CREDIT AGREEMENT



                          Dated as of July 31, 1998

                                    among

                       OPTICAL COATING LABORATORY, INC.



                        BANK OF AMERICA NATIONAL TRUST
                           AND SAVINGS ASSOCIATION,
                                   as Agent

                                     and

                         Letter of Credit Issuing Bank


                                     and

                THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO

<PAGE>
                              TABLE OF CONTENTS


Section                                                              Page
ARTICLE I DEFINITIONS...................................................1
     1.01  Certain Defined Terms........................................1
     1.02  Other Interpretive Provisions...............................20
     1.03  Accounting Principles.......................................21

ARTICLE II THE CREDITS.................................................21
     2.01  Amounts and Terms of Commitments............................21
     2.02  Loan Accounts...............................................22
     2.03  Procedure for Borrowing.....................................22
     2.04  Conversion and Continuation Elections.......................23
     2.05  Voluntary Termination or Reduction of Commitments...........24
     2.06  Optional Prepayments........................................24
     2.07  Mandatory Prepayments of Loans..............................25
     2.08  Repayment...................................................25
     2.09  Interest....................................................25
     2.10  Fees........................................................26
          (a)  Fees....................................................26
          (b)  Commitment Fees.........................................26
     2.11  Computation of Fees and Interest............................27
     2.12  Payments by the Company.....................................27
     2.13  Payments by the Banks to the Agent..........................28
     2.14  Sharing of Payments, Etc....................................28

ARTICLE III THE LETTERS OF CREDIT......................................29
     3.01  The Letter of Credit Subfacility............................29
     3.02  Issuance, Amendment and Renewal of Letters of Credit........30
     3.03  Risk Participations, Drawings and Reimbursements............32
     3.04  Repayment of Participations.................................34
     3.05  Role of the Issuing Bank....................................34
     3.06  Obligations Absolute........................................35
     3.07  Cash Collateral Pledge......................................36
     3.08  Letter of Credit Fees.......................................36
     3.09  Uniform Customs and Practice................................37

ARTICLE IV TAXES, YIELD PROTECTION AND ILLEGALITY......................37
     4.01  Taxes.......................................................37
     4.02  Illegality..................................................38
     4.03  Increased Costs and Reduction of Return.....................39
     4.04  Funding Losses..............................................40
     4.05  Inability to Determine Rates................................40
     4.06  Certificates of Banks.......................................41
     4.07  Survival....................................................41

ARTICLE V CONDITIONS PRECEDENT.........................................41
     5.01  Conditions of Initial Credit Extensions.....................41
          (a)Credit Agreement .........................................41
          (b)Resolutions; Incumbency ..................................42
          (c)Legal Opinion ............................................42
          (d)Payment of Fees ..........................................42
          (e)Placement of Debt ........................................42
          (f)Certificate ..............................................42
          (g)Agreements ...............................................43
          (h)Termination of Existing Syndicated Credit Agreement.......43
          (i)Other Documents ..........................................43
     5.02  Conditions to All Credit Extensions.........................43
          (a)Notice of Borrowing or Conversion/Continuation;
             Application...............................................43
          (b)Continuation of Representations and Warranties............43
          (c)No Existing Default ......................................43

ARTICLE VI REPRESENTATIONS AND WARRANTIES..............................44
     6.01  Corporate Existence and Power...............................44
     6.02  Corporate Authorization; No Contravention...................44
     6.03  Governmental Authorization..................................44
     6.04  Binding Effect..............................................45
     6.05  Litigation..................................................45
     6.06  No Default..................................................45
     6.07  ERISA Compliance............................................46
     6.08  Use of Proceeds; Margin Regulations.........................46
     6.09  Title to Properties.........................................46
     6.10  Taxes.......................................................47
     6.11  Financial Condition.........................................47
     6.12  Environmental Matters.......................................47
     6.13  Regulated Entities..........................................47
     6.14  No Burdensome Restrictions..................................48
     6.15  Copyrights, Patents, Trademarks and Licenses, etc...........48
     6.16  Subsidiaries................................................48
     6.17  Insurance...................................................48
     6.18  Swap Obligations............................................48
     6.19  Year 2000...................................................48
     6.20  Full Disclosure.............................................49

ARTICLE VII  AFFIRMATIVE COVENANTS.....................................49
     7.01  Financial Statements........................................49
     7.02  Certificates; Other Information.............................50
     7.03  Notices.....................................................51
     7.04  Preservation of Corporate Existence, Etc....................52     
     7.05  Maintenance of Property.....................................52
     7.06  Insurance...................................................52
     7.07  Payment of Obligations......................................53
     7.08  Compliance with Laws........................................53
     7.09  Compliance with ERISA.......................................53
     7.10  Inspection of Property and Books and Records................53
     7.11  Environmental Laws..........................................54
     7.12  Use of Proceeds.............................................54

ARTICLE VIII  NEGATIVE COVENANTS.......................................54
     8.01  Limitation on Liens.........................................54
     8.02  Restrictions on Liens.......................................56
     8.03  Disposition of Assets.......................................56
     8.04  Consolidations and Mergers..................................57
     8.05  Loans and Investments.......................................57
     8.06  Limitation on Indebtedness..................................60
     8.07  Transactions with Affiliates................................62
     8.08  Use of Proceeds.............................................62
     8.09  Contingent Obligations......................................62
     8.10  Joint Ventures..............................................62
     8.11  Lease Obligations...........................................62
     8.12  Restricted Payments.........................................63
     8.13  ERISA.......................................................63
     8.14  Tangible Net Worth..........................................63
     8.15  Leverage Ratio..............................................64
     8.16  Fixed Charge Coverage Ratio.................................64
     8.17  Change in Business..........................................64
     8.18  Accounting Changes..........................................64
     8.19  SICPA Agreements............................................64


ARTICLE IX EVENTS OF DEFAULT...........................................65
     9.01  Event of Default............................................65
          (a)Non-Payment ..............................................65
          (b)Representation or Warranty................................65
          (c)Specific Defaults ........................................65
          (d)Other Defaults ...........................................66
          (e)Cross-Default ............................................66
          (f)Insolvency; Voluntary Proceedings.........................66
          (g)Involuntary Proceedings...................................67
          (h)ERISA ....................................................67
          (i)Monetary Judgments .......................................67
          (j)Non-Monetary Judgments ...................................67
          (k)Change of Control ........................................68
          (l)Loss of Licenses .........................................68
          (m)Adverse Change ...........................................68
     9.02  Remedies....................................................68
     9.03  Rights Not Exclusive........................................69
     9.04  Certain Financial Covenant Defaults.........................69

ARTICLE X THE AGENT....................................................69
     10.01  Appointment and Authorization..............................69
     10.02  Delegation of Duties.......................................70
     10.03  Liability of Agent.........................................70
     10.04  Reliance by Agent..........................................71
     10.05  Notice of Default..........................................71
     10.06  Credit Decision............................................71
     10.07  Indemnification of Agent...................................71
     10.08  Agent in Individual Capacity...............................71
     10.09  Successor Agent............................................72
     10.10  Withholding Tax............................................72

ARTICLE XI MISCELLANEOUS...............................................74
     11.01  Amendments and Waivers.....................................74
     11.02  Notices....................................................75
     11.03  No Waiver; Cumulative Remedies.............................75
     11.04  Costs and Expenses.........................................76
     11.05  Company Indemnification....................................76
     11.06  Payments Set Aside.........................................76
     11.07  Successors and Assigns.....................................77
     11.08  Assignments, Participations, etc...........................77
     11.09  Confidentiality............................................78
     11.10  Set-off....................................................79
     11.11  Notification of Addresses, Lending Offices, Etc............79
     11.12  Counterparts...............................................79
     11.13  Severability...............................................79
     11.14  No Third Parties Benefited.................................80
     11.15  Governing Law and Jurisdiction.............................80
     11.16  Waiver of Jury Trial.......................................80
     11.17  Entire Agreement...........................................81
     11.18  Automatic Debit of Fees....................................81

SCHEDULES

Schedule 2.01   Commitments
Schedule 6.05   Litigation
Schedule 6.11   Permitted Liabilities
Schedule 6.12   Environmental Matters
Schedule 6.16   Subsidiaries and Minority Interests
Schedule 6.17   Insurance Matters
Schedule 8.01   Permitted Liens
Schedule 8.05   Certain Investments
Schedule 8.06   Certain Indebtedness
Schedule 8.09   Contingent Obligations
Schedule 11.02  Lending Offices; Addresses for Notices

EXHIBITS

Exhibit A       Form of Compliance Certificate
Exhibit B       Form of Notice of Borrowing
Exhibit C       Form of Notice of Conversion/Continuation
Exhibit D       Form of Legal Opinion of Company's Counsel
Exhibit E       Form of Assignment and Acceptance

                               CREDIT AGREEMENT


     This CREDIT AGREEMENT is entered into as of July 31, 1998, among Optical
Coating Laboratory, Inc. a Delaware corporation  (the "Company"), the several
financial  institutions   from  time   to  time   party  to   this  Agreement
(collectively, the  "Banks"; individually,  a "Bank"),  and  Bank of  America
National Trust and Savings Association, as letter of  credit issuing bank and
as agent for the Banks.

     WHEREAS, the  Banks  have agreed  to  make available  to  the Company  a
revolving credit facility with a letter of credit  subfacility upon the terms
and conditions set forth in this Agreement;

     NOW, THEREFORE, in  consideration of  the mutual  agreements, provisions
and covenants contained herein, the parties agree as follows:

                                  ARTICLE I

                                 DEFINITIONS

     1.01 Certain Defined  Terms.   The following  terms  have the  following
meanings:

          "Acceptable Bank" means any commercial bank:

            (a)  that is organized under the laws of the United States or any
     state thereof;

            (b)  that has capital, surplus and  undivided profits aggregating
     at least $100,000,000; and

            (c)  whose long-term unsecured debt obligations (or the long-term
     unsecured debt obligations of the bank holding company owning all of the
     capital stock  of such  bank) shall  have been  rated "A"  or higher  by
     Standard & Poor's or "A2" or higher by Moody's.

          "Acquisition"  means   any  transaction   or   series  of   related
     transactions for the purpose of or resulting, directly or indirectly, in
     (a) the  acquisition of  all or  substantially all  of the  assets of  a
     Person, or of any business or division of  a Person, (b) the acquisition
     of in  excess  of  50%  of  the capital  stock,  partnership  interests,
     membership interests or equity  of any Person, or  otherwise causing any
     Person to become a Subsidiary,  or (c) a merger or  consolidation or any
     other combination with  another Person  (other than a  Person that  is a
     Subsidiary) provided that the Company or the Subsidiary is the surviving
     entity.

          "Affiliate" means,  as  to  any  Person,  any other  Person  which,
     directly or indirectly, is in control of, is controlled  by, or is under
     common control with, such Person.   A Person shall be  deemed to control
     another  Person  if  the  controlling  Person   possesses,  directly  or
     indirectly, the power to direct or cause the direction of the management
     and policies  of the  other  Person, whether  through  the ownership  of
     voting securities, membership interests, by contract, or otherwise.

          "Agent"  means  BofA  in  its  capacity  as  agent  for  the  Banks
     hereunder, and any successor agent arising under Section 10.09.

          "Agent-Related Persons" means BofA and any  successor agent arising
     under Section  10.09 and  any successor  letter of  credit issuing  bank
     hereunder, together with their respective Affiliates,  and the officers,
     directors, employees, agents and  attorneys-in-fact of such  Persons and
     Affiliates.

          "Agent's Payment Office" means  the address for payments  set forth
     on Schedule 11.02, or such other  address as the Agent may  from time to
     time specify.

          "Agreement" means this Credit Agreement.

          "Applicable Fee Percentage"  means 0.200%, and  "Applicable Margin"
     means 0.625%  for  Offshore  Rate  Advances  and  0.00%  for  Base  Rate
     Advances, in  each case  until two  Business Days  after receipt  by the
     Agent of  the Compliance  Certificate delivered  pursuant to  subsection
     7.02(b),  together  with  the   financial  statements  referred   to  in
     subsection 7.01(a),  for the  Company's fiscal  quarter ending  July 31,
     1998; thereafter the Applicable Fee Percentage and the Applicable Margin
     shall  mean  the  percentage  specified  below  for  each  opposite  the
     applicable Leverage Ratio as set forth below:

     Leverage              Applicable Fee          Applicable  Margin
     --------              --------------          -------------------
     Ratio                   Percentage    Offshore Rate Loan  Base Rate Loan
     -----                   ----------    ------------------  --------------
     Less than 150 to          0.200%           0.625%            0.000%
     1.00

     Greater than or
     equal to 1.50 to
     1.00  but less than
     2.00 to 1.00              0.250%           0.750%            0.000%

     Greater than or
     equal  to 2.00 to
     1.00                      0.300%           1.000%            0.000%

          Each subsequent change in  the Applicable Margin shall  take effect
     two  Business  Days  after  receipt  by  the  Agent  of  the  Compliance
     Certificate delivered  pursuant to  Section 7.02(b),  together with  the
     financial statements referred  to in subsection  7.01(a) or  7.01(b), as
     applicable;  provided,  however,  that  if  the  Compliance  Certificate
     required  to  be  delivered  pursuant  to  subsection  7.02(b)  and  the
     financial statements  required to  be delivered  pursuant to  subsection
     7.01(a) or  7.01(b),  as applicable,  are  not  delivered when  required
     thereunder, the  Leverage Ratio  shall, until  two  Business Days  after
     receipt of such items, be deemed to be greater than or  equal to 2.00 to
     1.00.

          "Assignee" has the meaning specified in subsection 11.08(a).

          "Attorney Costs" means and  includes all fees and  disbursements of
     any law firm or other  external counsel, the allocated  cost of internal
     legal services and all disbursements of internal counsel.

          "Bank" has the meaning specified in the introductory clause hereto.
     References to the "Banks" shall include BofA,  including in its capacity
     as Issuing Bank; for purposes of clarification only,  to the extent that
     BofA may have  any rights  or obligations  in addition  to those  of the
     Banks due to  its status  as Issuing Bank,  its status  as such  will be
     specifically referenced.

          "Bankruptcy Code" means the  Federal Bankruptcy Reform Act  of 1978
     (11 U.S.C. S101, et seq.).

          "Base Rate" means, for any day, the higher of:  (a) 0.50% per annum
     above the latest  Federal Funds  Rate; and (b) the  rate of  interest in
     effect for such day as publicly  announced from time to time  by BofA in
     San Francisco,  California, as  its "reference  rate."   (The "reference
     rate" is a rate set by BofA based upon  various factors including BofA's
     costs and desired return, general economic conditions and other factors,
     and is used as  a reference point for  pricing some loans, which  may be
     priced at, above, or below such announced rate.)

          Any change  in the  reference  rate announced  by  BofA shall  take
     effect at the  opening of business  on the day  specified in  the public
     announcement of such change.

          "Base Rate  Loan means  a Revolving  Loan or  an L/C  Advance that
     bears interest based on the Base Rate.

          "BofA"  means   Bank  of   America  National   Trust  and   Savings
     Association, a national banking association.

          "Borrowing" means  a borrowing  hereunder  consisting of  Revolving
     Loans of the same Type made to the Company on the same  day by the Banks
     under Article II, and, other than in the case of Base Rate Loans, having
     the same Interest Period.

          "Borrowing Date" means any  date on which a  Borrowing occurs under
     Section 2.03.

          "Business Day" means any day other than a Saturday, Sunday or other
     day on which commercial  banks in New York,  New York or  San Francisco,
     California are  authorized  or required  by  law to  close  and, if  the
     applicable Business Day relates to any Offshore Rate  Loan, means such a
     day on which dealings are  carried on in the  applicable offshore dollar
     interbank market.

          "Capital Adequacy  Regulation"  means  any  guideline,  request  or
     directive of any  central bank or  other Governmental Authority,  or any
     other law, rule or regulation, whether  or not having the  force of law,
     in each  case,  regarding  capital  adequacy  of  any  Bank  or  of  any
     corporation controlling a Bank.

          "Cash Collateralize" means to pledge and deposit with or deliver to
     the Agent, for the benefit of the Agent, the Issuing Bank and the Banks,
     as collateral for the L/C Obligations, cash  or deposit account balances
     pursuant to  documentation in  form and  substance  satisfactory to  the
     Agent and the Issuing Bank  (which documents are hereby  consented to by
     the Banks).  Derivatives of such term  shall have corresponding meaning.
     The Company hereby grants the Agent,  for the benefit of  the Agent, the
     Issuing Bank and  the Banks, a  security interest in  all such  cash and
     deposit account  balances.    Cash  collateral  shall be  maintained  in
     blocked, interest bearing deposit accounts  at BofA.  The  types of, and
     the rates of interest on, such accounts shall be  determined by BofA and
     such accounts shall be  subject to BofA's standard  terms and conditions
     for such accounts.

     "Closing Date"  means the  date on  which all  conditions precedent  set
    forth in Section 5.01  are satisfied or waived  by all Banks (or,  in the
    case of subsection 5.01(d), waived by the Person entitled to receive such
    payment).

     "Code"  means  the  Internal  Revenue  Code  of  1986,  and  regulations
    promulgated thereunder.

     "Commitment", as  to each  Bank, has  the meaning  specified in  Section
    2.01.

     "Compliance Certificate" means a  certificate substantially in  the form
    of Exhibit A, or in such other form as the Majority Banks may accept from
    time-to-time.

     "Contingent Obligation" means, as to any Person,  any direct or indirect
    liability of  that Person,  whether or  not contingent,  with or  without
    recourse, (a) with respect  to any Indebtedness, lease,  dividend, letter
    of credit  or other  obligation (the  "primary  obligations") of  another
    Person (the "primary obligor"),  including any obligation of  that Person
    (i) to purchase, repurchase or otherwise acquire such primary obligations
    or any  security  therefor, (ii)  to  advance or  provide  funds for  the
    payment or  discharge of  any  such primary  obligation,  or to  maintain
    working capital or equity capital of the primary  obligor or otherwise to
    maintain the net worth  or solvency or any  balance sheet item,  level of
    income or financial condition  of the primary obligor,  (iii) to purchase
    property, securities or  services primarily for  the purpose  of assuring
    the owner of any  such primary obligation of  the ability of  the primary
    obligor to make payment of such primary obligation,  or (iv) otherwise to
    assure or hold harmless the holder of any such primary obligation against
    loss in respect thereof (each, a "Guaranty Obligation"); (b) with respect
    to any Surety Instrument (other than any Letter of Credit) issued for the
    account of that Person or as to which that Person is otherwise liable for
    reimbursement of  drawings or  payments; (c)  to purchase  any materials,
    supplies or other property  from, or to  obtain the services  of, another
    Person if the relevant  contract or other related  document or obligation
    requires that payment for such materials, supplies  or other property, or
    for such services, shall be  made regardless of whether  delivery of such
    materials, supplies or other property  is ever made or  tendered, or such
    services are ever performed  or tendered, or (d)  in respect of  any Swap
    Contract.  The amount of any Contingent Obligation shall,  in the case of
    Guaranty Obligations  (unless  otherwise  specifically provided  in  such
    Guaranty Obligations),  be deemed  equal to  the  stated or  determinable
    amount of  the  primary  obligation in  respect  of  which such  Guaranty
    Obligation is made or,  if not stated  or if indeterminable,  the maximum
    reasonably anticipated liability in  respect thereof, and in  the case of
    other Contingent  Obligations other  than in  respect of  Swap Contracts,
    shall be equal to the maximum reasonably anticipated liability in respect
    thereof, and in  the case  of Contingent Obligations  in respect  of Swap
    Contracts, shall be equal to the Swap Termination Value.

     "Contractual Obligation" means, as  to any Person, any  provision of any
    security  issued  by  such  Person  or  of  any  agreement,  undertaking,
    contract,  indenture,  mortgage,  deed  of  trust  or  other  instrument,
    document or agreement to which such  Person is a party or by  which it or
    any of its property is bound.

     "Conversion/Continuation Date" means  any date  on which,  under Section
    2.04, the Company (a) converts Loans of one Type to  another Type, or (b)
    continues as such, but  with a new  Interest Period, Offshore  Rate Loans
    having Interest Periods expiring on such date.

     "Credit Extension" means  and includes (a)  the making of  any Revolving
    Loans hereunder, and (b) the Issuance of any Letters of Credit hereunder.

     "Default" means  any event  or circumstance  which, with  the giving  of
    notice, the lapse  of time,  or both,  would (if  not cured  or otherwise
    remedied during such time) constitute an Event of Default.

     "Distribution"  means,   without  duplication,   with  respect   to  any
    corporation:

     (a)   any dividend or other distribution, direct or indirect, on account
    of any  shares of  capital stock  of  such corporation  now or  hereafter
    outstanding, whether  in cash  or other  property, except  a dividend  or
    other distribution payable solely in shares of stock of such corporation;
    and

     (b)   any redemption, retirement, purchase or  other acquisition, direct
    or indirect, of any  shares of capital stock  of such corporation  now or
    hereafter  outstanding,  including,  without   limitation,  any  deferred
    payment made by  such corporation in  connection with the  acquisition of
    its capital stock, or of any  warrants, rights or options  to acquire any
    shares of such stock.

         "Dollars", "dollars" and  "$" each mean  lawful money of  the United
    States.

         "EBIT" means,  for any  period, as  to a  Person, on  a consolidated
    basis, earnings before interest  income, interest expense, and  taxes. As
    used herein, "EBIT" shall also include the EBIT of any Person acquired by
    the Company or by a Subsidiary in an Acquisition for  the period prior to
    the date  of  such Acquisition  if  the Agent  and  the  Banks have  been
    furnished  with  audited   financial  statements  satisfactory   to  them
    confirming such items for the relevant periods prior to  the date of such
    Acquisition.

         "EBITDA" means, for any  period, as to  a Person, on  a consolidated
    basis, earnings of such Person before  interest income, interest expense,
    taxes, depreciation, and  amortization.  As  used herein,  "EBITDA" shall
    also include the  EBITDA of any  Person acquired by  the Company or  by a
    Subsidiary in an  Acquisition for the  period prior to  the date  of such
    Acquisition if the Agent and  the Banks have been  furnished with audited
    financial statements satisfactory to  them confirming such items  for the
    relevant periods prior to the date of such Acquisition.

         "Effective Amount" means (i) with respect to  any Revolving Loans on
    any date, the aggregate outstanding principal amount thereof after giving
    effect to any Borrowings and prepayments or repayments of Revolving Loans
    occurring on  such date;  and (ii)  with respect  to any  outstanding L/C
    Obligations on any date, the amount of such L/C  Obligations on such date
    after giving effect to  any Issuances of  Letters of Credit  occurring on
    such date  and any  other changes  in  the aggregate  amount  of the  L/C
    Obligations as of such date, including as a  result of any reimbursements
    of outstanding  unpaid  drawings  under  any  Letters of  Credit  or  any
    reductions in the maximum  amount available for drawing  under Letters of
    Credit taking effect on such date.

         "Eligible Assignee means (i) a commercial  bank organized under the
    laws of the United  States, or any state  thereof, and having  a combined
    capital and  surplus of  at least  $100,000,000; (ii)  a commercial  bank
    organized under the laws  of any other country  which is a member  of the
    Organization for  Economic  Cooperation and  Development  or a  political
    subdivision of  any  such  country, and  having  a  combined capital  and
    surplus of  at least  $100,000,000,  provided that  such  bank is  acting
    through a branch  or agency  located in  the United  States; and  (iii) a
    Person that is  primarily engaged in  the business of  commercial banking
    and that is (A) a Subsidiary  of a Bank, (B) a Subsidiary  of a Person of
    which a  Bank is  a Subsidiary,  or (C)  a Person  of which  a Bank  is a
    Subsidiary.

         "Environmental Claims" means  all claims,  however asserted,  by any
    Governmental Authority or  other Person  alleging potential  liability or
    responsibility for violation of any Environmental Law,  or for release or
    injury to the environment.

         "Environmental  Laws"  means  all  federal,  state  or  local  laws,
    statutes, common law  duties, rules,  regulations, ordinances  and codes,
    together with  all  administrative  orders,  directed  duties,  requests,
    licenses,  authorizations  and  permits  of,  and  agreements  with,  any
    Governmental Authorities, in each case relating to environmental, health,
    safety and land use matters.

         "ERISA" means the Employee  Retirement Income Security Act  of 1974,
    and regulations promulgated thereunder.

         "ERISA Affiliate"  means  any  trade  or  business (whether  or  not
    incorporated) under common control with the Company within the meaning of

    Section 414(b) or (c)  of the Code  (and Sections 414(m)  and (o)  of the
    Code for purposes of provisions relating to Section 412 of the Code).

         "ERISA Event" means (a) a Reportable Event with respect to a Pension
    Plan; (b) a  withdrawal by  the Company  or  any ERISA  Affiliate from  a
    Pension Plan subject to Section 4063 of ERISA during a plan year in which
    it was a substantial employer (as defined in Section 4001(a)(2) of ERISA)
    or a cessation of operations which is treated as  such a withdrawal under
    Section 4062(e) of  ERISA; (c) a  complete or  partial withdrawal  by the
    Company or any ERISA Affiliate from a  Multiemployer Plan or notification
    that a  Multiemployer Plan  is in  reorganization;  (d) the  filing of  a
    notice of intent  to terminate, the  treatment of a  Plan amendment  as a
    termination under Section 4041 or 4041A of ERISA,  or the commencement of
    proceedings by  the PBGC  to terminate  a Pension  Plan or  Multiemployer
    Plan; (e) an event  or condition  which might  reasonably be  expected to
    constitute grounds under Section 4042 of ERISA for the termination of, or
    the  appointment  of  a  trustee  to  administer,  any  Pension  Plan  or
    Multiemployer Plan; or (f) the imposition of any liability under Title IV
    of ERISA, other than PBGC  premiums due but not  delinquent under Section
    4007 of ERISA, upon the Company or any ERISA Affiliate.

         "Eurodollar Reserve  Percentage" has  the meaning  specified in  the
    definition of "Offshore Rate".

         "Event  of  Default"  means  any  of  the  events  or  circumstances
    specified in Section 9.01.

         "Exchange Act"  means  the  Securities  Exchange  Act of  1934,  and
    regulations promulgated thereunder.

         "Existing Syndicated  Credit Agreement"  means the  credit agreement
    dated as of May  24, 1995 among  the Company, the  financial institutions


    party thereto,  and BofA  as agent  for such  financial institutions  and
    letter of credit issuing bank.

         "FDIC" means  the  Federal Deposit  Insurance  Corporation, and  any
    Governmental Authority succeeding to any of its principal functions.

         "Federal Funds Rate" means, for any  day, the rate set  forth in the
    weekly statistical  release  designated as  H.15(519),  or any  successor
    publication, published by  the Federal  Reserve Bank of  New York  on the
    preceding Business Day opposite the caption  "Federal Funds (Effective)";
    or, if for any  relevant day such  rate is not  so published on  any such
    preceding Business Day, the rate for such day will be the arithmetic mean
    as determined  by the  Agent of  the rates  for the  last transaction  in
    overnight Federal funds arranged prior to 9:00 a.m.  (New York City time)
    on  that  day  by  each  of  three  leading   brokers  of  Federal  funds
    transactions in New York City selected by the Agent.

         "Fee Letter" has the meaning specified in subsection 2.10(a).

         "Fixed Charge Coverage Ratio" means, for  the date of determination,
    the ratio of the Company's (i) EBIT for the four quarter period ending on
    such date to (ii)  the sum of its  consolidated (x) net  interest expense
    for the four quarter period ending on such date  plus (y) current portion
    of long term debt, calculated on a prospective basis for the four quarter
    period beginning on such date of determination.  In calculating the Fixed
    Charge Coverage Ratio, Indebtedness  of Flex Products covered  by Section
    8.06(j) to the extent  it is owed to  SICPA or to  a third person  who is
    making the credit  extension in  lieu of SICPA  and the  interest expense
    allocated to such Indebtedness shall be excluded.

         "Flex Products" means Flex Products, Inc., a Delaware corporation.

         "Flex-SICPA Contract means the License and  Supply Agreement by and
    among Flex Products,  Inc. and  SICPA dated  as of  December 2,  1994, as
    amended pursuant  to  the  SICPA/OCLI  Settlement  Agreement by  a  First
    Amendment thereto dated as of November  19, 1997, as in effect  as of the
    date of this Agreement.

         "FRB" means the  Board of Governors  of the Federal  Reserve System,
    and any  Governmental  Authority  succeeding  to  any  of  its  principal
    functions.

         "Funded Debt"  means,  as  of the  date  of  determination, for  the
    Company  and   its  Subsidiaries   on  a   consolidated  basis,   without
    duplication, all  indebtedness  for  borrowed money,  all  non-contingent
    reimbursement or payment obligations with respect  to Surety Instruments,
    all obligations with  respect to capital  leases, the current  portion of
    mandatory redeemable  preferred stock,  and all  Guaranty Obligations  in
    respect of indebtedness or obligations of others  of the foregoing kinds;
    and  shall  exclude  all  indebtedness  created   or  arising  under  any
    conditional sale  or  other title  retention  agreement,  or incurred  as
    financing, in either case with respect to property acquired by the Person
    if the rights and remedies of the seller or bank  under such agreement in
    the event  of  default  are limited  to  repossessions  or sale  of  such
    property.

         "GAAP" means generally accepted accounting principles set forth from
    time to  time  in  the  opinions  and pronouncements  of  the  Accounting
    Principles  Board  and  the   American  Institute  of   Certified  Public
    Accountants and statements and pronouncements of the Financial Accounting
    Standards Board (or agencies with similar functions of comparable stature
    and  authority  within  the   U.S.  accounting  profession),   which  are
    applicable to the circumstances as of the date of determination.

         "Governmental Authority means any  nation or government,  any state
    or other  political subdivision  thereof, any  central  bank (or  similar
    monetary  or  regulatory   authority)  thereof,  any   entity  exercising
    executive, legislative, judicial, regulatory  or administrative functions
    of or pertaining to government, and any corporation or other entity owned
    or controlled, through stock or capital ownership or otherwise, by any of
    the foregoing.

         "Guaranty Obligation" has the meaning specified in the definition of
    "Contingent Obligation."

         "Honor Date" has the meaning specified in subsection 3.03(b).

         "Indebtedness" of  any Person  means, without  duplication, (a)  all
    indebtedness for borrowed money;  (b) all obligations  issued, undertaken
    or assumed as the deferred purchase price of  property or services (other
    than trade payables entered  into in the  ordinary course of  business on
    ordinary  terms);  (c)   all  non-contingent  reimbursement   or  payment
    obligations with  respect  to  Surety  Instruments;  (d) all  obligations
    evidenced by notes, bonds,  debentures or similar  instruments, including
    obligations so evidenced incurred  in connection with the  acquisition of
    property, assets or businesses;  (e) all indebtedness created  or arising
    under any  conditional  sale  or  other  title  retention  agreement,  or
    incurred as financing, in  either case with respect  to property acquired
    by the Person (excluding such indebtedness if the  rights and remedies of
    the seller  or bank  under such  agreement in  the event  of default  are
    limited to repossession  or sale of  such property); (f)  all obligations
    with respect  to capital  leases;  (g) all  indebtedness  referred to  in
    clauses (a) through (f) above secured by (or for which the holder of such
    Indebtedness has  an  existing  right,  contingent  or otherwise,  to  be
    secured by)  any  Lien  upon  or  in  property  (including  accounts  and
    contracts rights) owned by such  Person, even though such  Person has not
    assumed or become liable  for the payment  of such Indebtedness;  and (h)
    all Guaranty  Obligations in  respect of  indebtedness or  obligations of
    others of the kinds  referred to in clauses  (a) through (f) above.   For
    all purposes  of this  Agreement, the  Indebtedness of  any Person  shall
    include all recourse Indebtedness of any partnership  or joint venture or
    limited liability company in  which such Person  is a general  partner or
    joint venturer or  member, to  the extent  that such  Person may  be held
    liable for repayment thereof.

         "Indemnified Liabilities"  has  the  meaning  specified  in  Section
    11.05.

         "Indemnified Person" has the meaning specified in Section 11.05.

         "Independent  Auditor"  has  the  meaning  specified  in  subsection
    7.01(a).

         "Insolvency Proceeding"  means (a)  any case,  action or  proceeding
    before any court or other Governmental  Authority relating to bankruptcy,
    reorganization,  insolvency,   liquidation,  receivership,   dissolution,
    winding-up or relief of  debtors, or (b)  any general assignment  for the
    benefit of creditors, composition,  marshalling of assets  for creditors,
    or other, similar  arrangement in respect  of its creditors  generally or
    any substantial portion of its creditors;  undertaken under U.S. Federal,
    state or foreign law, including the Bankruptcy Code.

         "Interest Payment Date"  means, as  to any  Offshore Rate  Loan, the
    last day of each Interest Period  applicable to such Loan and,  as to any
    Base Rate Loan, the  last Business Day of  each January, April,  July and
    October (i.e.,  each fiscal  quarter of  the Company)  and the  Revolving
    Termination Date, provided, however,  that if any Interest  Period for an
    Offshore Rate Loan exceeds three months, the date that falls three months
    after the  beginning of  such  Interest Period  and  after each  Interest
    Payment Date thereafter is also an Interest Payment Date.

         "Interest Period" means,  as to any  Offshore Rate Loan,  the period
    commencing  on   the   Borrowing   Date   of   such  Loan   or   on   the
    Conversion/Continuation Date  on  which the  Loan  is  converted into  or
    continued as an  Offshore Rate  Loan, and  ending on  the date  one, two,
    three or six months thereafter as  selected by the Company  in its Notice
    of Borrowing or Notice of Conversion/Continuation;
    provided that:

              (i)  if any Interest Period  would otherwise end on  a day that
         is not a Business Day, that Interest Period shall be extended to the
         following Business Day, unless the result of such extension would be
         to carry such Interest Period into another  calendar month, in which
         event such Interest Period shall end on the preceding Business Day;

              (ii)  any Interest Period that begins on  the last Business Day
         of a calendar month (or on  a day for which there  is no numerically
         corresponding day in the calendar month at the  end of such Interest
         Period) shall end on the last Business Day of  the calendar month at
         the end of such Interest Period; and

              (iii)   no Interest  Period shall  extend beyond  the date  set
         forth in  clause (a)  of the  definition  of "Revolving  Termination
         Date."

         "IRS" means  the  Internal  Revenue  Service, and  any  Governmental
    Authority succeeding to any of its principal functions under the Code.

         "Issuance Date" has the meaning specified in subsection 3.01(a).



         "Issue" means, with respect to any Letter of Credit,  to issue or to
    extend the expiry of, or to renew or increase the  amount of, such Letter
    of  Credit;  and  the  terms  "Issued,"  "Issuing"  and  "Issuance"  have
    corresponding meanings.

         "Issuing Bank" means BofA in its  capacity as issuer of  one or more
    Letters of  Credit hereunder,  together with  any  replacement letter  of
    credit issuer arising under subsection 10.01(b) or Section 10.09.

