liens only secure Indebtedness permitted by Section 7.04(c), (B)such Liens and the Indebtedness secured thereby are incurred prior to or within120 days after such acquisition or the completion of such construction orimprovement, (C) the Indebtedness secured thereby does not exceed 90% of thecost of acquiring, constructing or improving such fixed or capital assets; and(D) such Liens shall not apply to any other property or assets of Holdings orany Subsidiary; or (ii) arising out of the refinancing, extension, renewal orrefunding of any Indebtedness secured by any such Liens, *provided* thatthe principal amount of such Indebtedness is not increased and such Indebtednessis not secured by any additional assets;

        (d) any Lien granted to the Lender securing any of theObligations or any other Indebtedness of the Credit Parties under the LoanDocuments or any Indebtedness under any Designated Hedge Agreement; or

        (e) Liens on the Borrower's machinery, equipment and/orbuildings located in Bethlehem, Pennsylvania to the extent that such Liens aresubordinated to the satisfaction of the Lender to the Liens of the Lendergranted pursuant to the Loan Documents and arise from financing that consists ofSubordinated Indebtedness in an aggregate principal amount not to exceed$2,000,000, at any time.

        Section 7.04 Indebtedness.Holdings will not, and will not permit any of its Subsidiaries to, contract,create, incur, assume or suffer to exist any Indebtedness of Holdings or any ofits Subsidiaries, *except*:

        (a) Indebtedness incurred under this Agreement and the otherLoan Documents;

        (b) the Indebtedness set forth on Schedule 7.04, andany refinancing, extension, renewal or refunding of any such Indebtedness notinvolving an increase in the principal amount thereof;

        (c) (i) Indebtedness consisting of Capital Lease Obligationsof Holdings and its Subsidiaries, (ii) Indebtedness secured by a Lien referredto in Section 7.03(c), and (iii) any refinancing, extension, renewal orrefunding of any such Indebtedness not involving an increase in the principalamount thereof, *provided* the aggregate outstanding principal amount(using Capitalized Lease Obligations in lieu of principal amount, in the case ofany Capital Lease) of Indebtedness permitted by this subpart (c) shall notexceed $100,000 at any time;

        (d) any intercompany loans (i) made by Holdings or anySubsidiary of Holdings to any Credit Party; or (ii) made by any ForeignSubsidiary of Holdings to any other Foreign Subsidiary of Holdings;

        (e) Indebtedness of Holdings and its Subsidiaries under HedgeAgreements, *provided* such Hedge Agreements have been entered into in theordinary course of business and not for speculative purposes; 

        (f) Indebtedness constituting Guaranty Obligations permittedby Section 7.05; and

        (g) other Indebtedness of the Credit Parties to the extentnot permitted by any of the foregoing subparts, *provided* that (i) allsuch Indebtedness constitutes Subordinated Indebtedness, (ii) no Default orEvent of Default shall then exist or immediately after incurring any of suchIndebtedness will exist, (iii) the documentation with respect to suchIndebtedness shall be in form and substance satisfactory 

48

to the Lender, and (iv)Holdings and its Subsidiaries shall be in compliance with the financialcovenants set forth in Section 7.07 both immediately before and after giving *pro forma* effect to the incurrence of such Indebtedness.

        Section 7.05 Investments andGuaranty Obligations. Holdings will not, and will not permit any of itsSubsidiaries to, directly or indirectly, (i) make or commit to make anyInvestment or (ii) be or become obligated under any Guaranty Obligations, *except*:

        (a) Investments by Holdings or any of its Subsidiaries incash and Cash Equivalents;

        (b) any endorsement of a check or other medium of payment fordeposit or collection, or any similar transaction in the normal course ofbusiness;

        (c) Holdings and its Subsidiaries may acquire and holdreceivables and similar items owing to them in the ordinary course of businessand payable or dischargeable in accordance with customary trade terms;

        (d) any Permitted Creditor Investment;

        (e) loans and advances to employees for business-relatedtravel expenses, moving expenses, costs of replacement homes, business machinesor supplies, automobiles and other similar expenses, in each case incurred inthe ordinary course of business, *provided* the aggregate outstandingamount of all such loans and advances shall not exceed $100,000 at any time;

        (f) to the extent not permitted by any of the other subpartsin this Section, Investments existing as of the Closing Date and described on Schedule 7.05 ;

        (g) any Guaranty Obligations of Holdings or any Subsidiary infavor of the Lender under any Designated Hedge Agreements pursuant to the LoanDocuments;

        (h) Investments of Holdings and its Subsidiaries in HedgeAgreements permitted to be entered into pursuant to this Agreement;

        (i) Investments (i) of Holdings or any of its Subsidiaries inany Subsidiary existing as of the Closing Date, (ii) of Holdings in any CreditParty made after the Closing Date, or (iii) of any Credit Party in any otherCredit Party made after the Closing Date;

        (j) intercompany loans permitted by Section 7.04(d); and

        (k) any Guaranty Obligation incurred by any Credit Party withrespect to Indebtedness of another Credit Party which Indebtedness is permittedby Section 7.04.

        Section 7.06 Restricted Payments.Holdings will not, and will not permit any of its Subsidiaries to, declare ormake, or agree to pay or make, directly or indirectly, any Restricted Payment,*except*:

        (a) Holdings or any of its Subsidiaries may declare and payor make Capital Distributions that are payable solely in additional shares ofits common stock (or warrants, options or other rights to acquire additionalshares of its common stock); 

49

        (b) (i) any Subsidiary of Holdings may declare and pay ormake Capital Distributions to any Credit Party, and (ii) any Foreign Subsidiaryof Holdings may declare and pay or make Capital Distributions to any otherForeign Subsidiary or to any Credit Party; and 

        (c) Holdings may declare and pay or make Cash Dividends tothe holders of its Preferred Shares (as defined in the Certificate ofIncorporation referred to below), *provided* that (i) no Default or Eventof Default shall have occurred and be continuing or would result therefrom, (ii)Holdings will be in compliance with the financial covenants set forth in Section7.07 after giving *pro forma* effect to each such Cash Dividend, and (iii)all such Cash Dividends shall be made by Holdings in such amounts and upon theterms and conditions set forth in its Certificate of Incorporation (as amendedby the Certificate of Designations, filed with the Secretary of State of theState of Delaware on June 8, 2005), as in effect on the Closing Date.

        Section 7.07 Financial Covenants.

        (a) Minimum Liquidity. Holdings will at all timesmaintain on a consolidated basis Liquidity in an amount equal to or greater than$1,000,000.

        (b) Minimum Consolidated EBITDA. Holdings shall have,at the end of each Testing Period ending on the dates set forth below,Consolidated EBITDA for such Testing Period of not less than the following:
**Testing Period**Consolidated EBITDA
December 31, 2005
($175,000)
March 31, 2006
$250,000
June 30, 2006
$500,000
September 30, 2006 and thereafter
$1,000,000
        (c) Consolidated Net Worth. Holdings will not permitits Consolidated Net Worth at any time to be less than the sum of (i) $4,000,000plus (ii) 50% of Consolidated Net Income of Holdings (to the extent apositive number) for each fiscal quarter ending after the Closing Date plus(iii) 75% of the net proceeds of any equity offering (or any debt offering tothe extent converted into equity).

