<PAGE>



                       AMENDMENT NO. 1 AND LIMITED WAIVER
                                       TO
                    POST-PETITION LOAN AND SECURITY AGREEMENT


         This AMENDMENT NO. 1 AND LIMITED WAIVER TO POST-PETITION LOAN AND
SECURITY AGREEMENT (this "Amendment") is dated as of March 31, 2003, is among
the Lenders, BANK OF AMERICA, N.A., as agent for the Lenders ("Agent"), W.R.
GRACE & CO. (the "Company") and the Subsidiaries of W.R. Grace and Co. parties
hereto (collectively, the "Borrowers").

         WHEREAS, the parties hereto are parties to a Post-Petition Loan and
Security Agreement dated as of April 1, 2001 (the "Loan Agreement"); and

         WHEREAS, the parties hereto desire to amend the Loan Agreement as
herein set forth:

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

         1.       Amendments.
                  ----------

                  (a) the introductory paragraph to the Loan Agreement is hereby
         amended by deleting the number "355" appearing in the fourth line
         therein and inserting "335" in its place.

                  (b) Section 1.4(a) of the Loan Agreement is hereby amended by
         deleting the amount "$15,000,000" which appears therein and inserting
         "$25,000,000" in its place.

                  (c) Section 1.7(c) of the Loan Agreement is hereby amended and
         restated in its entirety to read as follows:

                  (c) Location of Collateral Each Borrower represents and
                  warrants to the Agent and the Lenders that: (1) Schedule 1.7
                  sets forth a correct and complete list of each Borrower's
                  state of organization, organizational identification number
                  (if one is issued by such Borrower's state of organization),
                  chief executive office, the location of its books and records,
                  the locations of its Collateral, and the locations of all of
                  such Borrower's other places of business (other than in each
                  case (i) locations of real property where no Borrower has any
                  operations and where no Collateral (other than such real
                  property) is located, (ii) locations of Inventory which have
                  been described to the Agent in writing (including, without
                  limitation, in connection with the delivery of a Borrowing
                  Base Certificate) and (iii) locations of Collateral (other
                  than Inventory or Eligible Fixed Assets) which have been
                  disclosed to the Agent pursuant to the then most recent
                  Quarterly Location Schedule delivered to the Agent pursuant
                  hereto); and (2) Schedule 1.7



<PAGE>




                  correctly identifies any of such facilities and locations that
                  are not owned by a Borrower and sets forth the names of the
                  owners and lessors or sublessors of such facilities and
                  locations. Each Borrower covenants and agrees that it will not
                  (i) maintain any Collateral at any location other than those
                  locations listed for such Borrower on Schedule 1.7 (other than
                  (A) locations of Collateral consisting solely of real property
                  at which no Borrower has any operations, (B) locations of
                  Inventory which have been described to the Agent in writing
                  (including, without limitation, in connection with the
                  delivery of a Borrowing Base Certificate) and (C) locations of
                  Collateral (other than Inventory and Eligible Fixed Assets)
                  which have been disclosed to the Agent pursuant to the most
                  recent Quarterly Location Schedule delivered to the Agent
                  pursuant hereto), (ii) change the state of organization or the
                  location of its chief executive office from the location
                  identified in Schedule 1.7, unless it gives the Agent at least
                  thirty (30) days' prior written notice thereof and executes
                  any and all financing statements and other documents that the
                  Agent reasonably requests in connection therewith. In
                  addition, within 45 days of the end of each calendar quarter,
                  the Borrowers shall deliver to the agent a schedule (a
                  "Quarterly Location Schedule") which lists the locations of
                  the Collateral.

                  (d) Section 1.7(g) of the Loan Agreement is hereby amended by
         (i) deleting the term "20th" each time it appears therein and inserting
         the term "25th" in its place and (ii) deleting the phrase "an aging"
         appearing in clause (2) therein and inserting the phrase "a list" in
         its place.

                  (e) Section 1.7(h)(1) of the Loan Agreement is hereby amended
         by inserting (i) the parenthetical "(other than the Borrowers' Accounts
         which are not Eligible Accounts as a result of clause (h) of the
         definition of "Eligible Accounts" contained herein)" immediately
         following the phrase "with respect to the Borrowers' Accounts" which
         appears therein and (ii) the phrase ", or as directed by," immediately
         following the phrase "goods will have been delivered to" appearing in
         clause (v) thereof.

                  (f) Section 1.7(i)(1) of the Loan Agreement is hereby amended
         and restated in its entirety to read as follows:

                  "(l) Each Borrower represents and warrants to the Agent and
                  the Lenders and agrees with the Agent and the Lenders that all
                  of the Inventory owned by each Borrower is and will be held
                  for sale or lease, or to be furnished in connection with the
                  rendition of services, in the ordinary course of each
                  Borrower's business, and is and will be fit for such purposes,
                  except for damaged or defective goods arising in the ordinary
                  course of such Borrower's business. Each Borrower will keep
                  its Inventory in good and marketable condition, except for
                  damaged or defective goods or goods that






                                       2


<PAGE>




                  become obsolete or slow-moving to the extent such obsolete or
                  slow moving goods are not Eligible Inventory as a result of
                  clause (f) or clause (g) of the definition of "Eligible
                  Inventory" contained herein, in each case, arising in the
                  ordinary course of such Borrower's business. No Borrower will,
                  without the prior written consent of the Agent, acquire or
                  accept any goods that, if owned by such Person, would
                  constitute Inventory of such Person, on consignment or
                  approval other than goods that are identifiable by, and
                  segregated from other goods owned by, such Borrower, with a
                  fair market value not in excess of $7,500,000 in the aggregate
                  at any one time. Each Borrower agrees that all Inventory
                  produced by such Borrower in the United States of America will
                  be produced in accordance with the Federal Fair Labor
                  Standards Act of 1938, as amended, and all rules, regulations,
                  and orders thereunder. Each Borrower will conduct a physical
                  count of the Inventory at least once per Fiscal Year, and
                  after and during the continuation of an Event of Default, at
                  such other times as the Agent requests. The Borrowers will
                  maintain a perpetual inventory reporting system at all times.
                  No Borrower will, without the Agent's written consent,
                  transfer any Inventory on a bill-and-hold, guaranteed sale,
                  sale and return, sale on approval, consignment, or other
                  repurchase or return basis, other than Inventory having an
                  aggregate book value at any time not to exceed $5,000,000 (it
                  being acknowledged and agreed that no such Inventory, whether
                  or not in excess of such amount, shall constitute "Eligible
                  Inventory" as defined herein)."