         "Joint Venture"  means  a  single-purpose corporation,  partnership,
    limited  liability  company,  joint   venture  or  other   similar  legal
    arrangement (whether created by contract or  conducted through a separate
    legal entity)  now or  hereafter formed  by  the Company  or  any of  its
    Subsidiaries with another Person in order to conduct  a common venture or
    enterprise with such Person.

         "L/C Advance" means each  Bank's participation in any  L/C Borrowing
    in accordance with its Pro Rata Share.

         "L/C Amendment Application" means an application  form for amendment
    of outstanding  standby or  commercial documentary  letters of  credit as
    shall at any  time be in  use at  the Issuing Bank,  as the  Issuing Bank
    shall request.

         "L/C Application" means an application form for issuances of standby
    or commercial documentary letters  of credit as shall  at any time  be in
    use at the Issuing Bank, as the Issuing Bank shall request.

         "L/C Borrowing"  means  an  extension  of  credit resulting  from  a
    drawing under any Letter of  Credit which shall not  have been reimbursed
    on the date when made nor  converted into a Borrowing  of Revolving Loans
    under Section 3.03.

         "L/C Commitment" means the commitment of the  Issuing Bank to Issue,
    and the commitments of the  Banks severally to participate  in Letters of
    Credit from time to time Issued  or outstanding under Article  III, in an
    aggregate amount not to exceed on  any date the amount  of $5,000,000, as
    the same  shall  be  reduced as  a  result  of  a  reduction in  the  L/C
    Commitment pursuant to Section 2.05; provided that  the L/C Commitment is
    a  part  of  the   Commitments,  rather  than  a   separate,  independent
    commitment.

         "L/C Obligations" means  at any  time the sum  of (a)  the aggregate
    undrawn amount of all  Letters of Credit  then outstanding, plus  (b) the
    amount  of  all  unreimbursed  drawings  under  all  Letters  of  Credit,
    including all outstanding L/C Borrowings.

         "L/C-Related  Documents"  means  the  Letters  of  Credit,  the  L/C
    Applications, the  L/C  Amendment  Applications  and any  other  document
    relating to any  Letter of  Credit, including any  of the  Issuing Bank's
    standard form documents for letter of credit issuances.

         "Lending Office" means,  as to  any Bank, the  office or  offices of
    such Bank specified as its "Lending Office"  or "Domestic Lending Office"
    or "Offshore Lending Office", as the  case may be, on  Schedule 11.02, or
    such other office or  offices as such Bank  may from time to  time notify
    the Company and the Agent.

         "Letters of  Credit" means  any letters  of credit  (whether standby
    letters of credit or commercial documentary letters  of credit) Issued by
    the Issuing Bank pursuant to Article III.

         "Leverage Ratio means, for the date of  determination, the ratio of
    Funded Debt as  such date to  the Company's EBITDA  for the  four quarter
    period  ending  on  such   date.  In  calculating  the   Leverage  Ratio,
    Indebtedness of Flex Products covered by Section 8.06(j) to the extent it
    is owed to SICPA or to a third person who is  making the credit extension
    in lieu of SICPA and the interest expense  allocated to such Indebtedness
    shall be excluded.

         "Lien" means any security interest, mortgage, deed of trust, pledge,
    hypothecation, assignment,  charge or  deposit arrangement,  encumbrance,
    lien (statutory  or other)  or preferential  arrangement of  any kind  or
    nature whatsoever in respect of any property (including those created by,
    arising under  or  evidenced  by  any  conditional sale  or  other  title
    retention agreement, the interest of a lessor under  a capital lease, any
    financing lease having substantially  the same economic effect  as any of
    the foregoing, or the filing of any financing  statement naming the owner
    of the asset  to which  such lien  relates as  debtor, under  the Uniform
    Commercial Code  or  any  comparable law)  and  any  contingent or  other
    agreement to provide any of the foregoing, but not including the interest
    of a lessor under an operating lease.

         "Loan" means a  Revolving Loan  made by  a Bank  to a  Company under
    Article II, or an L/C Advance under Article III.

         "Loan Documents"  means  this Agreement,  the  Fee  Letter, the  L/C
    Related Documents, and all other documents delivered to  the Agent or any
    Bank in connection herewith.

         "Majority Banks" means at any time:

     (a)   both Banks if there are only two Banks party to this Agreement, or

     (b)   if there are more than two Banks party to this Agreement,

           (i) and BofA holds in excess  of 60% of the  then aggregate unpaid
         principal amount of  the Loans  or, if no  such principal  amount is
         outstanding, has 60% of  the combined Commitments, BofA  and another
         Bank, and
           (ii)     in all other cases,  Banks then holding in  excess of 60%
         of the then aggregate unpaid  principal amount of the  Loans, or, if
         no such principal amount  is then outstanding, Banks  then having in
         excess of 60% of the Commitments.

         "Margin Stock"  means "margin  stock"  as such  term  is defined  in
    Regulation G, T, U  or X of the FRB.

         "Material Adverse Effect" means (a) a material adverse change in, or
    a material  adverse effect  upon, the  operations, business,  properties,
    condition (financial or  otherwise) or  prospects of  the Company  or the
    Company and its Subsidiaries taken as a whole;  (b) a material impairment
    of the ability of the Company or any Subsidiary to perform under any Loan
    Document and to  avoid any Event  of Default; or  (c) a  material adverse
    effect upon  the  legality, validity,  binding  effect or  enforceability
    against the Company or any Subsidiary of any Loan Document.

         "Material Subsidiary"  means Flex  Products and,  at  any time,  any
    other Subsidiary  of the  Company having  at such  time either  (i) total
    (gross) revenues for the preceding  four fiscal quarter period  of 10% or
    more of  the total  (gross) revenues  of  the Company  on a  consolidated
    basis, or (ii) total assets, as  of the last day of  the preceding fiscal
    quarter, having a net book value of 10% or more of the  net book value of
    the Company's  consolidated total  assets, in  each case  based upon  the
    Company's most recent annual or quarterly  financial statements delivered
    to the Agent under Section 7.01.

         "Multiemployer  Plan  means  a  "multiemployer  plan",  within  the
    meaning of Section 4001(a)(3) of ERISA, to which the Company or any ERISA
    Affiliate makes, is  making, or  is obligated  to make  contributions or,
    during the preceding three calendar years, has made, or been obligated to
    make, contributions.

         "1998 Senior  Note Agreements"  means,  collectively, those  certain
    separate Note Purchase Agreements  each dated as  of July 30,  1998, each
    containing identical terms  and provisions, entered  into by  the Company
    with Modern  Woodmen of  America, American  Life  and Casualty  Insurance
    Company, Massachusetts Mutual Life Insurance Company,  MML Bay State Life
    Insurance Company, and Principal Life Insurance Company.

         "1998 Senior Notes" means those certain Senior Notes in the original
    aggregate principal amount of $44,400,000 dated on or about July 31, 1998
    issued pursuant to the 1998 Senior Note Agreements.

         "Net Issuance Proceeds" means, as to any issuance of common stock by
    any Person,  cash  proceeds  received or  receivable  by  such Person  in
    connection therewith, net of reasonable out-of-pocket  costs and expenses
    paid or incurred in  connection therewith in favor  of any Person  not an
    Affiliate of such Person.   Net Issuance Proceeds shall  not include cash
    proceeds received  in connection  with  (a) common  stock  issued by  the
    Company upon exercise of employee stock options,  (b) common stock issued
    by the Company to its employee stock ownership plan, and (c) common stock
    issued by the Company upon the exercise of rights for which no additional
    consideration is received by the Company.

         "Notice of Borrowing"  means a notice  in substantially the  form of
    Exhibit B.

         "Notice of Conversion/Continuation means a  notice in substantially
    the form of Exhibit C.

         "Obligations" means all  advances, debts,  liabilities, obligations,
    covenants and duties arising under any Loan Document owing by the Company
    to any  Bank, the  Agent, or  any Indemnified  Person, whether  direct or
    indirect  (including   those  acquired   by   assignment),  absolute   or
    contingent, due or to become due, now existing or hereafter arising.

         "Offshore Rate"  means, for  any Interest  Period,  with respect  to
    Offshore Rate Loans comprising  part of the  same Borrowing, the  rate of
    interest per annum (rounded upward  to the next 1/16th  of 1%) determined
    by the Agent as follows:

                                            LIBOR
         Offshore Rate =    ------------------------------------
                            1.00 - Eurodollar Reserve Percentage
      Where,

              "Eurodollar Reserve  Percentage"  means  for  any day  for  any
         Interest Period  the  maximum  reserve  percentage (expressed  as  a
         decimal, rounded upward to the next 1/100th of 1%) in effect on such
         day (whether or not applicable to any Bank) under regulations issued
         from time to  time by  the FRB for  determining the  maximum reserve
         requirement (including any emergency, supplemental or other marginal
         reserve requirement) with respect to Eurocurrency funding (currently
         referred to as "Eurocurrency liabilities"); and

              "LIBOR" means the rate of interest per  annum determined by the
         Agent (rounded  upward to  the next  1/16th of  1%) as  the rate  of
         interest at which dollar  deposits in the approximate  amount of the
         amount of the Loan to be made or continued as, or converted into, an


         Offshore Rate Loan by BofA and having a  maturity comparable to such
         Interest Period  would be  offered by  BofA  to major  banks in  the
         London interbank market at their request at approximately 11:00 a.m.
         (London time) two  Business Days prior  to the commencement  of such
         Interest Period.

         The Offshore Rate shall be adjusted automatically as to all Offshore
    Rate Loans then outstanding as of the effective date of any change in the
    Eurodollar Reserve Percentage.

         "Offshore Rate  Loan" means  a Revolving  Loan  that bears  interest
    based on the Offshore Rate.

         "Organization Documents" means, for any corporation, the certificate
    or  articles   of   incorporation,  the   bylaws,   any  certificate   of
    determination  or  instrument  relating   to  the  rights   of  preferred
    shareholders of such corporation,  any shareholder rights  agreement, and
    all applicable resolutions  of the board  of directors (or  any committee
    thereof) of such corporation.

         "Other Taxes" means any present or future stamp or documentary taxes
    or any other excise  or property taxes,  charges or similar  levies which
    arise from any payment made hereunder or from  the execution, delivery or
    registration of,  or otherwise  with respect  to, this  Agreement or  any
    other Loan Documents; excluding, in the case of each  Bank and the Agent,
    such taxes (including income taxes or franchise taxes)  as are imposed on
    or measured  by  each  Bank's net  income  by  the jurisdiction  (or  any
    political subdivision thereof) under the  laws of which such  Bank or the
    Agent, as the case may be, is organized or maintains a lending office.

         "Participant" has the meaning specified in subsection 11.08(d).

         "PBGC" means  the  Pension  Benefit  Guaranty  Corporation,  or  any
    Governmental Authority succeeding to any of its principal functions under
    ERISA.

         "Pension Plan" means a pension  plan (as defined in  Section 3(2) of
    ERISA)  subject  to  Title  IV  of  ERISA  which  the  Company  sponsors,
    maintains, or  to which  it makes,  is making,  or is  obligated to  make
    contributions, or in the case  of a multiple employer  plan (as described
    in Section 4064(a) of  ERISA) has made  contributions at any  time during
    the immediately preceding five plan years.

         "Permitted Liens" has the meaning specified in Section 8.01.

         "Permitted Repurchase Agreement" means any written agreement:

              (a)  that provides for

                   (i)    the   transfer  of  one   or  more   United  States
         Governmental Securities  to  the Company  or  a  Subsidiary from  an
         Acceptable Bank against a  transfer of funds (the  "transfer price")
         by the Company or such Subsidiary to such Acceptable Bank, and

                   (ii)   a simultaneous  agreement by  the  Company or  such
         Subsidiary, in connection with  such transfer of funds,  to transfer
         to such  Acceptable Bank  the same  or substantially  similar United
         States Governmental  Securities  for  a  price  not  less  than  the
         transfer price plus  a reasonable return  thereon at a  date certain
         not later than one year after such transfer of funds; and

              (b)  in respect of which  the Company or such  Subsidiary shall
         have the right, whether  by contract or pursuant  to applicable law,

         to liquidate such  repurchase agreement upon  the occurrence  of any
         default thereunder.

      "Permitted Swap  Obligations"  means  all  obligations  (contingent  or
     otherwise) of the  Company or any  Subsidiary existing or  arising under
     Swap  Contracts,  provided  that  each  of  the  following  criteria  is
     satisfied:   (a) such obligations  are (or  were) entered  into by  such
     Person in the ordinary  course of business  for the purpose  of directly
     mitigating risks associated with liabilities, commitments or assets held
     by such Person,  or changes in  the value of  securities issued  by such
     Person in conjunction with a securities repurchase program not otherwise
     prohibited hereunder, and  not for purposes  of speculation or  taking a
     "market view;" and (b) such Swap Contracts do  not contain any provision
     ("walk-away" provision)  exonerating the  non-defaulting party  from its
     obligation  to  make  payments   on  outstanding  transactions   to  the
     defaulting party.

         "Person" means  an  individual,  partnership,  corporation,  limited
    liability  company,   business  trust,   joint   stock  company,   trust,
    unincorporated association, joint venture or Governmental Authority.

         "Plan" means an employee benefit plan (as defined in Section 3(3) of
    ERISA) which the Company  sponsors or maintains  or to which  the Company
    makes, is making, or is obligated to make  contributions and includes any
    Pension Plan.

         "Pro Rata Share" means, as to  any Bank at any  time, the percentage
    equivalent (expressed as a  decimal, rounded to the  ninth decimal place)
    at such time of such Bank's Commitment divided by  the Commitments of all
    the Banks.

         "Redeemable Stock means, with respect to any  Person, each share of
    such Person's capital stock that is:

         (a)  redeemable, payable or  required to  be purchased  or otherwise
              retired or  extinguished, or  convertible into  indebtedness of
              such Person:

              (1)  at a fixed or determinable date, whether by operation of a
                   sinking fund or otherwise,

              (2)  at the option of any Person other than such Person, or

              (3)  upon the occurrence of  a condition not solely  within the
                   control of such Person; or

         (b)  convertible into other Redeemable Stock.

         "Reportable Event" means,  any of  the events  set forth  in Section
    4043(b) of ERISA or the regulations thereunder, other than any such event
    for which the 30-day  notice requirement under  ERISA has been  waived in
    regulations issued by the PBGC.

         "Requirement of Law" means, as to any Person,  any law (statutory or
    common), treaty, rule or regulation or determination  of an arbitrator or
    of a Governmental Authority, in  each case applicable to  or binding upon
    the Person or any of  its property or to  which the Person or  any of its
    property is subject.

         "Responsible Officer"  means  the  chief  executive officer  or  the
    president of the Company,  or any other officer  having substantially the
    same authority and  responsibility; or, with  respect to  compliance with
    financial covenants, the chief financial officer or  the treasurer of the

     Company, or any other officer having substantially the same authority and
    responsibility.

         "Restricted Payment" means any  Distribution (other than  on account
    of capital stock of  a Subsidiary owned  legally and beneficially  by the
    Company  or  another  Subsidiary)  including,   without  limitation,  any
    Distribution resulting in  the acquisition by  the Company  of securities
    which would constitute treasury stock.

         "Revolving Loan"  means an  extension of  credit  by a  Bank to  the
    Company under Article II, and may be a Base Rate Loan or an Offshore Rate
    Loan, each, a "Type" of Loan).

         "Revolving Termination Date" means the earliest to occur of:

              (a)  July 31, 2003; and

              (b)  the date  on which the Commitments  otherwise terminate in
         accordance with the provisions of this Agreement.

         "SEC"  means  the  Securities   and  Exchange  Commission,   or  any
    Governmental Authority succeeding to any of its principal functions.

         "SICPA" means SICPA Holding, S.A., a  company organized and existing
    under the laws of Switzerland.

         "SICPA Agreements" means the SICPA/OCLI Joint Acquisition Agreement,
    the Flex-SICPA Contract, and the SICPA/OCLI Settlement Agreement.

         "SICPA/OCLI  Joint   Acquisition  Agreement"   means  that   certain
    agreement between the Company and SICPA dated as of December 13, 1994 and
    amended by Addendum No.  1 thereto dated May  1, 1995 and Addendum  No. 2
    thereto dated as of September  23, 1997, and as  further amended pursuant
    to the terms of the SICPA/OCLI  Settlement Agreement, as in  effect as of
    the date of this Agreement, pursuant to which SICPA  and the Company have
    agreed to acquire  from ICI  Americas, Inc. all  of ICI  Americas, Inc.'s
    interest in  Flex  Products  and to  acquire  jointly  from ICI  American
    Holdings Inc.  all  of  ICI American  Holdings  Inc.'s  interest in  Flex
    Products' promissory note payable  to the order of  ICI American Holdings
    Inc. dated April 30, 1995, evidencing a revolving credit  and in the face
    amount of $15,000,000.

         "SICPA/OCLI Settlement  Agreement"  means  that  certain  Settlement
    Agreement dated as of November 19, 1997, by and among SICPA, the Company,
    Flex Products, the OCLI Designated Directors (as defined therein) and the
    SICPA Designated Directors (as defined therein).

         "Stock and  Note Purchase  Agreement" means  that certain  Stock and
    Note Purchase Agreement among the Company, SICPA, ICI Americas, Inc., and
    ICI American Holdings,  Inc. dated May  1, 1995, as  in effect as  of the
    date of this Agreement,  pursuant to which  the Company and  SICPA effect
    the  transactions  contemplated  in  the   SICPA/OCLI  Joint  Acquisition
    Agreement.

         "Subsidiary"  of  a  Person  means   any  corporation,  association,
    partnership, limited liability company,  joint venture or  other business
    entity of which more than  50% of the voting  stock, membership interests
    or  other  equity   interests  (in  the   case  of  Persons   other  than
    corporations), is  owned  or controlled  directly  or  indirectly by  the
    Person, or  one  or  more  of  the  Subsidiaries  of  the  Person,  or  a
    combination thereof.    Unless the  context  otherwise clearly  requires,
    references herein to a "Subsidiary" refer to a Subsidiary of the Company.
    A "Subsidiary" of the Company shall also include  any Person which, under
    GAAP, is  required  to  be  consolidated  in the  consolidated  financial
    statements of the Company.

         "Surety Instruments" means all letters of  credit (including standby
    and commercial), banker's  acceptances, bank guaranties,  shipside bonds,
    surety bonds and similar instruments.

      "Swap Contract"  means  any  agreement,  whether  or  not  in  writing,
     relating to any  transaction that  is a rate  swap, basis  swap, forward
     rate transaction,  commodity swap,  commodity option,  equity or  equity
     index swap or option, bond,  note or bill option,  interest rate option,
     forward foreign exchange transaction, cap, collar  or floor transaction,
     currency swap, cross-currency  rate swap,  swaption, currency  option or
     any other, similar transaction  (including any option to  enter into any
     of the foregoing) or any  combination of the foregoing,  and, unless the
     context otherwise clearly requires, any master  agreement relating to or
     governing any or all of the foregoing.

      "Swap Termination  Value" means,  in respect  of any  one or  more Swap
     Contracts,  after  taking  into  account  the   effect  of  any  legally
     enforceable netting agreement relating  to such Swap Contracts,  (a) for
     any date on or after the  date such Swap Contracts have  been closed out
     and  termination  value(s)  determined  in  accordance  therewith,  such
     termination value(s), and (b) for any date prior  to the date referenced
     in clause (a)  the amount(s) determined  as the  mark-to-market value(s)
     for such Swap Contracts, as determined based upon one or more mid-market
     or other readily available quotations provided  by any recognized dealer
     in such Swap Contracts (which may include any Bank).

     "Tangible Net Worth" means,  for the Company  and its Subsidiaries  on a
    consolidated basis, net worth minus goodwill.

     "Taxes" means  any and  all present  or future  taxes, levies,  imposts,
    deductions, charges  or withholdings,  and all  liabilities with  respect
    thereto, excluding, in the  case of each Bank  and the Agent,  such taxes
    (including income taxes or franchise taxes) as are imposed on or measured
    by  each  Bank's  net  income  by  the  jurisdiction  (or  any  political
    subdivision thereof) under the laws of  which such Bank or  the Agent, as
    the case may be, is organized or maintains a lending office.

     "Type" has the meaning specified in the definition of "Revolving Loan."

     "Unfunded Pension  Liability"  means  the  excess  of a  Plan's  benefit
    liabilities under Section 4001(a)(16) of ERISA, over the current value of
    that Plan's assets,  determined in accordance  with the  assumptions used
    for funding the Pension Plan pursuant to Section 412 of  the Code for the
    applicable plan year.

     "United States" and "U.S." each means the United States of America.

     "Wholly-Owned Subsidiary"  means any  corporation in  which (other  than
    directors' qualifying shares required  by law) 100% of  the capital stock
    of each class having ordinary voting power, and 100% of the capital stock
    of every  other  class,  in each  case,  at  the  time  as of  which  any
    determination is being made, is owned, beneficially and of record, by the
    Company, or by  one or  more of the  other Wholly-Owned  Subsidiaries, or
    both.

     1.02  Other Interpretive Provisions.

           (a) The meanings of  defined terms are  equally applicable  to the
singular and plural forms of the defined terms.

           (b) The words  "hereof", "herein",  "hereunder" and  similar words
refer to this  Agreement as a  whole and not  to any particular  provision of
this Agreement; and subsection, Section, Schedule  and Exhibit references are
to this Agreement unless otherwise specified.

     (c)   (1) The  term  "documents"  includes  any   and  all  instruments,
    documents,  agreements,  certificates,  indentures,   notices  and  other
    writings, however evidenced.

           (2) The term  "including"  is not  limiting  and means  "including
    without limitation."

           (3) In the computation of periods of time from a specified date to
    a later specified date, the  word "from" means "from  and including"; the
    words "to"  and  "until"  each mean  "to  but  excluding", and  the  word
    "through" means "to and including."

           (d) Unless otherwise expressly provided herein,  (i) references to
agreements (including this Agreement) and other contractual instruments shall
be deemed  to  include  all  subsequent  amendments and  other  modifications
thereto, but only to the  extent such amendments and  other modifications are
not prohibited by the terms of any Loan Document, and  (ii) references to any
statute or  regulation are  to be  construed as  including all  statutory and
regulatory provisions  consolidating, amending,  replacing, supplementing  or
interpreting the statute or regulation.

           (e) The  captions  and   headings  of   this  Agreement   are  for
convenience of reference only and shall not affect the interpretation of this
Agreement.

           (f) This Agreement  and  other  Loan  Documents  may  use  several
different limitations, tests or measurements to regulate  the same or similar


matters.  All  such limitations,  tests and  measurements are  cumulative and
shall each be performed in accordance with their terms.

           (g) This Agreement and the other Loan Documents  are the result of
negotiations among  and  have been  reviewed  by counsel  to  the Agent,  the
Company and  the  other  parties,  and  are  the  products  of  all  parties.
Accordingly, they  shall not  be construed  against  the Banks  or the  Agent
merely because of the Agent's or Banks' involvement in their preparation.

    1.03Accounting Principles.

        (a) Unless  the context  otherwise clearly  requires, all  accounting
terms not  expressly defined  herein shall  be construed,  and all  financial
computations required under this Agreement shall be  made, in accordance with
GAAP, consistently applied.

        (b) References herein to "fiscal year" and  "fiscal quarter" refer to
such fiscal periods of the Company.

ARTICLE II

THE CREDITS

    2.01Amounts  and Terms of  Commitments.  Each  Bank severally  agrees, on
the terms and  conditions set forth  herein, to make  Revolving Loans  to the
Company from time  to time  on any Business  Day during  the period  from the
Closing Date to the Revolving Termination Date, in an aggregate amount not to
exceed at any time outstanding, the  amount set forth on  Schedule 2.01 (such
amount, as it may be reduced under Section 2.05 or reduced  or increased as a
result  of  one  or   more  assignments  under  Section   11.08,  the  Bank's
"Commitment"); provided, however, that, after giving  effect to any Borrowing
of Revolving Loans, the  Effective Amount of all  outstanding Revolving Loans
and the Effective Amount of all L/C Obligations shall not  at any time exceed
the combined Commitments; and provided, further, that the Effective Amount of
the Revolving Loans of  any Bank plus the  participation of such Bank  in the
Effective Amount of  all L/C Obligations  shall not at  any time  exceed such
Bank's Commitment.  Within the limits of each  Bank's Commitment, and subject
to the other terms and conditions hereof, amounts borrowed  by the Company as
Revolving Loans  under this  Section may  be prepaid  under Section  2.06 and
reborrowed under this Section.

    2.02Loan  Accounts.   The Loans  made  by each  Bank and  the Letters  of
Credit Issued by  the Issuing  Bank shall be  evidenced by  one or  more loan
accounts or records maintained by such Bank or the Issuing  Bank, as the case
may be, in  the ordinary course  of business.   The loan accounts  or records
maintained by the Agent, the Issuing Bank, and each  Bank shall be conclusive
absent manifest error of  the amount of  the Loans made  by the Banks  to the
Company and the Letters of Credit  Issued for the account of  the Company and
the interest and payments thereon.  Any failure so to record  or any error in
doing so shall not, however, limit or otherwise affect  the obligation of the
Company hereunder to pay  any amount owing with  respect to the Loans  or any
Letter of Credit.

    2.03Procedure for Borrowing

        (a) Each  Borrowing  shall be  made  upon  the Company's  irrevocable
written notice delivered to  the Agent in the  form of a Notice  of Borrowing
(which notice must be received by the Agent prior to 9:00 a.m. San Francisco,
California time) (i)  three Business  Days prior  to the  requested Borrowing
Date, in the case of Offshore Rate Loans; and (ii) one  Business Day prior to
the requested Borrowing Date, in the case of Base Rate Loans, specifying:

            (1) the  amount of the Borrowing, which shall  be in an aggregate
    minimum amount of  $2,000,000 for  Offshore Rate  Loans, or  any integral
    multiple of $100,000 in excess of such amount;

            (2) the requested Borrowing Date, which shall be a Business Day;

            (3) the Type of Loans comprising the Borrowing; and

            (4) the  duration  of  the  Interest  Period  applicable  to  any
    Offshore Rate Loans included in such notice.  If  the Notice of Borrowing
    fails to specify the  duration of the  Interest Period for  any Borrowing
    comprised of Offshore  Rate Loans,  such Interest  Period shall  be three
    months.

provided, however,  that with  respect to  any Borrowing  to be  made on  the
Closing Date, the  Notice of Borrowing  shall be delivered  to the  Agent not
later than 2:00 p.m. (San Francisco, California time) one Business Day before
the Closing Date and such Borrowing will consist of Base Rate Loans only.

        (b) The Agent  will promptly notify each  Bank of its receipt  of any
Notice of Borrowing and of the  amount of such Bank's Pro Rata  Share of that
Borrowing.

        (c) Each Bank  will make  the amount  of its Pro  Rata Share  of each
Borrowing available  to the  Agent for  the  account of  the  Company at  the
Agent's Payment Office by 11:00 a.m. (San Francisco,  California time) on the
Borrowing Date requested by the Company in funds immediately available to the
Agent.  The proceeds  of all such  Loans will then  be made available  to the
Company by the Agent at such  office by crediting the account  of the Company
on the books of BofA with the aggregate of the amounts  made available to the
Agent by the Banks and in like funds as received by the Agent.

        (d) After giving effect to any Borrowing, there may not be at any one
time more than six different Interest Periods in effect.

    2.04Conversion and Continuation Elections.

        (a) The Company may, upon irrevocable written  notice to the Agent in
accordance with subsection 2.04(b):

            (1) elect,  as of  any Business  Day, in  the case  of Base  Rate
    Loans, or as of  the last day of  the applicable Interest Period,  in the
    case of  Offshore Rate  Loans, to  convert any  such Loans  (or any  part
    thereof in an amount not less than $2,000,000, or that  is in an integral
    multiple of $100,000 in excess thereof) into Loans of the other Type; or

            (2) elect, as of the  last day of the applicable Interest Period,
    to continue any Offshore  Rate Loans having Interest  Periods expiring on
    such day (or any part thereof  in an amount not less  than $2,000,000, or
    that is in an integral multiple of $100,000 in excess thereof);

provided, that if at any time the aggregate amount of  Offshore Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof  to be  less than  $2,000,000,  such Offshore  Rate Loans  shall
automatically convert into Base  Rate Loans, and on  and after such  date the
right of the Company to continue such Loans as, and  convert such Loans into,
Offshore Rate Loans, shall terminate (except  as provided immediately below).
With respect  to each  Borrowing that  is less  than $2,000,000  in aggregate
principal amount,  the  Company  may  combine  such  Borrowing  with  another
Borrowing(s) so as to have a  combined Borrowing of not  less than $2,000,000
(and, if  greater,  in an  integral  multiple of  $100,000)  and borrow  such
combined Borrowing as Offshore Rate Loans, subject to the other provisions of
this Agreement.

        (b) The Company shall deliver a  Notice of Conversion/Continuation to
be received by the Agent not  later than 9:00 a.m.  San Francisco, California
time)   at   least   (i)   three   Business   Days    in   advance   of   the
Conversion/Continuation Date,  if  the  Loans are  to  be  converted into  or
continued as Offshore Rate Loans; and (ii) one Business Day in advance of the
Conversion/Continuation Date, if the Loans are to be converted into Base Rate
Loans, specifying:

            (1) the proposed Conversion/Continuation Date;

            (2) the aggregate amount of Loans to be converted or renewed;

            (3) the  Type of Loans resulting from the  proposed conversion or
    continuation; and

            (4) other  than in the case of conversions  into Base Rate Loans,
    the duration of the requested Interest Period.

        (c) If  upon the  expiration  of any  Interest  Period applicable  to
Offshore Rate Loans, the Company has  failed to select timely  a new Interest
Period to be applicable to such  Offshore Rate Loans, as the case  may be, or
if any Default or Event of  Default then exists, the Company  shall be deemed
to have elected  to convert  such Offshore  Rate Loans  into Base  Rate Loans
effective as of the expiration date of such Interest Period.

        (d) The Agent  will promptly  notify each  Bank of  its receipt  of a
Notice of Conversion/Continuation, or, if no timely notice is provided by the
Company, the  Agent will  promptly notify  each Bank  of the  details of  any
automatic conversion.    All  conversions  and  continuations shall  be  made
ratably according  to the  respective outstanding  principal  amounts of  the
Loans held by each Bank with respect to which the notice was given.

        (e) Unless the  Majority Banks otherwise agree,  during the existence
of a Default or Event  of Default, the Company  may not elect to  have a Loan
converted into or continued as an Offshore Rate Loan.

        (f) After giving effect  to any conversion or  continuation of Loans,
there may not be at any one time more than six  different Interest Periods in
effect.

    2.05Voluntary Termination or  Reduction of Commitments.  The Company may,
upon not less than five Business  Days' prior notice to  the Agent, terminate
the Commitments,  or  permanently  reduce  the  Commitments by  an  aggregate
minimum amount of $5,000,000 or any multiple of $1,000,000 in excess thereof;
unless, after giving effect thereto and  to any prepayments of  Loans made on
the effective date thereof, (a)  the Effective Amount of  all Revolving Loans
and L/C Obligations together would exceed the amount  of the Commitments then
in  effect,  or  (b)  the  Effective  Amount  of  all  L/C  Obligations  then
outstanding would exceed the L/C Commitment.  Once reduced in accordance with
this Section, the  Commitments may not  be increased.   Any reduction  of the
Commitments shall be applied  to each Bank according  to its Pro  Rata Share.
If and to the  extent specified by  the Company in  the notice to  the Agent,
some or all of  the reduction in the  Commitments shall be applied  to reduce
the L/C Commitment.   All accrued commitment fees  and letter of  credit fees
to, but not including the effective  date of any reduction  or termination of
Commitments, shall  be  paid  on the  effective  date  of such  reduction  or
termination.

    2.06Optional  Prepayments. Subject to Section  4.04, the Company  may, at
any time or from time to  time, upon not less than three  Business Days' (for
Offshore Rate Loans) and one Business Day's (for Base Rate Loans) irrevocable
notice to the  Agent, ratably prepay  Loans in whole  or in part,  in minimum
amounts of $1,000,000 or  any multiple of $100,000  in excess thereof.   Such
notice of prepayment shall  specify the date  and amount of  such prepayment,
the Type(s) of Loans to be prepaid.  The Agent will promptly notify each Bank
of its receipt of any such notice, and of such Bank's Pro  Rata Share of such
prepayment.  If such notice is  given by the Company, the  Company shall make
such prepayment and the payment amount specified in such  notice shall be due
and payable on the date specified therein, together  with accrued interest to
each such date  on the amount  prepaid and any  amounts required  pursuant to
Section 4.04.

    2.07Mandatory Prepayments of Loans.   If on any date the Effective Amount
of L/C Obligations exceeds the L/C Commitment, the  Company shall, within two
Business Days, Cash  Collateralize the  outstanding Letters  of Credit  in an
amount equal to the excess of  the maximum amount then available  to be drawn
under the Letters  of Credit  over the  L/C Commitment.   Subject  to Section
4.04, if on any date after  giving effect to any  Cash Collateralization made
on such date pursuant to the preceding sentence, the  Effective Amount of all
Revolving Loans  then  outstanding  plus  the  Effective Amount  of  all  L/C
Obligations exceeds the combined  Commitments, the Company shall,  within two
Business Days and without notice or demand,  prepay the outstanding principal
amount of the  Revolving Loans  and L/C Advances  by an  amount equal  to the
applicable excess.

    2.08Repayment.   The Company  shall repay to  the Banks on  the Revolving
Termination  Date  the   aggregate  principal   amount  of   Revolving  Loans
outstanding on such date.

    2.09Interest.

        (a) Each Loan shall bear interest on the outstanding principal amount
thereof from the applicable Borrowing Date  at a rate per annum  equal to the
Offshore Rate  or the  Base Rate,  as the  case may  be (and  subject to  the
Company's right to convert to other Types of Loans  under Section 2.04), plus
the Applicable Margin.

        (b) Interest on each  Loan shall be paid in arrears  on each Interest
Payment Date.  Interest shall also  be paid on the date of  any prepayment of
Offshore Rate Loans under Section 2.06 or Section 2.07 for the portion of the
Loans so prepaid and upon payment (including prepayment) in full thereof and,
during the  existence of  any Event  of Default,  interest shall  be paid  on
demand of the Agent at the request or with the consent of the Majority Banks.

        (c) Notwithstanding subsection  (a) of this Section,  while any Event
of Default  exists or  after  acceleration, the  Company  shall pay  interest
(after as well as before entry of judgment thereon to the extent permitted by
law) on the  principal amount of  all outstanding Obligations  at a  rate per
annum which is  determined by adding  3% per annum  to the  Applicable Margin
then in effect for such Loans and, in the case of  Obligations not subject to
an Applicable Margin, at  a rate per  annum equal to  the Base Rate  plus 3%;
provided, however, that, on and  after the expiration of  any Interest Period
applicable to any Offshore Rate Loan outstanding on the date of occurrence of
such Event  of Default  or acceleration,  the principal  amount of  such Loan
shall,  during  the   continuation  of  such   Event  of  Default   or  after
acceleration, bear interest at a rate  per annum equal to the  Base Rate plus
3%.