        Section 7.08 Limitation on CertainRestrictive Agreements. Holdings will not, and will not permit any of itsSubsidiaries to, directly or indirectly, enter into, incur or permit to exist orbecome effective, any "negative pledge" covenant or other agreement, restrictionor arrangement that prohibits, restricts or imposes any condition upon (a) theability of Holdings or any Subsidiary to create, incur or suffer to exist anyLien upon any of its property or assets as security for Indebtedness, or (b) theability of any such Subsidiary to make Capital Distributions or any otherinterest or participation in its profits owned by Holdings or any Subsidiary ofHoldings, or pay any Indebtedness owed to Holdings or a Subsidiary of Holdings,or to make loans or advances to Holdings or any of Holdings' other Subsidiaries,or transfer any of its property or assets to Holdings or any of Holdings' otherSubsidiaries, *except* for such restrictions existing under or by reason of(i) applicable law, (ii) this Agreement and the other Loan Documents, (iii)customary provisions restricting subletting or assignment of any lease governinga leasehold interest, (iv) customary provisions restricting assignment of anylicensing agreement entered into in the ordinary course of business, (v)customary provisions restricting the transfer or further encumbering of assetssubject to Liens permitted under Section 7.03(c), (vi) customary restrictionsaffecting only a Subsidiary of Holdings under any agreement or instrumentgoverning any of the

50

Indebtedness of a Subsidiarypermitted pursuant to Section 7.04, (vii) restrictions affecting any ForeignSubsidiary of Holdings under any agreement or instrument governing anyIndebtedness of such Foreign Subsidiary permitted pursuant to Section 7.04, andcustomary restrictions contained in "comfort" letters and guarantees of any suchIndebtedness, (viii) any document relating to Indebtedness secured by a Lienpermitted by Section 7.03, insofar as the provisions thereof limit grants ofjunior liens on the assets securing such Indebtedness, and (ix) any OperatingLease or Capital Lease, insofar as the provisions thereof limit grants of asecurity interest in, or other assignments of, the related leasehold interest toany other Person.

        Section 7.09 Transactions withAffiliates. Holdings will not, and will not permit any Subsidiary to, enterinto any transaction or series of transactions with any Affiliate (other than,in the case of Holdings, any Subsidiary, and in the case of a Subsidiary,Holdings or another Subsidiary) other than in the ordinary course of business ofand pursuant to the reasonable requirements of Holdings' or such Subsidiary'sbusiness and upon fair and reasonable terms no less favorable to Holdings orsuch Subsidiary than would be obtained in a comparable arm's-length transactionwith a Person other than an Affiliate, *except* (i) sales of goods to anAffiliate for use or distribution outside the United States that in the goodfaith judgment of Holdings comply with any applicable legal requirements of theCode, or (ii) agreements and transactions with and payments to officers,directors and shareholders that are either (A) entered into in the ordinarycourse of business and not prohibited by any of the provisions of thisAgreement, or (B) entered into outside the ordinary course of business, approvedby the directors or shareholders of Holdings, and not prohibited by any of theprovisions of this Agreement or in violation of any law, rule or regulation.

        Section 7.10 Plan Terminations,Minimum Funding, etc. Holdings will not, and will not permit any Subsidiaryof Holdings or ERISA Affiliate to, (i) terminate any Plan or Plans so as toresult in liability of Holdings or any ERISA Affiliate to the PBGC in excess of,in the aggregate, the amount that is equal to 5% of Holdings' Consolidated NetWorth as of the date of the then most recent financial statements furnished tothe Lender pursuant to the provisions of this Agreement, (ii) permit to existone or more events or conditions that present a material risk of the terminationby the PBGC of any Plan or Plans with respect to which Holdings or anySubsidiary of Holdings or ERISA Affiliate would, in the event of suchtermination, incur liability to the PBGC in excess of such amount in theaggregate, (iii) fail to comply with the minimum funding standards of ERISA andthe Code with respect to any Plan, or (iv) incur an obligation to contribute to,or become a contributing sponsor (as such term is defined in Section 4001 ofERISA) in, any Multi-Employer Plan or Multiple Employer Plan.

        Section 7.11 Anti-Terrorism Laws.Neither Holdings nor any of its Subsidiaries shall be subject to or in violationof any law, regulation, or list of any government agency (including, withoutlimitation, the U.S. Office of Foreign Asset Control list, Executive Order No.13224 or the USA Patriot Act) that prohibits or limits the conduct of businesswith or the receiving of funds, goods or services to or for the benefit ofcertain Persons specified therein or that prohibits or limits the Lender frommaking any advance or extension of credit to the Borrower or from otherwiseconducting business with Holdings or any of its Subsidiaries.

ARTICLE VIII.EVENTS OF DEFAULT

        Section 8.01 Events of Default.Any of the following specified events shall constitute an Event of Default (eachan "Event of Default"):

51

        (a) Payments: the Borrower shall (i) default in thepayment when due (whether at maturity, on a date on which a required prepaymentis to be made, upon acceleration or otherwise) of any principal of the RevolvingLoans or any reimbursement obligation in respect of any Unpaid Drawing; or (ii)default, and such default shall continue for three or more Business Days, in thepayment when due of any interest on the Revolving Loans, any Fees or any otherObligations; or

        (b) Representations, etc.: any representation,warranty or statement made by any Credit Party herein or in any other LoanDocument or in any statement or certificate delivered or required to bedelivered pursuant hereto or thereto shall prove to be untrue in any materialrespect on the date as of which made or deemed made; or

        (c) Certain Covenants: any Credit Party shall defaultin the due performance or observance by it of any term, covenant or agreementcontained in Sections 2.10, 6.01, 6.02(ii), 6.03(b), 6.09, 6.10, 6.11, 6.12 or6.13 or Article VII or Article IX ; or

        (d) Other Covenants: any Credit Party shall default inthe due performance or observance by it of any term, covenant or agreementcontained in this Agreement or any other Loan Document (other than thosereferred to in Section 8.01(a) or (b) or (c) above) and such default is notremedied within 30 days after the earlier of (i) an Authorized Officer of anyCredit Party obtaining knowledge of such default or (ii) the Borrower receivingwritten notice of such default from the Lender; or

        (e) Cross Default Under Other Agreements: Holdings orany of its Subsidiaries shall (i) default in any payment with respect to anyMaterial Indebtedness (other than the Obligations), and such default shallcontinue after the applicable grace period, if any, specified in the agreementor instrument relating to such Material Indebtedness, or (ii) default in theobservance or performance of any agreement or condition relating to any suchMaterial Indebtedness or contained in any instrument or agreement evidencing,securing or relating thereto (and all grace periods applicable to suchobservance, performance or condition shall have expired), or any other eventshall occur or condition exist, the effect of which default or other event orcondition is to cause, or to permit the holder or holders of such MaterialIndebtedness (or a trustee or agent on behalf of such holder or holders) tocause any such Material Indebtedness to become due prior to its stated maturity;or any such Material Indebtedness of Holdings or any of its Subsidiaries shallbe declared to be due and payable, or shall be required to be prepaid (otherthan by a regularly scheduled required prepayment or redemption, prior to thestated maturity thereof); or (iii) without limitation of the foregoing clauses,default in any payment obligation under a Designated Hedge Agreement, and suchdefault shall continue after the applicable grace period, if any, specified insuch Designated Hedge Agreement or any other agreement or instrument relatingthereto; or

        (f) Invalidity of Loan Documents or Liens: anyprovision of any Loan Document, at any time after its execution and delivery andfor any reason other than as expressly permitted hereunder or under such LoanDocument or satisfaction in full of all the Obligations, ceases to be in fullforce and effect; or any Credit Party or any other Person contests in any mannerthe validity or enforceability of any provision of any Loan Document; or anyCredit Party denies that it has any or further liability or obligation under anyLoan Document, or purports to revoke, terminate or rescind any Loan Document orthe Lender fails to have; or

        (g) Judgments: (i) one or more judgments, orders ordecrees shall be entered against Holdings and/or any of its Subsidiariesinvolving a liability (other than a liability covered by insurance, as to whichthe carrier has adequate claims paying ability and has not effectively reservedits rights) of $50,000 or more in the aggregate for all such judgments, ordersand decrees for Holdings and its Subsidiaries, and any such judgments or ordersor decrees shall not have been vacated, discharged or stayed or bonded pendingappeal within 30 days (or such longer period, not in excess of 60 days, during

52

which enforcement thereof, and the filing of any judgment lien, is effectivelystayed or prohibited) from the entry thereof; or (ii) one or more judgments,orders or decrees shall be entered against Holdings and/or any of itsSubsidiaries involving a required divestiture of any material properties, assetsor business reasonably estimated to have a fair value in excess of $50,000, andany such judgments, orders or decrees shall not have been vacated, discharged orstayed or bonded pending appeal within 30 days (or such longer period, not inexcess of 60 days, during which enforcement thereof, and the filing of anyjudgment lien, is effectively stayed or prohibited) from the entry thereof; or

        (h) Insolvency Event: any Insolvency Event shall occurwith respect to Holdings or any Subsidiary of Holdings; or

        (i) ERISA: (i) any of the events described in clauses(i) through (xi) of Section 6.01(f) shall have occurred; and (ii) there shallresult from any such event or events the imposition of a Lien, the granting of asecurity interest, or a liability or a material risk of incurring a liability;or

        (j) Change of Control: if there occurs a Change ofControl; or

        (k) Material Adverse Effect: any event or developmenthas occurred that the Lender determines has or is reasonably likely to have aMaterial Adverse Effect.