                  (g) Section 1.7(j)(1) and (2) of the Loan Agreement are hereby
         amended and restated in their entirety to read as follows:

                  (1) Each Borrower represents and warrants to the Agent and the
                  Lenders and agrees with the Agent and the Lenders that all of
                  the Equipment owned by such Borrower is and will be used or
                  held for use in such Borrower's business, and is and will be
                  fit for such purposes, except for obsolete, damaged,
                  non-functioning or Equipment that has been replaced being held
                  in the ordinary course of business pending repair or disposal.
                  Each Borrower shall keep and maintain its Equipment in good
                  operating condition and repair (ordinary wear and tear
                  excepted) and shall make all necessary replacements thereof.

                  (2) No Borrower shall permit any Equipment to become a fixture
                  with respect to real property or to become an accession with
                  respect to other personal property with respect to which real
                  or personal property the Agent does not have a Lien. No
                  Borrower will, without the Agent's prior written consent,
                  alter or remove any



                                       3

<PAGE>



                  identifying symbol or number on any of such Borrower's
                  Equipment constituting Collateral.

                  (h) Section 1.7(m) of the Loan Agreement is hereby amended and
         restated in its entirety to read as follows:

                  "(m) Power Of Attorney. Each Borrower hereby appoints the
                  Agent and the Agent's designee as such Borrower's attorney,
                  with power: (a) to endorse such Borrower's name on any checks,
                  notes, acceptances, money orders, or other forms of payment or
                  security that come into the Agent's or any Lender's
                  possession; (b) to sign such Borrower's name on any invoice,
                  bill of lading, warehouse receipt or other negotiable or
                  non-negotiable Document constituting Collateral, on drafts
                  against customers, on assignments of Accounts, on notices of
                  assignment, financing statements and other public records and
                  to file any such financing statements by electronic means with
                  or without a signature as authorized or required by applicable
                  law or filing procedure; (c) to the extent not prohibited by
                  the Bankruptcy Court, notify the post office authorities to
                  change the address for delivery of such Borrower's mail to an
                  address designated by the Agent and to receive, open and
                  dispose of all mail addressed to such Borrower; (d) to send
                  requests for verification of Accounts to customers or Account
                  Debtors; (e) to complete in the Borrower's name or the Agent's
                  name, any order, sale or transaction, obtain the necessary
                  Documents in connection therewith, and collect the proceeds
                  thereof; (f) to clear Inventory through customs in such
                  Borrower's name, the Agent's name or the name of the Agent's
                  designee, and to sign and deliver to customs officials powers
                  of attorney in such Borrower's name for such purpose; and (g)
                  to do all things necessary to carry out this Agreement. Each
                  Borrower ratifies and approves all acts of such attorney in
                  connection with this Section 1.7(m). None of the Lenders or
                  the Agent nor their attorneys will be liable for any acts or
                  omissions or for any error of judgment or mistake of fact or
                  law except for their gross negligence or willful misconduct.
                  This power, being coupled with an interest, is irrevocable
                  until this Agreement has been terminated and the Obligations
                  have been fully satisfied. Except with respect to the power
                  granted to the Agent and the Agent's designees in clause (d)
                  above, the Agent covenants, and the Lenders acknowledge and
                  agree, that the Agent shall not exercise the rights granted to
                  it under this Section 1.7(m) unless an Event of Default exists
                  and is continuing."

                  (i) Section 1.7(o) of the Loan Agreement is hereby amended and
         restated in its entirety to read as follows:


                                       4
<PAGE>

                  "(o)     Patent, Trademark And Copyright Collateral.

                           (1) This Agreement is effective to create a valid and
                  continuing Lien on and, together with the Final Order, as
                  applicable, perfected Liens in favor of Agent on each
                  Borrower's patents, trademarks and copyrights.

                           (2) Each Borrower shall notify Agent promptly if it
                  knows or has reason to know that any application or
                  registration relating to any patent, trademark or copyright
                  (now or hereafter existing) material to such Borrower's
                  business may become abandoned or dedicated, or of any adverse
                  determination or development (including the institution of, or
                  any such determination or development in, any proceeding in
                  the United States Patent and Trademark Office, the United
                  States Copyright Office or any court) regarding such
                  Borrower's ownership of any patent, trademark or copyright
                  material to such Borrower's business, its right to register
                  the same, or to keep and maintain the same.

                           (3) Upon request of Agent and, in any event, in
                  conjunction with, and within the time provided for, the
                  delivery of the financial projections and capital expenditure
                  budget required pursuant to Section 5.2(f), each Borrower
                  shall provide Agent with a list of its applications for
                  patents and for registrations of trademarks and copyrights
                  with the United States Patent and Trademark Office, the United
                  States Copyright Office or any similar office or agency, and,
                  upon request of Agent, each Borrower shall execute and deliver
                  any and all patent security agreements, copyright security
                  agreements or trademark security agreements as Agent may
                  request to evidence Agent's Lien on such patent, trademark or
                  copyright, and the General Intangibles of each Borrower
                  relating thereto or represented thereby.