        (d) Anything herein to the  contrary notwithstanding, the obligations
of the Company to any Bank hereunder shall be subject  to the limitation that
payments of interest shall not be required for any  period for which interest
is  computed  hereunder,  to  the  extent  (but  only  to  the  extent)  that
contracting for or receiving such payment  by such Bank would  be contrary to
the provisions of any law applicable  to such Bank limiting  the highest rate
of interest that may be lawfully contracted for, charged  or received by such
Bank, and  in such  event the  Company shall  pay such  Bank interest  at the
highest rate permitted by applicable law.

    2.10  Fees.

        (a) Fees.  The Company shall pay  arrangement and agency fees to BofA
for its own account, in the  times and in the amounts required  by the letter
agreements (collectively,  the "Fee  Letter") between  the  Company and  BofA
dated March 3, 1998 and the attachments thereto.

        (b) Commitment Fees.   The  Company shall  pay to  the Agent  for the
account of each Bank a commitment fee equal to  the Applicable Fee Percentage
per annum times the  actual daily unused  portion of such  Bank's Commitment,
computed on a  quarterly basis in  arrears on the  last Business Day  of each
fiscal quarter  of the  Company based  upon  the daily  utilization for  that
quarter as calculated by the Agent.  For  purposes of calculating utilization
under this subsection, the Commitment shall  be deemed used to  the extent of
the Effective Amount of  Revolving Loans then outstanding  plus the Effective
Amount of L/C Obligations then outstanding.  Such commitment fee shall accrue
from the Closing Date to the Revolving Termination Date and  shall be due and
payable quarterly in arrears on the last Business Day of each January, April,
July and October  (i.e., each  fiscal quarter of  the Company)  commencing on
October 30,  1998 through  the  Revolving Termination  Date,  with the  final
payment to  be made  on the  Revolving  Termination Date;  provided that,  in
connection with any reduction or termination of the Commitments under Section
2.05, the accrued  commitment fee  calculated for the  period ending  on such
date shall also be  paid on the date  of such reduction or  termination, with
the following quarterly payment being  calculated on the basis  of the period
from such reduction or termination date to such quarterly  payment date.  The
commitment fees provided in this  subsection shall accrue at  all times after
the above-mentioned commencement date, including at any time during which one
or more conditions in Article V are not met.

    2.11Computation of Fees and Interest.

        (a) All computations  of interest for Base  Rate Loans when  the Base
Rate is determined by BofA's "reference rate" shall be made on the basis of a
year of 365 or 366 days,  as the case may  be, and actual days  elapsed.  All
other computations of fees and interest shall be made on the  basis of a 360-
day year and actual days elapsed  (which results in more  interest being paid
than if computed on  the basis of a  365-day year).  Interest  and fees shall
accrue during each  period during  which interest or  such fees  are computed
from the first day thereof to the last day thereof.

        (b) Each  determination of  an interest  rate by  the Agent  shall be
conclusive and  binding  on the  Company  and the  Banks  in  the absence  of
manifest error.

    2.12Payments by the Company.

        (a) All payments  to be  made by  the Company  shall be  made without
set-off, recoupment or counterclaim.  Except  as otherwise expressly provided
herein, all  payments by  the Company  shall  be made  to the  Agent for  the
account of the  Banks at  the Agent's Payment  Office, and  shall be  made in
dollars and in  immediately available  funds, no later  than 11:00  a.m. (San
Francisco, California time)  on the  date specified herein.   The  Agent will
promptly distribute  to each  Bank its  Pro Rata  Share (or  other applicable
share as  expressly  provided  herein)  of  such payment  in  like  funds  as
received.   Any payment  received by  the  Agent later  than  1:00 p.m.  (San
Francisco, California  time) shall  be deemed  to have  been received  on the
following Business Day and any  applicable interest or fee  shall continue to
accrue.

        (b) Subject  to  the  provisions  set  forth  in  the  definition  of
"Interest Period" herein, whenever any payment  is due on a day  other than a


Business Day, such payment shall be  made on the following  Business Day, and
such extension of time shall in  such case be included in  the computation of
interest or fees, as the case may be.

        (c) Unless the  Agent receives notice from  the Company prior  to the
date on which any payment is due to the Banks that the  Company will not make
such payment in  full as  and when required,  the Agent  may assume  that the
Company has  made  such  payment  in  full  to the  Agent  on  such  date  in
immediately available funds and the Agent may (but shall not be so required),
in reliance upon such assumption, distribute to each Bank on such due date an
amount equal to  the amount then  due such Bank.   If and  to the  extent the
Company has not made such payment in full to the Agent, each Bank shall repay
to the Agent on  demand such amount distributed  to such Bank,  together with
interest thereon at the  Federal Funds Rate for  each day from the  date such
amount is distributed to such Bank until the date repaid.

    2.13Payments by the Banks to the Agent.

        (a) Unless the Agent  receives notice from a Bank on  or prior to the
Closing Date or,  with respect to  any Borrowing after  the Closing  Date, at
least one Business Day  prior to the date  of such Borrowing, that  such Bank
will not make available as and  when required hereunder to the  Agent for the
account of  the Company  the amount  of  that Bank's  Pro Rata  Share of  the
Borrowing, the Agent may assume that each Bank has made such amount available
to the Agent  in immediately available  funds on the  Borrowing Date  and the
Agent may (but shall not be  so required), in reliance  upon such assumption,
make available to the Company on such date a corresponding amount.  If and to
the extent any  Bank shall  not have made  its full  amount available  to the
Agent in immediately available funds and the Agent  in such circumstances has
made available to the  Company such amount, that  Bank shall on  the Business
Day following such Borrowing  Date make such  amount available to  the Agent,
together with interest  at the Federal  Funds Rate for  each day  during such
period.  A notice of the Agent submitted to any Bank  with respect to amounts
owing under this subsection shall  be conclusive, absent manifest  error.  If
such amount is so made available, such payment to  the Agent shall constitute
such Bank's Loan on the date of Borrowing for all purposes of this Agreement.
If such  amount is  not  made available  to  the Agent  on  the Business  Day
following the  Borrowing Date,  the Agent  will  notify the  Company of  such
failure to fund  and, upon demand  by the Agent,  the Company shall  pay such
amount to the Agent for  the Agent's account, together  with interest thereon
for each day elapsed  since the date of  such Borrowing, at a  rate per annum
equal to the  interest rate applicable  at the time  to the  Loans comprising
such Borrowing.

        (b) The failure  of any Bank to  make any Loan on  any Borrowing Date
shall not relieve any other Bank  of any obligation hereunder to  make a Loan
on such Borrowing Date, but no  Bank shall be responsible for  the failure of
any other  Bank to  make the  Loan  to be  made  by such  other  Bank on  any
Borrowing Date.

    2.14Sharing  of  Payments, Etc.   If, other  than  as expressly  provided
elsewhere herein, any Bank  shall obtain on account  of the Loans made  by it
any payment  (whether voluntary,  involuntary, through  the  exercise of  any
right of set-off, or  otherwise) in excess of  its Pro Rata Share,  such Bank
shall immediately (a) notify  the Agent of such  fact, and (b)  purchase from
the other Banks  such participations in  the Loans made  by them as  shall be
necessary to cause such purchasing Bank to share the  excess payment pro rata
with each of  them; provided,  however, that if  all or  any portion  of such
excess payment  is  thereafter  recovered  from  the  purchasing  Bank,  such
purchase shall to that extent be rescinded and each other Bank shall repay to
the purchasing Bank the purchase price paid therefor, together with an amount
equal to such paying Bank's ratable share (according to the proportion of (i)
the amount of such paying Bank's required repayment to  (ii) the total amount
so recovered from the purchasing Bank)  of any interest or  other amount paid
or payable  by  the  purchasing  Bank  in respect  of  the  total  amount  so
recovered.  The Company  agrees that any  Bank so purchasing  a participation
from another Bank may, to the  fullest extent permitted by  law, exercise all
its rights of payment (including the right of set-off, but subject to Section
11.10) with respect to such participation  as fully as if such  Bank were the
direct creditor of  the Company  in the  amount of  such participation.   The
Agent will keep records (which shall be conclusive and binding in the absence
of manifest error) of participations purchased under this Section and will in
each case notify the Banks following any such purchases or repayments.

                                 ARTICLE III

                            THE LETTERS OF CREDIT

    3.01The Letter of Credit Subfacility.

        (a) On the  terms and  conditions set  forth herein,  (i) the Issuing
Bank agrees, (A) from time to time on any Business Day during the period from
the Closing Date to the Revolving Termination Date to issue Letters of Credit
for the  account of  the Company,  and to  amend or  renew Letters  of Credit
previously issued by it, in accordance with  subsections 3.02(c) and 3.02(d),
and (B)  to honor  drafts under  the Letters  of Credit;  and (ii)  the Banks
severally agree to participate in Letters of Credit Issued for the account of
the Company; provided, that the Issuing Bank shall not be obligated to Issue,
and no Bank shall be obligated to participate in, any Letter  of Credit if as
of the date of  Issuance of such Letter  of Credit (the "Issuance  Date") (1)
the Effective Amount of all L/C Obligations plus the  Effective Amount of all
Revolving Loans exceeds  the combined Commitments,  (2) the  participation of
any Bank in the  Effective Amount of all  L/C Obligations plus  the Effective
Amount of the Revolving Loans of such Bank exceeds such Bank's Commitment, or
(3) the  Effective Amount  of  L/C Obligations  exceeds  the L/C  Commitment.

Within the foregoing limits,  and subject to  the other terms  and conditions
hereof, the  Company's ability  to obtain  Letters of  Credit shall  be fully
revolving, and, accordingly,  the Company may,  during the  foregoing period,
obtain Letters of Credit to replace  Letters of Credit which  have expired or
which have been drawn upon and reimbursed.

        (b) The Issuing  Bank is under no  obligation to Issue any  Letter of
Credit if:

            (1) any  order, judgment or decree of  any Governmental Authority
    or arbitrator  shall  by its  terms  purport to  enjoin  or restrain  the
    Issuing Bank from Issuing  such Letter of  Credit, or any  Requirement of
    Law applicable to the Issuing  Bank or any request  or directive (whether
    or not  having the  force of  law) from  any Governmental  Authority with
    jurisdiction over the  Issuing Bank shall  prohibit, or request  that the
    Issuing Bank refrain from, the Issuance of letters of credit generally or
    such Letter of Credit in particular or shall impose upon the Issuing Bank
    with respect to such Letter of Credit any restriction, reserve or capital
    requirement (for  which the  Issuing Bank  is  not otherwise  compensated
    hereunder) not in effect  on the Closing Date,  or shall impose  upon the
    Issuing Bank  any  unreimbursed  loss,  cost  or expense  which  was  not
    applicable on the Closing Date and  which the Issuing Bank  in good faith
    deems material to it;

            (2) the  Issuing Bank has received written notice  from any Bank,
    the Agent or the  Company, on or prior  to the Business Day  prior to the
    requested date of Issuance of such Letter of Credit, that  one or more of
    the applicable conditions contained in Article V is not then satisfied;

            (3) the  expiry date  of any  requested Letter  of Credit  is (A)
    more than one year after the date of Issuance,  unless the Majority Banks
    have approved such  expiry date  in writing, or  (B) after  the Revolving


    Termination Date, unless all of the Banks have  approved such expiry date
    in writing;

            (4) the  expiry date of any  requested Letter of Credit  is prior
    to the maturity date of any  financial obligation to be  supported by the
    requested Letter of Credit;

            (5) any  requested Letter of Credit does not  provide for drafts,
    or is not otherwise in form and substance acceptable to the Issuing Bank,
    or the  Issuance  of a  Letter  of Credit  shall  violate any  applicable
    policies of the Issuing Bank;

            (6) any   standby  Letter  of  Credit  is  for   the  purpose  of
    supporting the issuance of any letter of credit by any other Person; or

            (7) such Letter of Credit is  in a face amount less than $100,000
    or denominated in a currency other than Dollars.

    3.02Issuance, Amendment and Renewal of Letters of Credit
        (a) Each  Letter  of Credit  shall  be  issued upon  the  irrevocable
written request of the Company received by the Issuing Bank (with a copy sent
by the Company to the Agent) at least four days (or such  shorter time as the
Issuing Bank may agree in a particular instance in its sole discretion) prior
to the proposed date of issuance.  Each such request for issuance of a Letter
of Credit  shall  be  by  facsimile,  confirmed immediately  in  an  original
writing, in the  form of an  L/C Application, and  shall specify in  form and
detail satisfactory to the Issuing Bank: (i) the proposed date of issuance of
the Letter of Credit (which shall be a Business Day); (ii) the face amount of
the Letter of Credit; (iii) the expiry date of the Letter of Credit; (iv) the
name and  address  of  the  beneficiary  thereof; (v)  the  documents  to  be
presented by the beneficiary of the  Letter of Credit in case  of any drawing
thereunder; (vi) the  full text  of any  certificate to  be presented  by the
beneficiary in case of any  drawing thereunder; and (vii)  such other matters
as the Issuing Bank may require.

        (b) At least two Business Days prior to the Issuance of any Letter of
Credit, the Issuing  Bank will  confirm with  the Agent  (by telephone  or in
writing) that the  Agent has received  a copy of  the L/C Application  or L/C
Amendment Application from  the Company  and, if not,  the Issuing  Bank will
provide the Agent with a copy thereof.  Unless the  Issuing Bank has received
notice on  or before  the Business  Day  immediately preceding  the date  the
Issuing Bank is  to issue  a requested Letter  of Credit  from the  Agent (A)
directing the Issuing Bank  not to issue such  Letter of Credit  because such
issuance is not then  permitted under subsection 3.01(a)  as a result  of the
limitations set  forth  in  clauses (1)  through  (3)  thereof or  subsection
3.01(b)(2); or (B) that one or more conditions specified in Article V are not
then satisfied; then, subject to the terms and conditions hereof, the Issuing
Bank shall, on the requested date,  issue a Letter of Credit  for the account
of the  Company in  accordance with  the Issuing  Bank's usual  and customary
business practices.

        (c) From time  to time while  a Letter of  Credit is  outstanding and
prior to  the Revolving  Termination Date,  the Issuing  Bank will,  upon the
written request of the Company received by the Issuing Bank (with a copy sent
by the Company to the Agent) at least five days (or such  shorter time as the
Issuing Bank may agree in a particular instance in its sole discretion) prior
to the proposed date of amendment,  amend any Letter of Credit  issued by it.
Each such  request for  amendment of  a  Letter of  Credit shall  be made  by
facsimile, confirmed immediately in an original writing, made  in the form of
an  L/C  Amendment  Application   and  shall  specify  in   form  and  detail
satisfactory to the Issuing  Bank:  (i) the  Letter of Credit to  be amended;
(ii) the proposed date of amendment of the Letter of Credit (which shall be a
Business Day);  (iii) the  nature of  the proposed  amendment; and  (iv) such
other matters as  the Issuing Bank  may require.   The Issuing Bank  shall be
under no obligation to amend any  Letter of Credit if:  (A)  the Issuing Bank
would have no obligation at such  time to issue such Letter of  Credit in its
amended form under the terms of this Agreement; or (B) the beneficiary of any
such letter of Credit does not accept the proposed amendment to the Letter of
Credit.  The Agent will promptly notify the Banks of the receipt by it of any
L/C Application or L/C Amendment Application.

        (d) The Issuing  Bank and  the Banks  agree that,  while a  Letter of
Credit is outstanding  and prior  to the Revolving  Termination Date,  at the
option of the Company and upon the written request of the Company received by
the Issuing Bank (with a copy sent by the Company to the Agent) at least five
days (or such  shorter time  as the Issuing  Bank may  agree in  a particular
instance in its sole discretion)  prior to the proposed  date of notification
of renewal, the Issuing  Bank shall be entitled  to authorize the  renewal of
any Letter of Credit issued by it.  Each such request for renewal of a Letter
of Credit shall be  made by facsimile,  confirmed immediately in  an original
writing, in the form  of an L/C Amendment  Application, and shall  specify in
form and detail satisfactory to the Issuing Bank: (i) the Letter of Credit to
be renewed; (ii) the proposed date  of notification of renewal  of the Letter
of Credit (which shall be a  Business Day); (iii) the revised  expiry date of
the Letter of  Credit; and (iv)  such other matters  as the Issuing  Bank may
require.   The Issuing  Bank shall  be under  no obligation  so to  renew any
Letter of Credit if:  (A) the Issuing Bank  would have no obligation  at such
time to issue or  amend such Letter of  Credit in its renewed  form under the
terms of this Agreement; or (B) the beneficiary of any  such Letter of Credit
does not  accept the  proposed  renewal of  the  Letter of  Credit.   If  any
outstanding Letter of  Credit shall  provide that  it shall  be automatically
renewed unless the beneficiary thereof receives notice  from the Issuing Bank
that such  Letter of  Credit shall  not be  renewed, and  if at  the time  of
renewal the Issuing Bank would be entitled to authorize the automatic renewal
of such Letter of Credit in accordance with this  subsection upon the request
of the Company but the Issuing Bank shall not have received any L/C Amendment
Application from the Company  with respect to  such renewal or  other written
direction by  the  Company  with  respect  thereto, the  Issuing  Bank  shall
nonetheless be permitted  to allow such  Letter of Credit  to renew,  and the
Company and the  Banks hereby authorize  such renewal, and,  accordingly, the
Issuing Bank shall be  deemed to have  received an L/C  Amendment Application
from the Company requesting such renewal.

        (e) The Issuing  Bank may,  at its  election (or  as required  by the
Agent at  the  direction  of the  Majority  Banks),  deliver any  notices  of
termination or other  communications to any  Letter of Credit  beneficiary or
transferee, and take  any other  action as necessary  or appropriate,  at any
time and from time to time, in order to cause the expiry  date of such Letter
of Credit to be a date not later than the Revolving Termination Date.

        (f) This Agreement  shall control in the  event of any  conflict with
any L/C-Related Document (other than any Letter of Credit).

        (g) The Issuing Bank will also deliver  to the Agent, concurrently or
promptly following its  delivery of a  Letter of Credit,  or amendment  to or
renewal of a Letter of Credit,  to an advising bank or a  beneficiary, a true
and complete copy of each such Letter of Credit or amendment to or renewal of
a Letter of Credit.

    3.03Risk Participations, Drawings and Reimbursements.

        (a) Immediately upon the Issuance of each Letter of Credit, each Bank
shall be deemed  to, and  hereby irrevocably  and unconditionally  agrees to,
purchase from the Issuing Bank a  participation in such Letter  of Credit and
each drawing thereunder in an amount equal to the product of (i) the Pro Rata
Share of such Bank, times (ii) the maximum amount available to be drawn under
such Letter of  Credit and  the amount  of such  drawing, respectively.   For
purposes of Section 2.01, each Issuance of a Letter of Credit shall be deemed
to utilize the Commitment  of each Bank by  an amount equal to  the amount of
such participation.

        (b) In  the event  of any  request for  a drawing  under a  Letter of
Credit by  the  beneficiary  or transferee  thereof,  the  Issuing Bank  will
promptly notify the Company.   The Company  shall reimburse the  Issuing Bank
prior to 10:00  a.m. San Francisco,  California time, on  each date  that any
amount is paid  by the  Issuing Bank under  any Letter  of Credit  (each such
date, an "Honor  Date"), in  an amount  equal to  the amount  so paid  by the
Issuing Bank.  In the event  the Company fails to reimburse  the Issuing Bank
for the full amount of any  drawing under any Letter of Credit  by 10:00 a.m.
San Francisco,  California time  on the  Honor  Date, the  Issuing Bank  will
promptly notify  the  Agent and  the  Agent will  promptly  notify each  Bank
thereof, and the  Company shall be  deemed to have  requested that  Base Rate
Loans be made  by the  Banks to  be disbursed  on the  Honor Date  under such
Letter of Credit,  subject to  the amount  of the  unutilized portion  of the
Commitments and subject  to the conditions  set forth in  Section 5.02.   Any
notice given by the Issuing Bank or the Agent pursuant to this subsection may
be oral  if  immediately  confirmed  in  writing  (including  by  facsimile);
provided that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect  of such notice and  provided, further, that
such confirmation will be provided by the Issuing Bank or the Agent.

        (c) Each Bank shall, upon any notice  pursuant to subsection 3.03(b),
make available to the Agent for  the account of the relevant  Issuing Bank an
amount in Dollars and  in immediately available funds  equal to its  Pro Rata
Share of the amount of  the drawing, whereupon the  participating Banks shall
(subject to subsection 3.03(e)) each be deemed to have  made a Revolving Loan
consisting of a Base Rate Loan to the Company in that amount.  If any Bank so
notified fails to make available to the Agent for the  account of the Issuing
Bank the amount of such Bank's Pro Rata Share of the amount of the drawing by
no later than 12:00  noon San Francisco, California  time on the  Honor Date,
then interest shall accrue  on such Bank's  obligation to make  such payment,
from the Honor Date to the  date such Bank makes such payment,  at a rate per
annum equal to the Federal Funds Rate in effect from time to time during such
period.  The Agent will promptly  give notice of the occurrence  of the Honor
Date, but failure of the Agent  to give any such notice on  the Honor Date or
in sufficient time  to enable any  Bank to effect  such payment on  such date
shall not relieve such Bank from its obligations under this Section.

        (d) With respect  to any unreimbursed  drawing that is  not converted
into Revolving Loans consisting of Base Rate Loans to the Company in whole or
in part, because of the Company's failure to satisfy the conditions set forth
in Section 5.02 or for any other reason, the Company shall  be deemed to have
incurred from  the  Issuing Bank  an  L/C Borrowing  in  the  amount of  such
drawing, which L/C  Borrowing shall  be due and  payable on  demand (together
with interest) and shall bear interest at a rate per annum  equal to the Base
Rate plus 3% per annum, and each Bank's payment to  the Issuing Bank pursuant
to subsection 3.03(c) shall be deemed payment in respect of its participation
in such L/C Borrowing and shall  constitute an L/C Advance from  such Bank in
satisfaction of its participation obligation under this Section.

        (e) Each Bank's obligation in accordance with  this Agreement to make
the Revolving Loans  or L/C Advances,  as contemplated by  this Section  as a
result of  a  drawing  under  a  Letter of  Credit,  shall  be  absolute  and
unconditional and  without recourse  to the  Issuing  Bank and  shall not  be
affected by  any  circumstance,  including  (i)  any  set-off,  counterclaim,
recoupment, defense  or other  right which  such  Bank may  have against  the
Issuing Bank, the Company or any other Person for any reason whatsoever; (ii)
the occurrence or continuance of a Default, an Event of Default or a Material
Adverse  Effect;  or  (iii)  any  other   circumstance,  happening  or  event
whatsoever, whether  or  not  similar  to  any of  the  foregoing;  provided,
however, that  each Bank's  obligation  to make  Revolving  Loans under  this
Section is subject to the conditions set forth in Section 5.02.

    3.04Repayment of Participations

        (a) Upon (and only upon) receipt by  the Agent for the account of the
Issuing  Bank  of  immediately  available  funds  from  the  Company  (i)  in
reimbursement of any  payment made by  the Issuing Bank  under the  Letter of
Credit with respect to which any  Bank has paid the Agent for  the account of
the Issuing  Bank  for such  Bank's  participation in  the  Letter of  Credit
pursuant to Section 3.03  or (ii) in payment  of interest thereon,  the Agent
will pay to each Bank, in  the same funds as those received  by the Agent for
the account of the Issuing Bank, the amount of such Bank's  Pro Rata Share of
such funds, and  the Issuing Bank  shall receive the  amount of the  Pro Rata
Share of such funds of any Bank that did not so pay the Agent for the account
of the Issuing Bank.

        (b) If  the Agent  or the  Issuing Bank  is required  at any  time to
return to the Company, or  to a trustee, receiver,  liquidator, custodian, or
any official in any Insolvency  Proceeding, any portion of  the payments made
by the Company to the Agent  for the account of the Issuing  Bank pursuant to
subsection 3.04(a) in  reimbursement of  a payment made  under the  Letter of
Credit or interest or fee thereon,  each Bank shall, on demand  of the Agent,
forthwith return to the Agent or the Issuing Bank the amount  of its Pro Rata
Share of  any amounts  so returned  by  the Agent  or the  Issuing Bank  plus
interest thereon from the date such  demand is made to the  date such amounts
are returned by such  Bank to the Agent  or the Issuing  Bank, at a  rate per
annum equal to the Federal Funds Rate in effect from time to time.

    3.05Role of the Issuing Bank.

        (a) Each Bank and the Company agree that, in paying any drawing under
a Letter of  Credit, the Issuing  Bank shall not  have any  responsibility to
obtain any document  (other than any  sight draft and  certificates expressly
required by  the Letter  of Credit)  or  to ascertain  or inquire  as to  the
validity or accuracy  of any  such document  or the  authority of  the Person
executing or delivering any such document.

        (b) No Agent-Related Person nor any of the respective correspondents,
participants or assignees  of the Issuing  Bank shall be  liable to  any Bank
for: (i) any action taken or omitted in connection herewith at the request or
with the approval of the Banks (including the Majority Banks, as applicable);
(ii) any  action taken  or omitted  in  the absence  of  gross negligence  or
willful misconduct; or  (iii) the due  execution, effectiveness,  validity or
enforceability of any L/C-Related Document.

        (c) The Company hereby assumes all risks  of the acts or omissions of
any beneficiary  or transferee  with respect  to  its use  of  any Letter  of
Credit; provided, however, that this assumption is not intended to, and shall
not, preclude the Company's pursuing such rights and remedies  as it may have
against the beneficiary or  transferee at law  or under any  other agreement.
No  Agent-Related  Person,   nor  any   of  the   respective  correspondents,
participants or assignees of the Issuing Bank, shall be liable or responsible
for any of the matters described in clauses (a) through  (g) of Section 3.06;
provided, however, anything in such clauses  to the contrary notwithstanding,
that the Company may have a  claim against the Issuing Bank,  and the Issuing
Bank may be liable to the Company, to the extent, but only  to the extent, of
any direct, as opposed to consequential or exemplary, damages suffered by the
Company which the Company  proves were caused  by the Issuing  Bank's willful
misconduct or gross negligence or  the Issuing Bank's willful  failure to pay
under any Letter of Credit after the presentation to it by the beneficiary of
a sight  draft  and  certificate(s) strictly  complying  with  the terms  and
conditions of a Letter  of Credit.  In  furtherance and not in  limitation of
the foregoing: (i) the Issuing Bank may accept documents that appear on their
face to  be  in  order,  without  responsibility for  further  investigation,
regardless of any notice or information to the contrary; and (ii) the Issuing
Bank shall  not  be  responsible  for  the validity  or  sufficiency  of  any
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or  in part,  which may  prove  to be  invalid or  ineffective for  any
reason.

    3.06Obligations  Absolute.   The obligations  of the  Company under  this
Agreement and any L/C-Related  Document to reimburse  the Issuing Bank  for a
drawing under a  Letter of  Credit, and to  repay any  L/C Borrowing  and any
drawing under a  Letter of  Credit converted into  Revolving Loans,  shall be
unconditional and irrevocable, and shall be paid  strictly in accordance with
the terms of this  Agreement and each  such other L/C-Related  Document under
all circumstances, including the following:

        (a) any lack of  validity or enforceability of this  Agreement or any
L/C-Related Document;

        (b) any change in the time, manner or  place of payment of, or in any
other term of, all or any of the obligations of the Company in respect of any
Letter of  Credit or  any other  amendment  or waiver  of or  any consent  to
departure from all or any of the L/C-Related Documents;

        (c) the existence of any claim, set-off,  defense or other right that
the Company may have at any time against any beneficiary or any transferee of
any Letter of Credit (or any Person for whom any such beneficiary or any such
transferee may be acting), the Issuing  Bank or any other  Person, whether in
connection with this  Agreement, the transactions  contemplated hereby  or by
the L/C-Related Documents or any unrelated transaction;

        (d) any draft, demand, certificate or  other document presented under
any  Letter  of  Credit   proving  to  be  forged,   fraudulent,  invalid  or
insufficient in  any  respect  or  any  statement  therein  being  untrue  or
inaccurate in  any respect;  or any  loss  or delay  in  the transmission  or
otherwise of  any document  required in  order to  make a  drawing under  any
Letter of Credit;

        (e) any  payment by  the  Issuing Bank  under  any  Letter of  Credit
against presentation of a draft or certificate that  does not strictly comply
with the terms of  any Letter of Credit;  or any payment made  by the Issuing
Bank under any Letter of Credit  to any Person purporting to be  a trustee in
bankruptcy, debtor-in-possession,  assignee  for  the benefit  of  creditors,
liquidator,  receiver  or  other  representative  of   or  successor  to  any
beneficiary or any transferee of any Letter of  Credit, including any arising
in connection with any Insolvency Proceeding;

        (f) any exchange, release or non-perfection of any collateral, or any
release or amendment  or waiver  of or  consent to  departure from  any other
guarantee, for all or any of the obligations of the Company in respect of any
Letter of Credit; or

        (g) any other  circumstance or happening  whatsoever, whether  or not
similar to any of the foregoing, including any  other circumstance that might
otherwise constitute a defense available  to, or a discharge  of, the Company
or a guarantor.

    3.07Cash Collateral  Pledge.  Upon (i)  the request of the  Agent, (A) if
the Issuing  Bank has  honored any  full or  partial drawing  request on  any
Letter of Credit and such drawing has resulted in an L/C Borrowing hereunder,
or (B) if, as  of the Revolving Termination  Date, any Letters of  Credit may
for any reason remain  outstanding and partially  or wholly undrawn,  or (ii)
the occurrence of the  circumstances described in Section  2.07 requiring the
Company to  Cash Collateralize  Letters of  Credit, then,  the Company  shall
within two Business Days Cash Collateralize the L/C  Obligations in an amount
equal to such L/C  Obligations.  The two  Business Days provided for  in this

Section is not intended to be  in addition to the two  Business Days provided
in Section 2.07.

    3.08Letter of Credit Fees.

        (a) The Company shall pay to the Agent for the account of each of the
Banks a letter of credit fee with respect to the Letters of Credit equal to a
rate per annum equal to the Applicable Margin for Offshore Rate Loans then in
effect times the  actual daily maximum  amount available to  be drawn  on the
outstanding Letters of Credit,  computed on a  quarterly basis in  arrears on
the last  Business Day  of each  fiscal  quarter of  the  Company based  upon
Letters of Credit outstanding  for that quarter  as calculated by  the Agent.
Such letter of credit fees shall  be due and payable quarterly  in arrears on
the last Business  Day of  each fiscal  quarter of  the Company  during which
Letters of Credit  are outstanding,  commencing on  the first  such quarterly
date to occur after the Closing Date, through  the Revolving Termination Date
(or such  later  date upon  which  the outstanding  Letters  of Credit  shall
expire), with the final payment to be made on  the Revolving Termination Date
(or such later expiration date).

        (b) The Company  shall pay  to the  Issuing Bank  a letter  of credit
fronting fee for each  Letter of Credit Issued  by the Issuing Bank  equal to
0.125% of the face amount (or  increased face amount, as the case  may be) of
such Letter of Credit.  Such  Letter of Credit fronting fee shall  be due and
payable on each date of Issuance of a Letter of Credit.

        (c) The Company  shall pay to the  Issuing Bank from time  to time on
demand the  normal  issuance, presentation,  amendment  and other  processing
fees, and other standard costs and  charges, of the Issuing  Bank relating to
letters of credit as from time to time in effect.

    3.09Uniform Customs  and Practice  The Uniform Customs  and Practice for
Documentary Credits  as published  by the  International Chamber  of Commerce
most recently at the time of  issuance of any Letter of  Credit shall (unless
otherwise expressly provided in the  Letters of Credit) apply  to the Letters
of Credit.

                                  ARTICLE IV

                    TAXES, YIELD PROTECTION AND ILLEGALITY

    4.01Taxes

        (a) Any and  all payments by  the Company to  each Bank or  the Agent
under this Agreement and any other Loan Document shall be made free and clear
of, and without  deduction or withholding  for any Taxes.   In  addition, the
Company shall pay all Other Taxes.

        (b) The Company agrees  to indemnify and hold harmless  each Bank and
the Agent for the full amount of Taxes or Other Taxes (including any Taxes or
Other Taxes  imposed  by  any  jurisdiction  on amounts  payable  under  this
Section) paid  by  the  Bank  or  the  Agent  and  any  liability  (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such  Taxes or Other Taxes  were correctly or
legally asserted.  Payment under this indemnification shall be made within 30
days after the date the Bank or the Agent makes written demand therefor.

        (c) If the Company shall be required by law to deduct or withhold any
Taxes or Other Taxes from or  in respect of any sum payable  hereunder to any
Bank or the Agent, then:

            (i) the  sum  payable shall  be increased  as  necessary so  that
    after  making  all   required  deductions  and   withholdings  (including
    deductions and withholdings applicable  to additional sums  payable under
    this Section) such  Bank or the  Agent, as the  case may be,  receives an
    amount equal to the sum it would have received had  no such deductions or
    withholdings been made;

            (ii)the Company shall make such deductions and withholdings;

            (iii)   the  Company  shall  pay  the  full  amount  deducted  or
    withheld  to  the  relevant  taxing  authority   or  other  authority  in
    accordance with applicable law; and

            (iv)the Company shall also pay to  each Bank or the Agent for the
    account of  such  Bank, at  the  time interest  is  paid, all  additional
    amounts which the respective Bank specifies as  necessary to preserve the
    after-tax yield the Bank would have received if such Taxes or Other Taxes
    had not been imposed.

        (d) Within 30  days after the date  of any payment by  the Company of
Taxes or Other Taxes, the Company  shall furnish the Agent the  original or a
certified copy of a receipt evidencing payment thereof,  or other evidence of
payment satisfactory to the Agent.

        (e) If the Company is required to  pay additional amounts to any Bank
or the Agent pursuant to subsection (c) of this Section, then such Bank shall
use reasonable efforts (consistent with legal and regulatory restrictions) to
change the jurisdiction  of its Lending  Office so as  to eliminate  any such
additional payment by the Company which may thereafter accrue, if such change
in the judgment of such Bank is not otherwise disadvantageous to such Bank.

        (f) Each  Bank  agrees,  upon written  request  of  the  Company,  to
cooperate with and assist the  Company in contesting any  assessment of Taxes
and/or Other Taxes which the Company determines were incorrectly or illegally
asserted, subject to the following:

            (1) All costs and  expenses (including Attorney Costs) will be at
    the expense of the  Company.  Such Bank  may, from time to  time, require
    prepayment of the estimated costs and expenses (including Attorney Costs)
    involved, without  precluding  final  settling  of accounts  between  the
    Company and such Bank;

            (2) Such  Bank shall, at  all times, retain  full control  of the
    contest which shall be  conducted as such  Bank, in its  sole discretion,
    may direct; and

            (3) Such Bank may  decide, in its sole discretion, to discontinue
    its cooperation  with  the  Company  in  such  contest  after  the  final
    administrative proceeding of such contest is concluded.