        Section 8.02 Remedies. Uponthe occurrence of any Event of Default, and at any time thereafter, if any Eventof Default shall then be continuing, the Lender shall, by written notice to theBorrower, take any or all of the following actions, without prejudice to therights of the Lender to enforce its claims against the Borrower or any otherCredit Party in any manner permitted under applicable law:

        (a) declare the Revolving Commitment terminated;

        (b) declare the principal of and any accrued interest inrespect of all Revolving Loans, all Unpaid Drawings and all other Obligations(other than any Obligations under any Designated Hedge Agreement) owinghereunder and thereunder to be, whereupon the same shall become, forthwith dueand payable without presentment, demand, protest or other notice of any kind,all of which are hereby waived by the Borrower;

        (c) terminate any Letter of Credit that may be terminated inaccordance with its terms; or

        (d) exercise any other right or remedy available under any ofthe Loan Documents or applicable law;
*provided that, if an Event of Default specified inSection 8.01(h) shall occur, the result that would occur upon the giving ofwritten notice by the Lender as specified in clauses (a) and/or (b) above shalloccur automatically without the giving of any such notice.

ARTICLE IX.****GUARANTY

        Section 9.01 Guaranty by Holdings.

        (a) Holdings irrevocably and unconditionally guarantees tothe Lender and each Designated Hedge Creditor, as applicable, the full andprompt payment when due (whether at the stated maturity, by acceleration orotherwise) of all of the Obligations. Such guaranty is an absolute,unconditional, present 

53

and continuing guaranty of payment and not of collectibility and is in no way conditioned or contingent upon any attempt tocollect from the Borrower or any other Subsidiary or Affiliate of the Borrower,or any other action, occurrence or circumstance whatsoever. If an Event ofDefault shall occur and be continuing hereunder or any payment default shalloccur and be outstanding under any Designated Hedge Agreement, Holdings will,immediately upon (and in any event no later than one Business Day following) itsreceipt of written notice from the Lender demanding payment hereunder, pay tothe Lender, for the benefit of the Creditors, in immediately available funds, atthe Payment Office, such amount of the Obligations as the Lender shall specifyin such notice.

        (b) In addition to the foregoing, Holdings unconditionallyand irrevocably, guarantees to the Creditors the payment of any and allObligations, whether or not due or payable by the obligor thereon, upon theoccurrence of an Insolvency Event in respect of the Borrower or such otherCredit Party, and unconditionally and irrevocably, promises to pay theObligations to the Lender, for the benefit of the Creditors, on demand, in suchmanner as is provided in the Loan Documents governing the Obligations.

        (c) As a separate, additional and continuing obligation,Holdings unconditionally and irrevocably undertakes and agrees, for the benefitof the Creditors, that, should any amounts constituting Obligations not berecoverable from the Borrower or any other Credit Party for any reasonwhatsoever (including, without limitation, by reason of any provision of anyLoan Document or any other agreement or instrument executed in connectiontherewith being or becoming, at any time, voidable, void, unenforceable, orotherwise invalid under any applicable law), then notwithstanding any notice orknowledge thereof by the Lender, any other Creditor, any of their respectiveAffiliates, or any other Person, Holdings as sole, original and independentobligor, upon demand by the Lender, will make payment to the Lender, for theaccount of the Creditors, of all such obligations not so recoverable by way offull indemnity.

        (d) All payments by Holdings under this Article IX shall bemade to the Lender, for the benefit of the Creditors, in such manner as isprovided in the Loan Documents to which such payments relate.

        Section 9.02 Subordination.

        (a) Any Indebtedness or other obligations or liabilities ofthe Borrower now or hereafter held by Holdings (collectively, "SubordinatedObligations") are hereby subordinated to the Indebtedness of the Borrower toany Creditor; and such Subordinated Obligations of the Borrower to Holdings, ifthe Lender, after an Event of Default has occurred, so requests, shall becollected, enforced and received by Holdings as trustee for the Lender and theother Creditors and be paid over to the Lender, for the benefit of theCreditors, on account of the Indebtedness of the Borrower owing under the LoanDocuments to the Lender and to the other Creditors, but without affecting orimpairing in any manner the liability of Holdings under the other provisions ofthis Article IX. Prior to the transfer by Holdings of any note or negotiableinstrument evidencing any Subordinated Obligation of the Borrower to Holdings,Holdings shall mark such note or negotiable instrument with a legend that thesame is subject to this subordination.

        (b) If and to the extent that Holdings makes any payment tothe Lender or any other Creditor or to any other Person pursuant to or inrespect of this Article IX, any reimbursement or similar claim that Holdings mayhave against the Borrower by reason thereof shall be subject and subordinate tothe prior termination of the Revolving Commitment and indefeasible payment infull of all Obligations.

        Section 9.03 Holdings' ObligationsAbsolute. The obligations of Holdings under this Article IX shall beabsolute and unconditional, shall not be subject to any counterclaim, setoff,deduction or defense based on any claim Holdings may have against the Borroweror any other Person, including,

54

without limitation,the Lender, any other Creditor, any of their respective Affiliates, or any otherGuarantor, and shall remain in full force and effect without regard to, andshall not be released, suspended, abated, deferred, reduced, limited,discharged, terminated or otherwise impaired or adversely affected by anycircumstance or occurrence whatsoever, other than indefeasible payment in fullof, and complete performance of, all of the Obligations, including, withoutlimitation:

        (a) any increase in the amount of the Obligations outstandingfrom time to time, including, without limitation, any increase in the aggregateoutstanding amount of the Revolving Loans and Letters of Credit above anyspecific maximum amount referred to in this Agreement as in effect on the datehereof, and any increase in any interest rate, Fee or other amount applicable toany portion of the Obligations or otherwise payable under any Loan Document;

        (b) any direction as to the application of any payment by theBorrower or by any other Person;

        (c) any incurrence of additional Obligations at any time orunder any circumstances, including, without limitation, (i) during thecontinuance of a Default or Event of Default, (ii) at any time when allconditions to such incurrence have not been satisfied, or (iii) in excess of anyborrowing base, sublimit or other limitations contained in this Agreement or anyof the other Loan Documents;

        (d) any renewal or extension of the time for payment ormaturity of any of the Obligations, or any amendment or modification of, oraddition or supplement to, or deletion from, this Agreement, any other LoanDocument, or any other instrument or agreement applicable to the Borrower or anyother Person, or any part thereof, or any assignment, transfer or otherdisposition of any thereof;

        (e) any failure of this Agreement, any other Loan Document,or any other instrument or agreement applicable to the Borrower or any otherPerson, to constitute the legal, valid and binding agreement or obligation ofany party thereto, enforceable in accordance with its terms, or any irregularityin the form of any Loan Document;

        (f) any waiver, consent, extension, indulgence or otheraction or inaction (including, without limitation, any lack of diligence, anyfailure to mitigate damages or marshal assets, or any election of remedies)under or in respect of (i) this Agreement, any other Loan Document, or any suchother instrument or agreement, or (ii) any obligation or liability of theBorrower or any other Person;

        (g) any payment made to the Lender or any other Creditor onthe Obligations that the Lender or any other Creditor repays, returns orotherwise restores to the Borrower or any other applicable obligor pursuant tocourt order in any bankruptcy, reorganization, arrangement, moratorium or otherdebtor relief proceeding;

        (h) any sale, exchange, release, surrender or foreclosure of,or any realization upon, or other dealing with, in any manner and in any order,any property, rights or interests by whomsoever at any time granted, assigned,pledged or mortgaged to secure, or howsoever securing, the Obligations, or anyother liabilities or obligations (including any of those hereunder), or anyportion of any thereof;

        (i) any release of any security or any guaranty by or at thedirection of the Lender or any other Creditor, or any release or discharge of,or limitation of recourse against, any Person furnishing any security orguaranty, including, without limitation, any release or discharge of Holdingsfrom this Article IX;

        (j) any Insolvency Event relating to the Borrower or to anyof its properties or assets;

55

        (k) any assignment, transfer or other disposition, in wholeor in part, by the Borrower or any other Person of its interest in any of theproperty, rights or interests constituting security for all or any portion ofthe Obligations or any other Indebtedness, liabilities or obligations;

        (l) any lack of notice to, or knowledge by, Holdings of anyof the matters referred to above; or

        (m) to the fullest extent permitted under applicable law nowor hereafter in effect, any other circumstance or occurrence, whether similar ordissimilar to any of the foregoing, that could or might constitute a defenseavailable to, or a discharge of the obligations of, a guarantor or other surety.