                           (4) Each Borrower shall take all actions that it
                  deems necessary or advisable or as requested by Agent to
                  maintain and pursue each application, to obtain the relevant
                  registration and to maintain the registration of each of such
                  Borrower's patents, trademarks and copyrights (now or
                  hereafter existing), including the filing of applications for
                  renewal, affidavits of use, affidavits of noncontestability
                  and opposition and interference and cancellation proceedings,
                  unless such Borrower shall reasonably determine that such
                  patent, trademark or copyright is not material to the conduct
                  of its business or such Borrower advises the Agent in writing
                  that such Borrower in the exercise of its reasonable business
                  judgment is not going to maintain or pursue any such
                  application or registration.

                                       5
<PAGE>

                           (5) In the event that any of the material patent,
                  trademark or copyright Collateral is infringed upon, or
                  misappropriated or diluted by a third party, the applicable
                  Borrower shall notify Agent promptly after such Borrower
                  learns thereof. Each Borrower shall, unless it shall
                  reasonably determine that such patent, trademark or copyright
                  Collateral is in no way material to the conduct of its
                  business or operations or such Borrower advises the Agent in
                  writing that such Borrower in the exercise of its reasonable
                  business judgment is not going to sue for infringement,
                  misappropriation or dilution, promptly sue for infringement,
                  misappropriation or dilution and to recover any and all
                  damages for such infringement, misappropriation or dilution,
                  and shall take such other actions as Agent shall reasonably
                  deem appropriate under the circumstances to protect such
                  patent, trademark or copyright Collateral."

                  (j) Section 1.7(r)(1) of the Loan Agreement is hereby amended
         by inserting the phrase "in connection with such sale" immediately
         after the word "advisable" in the last sentence thereof.

                  (k) Section 2.1(a) of the Loan Agreement is hereby amended by
         amending and restating the last two sentences thereof to read as
         follows:

                  The Borrowers shall pay to the Agent, for the ratable benefit
                  of Lenders, interest accrued on all Base Rate Loans in arrears
                  on the first day of each month hereafter and on the
                  Termination Date. The Borrowers shall pay to the Agent, for
                  the benefit of Lenders, interest on all LIBOR Rate Loans in
                  arrears on each LIBOR Interest Payment Date.

                  (l) Section 2.5 of the Loan Agreement is hereby amended by
         amending and restating in its entirety the first sentence thereof to
         read as follow:

                  "2.5 Unused Line Fee. On the first day of each month and on
                  the Termination Date, the Borrowers jointly and severally
                  agree to pay to the Agent, for the account of the Lenders, in
                  accordance with their respective Pro Rata Shares, an unused
                  line fee (the "Unused Line Fee") equal to (x) the product of
                  (i) three-eighths of one percent (.375%) per annum at all
                  times that the Average Daily Outstanding Exposure is equal to
                  or greater than $100,000,000 (ii) one half of one percent
                  (.50%) per annum at all times that the Average Daily
                  Outstanding Exposure is equal to or greater than $50,000,000
                  but less than $100,000,000 or (iii) five eights of one percent
                  (.625%) per annum at all times that the Average Daily
                  Outstanding Exposure is less than $50,000,000, in each case,
                  multiplied by (y) the amount by which the Maximum Revolver
                  Amount exceeded the sum of the average daily outstanding
                  amount



                                       6

<PAGE>




                  of Revolving Loans and the average daily undrawn face
                  amount of outstanding Letters of Credit during the immediately
                  preceding month or shorter period if calculated for the first
                  month hereafter or on the Termination Date. The Unused Line
                  Fee shall be computed on the basis of a 360-day year for the
                  actual number of days elapsed. All principal payments received
                  by the Agent shall be deemed to be credited to the Borrowers'
                  Loan Account immediately upon receipt for purposes of
                  calculating the Unused Line Fee pursuant to this Section 2.5."

                  (m) Section 4.2(a) of the Loan Agreement is hereby amended by
         deleting the phrase "any Lender" appearing in the fourth line therein
         and inserting the phrase "such Lender" in its place.

                  (n) Section 5.2(b), (c),(d) and (e) of the Loan Agreement are
         hereby amended and restated in their entirety to read as follows:

                  "(b) As soon as available, but in any event not later than
                  thirty (30) days after the end of each month, (i) unaudited
                  balance sheets of the Borrowers on a consolidated basis as at
                  the end of such month and as at the end of the prior Fiscal
                  Year, (ii) consolidated unaudited income statements for the
                  Borrowers on a consolidated basis for such month and for the
                  period from the beginning of the Fiscal Year to the end of
                  such month, and for the corresponding periods in the prior
                  Fiscal Year, and (iii) unaudited cash flow statements for the
                  Borrowers on a consolidated basis for such month, for the
                  period from the beginning of the Fiscal Year to the end of
                  such month, and for the period from the Petition Date until
                  the end of such month, all in reasonable detail, fairly
                  presenting the financial position and results of operations of
                  the Borrowers on a consolidated basis as at the date thereof
                  and for such periods, and prepared in accordance with GAAP
                  (except for the absence or abbreviation of footnotes and
                  subject to normal year-end adjustments) applied consistently
                  with the audited Financial Statements required to be delivered
                  pursuant to Section 5.2(a). The Borrower Representative, on
                  behalf of the Borrowers, shall certify by a certificate signed
                  by its chief financial officer that all such statements have
                  been prepared in accordance with GAAP (except for the absence
                  or abbreviation of footnotes and subject to normal year-end
                  adjustments) and present fairly the financial position of the
                  Borrowers on a consolidated basis as at the dates thereof and
                  the results of operations of the Borrowers on a consolidated
                  basis for the periods then ended.

                  (c) [Intentionally Omitted]

                  (d) [Intentionally Omitted]


                                       7
<PAGE>

                  (e) (i) Within thirty (30) days after the end of each month
                  (other than each December) (and within sixty (60) days after
                  the end of each December), a certificate of the Borrower
                  Representative signed by its chief financial officer setting
                  forth in reasonable detail the calculations required to
                  establish that the Borrowers were in compliance with the
                  covenant set forth in Section 7.22 for the twelve month period
                  ended at the end of such month and (ii) within sixty (60) days
                  after the end of each fiscal quarter a certificate of the
                  Borrower Representative signed by its chief financial officer
                  stating that, except as explained in reasonable detail in such
                  certificate, (A) all of the representations and warranties of
                  the Borrowers contained in this Agreement and the other Loan
                  Documents are correct and complete in all material respects as
                  at the last day of such quarter as if made at such time,
                  except for those that speak as of a particular date, (B) the
                  Borrowers are, at the date of such certificate, in compliance
                  in all material respects with all of their respective
                  covenants and agreements in this Agreement and the other Loan
                  Documents, and (C) no Default or Event of Default then exists
                  or existed during the period covered by the Financial
                  Statements for such month. If such quarterly certificate
                  discloses that a representation or warranty is not correct or
                  complete, or that a covenant has not been complied with, or
                  that a Default or Event of Default existed or exists, such
                  certificate shall set forth what action the Borrowers have
                  taken or propose to take with respect thereto."

                  (o) Section 5.2(f) of the Loan Agreement is hereby amended and
         restated in its entirety to read as follows:

                  "(f) Not less than forty-five (45) days after the beginning of
                  each Fiscal Year, (i) an annual forecast (to include
                  forecasted consolidated balance sheets, income statements and
                  cash flow statements) for the Borrowers on a consolidated
                  basis as at the end of and for each fiscal quarter of such
                  Fiscal Year and (ii) an annual budget of capital expenditures
                  with respect to the Borrowers on a consolidated basis for such
                  Fiscal Year. The Borrowers shall notify the Agent to the
                  extent that the aggregate capital expenditures of the
                  Borrowers for any Fiscal Year exceeds 120% of the budgeted
                  amount as set forth in such budget for such Fiscal Year,
                  provided pursuant to this Section 5.2(f)."

                  (p) Section 5.2(g) of the Loan Agreement is hereby amended by
         deleting the word "Promptly" and inserting the phrase "Upon the request
         of the Agent, promptly" in its place.

                  (q) Section 5.2(h) of the Loan Agreement is hereby amended and
         restated in its entirety to read as follows.

                                       8
<PAGE>

                  At the Agent's request, within ten Business Days after the
                  later of (i) the date on which the same are sent or (ii) the
                  date of such request, copies of all financial statements and
                  reports which the Company sends to its shareholders generally
                  relating to the business of the Company and its Subsidiaries,
                  and within ten Business Days after the later of (i) the date
                  on which the same are filed or (ii) the date of such request,
                  copies of all reports on Forms 10-K, 10-Q, 8-K, 8 and 10, and
                  Schedules 13D, 13E-3, 13E-4, 13-G, 14D-1 and 14D-9, or
                  successor forms or schedules, and the final prospectus in each
                  effective registration statement (other than registration
                  statements on Form S-8) and each post-effective amendment to
                  such registration statement which the Company may make to, or
                  file with, the Securities and Exchange Commission, and any
                  successor or analogous Governmental Authority.

                  (r) Section 5.2(i) of the Loan Agreement is hereby amended and
         restated in its entirety to read as follows:

                  "(i) As soon as available, but in any event not later than 15
                  days after any Borrower's receipt thereof, a copy of all
                  management reports and management letters prepared for the
                  Company and its consolidated Subsidiaries, by any independent
                  certified public accountants of any Borrower."

                  (s) Section 5.2(k)(ii) of the Loan Agreement is hereby amended
         by deleting the phrase "fifteen (15)" which appears therein and
         inserting the phrase "twenty-five (25)" in its place.

                  (t) Section 5.4 of the Loan Agreement is hereby amended by
         inserting the phrase ",or cause to be provided," following the phrase
         "shall provide" appearing in the fourth line therein:

                  (u) Section 6.12 of the Loan Agreement is hereby amended and
         restated in its entirety to read as follows:

                  "6.12 Litigation. Except as set forth on Schedule 6.12, there
                  is no pending, or to the best of any Borrower's knowledge
                  threatened, action, suit, proceeding, or counterclaim against
                  the Company or any of its consolidated Subsidiaries before any
                  Governmental Authority or arbitrator or panels of arbitrators
                  that (i) may not be stayed as a result of the Bankruptcy Cases
                  and (ii) would reasonably be expected to have a Material
                  Adverse Effect.".

                  (v) Section 6.18 of the Loan Agreement is hereby amended and
         restated in its entirety to read as follows:

                  "6.18 Taxes. Each Borrower and each Other Subsidiary have
                  filed all federal (or the equivalent thereof) and other tax
                  returns


                                       9
<PAGE>

                  and reports required to be filed, and have paid all federal
                  and other taxes, assessments, fees and other governmental
                  charges levied or imposed upon them or their properties,
                  income or assets otherwise due and payable other than (a) in
                  the case of the Borrowers, such taxes, assessments, fees and
                  other governmental charges (i) the payment of which has been
                  stayed as a result of the Borrowers' status as
                  debtors-in-possession in the Bankruptcy Cases or by an order
                  of the Bankruptcy Court, (ii) that are not yet delinquent,
                  (iii) that are being contested in good faith and for which
                  adequate reserves have been established by the Borrowers in
                  accordance with GAAP, or (iv) any portion of such taxes,
                  assessments fees and other governmental charges not so paid to
                  the extent that and only to the extent that such unpaid amount
                  does not exceed $200,000 in the aggregate for all payments due
                  in any calendar year; and (b) in the case of the Other
                  Subsidiaries, such taxes, assessments fees and other charges
                  the nonpayment of which could not reasonably be expected to
                  have a Material Adverse Effect."

                  (w) Section 6.22 of the Loan Agreement is hereby amended by
         inserting the phrase "as of the date of any such exhibit, report,
         statement or certificate." immediately before the period at the end of
         such Section 6.22.

                  (x) Section 6.26 of the Loan Agreement is hereby amended and
         restated in its entirety to read as follows:

                  "6.26 Other Subsidiaries. Except for Advanced Refining
                  Technologies LLC, Advanced Refining Technologies LP and The
                  Separations Group, none of the Other Subsidiaries, excluding
                  the Foreign Subsidiaries, owns any material amount of assets
                  or has any material income. None of the Other Subsidiaries
                  owns any patents, trademarks or licenses therefore or other
                  assets that are material to the business operations of any
                  Borrower and which have not been made available to such
                  Borrower by license or other agreement reasonably acceptable
                  to the Agent."

                  (y) Section 7.5(b) of the Loan Agreement is hereby amended and
         restated in its entirety to read as follows:

                  "(b) With respect to the insurance maintained by the
                  Borrowers, the Borrowers shall cause the Agent, for the
                  ratable benefit of the Agent and the Lenders, to be named as
                  secured party or mortgagee and sole loss payee or additional
                  insured, in a manner acceptable to the Agent. Each policy of
                  insurance shall contain a clause or endorsement providing that
                  the insurer will endeavor to give not less than thirty (30)
                  days' (but which may be ten (10) days' for nonpayment of
                  premiums) prior written notice to the Agent in the



                                       10


<PAGE>

                  event of cancellation of the policy for any reason whatsoever
                  (provided that such clause or endorsement may provide that the
                  insurer and its agents and representatives shall have no
                  obligation or liability for failure to give such notice). All
                  premiums for such insurance shall be paid by the Borrowers
                  when due, and certificates of insurance and, if requested by
                  the Agent or any Lender, photocopies of the policies, shall be
                  delivered to the Agent, in each case in sufficient quantity
                  for distribution by the Agent to each of the Lenders. If any
                  Borrower fails to procure such insurance or to pay the
                  premiums therefor when due, the Agent may, and at the
                  direction of the Majority Lenders shall, do so from the
                  proceeds of Revolving Loans."

                  (z) Section 7.7(a) is hereby amended by amending and restating
         in its entirety the first sentence thereof to read as follows:

                  "The Borrowers shall, and shall cause each of their respective
                  Subsidiaries to, conduct their respective business in material
                  compliance with all Environmental Law applicable to it,
                  including those relating to the generation, handling, use,
                  storage and disposal of any Contaminant."

                  (aa) Section 7.22 is hereby amended and restated in its
         entirety to read as follows:

                  7.22. EBITDAR. The Borrowers shall have EBITDAR, for the
                  twelve calendar month period ending on the last day of each
                  calendar month set forth below of not less than the amount set
                  forth below for such period:

<TABLE>
<CAPTION>
                                  Calendar Month                             EBITDAR
                                  --------------                             -------
                  <S>                                                      <C>
                  April, 2003 through and including March, 2004            $90,000,000

                  April, 2004 through and including March, 2005            $95,000,000

                  April, 2005 and each month thereafter                    $100,000,000
</TABLE>


                  (bb) Section 7.24(v)(a) of the Loan Agreement is hereby
         amended and restated in its entirety to read as follows:

                                       11
<PAGE>

                  "(a) working capital and other general corporate purposes
                  arising after the Petition Date or approved by the Bankruptcy
                  Court,"

                  (cc) Section 7.26 of the Loan Agreement is hereby amended and
         restated in its entirety to read as follows:

                  "7.26 Accounts. The Borrowers shall continue to cause all
                  proceeds of Accounts (other than Accounts that are not
                  Eligible Accounts as a result of clause (h) in the definition
                  of "Eligible Accounts" contained herein) to be forwarded to
                  lockbox accounts in existence on the date hereof and as
                  described as such on Schedule 6.23 hereof; provided, however,
                  that the Borrowers may add new lockbox accounts or close
                  existing lockbox accounts with the prior written consent of
                  the Agent as long as, with respect to any such new lockbox
                  accounts, a tri-party or other similar agreement in form and
                  substance satisfactory to the Agent is executed by the
                  applicable Borrower, depository bank and the Agent."

                  (dd) Section 8.2(d) is hereby amended and restated in its
         entirety to read as follows:

                  "(d) The Final Order shall be in full force and effect and
                  shall not have been vacated, reversed, modified, amended or
                  stayed."

                  (ee) Annex A to the Loan Agreement is hereby amended by
         amending and restating in their entirety the following definitions:

                  "Final Order" means the final order entered by the Bankruptcy
         Court in connection with the Bankruptcy Cases, as amended by the
         Amendment Order.

                  "LIBOR Interest Payment Date" means, with respect to a LIBOR
         Rate Loan, the Termination Date and the last day of each Interest
         Period applicable to such Loan.

                  "Restricted Investment" means, as to any Borrower, any
         acquisition of property by such Person in exchange for cash or other
         property, whether in the form of an acquisition of stock, debt, or
         other indebtedness or obligation, or the purchase or acquisition of any
         other property, or a loan, advance, capital contribution, or
         subscription, including in connection with the organization, creation
         or acquisition of any Subsidiary (each an "Investment"), except the
         following: (a) acquisitions of Equipment and other capital assets in
         the ordinary course of business of such Person; (b) acquisitions of
         Inventory in the ordinary course of business of such Person; (c)
         acquisitions of current assets acquired in the ordinary course of
         business of such Person; (d) Investments in Cash Equivalents; (e)
         Investments by any Borrower in any other Borrower, (f) extensions of
         trade credit and prepaid expenses made in the ordinary course of
         business, (g) (i) loans to officers of any Borrower in the ordinary
         course of business, (ii) loans and advances to employees of any
         Borrower for travel, entertainment and relocation expenses in the


                                       12
<PAGE>

         ordinary course of business and (iii) loans by any Borrower to
         employees in connection with management incentive plans, provided that
         the aggregate outstanding principal amount of all such loans and
         advances made pursuant to this clause (g) shall not exceed $5,000,000
         at any time; (h) loans, made while no Default or Event of Default has
         occurred and is continuing, in an aggregate amount not to exceed
         $11,000,000 at any time outstanding made to ART by W. R. Grace &
         Co.-Conn.; (i) loans, made while no Default or Event of Default has
         occurred and is continuing, to The Separations Group in an aggregate
         amount not to exceed $5,000,000 at any time outstanding; (j)
         Investments outstanding on the Amendment No. 1 Closing Date and listed
         on Schedule A-1; (k) Investments, made while no Default or Event of
         Default has occurred and is continuing, not otherwise permitted
         hereunder by any Borrower in any Other Subsidiary, provided that (A)
         immediately prior to and immediately after giving effect to such
         Investments, Availability equals or is greater than $125,000,000 and
         (B) after giving effect to such Investments, the aggregate then
         outstanding amount of all such Investments made pursuant to this clause
         (k) subsequent to the Amendment No. 1 Closing Date shall not exceed (i)
         $20,000,000 in the aggregate on a net annual cash flow basis in the
         first twelve month period following the Amendment No. 1 Closing Date;
         (ii) $40,000,000 in the aggregate on a net annual cash flow basis
         cumulatively during the first twenty four month period following the
         Amendment No. 1 Closing Date; and (iii) $60,000,000 in the aggregate on
         a net annual cash flow basis cumulatively during the first thirty six
         month period following the Amendment No. 1 Closing Date (it being
         agreed that only $22,500,000 of this amount may be invested through
         transactions which do not require and have not received approval of the
         Bankruptcy Court); (l) Investments received in connection with the
         collection of Accounts in the ordinary course of business; (m)
         Investments received as consideration in connection with any asset sale
         or other disposition of assets permitted hereunder; and (n) other
         Investments not otherwise permitted hereunder made by any Borrower,
         provided that, after giving effect thereto, the aggregate amount of all
         such Investments made at any time after the Amendment No. 1 Closing
         Date by all Borrowers under this clause (n) shall not exceed $1,000,000
         at any time outstanding.

                  "Stated Termination Date" means April 1, 2006.

                  "Termination Date" means the earliest to occur of (i) the
         Stated Termination Date, (ii) the date the Total Facility is terminated
         either by the Borrowers pursuant to Section 3.2 or by the Majority
         Lenders pursuant to Section 9.2, (iii) the date this Agreement is
         otherwise terminated for any reason whatsoever pursuant to the terms of
         this Agreement and (iv) the Effective Date (as defined in the Plan of
         Reorganization) on which a Plan of Reorganization is approved by the
         Bankruptcy Court.

                  (ff) Annex A to the Loan Agreement is hereby amended by
         inserting the following definitions in their proper alphabetical order:

                  "Amendment No. 1 Closing Date" means March 31, 2003.

                  "Amendment Order" has the meaning set forth in that certain
                  Amendment No. 1 and Limited Waiver to Post-Petition Loan and


                                       13
<PAGE>

                  Security Agreement dated as of March 31, 2003 among the
                  Lenders, the Agent and the Borrowers.

                  (gg) The definition of "Adjusted Net Earnings from Operations"
         set forth in Annex A to the Loan Agreement is hereby amended by
         deleting the word "and" appearing before clause (g) therein and
         inserting the following immediately before the period thereof:

                  "and (h) any non-cash charge for which any expenditure would
                  require Bankruptcy Court Approval (which non-cash charges
                  shall not be reduced for any such expenditure made pursuant to
                  Bankruptcy Court approval)."

                  (hh) The definition of "Eligible Inventory" set forth in Annex
         A to the Loan Agreement is hereby amended by amending and restating in
         its entirety clause (c) thereof to read as follows:

                  (c) that does not consist of finished goods, raw materials or
                  work in process;

                  (ii) The schedules attached hereto as Annex III shall amend
         and restate in their entirety the corresponding schedules attached to
         the Loan Agreement prior to giving effect to this Amendment.

         2. Limited Waiver. Subject to the conditions precedent set forth below,
the Agent and the Lenders hereby waive any breach or violation of any Section of
the Loan Agreement arising or existing on or prior to the date hereof and to the
extent caused solely by the event or circumstances set forth opposite such
Section on Annex I attached hereto. This waiver shall be limited precisely as
written and shall not be deemed to (i) be a consent to any amendment, waiver or
modification of any other term or condition of the Loan Agreement or any other
Loan Document, except to the extent set forth herein or (ii) prejudice any right
or remedy that the Agent or the Lenders may have or may have in the future under
or in connection with the Loan Agreement or any other Loan Document.

         3. Amendment Fees. The Borrowers, jointly and severally agree to pay
the Agent, on the date the Amendment Order is entered (all of which shall be
fully earned and nonrefundable as of such date):

                  (a) for the ratable benefit of the Lenders, a facility fee
         (the "Facility Fee") is the amount of $1,250,000;

                  (b) for the Agent's sole account, a syndication fee (the
         "Syndication Fee") in the amount of $375,000; and

                  (c) for the Agent's sole account, an administrative fee (the
         "Administrative Fee"; together with the Facility Fee and the
         Syndication Fee, collectively referred to as the "Amendment Fees") in
         the amount of $225,000.

                                       14
<PAGE>

         4. Conditions. (a) This Amendment shall be effective upon satisfaction
of the following conditions precedent:

                  (i) This Amendment shall have been executed by each party
         hereto; and

                  (ii) The Agent shall have received a certificate from the
         chief financial officer of the Company certifying that (i) immediately
         after giving effect to this Amendment, all representations and
         warranties made hereunder, in the Loan Agreement and in the other Loan
         Documents shall be true and correct as if made on the date hereof, (ii)
         the Borrowers have performed and complied with all covenants,
         agreements and conditions contained herein which are required to be
         performed or complied with by the Borrowers on or before the date
         hereof and (iii) no Default or Event of Default shall have occurred and
         be continuing after giving effect to this Amendment.

         (b) The following shall be conditions precedent to the execution of
this Amendment:

                  (i) The Agent shall have received (i) copies of the articles
             of incorporation or certificates of formation or other charter
             documents of each Borrower, (ii) copies of the bylaws or other
             similar agreement and all amendments thereto of each Borrower,
             (iii) copies of resolutions of the Board of Directors or similar
             managing body of each Borrower approving and adopting this
             Amendment, the transactions contemplated herein and authorizing
             execution and delivery thereof, in each case, of each Borrower and
             certified by a secretary or assistant secretary of the Company to
             be true and correct and in force and effect as of the date hereof,
             (iv) a certificate of the Secretary or Assistant Secretary (or
             equivalent thereof) of each Borrower certifying as to the
             incumbency of the officers of each Borrower, and (v) an original,
             duly certified as of a current date by the applicable Secretary of
             State, of a good standing certificate issued by the Secretary of
             the state of incorporation or organization of each Borrower;

                  (ii) The Borrowers shall have paid the Amendment Fees and all
             other fees and expenses of the Agent and the Attorney Costs
             incurred in connection with this Amendment and any of the Loan
             Documents and the transactions contemplated thereby to the extent
             invoiced;

                  (iii) The Agent shall have received evidence, in form, scope,
             and substance, reasonably satisfactory to the Agent, of all
             insurance coverage as required by the Loan Agreement;

                  (iv) The Agent and the Lenders shall have had an opportunity,
             if they so choose, to examine the books of account and other
             records and files of the Borrowers and to make copies thereof, and
             to conduct a pre-extension audit which shall include, without
             limitation, updated desktop fixed asset appraisals, verification of
             Inventory, Accounts, and the Borrowing Base, and the results of



                                       15
<PAGE>


             such examination and audit shall have been satisfactory to the
             Agent and the Lenders in all respects;

                  (v) All proceedings taken in connection with the execution of
             this Amendment and all documents and papers relating thereto shall
             be satisfactory in form, scope, and substance to the Agent and the
             Lenders;

                  (vi) The Agent shall have received a copy of the signed order
             (the "Amendment Order") of the Bankruptcy Court in substantially
             the form of Annex II hereto authorizing and approving the
             transactions contemplated hereby. The Amendment Order (i) shall be
             in form and substance satisfactory to the Agent, (ii) shall be
             certified by the Clerk of the Bankruptcy Court as having been duly
             entered, (iii) shall have authorized extensions of credit by the
             Lenders in amounts up to $250,000,000, (iv) shall approve the
             payment by the Borrowers of all of the fees set forth in Section 3
             hereof and in Section 2.5 of the Loan Agreement as amended hereby,
             and (v) shall be in full force and effect and shall not have been
             vacated, reversed, modified, amended or stayed; and

                  (vii) The Agent shall have received an executed tri-party
             agreements in form and substance satisfactory the Agent with
             respect to lockbox accounts and other relevant accounts of the
             Borrowers (which agreements shall provide that the Agent may after
             the occurrence of an Event of Default, direct the applicable bank
             to transfer funds from the applicable accounts as the Agent
             directs).

         5.  Reference to and Effect Upon the Loan Agreement.

             (a) Except as specifically amended above, the Loan Agreement and
         the other Loan Documents shall remain in full force and effect and are
         hereby ratified and confirmed.

             (b) Upon the effectiveness of this Amendment, each reference in the
         Loan Agreement to "this Agreement", "hereunder", "hereof", "herein" or
         words of similar import shall mean and be a reference to the Loan
         Agreement as amended hereby.

         6.  Defined Terms. Except as otherwise defined herein, all defined
terms herein shall have the meanings ascribed thereto in the Loan Agreement.

         7.  Governing Law. THIS AMENDMENT SHALL BE INTERPRETED AND THE RIGHTS
AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL
LAWS (PROVIDED THAT PERFECTION ISSUES WITH RESPECT TO ARTICLE 9 OF THE UCC MAY
GIVE EFFECT TO APPLICABLE CHOICE OR CONFLICT OF LAW RULES SET FORTH IN ARTICLE 9
OF THE UCC) OF THE STATE OF NEW YORK TO THE EXTENT NOT PREEMPTED BY FEDERAL
BANKRUPTCY LAWS; PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.


                                       16
<PAGE>

         8.  Headings. Section headings in this amendment are included herein
for convenience of reference only and shall not constitute a part of this
Amendment for any other purposes.

         9. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed an original, but
all such counterparts shall constitute one and the same instrument.



                            (Signature Page Follows)

                                       17

<PAGE>


         IN WITNESS WHEREOF, this Amendment has been duly executed as of the
date first written above.

                                     BANK OF AMERICA, N.A.,
                                     as Agent and Lender


                                     By:
                                        ---------------------------------------
                                     Name:
                                           ------------------------------------
                                     Title:
                                           ------------------------------------


                                      BORROWERS:

                                      W. R. Grace & Co.
                                      A-1 Bit & Tool Co., Inc.
                                      Alewife Boston Ltd.
                                      Alewife Land Corporation
                                      Amicon, Inc.
                                      CB Biomedical, Inc.
                                      CCHP, Inc.
                                      Coalgrace, Inc.
                                      Coalgrace II, Inc.
                                      Creative Food 'N Fun Company
                                      Darex Puerto Rico, Inc.
                                      Del Taco Restaurants, Inc.
                                      Ecarg, Inc.
                                      Five Alewife Boston Ltd.
                                      G C Limited Partners I, Inc.
                                      G C Management, Inc.
                                      GEC Management Corporation
                                      GN Holdings, Inc.
                                      GPC Thomasville Corp.
                                      Gloucester New Communities Company, Inc.
                                      Grace A-B Inc.
                                      Grace A-B II Inc.
                                      Grace Chemical Company of Cuba
                                      Grace Culinary Systems, Inc.
                                      Grace Drilling Company
                                      Grace Energy Corporation
                                      Grace Environmental, Inc.
                                      Grace Europe, Inc.
                                      Grace H-G Inc.
                                      Grace H-G II Inc.


            [Signature Page to Amendment No. 1 and Limited Waiver to
                   Post-Petition Loan and Security Agreement]

<PAGE>



                                      Grace Hotel Services Corporation
                                      Grace International Holdings, Inc.
                                      Grace Offshore Company
                                      Grace PAR Corporation
                                      Grace Petroleum Libya Incorporated
                                      Grace Tarpon Investors, Inc.
                                      Grace Ventures Corp.
                                      Grace Washington, Inc.
                                      W. R. Grace Capital Corporation
                                      W. R. Grace & Co.-Conn.
                                      W. R. Grace Land Corporation
                                      Gracoal, Inc.
                                      Gracoal II, Inc.
                                      Guanica-Caribe Land Development
                                        Corporation
                                      Hanover Square Corporation
                                      Homco International, Inc.
                                      Kootenai Development Company
                                      L B Realty, Inc.
                                      Litigation Management, Inc.
                                      Monolith Enterprises, Incorporated
                                      Monroe Street, Inc.
                                      MRA Holdings Corp.
                                      MRA Intermedco, Inc.
                                      MRA Staffing Systems, Inc.
                                      Remedium Group, Inc.
                                      Southern Oil, Resin & Fiberglass, Inc.
                                      Water Street Corporation, each as a
                                        Debtor and a  Debtor-in-Possession


                                      By:
                                          ------------------------------------
                                      Its Senior Vice President or
                                      Vice President



            [Signature Page to Amendment No. 1 and Limited Waiver to
                   Post-Petition Loan and Security Agreement]



<PAGE>

                                       CC Partners, as a Debtor and Debtor-in-
                                         Possession

                                         By:   MRA Staffing Systems, Inc.,
                                               a General Partner

                                               By:
                                                  ----------------------------

                                               Its:
                                                   ---------------------------

                                         By:   CCHP, Inc., a General Partner

                                               By:
                                                  ----------------------------

                                               Its:
                                                   ---------------------------


                                       Axial Basin Rand Company, as a Debtor and
                                          Debtor-in-Possession

                                               By:
                                                  ----------------------------

                                               Its:
                                                   ---------------------------


                                           By: Grace A-B II, Inc., a General
                                                 Partner

                                               By:
                                                  ----------------------------

                                               Its:
                                                   ---------------------------

                                           By: Grace A-B, Inc., a General
                                                  Partner

                                               By:
                                                  ----------------------------

                                               Its:
                                                   ---------------------------

                                         Hayden-Gulch West Coal Company, as a
                                            Debtor and Debtor-in-Possession

                                           By: Grace H-G, Inc., a General
                                                  Partner

                                               By:
                                                  ----------------------------

                                               Its:
                                                   ---------------------------

                                           By:   Grace H-G II, Inc., a General
                                                   Partner

                                               By:
                                                  ----------------------------

                                               Its:
                                                   ---------------------------








            [Signature Page to Amendment No. 1 and Limited Waiver to
                   Post-Petition Loan and Security Agreement]

<PAGE>




                                          H-G Coal Company, as a Debtor and
                                             Debtor-in-Possession

                                             By: Coalgrace, Inc., a General
                                                   Partner

                                                 By:
                                                    ----------------------------

                                                 Its:
                                                     ---------------------------

                                             By: Coalgrace II, Inc., a
                                                   General Partner

                                                 By:
                                                    ----------------------------

                                                 Its:
                                                     ---------------------------

                                           Dewey and Almy, LLC, as a Debtor and
                                              Debtor-in-Possession

                                             By: W. R. Grace & Co.-Conn.,
                                                   its sole member

                                                 By:
                                                    ----------------------------

                                                 Its:
                                                     ---------------------------


            [Signature Page to Amendment No. 1 and Limited Waiver to
                   Post-Petition Loan and Security Agreement]


<PAGE>


                                    TRANSAMERICA BUSINESS CAPITAL
                                    CORPORATION


                                    By:
                                       ------------------------------------

                                    Title:
                                           --------------------------------

                                    Address:  555 Theodore Fremd Avenue
                                              Suite C-301
                                              Rye, New York 10580
                                              Attention:  Dave McCann and Gary
                                              Luks
                                              Facsimile: (914) 921-5883 and
                                              (914) 921-0110










<PAGE>


                                    GMAC COMMERCIAL CREDIT LLC

                                    By:
                                       ------------------------------------

                                    Title:
                                           --------------------------------

                                    Address:  1290 Avenue of the Americas
                                              3rd Floor
                                              New York, New York  10104
                                              Attention:  Jane Frangos
                                              Facsimile: (212) 884-7384




<PAGE>

                                    THE CIT GROUP/BUSINESS CREDIT

                                    By:
                                       ------------------------------------

                                    Title:
                                           --------------------------------

                                    Address:  1211 Avenue of the Americas
                                              New York, New York  10036
                                              Attention:  Monique Fuller
                                              Facsimile: (212) 536-1293


<PAGE>



                                    PNC BANK, NATIONAL ASSOCIATION

                                    By:
                                       ------------------------------------

                                    Title:
                                           --------------------------------

                                    Address:  Two Tower Center Blvd.
                                              8th Floor
                                              East Brunswick, New Jersey 08816
                                              Attention:  Arthur Lippens
                                              Facsimile: (732) 220-4393



<PAGE>

                                    BANK OF SCOTLAND

                                    By:
                                       ------------------------------------

                                    Title:
                                           --------------------------------

                                    Address:  311 South Wacker Drive
                                              Suite 1625
                                              Chicago, Illinois 60606
                                              Attention:  Matthew McLaurin
                                              Facsimile: (312) 939-9715



<PAGE>


                                    AmSouth Capital Corp.

                                    By:
                                       ------------------------------------

                                    Title:
                                           --------------------------------

                                              Address: 350 Park Avenue
                                              29th Floor
                                              New York, New York 10022
                                              Attention: Frank Marsicano
                                              Facsimile: (212) 935-7458