    4.02Illegality.

        (a) If any Bank  determines that the introduction  of any Requirement
of Law, or any change in any Requirement of Law, or  in the interpretation or
administration of any Requirement of Law,  has made it unlawful,  or that any
central bank  or  other  Governmental  Authority  has  asserted  that  it  is
unlawful, for any Bank or its applicable Lending Office to make Offshore Rate
Loans, then, on notice thereof by the Bank to the  Company through the Agent,
any obligation of that  Bank to make Offshore  Rate Loans shall  be suspended
until the  Bank notifies  the Agent  and the  Company that  the circumstances
giving rise to such determination no longer exist.

        (b) If a Bank determines that it is unlawful to maintain any Offshore
Rate Loan, the  Company shall, upon  its receipt of  notice of such  fact and
demand from  such Bank  (with  a copy  to  the Agent),  prepay  in full  such
Offshore Rate Loans  of that  Bank then  outstanding, together  with interest
accrued thereon and amounts required  under Section 4.04, either  on the last
day of the  Interest Period  thereof, if  the Bank  may lawfully  continue to
maintain such Offshore Rate  Loans to such day,  or immediately, if  the Bank
may not  lawfully continue  to maintain  such  Offshore Rate  Loan.   If  the
Company is required to  so prepay any  Offshore Rate Loan,  then concurrently
with such prepayment,  the Company shall,  at its option  and subject  to the
other provisions of  this Agreement,  borrow from the  affected Bank,  in the
amount of such repayment, a Base Rate Loan.

        (c) If the obligation  of any Bank to make or  maintain Offshore Rate
Loans has been so terminated or  suspended, the Company may  elect, by giving
notice to the Bank through the Agent that all Loans  which would otherwise be
made by the Bank as Offshore Rate Loans shall be instead  Base Rate Loans, at
the option  of  the Company  and  subject to  the  other  provisions of  this
Agreement.

        (d) Before giving  any notice  to the Agent  under this  Section, the
affected Bank shall designate a different Lending Office  with respect to its
Offshore Rate Loans if such designation  will avoid the need  for giving such
notice or making such  demand and will not,  in the judgment of  the Bank, be
illegal or otherwise disadvantageous to the Bank.

    4.03Increased Costs and Reduction of Return.

        (a) If any Bank  determines that, due to  either (i) the introduction
of or any change (other than  any change by way of imposition  of or increase
in reserve requirements included in the calculation of  the Offshore Rate) in
or in the interpretation of any  law or regulation or  (ii) the compliance by
that Bank  with any  guideline or  request  from any  central  bank or  other
Governmental Authority (whether or not having the force  of law), there shall
be any increase  in the  cost to  such Bank  of agreeing  to make  or making,
funding or maintaining any Offshore Rate Loans or participating in Letters of
Credit, or, in the case of the Issuing Bank, any increase in  the cost to the
Issuing Bank  of agreeing  to issue,  issuing, or  maintaining any  Letter of
Credit or of agreeing to make  or making, funding, or  maintaining any unpaid
drawing under any Letter of Credit, then the Company shall be liable for, and
shall from time to time, upon  demand (with a copy of such  demand to be sent
to the Agent),  pay to  the Agent for  the account  of such  Bank, additional
amounts as are sufficient to compensate such Bank for such increased costs.

        (b) If any  Bank shall have determined  that (i) the  introduction of
any Capital  Adequacy Regulation,  (ii) any  change in  any Capital  Adequacy
Regulation, (iii) any change  in the interpretation or  administration of any
Capital Adequacy  Regulation  by  any  central  bank  or  other  Governmental
Authority charged with the interpretation or  administration thereof, or (iv)
compliance by the Bank (or its Lending Office) or any corporation controlling
the Bank with any  Capital Adequacy Regulation,  affects or would  affect the
amount of capital required  or expected to be  maintained by the Bank  or any
corporation controlling the Bank  and (taking into consideration  such Bank's
or such  corporation's policies  with respect  to capital  adequacy and  such
Bank's desired return on capital) determines that the  amount of such capital
is  increased  as  a  consequence  of  its   Commitment,  loans,  credits  or
obligations under  this Agreement,  then, upon  demand  of such  Bank to  the
Company through the Agent,  the Company shall pay  to the Bank, from  time to
time as specified  by the Bank,  additional amounts sufficient  to compensate
the Bank for such increase.

    4.04Funding Losses.  The Company  shall reimburse each Bank and hold each
Bank harmless from any loss or expense which the Bank may sustain or incur as
a consequence of:

        (a) the failure of the Company to  make on a timely basis any payment
of principal of any Offshore Rate Loan;

        (b) the failure of the Company to  borrow, continue or convert a Loan
after the  Company  has given  (or  is  deemed to  have  given)  a Notice  of
Borrowing or a Notice of Conversion/Continuation;

        (c) the failure of  the Company to make any  prepayment in accordance
with any notice delivered under Section 2.06;

        (d) the  prepayment (including  pursuant to  Section  2.07) or  other
payment (including after acceleration thereof) of an Offshore  Rate Loan on a
day that is not the last day of the relevant Interest Period; or

        (e) the automatic conversion under Section 2.04  of any Offshore Rate
Loan to a Base Rate Loan  on a day that is  not the last day  of the relevant
Interest Period;
including  any  such  loss  or  expense  arising   from  the  liquidation  or
reemployment of funds obtained by it  to maintain its Offshore  Rate Loans or
from fees  payable  to terminate  the  deposits from  which  such funds  were
obtained.  For purposes of calculating amounts payable by  the Company to the
Banks under this  Section and  under subsection  4.03(a), each  Offshore Rate
Loan made by  a Bank (and  each related reserve,  special deposit  or similar
requirement) shall be conclusively deemed to have been funded at the Offshore
Rate for such Offshore Rate Loan by a matching deposit  or other borrowing in
the interbank eurodollar market for a comparable amount  and for a comparable
period, whether or not such Offshore Rate Loan is in fact so funded.

    4.05Inability to  Determine Rates.  If the Majority  Banks determine that
for any reason adequate and reasonable means do not exist for determining the
Offshore Rate for any  requested Interest Period  with respect to  a proposed
Offshore Rate  Loan,  or  that  the  Offshore  Rate  applicable  pursuant  to
subsection 2.09(a)  for  any  requested Interest  Period  with  respect to  a
proposed Offshore Rate Loan does  not adequately and fairly  reflect the cost
to such Banks  of funding such  Loan, the Agent  will promptly so  notify the
Company and each Bank.   Thereafter, the obligation  of the Banks to  make or
maintain Offshore Rate  Loans hereunder  shall be  suspended until  the Agent
upon the instruction of  the Majority Banks  revokes such notice  in writing.
Upon receipt of such notice, the  Company may revoke any  Notice of Borrowing
or Notice of Conversion/Continuation  then submitted by  it.  If  the Company
does not revoke such  Notice, the Banks shall  make, convert or  continue the
Loans, as proposed by the Company, in the amount  specified in the applicable
notice submitted by the Company, but  such Loans shall be  made, converted or
continued as Base Rate Loans instead of Offshore Rate Loans.

    4.06Certificates   of  Banks.     Any  Bank  claiming   reimbursement  or
compensation under this Article shall deliver to the Company  (with a copy to
the Agent)  a  certificate  setting forth  in  reasonable  detail the  amount
payable to the Bank  hereunder and such  certificate shall be  conclusive and
binding on the Company in the absence of manifest error.

    4.07Survival.   The  agreements and  obligations of  the Company  in this
Article shall survive the payment of all other Obligations.


                                  ARTICLE V

                             CONDITIONS PRECEDENT

     5.01  Conditions of Initial  Credit Extensions.  The obligation  of each
Bank to  make  its  initial Credit  Extension  hereunder  is subject  to  the
condition that the Agent have received  on or before the Closing  Date all of
the following, in form and substance satisfactory to the Agent and each Bank,
and in sufficient copies for each Bank:

           (a) Credit Agreement.    This  Agreement  executed by  each  party
thereto;
           (b) Resolutions; Incumbency.

           (1) Copies of the  resolutions of  the board  of directors  of the
    Company authorizing the transactions contemplated hereby, certified as of
    the Closing  Date  by the  Secretary  or an  Assistant  Secretary of  the
    Company; and

           (2) A certificate of the  Secretary or Assistant Secretary  of the
    Company, certifying the names and true signatures of  the officers of the
    Company authorized to execute,  deliver and perform, as  applicable, this
    Agreement, and all other Loan Documents to be delivered by it hereunder;

           (c) Legal Opinion.   An  opinion of  Collette &  Erickson, outside
counsel  to  the  Company  and   addressed  to  the  Agent   and  the  Banks,
substantially in the form of Exhibit D;

           (d) Payment of Fees.   Evidence of payment  by the Company  of all
accrued and  unpaid fees,  costs and  expenses  to the  extent  then due  and
payable on the Closing Date, together with reasonable  Attorney Costs of BofA
to the extent invoiced prior to or on the Closing  Date, plus such additional
amounts of Attorney Costs  as shall constitute BofA's  reasonable estimate of
Attorney Costs  incurred  or  to  be  incurred  by  it  through  the  closing
proceedings (provided that such estimate shall  not thereafter preclude final
settling of accounts between the Company and BofA); including any such costs,
fees and expenses arising under or referenced in Sections 2.10 and 11.04;

           (e) Placement of Debt   The  Company shall  have issued  the 1998
Senior Notes,  which shall  evidence  long term  fixed-rate  debt with  final
maturities of at  least five years  from the placement  date in  an aggregate
principal amount of at least $30,000,000 (the "Placement").

           (f) Certificate.  A certificate signed by a Responsible Officer or
any authorized vice president of the  Company, dated as of  the Closing Date,
stating that:

           (1) the representations and warranties contained in Article VI are
    true and correct on and as of such date, as though made on and as of such
    date;
           (2) no Default or Event of Default exists or would result from the
    Credit Extension;

           (3) the Placement has occurred on or before the Closing Date; and

           (4) there has  occurred  since  October  31,  1997,  no  event  or
    circumstance that has resulted or could reasonably  be expected to result
    in a Material Adverse Effect;

           (g) Agreements.  Copies certified by the  Secretary of the Company
as being  true and  complete as  of the  date of  this Agreement  of (i)  the
SICPA/OCLI  Settlement  Agreement  (including  all   schedules  and  exhibits
thereto), (ii)  all amendments  to the  Flex-SICPA  Contract, the  SICPA/OCLI
Joint Acquisition Agreement and the Stock and Note Purchase Agreement entered
into after the "closing date" under the Existing Syndicated Credit Agreement,
and (iii) the 1998 Senior Note Agreements.

           (h) Termination of Existing Syndicated Credit Agreement.  Evidence
satisfactory to the  Agent that  all commitments to  lend under  the Existing
Syndicated Credit Agreement  have been  terminated and  that the  Company has
repaid (or made arrangements satisfactory to the Agent  for repayment of) all
principal, interest, commitment  fees, letter of  credit fees and  other sums
due thereunder; and

           (i) Other Documents.  Such other approvals, opinions, documents or
materials as the Agent or any Bank may request.

     5.02  Conditions to All Credit Extensions.  The  obligation of each Bank
to make any Loan to be made by it (including its initial Loan) or to continue
or convert any Loan under Section 2.04 and the obligation of the Issuing Bank
to Issue any  Letter of Credit  (including the initial  Letter of  Credit) is
subject to  the satisfaction  of the  following conditions  precedent on  the
relevant Borrowing Date, Conversion/Continuation Date, or Issuance Date:

           (a) Notice of  Borrowing or  Conversion/Continuation; Application.
The Agent shall have received (with, in the case of the  initial Loan only, a
copy   for   each    Bank)   a   Notice    of   Borrowing,   a    Notice   of
Conversion/Continuation, or  in the  case of  any Issuance  of any  Letter of
Credit, the Issuing Bank and the Agent shall have received an L/C Application
or L/C Amendment Application as required under Section 3.02;

           (b) Continuation  of   Representations   and   Warranties.     The
representations and warranties in Article VI shall be true and correct on and
as of  such Borrowing  Date  or Conversion/Continuation  Date  with the  same
effect as if made on and as of such Borrowing Date or Conversion/Continuation
Date (except  to the  extent such  representations  and warranties  expressly
refer to an earlier date, in which case they shall be true  and correct as of
such earlier date); and

           (c) No Existing Default.   No  Default or  Event of  Default shall
exist or shall result from such Borrowing or continuation or conversion.

Each  Notice  of  Borrowing,  Notice  of   Conversion/Continuation,  and  L/C
Application or L/C Amendment  Application submitted by the  Company hereunder
shall constitute a representation  and warranty by the  Company hereunder, as
of  the  date  of   each  such  notice  and   as  of  each   Borrowing  Date,
Conversion/Continuation Date,  or  Issuance  Date,  as applicable,  that  the
conditions in this Section 5.02 are satisfied.


                                  ARTICLE VI

                        REPRESENTATIONS AND WARRANTIES

    The Company represents and warrants to the Agent and each Bank that:

    6.01Corporate  Existence  and  Power.    The  Company  and  each  of  its
Subsidiaries:

        (a) is a  corporation duly  organized, validly  existing and  in good
standing under the laws of the jurisdiction of its incorporation;

        (b) has  the  power  and authority  and  all  governmental  licenses,
authorizations, consents  and  approvals  to own  its  assets,  carry on  its
business and to execute, deliver, and perform its  obligations under the Loan
Documents;

        (c) is duly qualified as a foreign corporation and is licensed and in
good standing under the laws of each jurisdiction  where its ownership, lease
or operation  of  property  or the  conduct  of  its business  requires  such
qualification or license; and

        (d) is in  compliance with  all Requirements of  Law except,  in each
case referred to in clause (c) or clause (d), to the  extent that the failure
to do so could not reasonably be expected to have a Material Adverse Effect.

    6.02Corporate  Authorization; No Contravention.   The execution, delivery
and performance by the Company of this Agreement and each other Loan Document
to which the  Company is party,  have been duly  authorized by  all necessary
corporate action, and do not and will not:

        (a) contravene  the  terms  of  any  of  the  Company's  Organization
Documents;

        (b) conflict with or result in any breach or contravention of, or the
creation  of  any  Lien  under,  any   document  evidencing  any  Contractual
Obligation to which the Company is a party or any  order, injunction, writ or
decree of any Governmental Authority to which the Company  or its property is
subject; or

        (c) violate any Requirement of Law.

    6.03Governmental   Authorization.    No  approval,   consent,  exemption,
authorization, or  other  action  by,  or  notice to,  or  filing  with,  any
Governmental Authority  is  necessary  or  required  in connection  with  the
execution, delivery or performance by, or enforcement against, the Company or
any of its  Subsidiaries of  the Agreement or  any other  Loan Document.   In
providing the representations and warranties in this Section, the Company has
assumed that, other than  the Company and its  Subsidiaries, no party  to the
Agreement or any of the other Loan Documents is subject  to any statute, rule
or regulation,  or  to  any  impediment  to  which  contracting  parties  are
generally not subject, which requires the Company, any of its Subsidiaries or
any other  Person to  obtain approval,  consent, exemption,  authorization or
other action by, or  to provide notice to,  or filing with,  any Governmental
Authority in connection  with the execution,  delivery or performance  by, or
enforcement against, the Company or any of its  Subsidiaries of the Agreement
or any other Loan Document.

    6.04Binding  Effect.   This  Agreement and  each other  Loan Document  to
which the  Company  is  a  party  constitute the  legal,  valid  and  binding
obligations of  the Company,  enforceable against  the Company  in accordance
with their  respective terms,  except  as enforceability  may  be limited  by
applicable bankruptcy, insolvency, or similar laws  affecting the enforcement
of creditors'  rights  generally  or  by  equitable  principles  relating  to
enforceability.

    6.05Litigation.    Except as  specifically  disclosed  in Schedule  6.05,
there are no actions, suits,  proceedings, claims or disputes  pending, or to
the best knowledge  of the  Company, threatened or  contemplated, at  law, in
equity, in  arbitration or  before any  Governmental  Authority, against  the
Company, or its Subsidiaries or any of their respective properties which:

        (a) purport to affect or pertain to  this Agreement or any other Loan
Document, or any of the transactions contemplated hereby or thereby; or

        (b) if determined adversely to the Company or its Subsidiaries, would
reasonably be expected  to have  a Material Adverse  Effect.   No injunction,
writ, temporary restraining order or any order of any  nature has been issued
by any court or other Governmental Authority purporting to enjoin or restrain
the execution, delivery or  performance of this  Agreement or any  other Loan
Document, or directing that  the transactions provided for  herein or therein
not be consummated as herein or therein provided.

    6.06No Default.   No Default or  Event of Default exists  or would result
from the incurring  of any  Obligations by the  Company.   As of  the Closing
Date, neither the  Company nor  any Subsidiary  is in  default under  or with
respect to any Contractual  Obligation in any respect  which, individually or
together with  all such  defaults, could  reasonably  be expected  to have  a
Material Adverse Effect, or  that would, if  such default had  occurred after
the Closing Date, create an Event of Default under subsection 9.01(e).

    6.07ERISA Compliance.

        (a) Each  Plan is  in compliance  in all  material respects  with the
applicable provisions  of ERISA,  the Code  and other  federal or  state law.
Each Plan which is intended to  qualify under Section 401(a) of  the Code has
received a  favorable  determination letter  from  the IRS  and  to the  best
knowledge of the Company, nothing has occurred which would  cause the loss of
such qualification.    The Company  and  each ERISA  Affiliate  has made  all
required contributions to any Plan subject to Section 412 of the Code, and no
application for a funding waiver  or an extension of  any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.

        (b) There  are no  pending  or, to  the  best  knowledge of  Company,
threatened claims,  actions  or  lawsuits,  or  action  by  any  Governmental
Authority, with respect to any Plan which has resulted or could reasonably be
expected to  result  in  a  Material  Adverse Effect.    There  has  been  no
prohibited transaction  or violation  of the  fiduciary responsibility  rules
with respect to any Plan which  has resulted or could  reasonably be expected
to result in a Material Adverse Effect.

        (c) (i)   No ERISA Event  has occurred or  is reasonably  expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
the Company nor any  ERISA Affiliate has  incurred, or reasonably  expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums  due and  not delinquent under  Section 4007  of ERISA);
(iv) neither the Company nor any ERISA Affiliate  has incurred, or reasonably
expects to incur, any  liability (and no event  has occurred which,  with the
giving of notice under Section 4219 of ERISA, would result in such liability)
under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and
(v) neither the Company nor any ERISA Affiliate has  engaged in a transaction
that could be subject to Section 4069 or 4212(c) of ERISA.

    6.08Use of  Proceeds; Margin Regulations.  The proceeds  of the Loans are
to be used solely for the purposes set forth in and permitted by Section 7.12
and Section  8.08.   Neither  the  Company nor  any  Subsidiary is  generally
engaged in the business  of purchasing or  selling Margin Stock  or extending
credit for the purpose of purchasing or carrying Margin Stock.

    6.09Title  to Properties.    The Company  and each  Subsidiary have  good
record and marketable title  in fee simple  to, or valid  leasehold interests
in, all real  property necessary  or used  in the  ordinary conduct  of their
respective businesses,  except  for  such  defects  in title  as  could  not,
individually or in the aggregate, have a Material Adverse Effect.   As of the
Closing Date, the property of the Company and its  Subsidiaries is subject to
no Liens, other than Permitted Liens.

    6.10Taxes.   The Company and its Subsidiaries have  filed all Federal and
other material tax returns  and reports required to  be filed, and  have paid
all  Federal  and   other  material  taxes,   assessments,  fees   and  other
governmental charges levied or imposed upon them  or their properties, income
or assets otherwise due and  payable, except those which  are being contested
in good faith by appropriate proceedings and for which adequate reserves have
been provided in accordance  with GAAP. There  is no proposed  tax assessment
against the Company or  any Subsidiary that would,  if made, have  a Material
Adverse Effect.

    6.11Financial Condition.

        (a) The audited consolidated financial statements  of the Company and
its Subsidiaries  dated  October  31,  1997,  and  the  related  consolidated
statements of income or  operations, shareholders' equity and  cash flows for
the fiscal quarter ended on that date:

            (1) were  prepared in accordance  with GAAP  consistently applied
    throughout the  period  covered thereby,  except  as otherwise  expressly
    noted therein;

            (2) fairly  present the  financial condition  of the  Company and
    its Subsidiaries as of the date thereof and results of operations for the
    period covered thereby; and

            (3) except  as specifically disclosed in Schedule  6.11, show all
    material indebtedness and other liabilities, direct or contingent, of the
    Company and  its  consolidated  Subsidiaries  as  of  the  date  thereof,
    including liabilities  for  taxes,  material commitments  and  Contingent
    Obligations.

        (b) Since  October  31, 1997,  there  has  been no  Material  Adverse
Effect.

    6.12Environmental Matters.   The Company conducts in  the ordinary course
of business  a  review  of the  effect  of  existing Environmental  Laws  and
existing Environmental Claims on its business, operations and properties, and
as a  result thereof  the Company  has reasonably  concluded that,  except as
specifically  disclosed  in  Schedule  6.12,  such   Environmental  Laws  and
Environmental Claims could not, individually or  in the aggregate, reasonably
be expected to have a Material Adverse Effect.

    6.13Regulated Entities.  None  of the Company, any Person controlling the
Company, or any Subsidiary, is an "Investment Company"  within the meaning of
the Investment Company Act of 1940.  The Company is not subject to regulation
under the Public Utility Holding Company Act of 1935,  the Federal Power Act,
the Interstate Commerce Act,  any state public  utilities code, or  any other
Federal or  state  statute  or  regulation  limiting  its  ability  to  incur
Indebtedness.

    6.14No Burdensome  Restrictions.  Neither the Company  nor any Subsidiary
is a  party to  or bound  by any  Contractual Obligation,  or subject  to any
restriction in any  Organization Document, or  any Requirement of  Law, which
could reasonably be expected to have a Material Adverse Effect.

    6.15Copyrights,  Patents, Trademarks  and Licenses, etc   The  Company or
its Subsidiaries own or are licensed  or otherwise have the right  to use all
of  the  patents,  trademarks,   service  marks,  trade   names,  copyrights,
contractual franchises, authorizations and  other rights that  are reasonably
necessary for the operation of their  respective businesses, without conflict
with the rights of any other  Person.  To the best knowledge  of the Company,
no slogan or other  advertising device, product, process,  method, substance,
part or other material now employed,  or now contemplated to  be employed, by
the Company or  any Subsidiary infringes  upon any rights  held by  any other
Person.   Except as  specifically disclosed  in  Schedule 6.05,  no claim  or
litigation regarding any of  the foregoing is  pending or threatened,  and no
patent, invention, device, application, principle or  any statute, law, rule,
regulation, standard or code is pending or, to the  knowledge of the Company,
proposed, which,  in either  case, could  reasonably  be expected  to have  a
Material Adverse Effect.

    6.16Subsidiaries.     As  of  the  Closing  Date,  the   Company  has  no
Subsidiaries other than those specifically disclosed in  part (a) of Schedule
6.16 and has no equity investments  in any other corporation  or entity other
than those specifically disclosed in part (b) of Schedule 6.16.

    6.17Insurance.   Except as specifically  disclosed in Schedule  6.17, the
properties of the Company  and its Subsidiaries are  insured with financially
sound and reputable  insurance companies  not Affiliates  of the  Company, in
such  amounts,  with  such  deductibles  and  covering   such  risks  as  are
customarily carried  by companies  engaged in  similar businesses  and owning
similar properties  in  localities  where  the  Company  or  such  Subsidiary
operates.

    6.18Swap  Obligations.  Neither the  Company nor any of  its Subsidiaries
has incurred any outstanding obligations under any Swap Contracts, other than
Permitted Swap Obligations.

    6.19Year  2000. On  the basis  of a  comprehensive review  and assessment
presently being conducted of the Company's and  its Subsidiaries' systems and
equipment and inquiry  now underway  of the  Company's and  its Subsidiaries'
material suppliers  and vendors,  the Company  reasonably  believes that  the
"Year 2000 problem" (that is, the inability of computers, as well as embedded
microchips  in  non-computer  devices,  to  perform  properly  date-sensitive
functions with  respect to  certain dates  prior  to and  after December  31,
1999), including costs of remediation, will not result  in a Material Adverse
Effect.   The Company  is  developing contingency  plans  that it  reasonably
believes will  ensure  that any  interruption  or impairment  of  its or  its
Subsidiaries' own  systems  or  equipment, or  the  systems  or equipment  of
material suppliers or  vendors, due to  the Year 2000  problem, or  a general
failure of or interruption in the  communications and delivery infrastructure
of the Company  or its Subsidiaries,  will not result  in a  Material Adverse
Effect.

    6.20Full Disclosure.   None of the representations or  warranties made by
the Company  or any  Subsidiary in  the Loan  Documents as  of the  date such
representations and  warranties are  made or  deemed  made, and  none of  the
statements  contained  in  any  exhibit,  report,  statement  or  certificate
furnished by or on behalf of the Company or any Subsidiary in connection with
the Loan Documents (including the offering and disclosure materials delivered
by or on  behalf of  the Company  to the  Banks prior  to the  Closing Date),
contains any untrue statement of a  material fact or omits  any material fact
required to  be  stated therein  or  necessary to  make  the statements  made
therein, in  light  of  the circumstances  under  which  they are  made,  not
misleading as of the time when made or delivered.


                                 ARTICLE VII

                            AFFIRMATIVE COVENANTS

    So long as any Bank shall  have any Commitment hereunder, or  any Loan or
other Obligation shall remain unpaid or unsatisfied, or  any Letter of Credit
shall remain  outstanding,  unless the  Majority  Banks  waive compliance  in
writing:

    7.01Financial  Statements.  The  Company shall deliver  to the  Agent and
each Bank, in  form and  detail satisfactory  to the  Agent and  the Majority
Banks:

        (a) (1)  as soon as available, but  not later than 105 days after the
    end of each fiscal year, a copy of the audited consolidated balance sheet
    of the Company and  its Subsidiaries as at  the end of such  year and the
    related consolidated  statements of  income or  operations, shareholders'
    equity and  cash flows  for such  year,  setting forth  in  each case  in
    comparative  form  the  figures   for  the  previous  fiscal   year,  and
    accompanied  by   the   opinion  of   Deloitte   &   Touche  or   another
    nationally-recognized independent  public  accounting firm  ("Independent
    Auditor") which  opinion  shall state  that  such consolidated  financial
    statements  present  fairly  the  financial  position   for  the  periods
    indicated in  conformity with  GAAP applied  on a  basis consistent  with
    prior years.  Such opinion shall not be qualified or limited because of a
    restricted or  limited  examination by  the  Independent  Auditor of  any
    material portion  of the  Company's or  any Subsidiary's  records or  any
    other reason;

            (2)  as soon as available, but  not later than 105 days after the
    end of each fiscal year, a copy of the balance sheet  of Flex Products as
    at the end  of such year  and the related  statements of income  and cash
    flows for such year, setting forth  in each case in  comparative form the
    figures for  the previous  fiscal year,  and certified  by a  Responsible
    Officer as  fairly  presenting,  in  accordance  with  GAAP  (subject  to
    ordinary, good faith audit adjustments  and the absence of  notes to such
    financial  statements),  the  financial  position  and   the  results  of
    operations of Flex Products;

        (b) (1)  as soon  as available, but not later than  60 days after the
    end of each  of the first  three fiscal quarters  of each fiscal  year, a
    copy of the unaudited consolidated  balance sheet of the  Company and its
    Subsidiaries as of the end  of such quarter and  the related consolidated
    statements of income, shareholders' equity and cash  flows for the period
    commencing on the first  day and ending on  the last day of  such quarter
    and commencing on the first day of the fiscal year and ending on the last
    day of such  quarter, and  certified by a  Responsible Officer  as fairly
    presenting, in  accordance with  GAAP (subject  to  ordinary, good  faith
    audit adjustments and the absence of notes to such financial statements),
    the financial position and the  results of operations of  the Company and
    the Subsidiaries;

            (2)  as soon  as available, but not later than  60 days after the
    end of each  of the first  three fiscal quarters  of each fiscal  year, a
    copy of the balance sheet of Flex Products as of the  end of such quarter
    and the  related  statements of  income  and cash  flows  for the  period
    commencing on the first  day and ending on  the last day of  such quarter
    and commencing on the first day of the fiscal year and ending on the last
    day of such  quarter, and  certified by a  Responsible Officer  as fairly
    presenting, in  accordance with  GAAP (subject  to  ordinary, good  faith
    audit adjustments and the absence of notes to such financial statements),
    the financial position and the results of operations of Flex Products.

    7.02Certificates;  Other Information.  The  Company shall furnish  to the
Agent and each Bank:

        (a) concurrently  with  the  delivery  of  the  financial  statements
referred to  in  subsection  7.01(a)(1),  a  certificate of  the  Independent
Auditor stating that during the examination there was  observed no Default or
Event of Default  of the  kind which would  normally be  revealed by  such an
examination, or a  statement of such  Default or Event  of Default if  any is
found whether or not the same shall have been cured;

        (b) concurrently  with  the  delivery  of  the  financial  statements
referred to in  subsections 7.01(a)(1) and  (b)(1), a  Compliance Certificate
executed by a Responsible Officer;

        (c) promptly, copies of all financial statements and reports that the
Company sends to its shareholders, and copies of all financial statements and
regular, periodical or special reports (including Forms 10K, 10Q and 8K) that
the Company or any Subsidiary may make to, or file with, the SEC;

        (d) annually not  later than 45 days  after the commencement  of each
fiscal year,  the  consolidated  operating  budget  of the  Company  and  its
Subsidiaries for the coming fiscal year; and

        (e) promptly, notice  of each  change in  ownership of  Flex Products
(including each change in the proportionate ownership of Flex Products by the
Company and/or SICPA);

        (f) promptly,  such additional  information  regarding the  business,
financial or corporate affairs of the Company or any Subsidiary as the Agent,
at the request of any Bank, may from time to time request.

    7.03Notices.  The Company shall promptly notify the Agent and each Bank:

        (a) of the occurrence of any Default  or Event of Default, and of the
occurrence or existence  of any event  or circumstance that  foreseeably will
become a Default or Event of Default;

        (b) of  any matter  that has  resulted or  may result  in a  Material
Adverse Effect, including  (i) breach or  non-performance of, or  any default
under, a Contractual Obligation  of the Company  or any Subsidiary;  (ii) any
dispute, litigation,  investigation,  proceeding  or suspension  between  the
Company or  any  Subsidiary  and any  Governmental  Authority;  or (iii)  the
commencement of, or any material development in, any litigation or proceeding
affecting the Company or any Subsidiary; including pursuant to any applicable
Environmental Laws;

        (c) of the  occurrence of any of  the following events  affecting the
Company or any ERISA Affiliate (but in no event more than  10 days after such
event), and deliver  to the Agent  and each  Bank a copy  of any  notice with
respect to such  event that is  filed with a  Governmental Authority  and any
notice delivered  by a  Governmental Authority  to the  Company or  any ERISA
Affiliate with respect to such event:

            (1) an ERISA Event;

            (2) a material increase  in the Unfunded Pension Liability of any
    Pension Plan;

            (3) the  adoption of,  or the  commencement of  contributions to,
    any Plan subject to Section 412  of the Code by the Company  or any ERISA
    Affiliate; or

            (4) the  adoption of any amendment  to a Plan subject  to Section
    412 of the  Code, if  such amendment  results in  a material  increase in
    contributions or Unfunded Pension Liability;

        (d) of  any  material  change in  accounting  policies  or  financial
reporting practices by the  Company or any of  its consolidated Subsidiaries;
and
        (e) each proposed amendment to any or all of the SICPA Agreements.

        Each  notice under  this Section  shall be  accompanied by  a written
statement by a  Responsible Officer setting  forth details of  the occurrence
referred to  therein, and  stating what  action the  Company or  any affected
Subsidiary proposes to  take with  respect thereto  and at  what time.   Each
notice under subsection 7.03(a) shall describe with particularity any and all
clauses or provisions of this Agreement or other Loan Document that have been
(or foreseeably will be) breached or violated.

    7.04Preservation  of Corporate  Existence, Etc.   The Company  shall, and
shall cause each Subsidiary  (except where the failure  so to cause  any such
Subsidiary could  not  be  reasonably expected  to  have  a Material  Adverse
Effect) to:

        (a) preserve  and maintain  in full  force and  effect its  corporate
existence and good standing  under the laws of  its state or  jurisdiction of
incorporation;

        (b) preserve and maintain  in full force and  effect all governmental
rights,  privileges,   qualifications,  permits,   licenses  and   franchises
necessary or  desirable in  the normal  conduct  of its  business, except  in
connection with transactions  permitted by Section  8.04 and sales  of assets
permitted by Section 8.03;

        (c) use reasonable  efforts, in the  ordinary course of  business, to
preserve its business organization and goodwill; and

        (d) preserve or  renew, to  the extent legally  possible, all  of its
registered  patents,  trademarks,   trade  names   and  service   marks,  the
non-preservation of which  could reasonably  be expected  to have  a Material
Adverse Effect.

    7.05Maintenance  of Property.    The Company  shall  maintain, and  shall
cause each Subsidiary  to maintain,  and preserve all  its property  which is
used or useful in its business in good working  order and condition, ordinary
wear and tear excepted.

    7.06Insurance.    The  Company  shall  maintain,  and  shall  cause  each
Subsidiary to  maintain,  with financially  sound  and reputable  independent
insurers, insurance with respect to its properties  and business against loss
or damage of the kinds customarily insured against by  Persons engaged in the
same or  similar  business,  of  such  types  and  in  such  amounts  as  are
customarily carried under similar circumstances by such other Persons.

    7.07Payment  of Obligations   The  Company shall,  and shall  cause each
Subsidiary to, pay and  discharge as the same  shall become due  and payable,
all their respective obligations and liabilities, including:

        (a) all  tax liabilities,  assessments  and  governmental charges  or
levies upon  it  or its  properties  or assets,  unless  the  same are  being
contested in good faith  by appropriate proceedings and  adequate reserves in
accordance with GAAP are being maintained by the Company or such Subsidiary;

        (b) all lawful  claims which, if unpaid,  would by law become  a Lien
upon its property; and

        (c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument  or agreement evidencing
such Indebtedness.

    7.08Compliance  with Laws.   The  Company shall  comply, and  shall cause
each Subsidiary to comply, in all material respects  with all Requirements of
Law of any Governmental Authority having jurisdiction over it or its business
(including the  Federal Fair  Labor Standards  Act),  except such  as may  be
contested in good faith or as to which a bona fide dispute may exist.

    7.09Compliance  with ERISA.  The  Company shall, and shall  cause each of
its ERISA  Affiliates  to:   (a)  maintain each  Plan  in  compliance in  all
material respects with the applicable provisions of ERISA, the Code and other
federal or state law;  (b) cause each Plan  which is qualified  under Section
401(a) of the Code to maintain such qualification; and  (c) make all required
contributions to any Plan subject to Section 412 of the Code.