        Section 9.04 Waivers. Holdingsunconditionally waives, to the maximum extent permitted under any applicable lawnow or hereafter in effect, insofar as its obligations under this Article IX areconcerned, (a) notice of any of the matters referred to in Section 9.03, (b) allnotices required by statute, rule of law or otherwise to preserve any rightsagainst Holdings hereunder, including, without limitation, any demand,presentment, proof or notice of dishonor or non-payment of any Obligation,notice of acceptance of the Guaranty provided under this Article IX, notice ofthe incurrence of any Obligation, notice of any failure on the part of theBorrower, any of its Subsidiaries or Affiliates, or any other Person, to performor comply with any term or provision of this Agreement, any other Loan Documentor any other agreement or instrument to which the Borrower or any other Personis a party, or notice of the commencement of any proceeding against any otherPerson or any of its property or assets, (c) any right to the enforcement,assertion or exercise against the Borrower or against any other Person or anycollateral of any right, power or remedy under or in respect of this Agreement,the other Loan Documents or any other agreement or instrument, and (d) anyrequirement that Holdings be joined as a party to any proceedings against theBorrower or any other Person for the enforcement of any term or provision ofthis Agreement, the other Loan Documents, or any other agreement or instrument.

        Section 9.05 Subrogation Rights.Until such time as the Obligations have been paid in full in cash and otherwisefully performed and the Revolving Commitment under this Agreement have beenterminated, Holdings hereby irrevocably waives all rights of subrogation that itmay at any time otherwise have as a result of this Article IX (whethercontractual, under Section 509 of the Bankruptcy Code, or otherwise) to theclaims of the Lender and/or the other Creditors against the Borrower, any otherGuarantor or any other guarantor of or surety for the Obligations and allcontractual, statutory or common law rights of reimbursement, contribution orindemnity from the Borrower or any other Guarantor that it may at any timeotherwise have as a result of this Article IX.

        Section 9.06 Holdings Familiarwith Borrower's Affairs. Holdings confirms that it has made its ownindependent investigation with respect to the creditworthiness of the Borrowerand its other Subsidiaries and Affiliates and is not executing this Agreement inreliance on any representation or warranty by the Lender or any other Creditoror any other Person acting on behalf of the Lender or any other Creditor as tosuch creditworthiness. Holdings expressly assumes all responsibilities to remaininformed of the financial condition of the Borrower and its other Subsidiariesand Affiliates and any circumstances affecting (a) the Borrower's or any otherSubsidiary's or Affiliate's ability to perform its obligations under thisAgreement and the other Loan Documents to which it is a party, or (b) anycollateral securing, or any other guaranty for, all or any part of theBorrower's or such other Subsidiary's or Affiliate's payment and performanceobligations thereunder; and Holdings further agrees that the Lender and theother Creditors shall have no duty to advise Holdings of information known tothem regarding such circumstances or the risks Holdings undertakes in thisArticle IX.

        Section 9.07 Solvency.Holdings represents and warrants to the Lender and each of the other Creditorsthat as of the date Holdings has become a party to this Agreement, (i) Holdingshas

56

received consideration that is the reasonableequivalent value of the obligations and liabilities that Holdings has incurredto the Lender and the other Creditors under this Article IX and the other LoanDocuments to which Holdings is a party; (ii) Holdings has capital sufficient tocarry on its business and transactions and all business and transactions inwhich it is about to engage and is solvent and able to pay its debts as theymature; (iii) Holdings owns property having a value, both at fair valuation andat present fair salable value, greater than the amount required to pay itsdebts; and (iv) Holdings is not entering into the Loan Documents to which it isa party with the intent to hinder, delay or defraud its creditors.

        Section 9.08 Continuing Guaranty;Remedies Cumulative, etc. The guaranty provided under this Article IX is acontinuing guaranty, all liabilities to which it applies or may apply under theterms hereof shall be conclusively presumed to have been created in reliancehereon, and this Article IX shall remain in full force and effect untilterminated as provided in Section 9.14. No failure or delay on the part of theLender or any other Creditor in exercising any right, power or privilegehereunder shall operate as a waiver thereof, nor shall any single or partialexercise of any right, power or privilege hereunder preclude any other orfurther exercise thereof or the exercise of any other right, power or privilege.The rights and remedies herein expressly specified are cumulative and notexclusive of any rights or remedies that the Lender or any other Creditor wouldotherwise have. No notice to or demand on Holdings in any case shall entitleHoldings to any other further notice or demand in similar or other circumstancesor constitute a waiver of the rights of the Lender or any other Creditor to anyother or further action in any circumstances without notice or demand. It is notnecessary for, and neither the Lender nor any other Creditor, undertakes anyobligation or duty to, inquire into the capacity or powers of the Borrower orany of its Subsidiaries or the officers, directors, partners or agents acting orpurporting to act on its behalf, and any indebtedness made or created inreliance upon the professed exercise of such powers shall be guaranteedhereunder.

        Section 9.09 Enforcement Expenses.Holdings hereby agrees to pay, to the extent not paid pursuant to Section 10.01,all out-of-pocket costs and expenses of the Lender and each other Creditor inconnection with the enforcement of this Article IX and any amendment, waiver orconsent relating hereto (including, without limitation, the fees anddisbursements of a single counsel employed by the Lender and the other Creditorsfor each applicable jurisdiction, unless such counsel has a conflict of interestprohibiting it from representing one or more of the Creditors, in which case thefees and disbursements of separate counsel for such Creditors shall also be paidby Holdings as aforesaid).

        Section 9.10 Right of Setoff.In addition to any rights now or hereafter granted under applicable law and notby way of limitation of any such rights, upon the occurrence and during thecontinuance of an Event of Default after any applicable notice and grace period,each Creditor is hereby authorized at any time or from time to time, withoutnotice to Holdings or to any other Person, any such notice being expresslywaived, to the fullest extent permitted under applicable law now or hereafter ineffect, to set off and to appropriate and apply any and all deposits (general orspecial) and any other indebtedness at any time held or owing by such Creditorto or for the credit or the account of Holdings, against and on account of theobligations and liabilities of Holdings to such Creditor under this Article IX,irrespective of whether or not the Lender or such Creditor shall have made anydemand hereunder and although said obligations, liabilities, deposits or claims,or any of them, shall be contingent or unmatured. Each Creditor agrees topromptly notify Holdings after any such set off and application, *provided,however,* that the failure to give such notice shall not affect the validityof such set off and application.

        Section 9.11 Reinstatement. Ifa claim is ever made upon the Lender or any other Creditor for recission,repayment, recovery or restoration of any amount or amounts received by theLender or any other Creditor in payment or on account of any of the Obligationsand any of the aforesaid payees repays all or part of said amount by reason of(a) any judgment, decree or order of any court or administrative body havingjurisdiction over such payee or any of its property, or (b) any settlement orcompromise of

57

any such claim effected by such payeewith any such claimant, then and in such event (i) any such judgment, decree,order, settlement or compromise shall be binding upon Holdings, notwithstandingany revocation hereof or other instrument evidencing any liability of theBorrower, (ii) Holdings shall be and remain liable to the aforesaid payeeshereunder for the amount so repaid or otherwise recovered or restored to thesame extent as if such amount had never originally been received by any suchpayee, and (iii) this Article IX shall continue to be effective or bereinstated, as the case may be, all as if such repayment or other recovery hadnot occurred.

        Section 9.12 Full RecourseObligations. It is the desire and intent of Holdings, the Lender and theother Creditors that this Article IX shall be enforced as a full recourseobligation of Holdings to the fullest extent permissible under the laws andpublic policies applied in each jurisdiction in which enforcement is sought. 

        Section 9.13 Payments Free andClear of Setoffs, Counterclaims and Taxes, etc. 

        (a) All payments made by Holdings hereunder will be madewithout setoff, counterclaim or other defense and, except as provided for inthis Section 9.13, all such payments will be made free and clear of, and withoutdeduction or withholding for, any present or future Taxes. If any Taxes are solevied or imposed, Holdings agrees to pay the full amount of such Taxes and suchadditional amounts as may be necessary so that every payment by it of allamounts due hereunder, after withholding or deduction for or on account of anyTaxes will not be less than the amount provided for herein. If any amounts arepayable in respect of Taxes pursuant to the preceding sentence, Holdings agreesto reimburse each Creditor, upon the written request of such Creditor for taxesimposed on or measured by the net income or profits of such Creditor pursuant tothe laws of the jurisdiction in which such Creditor is organized or in which theprincipal office of such Creditor is located or under the laws of any politicalsubdivision or taxing authority of any such jurisdiction in which the principaloffice of such Creditor is located and for any withholding of income or similartaxes imposed by the United States of America as such Creditor shall determineare payable by, or withheld from, such Creditor in respect of such amounts sopaid to or on behalf of such Creditor pursuant to the preceding sentence, whichrequest shall be accompanied by a statement from such Creditor setting forth, inreasonable detail, the computations used in determining such amounts. Holdingswill furnish to the Lender within 45 days after the date the payment of anyTaxes, or any withholding or deduction on account thereof, is due pursuant toapplicable law certified copies of tax receipts, or other evidence satisfactoryto the applicable Creditor, evidencing such payment by Holdings. Holdings willindemnify and hold harmless the Lender and each Creditor, and reimburse theLender or such Creditor upon its written request, for the amount of any Taxes solevied or imposed on and paid or withheld by such Creditor in respect ofpayments by Holdings hereunder.

        (b) Notwithstanding anything to the contrary contained inthis Section 9.13, (i) Holdings shall be entitled, to the extent it is requiredto do so by law, to deduct or withhold income or other similar taxes imposed bythe United States (or any political subdivision or taxing authority thereof ortherein) from any amounts payable hereunder for the account of any Creditor thatis not a United States Person (as such term is defined in Section 7701(a)(30) ofthe Code) for United States federal income tax purposes and that has notprovided to the Borrower such forms that establish a complete exemption fromsuch deduction or withholding; and (ii) Holdings shall not be obligated pursuantto this Section 9.13 to gross-up payments to be made to a Creditor in respect ofincome or similar taxes imposed by the United States or any additional amountswith respect thereto if such Creditor has not provided to the Borrower suchforms.

        Section 9.14 Termination.After the termination of the Revolving Commitment and all Designated HedgeAgreements, when no LC Outstandings exist and when all Revolving Loans and otherObligations (other than unasserted indemnity obligations) have been paid infull, this guaranty provided

58

under this Article IXwill terminate and the Lender, at the request and expense of the Borrower and/orHoldings, will execute and deliver to Holdings an instrument or instrumentsacknowledging such termination.

        Section 9.15 Enforcement Only byLender. The Creditors agree that the guaranty provided under this Article IXmay be enforced only by the action of the Lender and that no Creditor shall haveany right individually to seek to enforce or to enforce the guaranty providedunder this Article IX, it being understood and agreed that such rights andremedies may be exercised by the Lender, for the benefit of the Creditors, uponthe terms of this Article IX.

        Section 9.16 Effect of Stay.In the event that acceleration of the time for payment of any amount payable byHoldings under any of the Obligations is stayed upon insolvency, bankruptcy orreorganization of Holdings, all such amounts otherwise subject to accelerationunder the terms of any applicable agreement or instrument evidencing or relatingto any of the Obligations shall nonetheless be payable by Holdings under thisArticle forthwith on demand by the Lender.

ARTICLE X.****MISCELLANEOUS

        Section 10.01 Payment of Expensesetc. The Borrower agrees to pay (or reimburse the Lender) all of thefollowing: (i) whether or not the transactions contemplated hereby areconsummated, for all reasonable out-of-pocket costs and expenses of the Lenderin connection with the negotiation, preparation, administration and executionand delivery of the Loan Documents and the documents and instruments referred totherein; (ii) all reasonable out-of-pocket costs and expenses of the Lender inconnection with any amendment, waiver or consent relating to any of the LoanDocuments that are requested by any Credit Party; (iii) all reasonableout-of-pocket costs and expenses of the Lender in connection with theenforcement of any of the Loan Documents or the other documents and instrumentsreferred to therein, including, without limitation,  the reasonable fees anddisbursements of any individual counsel to the Lender (including, withoutlimitation, allocated costs of internal counsel); (iv) any and all present andfuture stamp and other similar taxes with respect to the foregoing matters andsave the Lender harmless from and against any and all liabilities with respectto or resulting from any delay or omission (other than to the extentattributable to any such indemnified Person) to pay such taxes.

        Section 10.02 Indemnification.The Borrower agrees to indemnify the Lender and its Related Parties(collectively, the "Indemnitees") from and hold each of them harmlessagainst any and all losses, liabilities, claims, damages or expenses reasonablyincurred by any of them as a result of, or arising out of, or in any way relatedto, or by reason of (i) any investigation, litigation or other proceeding(whether or not the Lender is a party thereto) related to the entering intoand/or performance of any Loan Document or the use of the proceeds of anyRevolving Loans hereunder or the consummation of any transactions contemplatedin any Loan Document, other than any transactions solely involving theassignment by the Lender of all or a portion of its Revolving Loans andRevolving Commitment, or the granting of participations therein, as provided inthis Agreement, or arising solely out of any examination of the Lender by anyregulatory or other Governmental Authority having jurisdiction over it, or (ii)the actual or alleged presence of Hazardous Materials in the air, surface wateror groundwater or on the surface or subsurface of any Real Property owned,leased or at any time operated by Holdings or any of its Subsidiaries, therelease, generation, storage, transportation, handling or disposal of HazardousMaterials at any location, whether or not owned or operated by Holdings or anyof its Subsidiaries, if Holdings or any such Subsidiary could have or is allegedto have any responsibility in respect thereof, the non-compliance of any suchReal Property with foreign, federal, state and local laws, regulations andordinances (including applicable permits thereunder) applicable thereto, or anyEnvironmental Claim

59

asserted against Holdings or anyof its Subsidiaries, in respect of any such Real Property, including, in thecase of each of (i) and (ii) above, without limitation, the reasonabledocumented fees and disbursements of counsel incurred in connection with anysuch investigation, litigation or other proceeding (but excluding any suchlosses, liabilities, claims, damages or expenses to the extent incurred byreason of the gross negligence or willful misconduct of the Person to beindemnified or of any other Indemnitee who is such Person or an Affiliate ofsuch Person). To the extent that the undertaking to indemnify, pay or holdharmless any Person set forth in the preceding sentence may be unenforceablebecause it is violative of any law or public policy, the Borrower shall make themaximum contribution to the payment and satisfaction of each of the indemnifiedliabilities that is permissible under applicable law. 

        Section 10.03 Right of Setoff.In addition to any rights now or hereafter granted under applicable law orotherwise, and not by way of limitation of any such rights, upon the occurrenceand during the continuance of an Event of Default, the Lender is herebyauthorized at any time or from time to time, without presentment, demand,protest or other notice of any kind to the Borrower or to any other Person, anysuch notice being hereby expressly waived, to set off and to appropriate andapply any and all deposits (general or special) and any other Indebtedness atany time held or owing by the Lender (including, without limitation, bybranches, agencies and Affiliates of the Lender wherever located) to or for thecredit or the account of the Borrower against and on account of the Obligationsand liabilities of the Borrower to the Lender under this Agreement or under anyof the other Loan Documents, including, without limitation, all claims of anynature or description arising out of or connected with this Agreement or anyother Loan Document, irrespective of whether or not the Lender shall have madeany demand hereunder and although said Obligations, liabilities or claims, orany of them, shall be contingent or unmatured. The Lender agrees to promptlynotify the Borrower after any such set off and application, *provided*, *however*, that the failure to give such notice shall not affect the validityof such set off and application.