    7.10Inspection  of Property  and Books  and Records.   The  Company shall
maintain and shall cause each  Subsidiary to maintain proper  books of record
and account, in which full, true and correct entries  in conformity with GAAP
consistently applied shall be made of all  financial transactions and matters
involving the assets and  business of the Company  and such Subsidiary.   The
Company  shall   permit,  and   shall  cause   each  Subsidiary   to  permit,
representatives and independent contractors of the Agent or any Bank to visit
and inspect any of  their respective properties, to  examine their respective
corporate, financial  and  operating  records,  and  make copies  thereof  or
abstracts therefrom, and  to discuss their  respective affairs,  finances and
accounts with their  respective directors,  officers, and  independent public
accountants, all at such reasonable times during normal business hours and as
often as may  be reasonably  desired, upon reasonable  advance notice  to the
Company; provided, however, when an Event of Default exists  the Agent or any
Bank may do any of  the foregoing at the  expense of the Company  at any time
during normal business hours and without advance notice.

    7.11Environmental  Laws.    The  Company  shall,  and  shall  cause  each
Subsidiary to,  conduct its  operations and  keep and  maintain its  property
substantially in compliance with all Environmental Laws.

    7.12Use of Proceeds. The Company shall  use the proceeds of the Loans and
the Letters  of Credit  for  working capital,  capital  equipment, and  other
general corporate purposes, including the repayment  of the loans outstanding
as of the  Closing Date  under the Existing  Syndicated Credit  Agreement, so
long as such usage  is not in contravention  of any Requirement of  Law or of
any Loan Document.

                                 ARTICLE VIII

                              NEGATIVE COVENANTS

    So long as any Bank shall  have any Commitment hereunder, or  any Loan or
other Obligation shall remain unpaid or unsatisfied, or  any Letter of Credit
shall remain  outstanding,  unless the  Majority  Banks  waive compliance  in
writing:

    8.01Limitation on Liens.  The Company  shall not, and shall not suffer or
permit any Subsidiary to, directly or indirectly, make, create, incur, assume
or suffer to exist any Lien upon or with respect to any part of its property,
whether now owned or hereafter acquired, other than the following ("Permitted
Liens"):

        (a) any Lien existing on property of the Company or any Subsidiary on
the Closing  Date  and  set  forth  in Schedule  8.01  securing  Indebtedness
outstanding on such date;

        (b) any Lien created under any Loan Document;

        (c) Liens for taxes, fees, assessments  or other governmental charges
which are not delinquent or remain payable without penalty,  or to the extent
that non-payment thereof is permitted by Section 7.07;

        (d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of business
which are not delinquent or remain payable without penalty or which are being
contested in  good faith  and by  appropriate proceedings,  which proceedings
have the effect of preventing the forfeiture or sale  of the property subject
thereto;

        (e) Liens  (other  than any  Lien  imposed  by ERISA)  consisting  of
pledges or deposits required in the ordinary course of business in connection
with workers' compensation, unemployment insurance and  other social security
legislation;

        (f) Liens on the  property of the Company or  its Subsidiary securing
(i) the non-delinquent performance  of bids, trade contracts  (other than for
borrowed money), leases,  statutory obligations, (ii)  contingent obligations
on surety, and appeal bonds, and (iii) other  non-delinquent obligations of a
like nature; in  each case, incurred  in the ordinary  course of  business as
presently conducted;

        (g) Liens  consisting  of  judgment  or  judicial  attachment  liens,
provided that the enforcement of such Liens is effectively stayed, the claims
secured thereby are being actively contested in good faith and by appropriate
proceedings,  adequate  book  reserves   shall  have  been   established  and
maintained and shall exist  with respect thereto, and  all such liens  in the
aggregate at any time outstanding for the Company and its Subsidiaries do not
exceed $5,000,000;

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

        (i) Liens on  assets of corporations which  become Subsidiaries after
the date of this Agreement, provided, however, that such Liens existed at the
time the respective corporations became Subsidiaries and  were not created in
anticipation thereof;

        (j) (1)  purchase  money security interests on  any property acquired
    or held by  the Company  or its  Subsidiaries in  the ordinary  course of
    business, securing Indebtedness  incurred or assumed  for the  purpose of
    financing all  or  any  part of  the  cost  of acquiring  such  property;
    provided that (i)  any such Lien  attaches to such  property concurrently
    with or within 20 days after the acquisition thereof,  and (ii) such Lien
    attaches solely to the property so acquired in such transaction;

            (2)   A deed of  trust on the  Company's property in  Santa Rosa,
    California, to secure financing up to $9,000,000  for the construction of
    general purpose manufacturing and office buildings on such property;

        (k)   Liens securing  obligations  in respect  of  capital leases  on
assets subject  to  such  leases,  provided  that  such  capital  leases  are
otherwise permitted hereunder;

        (l) Liens arising  solely by  virtue of any  statutory or  common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to  deposit accounts  or other funds  maintained with  a creditor
depository institution;  provided that  (i)  such deposit  account  is not  a
dedicated cash collateral account and is not  subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated
by the FRB, and (ii) such deposit  account is not intended by  the Company or
any Subsidiary to provide collateral to the depository institution;

        (m) Liens  consisting of  pledges of  cash  collateral or  government
securities to  secure on  a mark-to-market  basis Permitted  Swap Obligations
only, provided that  the counterparty  to any Swap  Contract relating  to any
such Permitted Swap  Obligations is  under a  similar requirement  to deliver
similar collateral from time to time  to the Company or  the Subsidiary party
thereto on a mark-to-market basis;

        (n) Liens  not otherwise  permitted pursuant  to clauses  (a) through
(m), inclusive, of this Section; provided, that:

            (1)  the Indebtedness or other  obligations secured thereby shall
    have  been  incurred,  or  shall  be  permitted  to  be  outstanding,  in
    accordance with the provisions of Section 8.06 of this Agreement; and

            (2)    immediately prior  to,  and  after  giving effect  to  the
    incurrence,  assumption  or  creation  thereof  and   to  any  concurrent
    application of  the  proceeds of  any  Indebtedness  or other  obligation
    secured thereby, (A) the  aggregate amount of all  Indebtedness and other
    obligations  secured  by  such  Liens  at  such  time  would  not  exceed
    $5,000,000, and (B) no Default or Event of Default would exist; and

        (o) Liens securing renewals, extensions (as to time) and refinancings
of Indebtedness secured by the Liens described in clauses  (a) through (n) of
this Section; provided, that:

            (1)  the  amount of Indebtedness or other  obligations secured by
    each such  Lien  is  not  increased  in excess  of  the  amount  of  such
    Indebtedness or  other  obligations  outstanding  on  the  date  of  such
    renewal, extension or refinancing;

            (2)   none of  such Liens  is extended  to encumber  or otherwise
    relate to  or  cover  any  additional  property of  the  Company  or  any
    Subsidiary; and

            (3)  immediately prior to, and immediately after the consummation
    of such  renewal,  extension  or  refinancing,  and after  giving  effect
    thereto, no Default or Event of Default exists or would exist.

    8.02Restrictions  on Liens  Except for the  1998 Senior  Note Agreements
and the ABN AMRO Bank N.V. refinancing of the Von  Birkhahn Note balance, the
Company shall not, and shall not suffer or permit any Subsidiary to, directly
or indirectly,  enter  into  any  Contractual  Obligations that  impairs  the
ability of the Company  to grant or prohibits  the Company from  granting any
Lien(s) in favor of the Agent and the Banks.

    8.03Disposition of  Assets.  The Company shall not,  and shall not suffer
or permit any  Subsidiary to,  directly or  indirectly, sell,  assign, lease,
convey, transfer  or otherwise  dispose of  (whether in  one or  a series  of
transactions) any property (including accounts and  notes receivable, with or
without recourse and shares in any Subsidiary) or enter into any agreement to
do any of the foregoing, except:

        (a) dispositions of inventory, or  used, worn-out, fully depreciated,
or surplus equipment, all in the ordinary course of business;

        (b) the  sale of  equipment  to the  extent  that  such equipment  is
exchanged for  credit  against  the  purchase  price of  similar  replacement
equipment, or the proceeds  of such sale  are reasonably promptly  applied to
the purchase price of such replacement equipment;

        (c) dispositions  of inventory,  equipment or  other property  by the
Company or  any  Subsidiary to  the  Company or  any  Subsidiary pursuant  to
reasonable business requirements; and

        (d) dispositions (but not  including any disposition of  any fixed or
capital assets or any shares in any Subsidiary) not otherwise permitted under
this Section which are made for fair market value; provided,  that (i) at the
time of any disposition, no Event of Default shall exist or shall result from
such disposition, (ii) the aggregate sales price  from such disposition shall
be paid in cash, and (iii)  the aggregate value of all assets  so sold by the
Company and its Subsidiaries, together, shall not exceed  in any twelve month
period, 10% of  the gross book  value of  the assets of  the Company  and its
Subsidiaries  on  a  consolidated  basis  (exclusive  of  goodwill,  patents,
trademarks, trade  names, organization  expense, treasury  stock, unamortized
debt discount and expense, deferred charges, and other like intangibles) less
reserves applicable thereto.

    8.04Consolidations  and Mergers.   The Company shall  not, and  shall not
suffer or  permit any  Subsidiary to,  merge,  consolidate with  or into,  or
convey, transfer, lease or  otherwise dispose of (whether  in one transaction
or in  a series  of transactions)  all  or substantially  all  of its  assets
(whether now  owned or  hereafter acquired)  to or  in favor  of any  Person,
except:

        (a) any  Subsidiary may  merge with  the Company,  provided that  the
Company shall be the continuing or surviving corporation, or  with any one or
more Subsidiaries,  provided  that  if any  transaction  shall  be between  a
Subsidiary and a Wholly-Owned  Subsidiary, the Wholly-Owned  Subsidiary shall
be the continuing or surviving corporation; and

        (b) any Subsidiary  may sell all or  substantially all of  its assets
(upon  voluntary  liquidation  or  otherwise),  to  the  Company  or  another
Wholly-Owned Subsidiary.

    8.05Loans  and Investments.  The  Company shall not purchase  or acquire,
or suffer  or permit  any Subsidiary  to  purchase or  acquire,  or make  any
commitment therefor, any capital  stock, equity interest, or  any obligations
or other securities of, or any interest in, any Person, or  make or commit to
make any Acquisitions, or make or commit to make any advance, loan, extension
of credit or capital contribution to  or any other investment  in, any Person
including any Affiliate of the Company, except for:

        (a) investments  in property  to be  used in  the ordinary  course of
business of the Company and its Subsidiaries;

        (b) investments in trade accounts receivable arising from the sale of
goods and services in the ordinary course of business of  the Company and its
Subsidiaries;

        (c) investments  in United  States Governmental  Securities, provided
that such obligations mature within three years from  the date of acquisition
thereof;

        (d) investments in commercial  paper given either of  the two highest
ratings  by  either  Standard  &  Poor's  or   Moody's,  provided  that  such
obligations mature within 270 days from the date of creation thereof;

        (e) investments  constituting   loans  and  advances   to  employees,
including travel advances and  relocation loans, made in  the ordinary course
of and furtherance of the business of the Company or any Subsidiary;

        (f) investments  in demand  deposit accounts  maintained with  one or
more local commercial banks, which qualify as  Acceptable Banks, as operating
funds accounts used in the ordinary course of business of the Company and the
Subsidiaries;

        (g) investments in publicly-traded shares in any open-end mutual fund
that invests  solely in  Investments of  the  type described  in clause  (c),
clause (d), clause (i) or clause (j) of this Section and  has total assets in
excess of $1,000,000,000,  provided that such  Investments are  classified as
current assets in accordance with GAAP;

        (h) investments  in  money  market preferred  stock  of  corporations
organized under the laws of the  United States or any state  thereof that (i)
is commonly  referred to  by the  terms  "Dutch-Auction Preferred,"  "Capital
Market Preferred,"  "Remarketed  Preferred,"  "Variable  Rate  Preferred"  or
similar terms, and (ii)  has been given, at  the time of acquisition,  one of
the two highest ratings by either Standard & Poor's or Moody's;

        (i) investments in  certificates of  deposit or  banker's acceptances
issued by an  Acceptable Bank, provided  that such obligations  mature within
one year from the date of acquisition thereof;

        (j) investments in Permitted Repurchase Agreements;

        (k) investments in Dollar-denominated deposits with:

            (1)   a bank  organized under  the laws  of a  country that  is a
    member of the  European Community (or  any political subdivision  of such
    country)  having  a  combined  capital  and  surplus  of  not  less  than
    $100,000,000 and given an issuer rating of "A" by Thomson BankWatch, Inc.
    (or a comparable rating by another nationally-recognized rating agency of
    similar standing if Thomson BankWatch,  Inc. is not then  in the business
    of rating commercial banks), or

            (2)  a foreign branch of an Acceptable Bank;

        (l) investments in tax-exempt obligations of any  state of the United
States, or  any municipality  of any  such  state, given  either  of the  two
highest ratings by either  Standard & Poor's  or Moody's, provided  that such
obligations mature within three years from the date of acquisition thereof;

        (m) investments in  joint ventures, provided that  the aggregate book
value  of  all  such  investments  shall  not  at  any  time  exceed  10%  of
consolidated total assets of  the Company and its  Subsidiaries determined at
such time;

        (n) investments in  federally insured  money market  deposit accounts
maintained with one or more Acceptable Banks;

        (o) other  investments in  securities for  cash management  purposes,
made in accordance with the Company's investment policies as in effect on the
Closing Date and as  more particularly set  forth in Schedule  8.05, maturing
within one  year from  the date  of  acquisition thereof,  provided that  the
aggregate book value  of all such  investments shall not  at any  time exceed
2.50% of the consolidated  total assets of  the Company and  its Subsidiaries
determined at such time;

        (p) investments  in  existence  on  the  Closing  Date  described  in
Schedule 8.05;

        (q) extensions of credit  to and equity investments  in Flex Products
(including the  investments  contemplated  in  the  Stock and  Note  Purchase
Agreement); the aggregate amount of credit extended to Flex Products shall be
subject to the limits set forth in subsection 8.06(g);

        (r) investments constituting  Permitted Swap Obligations  or payments
or advances under Swap Contracts relating to Permitted Swap Obligations; and

        (s) any other  investment not otherwise  permitted under  clauses (a)
through (r)  hereof  and  subject  to  the  provisions  of  Section  8.06(h);
provided, that:

            (1) immediately  after,  and after  giving  effect  to, any  such
    investment, the  sum  of  the  aggregate  amount of  (x)  all  Restricted
    Payments declared or made  during the period  from and after  October 31,
    1994 to and including the date such investment is made, plus (y) all such
    investments made pursuant  to this  subsection held at  such time  by the
    Company and its Subsidiaries would not exceed the sum of:

                (A)  $7,000,000, plus

                (B)   the  sum of  50% (or minus  100% if  a deficit)  of the
        cumulative   consolidated  net   income  of   the  Company   and  its
        Subsidiaries  for the  period commencing after  October 31,  1994 and
        ending on and including the date such investment is made, plus

                (C)  the aggregate amount  of cash proceeds (net of all costs
        and  out-of-pocket  expenses   in  connection  therewith,  including,
        without  limitation, placement, underwriting  and brokerage  fees and
        expenses) received by  the Company and its Subsidiaries after October
        31,  1994 and prior to  such time from the  issuance and sale  of (I)
        capital  stock (other than Redeemable  Stock) of the  Company (either
        directly  or  through  the  exercise of  warrants,  rights  or  other
        options  or  the  exercise  of  any  rights  of  the  holder  of  any
        Indebtedness of  the Company to convert such  Indebtedness to capital
        stock (other than Redeemable  Stock)) or (II) any warrants, rights or
        other options to purchase such capital stock; and

            (2)   immediately  before,  and  after  giving  effect  to,  such
    investment, no Default or Event of Default exists or would exist.

    8.06Limitation  on Indebtedness.   The Company shall  not, and  shall not
suffer or permit any Subsidiary  to, create, incur, assume,  suffer to exist,
or otherwise become or remain directly or indirectly  liable with respect to,
any Indebtedness, except:

        (a) Indebtedness incurred pursuant to this Agreement;

        (b) Indebtedness  consisting  of   Contingent  Obligations  permitted
pursuant to Section 8.09; and

        (c) Indebtedness  existing  on the  Closing  Date  and set  forth  in
Schedule 8.06;

        (d) Indebtedness  incurred   in  connection  with   leases  permitted
pursuant to Section 8.11;

        (e) Indebtedness evidenced  by the 1998  Senior Notes, not  to exceed
$44,400,000 in aggregate principal amount;

        (f) Indebtedness,  not  to  exceed $9,000,000  in  principal  amount,
secured by the deed of trust described in Section 8.01(j)(2), for the purpose
of financing  the construction  of general  purpose manufacturing  and office
buildings on such property; provided  that the weighted average  life of such
Indebtedness is  for  a term  not  shorter than  the  remaining  term of  the
revolving credit under this Agreement;

        (g) In addition to the Indebtedness existing  on the Closing Date and
    set forth in Schedule 8.06:

            (1) Unsecured  Indebtedness incurred  by the  Subsidiaries (other
    than Flex Products) of  the Company (this Indebtedness  may be guaranteed
    by the Company)  not to  exceed at  any one  time an  aggregate principal
    amount of $5,000,000 (utilized and unutilized);

            (2) Indebtedness    incurred   by   Flex    Products   (including
    Indebtedness to  SICPA  and  the  Company);  provided  that  Indebtedness
    incurred by Flex Products to third parties shall not be guaranteed by the
    Company;

        (h) Indebtedness secured by Liens permitted  under Section 8.01(i) in
an aggregate  amount which,  together with  the  investments permitted  under
Section 8.05(s) does  not exceed the  amount permitted for  investments under
such Section;

        (i) Indebtedness of  the Company not  covered in clauses  (a) through
(h) of this Section  not to exceed the  amounts by which  $32,000,000 exceeds
the combined Commitments as of the date of computation; and

        (j) Indebtedness of Flex Products to third  persons which is incurred
in lieu of Indebtedness to SICPA pursuant to the SICPA/OCLI Joint Acquisition
Agreement, provided that:

            (1) The  terms  and  provisions  of  such Indebtedness  meet  the
    requirements of the SICPA/OCLI Joint Acquisition  Agreement applicable to
    credit extensions made by SICPA and the Company thereunder;

            (2) The Company extends credit  to Flex Products at the same time
    pursuant to the terms of the SICPA/OCLI Joint Acquisition Agreement;

            (3) Such   Indebtedness  to  third   persons  is  at   all  times
    guaranteed by SICPA; and

            (4) If a breach  or default occurs under the documents evidencing
    such Indebtedness to third persons, payment of  such Indebtedness is made
    by SICPA

The provisions of this Section shall govern in the event of any contradiction
or ambiguity between the provisions  of this Section and  any other provision
of this Agreement or other Loan Document.

    8.07Transactions with  Affiliates  The Company shall not,  and shall not
suffer or  permit any  Subsidiary to,  enter  into any  transaction with  any
Affiliate of  the Company,  except upon  fair  and reasonable  terms no  less
favorable to the Company or such Subsidiary than would obtain in a comparable
arm's-length transaction with  a Person  not an Affiliate  of the  Company or
such Subsidiary.

    8.08Use of Proceeds.    The  Company shall not,  and shall not  suffer or
permit any Subsidiary to, use any portion of the Loan  proceeds or any Letter
of Credit, directly  or indirectly,  (i) to purchase  or carry  Margin Stock,
(ii) to repay or  otherwise refinance indebtedness  of the Company  or others
incurred to purchase or  carry Margin Stock, (iii)  to extend credit  for the
purpose of purchasing or  carrying any Margin Stock,  or (iv) to  acquire any
security in  any transaction  that is  subject  to Section  13 or  14 of  the
Exchange Act.

    8.09Contingent Obligations.  The  Company shall not, and shall not suffer
or permit any  Subsidiary to, create,  incur, assume or  suffer to  exist any
Contingent Obligations except:

        (a) endorsements for collection or deposit in  the ordinary course of
business;

        (b) Permitted Swap Obligations; and

        (c) Contingent  Obligations  of  the  Company  and  its  Subsidiaries
existing as of the Closing Date and listed in Schedule 8.09.

    8.10Joint  Ventures.   The Company  shall not,  and shall  not suffer  or
permit any  Subsidiary  to,  enter into  any  Joint  Venture, other  than  in
businesses and  industries  reasonably  related  to  the  Company's  or  such
Subsidiary's business or industries as of the date of this Agreement.

    8.11Lease  Obligations  The Company  shall not, and shall  not suffer or
permit any Subsidiary to, create or  suffer to exist any  obligations for the
payment of rent for  any property under lease  or agreement to  lease, except
for:

        (a) leases of  the Company  and of Subsidiaries  in existence  on the
Closing Date and any renewal, extension or refinancing thereof;

        (b) operating leases  entered into by  the Company or  any Subsidiary
after the Closing Date in the ordinary course of business;

        (c) leases entered  into by the Company  or any Subsidiary  after the
Closing  Date  pursuant   to  sale-leaseback  transactions   permitted  under
subsection 8.03(d); and

        (d) capital leases other  than those permitted under  clauses (a) and
(c) of this Section, entered into by the Company or  any Subsidiary after the
Closing Date  to finance  the  acquisition of  equipment;  provided that  the
aggregate annual rental payments for all such capital leases shall not exceed
$15,000,000.

    8.12Restricted Payments.

        (a) The  Company  shall not,  and  shall  not  suffer or  permit  any
Subsidiary to, declare or make any Restricted Payment unless:

            (1) immediately   after,  and  after   giving  effect   to,  such
    Restricted Payment, the sum of the aggregate amount of (x) all Restricted
    Payments declared or made  during the period  from and after  October 31,
    1994 to and including the date such Restricted Payment  is made, plus (y)
    all investments  made  pursuant  to  Subsection  8.05(s),  plus  (z)  all
    Indebtedness permitted under Section 8.06(h) held or owed at such time by
    the Company and its Subsidiaries would not exceed the sum of

                (A) $7,000,000 plus

                (B) the sum of  50% (or minus 100% in the  case of a deficit)
        of  the cumulative  consolidated net  income of  the Company  and its
        Subsidiaries  for the  period commencing after  October 31,  1994 and
        ending on and including  the date such Restricted Payment is declared
        or made, and

            (2) at  the time of such declaration and  immediately before, and
    after giving effect to, such  Restricted Payment, no Default  or Event of
    Default exists or would exist.

        (b) The Company  shall not authorize a  Distribution on any  class of
its capital stock that is not payable within 90 days of authorization.

    8.13ERISA.  The Company shall not, and  shall not suffer or permit any of
its ERISA Affiliates to:  (a) engage in a prohibited transaction or violation
of the  fiduciary responsibility  rules with  respect to  any Plan  which has
resulted or  could  reasonably be  expected  to result  in  liability of  the
Company in an aggregate  amount in excess of  $1,000,000; or (b) engage  in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.

    8.14Tangible  Net Worth.  The  Company shall not  permit, as of  the last
day of any fiscal quarter, its Tangible Net Worth to be less than $70,000,000
plus 50% of consolidated  net income after  income taxes (but  without giving
effect  to  any  net  losses)  earned  in  any  quarterly  accounting  period
commencing after October 31, 1997 plus 50% of any Net Issuance Proceeds after
the date hereof.

    8.15Leverage Ratio.  The Company shall not  permit, as of the last day of
any fiscal quarter, its Leverage Ratio to exceed 2.50 to 1.00.

    8.16Fixed  Charge Coverage Ratio.   The Company  shall not permit,  as of
the last day  of any fiscal  quarter, its Fixed  Charge Coverage Ratio  to be
less than 1.50 to 1.00.

    8.17Change in Business.   The Company shall not, and  shall not suffer or
permit  any  Subsidiary  to,   engage  in  any  material   line  of  business
substantially different  from  those  lines of  business  carried  on by  the
Company and its Subsidiaries on the date hereof.

    8.18Accounting Changes.   The Company shall not, and  shall not suffer or
permit any Subsidiary to, make any significant change in accounting treatment
or reporting practices, except as required by GAAP, or change the fiscal year
of the  Company  or of  any  Subsidiary; except  that  the  Company shall  be
permitted to change  to the  Company's fiscal  year the  fiscal year  of Flex
Products, Netra Corporation, or any Subsidiary acquired  by the Company after
the date of this Agreement.

    8.19SICPA Agreements.

        (a) The  Company  shall  not  materially  amend   any  of  the  SICPA
Agreements without the prior written consent of the Majority Banks.

        (b) (1)  The Company shall give  the Banks, through the Agent, notice
    of each proposed material amendment to any or all of the SICPA Agreements
    not less than  20 days prior  to the date  the Company proposes  to enter
    into any  such  amendment.   Each  notice under  this  subsection, to  be
    effective, must  include a  full and  complete explanation  (in form  and
    detail acceptable  to  the  Majority  Banks)  of the  proposed  amendment
    covered by such notice and the  20 day period commences on  the day after
    which such notice is received by the Agent.

            (2)  The Majority Banks shall,  within such 20 day period, advise
    the Agent whether the Majority  Banks object to the  amendment covered by
    such notice.  Failure of the Majority Banks to object  within such 20 day
    period shall be deemed a consent to the amendment by the Majority Banks.

        (c) The Company may elect to give the Banks notice through the Agent,
describing a proposed amendment  to any or all  of the SICPA Agreements.   If
the Company elects to give the Banks notice under  this subsection, the Banks
shall have a period of five  calendar days (but not less  than three Business
Days) within  which to  advise the  Company whether  the Banks  consider such
proposed amendment  a material  amendment.   Failure to  respond within  such
period shall be deemed  notice by the Banks  that such proposed  amendment is
not a material amendment, in which case the Company need  not comply with the
provisions of  subsection (b)  of this  Section.   If  the  Banks advise  the
Company that such proposed amendment is not a material amendment, such advise
shall bind the  Banks.  If  the Banks advise  the Company that  such proposed
amendment  is  a  material  amendment,  the  Company  must  comply  with  the
provisions of  subsection  (b)  of this  Section.    Each notice  under  this
subsection must, in  order to  be effective, specifically  refer to  (y) this
subsection and (z)  the period  within which  a response  is required  if the
amendment described in the notice is to be considered a material amendment.

        (d) The Company understands  that two of the  fundamental premises on
which the Banks' decision to grant the credit provided  in this Agreement are
the terms and provisions of the SICPA Agreements as in effect  as of the date
of this Agreement, and therefore any material amendment to any  or all of the
SICPA Agreements will affect these fundamental premises.  Any decision by any
Bank to object to a proposed amendment to either or  both of these Agreements
will be in light of such effect.

        (e) The Company also understands that a failure to obtain the consent
of Majority  Banks  to a  proposed  amendment  to any  or  all  of the  SICPA
Agreements is an  Event of Default  if the Majority  Banks disagree  with the
Company's determination that a  proposed amendment is  not material and  as a
result notice of the  proposed amendment required  under this Section  is not
given to the Agent.

                                  ARTICLE IX
                              EVENTS OF DEFAULT

    9.01Event  of Default.  Any  of the following shall  constitute an "Event
of Default":

        (a) Non-Payment.  The Company fails to  pay, (i) when and as required
to be  paid  herein, any  amount  of principal  of  any Loan  or  of any  L/C
Obligation, or  (ii)  within  five  days  after the  same  becomes  due,  any
interest, fee or any other amount  payable hereunder or under  any other Loan
Document; or

        (b) Representation or  Warranty.  Any  representation or  warranty by
the Company or any Subsidiary made  or deemed made herein, in  any other Loan
Document, or which is contained in any certificate,  document or financial or
other statement by the  Company, any Subsidiary, or  any Responsible Officer,
furnished at any  time under this  Agreement, or in  or under any  other Loan
Document, is incorrect in any material  respect on or as of the  date made or
deemed made; or

        (c) Specific Defaults.   The Company fails to perform  or observe any
term, covenant or  agreement contained  in any of  Section 7.01,  7.02, 7.03,
7.12, or in Article VIII, and, in the case of any term, covenant or agreement
contained in  any  of Sections  7.01  or 7.02,  such  default shall  continue
unremedied for a period of ten days after the occurrence thereof; or

        (d) Other  Defaults.   The Company  fails to  perform or  observe any
other term  or  covenant  contained  in  this Agreement  or  any  other  Loan
Document, and such default shall continue unremedied for a  period of 20 days
after the earlier of  (i) the date upon  which a Responsible Officer  knew or
reasonably should have  known of  such failure  or (ii)  the date  upon which
written notice thereof is given to the Company by the Agent or any Bank; or

        (e) Cross-Default.   (i) The Company or  any Subsidiary (A)  fails to
make any  payment in  respect of  any Indebtedness  or Contingent  Obligation
(other than  in respect  of  Swap Contracts)  having  an aggregate  principal
amount (including  undrawn  committed  or  available  amounts  and  including
amounts owing  to  all  creditors under  any  combined  or syndicated  credit
arrangement) of more than $2,000,000 when due (whether by scheduled maturity,
required prepayment,  acceleration, demand,  or otherwise)  and such  failure
continues after the applicable grace  or notice period, if  any, specified in
the relevant document on the date of such failure; or (B) fails to perform or
observe any other condition  or covenant, or any  other event shall  occur or
condition exist,  under any  agreement  or instrument  relating  to any  such
Indebtedness or Contingent Obligation,  and such failure continues  after the
applicable grace or notice period, if any, specified in the relevant document
on the date of such failure if the effect of such failure, event or condition
is to  cause, or  to permit  the holder  or holders  of such  Indebtedness or
beneficiary or beneficiaries of such  Indebtedness (or a trustee  or agent on
behalf of such holder  or holders or  beneficiary or beneficiaries)  to cause
such Indebtedness to be  declared to be due  and payable prior to  its stated
maturity, or such Contingent Obligation to become  payable or cash collateral
in respect  thereof  to  be demanded  or  (ii) there  occurs under  any  Swap
Contract an  Early  Termination  Date  (as  defined in  such  Swap  Contract)
resulting from (1) any event of default under such Swap  Contract as to which
the Company or  any Subsidiary is  the Defaulting Party  (as defined  in such
Swap Contract) or (2) any Termination Event  (as so defined) as  to which the
Company or  any Subsidiary  is an  Affected Party  (as so  defined), and,  in
either event,  the  Swap  Termination  Value  owed by  the  Company  or  such
Subsidiary as a result thereof is greater than $2,000,000; or

        (f) Insolvency; Voluntary  Proceedings.  The Company  or any Material
Subsidiary (i) ceases or fails to  be solvent, or generally fails  to pay, or
admits in writing its inability to pay, its debts as they become due, subject
to applicable grace periods, if any, whether at stated maturity or otherwise;
(ii) voluntarily ceases to conduct its business in the ordinary course; (iii)
commences any Insolvency Proceeding with respect to itself; or (iv) takes any
action to effectuate or authorize any of the foregoing; or

        (g) Involuntary Proceedings.

            (1) Any  involuntary Insolvency Proceeding is  commenced or filed
    against the Company  or any Material  Subsidiary, or any  writ, judgment,
    warrant of attachment, execution or similar process,  is issued or levied
    against a substantial part of the Company's  or any Material Subsidiary's
    properties, and any such  proceeding or petition shall  not be dismissed,
    or such  writ,  judgment, warrant  of  attachment,  execution or  similar
    process shall not  be released,  vacated or fully  bonded within  60 days
    after commencement, filing or levy;

            (2) the  Company or any  Material Subsidiary admits  the material
    allegations of a petition against it in any  Insolvency Proceeding, or an
    order for relief (or similar order under non-U.S. law)  is ordered in any
    Insolvency Proceeding; or

            (3) the  Company  or any  Material Subsidiary  acquiesces in  the
    appointment of a  receiver, trustee, custodian,  conservator, liquidator,
    mortgagee in possession (or agent therefor), or  other similar Person for
    itself or a substantial portion of its property or business; or

        (h) ERISA.

            (1) An ERISA Event shall occur  with respect to a Pension Plan or
    Multiemployer Plan which has resulted or could  reasonably be expected to
    result in liability of the Company under Title IV of ERISA to the Pension
    Plan, Multiemployer Plan or the PBGC in an aggregate  amount in excess of
    $1,000,000;

            (2) the aggregate  amount of Unfunded Pension Liability among all
    Pension Plans at any time exceeds $1,000,000; or

            (3) the  Company or any  ERISA Affiliate shall  fail to  pay when
    due, after the expiration of any applicable grace period, any installment
    payment with respect  to its withdrawal  liability under Section  4201 of
    ERISA under  a Multiemployer  Plan in  an aggregate  amount in  excess of
    $1,000,000; or

        (i) Monetary  Judgments.   One or  more non-interlocutory  judgments,
non-interlocutory orders, decrees  or arbitration  awards is  entered against
the Company or any Subsidiary involving in the aggregate  a liability (to the
extent not  covered by  independent  third-party insurance  as  to which  the
insurer does not  dispute coverage)  as to  any single  or related  series of
transactions, incidents or  conditions, of $5,000,000  or more, and  the same
shall remain unvacated and  unstayed pending appeal for  a period of  20 days
after the entry thereof; or

        (j) Non-Monetary  Judgments.   Any  non-monetary  judgment, order  or
decree is entered against the Company  or any Subsidiary which  does or would
reasonably be expected to have a Material Adverse Effect,  and there shall be
any period of 10 consecutive days during which a stay  of enforcement of such
judgment or order, by reason of  a pending appeal or otherwise,  shall not be
in effect; or

        (k) Change of  Control.  More  than 50% of  the Company's  issued and
outstanding common stock is owned as a block by a Person or Persons acting in
concert with Persons other  than the Persons who  own the Company's  stock on
the date of this Agreement, if such change of control  continues for a period
of 30 days from the earlier of (i) the date the Company  advises Bank of such
change of control or (ii) the date Bank advises the  Company that such change
of control will be an Event of Default upon the lapse  of such 30-day period;
or

        (l) Loss of Licenses.  Any Governmental Authority revokes or fails to
renew any  material  license,  permit or  franchise  of  the Company  or  any
Subsidiary, or  the  Company  or any  Subsidiary  for  any reason  loses  any
material license,  permit or  franchise,  or the  Company  or any  Subsidiary
suffers the  imposition  of  any  restraining  order, escrow,  suspension  or
impound  of   funds  in   connection  with   any   proceeding  (judicial   or
administrative) with respect  to any material  license, permit  or franchise;
provided, however, that to the extent  any of the foregoing  shall occur with
respect to a Subsidiary, it shall  not constitute an Event  of Default unless
such occurrence  could reasonably  be  expected to  have  a Material  Adverse
Effect; or

        (m) Adverse Change.  There occurs a Material Adverse Effect.