        Section 10.04 Notices. 

        (a) Generally. Except in the case of notices and othercommunications expressly permitted to be given by telephone (and except asprovided in subpart (c) below), all notices and other communications providedfor herein shall be in writing and shall be delivered by hand or overnightcourier service, mailed by certified or registered mail or sent by telecopier asfollows:

        (i) if to the Borrower, to it at 847 Main Street,		Buffalo, New York 14203, Attention: William H. Burns, Jr. (Telecopier		No. (716) 855-1078);

        (ii) if to Holdings, to it c/o 847 Main Street,		Buffalo, New York 14203, Attention: William H. Burns, Jr. (Telecopier		No. (716) 855-1078); and

        (iii) if to the Lender, to it at the Notice Office.

        (b) Receipt of Notices. Notices and communicationssent by hand or overnight courier service, or mailed by certified or registeredmail, shall be deemed to have been given when received; notices sent bytelecopier shall be deemed to have been given when sent and receipt has beenconfirmed by telephone. Notices delivered through electronic communications tothe extent provided in subpart (c) below shall be effective as provided in saidsubpart (c).

        (c) Electronic Communications. Notices and othercommunications to the Lender hereunder and required to be delivered pursuant toSections 6.01(a), (b), (c), (d), (h) or (i) may be delivered or furnished byelectronic communication (including e-mail and Internet or intranet web sites)pursuant to procedures approved by the Lender. The Lender and the Borrower may,in their discretion, agree in a 

60

separate writing to accept notices and othercommunications to them hereunder by electronic communications pursuant toprocedures approved by it, *provided* that approval of such procedures maybe limited to particular notices or communications. Unless the Lender otherwiseprescribes, (i) notices and other communications sent to an e-mail address shallbe deemed received upon the sender's receipt of an acknowledgement from theintended recipient (such as by the "return receipt requested" function, asavailable, return e-mail or other written acknowledgement), *provided* thatif such notice or other communication is not sent during the normal businesshours of the recipient, such notice or communication shall be deemed to havebeen sent at the opening of business on the next Business Day for the recipient,and (ii) notices or communications posted to an Internet or intranet web siteshall be deemed received upon the deemed receipt by the intended recipient atits e-mail address as described in the foregoing clause (i) of notification thatsuch notice or communication is available and identifying the web site addresstherefor.

        (d) Change of Address, Etc. Any party hereto maychange its address or telecopier number for notices and other communicationshereunder by notice to each of the other parties hereto in accordance withSection 10.04(a).

        Section 10.05 Successors andAssigns. This Agreement shall be binding upon and inure to the benefit ofand be enforceable by the parties hereto and their respective successors andassigns; *provided, however,* that neither the Borrower nor Holdings mayassign or transfer any of its rights or obligations hereunder without the priorwritten consent of the Lender.

        Section 10.06 No Waiver; RemediesCumulative. No failure or delay on the part of the Lender in exercising anyright, power or privilege hereunder or under any other Loan Document and nocourse of dealing between any Credit Party and the Lender shall operate as awaiver thereof; nor shall any single or partial exercise of any right, power orprivilege hereunder or under any other Loan Document preclude any other orfurther exercise thereof or the exercise of any other right, power or privilegehereunder or thereunder. No notice to or demand on any Credit Party in any caseshall entitle such Credit Party to any other or further notice or demand insimilar or other circumstances or constitute a waiver of the rights of theLender to any other or further action in any circumstances without notice ordemand. Without limiting the generality of the foregoing, the making of aRevolving Loan or any LC Issuance shall not be construed as a waiver of anyDefault or Event of Default, regardless of whether the Lender may have hadnotice or knowledge of such Default or Event of Default at the time. The rightsand remedies herein expressly provided are cumulative and not exclusive of anyrights or remedies that the Lender would otherwise have.

        Section 10.07 Governing Law;Submission to Jurisdiction; Venue; Waiver of Jury Trial. 

        (a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THERIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BECONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEWYORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES (OTHER THAN SECTION 5-1401OF THE NEW YORK GENERAL OBLIGATIONS LAW). TO THE FULLEST EXTENT PERMITTED BYLAW, THE BORROWER AND HOLDINGS EACH HEREBY UNCONDITIONALLY AND IRREVOCABLYWAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY JURISDICTION OTHER THAN THE STATEOF NEW YORK GOVERNS THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. Any legalaction or proceeding with respect to this Agreement or any other Loan Documentmay be brought in the Supreme Court of the State of New York sitting in New YorkCounty or in the United States District Court of the Southern District of NewYork, and, by execution and delivery of this Agreement, the Borrower andHoldings each hereby irrevocably accepts for itself and in respect of itsproperty, generally and unconditionally, the jurisdiction 

61

of the aforesaidcourts. The Borrower and Holdings each hereby further irrevocably consents tothe service of process out of any of the aforementioned courts in any suchaction or proceeding by the mailing of copies thereof by registered or certifiedmail, postage prepaid, to any Credit Party at its address for notices pursuantto Section 10.04, such service to become effective 30 days after such mailing orat such earlier time as may be provided under applicable law. Nothing hereinshall affect the right of the Lender to serve process in any other mannerpermitted by law or to commence legal proceedings or otherwise proceed againstthe Credit Parties in any other jurisdiction.

        (b) The Borrower and Holdings each hereby irrevocably waivesany objection that it may now or hereafter have to the laying of venue of any ofthe aforesaid actions or proceedings arising out of or in connection with thisAgreement or any other Loan Document brought in the courts referred to inSection 10.07(a) above and hereby further irrevocably waives and agrees not toplead or claim in any such court that any such action or proceeding brought inany such court has been brought in an inconvenient forum.

        (c) **EACH OF THE PARTIES TO THIS AGREEMENT HEREBYIRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING ORCOUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHERLOAN DOCUMENTS (INCLUDING, WITHOUT LIMITATION, ANY AMENDMENTS, WAIVERS OR OTHERMODIFICATIONS RELATING TO ANY OF THE FOREGOING), OR THE TRANSACTIONSCONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO HEREBY (A) CERTIFIES THAT NOREPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLYOR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEKTO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHERPARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHERTHINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS PARAGRAPH**.

        Section 10.08 Counterparts.This Agreement may be executed in any number of counterparts and by thedifferent parties hereto on separate counterparts, each of which when soexecuted and delivered shall be an original, but all of which shall togetherconstitute one and the same agreement. A set of counterparts executed by all theparties hereto shall be lodged with the Borrower and the Lender.

        Section 10.09 Integration.This Agreement, the other Loan Documents and any separate letter agreements withrespect to fees payable to the Lender constitute the entire contract among theparties relating to the subject matter hereof and thereof and supersede any andall previous agreements and understandings, oral or written, relating to thesubject matter hereof or thereof.

        Section 10.10 Headings Descriptive.The headings of the several Sections and other portions of this Agreement areinserted for convenience only and shall not in any way affect the meaning orconstruction of any provision of this Agreement.

        Section 10.11 Amendment or Waiver.Neither this Agreement nor any other Loan Document, nor any terms hereof orthereof, may be amended, changed, waived or otherwise modified unlesssuch amendment, change, waiver or other modification is in writing and signed bythe Credit Parties hereto and the Lender

        Section 10.12 Survival ofIndemnities. All indemnities set forth herein including, without limitation,in Article III (subject to the limitations set forth Section 3.01(b)) or Section10.02 shall survive the execution and delivery of this Agreement and the makingand repayment of the Obligations.

62

        Section 10.13 Confidentiality.