    9.02Remedies.   If any Event of  Default occurs, the Agent  shall, at the
request of, or may, with the consent of, the Majority Banks:

        (a) declare  the  commitment of  each  Bank  to  make Loans  and  any
obligation of the Issuing Bank to  Issue Letters of Credit  to be terminated,
whereupon such commitments and obligation shall be terminated;

        (b) declare an amount  equal to the maximum aggregate  amount that is
or at  any  time  thereafter  may  become available  for  drawing  under  any
outstanding Letters  of Credit  (whether or  not any  beneficiary shall  have
presented, or shall be entitled at such time to present,  the drafts or other
documents required to draw  under such Letters  of Credit) to  be immediately
due and  payable (such  amount to  be  held as  Cash Collateral  for the  L/C
Obligations and any other Obligations and promptly returned to the Company as
and to  the extent  the outstanding  Letters of  Credit expire  without being
drawn and the other Obligations are satisfied); and

        (c) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon,  and all other amounts  owing or payable
hereunder or under any other Loan Document to be immediately due and payable;

in all such cases without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the Company; and

        (d) exercise  on  behalf of  itself  and  the  Banks all  rights  and
remedies available to it and the Banks under the Loan Documents or applicable
law;

provided, however,  that  upon  the  occurrence  of any  event  specified  in
subsection (f)  or  (g)  of Section  9.01  (in  the  case  of clause  (1)  of
subsection (g) upon the  expiration of the 60-day  period mentioned therein),
the obligation of each Bank to  make Loans and any obligation  of the Issuing
Bank to Issue Letters of Credit shall automatically  terminate and the unpaid
principal amount of all outstanding Loans and all  interest and other amounts
as aforesaid shall automatically  become due and payable  without further act
of the Agent, the Issuing Bank, or any Bank.

    9.03Rights Not Exclusive.  The  rights provided for in this Agreement and
the other Loan Documents  are cumulative and are  not exclusive of  any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other  instrument,  document  or  agreement  now  existing  or  hereafter
arising.

    9.04Certain  Financial  Covenant  Defaults.   In  the  event that,  after
taking into account any extraordinary charge to earnings taken or to be taken
as of the end of any fiscal period of the Company (a "Charge"), and if solely
by virtue of such  Charge, there would exist  an Event of Default  due to the
breach of any  of Sections 8.14  through 8.16, as  of such fiscal  period end
date, such Event of Default shall be deemed to arise upon  the earlier of (a)
the date after  such fiscal period  end date on  which the  Company announces
publicly it  will take,  is taking  or has  taken such  Charge (including  an
announcement in the form of a  statement in a report filed with  the SEC) or,
if such announcement is made prior  to such fiscal period end  date, the date
that is such fiscal period end date, and (b) the date the Company delivers to
the Agent its audited  annual or unaudited quarterly  financial statements in
respect of such fiscal period reflecting such Charge as taken.

                                  ARTICLE X

                                  THE AGENT

     10.01 Appointment and Authorization.

          (a)  Each  Bank  hereby  irrevocably  (subject  to  Section  10.09)
appoints, designates  and authorizes  the Agent  to take  such action  on its
behalf under the provisions  of this Agreement  and each other  Loan Document
and to  exercise  such  powers  and  perform such  duties  as  are  expressly
delegated to it by  the terms of this  Agreement or any other  Loan Document,
together  with   such   powers   as   are  reasonably   incidental   thereto.
Notwithstanding any  provision to  the contrary  contained elsewhere  in this
Agreement or in any other Loan Document, the Agent shall  not have any duties
or responsibilities, except those  expressly set forth herein,  nor shall the
Agent have or be deemed to have any fiduciary relationship with any Bank, and
no implied  covenants, functions,  responsibilities,  duties, obligations  or
liabilities shall be read into this  Agreement or any other  Loan Document or
otherwise exist against  the Agent.  Without limiting  the generality  of the
foregoing sentence,  the  use of  the  term "agent"  in  this Agreement  with
reference to the  Agent is  not intended  to connote  any fiduciary  or other
implied (or  express)  obligations  arising  under  agency  doctrine  of  any
applicable law.   Instead, such  term is used  merely as  a matter  of market
custom,  and  is  intended  to  create  or  reflect  only  an  administrative
relationship between independent contracting parties.

           (b) The Issuing Bank shall act on behalf of the Banks with respect
to any Letters of Credit Issued by it and  the documents associated therewith
until such time and except for so long as the Agent may  agree at the request
of the Majority  Banks to  act for  such Issuing  Bank with  respect thereto;
provided, however, that the Issuing Bank  shall have all of  the benefits and
immunities (i) provided to the Agent in this Article with respect to any acts
taken or omissions suffered by the Issuing Bank in connection with Letters of
Credit Issued by it  or proposed to be  Issued by it and  the application and
agreements for letters of credit pertaining to the Letters of Credit as fully
as if the term  "Agent", as used in  this Article, included the  Issuing Bank
with respect to such acts or omissions, and  (ii) as additionally provided in
this Agreement with respect to the Issuing Bank.

     10.02 Delegation of Duties   The  Agent may execute  any of  its duties
under this  Agreement  or  any other  Loan  Document  by or  through  agents,
employees or attorneys-in-fact  and shall  be entitled  to advice  of counsel
concerning all matters pertaining to such duties.  The Agent (but only in its
capacity as Agent) shall not be responsible for  the negligence or misconduct
of any agent or attorney-in-fact that it selects with reasonable care.

     10.03 Liability of Agent.   None of the Agent-Related  Persons shall (i)
be liable for any action taken or omitted to be taken by any of them under or
in connection  with  this  Agreement  or  any  other  Loan  Document  or  the
transactions contemplated  hereby (except  for its  own  gross negligence  or
willful misconduct), or (ii) be responsible in any manner to any of the Banks
for any recital, statement, representation or warranty made by the Company or
any Subsidiary or Affiliate of the Company, or any officer thereof, contained
in this  Agreement or  in any  other Loan  Document, or  in any  certificate,
report, statement  or  other document  referred  to or  provided  for in,  or
received by the  Agent under  or in  connection with,  this Agreement  or any
other  Loan   Document,   or   the  validity,   effectiveness,   genuineness,
enforceability or sufficiency of  this Agreement or any  other Loan Document,
or for any failure of the Company or any other party to  any Loan Document to
perform its  obligations hereunder  or thereunder.   No  Agent-Related Person
shall be under any  obligation to any Bank  to ascertain or to  inquire as to
the observance  or performance  of any  of  the agreements  contained in,  or
conditions of, this Agreement or any  other Loan Document, or  to inspect the
properties, books  or  records  of  the  Company  or  any  of  the  Company's
Subsidiaries or Affiliates.

     10.04 Reliance by Agent.

           (a) The Agent  shall  be  entitled to  rely,  and  shall be  fully
protected  in  relying,  upon  any  writing,   resolution,  notice,  consent,
certificate, affidavit,  letter,  telegram,  facsimile,  telex  or  telephone
message, statement or  other document  or conversation believed  by it  to be
genuine and  correct and  to have  been signed,  sent or  made by  the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to the Company),  independent accountants and other  experts selected
by the Agent. The  Agent shall be fully  justified in failing or  refusing to
take any action  under this Agreement  or any other  Loan Document  unless it
shall first receive such  advice or concurrence of  the Majority Banks  as it
deems appropriate and, if  it so requests, it  shall first be  indemnified to
its satisfaction by the Banks against any and all liability and expense which
may be incurred  by it by  reason of  taking or continuing  to take  any such
action.  The Agent  shall in all  cases be fully  protected in acting,  or in
refraining from acting, under  this Agreement or  any other Loan  Document in
accordance with a request or consent  of the Majority Banks  and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all of the Banks.

           (b) For purposes  of determining  compliance  with the  conditions
specified in Section 5.01, each  Bank that has executed  this Agreement shall
be deemed to have consented to, approved or accepted or to be satisfied with,
each document  or other  matter either  sent by  the Agent  to such  Bank for
consent, approval, acceptance or  satisfaction, or required thereunder  to be
consented to or approved by or acceptable or satisfactory to the Bank.

     10.05 Notice of  Default.    The  Agent  shall not  be  deemed  to  have
knowledge or notice  of the occurrence  of any Default  or Event  of Default,
except with respect  to defaults  in the payment  of principal,  interest and
fees required to be  paid to the Agent  for the account of  the Banks, unless
the Agent  shall have  received written  notice from  a Bank  or the  Company
referring to this Agreement, describing such Default or  Event of Default and
stating that such notice is a "notice of default".  The Agent will notify the
Banks of its receipt  of any such notice.   The Agent shall  take such action
with respect to such Default or  Event of Default as may be  requested by the
Majority Banks in accordance with Article IX;  provided, however, that unless
and until the Agent has received  any such request, the Agent  may (but shall
not be obligated to)  take such action, or  refrain from taking  such action,
with respect to such Default or  Event of Default as it  shall deem advisable
or in the best interest of the Banks.

     10.06 Credit  Decision.    Each  Bank  acknowledges  that  none  of  the
Agent-Related Persons has made any representation or warranty to it, and that
no act by the Agent hereinafter taken, including any review of the affairs of
the  Company  and  its  Subsidiaries,  shall  be  deemed  to  constitute  any
representation or warranty  by any  Agent-Related Person to  any Bank.   Each
Bank represents to the Agent that it has,  independently and without reliance
upon any Agent-Related Person and based on such  documents and information as
it has deemed appropriate, made  its own appraisal of  and investigation into
the business, prospects, operations, property, financial  and other condition
and creditworthiness of the Company and its  Subsidiaries, and all applicable
bank regulatory laws  relating to the  transactions contemplated  hereby, and
made its own decision  to enter into this  Agreement and to extend  credit to
the Company hereunder.  Each Bank also represents that it will, independently
and without  reliance  upon  any  Agent-Related  Person  and  based  on  such
documents and information as it shall deem appropriate  at the time, continue
to make its own  credit analysis, appraisals and  decisions in taking  or not
taking action under this Agreement and the other Loan  Documents, and to make
such investigations  as  it  deems  necessary  to inform  itself  as  to  the
business, prospects, operations, property, financial and  other condition and
creditworthiness of  the Company.    Except for  notices,  reports and  other
documents expressly  herein required  to be  furnished  to the  Banks by  the
Agent, the Agent  shall not have  any duty or  responsibility to  provide any
Bank with any credit or other information concerning the business, prospects,
operations, property, financial  and other  condition or  creditworthiness of
the Company which may  come into the possession  of any of  the Agent-Related
Persons.

     10.07 Indemnification  of  Agent    Whether  or  not  the  transactions
contemplated hereby are  consummated, the Banks  shall indemnify  upon demand
the Agent-Related Persons (to  the extent not reimbursed  by or on  behalf of
the Company and without limiting the obligation of the Company to do so), pro
rata, from  and  against  any  and  all  Indemnified  Liabilities;  provided,
however, that no Bank  shall be liable for  the payment to  the Agent-Related
Persons of any portion of such Indemnified  Liabilities resulting solely from
such Person's gross negligence or willful misconduct.   Without limitation of
the foregoing,  each  Bank shall  reimburse  the Agent  upon  demand for  its
ratable share  of any  costs or  out-of-pocket  expenses (including  Attorney
Costs) incurred by the  Agent in connection with  the preparation, execution,
delivery, administration,  modification,  amendment  or enforcement  (whether
through negotiations, legal proceedings or otherwise) of,  or legal advice in
respect of rights or  responsibilities under, this Agreement,  any other Loan
Document, or  any document  contemplated by  or  referred to  herein, to  the
extent that the Agent is not reimbursed for such expenses by  or on behalf of
the Company.  The  undertaking in this Section  shall survive the  payment of
all Obligations hereunder and the resignation or replacement of the Agent.

     10.08 Agent in Individual  Capacity.  BofA  and its Affiliates  may make
loans to, issue letters of credit  for the account of,  accept deposits from,
acquire equity  interests in  and generally  engage in  any kind  of banking,
trust, financial advisory,  underwriting or other  business with  the Company
and its Subsidiaries and Affiliates as though BofA were not  the Agent or the
Issuing Bank hereunder and  without notice to or  consent of the Banks.   The
Banks acknowledge that, pursuant  to such activities, BofA  or its Affiliates
may receive information  regarding the Company  or its  Affiliates (including
information that may  be subject to  confidentiality obligations in  favor of
the Company or such Subsidiary) and acknowledge that the Agent shall be under
no obligation  to provide  such information  to them.   With  respect to  its
Loans, BofA shall have the same rights and powers under this Agreement as any
other Bank and may exercise the  same as though it were not  the Agent or the
Issuing Bank, and the terms "Bank" and "Banks" include BofA in its individual
capacity.

     10.09 Successor Agent.    The  Agent may,  and  at  the request  of  the
Majority Banks shall, resign as Agent upon 30 days' notice to  the Banks.  If
the Agent resigns under this Agreement, the Majority Banks shall appoint from
among the Banks a  successor agent for the  Banks.  If no  successor agent is
appointed prior to the  effective date of the  resignation of the  Agent, the
Agent may  appoint,  after  consulting with  the  Banks  and the  Company,  a
successor agent from among the Banks.  Upon the acceptance of its appointment
as successor agent hereunder, such  successor agent shall succeed  to all the
rights, powers and duties  of the retiring Agent  and the term  "Agent" shall
mean such successor  agent and the  retiring Agent's appointment,  powers and
duties as Agent shall be terminated.  After  any retiring Agent's resignation
hereunder as Agent,  the provisions  of this Article  and Sections  11.04 and
11.05 shall inure to  its benefit as  to any actions  taken or omitted  to be
taken by it while it was  Agent under this Agreement.  If  no successor agent
has accepted appointment as  Agent by the date  which is 30 days  following a
retiring Agent's  notice  of resignation,  the  retiring Agent's  resignation
shall nevertheless thereupon become effective and the Banks shall perform all
of the duties of the Agent hereunder until such time, if any, as the Majority
Banks appoint a successor agent  as provided for above.   Notwithstanding the
foregoing, however, BofA may  not be removed as  the Agent at the  request of
the Majority  Banks unless  BofA  shall also  simultaneously  be replaced  as
"Issuing Bank"  hereunder pursuant  to documentation  in  form and  substance
reasonably satisfactory to BofA.

     10.10 Withholding Tax.

           (a) If any Bank is  a "foreign corporation, partnership  or trust"
within the meaning  of the  Code and such  Bank claims  exemption from,  or a
reduction of, U.S. withholding tax under  Sections 1441 or 1442  of the Code,
such Bank agrees with and in favor of the Agent, to deliver to the Agent:

           (1) if such  Bank claims  an exemption  from, or  a reduction  of,
    withholding tax under a United States tax  treaty, two properly completed
    and executed copies of IRS Form  1001 before the payment  of any interest
    in the first calendar year and before the payment of any interest in each
    third succeeding calendar  year during which  interest may be  paid under
    this Agreement;

           (2) if such Bank claims that interest paid under this Agreement is
    exempt from  United  States withholding  tax  because  it is  effectively
    connected with  a  United States  trade  or business  of  such Bank,  two
    properly completed  and  executed  copies of  IRS  Form  4224 before  the
    payment of any interest is due in the first taxable year of such Bank and
    in each succeeding taxable year of such Bank during which interest may be
    paid under this Agreement; and

            (3)     such other form  or forms  as may  be required  under the
    Code or other laws of the United States as a condition to exemption from,
    or reduction of, United States withholding tax.

Such Bank agrees to promptly notify the Agent of  any change in circumstances
which would modify or render invalid any claimed exemption or reduction.

           (b) If  any  Bank   claims  exemption   from,  or   reduction  of,
withholding tax under a United States  tax treaty by providing  IRS Form 1001
and such  Bank  sells,  assigns,  grants  a participation  in,  or  otherwise
transfers all or part  of the Obligations of  the Company to such  Bank, such
Bank agrees to notify  the Agent of the  percentage amount in which  it is no
longer the beneficial owner of Obligations  of the Company to such  Bank.  To
the extent of such  percentage amount, the Agent  will treat such  Bank's IRS
Form 1001 as no longer valid.

           (c) If any Bank claiming exemption from  United States withholding
tax by  filing  IRS  Form  4224  with the  Agent  sells,  assigns,  grants  a
participation in, or otherwise  transfers all or  part of the  Obligations of
the Company to such Bank,  such Bank agrees to  undertake sole responsibility
for complying with the withholding tax requirements  imposed by Sections 1441
and 1442 of the Code.

           (d) If any  Bank is  entitled  to a  reduction  in the  applicable
withholding tax, the  Agent may  withhold from any  interest payment  to such
Bank an amount equivalent to the applicable withholding tax after taking into
account such  reduction.    However,  if  the forms  or  other  documentation
required by subsection (a)  of this Section are  not delivered to  the Agent,
then the  Agent may  withhold from  any  interest payment  to  such Bank  not
providing such  forms or  other  documentation an  amount  equivalent to  the
applicable withholding tax  imposed by  Sections 1441 and  1442 of  the Code,
without reduction.

           (e) If the IRS or  any other Governmental Authority  of the United
States or other jurisdiction asserts a claim that the  Agent did not properly
withhold tax from amounts paid to or for the account of any Bank (because the
appropriate form was  not delivered,  was not  properly executed,  or because
such Bank  failed to  notify the  Agent of  a change  in circumstances  which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any  other reason)  such Bank  shall indemnify  the Agent  fully for  all
amounts paid,  directly or  indirectly, by  the  Agent as  tax or  otherwise,
including penalties  and interest,  and including  any taxes  imposed by  any
jurisdiction on the amounts payable to the Agent under this Section, together
with all costs and  expenses (including Attorney  Costs).  The  obligation of
the Banks under this subsection shall survive the  payment of all Obligations
and the resignation or replacement of the Agent.


                                  ARTICLE XI

                                MISCELLANEOUS

    11.01   Amendments and Waivers.  No amendment  or waiver of any provision
of this Agreement or any other Loan Document, and no  consent with respect to
any departure by the  Company therefrom, shall  be effective unless  the same
shall be in writing and signed by the Majority Banks (or by  the Agent at the
written request of the  Majority Banks) and  the Company and  acknowledged by
the Agent, and then any such waiver or consent shall be effective only in the
specific instance and  for the  specific purpose  for which  given; provided,
however, that no such waiver, amendment, or consent  shall, unless in writing
and signed by all the Banks and the Company and acknowledged by the Agent, do
any of the following:

        (a) increase or extend  the Commitment of any Bank  (or reinstate any
Commitment terminated pursuant to Section 9.02);

        (b) postpone or delay  any date fixed by this Agreement  or any other
Loan Document for any payment of principal, (including mandatory prepayments)
interest, fees or other amounts due  to the Banks (or any  of them) hereunder
or under any other Loan Document;

        (c) reduce the principal of, or the rate of interest specified herein
on any Loan,  or (subject  to clause (ii)  below) any  fees or  other amounts
payable hereunder or under any other Loan Document;

        (d) change  the percentage  of the  Commitments or  of the  aggregate
unpaid principal amount of the Loans  which is required for the  Banks or any
of them to take any action hereunder; or

        (e) amend  this Section,  or Section  2.14, or  any provision  herein
providing for consent or other action by all Banks;

and, provided further, that (i) no amendment, waiver or consent shall, unless
in writing and signed by the  Issuing Bank in addition to  the Majority Banks
or all the  Banks, as the  case may be,  affect the rights  or duties  of the
Issuing Bank under this Agreement or any L/C-Related Document relating to any
Letter of Credit Issued or to  be Issued by it, (ii) no  amendment, waiver or
consent shall, unless in writing and  signed by the Agent in  addition to the
Majority Banks or all  the Banks, as  the case may  be, affect the  rights or
duties of the  Agent under  this Agreement  or any  other Loan  Document, and
(iii) the  Fee Letter  may be  amended,  or rights  or privileges  thereunder
waived, in a writing executed by the parties thereto.

    11.02  Notices.

        (a) All  notices,  requests  and other  communications  shall  be  in
writing (including,  unless  the  context  expressly otherwise  provides,  by
facsimile transmission, provided that  any matter transmitted by  the Company
by facsimile (i) shall  be immediately confirmed by  a telephone call  to the
recipient at  the  number specified  on  Schedule 11.02,  and  (ii) shall  be
followed promptly by delivery  of a hard  copy original thereof)  and mailed,
faxed or delivered, to the address or facsimile  number specified for notices
on Schedule 11.02; or, as directed to the Company or the Agent, to such other
address as shall be designated by such party in a written notice to the other
parties, and as directed to any  other party, at such other  address as shall
be designated by such party in a written notice to the Company and the Agent.

        (b) All  such  notices,  requests   and  communications  shall,  when
transmitted by overnight delivery, or faxed, be  effective when delivered for
overnight (next-day) delivery,  or transmitted in  legible form  by facsimile
machine, respectively, or if  mailed, upon the  third Business Day  after the
date deposited into  the U.S.  mail, or if  delivered, upon  delivery; except
that notices pursuant to  Article II, III or  X shall not be  effective until
actually received by the  Agent, and notices pursuant  to Article III  to the
Issuing Bank shall not  be effective until  actually received by  the Issuing
Bank at the address specified for the "Issuing Bank" on Schedule 11.02.

        (c) Any  agreement of  the  Agent and  the  Banks  herein to  receive
certain notices by telephone or  facsimile is solely for  the convenience and
at the request of the Company.  The Agent and the Banks  shall be entitled to
rely on the authority of any  Person purporting to be a  Person authorized by
the Company to give  such notice and the  Agent and the Banks  shall not have
any liability to the Company or  other Person on account of  any action taken
or not taken by  the Agent or the  Banks in reliance upon  such telephonic or
facsimile notice.  The obligation of  the Company to repay the  Loans and L/C
Obligations shall not be affected in any way or to any  extent by any failure
by the Agent and the Banks to receive written  confirmation of any telephonic
or facsimile  notice  or  the  receipt  by  the Agent  and  the  Banks  of  a
confirmation which is at variance with the terms understood  by the Agent and
the Banks to be contained in the telephonic or facsimile notice.

    11.03   No Waiver;  Cumulative Remedies.  No  failure to exercise  and no
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder, shall operate  as a waiver thereof;   nor shall
any single  or partial  exercise of  any  right, remedy,  power or  privilege
hereunder preclude any other or  further exercise thereof or  the exercise of
any other right, remedy, power or privilege.

    11.04   Costs and Expenses.  The Company shall:

        (a) whether  or   not  the   transactions  contemplated   hereby  are
consummated, pay or reimburse  BofA (including in  its capacity as  Agent and
Issuing Bank) within five  Business Days after demand  (subject to subsection
5.01(d)) for  all  costs and  expenses  incurred by  BofA  (including in  its
capacity as  Agent and  Issuing  Bank) in  connection  with the  development,
preparation, delivery, administration  and execution  of, and  any amendment,
supplement,  waiver  or  modification  to  (in  each  case,  whether  or  not
consummated), this  Agreement,  any Loan  Document  and  any other  documents
prepared in connection  herewith or  therewith, and  the consummation  of the
transactions contemplated hereby  and thereby, including  reasonable Attorney
Costs incurred by BofA (including in its capacity as  Agent and Issuing Bank)
with respect thereto; and

        (b) pay or  reimburse the  Agent and each  Bank within  five Business
Days after demand (subject to subsection 5.01(d)) for  all costs and expenses
(including  Attorney  Costs)  incurred   by  them  in  connection   with  the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or  any other Loan Document  during the existence  of an
Event of Default or after acceleration of the  Loans (including in connection
with any "workout" or restructuring regarding the Loans, and including in any
Insolvency Proceeding or appellate proceeding).

    11.05   Company  Indemnification.    Whether   or  not  the  transactions
contemplated hereby are consummated, the Company shall indemnify and hold the
Agent-Related Persons, and  each Bank  and each  of its  respective officers,
directors,  employees,  counsel,  agents  and   attorneys-in-fact  (each,  an
"Indemnified Person")  harmless from  and against  any  and all  liabilities,
obligations, losses,  damages, penalties,  actions, judgments,  suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever  which may  at any  time (including  at any  time following
repayment of the  Loans, the termination  of the Letters  of Credit,  and the
termination, resignation or  replacement of the  Agent or replacement  of any
Bank)  be imposed on, incurred by or asserted against any  such Person in any
way relating to or arising out of this Agreement or any document contemplated
by or referred  to herein,  or the transactions  contemplated hereby,  or any
action taken or omitted by any such Person under or in connection with any of
the foregoing,  including with  respect to  any investigation,  litigation or
proceeding (including  any  Insolvency  Proceeding or  appellate  proceeding)
related to or arising out of this Agreement or the Loans or Letters of Credit
or the use of the proceeds thereof, whether or not  any Indemnified Person is
a  party  thereto   (all  the   foregoing,  collectively,   the  "Indemnified
Liabilities"); provided, that the Company shall  have no obligation hereunder
to any Indemnified Person  with respect to Indemnified  Liabilities resulting
solely from the  gross negligence or  willful misconduct of  such Indemnified
Person. The agreements  in this  Section shall survive  payment of  all other
Obligations.

    11.06   Payments  Set Aside.   To  the extent  that the  Company makes  a
payment to the Agent or the  Banks, or the Agent or the  Banks exercise their
right of set-off,  and such payment  or the proceeds  of such set-off  or any
part thereof  are  subsequently invalidated,  declared  to  be fraudulent  or
preferential, set  aside or  required (including  pursuant to  any settlement
entered into by the Agent or  such Bank in its discretion) to  be repaid to a
trustee, receiver  or any  other  party, in  connection  with any  Insolvency
Proceeding or  otherwise,  then  (a)  to  the extent  of  such  recovery  the
obligation or  part thereof  originally  intended to  be  satisfied shall  be
revived and continued  in full force  and effect as  if such payment  had not
been made  or such  set-off had  not occurred,  and (b)  each Bank  severally
agrees to pay to the  Agent upon demand its  pro rata share of  any amount so
recovered from or repaid by the Agent.

    11.07   Successors and Assigns   The provisions of  this Agreement shall
be binding upon  and inure  to the benefit  of the  parties hereto  and their
respective successors and assigns, except that the Company  may not assign or
transfer any of its  rights or obligations  under this Agreement  without the
prior written consent of the Agent and each Bank.

    11.08   Assignments, Participations, etc

        (a) Any Bank  may, with the prior  written consent of the  Company at
all times other  than during  the existence of  an Event  of Default  and the
Agent and  the  Issuing Bank,  which  consent of  the  Company  shall not  be
unreasonably withheld,  at  any  time assign  and  delegate  to one  or  more
Eligible Assignees  (provided that  no written  consent of  the Company,  the
Agent, or  the  Issuing  Bank  shall  be  required  in  connection  with  any
assignment and  delegation by  a Bank  to  an Eligible  Assignee  that is  an
Affiliate of such Bank) (each an "Assignee") all, or any ratable part of all,
of the Loans, the  Commitment, the L/C Obligations  and the other  rights and
obligations of such Bank hereunder, in a minimum amount of $5,000,000 (or the
remainder of  its  Loans,  Commitment  and  L/C  Obligations,  if  less  than
$5,000,000); provided, however, that  the Company and the  Agent may continue
to deal solely  and directly with  the assignor Bank  in connection  with the
interest so  assigned  to  an  Assignee  until (i)  written  notice  of  such
assignment,  together  with  payment  instructions,   addresses  and  related
information with  respect  to the  Assignee,  shall have  been  given to  the
Company and the Agent by such  Bank and the Assignee; (ii) such  Bank and its
Assignee shall have delivered to the Company and the  Agent an Assignment and
Acceptance in the form of Exhibit E  ("Assignment  and Acceptance") and (iii)
the assignor Bank has  paid to the  Agent a processing  fee in the  amount of
$4,000.

        (b) From and after the date that the Agent notifies the assignor Bank
that it has received (and that  the Agent and the Issuing  Bank have provided
their consents with  respect to)  an executed  Assignment and  Acceptance and
payment of the above-referenced  processing fee, (i) the  Assignee thereunder
shall be  a party  hereto and,  to  the extent  that  rights and  obligations
hereunder  have  been  assigned  to  it  pursuant   to  such  Assignment  and
Acceptance, shall have the  rights and obligations of  a Bank under  the Loan
Documents, and (ii) the  assignor Bank shall, to  the extent that  rights and
obligations hereunder and under  the other Loan Documents  have been assigned
by it pursuant to such  Assignment and Acceptance, relinquish  its rights and
be released from its obligations under the Loan Documents.

        (c) Immediately  upon  each  Assignee's  making  its  processing  fee
payment under the Assignment  and Acceptance, this Agreement  shall be deemed
to be amended to the extent, but only to the extent, necessary to reflect the
addition of  the Assignee  and  the resulting  adjustment  of the  Commitment
arising therefrom.  The Commitment  allocated to  each Assignee  shall reduce
such Commitment of the assigning Bank pro tanto.

        (d) Any Bank may at any time sell  to one or more commercial banks or
other Persons not Affiliates  of the Company (a  "Participant") participating
interests in any Loans, the Commitment  of that Bank and  the other interests
of that  Bank (the  "originating Bank")  hereunder and  under the  other Loan
Documents; provided,  however, that  (i) the  originating Bank's  obligations
under this Agreement shall remain unchanged,  (ii) the originating Bank shall
remain solely responsible for the performance  of such obligations, (iii) the
Company, the Issuing Bank,  and the Agent shall  continue to deal  solely and
directly with the originating Bank in connection  with the originating Bank's
rights and obligations under this Agreement and the other Loan Documents, and
(iv) no Bank shall transfer  or grant any participating  interest under which
the Participant has  rights to approve  any amendment to,  or any  consent or
waiver with respect to, this Agreement or any other  Loan Document, except to
the extent such amendment, consent or waiver  would require unanimous consent
of the Banks as described in the first proviso to Section  11.01. In the case
of any such participation, the  Participant shall be entitled  to the benefit
of Sections 4.01, 4.03,  and 11.05 as though  it were also a  Bank hereunder,
and if amounts outstanding under this Agreement are due  and unpaid, or shall
have been declared or shall have  become due and payable  upon the occurrence
of an Event of Default, each Participant shall be deemed to have the right of
set-off in respect of its participating interest in  amounts owing under this
Agreement to the same extent as  if the amount of  its participating interest
were owing directly to it as a Bank under this Agreement.

        (e) Notwithstanding any  other provision in this  Agreement, any Bank
may at any time create a security interest in, or pledge,  all or any portion
of its rights under  and interest in this  Agreement in favor of  any Federal
Reserve Bank in  accordance with  Regulation A  of the  FRB or  U.S. Treasury
Regulation 31 CFR  S203.14, and  such Federal Reserve  Bank may  enforce such
pledge or security interest in any manner permitted under applicable law.

    11.09   Confidentiality.   Each  Bank agrees  to  take and  to cause  its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information  identified as "confidential"
or "secret"    by the  Company  and provided  to  it by  the  Company or  any
Subsidiary, or by the Agent  on such Company's or  Subsidiary's behalf, under
this Agreement or  any other  Loan Document, and  neither it  nor any  of its
Affiliates shall use any such information other than in connection with or in
enforcement of this Agreement and  the other Loan Documents  or in connection
with other  business  now  or hereafter  existing  or  contemplated with  the
Company or any Subsidiary; except to  the extent such information  (i) was or
becomes generally  available  to  the  public  other  than  as  a  result  of
disclosure  by   the  Bank,   or  (ii)   was  or   becomes  available   on  a
non-confidential basis from  a source other  than the Company,  provided that
such source  is not  bound by  a confidentiality  agreement with  the Company
known to  the  Bank;  provided, however,  that  any  Bank may  disclose  such
information (A)  at  the  request  or  pursuant to  any  requirement  of  any
Governmental Authority to which the Bank is subject or  in connection with an
examination of such Bank by any  such authority; (B) pursuant  to subpoena or
other court  process; (C)  when required  to  do so  in  accordance with  the
provisions of any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding  to which the Agent,
any Bank  or their  respective Affiliates  may be  party; (E)  to the  extent
reasonably required in connection  with the exercise of  any remedy hereunder
or under any other Loan Document; (F) to such Bank's independent auditors and
other professional advisors;  (G) to any  Participant or Assignee,  actual or
potential,  provided  that  such  Person  agrees  in  writing  to  keep  such
information confidential to the same extent required  of the Banks hereunder;
(H) as to any Bank or  its Affiliate, as expressly permitted  under the terms
of any other  document or  agreement regarding  confidentiality to  which the
Company or any Subsidiary is party or is deemed party with  such Bank or such
Affiliate; and (I) to its Affiliates.

    11.10   Set-off.   In addition to  any rights and  remedies of  the Banks
provided by  law, if  an  Event of  Default  exists or  the  Loans have  been
accelerated, each  Bank is  authorized at  any time  and from  time to  time,
without prior notice  to the  Company, any  such notice  being waived  by the
Company to the fullest extent permitted by law, to set off  and apply any and
all deposits (general or  special, time or  demand, provisional or  final) at
any time held by, and other  indebtedness at any time owing by,  such Bank to
or for  the  credit  or the  account  of  the  Company  against any  and  all
Obligations owing to  such Bank, now  or hereafter existing,  irrespective of
whether or  not the  Agent or  such Bank  shall have  made demand  under this
Agreement  or  any  Loan  Document  and  although  such  Obligations  may  be
contingent or unmatured.  Each Bank agrees promptly to notify the Company and
the Agent after any such set-off and application made by such Bank; provided,
however, that the failure to give  such notice shall not  affect the validity
of such set-off and application.

    11.11   Notification of Addresses, Lending Offices, Etc  Each Bank shall
notify the Agent in writing of any changes in the address to which notices to
the Bank should be directed, of  addresses of any Lending  Office, of payment
instructions in respect  of all payments  to be made  to it hereunder  and of
such other administrative information as the Agent shall reasonably request.

    11.12   Counterparts.   This Agreement may be  executed in any  number of
separate counterparts, each of  which, when so  executed, shall be  deemed an
original, and  all of  said counterparts  taken together  shall be  deemed to
constitute but one and the same instrument.

    11.13   Severability.     The  illegality  or  unenforceability   of  any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect  or impair the legality or  enforceability of the
remaining provisions  of  this  Agreement  or  any  instrument  or  agreement
required hereunder.

    11.14   No Third Parties  Benefited.  This Agreement is  made and entered
into for the sole protection and legal benefit of the Company, the Banks, the
Agent and  the  Agent-Related Persons,  and  their  permitted successors  and
assigns, and no other Person shall be a direct  or indirect legal beneficiary
of, or have  any direct or  indirect cause of  action or claim  in connection
with, this Agreement or any of the other Loan Documents.

    11.15   Governing Law and Jurisdiction.

        (a) THIS AGREEMENT SHALL BE GOVERNED BY,  AND CONSTRUED IN ACCORDANCE
WITH, THE LAW  OF THE STATE  OF CALIFORNIA; PROVIDED  THAT THE AGENT  AND THE
BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

        (b) ANY LEGAL ACTION OR PROCEEDING WITH  RESPECT TO THIS AGREEMENT OR
ANY OTHER  LOAN  DOCUMENT MAY  BE  BROUGHT  IN THE  COURTS  OF  THE STATE  OF
CALIFORNIA OR OF THE UNITED  STATES FOR THE NORTHERN  DISTRICT OF CALIFORNIA,
AND BY EXECUTION  AND DELIVERY OF  THIS AGREEMENT, EACH  OF THE  COMPANY, THE
AGENT AND THE BANKS CONSENTS, FOR  ITSELF AND IN RESPECT OF  ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION  OF THOSE  COURTS.  EACH  OF THE  COMPANY, THE
AGENT AND THE BANKS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH
IT MAY NOW OR HEREAFTER HAVE  TO THE BRINGING OF ANY ACTION  OR PROCEEDING IN
SUCH JURISDICTION  IN  RESPECT  OF THIS  AGREEMENT  OR  ANY DOCUMENT  RELATED
HERETO.  THE COMPANY, THE AGENT AND THE BANKS EACH  WAIVE PERSONAL SERVICE OF
ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY CALIFORNIA LAW.

    11.16   Waiver of Jury Trial.  THE  COMPANY, THE BANKS AND THE AGENT EACH
WAIVE THEIR RESPECTIVE RIGHTS  TO A TRIAL  BY JURY OF  ANY CLAIM OR  CAUSE OF
ACTION BASED UPON OR ARISING OUT  OF OR RELATED TO THIS  AGREEMENT, THE OTHER
LOAN DOCUMENTS, OR  THE TRANSACTIONS CONTEMPLATED  HEREBY OR THEREBY,  IN ANY
ACTION, PROCEEDING OR  OTHER LITIGATION  OF ANY  TYPE BROUGHT  BY ANY  OF THE
PARTIES AGAINST ANY OTHER  PARTY OR ANY AGENT-RELATED  PERSON, PARTICIPANT OR
ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE COMPANY, THE BANKS AND THE AGENT EACH AGREE THAT ANY  SUCH CLAIM OR CAUSE
OF ACTION SHALL BE TRIED BY  A COURT TRIAL WITHOUT A JURY.   WITHOUT LIMITING
THE FOREGOING, THE  PARTIES FURTHER  AGREE THAT THEIR  RESPECTIVE RIGHT  TO A
TRIAL BY  JURY IS  WAIVED BY  OPERATION  OF THIS  SECTION AS  TO ANY  ACTION,
COUNTERCLAIM OR  OTHER  PROCEEDING  WHICH SEEKS,  IN  WHOLE  OR IN  PART,  TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT  OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.  THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT  AMENDMENTS,  RENEWALS,  SUPPLEMENTS  OR   MODIFICATIONS  TO  THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.

    11.17   Entire Agreement.   This Agreement, together with  the other Loan
Documents, embodies the entire agreement and understanding among the Company,
the Banks,  the Issuing  Bank and  the  Agent, and  supersedes  all prior  or
contemporaneous agreements  and  understandings of  such  Persons, verbal  or
written, relating to the subject matter hereof and thereof.

    11.18   Automatic Debit  of Fees.   With respect  to any  commitment fee,
arrangement fee,  or  other fee,  or  any other  cost  or expense  (including
Attorney Costs)  due  and  payable  to  the Agent  or  BofA  under  the  Loan
Documents, the  Company  hereby  irrevocably  authorizes  BofA to  debit  the
Company's designated  account (Account  No. 1498-1-00215)  with BofA  or such
other account or accounts with BofA  as the Company may  designate in writing
to the Agent  in an amount  such that the  aggregate amount debited  from all
such deposit accounts does not exceed such fee or other cost  or expense.  If
there are insufficient funds in such deposit accounts to  cover the amount of
the fee or other cost or  expense then due, such debits will  be reversed (in
whole or in  part, in  BofA's sole  discretion) and  such amount  not debited
shall be deemed  to be unpaid.   No  such debit under  this Section  shall be
deemed a set-off.

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


                                   OPTICAL COATING LABORATORY, INC.

                                   By:                                  
                                   Name:                                
                                   Title:                               


                                   BANK OF AMERICA NATIONAL TRUST
                                   AND SAVINGS ASSOCIATION,
                                   as Agent



                                SCHEDULE 2.01
                                 COMMITMENTS
                             AND PRO RATA SHARES


Bank                        Commitment        Pro Rata Share
----                        ----------        --------------
Bank of America
National Trust
and Savings                  $11,000,000             55%
Association

ABN AMRO Bank N.V.           $ 9,000,000             45%
                             -----------            ----
TOTAL                        $20,000,000            100%



                      OPTICAL COATING LABORATORY, INC.
                              AND SUBSIDIARIES

                         SCHEDULE 6.05:  Litigation

1.   In 1997,  Optical Corporation  of  America ("OCA")  and  certain of  its
     directors  and  officers  ("Affiliates")  commenced   suit  against  the
     Company.  The complaint arises out of a letter of intent executed by the
     Company and OCA in March  1996 and an ensuing  merger agreement executed
     by the Company and  OCA in June 1996.   Under the merger  agreement, the
     Company would acquire OCA.   The complaint  seeks damages for  costs and
     expenses incurred by  OCA in  pursuing the  merger transaction  with the
     Company due to the Company's alleged negligent misrepresentations to OCA
     and Affiliates and the Company's alleged breach of  its letter of intent
     with OCA.   The  Company has  filed  counterclaims against  OCA and  the
     Affiliates based on OCA's breach of the merger  agreement and is seeking
     damages based on the difference  between the value of  OCA's business to
     the Company  and  the  agreed  upon  purchase  price  under  the  merger
     agreement.  The Company does not believe that  this litigation will have
     any material adverse effect on its future operating results or financial
     condition.

2.   In 1997, Flex Products filed a suit in United  States District Court for
     the Eastern District of  Michigan alleging that BASF  Corporation (BASF)
     and BASF AG  have infringed Flex's  patents covering  optically variable
     thin film flakes which, when  mixed with paints and  inks, produce color
     shifting visual  properties.   The  complaint  requests  that the  Court
     enjoin BASF from importing,  making, using, selling or  offering to sell
     the infringing pigment in the  United States.  The  complaint also seeks
     damages  for  the   infringement,  including   treble  damages   if  the
     infringement is  found  to  be willful.  BASF  Corporation  has filed  a
     counterclaim seeking  a  declaration  that  the  patent in  question  is
     invalid.  Both BASF companies have requested that  they be awarded their
     attorneys' fees and costs. Management remains  confident in the validity
     of Flex  Products'  patent, and  based  upon  the information  currently
     available, that the BASF product is, in fact, covered by the patent.

3.   During  the  past  several  years,  the  Company  has  been  engaged  in
     litigation in the  United Kingdom ("U.K.")  involving infringement  of a
     Company patent  by Pilkington,  a U.K.  company.   The  Company won  its
     action at the Patents County Courts level but lost on appeal to the U.K.
     House of Lords.   During the  injunction period, Pilkington  submitted a
     claim for damages totaling approximately $1.6  million for lost profits.
     The Company and legal counsel are in the process of reviewing the claim.
     Management believes  that  the  amount  of  the claim  is  substantially
     overstated and that  the ultimate  settlement will  not have  a material
     adverse effect on the financial statements.

4.   On July 29, 1998, Management learned that a suit was filed in the United
     States District Court  for the  Northern District  of Texas  by Magnetic
     Technologies S.P.R.L.  against the  Company, Connectware,  Inc. and  AMP
     Incorporation.  The Company has not been served with the complaint.  The
     complaint alleges violations of  Section 1 of the  Sherman Antitrust Act
     and conspiracy  between  AMP,  Connectware  and  the  Company.  Mangetic
     Technologies had  previously sought  to join  the Company  and AMP  in a
     pending state  court action  in Texas  by Magnetic  Technologies against
     Connectware alleging similar  violations of  antitrust laws  under Texas
     law. The  Company  and  AMP  were  dismissed from  this  State  lawsuit.
     Management has reviewed this matter and does not believe that it has any
     merit.  In addition,  the Company has an  indemnification agreement from
     Connectware relating to any claims by  Magnetic Technologies against the
     Company arising out of the transactions alleged in the complaint.




                      OPTICAL COATING LABORATORY, INC.
                              AND SUBSIDIARIES

                    SCHEDULE 6.11:  Permitted Liabilities

None.




                      OPTICAL COATING LABORATORY, INC.
                              AND SUBSIDIARIES

                    SCHEDULE 6.12:  Environmental Matters

In 1988, the Company discovered ground water  contamination at its facilities
in Santa  Rosa,  California.    With  the  assistance  of  its  environmental
consultants and  under the  regulatory guidance  of  the California  Regional
Water Quality Control Board,  the Company established a  program for reducing
contaminant concentration levels to acceptable federal and  state levels.  In
prior years, the Company recorded accruals to cover the future estimated cost
of drilling additional  extraction and monitoring  wells and  considers those
accruals to  be adequate.   The  Company spent  $0, $228,000  and $10,000  in
fiscal years  1997, 1996  and 1995  for drilling,  extraction and  monitoring
wells which were charged  against those accruals.   In addition,  the accrual
was reduced by a total of  $200,000 in 1997 and 1996 as  a result of approval
of the  Company's final  remediation plan  by the  California Regional  Water
Quality Control Board.   Ongoing ground  water remediation expenses,  and the
cost of compliance with environmental standards for  years 1995 through 1997,
have not been material to the operations of the Company, and the Company does
not expect them to be material in the future

Flex Products, Inc. ("Flex")

1.   Ground water contamination  had extended to  OCLI's Building  D location
     where a  portion  of  Flex's  operations  are  located.    None  of  the
     contaminants found were associated with materials used by Flex.

2.   In 1994, Flex exceeded its permitted acetone emission levels. Since that
     period, Flex has  redesigned the  acetone stripper  and has  received an
     increase in its allowable emission levels from the BAAQMD.

3.   Flex is in possession of all documentation for permitted equipment.

4.   Flex continues to offer its hazardous wastes to reputable waste handling
     companies.  All companies are inspected and audited  to ensure that they
     are in compliance,  that they have  no pending  environmental citations,
     that they are fully bonded and insured and that they have a solid safety
     history.

5.   In 1993, a plastic tub containing some used oil owned by Flex overflowed
     due to  rain and  some of  the  oil escaped  into a  sump.   Today,  all
     secondary containment pallets are either covered or placed in a location
     to avoid  rain  access.   When  used for  cleaning  of oil  contaminated
     equipment, the contaminated liquid is immediately prepared for disposal.
     Flex maintains a current waste profile for water containing oil.

6.   In 1995, OCLI received a notice from the Industrial Waste Superintendent
     of Santa Rosa, California, that it was  approaching its discharge limits
     for total toxic organics.  The largest constituent  of the discharge was
     acetone, a by-product of Flex's operations. Flex redesigned its Building
     D stripper unit  to eliminate  the use  of a  water sealed  vacuum pump.
     With the  completion  of that  project,  Flex is  now  a zero  discharge
     facility.


OCLI Optical Coating Laboratory, Ltd., Scotland

None

OCLI Optical Coating Laboratory, GmbH, Germany

None



                      OPTICAL COATING LABORATORY, INC.
                              AND SUBSIDIARIES

             SCHEDULE 6.16:  Subsidiaries and Minority Interests

(a)  Optical Coating Laboratory, Inc. has the following subsidiaries:

                                                     Percent of      Place of
Subsidiary Name                                      Ownership  Incorporation

OCLI International Service Corporation................   100%      California

OCLI Foreign Sales Corporation........................   100%            Guam

OCLI Optical Coating Laboratory, Ltd..................   100%        Scotland

OCLI Optical Coating Laboratory GmbH..................   100%         Germany

MMG Glastechnik GmbH..................................   100%         Germany

OCLI Optical Coatings Espana S.A......................   100%           Spain

Optical Coating Laboratory B.V........................   100%     Netherlands

Optical Coating Laboratory EURL.......................   100%          France

Flex Products, Inc....................................    60%        Delaware
Hakuto-OCLI, Ltd. (OCLI Asia).........................    50%           Japan

(b)  Optical Coating Laboratory, Inc. has the following minority interests:

None



                      OPTICAL COATING LABORATORY, INC.
                              AND SUBSIDIARIES

                      SCHEDULE 6.17: Insurance Matters

The Company carries earthquake insurance in the following amounts:

1.   C-9 Coating Machine                        $ 5.9 million
2.   Blanket Policy for OCLI                    $ 5.0 million
3.   Blanket Policy for Flex Products, Inc.     $10.0 million


                      OPTICAL COATING LABORATORY, INC.
                              AND SUBSIDIARIES

                       SCHEDULE 8.01: Permitted Liens

Please see  the  attached  "Minimum  Operating Lease  Commitments"  schedule.
Also, please see the mortgages and other liens referenced in Schedule 8.06.



                      OPTICAL COATING LABORATORY, INC.
                              AND SUBSIDIARIES

                     SCHEDULE 8.05: Certain Investments

Investments in and advances to subsidiaries at 4/30/98:

(Amounts in thousands)                                              At 4/30/98


Investment in OCLI Optical Coating Laboratory, B.V.,
  The Netherlands.................................................        $26
Investment in OCLI Optical Coating Laboratory, GmbH, Germany......     13,719
Advances to OCLI Optical Coating Laboratory, GmbH, Germany........      3,809
Advances to OCLI Optical Coating Laboratory, B.V.,
  The Netherlands.................................................        664
Investments in OCLI Optical Coating Laboratory, Ltd., Scotland....      1,042
Investment in Hakuto-OCLI, Ltd. Joint Venture, Japan..............        849
Investment in Flex Products, Inc., Santa Rosa, California.........      9,550
Advances to Flex Products, Inc., Santa Rosa, California...........      6,000
Advances to OCLI Optical Coatings Espana, Spain...................        819


                      OPTICAL COATING LABORATORY, INC.
                              AND SUBSIDIARIES

                     SCHEDULE 8.06: Certain Indebtedness

                                                            Disclosure was at
(Amounts in thousands)                                       the closing date
                                                            -----------------

Aid Association for Lutherans. Mortgage payable.  Interest at 8%.
   Collateralized by a 72,000 sq. ft. newly constructed buildingd
   and related land.  Principal and interest payments of $25,000r
   per month through 2011..........................................  $  2,370

Aid Association for Lutherans. Mortgage payable.  Interest at 7.5%.
   Collateralized by a 65,000 sq. ft. newly constructed building and
   related land leased to Flex Products.  Principal and interest
   payments of $28,000 per month through 2011.....................      2,735

Scottish Development Agency.  Building loan, with a conditional
   interest moratorium from February 1, 1995 through January 31, 1998,
   with interest at 9.5% thereafter. Semiannual principal payments of
   approximately $100,000 are payable through January 1998 with
   subsequent payments of $331,000, comprising principal and
   interest, through 2006. Collateralized by the land and building
   of the Company's Scottish subsidiary...........................      3,748

ABN AMRO.  Unsecured  bank note.  Interest  at 5.6%. Quarterly
principal and interest payments of approximately $300,000
through December 2002.............................................      4,075

Deutsche Bank.  Bank loans of OCLI/MMG Division with interest
   rates ranging from 4.5% to 7.5%. Payable in semiannual and
   annual installments through 2020.  Partly collateralized by
   mortgages on OCLI/MMG Division land and buildings and liens
   on equipment...................................................      3,284

Asahi Bank. Bank line of Credit - Hakuto/OCLI J.V., Japan.........      1,498

Present value of obligations under capital leases at
  imputed interest rates from 8.0% to 9.5% payable in
  monthly installments through 2004...............................      2,166
                                                                       19,876
Less current maturities ..........................................     (5,594)
                                                                      -------
      Total long-term debt, net of current maturities.............    $14,282
                                                                      =======

The Company has a surety bond for $903,000 to  satisfy the Company's workers'
compensation self-insurance requirements.   The surety bond carries  a fee of
1.00% per year.

During 1997, the Company replaced its 8%, $5 million  note payable to private
parties with a 5.6% bank note.  Payments of principal  and interest under the
new note are denominated in  German marks and are  approximately $300,000 per
quarter through  December  2002.   In  connection with  the  note payable  to
private parties, the Company carried an incremental  credit facility to cover
a surety letter for  approximately $2.5 million issued  to secure 50%  of the
Company's obligation arising from the purchase of MMG.  As  the new note does
not require a surety letter, the $2.5 million surety letter was canceled.

During 1997,  the  Company recorded  capital  leases  totaling $2,037,000  to
finance the hardware, software and integration costs of a new computer system
that is to  be implemented in  1998.  Lease  terms run through  February 2002
with payments totaling approximately $50,000 per month.

The Company's  subsidiary  in Scotland  has  a credit  arrangement  of up  to
approximately $490,000 at market  interest rates and has  outstanding letters
of credit of approximately $330,000  to guarantee import duties.   There were
no borrowings under the credit arrangement in fiscal years 1997 or 1996.

The Company's subsidiary in Germany has various  credit facilities with local
banks totaling  approximately $381,000  which are  used  for working  capital
requirements.  These credit facilities  are utilized as part  of normal local
payment practices.

During 1996, the Company entered into  three sale/lease-back arrangements for
a newly acquired continuous coating machine and related equipment and for two
newly acquired coating machines to be used in the manufacturing operations of
Flex Products.  Cash proceeds from  the sale/lease-back arrangements exceeded
the Company's cost by  approximately $750,000 which was  recorded as deferred
revenue and  is  being  amortized  against  lease expenses  at  the  rate  of
approximately $125,000 per year.  The lease terms are  six years with monthly
payments totaling approximately $290,000 and buyout provisions  at the end of
each lease.

The Company has certain  financial covenants and restrictions  under its bank
credit arrangements and the unsecured senior notes.



                      OPTICAL COATING LABORATORY, INC.
                          AND RESTRICTED COMPANIES

                    SCHEDULE 8.09: Contingent Obligations

Existing Guarantees

Optical Coating Laboratory, Inc.

a.   Surety Bond  with  National  Fire  Insurance  Company  of  Hartford  for
     $819,776  covering   the   Company's   State  of   California   Workers'
     Compensation self-insured liabilities.

b.   Guarantee to Hakuto  Co., Ltd.  for one-half (1/2)  of both  present and
     future loans between the Bank and Hakuto-OCLI Co.,  Ltd. (the "J.V.") to
     which Hakuto guaranteed to the Bank  the obligations of the  J.V. to the
     Bank.

c.   Letter of Comfort to Deutsche Bank AG, Germany, for credit facilities up
     to DM 3,000,000 (German  Marks Three Million) for  MMG Glastechnik GmbH,
     Germany.

d.   Guarantee on behalf of OCLI Optical Coating Laboratory, Ltd. to Barclays
     Bank, Edinburgh, Scotland, dated  May 25, 1984 for  U.S. $800,000 (Eight
     Hundred Thousand U.S. Dollars).

OCLI Optical Coating Laboratory, Ltd., Scotland

None

OCLI Optical Coating Laboratory, GmbH, Germany

None

Flex Products, Inc.

None



                               SCHEDULE 11.02
                           AGENT'S PAYMENT OFFICE
                   OFFSHORE AND DOMESTIC LENDING OFFICES,
                            ADDRESSES FOR NOTICES


OPTICAL COATING LABORATORIES, INC.
2789 Northpoint Parkway
Santa Rosa, CA  95407-7397
Attention:     Jeffrey M. Ryan
Telephone:     707/525-7656
Facsimile:     707/525-7410


BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
   as Agent

Notices for Borrowing, Conversions/Continuations, Payments:
Bank of America National Trust and Savings Association
Agency Management Services #5596
1850 Gateway Boulevard, 5th Floor
Concord, CA  94520
Attention:     Irene Ruddell, Associate Agency Officer
Telephone:     925/675-8441
Facsimile:     925/675-8500

Other Notices:
Bank of America National Trust and Savings Association
Credit Products #3838
555 California Street, 41st Floor

San Francisco, CA  94104
Attention:     James P. Johnson
Telephone:     415/622-6177
Facsimile:     415/622-2385

Agent's Payment Office:
Bank of America National Trust and Savings Association
1850 Gateway Boulevard
Concord, CA  94520
Attention:     Agency Management Services #5596
Reference:     Optical Coating Laboratories, Inc.
For Credit to Bancontrol Acct. No. 12334-14577

BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
   as Issuing Bank

Address for Notices:
Bank of America National Trust and Savings Association
Trade Operations #22621
333 S. Beaudry Avenue, 19th Floor
Los Angeles, CA  90017
Attention:     Sandra Leon
Telephone:     213/345-5231
Facsimile:     213/345-6684

BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
   as a Bank

Domestic and Offshore Lending Office:
Bank of America National Trust and Savings Association
1850 Gateway Boulevard, 4th Floor
Concord, CA  94520
Attention:     Joyce Drumgoole
Telephone:     925/675-7132
Facsimile:     925/675-7235

Notices (other than Borrowing Notices and Notices of
Conversion/Continuation):
Bank of America National Trust and Savings Association
Credit Products #3838
555 California Street, 41st Floor
San Francisco, CA  94104
Attention:     James P. Johnson
Telephone:     415/622-6177
Facsimile:     415/622-4585


ABN AMRO BANK N.V.

Domestic and Offshore Lending Office:
ABN AMRO Bank N.V.
135 South LaSalle Street, Suite 625
Chicago, IL  60603-4108
Attention:     Loan Administration
Telephone:     312/904-8855
Facsimile:     312/904-1287

Notices (other than Borrowing Notices and Notices of
Conversion/Continuation):
ABM AMRO Bank N.V.
135 South LaSalle Street, Suite 625
Chicago, IL  60603-4108
Attention:     Credit Administration
Telephone:     312/904-8835
Facsimile:     312/904-8840

With a copy to:
ABN AMRO Bank N.V.
101 California Street, Suite 4550
San Francisco, CA  94111-5812
Attention:  Mathew Harvey
Telephone:     415/984-3733
Facsimile:     415/362-3524


                                   By:                                  
                                   Name:                                
                                   Title:                               


                                   BANK OF AMERICA NATIONAL TRUST
                                   AND SAVINGS ASSOCIATION,
                                   as Issuing Bank and as a Bank

                                   By:                                  


                                   Name:                                
                                   Title:                               



                                   ABN AMRO BANK N.V.

                                   By:                                  
                                   Name:                                
                                   Title:                               

                                   By:                                  
                                   Name:                                
                                   Title:                               


                                  EXHIBIT A
                      OPTICAL COATING LABORATORY, INC.
                           COMPLIANCE CERTIFICATE

                                        Financial
                                        Statement Date: _________, ______

     Reference is made to that certain Credit Agreement dated  as of July 31,
1998 (as amended, amended  and restated, modified, supplemented,  extended or
renewed from  time to  time, the  "Credit Agreement")  among Optical  Coating
Laboratory, Inc.  (the "Company"),  the several  financial institutions  from
time to time parties thereto (the "Banks") and Bank of America National Trust
and Savings Association, as  letter of credit issuing  bank and as  agent for
the Banks (in such capacity, the "Agent").   Unless otherwise defined herein,
capitalized terms used herein  have the respective meanings  assigned to them
in the Credit Agreement.
     The undersigned  Responsible Officer  hereby certifies  as  of the  date
hereof that he/she  is the  ___________ of  the Company,  and that,  as such,
he/she is authorized to execute and deliver this Certificate to the Banks and
the Agent on the behalf of the Company and its consolidated Subsidiaries, and
that:

[Use the following paragraph  if this Certificate is  delivered in connection
with the financial  statements required by  subsection 7.01(a) of  the Credit
Agreement.]

     1.   Attached are true  and correct copies  of the  audited consolidated
balance sheet of the Company and its Subsidiaries as at the end of the fiscal
year ended ___________,  ______, and the  related consolidated  statements of
income or operations,  shareholders' equity  and cash  flows for  such fiscal
year, setting forth  in each  case in  comparative form  the figures  for the
previous fiscal year, accompanied by the opinion  of the Independent Auditor,
which opinion (a) states that such consolidated  financial statements present
fairly the financial  position for the  periods indicated in  conformity with
GAAP applied on a basis consistent with prior years, and (b) is not qualified
or limited because of a restricted or limited  examination by the Independent
Auditor of any material portion of the Company's  or any Subsidiary's records
or any other reason.   Attached as well  is a certificate of  the Independent
Auditor stating  that in  making the  examination necessary  for its  opinion
there was observed  no Default or  Event of Default  of the kind  which would
normally be  revealed by  such an  examination,  except as  specified in  the
certificate.

     2.   Attached are true and correct  copies of the balance  sheet of Flex
Products as at the end of the fiscal year ended  ____________, _____, and the
related statements of income and cash  flows for such year,  setting forth in
each case in comparative form the figures for the previous fiscal year, which
fairly present,  in accordance  with GAAP  (subject to  ordinary, good  faith
audit adjustments and the absence of notes to such financial statements), the
financial position and the results of operations of Flex Products.

or

[Use the following paragraph  if this Certificate is  delivered in connection
with the financial  statements required by  subsection 7.01(b) of  the Credit
Agreement.]

     1.   Attached are true and correct copies  of the unaudited consolidated
balance sheet of the Company and its Subsidiaries as of the end of the fiscal
quarter ended __________, ______, and the  related consolidated statements of
income, shareholders' equity and cash flows for the  period commencing on the
first day and ending  on the last day  of such quarter and  commencing on the
first day of  the fiscal year  and ending  on the last  day of  such quarter,
which fairly present in accordance with GAAP (subject to ordinary, good faith
audit adjustments and the absence of notes to such financial statements), the
financial position  and the  results of  operations  of the  Company and  its
Subsidiaries.

     2.   Attached are true and correct  copies of the balance  sheet of Flex
Products  as  of  the  end  of  the   fiscal  quarter  ended  ______________,
_____________, and the related  statements of income  and cash flows  for the
period commencing on the first day and ending on the last day of such quarter
and commencing on the first day of the fiscal year and ending on the last day
of such quarter, which  fairly present, in  accordance with GAAP  (subject to
ordinary, good  faith audit  adjustments and  the  absence of  notes to  such
financial statements), the financial  position and the results  of operations
of Flex Products.

     3.   The undersigned has reviewed and is familiar with  the terms of the
Credit Agreement  and  has made,  or  has caused  to  be  made under  his/her
supervision, a  detailed review  of the  transactions and  conditions of  the
Company and  its Subsidiaries  during the  accounting period  covered by  the
attached financial statements.

     4.   To the  best knowledge  of  the undersigned,  the  Company and  its
Subsidiaries, during such period,  have observed, performed or  satisfied all
of their covenants and other agreements and satisfied  every condition in the
Credit Agreement to be  observed, performed or  satisfied by the  Company and
its Subsidiaries,  and the  undersigned has  no knowledge  of any  Default or
Event of Default.

     5.   The following financial covenant analyses and information set forth
on Schedule 1 attached hereto are true and accurate on and as  of the date of
this Certificate.    All  amounts and  ratios  in  Schedule  1refer  to  the
financial statements attached  hereto and are  determined in  accordance with
the specifications set forth in the Credit Agreement.

     IN WITNESS WHEREOF, the undersigned has executed this Certificate as the
___________________ of the Company as of _________________, ______.

                              OPTICAL COATING LABORATORY, INC.
                              By:                                          
                              Title:


                                                      Date:                   
                                                      For the fiscal quarter
                                                      ended:                  


Schedule 1
to the Compliance Certificate
Financial Covenant Analyses and Information

8.01 Limitation on Liens.


                                   Actual          Permitted

Aggregate principal amount
secured by judgment and
judicial    attachment    Liens    $___________
covered by S8.01(g)                                $5,000,000


                                   Actual          Permitted

Aggregate principal  amount  of
Indebtedness secured by deed of
trust on the Company's property
in   Santa   Rosa,   California    $___________
(S8.01(j)(2))                                      $9,000,000

                                   Actual          Permitted

                    
1 All items determined on a consolidated basis and in accordance with GAAP,
consistently applied.


Aggregate principal  amount  of
secured Indebtedness and  other    $___________
obligations covered by S8.01(n)                    $5,000,000

8.03 Disposition of Assets.


                                   Actual          Permitted

Aggregate amount of
dispositions covered by            $___________    $__________
S8.03(d)                                                *


   * Not to exceed in any twelve month period, 10% of the gross book value of
     the assets of the Company  and its Subsidiaries on  a consolidated basis
     (exclusive of goodwill,  patents, trademarks, trade  names, organization
     expense, treasury stock, unamortized debt discount and expense, deferred
     charges, and other like intangibles) less reserves applicable thereto.

8.05 Loans and Investments.

                                   Actual          Permitted

Aggregate amount of investments    $___________    $__________
covered by S8.05(o)                                     *

   * The aggregate book value of all  such investments shall not  at any time
     exceed 2.50% of  the consolidated  total assets of  the Company  and its
     Subsidiaries determined at such time.

8.05(s) Investments.

1.   Aggregate amount of all Restricted Payments declared
     or made during the period from and after October 31,
     1994 to and including the date proposed investment is
     to be made:                                                $____________
     

2.   All investments previously made pursuant to S8.05(s) held
     by the Company and its Subsidiaries:                       $____________

3.   All Indebtedness permitted under S8.06(h) owed by the
     Company and its Subsidiaries:                              $____________

4.   Sum of 1 + 2 + 3:                                          $____________

5.                                                              $   7,000,000
                                                                 ------------
6.   50% of cumulative consolidated net income of the
     Company and its Subsidiaries for the period
     commencing after October 31, 1994 and ending on
     and including the date the proposed investment is
     to be made (or minus 100% of deficit):                    $_____________

7.   Aggregate of net cash proceeds from and after
     October 31, 1994 to and including the date the
     proposed investment is to be made from issuance
     and sale of capital stock (other than Redeemable
     Stock) and warrants, rights or options:                   $
                                                                =============

8.   Line 5 plus line 6 (minus if 6 represents a deficit)
     plus line 7:                                              $_____________

9.   Amount in line 4:                                         $_____________

10.  Amount in line 8:                                         $_____________

11.  Line 8 minus line 4:                                      $_____________

12.  Amount of proposed investment (cannot exceed
     amount in line 11):                                       $_____________

8.06 Limitation on Indebtedness.

                                                           Not to be
                                                           shorter
Aggregate principal  amount  of                            than the
Indebtedness secured by deed of            Weighted        remaining
trust on the Company's Property            average life    term of the
in   Santa   Rosa,   California            of such         revolving
(S8.06(f))                                 Indebtedness    credit

Actual:    $___________

Permitted: $9,000,000                      ___________     ____________


                                           Actual          Permitted

Aggregate amount of
Indebtedness of the Company's
Subsidiaries (other  than  Flex
Products) (utilized and
unutilized) covered by
S8.06(g)(1)                               $___________     $5,000,000



                                          Actual           Permitted

                                                           $32,000,00
Aggregate amount of
Indebtedness covered by                                    _  *      
S8.06(i)                                                   ----------
                                         $                 $
                                         ------------      ==========

   * = Aggregate of then combined Commitments (utilized and unutilized).


8.06(j) Covenant Calculations:

1.   Principal amount of Indebtedness to third person:      $            
                                                            -----------
2.   Name of third person:                                                   
                                                            -----------
3.   Guaranteed by SICPA:                                      Yes

4.   Corresponding principal amount of Indebtedness of
     Flex Products to the Company (must be 150% of amount
     on line 1):                                            $            
                                                            ------------
8.11 Lease Obligations.


                                            Actual          Permitted

Aggregate annual rental
payments for capital leases
covered by S8.11(d)                        $___________     $15,000,000

8.12 Restricted Payments.

1.   Aggregate amount of all Restricted Payments declared
     or made during the period from and after October 31,
     1994 to and including the date proposed Restricted
     Payment is to be declared or made:                     $____________

2.   All investments made pursuant to S8.05(s) held by
     the Company and its Subsidiaries:                      $____________

3.   All Indebtedness permitted under S8.06(h) owed
     by the Company and its Subsidiaries:                   $____________

4.   Sum of 1 + 2 + 3:                                      $
                                                            =============
5.                                                          $   7,000,000
                                                            -------------
6.   50% of cumulative consolidated net income of the
     Company and its Subsidiaries for the period
     commencing after October 31,1994 and ending on and
     including the date the proposed Restricted Payment
     is to be made (or minus 100% of deficit):              $____________
     

7.   5 plus 6 (minus if 6 represents a deficit):            $____________

8.   Amount in line 4:                                      $____________

9.   Amount in line 7:                                      $____________

10.  Line 7 minus line 4:                                   $____________

11.  Amount of proposed Restricted Payment
     (cannot exceed amount in line 10):                     $
                                                            =============

8.14 Tangible Net Worth.

                                            Actual          Permitted

                                                           $70,000,000
                                                           +   *
                                                           -----------
                                                           +   **
                                                           -----------
Tangible Net Worth                         $__________     $__________

    * 50% of consolidated net  income after income taxes  (but without giving
     effect to  any net  losses) earned  in any  quarterly accounting  period
     commencing after October 31, 1997.

   ** 50% of cash proceeds net out-of-pocket costs and  expenses paid to non-
     Affiliates (not including  cash proceeds from  common stock  issued upon
     exercise of employee stock  options, issued to employee  stock ownership
     plan, or  issued  upon  the  exercise  of  rights  where  no  additional
     consideration is received by the Company).

8.15 Leverage Ratio.

1.   Funded Debt (after subtracting Indebtedness of Flex
     Products covered by S8.06(j) and Indebtedness of Flex
     Products to SICPA under the SICPA/OCLI Joint Acquisition
     Agreement (the "Flex-SICPA Debt")):                        $           
                                                                ------------
2.   EBITDA (after subtracting the interest expense related
     to the Flex-SICPA Debt) (EBITDA to be measured
     on a four quarter trailing basis and may include acquired
     EBITDA to extent permitted under the Credit Agreement):    $     
                                                                ------------
3.   Ratio of 1 to 2:                                                        
                                                                ------------
4.   Required ratio of 1 to 2:                                  2.50 to 1.00
                                                                ------------

8.16 Fixed Charge Coverage Ratio.

1.   EBIT* (after subtracting the interest expense related to
     the Flex-SICPA Debt):                                      $            
                                                                ------------
2.   Net interest expense* (after subtracting the interest
     expense related to the Flex-SICPA Debt) plus current
     portion of long term debt** (after subtracting the
     current portion of the Flex-SICPA Debt):                   $            
                                                                ------------
3.   Ratio of 1 to 2:                                                        

4.   Required ratio of 1 to 2:                                  1.50 to 1.00
                                                                ------------
    * EBIT and interest expense will  be measured on a  four quarter trailing
     basis and may  include acquired  EBIT to  extent permitted  under Credit
     Agreement.

   ** Current portion of long term debt will be calculated  on a four quarter
     prospective basis.


                                  EXHIBIT B
                             NOTICE OF BORROWING

                                             Date: ___________, _____

To:  Bank of America National Trust and Savings Association  as Agent for the
     Banks parties to  the Credit  Agreement dated  as of  July 31,  1998 (as
     amended, amended  and  restated,  modified,  supplemented,  extended  or
     renewed from time to time, the "Credit Agreement") among Optical Coating
     Laboratory, Inc., certain Banks  which are signatories thereto  and Bank
     of America National Trust  and Savings Association, as  letter of credit
     issuing bank and as Agent

Ladies and Gentlemen:

     The undersigned,  Optical  Coating  Laboratory,  Inc.  (the  "Company"),
refers to the Credit Agreement,  the terms defined therein  being used herein
as therein  defined, and  hereby gives  you notice  irrevocably, pursuant  to
Section 2.03 of the Credit Agreement, of the Borrowing specified below:

          1.   The  aggregate   amount   of   the   proposed   Borrowing   is
     $_____________.

          2.   The Business Day of  the proposed Borrowing  is _____________,
     _____.

          3.   The Borrowing is to  be comprised of $________  of [Base Rate]
     [Offshore Rate] Loans.

          4.   The duration  of the  Interest Period  for  the Offshore  Rate
     Loans included in the Borrowing shall be ____ months.