        (a) The Lender agrees to maintain the confidentiality of theConfidential Information, *except* that Confidential Information may bedisclosed (1) to its and its Affiliates' directors, officers, employees andagents, including accountants, legal counsel and other advisors (it beingunderstood that the persons to whom such disclosure is made will be informed ofthe confidential nature of such Confidential Information and instructed to keepsuch Confidential Information confidential), (2) to any direct or indirectcontractual counterparty in any Hedge Agreement (or to any such contractualcounterparty's professional advisor), so long as such contractual counterparty(or such professional advisor) agrees to be bound by the provisions of thisSection, (3) to the extent requested by any regulatory authority, (4) to theextent required by applicable laws or regulations or by any subpoena or similarlegal process, (5) to any other party to this Agreement, (6) to any othercreditor of any Credit Party that is a direct or intended beneficiary of any ofthe Loan Documents, so long as such creditor agrees to be bound by theprovisions of this Section, (7) in connection with the exercise of any remedieshereunder or under any of the other Loan Documents, or any suit, action orproceeding relating to this Agreement or any of the other Loan Documents or theenforcement of rights hereunder or thereunder, (8) subject to an agreementcontaining provisions substantially the same as those of this Section, to anyassignee of or participant in any of its rights or obligations under thisAgreement, (9) with the consent of Holdings, or (10) to the extent suchConfidential Information (i) becomes publicly available other than as a resultof a breach of this Section, or (ii) becomes available to the Lender on anon-confidential basis from a source other than a Credit Party and not otherwisein violation of this Section.

        (b) As used in this Section, "Confidential Information"shall mean all information received from any Credit Party relating to suchCredit Party or its business, other than any such information that is availableto the Lender on a non-confidential basis prior to disclosure by any CreditParty; *provided, however,* that, in the case of information received fromsuch Credit Party after the Closing Date, such information is clearly identifiedat the time of delivery as confidential.

        (c) Any Person required to maintain the confidentiality ofConfidential Information as provided in this Section shall be considered to havecomplied with its obligation to do so if such Person has exercised the samedegree of care to maintain the confidentiality of such Confidential Informationas such Person would accord to its own confidential information. The Borrowerand Holdings each hereby agrees that the failure of the Lender to comply withthe provisions of this Section shall not relieve such Credit Party of any of itsobligations under this Agreement or any of the other Loan Documents.

        Section 10.14 Limitations onLiability of Lender's LC Issuances. The Borrower assumes all risks of theacts or omissions of any beneficiary or transferee of any Letter of Credit withrespect to its use of such Letters of Credit. Neither the Lender nor any of itsofficers or directors shall be liable or responsible for: (a) the use that maybe made of any Letter of Credit or any acts or omissions of any beneficiary ortransferee in connection therewith; (b) the validity, sufficiency or genuinenessof documents, or of any endorsement thereon, even if such documents should proveto be in any or all respects invalid, insufficient, fraudulent or forged;(c) payment by the Lender against presentation of documents that do not complywith the terms of a Letter of Credit, including failure of any documents to bearany reference or adequate reference to such Letter of Credit; or (d) any othercircumstances whatsoever in making or failing to make payment under any Letterof Credit, *except* that the Borrower shall have a claim against theLender, and the Lender shall be liable to the Borrower, to the extent of anydirect, but not consequential, damages suffered by the Borrower that theBorrower proves were caused by (i) the Lender's willful misconduct or grossnegligence in determining whether documents presented under a Letter of Creditcomply with the terms of such Letter of Credit or (ii) the Lender's willfulfailure to make lawful payment under any Letter of Credit after the presentationto it of documentation strictly complying with the terms and conditions of suchLetter of Credit. In furtherance and not in limitation of

63

the foregoing, the Lender may accept documents thatappear on their face to be in order, without responsibility for furtherinvestigation.

        Section 10.15 General Limitationof Liability. No claim may be made by any Credit Party or any other Personagainst the Lender or the Affiliates, directors, officers, employees, attorneysor agents of any of the Lender for any damages other than actual compensatorydamages in respect of any claim for breach of contract or any other theory ofliability arising out of or related to the transactions contemplated by thisAgreement or any of the other Loan Documents, or any act, omission or eventoccurring in connection therewith; the Borrower and Holdings hereby, to thefullest extent permitted under applicable law, waive, release and agree not tosue or counterclaim upon any such claim for any special, consequential orpunitive damages, whether or not accrued and whether or not known or suspectedto exist in their favor.

        Section 10.16 No Duty. Allattorneys, accountants, appraisers, consultants and other professional persons(including the firms or other entities on behalf of which any such Person mayact) retained by the Lender with respect to the transactions contemplated by theLoan Documents shall have the right to act exclusively in the interest of theLender and shall have no duty of disclosure, duty of loyalty, duty of care, orother duty or obligation of any type or nature whatsoever to Holdings, to any ofits Subsidiaries, or to any other Person, with respect to any matters within thescope of such representation or related to their activities in connection withsuch representation. The Borrower and Holdings each, on behalf of itself and itsSubsidiaries, not to assert any claim or counterclaim against any such personswith regard to such matters, all such claims and counterclaims, now existing orhereafter arising, whether known or unknown, foreseen or unforeseeable, beinghereby waived, released and forever discharged.

        Section 10.17 Lender Not Fiduciaryto Borrower, etc. The relationship among Holdings and its Subsidiaries, onthe one hand, and the Lender on the other hand, is solely that of debtor andcreditor, and the Lender has no fiduciary or other special relationship withHoldings and its Subsidiaries, and no term or provision of any Loan Document, nocourse of dealing, no written or oral communication, or other action, shall beconstrued so as to deem such relationship to be other than that of debtor andcreditor.

        Section 10.18 Survival ofRepresentations and Warranties. All representations and warranties hereinshall survive the making of Revolving Loans and all LC Issuances hereunder, theexecution and delivery of this Agreement, any Notes and the other documents theforms of which are attached as Exhibits , the issue and delivery of any Notes,any disposition thereof by any holder thereof, and any investigation made by theLender any other holder of any of any Notes or on its behalf. All statementscontained in any certificate or other document delivered to the Lender or anyholder of any Notes by or on behalf of Holdings or any of its Subsidiariespursuant hereto or otherwise specifically for use in connection with thetransactions contemplated hereby shall constitute representations and warrantiesby the Credit Parties hereunder, made as of the respective dates specifiedtherein or, if no date is specified, as of the respective dates furnished to theLender.

        Section 10.19 Severability.Any provision of this Agreement held to be invalid, illegal or unenforceable inany jurisdiction shall, as to such jurisdiction, be ineffective to the extent ofsuch invalidity, illegality or unenforceability without affecting the validity,legality and enforceability of the remaining provisions hereof; and theinvalidity of a particular provision in a particular jurisdiction shall notinvalidate such provision in any other jurisdiction.

        Section 10.20 Independence ofCovenants. All covenants hereunder shall be given independent effect so thatif a particular action, event, condition or circumstance is not permitted by any

64

of such covenants, the fact that it would be permittedby an exception to, or would otherwise be within the limitations or restrictionsof, another covenant, shall not avoid the occurrence of a Default or an Event ofDefault if such action is taken or event, condition or circumstance exists.

        Section 10.21 Interest RateLimitation. Notwithstanding anything herein to the contrary, if at any timethe interest rate applicable to any Revolving Loan, together with all fees,charges and other amounts that are treated as interest on such Revolving Loanunder applicable law (collectively, the "Charges"), shall exceed themaximum lawful rate (the "Maximum Rate") that may be contracted for,charged, taken, received or reserved by the Lender in accordance with applicablelaw, the rate of interest payable in respect of such Revolving Loan hereunder,together with all Charges payable in respect thereof, shall be limited to theMaximum Rate and, to the extent lawful, the interest and Charges that would havebeen payable in respect of such Revolving Loan but were not payable as a resultof the operation of this Section shall be cumulated and the interest and Chargespayable to the Lender in respect of other Revolving Loans or periods shall beincreased (but not above the Maximum Rate therefor) until such cumulated amount,together with interest thereon at the Base Rate to the date of repayment, shallhave been received by the Lender.

        Section 10.22 USA Patriot Act.The Lender is subject to the USA Patriot Act and hereby notifies Holdings andthe Borrower that pursuant to the requirements of the USA Patriot Act, it isrequired to obtain, verify and record information that identifies Holdings andthe Borrower, which information includes the name and address of Holdings andthe Borrower and other information that will allow the Lender to identifyHoldings and the Borrower in accordance with the USA Patriot Act.

[Remainder of page intentionally left blank.]

65

        IN WITNESS WHEREOF, each of the parties hereto has caused acounterpart of this Agreement to be duly executed and delivered as of the datefirst above written.
 MINRAD, INC.
By: /s/		William H. Burns, Jr.______________Name: William H. Burns, Jr.		Title: President and CEO
 MINRAD INTERNATIONAL, INC.
		By: /s/ William H. Burns, Jr.______________Name: William H. Burns, Jr.		Title: President and CEO
 KEYBANK NATIONAL ASSOCIATION
		By: /s/ Chris Swindell                                         Name: Chris Swindell		Title: Senior Vice President
  ****
66

** 
CREDIT AGREEMENT

dated as of

December 21, 2005

among

MINRAD, INC.,
*as the Borrower,*
MINRAD INTERNATIONAL, INC.,
*as a Credit Party

and*
KEYBANK NATIONAL ASSOCIATION,
*as the Lender*
$3,500,000 Revolving Facility**** **

 

**TABLE OF CONTENTS**
 **Page**
ARTICLE I. DEFINITIONS AND TERMS 

1
 
Section 1.01
Certain Defined Terms

1
 
Section 1.02
Computation of Time Periods

20
 
Section 1.03
Accounting Terms

20
 
Section 1.04
Terms Generally

21
ARTICLE II. THE TERMS OF THE CREDIT		FACILITY 

21
 
Section 2.01
Revolving Facility

21
 
Section 2.02
Letters of Credit

21
 
Section 2.03
Notice of Borrowing

23
 
Section 2.04
Evidence of Obligations

23
 
Section 2.05
Interest; Default Rate

23
 
Section 2.06
Fees

24
 
Section 2.07
Termination and Reduction of							Revolving Commitment

25
 
Section 2.08
Voluntary, Scheduled and Mandatory							Prepayments of Revolving Loans

25
 
Section 2.09
Method and Place of Payment

26
 
Section 2.10
Guaranty by the Borrower

26
ARTICLE III. ADDITIONAL AMOUNTS, NET		PAYMENTS AND INCREASED COSTS 

28
 
Section 3.01
Additional Amounts

28
 
Section 3.02
Net Payments

28
 
Section 3.03
Increased Costs for LC Issuances

29
ARTICLE IV. CONDITIONS PRECEDENT 

30
 
Section 4.01
Conditions Precedent at Closing Date							

30
 
Section 4.02
Conditions Precedent to All Credit							Events

32
ARTICLE V. REPRESENTATIONS AND WARRANTIES		

33
 
Section 5.01
Corporate Status

33
 
Section 5.02
Corporate Power and Authority

33
 
Section 5.03
No Violation

33
 
Section 5.04
Governmental Approvals

34
 
Section 5.05
Litigation

34
 
Section 5.06
Use of Proceeds; Margin Regulations							

34
 
Section 5.07
Financial Statements

34
-i-

**TABLE OF CONTENTS**(continued)    **Page**
 
Section 5.08
Solvency

35
 
Section 5.09
No Material Adverse Change

35
 
Section 5.10
Tax Returns and Payments

35
 
Section 5.11
Title to Properties, etc

35
 
Section 5.12
Lawful Operations, etc

36
 
Section 5.13
Environmental Matters

36
 
Section 5.14
Compliance with ERISA

36
 
Section 5.15
Intellectual Property, etc

37
 
Section 5.16
Investment Company Act, etc

37
 
Section 5.17
Insurance

37
 
Section 5.18
Burdensome Contracts; Labor							Relations

37
 
Section 5.19
Security Interests

37
 
Section 5.20
True and Complete Disclosure

38
 
Section 5.21
Defaults

38
 
Section 5.22
Anti-Terrorism Law Compliance

38
ARTICLE VI. AFFIRMATIVE COVENANTS 

38
 
Section 6.01
Reporting Requirements

38
 
Section 6.02
Books, Records and Inspections

42
 
Section 6.03
Insurance

42
 
Section 6.04
Payment of Taxes and Claims

42
 
Section 6.05
Corporate Franchises

43
 
Section 6.06
Good Repair

43
 
Section 6.07
Compliance with Statutes, etc

43
 
Section 6.08
Compliance with Environmental Laws							

43
 
Section 6.09
Certain Subsidiaries to Execute a							Guaranty

43
 
Section 6.10
Additional Security; Real Estate							Matters; Further Assurances

44
 
Section 6.11
Most Favored Covenant Status

46
 
Section 6.12
Senior Debt

46
 
Section 6.13
Post-Closing Covenants

46
ARTICLE VII. NEGATIVE COVENANTS 

47
 
Section 7.01
Changes in Business

47
 
Section 7.02
Consolidation, Merger, Acquisitions,							Asset Sales, etc

47
-ii-

**TABLE OF CONTENTS**(continued)
   **Page**
 
Section 7.03
Liens

47
 
Section 7.04
Indebtedness

48
 
Section 7.05
Investments and Guaranty Obligations							

49
 
Section 7.06
Restricted Payments

49
 
Section 7.07
Financial Covenants

50
 
Section 7.08
Limitation on Certain Restrictive							Agreements

50
 
Section 7.09
Transactions with Affiliates

51
 
Section 7.10
Plan Terminations, Minimum Funding,							etc

51
 
Section 7.11
Anti-Terrorism Laws

51
ARTICLE VIII. EVENTS OF DEFAULT 

51
 
Section 8.01
Events of Default

51
 
Section 8.02
Remedies

53
ARTICLE IX. GUARANTY 

53
 
Section 9.01
Guaranty by Holdings

53
 
Section 9.02
Subordination

54
 
Section 9.03
Holdings' Obligations Absolute

54
 
Section 9.04
Waivers

56
 
Section 9.05
Subrogation Rights

56
 
Section 9.06
Holdings Familiar with Borrower's							Affairs

56
 
Section 9.07
Solvency

56
 
Section 9.08
Continuing Guaranty; Remedies							Cumulative, etc

57
 
Section 9.09
Enforcement Expenses

57
 
Section 9.10
Right of Setoff

57
 
Section 9.11
Reinstatement

57
 
Section 9.12
Full Recourse Obligations

58
 
Section 9.13
Payments Free and Clear of Setoffs,							Counterclaims and Taxes, etc

58
 
Section 9.14
Termination

58
 
Section 9.15
Enforcement Only by Lender

59
 
Section 9.16
Effect of Stay

59
ARTICLE X. MISCELLANEOUS 

59
 
Section 10.01
Payment of Expenses etc

59
 
Section 10.02
Indemnification

59
-iii-

**TABLE OF CONTENTS**(continued)
   **Page**
 
Section 10.03
Right of Setoff

60
 
Section 10.04
Notices

60
 
Section 10.05
Successors and Assigns

61
 
Section 10.06
No Waiver; Remedies Cumulative

61
 
Section 10.07
Governing Law; Submission to							Jurisdiction; Venue; Waiver of Jury Trial

61
 
Section 10.08
Counterparts

62
 
Section 10.09
Integration

62
 
Section 10.10
Headings Descriptive

62
 
Section 10.11
Amendment or Waiver

62
 
Section 10.12
Survival of Indemnities

62
 
Section 10.13
Confidentiality

63
 
Section 10.14
Limitations on Liability of							Lender's LC Issuances

63
 
Section 10.15
General Limitation of Liability

64
 
Section 10.16
No Duty

64
 
Section 10.17
Lender Not Fiduciary to Borrower,							etc

64
 
Section 10.18
Survival of Representations and							Warranties

64
 
Section 10.19
Severability

64
 
Section 10.20
Independence of Covenants

64
 
Section 10.21
Interest Rate Limitation

65
 
Section 10.22
USA Patriot Act

65
-iv-

**TABLE OF CONTENTS **

**Page**

EXHIBITS
Exhibit AForm of Revolving Facility NoteExhibit B-1Form of LC RequestExhibit B-2Form of Notice of BorrowingExhibit CForm of Security AgreementExhibit DForm of Borrowing Base CertificateExhibit EForm of Compliance CertificateExhibit FForm of Closing CertificateExhibit GForm of Mortgage 
SCHEDULES
Schedule 3Mortgaged Real PropertySchedule 5.01Subsidiary InformationSchedule 5.17InsuranceSchedule 7.03LiensSchedule 7.04IndebtednessSchedule 7.05Investments
 *****