     The undersigned hereby certifies that the  following statements are true
on the date hereof, and will  be true on the date of  the proposed Borrowing,
before and after giving effect thereto and to the application of the proceeds
therefrom:

          (a)  the representations and warranties of the Company contained in
     Article VI of the Credit  Agreement are true  and correct with  the same
     effect as if  made on and  as of  such date (except  to the  extent such
     representations and warranties  expressly refer to  an earlier  date, in
     which case they are true and correct as of such earlier date);

          (b)  no Default or Event of Default has occurred and is continuing,
     or would result from such proposed Borrowing; and

          (c)  the proposed Borrowing will not cause  the Effective Amount of
     all outstanding  Revolving Loans  and the  Effective Amount  of all  L/C
     Obligations to exceed the combined Commitments.

                              OPTICAL COATING LABORATORY, INC.
                              By:                                          
                              Title:                                       
                              By:                                          
                              Title:                                       

                                  EXHIBIT C
                      NOTICE OF CONVERSION/CONTINUATION

                                        Date: ___________, ____

To:  Bank of America National Trust and Savings Association, as Agent for the
     Banks parties to  the Credit  Agreement dated  as of  July 31,  1998 (as
     amended, amended  and  restated,  modified,  supplemented,  extended  or
     renewed from time to time, the "Credit Agreement") among Optical Coating
     Laboratory, Inc., certain Banks  which are signatories thereto  and Bank
     of America National Trust  and Savings Association, as  letter of credit
     issuing bank and as Agent

Ladies and Gentlemen:

     The undersigned,  Optical  Coating  Laboratory,  Inc.  (the  "Company"),
refers to the Credit Agreement,  the terms defined therein  being used herein
as therein  defined, and  hereby gives  you notice  irrevocably, pursuant  to
Section 2.04 of the  Credit Agreement, of the  [conversion] [continuation] of
the Revolving Loans specified herein, that:

          1.   The proposed Conversion/Continuation Date is __________, ____.

          2.   The aggregate amount of the Revolving  Loans to be [converted]
     [continued] is $_________.

          3.   The Revolving Loans are to be  [converted into] [continued as]
     [Offshore Rate] [Base Rate] Loans.

          4.   The duration  of the  Interest Period  for  the Offshore  Rate
     Loans included in the [conversion] [continuation] shall be ___ months.

     The undersigned hereby certifies that the  following statements are true
on the date hereof, and will be true on the date of the proposed [conversion]
[continuation], before and after giving effect thereto:

          (a)  the representations and warranties of the Company contained in
     Article VI of the Credit  Agreement are true  and correct with  the same
     effect as if  made on and  as of  such date (except  to the  extent such
     representations and warranties  expressly refer to  an earlier  date, in
     which case they are true and correct as of such earlier date);

               (b)  no Default or Event of Default has occurred and is 
     continuing, or would result from such proposed [conversion] 
     [continuation]; and

          (c)  the proposed  [conversion] [continuation]  will not  cause the
     Effective Amount of  all outstanding Revolving  Loans and  the Effective
     Amount of all L/C Obligations to exceed the combined Commitments.

                              OPTICAL COATING LABORATORY, INC.
                              By:                                          
                              Title:                                       
                              By:                                          
                              Title:                                       


                                  EXHIBIT D
                 FORM OF LEGAL OPINION OF COMPANY'S COUNSEL



                              August 3, 1998




Bank of America National Trust &
  Savings Association, as Agent
  for Banks, as the Letter of Credit
  Issuing Bank, and as a Bank
555 California Street, 41st Floor, #3838
San Francisco, California  94104

ABN AMRO Bank N.V., as a Bank
101 California Street, Suite 4550
San Francisco, California 94104

     Re:  $20,000,000 Credit Facility by Bank of America
          National Trust & Savings Association and
          Certain Other Financial Institutions to
          Optical Coating Laboratory, Inc.

Ladies and Gentlemen:

     We have acted as counsel to Optical Coating Laboratory,
Inc., a Delaware corporation (the "Company"), in connection
with the execution and delivery by the Company of that
certain Credit Agreement dated as of July 31, 1998, by and
among the Company, Bank of America National Trust and
Savings Association, as Agent for the Banks, as the Letter
of Credit Issuing Bank, and as a Bank, ABN AMRO Bank, N.V.,
as a Bank, and the other financial institutions from time to
time party thereto (the "Agreement") providing for a
revolving credit facility (including a letter of credit
subfacility) from you to the Company of up to $20,000,000
(the "Loan").  This firm also represents the Company on a
regular basis, although our engagement has been limited to
specific matters as to which we have been consulted by the
Company.  We are delivering this opinion to you pursuant to
Section 5.01(c) of the Agreement.  All capitalized terms
used and not expressly defined herein shall have the meaning
given to them in the Agreement.

     In connection with the foregoing we have been furnished
with originals or copies certified to our satisfaction of
such corporate or other records of the Company, with such
certificates of officers and representatives of the Company,
and with such other documents, and we have made such other
examinations, investigations and inquiries of the Company
and its officers, as we have deemed necessary as a basis for
the opinions expressed below.

     In connection with this opinion, we have examined and
relied upon originals, or copies certified or otherwise
identified to our satisfaction as being true copies, of the
following, each dated this date unless otherwise indicated:
     A.   The Agreement;

     B.   Any other documents specified in the Agreement to
be executed and delivered by the Company in conjunction with
delivery of the Agreement (together with the Agreement,
the "Loan Documents");

     C.   A Certificate of the Secretary of the Company
certifying as to (i) the Certificate of Incorporation of the
Company, (ii) the Bylaws of the Company and (iii)
resolutions adopted by the Board of Directors of the
Company;
     
     D.   A certificate executed by Charles J. Abbe,
President and Chief Executive Officer, Craig B. Collins,
Vice President, Finance and Chief Financial Officer and
Jeffrey M. Ryan, Assistant Treasurer of the Company
(the "Company's Certificate"), stating that aside
from certain outstanding indentures and loan, credit,
guaranty or lease agreements, all of which are identified in
said certificate, no other agreements or instruments or
orders, writs, judgments, awards, injunctions and decrees,
affect or purport to affect the right of the Company to
borrow money or to undertake and perform obligations of the
Company under the Agreement;

     E.   A certificate of the Secretary of State of
Delaware, dated July 14, 1998, attesting to the continued
corporate existence and good standing of, and current
payment of franchise taxes by, the Company in that state;

     F.   A certificate of the Secretary of State of
California, dated July 14, 1998, attesting that the Company
is qualified to transact business as a foreign corporation
in that state;

     G.   A certificate of the Franchise Tax Board of
California, dated July 15, 1998, attesting to the good
standing of the Company with that agency; and

     H.   Originals, or copies certified or otherwise
identified to our satisfaction, of such other documents,
records, instruments and certificates of public officials as
we have deemed necessary or appropriate to enable us to
render this opinion.

     We have also examined originals or copies of the
documents listed in the Company's Certificate.

     In conducting our examination we have assumed, without
investigation, the genuineness of all signatures, the
correctness of all certificates, the authenticity of all
certificates and documents submitted to us as originals, the
conformity to original documents of all documents submitted
to us as certified or photostatic copies and the
authenticity of the originals of such copies, and the
accuracy and completeness of all records made available to
us by the Company.  We have also assumed, without
investigation, the accuracy of the representations and
warranties as to factual matters made by any party in the
Agreement and the accuracy of the representations and
statements made to us by officers or employees of the
Company and by public officials.  In making our examination
of documents and instruments executed by any person or
entity, we have assumed, without investigation, that each
such person or entity has (i) the power, capacity, right and
legal authority to enter into and perform all of its
obligations under such documents and instruments, (ii) duly
authorized all requisite action with respect to such
documents and instruments, and (iii) duly executed and
delivered such documents and instruments.  We have not,
however, made the assumptions set forth in the immediately
preceding sentence with respect to the Company or its power,
capacity, right, authority, authorization or execution of
documents and instruments.

     Whenever a statement below is qualified by the phrases
"known to us" or "to our knowledge," it is intended to
indicate that during the course of our representation of the
Company, no information that would give us actual knowledge
of, or a reasonable belief concerning, the inaccuracy of
such statement has come to the attention of those attorneys
in this firm who have rendered legal services to the
Company.  Except as otherwise expressly indicated, we have
not undertaken any independent investigation to determine
the accuracy of such statement, and any limited inquiry
undertaken by us during the preparation of this opinion
letter should not be regarded as such an investigation.  No
inference as to our knowledge of any matters bearing on the
accuracy of any such statement should be drawn from the fact
of our representation of the Company.

     In rendering the opinions hereinafter expressed, we
have also assumed, without investigation, that the following
facts are true:

     1.   You, and your Assignees, if any, will enforce your
respective rights under the Agreement in circumstances and
in a manner in which it is commercially reasonable to do so,
and in accordance with all procedural requirements under
applicable law.

     2.   No party to the Agreement or to any of the other
Loan Documents or any agreement relating thereto is subject
to any statute, rule, or regulation, or to any impediment to
which contracting parties are generally not subject, which
requires the Company or any other person or party to obtain
the consent of or to make a declaration or filing with any
governmental authority or other person or entity.  However,
we have not assumed, for the purposes of this letter, that
the Company is not subject to any such statute, rule,
regulation or impediment.

     3.   We assume that you, and your Assignees, if any,
are exempt from the usury laws of the State of California.

     The opinions expressed below are subject to the
following qualifications:

     1.   Our opinions below are subject to the following:
(a) the effect of bankruptcy, insolvency, fraudulent
conveyance, reorganization, arrangement, moratorium and
other similar laws now or hereafter in effect relating to or
affecting the rights of creditors generally; (b) the
limitations imposed by California law, federal law, or
equitable or public policy principles upon the performance
or enforceability of any of the remedies, covenants, or
other provisions of the Agreement or other Loan Documents
and upon the availability of injunctive relief or other
equitable remedies, including, without limitation, the
effect of California and federal court decisions invoking
statutes or principles of equity or of public policy, which
have held that certain covenants and provisions of
agreements are unenforceable where: (i) the breach of such
covenants or provisions imposes restrictions or burdens upon
the debtor, including acceleration or the imposition of late
payment charges or increased interest rates upon delinquency
in the payment of indebtedness due under debt instruments,
and it cannot be demonstrated that the enforcement of such
restrictions or burdens is reasonably necessary for the
protection of the creditor, or (ii) the creditor's
enforcement of such covenants or provisions under the
circumstances would violate the creditor's implied covenant
of good faith and fair dealing; and (c) the limitations upon
the ability of the Company or any other party to the
Agreement to waive any rights, claims or defenses available
to such party at law or in equity pursuant to statute or
otherwise.  With respect to subclause (i) of clause (b)
above, but without limiting the generality of the foregoing,
we note that certain cases have held that imposition of
increased interest or late charges were, under the
circumstances, punitive and invalid.  See Garrett v. Coast
and Southern Federal Savings & Loan, 9 Cal.3d 731 (1973).

     2.   In expressing our opinions below, we note that
your right to enforce certain remedies set forth in the
Agreement may be subject to various notice and procedural
limitations imposed by California law.

     3.   We are members of the Bar of the State of
California and do not hold ourselves out as experts on the
law of any other state.  Our opinions below are limited to
the effect of the laws of the State of California and of the
federal laws of the United States.  Accordingly, we express
no opinion with respect to the laws of any other
jurisdiction, or the effect thereof, on the transactions
contemplated by the Agreement.  The foregoing
notwithstanding, we are sufficiently familiar with the
General Corporation Law of the State of Delaware to render
the opinion in clause (i) of opinion paragraph (a) below.

     4.   Our opinions below are limited to matters
expressly set forth in this opinion letter, and no opinion
is to be implied or may be inferred beyond the matters
expressly so stated.

     5.   We call your attention to the fact that no opinion
is expressed with regard to any financial or similar
covenants contained in the Agreement or in any other
agreement or instrument with application to the Company.

     6.   We call your attention to the fact that no opinion
is expressed with regard to usury laws as would apply to you
or any of your Assignees or any Participants.
     7.   We call your attention to the fact that no opinion
is expressed with regard to the validity or enforceability
of the provisions set forth in Article X of the Agreement
or, to the extent they relate only to the relationship among
the Banks and the Issuing Bank, the provisions set forth in
Article III of the Agreement.

     Based upon and subject to the foregoing, we are of the
opinion that:

     (a)  The Company (i) is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware and is qualified to do business as a
foreign corporation in the State of California and (ii) is
duly qualified as a foreign corporation and in good standing
in each state where its ownership, lease or operation of
property or the conduct of its business requires such
qualification, except, in the case of clause (ii), to the
extent that the failure to do so could not reasonably be
expected to have a Material Adverse Effect.

     (b)  The Company has the power and authority to execute
and deliver, and to perform and observe the provisions of,
each of the Agreement and the other Loan Documents.

     (c)  The execution, delivery and performance by the
Company of the Agreement and the other Loan Documents have
been duly authorized by all necessary corporate action.

     (d)  The Agreement and the other Loan Documents have
been duly executed and delivered by the Company.

     (e)  To our knowledge, no approval, consent, exemption,
authorization, or other action by, or notice to, or filing
with, any Governmental Authority is necessary or required in
connection with the execution, delivery or performance by,
or enforcement against, the Company of the Agreement or any
other Loan Document.

     (f)  The Agreement and each other Loan Document to
which the Company is a party constitute the legal, valid and
binding obligations of the Company, enforceable against the
Company in accordance with their respective terms.

     (g)  Neither the Company nor any Subsidiary of the
Company is an "Investment Company" or a company "controlled"
by an Investment Company within the meaning of the
Investment Company Act of 1940.  The Company is not subject
to regulation under the Public Utility Holding Company Act
of 1935, the Federal Power Act, the Interstate Commerce Act
(as revised by the ICC Termination Act of 1995), or, to our
knowledge, any other Federal or state statute or regulation
limiting its ability to incur Indebtedness.  Without
limiting any qualification or assumption set forth in this
letter, we note that our opinion in this Paragraph (g) is
based solely upon the Company's Certificate and we have made
no independent investigation of the status of the Company,
any Person controlling the Company or any Subsidiary of the
Company as an "Investment Company" or as to whether the
Company is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, or any other Federal or state
statute or regulation limiting its ability to incur
Indebtedness.

     (h)  The execution, delivery and performance of the
Agreement and the other Loan Documents by the Company are
not in violation of the Certificate of Incorporation or
Bylaws of the Company or, to our knowledge, any Requirement
of Law.

     (i)  To our knowledge after due inquiry of officers of
the Company, the execution, delivery and performance of the
Agreement and the other Loan Documents by the Company will
not violate or result in a breach of any of the terms of or
constitute a default under or result in the creation of any
Lien on any property or assets of the Company pursuant to
the terms of any agreement or instrument to which the
Company is a party and which is listed in the Company's
Certificate, or any order, injunction, writ or decree of any
Governmental Authority to which the Company or its property
is subject.

     (j)  The execution, delivery and performance of the
Agreement and the other Loan Documents will not conflict
with or contravene any of Regulations G, T, U and X
promulgated by the Federal Reserve Board.

     (k)  To our knowledge and except with respect to those
matters identified on Schedule 6.05 to the Agreement, there
are no actions, suits, proceedings, claims or disputes
pending or threatened against the Company or its
Subsidiaries or any of their respective properties before
any court, regulatory body, administrative agency, at law,
in equity, in arbitration or before any Governmental
Authority which (a) purport to affect or pertain to the
Agreement or the other Loan Documents, or any of the
transactions contemplated thereby, or (b) if determined
adversely to the Company or its Subsidiaries, would
reasonably be expected to have a Material Adverse Effect.

     This opinion letter is rendered solely for your benefit
in connection with the transactions described in the
Agreement.  Without our prior written consent, this opinion
letter may not be (a) relied upon by any other person or
entity or used for any other purpose; (b) quoted in whole or
in part or otherwise referred to in any report or document;
or (c) furnished (the original or copies thereof) to any
person or entity except in connection with the enforcement
of the Loan Documents by you or to regulatory authorities to
which you are subject.

                         Very truly yours,



                         Collette & Erickson LLP


OCLI 1.729

                                  EXHIBIT E
                 FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

          This ASSIGNMENT  AND  ACCEPTANCE  AGREEMENT (this  "Assignment  and
Acceptance")   dated   as    of   __________,    _____   is    made   between
_______________________ (the "Assignor") and  __________________________ (the
"Assignee").
                                   RECITALS

          WHEREAS, the  Assignor is  party to  that certain  Credit Agreement
dated as  of  July 31,  1998  (as amended,  amended  and restated,  modified,
supplemented, extended or renewed from time to  time, the "Credit Agreement")
among  Optical  Coating  Laboratory,   Inc.,  a  Delaware   corporation  (the
"Company"), the  several  financial  institutions  from  time to  time  party
thereto (including the Assignor,  the "Banks"), and Bank  of America National
Trust and Savings  Association, as  letter of  credit issuing  bank ("Issuing
Bank") and as agent  for the Banks (the  "Agent").  Any terms  defined in the
Credit Agreement and not defined  in this Assignment and  Acceptance are used
herein as defined in the Credit Agreement;

          WHEREAS, as provided under  the Credit Agreement, the  Assignor has
committed to  making Revolving  Loans to,  and to  participate in  Letters of
Credit issued  by the  Issuing Bank  for the  account of,  the Company  in an
aggregate amount not to exceed $__________ (the "Commitment");

          WHEREAS, [the Assignor  has made Revolving  Loans in  the aggregate
principal amount  of $__________  to  the Company]  [no  Revolving Loans  are
outstanding under the Credit Agreement];

          WHEREAS, [the Assignor has acquired a  participation in the Issuing
Bank's liability under Letters of Credit in an  aggregate principal amount of
$____________ (the "L/C Obligations")] [no Letters of  Credit are outstanding
under the Credit Agreement]; and

          WHEREAS, the Assignor  wishes to  assign to  the Assignee  [part of
the] [all] rights and obligations of the Assignor  under the Credit Agreement
in respect of its Commitment, [together with a  corresponding portion of each
of its outstanding Revolving Loans  and L/C Obligations,] in  an amount equal
to $__________  (the  "Assigned Amount)  on  the terms  and  subject to  the
conditions set forth herein and  the Assignee wishes to  accept assignment of
such rights and to  assume such obligations from  the Assignor on  such terms
and subject to such conditions;

          NOW, THEREFORE, in  consideration of the  foregoing and  the mutual
agreements contained herein, the parties hereto agree as follows:

     1.   Assignment and Acceptance.

          (a)  Subject to  the terms  and conditions  of this  Assignment and
Acceptance, (i) the  Assignor  hereby sells,  transfers  and  assigns to  the
Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes from
the Assignor, without recourse and without representation or warranty (except
as expressly provided in this Assignment and Acceptance) __% (the "Assignee's
Percentage Share") of (A) the Commitment [and the Revolving Loans and the L/C
Obligations]  of  the   Assignor  and   (B) all  related   rights,  benefits,
obligations, liabilities  and  indemnities  of  the  Assignor  under  and  in
connection with the Credit Agreement and the Loan Documents.

          [If appropriate, add  paragraph specifying  payment to  Assignor by
Assignee of  outstanding principal  of, accrued  interest on,  and fees  with
respect to, Revolving Loans and L/C Obligations assigned.]

          (b)  With effect on  and after  the Effective  Date (as  defined in
Section 5 hereof), the Assignee shall be a party to  the Credit Agreement and
succeed to  all  of  the rights  and  be  obligated  to  perform all  of  the
obligations of a Bank under the Credit  Agreement, including the requirements
concerning  confidentiality  and  the  payment  of  indemnification,  with  a
Commitment in an amount  equal to the Assigned  Amount.  The  Assignee agrees
that it will perform  in accordance with their  terms all of  the obligations
which by the terms of the Credit Agreement are required to be performed by it
as a Bank.  It is the intent of the parties hereto that the Commitment of the
Assignor shall, as of  the Effective Date, be  reduced by an amount  equal to
the Assigned  Amount and  the Assignor  shall  relinquish its  rights and  be
released from its obligations under  the Credit Agreement to  the extent such
obligations have  been  assumed  by  the  Assignee;  provided,  however,  the
Assignor shall not relinquish  its indemnity rights under  the Loan Documents
(including rights  arising  under  Article IV  and  subsection  11.04(b)  and
Section 11.05 of the Credit Agreement).

          (c)  After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignee's Commitment will be $__________.

          (d)  After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignor's Commitment will be $__________.

     2.   Payments.

          (a)  As  consideration  for  the  sale,   assignment  and  transfer
contemplated in Section 1 hereof, the  Assignee shall pay to  the Assignor on
the Effective  Date  in  immediately  available  funds  an  amount  equal  to
$__________, representing  the Assignee's  Pro Rata  Share  of the  principal
amount of all Revolving Loans.

          (b)  The [Assignor] [Assignee] further agrees to pay to the Agent a
processing fee  in  the  amount  specified  in Section 11.08  of  the  Credit
Agreement.

     3.   Reallocation of Payments.

     Any interest, fees and other payments accrued to the Effective Date with
respect to the Commitment, Revolving  Loans and L/C Obligations  shall be for
the account of the Assignor.   Any interest, fees and  other payments accrued
on and after  the Effective  Date with respect  to the  Commitment, Revolving
Loans and L/C Obligations shall be for the account of the  Assignee.  Each of
the Assignor and the Assignee agrees that it will hold in trust for the other
party any interest, fees and other amounts which it may  receive to which the
other party is  entitled pursuant to  the preceding sentence  and pay  to the
other party any such amounts which it may receive promptly upon receipt.

     4.   Independent Credit Decision.

     The Assignee (a) acknowledges that it has received a  copy of the Credit
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements referred to  in Section 6.11 or  7.01 of the
Credit Agreement, and such other  documents and information as  it has deemed
appropriate to make its own credit  and legal analysis and  decision to enter
into  this  Assignment   and  Acceptance;  and   (b) agrees  that   it  will,
independently and without reliance upon the Assignor, the  Agent or any other
Bank and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit and legal decisions in taking or
not taking action under the Credit Agreement.

     5.   Effective Date; Notices.

          (a)  As between the Assignor  and the Assignee, the  effective date
for this Assignment and Acceptance shall be  __________, ____ (the "Effective
Date"); provided that the following conditions  precedent have been satisfied
on or before the Effective Date:

               (i)  this Assignment  and  Acceptance  shall be  executed  and
delivered by the Assignor and the Assignee;

               (ii) any consent  of the  Company, the  Issuing  Bank and  the
Agent required  for an  effective assignment  of the  Assigned Amount  by the
Assignor to the  Assignee under Section 11.08  of the Credit  Agreement shall
have been duly  obtained and  shall be  in full  force and  effect as  of the
Effective Date;

               (iii)     the Assignee shall pay  to the Assignor  all amounts
due to the Assignor under this Assignment and Acceptance;

               (iv) the Assignee  shall have  complied with  Section 10.10 of
the Credit Agreement (if applicable); and

               (v)  the processing fee referred to in Section 2(b) hereof and
in Section 11.08 of the Credit Agreement shall have been paid to the Agent.

          (b)  Promptly  following  the  execution  of  this  Assignment  and
Acceptance, the Assignor shall deliver  to the Company, the  Issuing Bank and
the  Agent  for  acknowledgement  by  the  Agent,   a  Notice  of  Assignment
substantially in the form attached hereto as Schedule 1.

     6.   Agent.

          (a)  The Assignee hereby appoints and authorizes  the Agent to take
such action as  agent on  its behalf and  to exercise  such powers  under the
Credit Agreement as are delegated to  the Agent by the Banks  pursuant to the
terms of the Credit Agreement.

          [(b) The Assignee shall assume no duties or obligations held by the
Assignor in its capacity as Agent under the  Credit Agreement.] [INCLUDE ONLY
IF ASSIGNOR IS AGENT]

     7.   Withholding Tax.

     The Assignee (a) represents and warrants to the  Assignor, the Agent and
the Company that under applicable law and treaties no tax will be required to
be withheld by the  Assignor with respect to  any payments to be  made to the
Assignee hereunder, (b) agrees to furnish (if it is  organized under the laws
of any jurisdiction other than the United States or any State thereof) to the
Agent and the Company prior to the time that the Agent or Company is required
to make  any payment  of  principal, interest  or  fees hereunder,  duplicate
executed originals of either U.S. Internal Revenue Service  Form 4224 or U.S.
Internal Revenue Service Form  1001 (wherein the Assignee  claims entitlement
to the benefits of a tax  treaty that provides for a  complete exemption from
U.S. federal income withholding tax on all payments  hereunder) and agrees to
provide new  Forms  4224  or  1001  upon the  expiration  of  any  previously
delivered form or  comparable statements in  accordance with  applicable U.S.
law and regulations  and amendments thereto,  duly executed and  completed by
the Assignee, and  (c) agrees  to comply  with all  applicable U.S.  laws and
regulations with regard to such withholding tax exemption.

     8.   Representations and Warranties.

          (a)  The Assignor represents and warrants that  (i) it is the legal
and beneficial owner of the interest being assigned by  it hereunder and that
such interest is free and clear  of any Lien or other  adverse claim; (ii) it
is duly organized  and existing and  it has the  full power and  authority to
take, and  has  taken,  all action  necessary  to  execute and  deliver  this
Assignment and Acceptance and any other documents required or permitted to be
executed or delivered by it in connection with this Assignment and Acceptance
and to fulfill its  obligations hereunder; (iii) no notices  to, or consents,
authorizations or  approvals of,  any  Person are  required  (other than  any
already given or obtained) for its due execution, delivery and performance of
this Assignment and Acceptance, and apart from any agreements or undertakings
or filings required by the Credit Agreement, no further  action by, or notice
to, or filing with, any Person is required of it for such execution, delivery
or performance;  and  (iv) this  Assignment  and  Acceptance  has  been  duly
executed and delivered  by it  and constitutes the  legal, valid  and binding
obligation of the  Assignor, enforceable against  the Assignor  in accordance
with the terms hereof, subject, as to enforcement, to bankruptcy, insolvency,
moratorium, reorganization and other laws of  general application relating to
or affecting creditors' rights and to general equitable principles.

          (b)  The Assignor makes no  representation or warranty  and assumes
no  responsibility   with   respect   to   any  statements,   warranties   or
representations made in  or in  connection with the  Credit Agreement  or the
execution, legality,  validity, enforceability,  genuineness, sufficiency  or
value of the Credit Agreement  or any other instrument  or document furnished
pursuant thereto.    The  Assignor makes  no  representation  or warranty  in
connection with, and assumes no responsibility with respect to, the solvency,
financial condition  or statements  of  the Company,  or  the performance  or
observance by the  Company, of  any of its  respective obligations  under the
Credit Agreement or any other instrument or  document furnished in connection
therewith.

          (c)  The Assignee  represents  and  warrants  that (i) it  is  duly
organized and existing and it has  full power and authority to  take, and has
taken, all  action  necessary  to execute  and  deliver  this Assignment  and
Acceptance and any other  documents required or  permitted to be  executed or
delivered by it  in connection  with this Assignment  and Acceptance,  and to
fulfill  its  obligations  hereunder;   (ii) no  notices  to,   or  consents,
authorizations or  approvals of,  any  Person are  required  (other than  any
already given or obtained) for its due execution, delivery and performance of
this Assignment and Acceptance; and apart from any agreements or undertakings
or filings required by the Credit Agreement, no further  action by, or notice
to, or filing with, any Person is required of it for such execution, delivery
or performance; (iii) this Assignment  and Acceptance has been  duly executed
and delivered by it and  constitutes the legal, valid  and binding obligation
of the  Assignee, enforceable  against the  Assignee in  accordance with  the
terms  hereof,  subject,  as  to  enforcement,   to  bankruptcy,  insolvency,
moratorium, reorganization and other laws of  general application relating to
or affecting  creditors'  rights and  to  general  equitable principles;  and
(iv) it is an Eligible Assignee.

     9.   Further Assurances.

     The Assignor and the Assignee  each hereby agree to  execute and deliver
such other  instruments, and  take such  other  action, as  either party  may
reasonably request in connection  with the transactions contemplated  by this
Assignment and Acceptance,  including the  delivery of  any notices  or other
documents or instruments to the Company  or the Agent, which  may be required
in connection with the assignment and assumption contemplated hereby.

     10.  Miscellaneous.

          (a)  Any amendment or  waiver of any  provision of  this Assignment
and Acceptance shall  be in  writing and signed  by the  parties hereto.   No
failure or delay  by either party  hereto in exercising  any right,  power or
privilege hereunder shall operate as a  waiver thereof and any  waiver of any
breach of the provisions of  this Assignment and Acceptance  shall be without
prejudice to any rights with respect to any other or further breach thereof.

          (b)  All payments made hereunder shall be  made without any set-off
or counterclaim.

          (c)  The Assignor and the Assignee shall each pay its own costs and
expenses incurred in connection with the  negotiation, preparation, execution
and performance of this Assignment and Acceptance.

          (d)  This Assignment and Acceptance  may be executed in  any number
of counterparts and all of  such counterparts taken together  shall be deemed
to constitute one and the same instrument.

          (e)  THIS ASSIGNMENT  AND  ACCEPTANCE  SHALL  BE  GOVERNED  BY  AND
CONSTRUED IN  ACCORDANCE  WITH THE  LAW  OF THE  STATE  OF  CALIFORNIA.   The
Assignor and  the  Assignee each  irrevocably  submits  to the  non-exclusive
jurisdiction of any  State or  Federal court sitting  in California  over any
suit, action or proceeding arising out of or relating  to this Assignment and
Acceptance and irrevocably agrees that  all claims in respect  of such action
or proceeding may be heard and determined in such California State or Federal
court.   Each party  to  this Assignment  and  Acceptance hereby  irrevocably
waives, to the  fullest extent it  may effectively do  so, the defense  of an
inconvenient forum to the maintenance of such action or proceeding.

          (f)  THE  ASSIGNOR   AND  THE   ASSIGNEE  EACH   HEREBY  KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE  ANY RIGHTS THEY MAY  HAVE TO A  TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING  OUT OF, UNDER, OR
IN CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE,  THE CREDIT AGREEMENT, ANY
RELATED DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
OR STATEMENTS (WHETHER ORAL OR WRITTEN).

          [Other provisions  to be  added as  may be  negotiated between  the
Assignor and the Assignee, provided that such provisions are not inconsistent
with the Credit Agreement.]

     IN WITNESS  WHEREOF, the  Assignor  and the  Assignee  have caused  this
Assignment and  Acceptance  to  be  executed  and  delivered  by  their  duly
authorized officers as of the date first above written.

                              [ASSIGNOR]

                              By:                                       
                              Title:                                    
                              By:                                       
                              Title:                                    
                              Address:

                              [ASSIGNEE]

                              By:                                       
                              Title:                                    
                              By:                                       
                              Title:                                    
                              Address:

SCHEDULE 1


NOTICE OF ASSIGNMENT AND ACCEPTANCE

_______________, ____

Bank of America National Trust
  and Savings Association, as Agent,
  and as Letter of Credit Issuing Bank
U.S. Division Credit Products-SF #3838
555 California Street, 41st Floor
San Francisco, CA  94104
Attn:  James P. Johnson, Managing Director

Optical Coating Laboratory, Inc.
2789 Northpoint Parkway
Santa Rosa, CA  95407-7397
Attn:  Treasurer

Ladies and Gentlemen:

     We refer to the Credit Agreement dated as of July  31, 1998 (as amended,
amended and restated, modified,  supplemented, extended or renewed  from time
to time the "Credit  Agreement") among Optical Coating  Laboratory, Inc. (the
"Company"), the Banks referred to therein and Bank  of America National Trust
and Savings Association,  as letter of  credit issuing bank  ("Issuing Bank")
and as  agent for  the Banks  (the  "Agent").   Terms defined  in the  Credit
Agreement are used herein as therein defined.

     1.   We hereby give  you notice  of, and request  your consent  to2, the
assignment by  __________________ (the  "Assignor")  to _______________  (the
"Assignee") of _____% of the right, title and interest of the Assignor in and
to the Credit Agreement (including, without limitation,  the right, title and
interest of the Assignor in and to the Commitments of  the Assignor, [and all
outstanding Revolving  Loans  made  by  the  Assignor]  [and  the  Assignor's
participation in  the Letters  of  Credit]) pursuant  to  the Assignment  and
Acceptance Agreement  attached  hereto  (the  "Assignment  and  Acceptance").
Before  giving  effect  to  such  assignment  the  Assignor's  Commitment  is
$ ___________ [and] [the aggregate amount of  its outstanding Revolving Loans
See Section 11.08 of Credit Agreement regarding circumstances under which
is  $_____________]  [,   and  its  participation   in  L/C   Obligations  is
$_____________].

     2.   The Assignee agrees that, upon receiving the  consent of the Agent,
the Issuing Bank  and, if  applicable, the Company,  to such  assignment, the
Assignee will be bound by the  terms of the Credit Agreement as  fully and to
the same extent  as if  the Assignee  were the  Bank originally  holding such
interest in the Credit Agreement.

     3.   The following administrative details apply to the Assignee:

          (A)  Notice Address:

Assignee name:    __________________________
Address:          __________________________
                  __________________________
                  __________________________
Attention:        __________________________
Telephone:        (___) ____________________
Telecopier:       (___) ____________________
Telex             __________________________
(Answerback):

          (B)  Payment Instructions:

Account No.:      __________________________
At:               __________________________
                  __________________________
                  __________________________
Reference:        __________________________
Attention:        __________________________
                                                                                
Company consent is or is not required.

     4.   You are entitled to  rely upon the representations,  warranties and
covenants of each of  the Assignor and  Assignee contained in  the Assignment
and Acceptance.

     IN WITNESS  WHEREOF, the  Assignor  and the  Assignee  have caused  this
Notice of Assignment and Acceptance  to be executed by  their respective duly
authorized  officials,  officers  or  agents  as  of  the  date  first  above
mentioned.

[NAME OF ASSIGNOR]

By:

______________________________

Title:
______________________________

By:
______________________________

Title:
______________________________


[NAME OF ASSIGNEE]

By:
______________________________

Title:
______________________________

By:
______________________________

Title:
______________________________




ACKNOWLEDGED AND ASSIGNMENT CONSENTED TO:
OPTICAL   COATING   LABORATORY,INC.

By:
Title:

By:
Title:


BANK OF AMERICA  NATIONAL TRUST
AND  SAVINGS   ASSOCIATION,  as Agent

By:
Title:


BANK OF AMERICA  NATIONAL TRUST
AND   SAVINGS  ASSOCIATION,  as
Issuing Bank


By:
Title: