<PAGE>   1
                                                                  EXHIBIT 10.42




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





                              FILTERTEK USA, INC.



                    $10,000,000 6.58% SERIES A SENIOR NOTES
                              DUE AUGUST 18, 2000


                    $30,000,000 6.98% SERIES B SENIOR NOTES
                              DUE AUGUST 18, 2005


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

                                 NOTE AGREEMENT

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


                          DATED AS OF AUGUST 18, 1995




================================================================================
<PAGE>   2

                               TABLE OF CONTENTS

                            (Not Part of Agreement)




<TABLE>
<CAPTION>
                                                                                                        Page
                                                                                                        ----
<S>      <C>                                                                                              <C>
1.       AUTHORIZATION OF ISSUE OF NOTES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    1
                                                                                              
2.       PURCHASE AND SALE OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    2
                                                                                              
3.       CONDITIONS OF CLOSING  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    2
         3A.     OPINION OF PURCHASERS' SPECIAL COUNSEL . . . . . . . . . . . . . . . . . . . . . . . .    2
         3B.     OPINION OF TRANSACTION PARTIES' COUNSEL  . . . . . . . . . . . . . . . . . . . . . . .    2
         3C.     REPRESENTATIONS AND WARRANTIES; NO DEFAULT . . . . . . . . . . . . . . . . . . . . . .    2
         3D.     PURCHASE PERMITTED BY APPLICABLE LAWS. . . . . . . . . . . . . . . . . . . . . . . . .    3
         3E.     PRIVATE PLACEMENT NUMBERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    3
         3F.     FEES AND EXPENSES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    3
         3G.     DELIVERY OF NOTES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    3
         3H.     SALE OF NOTES TO OTHER PURCHASERS  . . . . . . . . . . . . . . . . . . . . . . . . . .    3
         3I.     BANK AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    3
         3J.     PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    3
                                                                                              
4.       PREPAYMENTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    3
         4A(1).  REQUIRED PREPAYMENTS OF SERIES A NOTES . . . . . . . . . . . . . . . . . . . . . . . .    3
         4A(2).  REQUIRED PREPAYMENTS OF SERIES B NOTES . . . . . . . . . . . . . . . . . . . . . . . .    4
         4B.     OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT  . . . . . . . . . . . . . . . . . .    4
         4C.     NOTICE OF OPTIONAL PREPAYMENT  . . . . . . . . . . . . . . . . . . . . . . . . . . . .    4
         4D.     PARTIAL PAYMENTS PRO RATA  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    4
         4E.     RETIREMENT OF NOTES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    5
                                                                                              
5.       AFFIRMATIVE COVENANTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    5
         5A.     FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    5
         5B.     INFORMATION REQUIRED BY RULE 144A  . . . . . . . . . . . . . . . . . . . . . . . . . .    7
         5C.     INSPECTION OF PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    7
         5D.     COVENANT TO SECURE NOTE EQUALLY  . . . . . . . . . . . . . . . . . . . . . . . . . . .    7
         5E.     CHANGE IN CONTROL PUT OPTION.  . . . . . . . . . . . . . . . . . . . . . . . . . . . .    7
         5F.     CONDUCT OF BUSINESS; MAINTENANCE OF EXISTENCE; COMPLIANCE WITH LAWS  . . . . . . . . .    8
         5G.     MAINTENANCE OF PROPERTY; INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . .    8
         5H.     NOTICE OF SUITS, ADVERSE CHANGE IN BUSINESS, ETC.  . . . . . . . . . . . . . . . . . .    9
                                                                                              
6.       NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    9
         6A.     FINANCIAL COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    9
         6B.     RESTRICTED PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10
         6C.     LIEN, DEBT AND OTHER RESTRICTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . .   10
         6D.     ISSUANCE OF STOCK BY SUBSIDIARIES. . . . . . . . . . . . . . . . . . . . . . . . . . .   16
         6E.     ADDITIONAL GUARANTEES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16
                                                                                              
7.       EVENTS OF DEFAULT  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16
         7A.     ACCELERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16
         7B.     RESCISSION OF ACCELERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   20
                                                                                                            
</TABLE>                                                              
<PAGE>   3
                                                           
<TABLE>                                                                
<S>      <C>                                                                                              <C>
         7C.     NOTICE OF ACCELERATION OR RESCISSION . . . . . . . . . . . . . . . . . . . . . . . . .   20
         7D.     OTHER REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   20
                                                                                              
8.       REPRESENTATIONS, COVENANTS AND WARRANTIES  . . . . . . . . . . . . . . . . . . . . . . . . . .   21
         8A.     ORGANIZATION; POWER AND AUTHORITY  . . . . . . . . . . . . . . . . . . . . . . . . . .   21
         8B.     FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   21
         8C.     ACTIONS PENDING  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   22
         8D.     OUTSTANDING INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   22
         8E.     TITLE TO PROPERTIES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   22
         8F.     TAXES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   22
         8G.     CONFLICTING AGREEMENTS AND OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . .   22
         8H.     OFFERING OF NOTES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   23
         8I.     REGULATION G, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   23
         8J.     ERISA  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   24
         8K.     GOVERNMENTAL CONSENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   24
         8L.     ENVIRONMENTAL COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   24
         8M.     DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   25
                                                                                              
9.       REPRESENTATIONS OF EACH PURCHASER  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   25
         9A.     NATURE OF PURCHASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   25
         9B.     SOURCE OF FUNDS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   25
                                                                                              
10.      DEFINITIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   25
         10A.    YIELD-MAINTENANCE TERMS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   25
         10B.    OTHER TERMS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   27
         10C.    ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS  . . . . . . . . . . . . . . . . . . .   35
                                                                                              
12.      MISCELLANEOUS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   41
         12A.    NOTE PAYMENTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   41
         12B.    EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   42
         12C.    CONSENT TO AMENDMENTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   42
         12D.    FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES . . . . . . . . . . . .   43
         12E.    PERSONS DEEMED OWNERS; PARTICIPATIONS  . . . . . . . . . . . . . . . . . . . . . . . .   43
         12F.    SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT . . . . . . . . . . . . .   44
         12G.    SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   44
         12H.    NOTICES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   44
         12I.    PAYMENTS DUE ON NON-BUSINESS DAYS  . . . . . . . . . . . . . . . . . . . . . . . . . .   44
         12J.    SATISFACTION REQUIREMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   45
         12K.    GOVERNING LAW  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   45
         12L.    INDEPENDENCE OF COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   45
         12M.    SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   45
         12N.    DESCRIPTIVE HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   45
         12O.    COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   45
         12P.    SEVERALTY OF OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   45
         12Q.    DISCLOSURE TO OTHER PERSONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   46
         12R.    INDEPENDENT CREDIT INVESTIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . .   46
</TABLE>





                                      -ii-
<PAGE>   4


PURCHASER SCHEDULE

EXHIBIT A-1  --  FORM OF SERIES A NOTE

EXHIBIT A-2  --  FORM OF SERIES B NOTE

EXHIBIT B  --  FORM OF OPINION OF COMPANY'S COUNSEL

SCHEDULE 6(C)(1) -- LIST OF EXISTING LIENS

SCHEDULE 6(C)(3) -- LIST OF EXISTING PRIORITY DEBT

SCHEDULE 8G  --  LIST OF AGREEMENTS RESTRICTING DEBT

SCHEDULE 10B(1) -- MEMBERS OF SCHAWK FAMILY
<PAGE>   5

                              FILTERTEK USA, INC.
                                1695 RIVER ROAD
                          DES PLAINES, ILLINOIS 60018


        
                                                As of August 18, 1995



To Each of the Purchasers Named in the
 Purchaser Schedule Attached Hereto


Ladies and Gentlemen:

         The undersigned, Filtertek USA, Inc. (herein called "FILTERTEK"),
Schawk, Inc. (herein called the "COMPANY"), Plastic Molded Concepts, Inc.
(herein called "PMC") and Tek Packaging Group, Inc. (herein called
"PACKAGING"), hereby agree with the purchasers named in the Purchaser Schedule
attached hereto (herein called the "PURCHASERS") as follows:

         1.     AUTHORIZATION OF ISSUE OF NOTES.  Filtertek will authorize the
issue of the following:

         (i)    its senior promissory notes in the aggregate principal amount of
$10,000,000 (herein called the "SERIES A NOTES"), to be dated the date of issue
thereof, to mature August 18, 2000, to bear interest on the unpaid balance
thereof from the date thereof until the principal thereof shall have become due
and payable at the rate of 6.58% per annum and on overdue payments at the rate
specified therein, and to be substantially in the form of Exhibit A-1 attached
hereto.  The term "SERIES A NOTES" as used herein shall include each Series A
Note delivered pursuant to any provision of this Agreement and each Series A
Note delivered in substitution or exchange for any other Series A Note pursuant
to any such provision; and

         (ii)   its senior promissory notes in the aggregate principal amount of
$30,000,000 (herein called the "SERIES B NOTES"), to be dated the date of issue
thereof, to mature August 18, 2005, to bear interest on the unpaid balance
thereof from the date thereof until the principal thereof shall have become due
and payable at the rate of 6.98% per annum and on overdue payments at the rate
specified therein, and to be substantially in the form of Exhibit A-2 attached
hereto.  The term "SERIES B NOTES" as used herein shall include each Series B
Note delivered pursuant to any provision of this Agreement and each Series B
Note delivered in substitution or exchange for any other Series B Note pursuant
to any such provision.





                                      -1-
<PAGE>   6

The term "NOTE" or "NOTES" as used herein shall include each Series A Note and
Series B Note delivered pursuant to any provision of this Agreement and each
Series A Note and Series B Note delivered in substitution or exchange for any
such Note pursuant to any such provision.

         2.     PURCHASE AND SALE OF NOTES.  Filtertek hereby agrees to sell
to each Purchaser and, subject to the terms and conditions herein set forth,
each Purchaser agrees to purchase from Filtertek the aggregate principal amount
of Notes set forth opposite such Purchaser's name in the Purchaser Schedule
attached hereto at 100% of such aggregate principal amount.  Filtertek will
deliver to each Purchaser, at the offices of Schiff Hardin & Waite at 7200
Sears Tower, Chicago, Illinois 60606, one or more Notes registered in such
Purchaser's name, evidencing the aggregate principal amount of Notes to be
purchased by such Purchaser and in the denomination or denominations specified
with respect to such Purchaser in the Purchaser Schedule against payment of the
purchase price thereof by transfer of immediately available funds for credit to
Filtertek's account #73 10447 at Bank of America Illinois, Chicago, Illinois,
ABA #071000039, on the date of closing, which shall be August 18, 1995 or any
other date on or before August 31, 1995 upon which Filtertek and the Purchasers
may mutually agree (herein called the "CLOSING" or the "DATE OF CLOSING").

         3.     CONDITIONS OF CLOSING.  Each Purchaser's obligation to
purchase and pay for the Notes to be purchased by such Purchaser hereunder is
subject to the satisfaction, on or before the date of closing, of the following
conditions:

         3A.    OPINION OF PURCHASERS' SPECIAL COUNSEL. Such Purchaser shall
have received from Schiff Hardin & Waite, who are acting as special counsel for
the Purchasers in connection with this transaction, a favorable opinion
satisfactory to such Purchaser as to such matters incident to the matters
herein contemplated as it may reasonably request.

         3B.    OPINION OF TRANSACTION PARTIES' COUNSEL.  Such Purchaser shall
have received from Vedder Price Kaufman & Kammholz, special counsel for the
Transaction Parties, a favorable opinion satisfactory to such Purchaser and
substantially in the form of Exhibit B attached hereto, and the Transaction
Parties, by their execution of this Agreement, authorize and request such
counsel to render such opinion to the Purchasers.


         3C.    REPRESENTATIONS AND WARRANTIES; NO DEFAULT.  The representations
and warranties contained in paragraph 8 shall be true on and as of the date of
closing, except to the extent of changes caused by the transactions herein
contemplated; there shall exist on the date of closing no Event of Default or
Default; and the Company shall have delivered to such Purchaser an Officer's
Certificate, dated the date of closing, to both such effects.





                                      -2-
<PAGE>   7


         3D.    PURCHASE PERMITTED BY APPLICABLE LAWS.  The purchase of and
payment for the Notes to be purchased by such Purchaser on the date of closing
on the terms and conditions herein provided (including the use of the proceeds
of such Notes by Filtertek) shall not violate any applicable law or
governmental regulation (including, without limitation, section 5 of the
Securities Act or Regulation G, T or X of the Board of Governors of the Federal
Reserve System) and shall not subject such Purchaser to any tax, penalty,
liability or other onerous condition under or pursuant to any applicable law or
governmental regulation, and such Purchaser shall have received such
certificates or other evidence as it may request to establish compliance with
this condition.

         3E.    PRIVATE PLACEMENT NUMBERS.  Private placement numbers shall have
been obtained from Standard & Poor's CUSIP Service Bureau with respect to the
Notes.

         3F.    FEES AND EXPENSES.  Filtertek shall have paid such fees and
expenses of the Purchasers' special counsel (up to a maximum amount of $35,000)
as the Purchasers shall have required to have been paid on or before the date
of closing.

         3G.    DELIVERY OF NOTES.  Filtertek shall have delivered to such
Purchaser on the date of closing the Notes to be delivered to such Purchaser
pursuant to paragraph 2, all duly completed and executed by Filtertek.

         3H.    SALE OF NOTES TO OTHER PURCHASERS.  Filtertek shall have sold
to the other Purchasers the Notes to be purchased by them at the closing and
shall have received payment in full therefor.

         3I.    BANK AGREEMENT.  All Liens created under any Loan Document (as
defined in the Bank Agreement) shall have been terminated to the satisfaction
of such Purchaser.

         3J.    PROCEEDINGS.  All corporate and other proceedings taken or to be
taken in connection with the transactions contemplated hereby and all documents
incident thereto shall be satisfactory in substance and form to such Purchaser,
and such Purchaser shall have received all such counterpart originals or
certified or other copies of such documents as it may reasonably request.

         4.     PREPAYMENTS.  The Notes shall be subject to prepayment with
respect to the required prepayments specified in paragraphs 4A(1) and 4A(2) and
the optional prepayments permitted by paragraph 4B.

         4A(1). REQUIRED PREPAYMENTS OF SERIES A NOTES.  Until the Series A
Notes shall be paid in full, Filtertek shall apply to the prepayment of the
Series A Notes, without premium, the sum of $5,000,000 on August 18 in each of
the years 1999 and 2000, inclusive, and such principal amounts of the Series A
Notes,





                                      -3-
<PAGE>   8

together with interest thereon to the prepayment dates, shall become due on
such prepayment dates.

         4A(2). REQUIRED PREPAYMENTS OF SERIES B NOTES.  Until the Series B
Notes shall be paid in full, Filtertek shall apply to the prepayment of the
Series B Notes, without premium, the sum of $6,000,000 on August 18 in each of
the years 2001 to 2004, inclusive, and such principal amounts of the Series B
Notes, together with interest thereon to the prepayment dates, shall become due
on such prepayment dates.  The remaining unpaid principal amount of the Series
B Notes, together with interest accrued thereon, shall become due on the
maturity date of the Series B Notes.
                
         4B.    OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT.  On and
after August 18, 1996, the Notes shall be subject to prepayment, in whole at
any time or from time to time in part (in multiples of $100,000 with a minimum
of $1,000,000), at the option of Filtertek, at 100% of the principal amount so
prepaid plus interest thereon to the prepayment date and the Yield-Maintenance
Amount, if any, with respect to each Note.  Any partial prepayment of the Notes
pursuant to this paragraph 4B allocated to the Series A Notes pursuant to
paragraph 4D hereof  shall be applied in satisfaction of the required payments
of principal thereof under paragraph 4A(1) hereof in inverse order of their
scheduled due dates, and any partial payment of Notes pursuant to this
paragraph 4B allocated to the Series B Notes pursuant to paragraph 4D hereof
shall be applied in satisfaction of the required payments of principal thereof
under paragraph 4A(2) hereof in the inverse order of their scheduled due dates.

         4C.    NOTICE OF OPTIONAL PREPAYMENT.  Filtertek shall give the
holder of each Note irrevocable written notice of any prepayment pursuant to
paragraph 4B not less than 10 Business Days prior to the prepayment date,
specifying such prepayment date and the principal amount of the Notes, and of
the Notes held by such holder, to be prepaid on such date and stating that such
prepayment is to be made pursuant to paragraph 4B.  Notice of prepayment having
been given as aforesaid, the principal amount of the Notes specified in such
notice, together with interest thereon to the prepayment date and together with
the Yield-Maintenance Amount, if any, with respect thereto, shall become due
and payable on such prepayment date.  Filtertek shall, on or before the day on
which it gives written notice of any prepayment pursuant to paragraph 4B, give
telephonic notice of the principal amount of the Notes to be prepaid and the
prepayment date to each Significant Holder which shall have designated a
recipient of such notices in the Purchaser Schedule attached hereto or by
notice in writing to Filtertek or the Company.

         4D.    PARTIAL PAYMENTS PRO RATA.  Upon any partial prepayment of the
Notes of any Series pursuant to paragraph 4A(1) or 4A(2),





                                      -4-
<PAGE>   9

the principal amount so prepaid shall be allocated to all Notes of such Series
at the time outstanding (including, for the purpose of this sentence only, all
Notes of such Series prepaid or otherwise retired or purchased or otherwise
acquired by Filtertek or any of its Subsidiaries or Affiliates (including,
without limitation, Notes of such Series purchased by Filtertek pursuant to
paragraph 5E) other than by prepayment pursuant to paragraph 4A(1), 4A(2) or
4B) in proportion to the respective outstanding principal amounts thereof.
Upon any partial prepayment of the Notes pursuant to paragraph 4B, the
principal amount so prepaid shall be allocated to all Notes at the time
outstanding in proportion to the respective outstanding principal amounts
thereof.

         4E.    RETIREMENT OF NOTES.  The Transaction Parties shall not, and 
shall not permit any of their Subsidiaries or Affiliates to, prepay or otherwise
retire in whole or in part prior to their stated final maturity (other than by
prepayment pursuant to paragraph 4A(1), 4A(2) or 4B, upon exercise of the put
option pursuant to paragraph 5E, or upon acceleration of such final maturity
pursuant to paragraph 7A), or purchase or otherwise acquire, directly or
indirectly, Notes held by any holder.

         5.     AFFIRMATIVE COVENANTS.
                
         5A.    FINANCIAL STATEMENTS.  The Company and Filtertek jointly and
severally covenant to deliver to each Significant Holder in duplicate:

                (i)     as soon as practicable and in any event within 45
         days after the end of each quarterly period (other than the last
         quarterly period) in each fiscal year, consolidated statements of
         income, stockholders' equity and cash flows of the Company and its
         Subsidiaries for the period from the beginning of the current fiscal
         year to the end of such quarterly period, and a consolidated balance
         sheet of the Company and its Subsidiaries as at the end of such
         quarterly period, setting forth in each case in comparative form
         figures for the corresponding period in the preceding fiscal year, all
         in reasonable detail and satisfactory in form to the Required
         Holder(s) and certified by an authorized financial officer of the
         Company, subject to changes resulting from year-end adjustments;

                (ii)    as soon as practicable and in any event within 90
         days after the end of each fiscal year, consolidating and consolidated
         statements of income and cash flows and a consolidated statement of
         stockholders' equity of the Company and its Subsidiaries for such
         year, and a consolidating and consolidated balance sheet of the
         Company and its Subsidiaries as at the end of such year, setting forth
         in each case in comparative form corresponding consolidated figures
         from the preceding annual audit, all in reasonable detail and





                                      -5-
<PAGE>   10

         satisfactory in form to the Required Holder(s) and, as to the
         consolidated statements, reported on by independent public accountants
         of recognized national standing selected by the Company whose report
         shall be without limitation as to the scope of the audit and
         satisfactory in substance to the Required Holder(s) and, as to the
         consolidating statements, certified by an authorized financial officer
         of the Company;

                (iii)   promptly upon transmission thereof, copies of all such
         financial statements, proxy statements, notices and reports as it
         shall send to its public stockholders and copies of all registration
         statements (without exhibits) and all reports which it files with the
         Securities and Exchange Commission (or any governmental body or agency
         succeeding to the functions of the Securities and Exchange
         Commission);

                (iv)    promptly upon receipt thereof, a copy of each other
         report submitted to the Company or any Subsidiary by independent
         accountants in connection with any annual, interim or special audit
         made by them of the books of the Company or any Subsidiary; and

                (v)     with reasonable promptness, such other financial data
         as such Significant Holder may reasonably request.

Together with each delivery of financial statements required by clauses (i) and
(ii) above, the Company and Filtertek will deliver to each Significant Holder
an Officer's Certificate demonstrating (with computations in reasonable detail)
compliance by the Company and its Subsidiaries with the provisions of
paragraphs 6A(1), 6A(2), 6B, 6C(2), 6C(3), 6C(4)(ix) and 6C(7) and stating that
there exists no Event of Default or Default, or, if any Event of Default or
Default exists, specifying the nature and period of existence thereof and what
action the Company and Filtertek proposes to take with respect thereto.
Together with each delivery of financial statements required by clause (ii)
above, the Company and Filtertek will deliver to each Significant Holder a
certificate of such accountants stating that, in making the audit necessary for
their report on such financial statements, they have obtained no knowledge of
any Event of Default or Default, or, if they have obtained knowledge of any
Event of Default or Default, specifying the nature and period of existence
thereof.  Such accountants, however, shall not be liable to anyone by reason of
their failure to obtain knowledge of any Event of Default or Default which
would not be disclosed in the course of an audit conducted in accordance with
generally accepted auditing standards.  The Company and Filtertek also covenant
that immediately after any Responsible Officer obtains knowledge of an Event of
Default or Default, they will deliver to each Significant Holder an Officer's
Certificate specifying the nature and period of existence thereof and what
action the Company and Filtertek propose to take with respect thereto.





                                      -6-
<PAGE>   11


         5B.    INFORMATION REQUIRED BY RULE 144A.  Each of the Company and
Filtertek jointly and severally covenant that it will, upon the request of the
holder of any Note, provide such holder, and any qualified institutional buyer
designated by such holder, such financial and other information as such holder
may reasonably determine to be necessary in order to permit compliance with the
information requirements of Rule 144A under the Securities Act in connection
with the resale of Notes, except at such times as Filtertek is subject to the
reporting requirements of section 13 or 15(d) of the Exchange Act.  For the
purpose of this paragraph 5B, the term "qualified institutional buyer" shall
have the meaning specified in Rule 144A under the Securities Act.

         5C.    INSPECTION OF PROPERTY.  The Company and Filtertek jointly and
severally covenant that they will permit any Person designated by any
Significant Holder in writing, at such Significant Holder's expense, to visit
and inspect any of the properties of Filtertek, the Company and its
Subsidiaries, to examine the corporate books and financial records of
Filtertek, the Company and its Subsidiaries and make copies thereof or extracts
therefrom and to discuss the affairs, finances and accounts of any of such
corporations with the principal officers of Filtertek, the Company and its
independent public accountants, all at such reasonable times and as often as
such Significant Holder may reasonably request.

         5D.    COVENANT TO SECURE NOTE EQUALLY.  The Company and Filtertek
jointly and severally covenant that, if they or any Subsidiary shall create or
assume any Lien upon any of their property or assets, whether now owned or
hereafter acquired, other than Liens permitted by the provisions of paragraph
6C(1) (unless prior written consent to the creation or assumption thereof shall
have been obtained pursuant to paragraph 12C), they will make or cause to be
made effective provision whereby the Notes will be secured by such Lien equally
and ratably with any and all other Indebtedness thereby secured so long as any
such other Indebtedness shall be so secured.

         5E.    CHANGE IN CONTROL PUT OPTION.  The Company and Filtertek
covenant that within three Business Days after any Responsible Officer shall
obtain knowledge of the occurrence of a Change in Control Event, the Company
and Filtertek shall provide each holder of Notes written notice thereof,
describing in reasonable detail the facts and circumstances constituting such
Change in Control Event.  Following the occurrence of any Change in Control
Event, if at any time prior to 15 Business Days after receipt of notice
thereof, the holder of any Notes requests in writing that Filtertek purchase
the Notes held by such holder, Filtertek shall, on the 25th Business Day after
such receipt of such notice, purchase (and each such holder thereof shall sell)
such Notes at a purchase price equal to the aggregate outstanding principal
amount thereof, together with interest thereon to the date of purchase and the





                                      -7-
<PAGE>   12

Yield-Maintenance Amount, if any, with respect thereto.  Each Purchaser of
Series B Notes hereby irrevocably relinquishes for itself, but not for any
subsequent holder of Series B Notes, the right to sell its Series B Notes
pursuant to this paragraph 5E unless either (i) on or after the earlier of the
date upon which (a) the Change of Control Event is first publicly announced or
(b) the Change of Control Event occurs, and within one year after such date,
the aggregate amount of all Funded Debt of the Company and its Subsidiaries on
a consolidated basis is greater than or equal to 55% of Consolidated
Capitalization, or (ii) any holder of Series A Notes makes a request to have
any Series A Notes purchased by Filtertek pursuant to this paragraph 5E, in
which event such Purchaser may request that Filtertek purchase the Series B
Notes held by such holder pursuant to this paragraph 5E at any time prior to 5
Business Days after receipt by such Purchaser of notice of the occurrence of an
event described in clause (i) or (ii).  The Company and Filtertek agree to
notify in writing the holders of the Series B Notes promptly, but in any event
within 2 Business Days, following the occurrence of an event described in
clause (i) or (ii).  No holder of any such Note shall be required to make any
representation or warranty in connection with such sale, other than with
respect to its ownership of its Note.

         5F.    CONDUCT OF BUSINESS; MAINTENANCE OF EXISTENCE; COMPLIANCE WITH
LAWS.  The Company and Filtertek jointly and severally covenant to, and to
cause each Subsidiary to, (i) continue to engage primarily in the material
lines of business which Filtertek, the Company and its Subsidiaries operate,
respectively, as of the date of closing, (ii) preserve, renew and keep in full
force and effect the corporate existence, and all material rights, privileges,
franchises, permits and licenses of Filtertek, the Company and its
Subsidiaries, respectively, provided, however, that this clause (ii) shall not
prohibit a merger otherwise permitted pursuant to the terms hereof, and (iii)
comply in all material respects with all applicable laws, ordinances, rules,
regulations and other requirements of governmental authorities (including,
without limitation, all federal, state, local and regional statutes, laws,
ordinances and judicial or administrative orders, judgments, rulings and
regulations relating to protection of the environment and ERISA).

         5G.    MAINTENANCE OF PROPERTY; INSURANCE.

                (i)     The Company and Filtertek jointly and severally
covenant to, and to cause each Subsidiary to, maintain its property in good
working order and condition and make all necessary repairs, renewals,
replacements, additions, betterments and improvements thereto so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this paragraph shall
prevent Filtertek,





                                      -8-
<PAGE>   13

the Company or any Subsidiary from discontinuing or disposing of any of its
property to the extent otherwise permitted by paragraph 6C(7) hereof.
                     
                (ii)    The Company and Filtertek jointly and severally
covenant to insure and keep insured, and to cause each Subsidiary to insure and
keep insured, with financially sound and reputable insurers, so much of their
respective property and in such amounts as is usually and customarily insured
by companies engaged in similar businesses with respect to property of a
similar character.

         5H.    NOTICE OF SUITS, ADVERSE CHANGE IN BUSINESS, ETC.  The Company
and Filtertek jointly and severally covenant to, and to cause each Subsidiary
to, as soon as possible, and in any event within five (5) Business Days after
any officer of such Person learns of the following, give written notice to each
Significant Holder:  (i) of any material proceeding(s) (including, without
limitation, litigation, investigations, arbitration or governmental
proceedings) being instituted or threatened to be instituted by or against such
Person in any federal, state, local or foreign court or before any commission
or other regulatory body (federal, state, local or foreign), (ii) that such
Person's operations are not in full compliance with all requirements of
applicable federal, state, local or foreign law, ordinance, rule, regulation or
other governmental requirement, except for notices as to matters which, either
individually or in the aggregate, could not reasonably be expected to have a
material adverse effect on the property or assets, business, condition
(financial or otherwise) or the operations of the Company and its Subsidiaries,
taken as a whole, (iii) that, without limiting the foregoing clause (ii), such
Person is subject to a material federal, state, local or foreign investigation
evaluating whether any remedial action is needed to respond to the release of
any hazardous or toxic waste, substance or constituent, or other substance into
the environment and (iv) of any material adverse change in such Person's
property or assets, business, condition (financial or otherwise), operations or
prospects.

         6.     NEGATIVE COVENANTS.

         6A.    FINANCIAL COVENANTS.  The Company and Filtertek jointly and
severally covenant not to permit:

         6A(1). CURRENT RATIO.  As of the last day of any fiscal quarter, the
ratio of (a) the sum of Consolidated Current Assets as of the last day of such
quarter plus Consolidated Current Assets as of the last day of each of the
three fiscal quarters immediately preceding such fiscal quarter to (b) the sum
of the Consolidated Current Liabilities as of the last day of such quarter plus
the Consolidated Current Liabilities as of the last day of each of the three
fiscal quarters immediately preceding such fiscal quarter to be less than 1.0
to 1.0; or





                                      -9-
<PAGE>   14


         6A(2). NET WORTH.  Consolidated Net Worth at any time to be less than
the sum of (i) $60,000,000, plus (ii) if positive, 25% of Cumulative Adjusted
Net Earnings;

         6B.    RESTRICTED PAYMENTS.  The Company and Filtertek jointly and
severally covenant that they will not, and will not permit any Subsidiary to,
make, pay or declare, or commit to make, pay or declare, any Restricted Payment
if after giving effect to such Restricted Payment the aggregate amount of all
Restricted Payments made after December 31, 1994 would exceed the sum of (i)
$10,000,000, plus (ii) 75% (or minus 100% in the case of a deficit) of
Cumulative Adjusted Net Earnings.  Notwithstanding the foregoing, no Restricted
Payment shall be made if (a) a Default or Event of Default exists or would
exist after giving effect to such Restricted Payment or (b) after giving effect
to such Restricted Payment, the Company could not incur at least $1 of
additional Funded Debt pursuant to paragraph 6C(2);

         6C.    LIEN, DEBT AND OTHER RESTRICTIONS.  The Company and Filtertek
jointly and severally covenant that they will not, and will not permit any
Subsidiary to:

         6C(1). LIENS.  Create, assume or suffer to exist any Lien upon any of
its properties or assets, whether now owned or hereafter acquired (whether or
not provision is made for the equal and ratable securing of the Notes in
accordance with the provisions of paragraph 5D), except:

                (i)     any Lien existing on property of the Company,
         Filtertek, or any Subsidiary on the date of closing and set forth in
         Schedule 6C(1) securing Indebtedness outstanding on such date;

                (ii)    Liens for taxes, fees, assessments or other
         governmental charges which are not delinquent or remain payable
         without penalty, interest or other charge, provided that no notice of
         lien has been filed or recorded under the Code;

                (iii)   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 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;

                (iv)    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;





                                      -10-
<PAGE>   15

                (v)     Liens on the property of the Company, Filtertek, or
         any Subsidiary securing (a) the non-delinquent performance of bids and
         trade contracts and leases (provided such Liens are with respect to
         deposits made to secure performance of such contracts or leases), and
         statutory obligations, (b) contingent obligations on surety and appeal
         bonds, and (c) other non-delinquent obligations of a like nature; in
         each case, incurred in the ordinary course of business and not in
         connection with the borrowing of money or the obtaining of credit or
         advances, provided all such Liens in the aggregate would not (even if
         enforced) cause a material adverse effect on the property or assets,
         business, condition (financial or otherwise) or operations of the
         Company, Filtertek or any Subsidiary;

                (vi)    Liens consisting of judgment or judicial attachment
         liens, provided that the enforcement of such Liens is effectively
         stayed and all such Liens in the aggregate at any time outstanding for
         the Company, Filtertek, and its Subsidiaries do not exceed $500,000;

                (vii)   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, Filtertek and any Subsidiaries;

                (viii)  any Lien on assets of corporations which become
         Subsidiaries after the date of this Agreement, provided, however, that
         (a) such Lien existed at the time the respective corporations became
         Subsidiaries and was not created in anticipation thereof, (b) the
         principal amount of the Indebtedness secured by such Lien shall not at
         any time exceed, together with Indebtedness secured by Liens permitted
         under paragraph 6C(1)(ix), $7,500,000, and (c) the Indebtedness
         secured by such Lien is permitted by paragraphs 6C(2) and 6C(3);

                (ix)    purchase money security interests on equipment or
         real property acquired or held by the Company, Filtertek or any
         Subsidiary 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 (a) any such Lien
         attaches to such property concurrently with or within 20 days after
         the acquisition thereof, (b) such Lien attaches solely to the property
         so acquired in such transaction, (c) the principal amount of the
         Indebtedness secured thereby does not exceed 100% of the cost of such
         property, (d) the aggregate Indebtedness secured by such purchase
         money security interests shall not at any time





                                      -11-
<PAGE>   16

         exceed, together with Indebtedness secured by Liens permitted under
         subsection 6C(1)(viii), $7,500,000 and (e) the Indebtedness secured by
         such Lien is permitted by paragraphs 6C(2) and 6C(3);

                (x)     Liens securing Capitalized Lease Obligations on
         assets subject to leases thereunder, provided that such Capitalized
         Lease Obligations are otherwise permitted by paragraph 6C(2) and
         6C(3); and

                (xi)    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 (a)
         such deposit account is not a dedicated cash collateral account and is
         not subject to restrictions against access by the Company or any
         Subsidiary in excess of those set forth by regulations promulgated by
         the Board of Governors of the Federal Reserve System, and (b) such
         deposit account is not intended by the Company or any Subsidiary to
         provide collateral to the depository institution;

         6C(2). FUNDED DEBT.  Create, incur or assume any Funded Debt, unless
immediately after giving effect to the incurrence, issuance or assumption of
such Funded Debt (i) the aggregate amount of all Funded Debt of the Company and
its Subsidiaries on a consolidated basis is less than or equal to 60% of
Consolidated Capitalization, (ii) the ratio of (A) Consolidated Earnings
Available for Fixed Charges for the four consecutive fiscal quarters ending
with the fiscal quarter most recently ended on or prior to the date of
creation, incurrence or assumption of such Funded Debt to (B) Fixed Charges for
such four consecutive fiscal quarters, is greater than or equal to 2.0 to 1.0,
and (iii) if such Funded Debt is Priority Debt, such creation, incurrence or
assumption is permitted by paragraph 6C(3).  For the purposes of this paragraph
6C(2), any Person becoming a Subsidiary after the date of this Agreement shall
be deemed to have incurred all of its then outstanding Funded Debt at the time
it becomes a Subsidiary of the Company;

         6C(3). PRIORITY DEBT.  Create, incur, assume or suffer to exist any
Priority Debt other than:

                (i)     Priority Debt consisting of Capitalized Lease
         Obligations existing on the date hereof, which Capitalized Lease
         Obligations are described on Schedule 6C(3) hereto, provided that no
         such Capitalized Lease Obligation shall be extended, renewed or
         increased; and

                (ii)    other Priority Debt, provided that (a) the aggregate
         amount of all such other Priority Debt outstanding at any time





                                      -12-
<PAGE>   17

         does not exceed 15% of Consolidated Net Worth at such time, and (b)
         the creation, incurrence or assumption of such other Priority Debt is
         permitted by paragraph 6C(2);

         6C(4).  LOANS, ADVANCES AND INVESTMENTS.  Make or permit to remain
outstanding any loan or advance to, or own, purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any Person (all of the foregoing being herein called
"INVESTMENTS"), except that the Company or any Subsidiary may:

                (i)     make or permit to remain outstanding loans or
         advances to any Subsidiary, provided, however, that the aggregate
         outstanding amount of all advances and loans made by the Company or
         Filtertek to all Subsidiaries that are liable under a Guarantee with
         respect to all or any portion of Indebtedness under the Bank Agreement
         shall not at any time exceed $750,000;

                (ii)    own, purchase or acquire obligations of, or fully
         guaranteed by, the United States of America provided such obligations
         mature within one year from the date of acquisition thereof;

                (iii)   own, purchase or acquire commercial paper rated A-1 or
         better by Standard and Poor's Corporation or P-1 or better by Moody's
         Investors Service, Inc.;

                (iv)    maintain demand deposit accounts in the ordinary
         course of business;

                (v)     own, purchase or acquire certificates of deposit
         issued by and time deposits with commercial banks (whether domestic or
         foreign) having capital and surplus in excess of $100,000,000;

                (vi)    own, purchase or acquire common stock of companies
         publicly traded on a national exchange; provided, that the aggregate
         cost of such common stock does not at any time exceed $1,000,000;

                (vii)   own, purchase or acquire adjustable rate preferred
         stock and preferred stock of companies listed on the S&P 500 and
         having a long-term debt rating of A or better by Standard & Poor's
         Corporation or A2 or better by Moody's Investors Services, Inc., and
         loan participations, so long as the underlying obligor has a
         short-term debt rating of A-2 or better by Standard & Poor's
         Corporation or P-2 or better by Moody's Investors Service, Inc.;
         provided, that the aggregate cost of such investments does not at any
         time exceed $2,000,000;





                                      -13-
<PAGE>   18

                (viii)  make extensions of credit in the nature of accounts
         receivable or notes receivable arising from the sale or lease of goods
         or services in the ordinary course of business;

                (ix)    make Investments in Persons transacting business related
         to or involving the primary business lines of the Company, provided
         that the aggregate amount of all Investments made under this clause
         (ix) does not exceed at any time 10% of Consolidated Net Worth at such
         time;

                (x)     own, purchase or acquire stock, obligations or
         securities of a Subsidiary or a Person which immediately after such
         purchase or acquisition will be a Subsidiary;

                (xi)    make extensions of credit to employees of the
         Company, Filtertek or any Subsidiary in the ordinary course of
         business consistent with past practice and in an aggregate amount at
         any one time outstanding not to exceed $1,000,000, provided, that the
         Company, Filtertek and any Subsidiary may not extend credit to
         Clarence W. Schawk or David A. Schawk; and

                (xii)   Restricted Investments permitted by paragraph 6B;

         6C(5). SALE OF STOCK AND DEBT OF SUBSIDIARIES.  Sell or otherwise
dispose of, or part with control of, any shares of stock or Indebtedness of any
Subsidiary (other than Filtertek), except to the Company or a Wholly-Owned
Subsidiary, and except that all shares of stock and Indebtedness of any
Subsidiary at the time owned by or owed to the Company and all Subsidiaries may
be sold as an entirety for a cash consideration which represents the fair value
(as determined in good faith by the Board of Directors of the Company) at the
time of sale of the shares of stock and Indebtedness so sold; provided that (a)
such sale or other disposition is treated as a Transfer of the assets of such
Subsidiary subject to paragraph 6C(7)(iii) and is permitted by paragraph
6C(7)(iii) and (b) at the time of such sale, such Subsidiary shall not own,
directly or indirectly, any shares of stock or Indebtedness of any other
Subsidiary (unless all of the shares of stock and Indebtedness of such other
Subsidiary owned, directly or indirectly, by the Company and all Subsidiaries
are simultaneously being sold as permitted by this paragraph 6C(5));

         6C(6). MERGER AND CONSOLIDATION.  Merge or consolidate with or into
any other Person, except that:

                (i)     any Subsidiary of the Company (other than Filtertek)
         may merge or consolidate with or into the Company, provided that the
         Company is the continuing or surviving corporation,





                                      -14-
<PAGE>   19

                (ii)    any Subsidiary of the Company (other than Filtertek)
         may merge or consolidate with or into a Wholly-Owned Subsidiary of the
         Company, provided that such Wholly-Owned Subsidiary is the continuing
         or surviving corporation, and

                (iii)   the Company or Filtertek may merge with any other
         solvent corporation, provided that (a) the surviving corporation is a
         corporation organized and existing under the laws of the United States
         of America or a state thereof, with substantially all of its assets
         located and a majority of its business conducted within the United
         States, (b) if the Company or Filtertek is not the surviving
         corporation, such corporation expressly assumes, by an agreement
         satisfactory in substance and form to the Required Holders (which
         agreement may require in connection with such assumption the delivery
         of such opinions of counsel as the Required Holders may reasonably
         request), the obligations of the Company under this Agreement and
         under the Notes, and (c) no Default or Event of Default exists or
         would exist immediately after giving effect to such merger;

provided, however, that no merger or consolidation under this paragraph 6C(6)
shall be permitted unless immediately after giving effect thereto the Company
shall be able to incur at least $1 of additional Funded Debt pursuant to
paragraph 6C(2);

         6C(7). TRANSFER OF ASSETS.  Transfer any of its assets except that:

                (i)     the Company or any Subsidiary may Transfer assets in
         the ordinary course of business,

                (ii)    any Subsidiary other than Filtertek may Transfer
         assets to the Company or a Wholly-Owned Subsidiary if after giving
         effect thereto the Company shall be able to incur at least $1 of
         additional Funded Debt pursuant to paragraph 6C(2), and

                (iii)   the Company or any Subsidiary may otherwise Transfer
         assets, provided that after giving effect thereto (a) the aggregate
         Value of all Annual Transferred Assets, plus the aggregate Value of
         the assets then proposed to be Transferred, does not exceed 15% of the
         consolidated total assets of the Company and its Subsidiaries as of
         the end of the fiscal quarter most recently ended on or prior to the
         date of such Transfer, (b) all Annual Transferred Assets, together
         with the assets then proposed to be Transferred, have not contributed,
         in the aggregate, more than 10% of Consolidated Net Earnings during
         either of the two fiscal years most recently ended on or prior to the
         date of such Transfer, and (c) the Company shall be able to incur at
         least $1 of additional Funded Debt pursuant to paragraph 6C(2);





                                      -15-
<PAGE>   20


         6C(8). SALE OR DISCOUNT OF RECEIVABLES.  Sell with recourse, or
discount or otherwise sell for less than the face value thereof, any of its
notes or accounts receivable; or

         6C(9). RELATED PARTY TRANSACTIONS.  Directly or indirectly, purchase,
acquire or lease any property from, or sell, transfer or lease any property to,
or otherwise deal with, in the ordinary course of business or otherwise, any
Related Party; provided that the foregoing shall not apply to any transaction
entered into (A) in the ordinary course of and pursuant to the reasonable
requirements of the Company's or a Subsidiary's business and (B) upon fair and
reasonable terms no less favorable to the Company or such Subsidiary than would
be obtained in a comparably arm's length transaction with a Person other than a
Related Party.

         6D.    ISSUANCE OF STOCK BY SUBSIDIARIES.  The Company and Filtertek
jointly and severally covenant that they will not permit any Subsidiary (either
directly or indirectly by the issuance of rights or options for, or securities
convertible into, such shares) to, and Filtertek covenants that it will not,
issue, sell or otherwise dispose of any shares of any class of its stock (other
than directors' qualifying shares) except to the Company or a Wholly-Owned
Subsidiary.

         6E.    ADDITIONAL GUARANTEES.  The Company and Filtertek jointly and
severally covenant not to permit any Subsidiary to become liable under a
Guarantee with respect to any of the obligations of the Company, Filtertek or
any Subsidiary or Affiliate of the Company under the Bank Agreement or any
other agreement, document or instrument now or hereafter executed or delivered
in connection therewith unless concurrently therewith such Subsidiary
guarantees the Obligations by becoming a party to this Agreement as a
"Guarantor" hereunder pursuant to written agreements in form and substance
satisfactory to the Required Holder(s).

         7.     EVENTS OF DEFAULT.

         7A.    ACCELERATION.  If any of the following events shall occur and
be continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):

                (i)     Filtertek defaults in the payment of any principal of
         or Yield-Maintenance Amount payable with respect to any Note when the
         same shall become due, either by the terms thereof or otherwise as
         herein provided; or

                (ii)    Filtertek defaults in the payment of any interest on
         any Note for more than five Business Days after the date due; or





                                      -16-
<PAGE>   21

                (iii)   Filtertek, the Company or any Subsidiary defaults
         (whether as primary obligor or as guarantor or other surety) in any
         payment of principal of or interest on any other obligation for
         borrowed money (or any Capitalized Lease Obligation, any obligation
         under a conditional sale or other title retention agreement, any
         obligation issued or assumed as full or partial payment for property
         whether or not secured by a purchase money mortgage or any obligation
         under notes payable or drafts accepted representing extensions of
         credit) beyond any period of grace provided with respect thereto, or
         Filtertek, the Company or any Subsidiary fails to perform or observe
         any other agreement, term or condition contained in any agreement
         under which any such obligation is created (or if any other event
         thereunder or under any such agreement shall occur and be continuing)
         and the effect of such failure or other event is to cause, or to
         permit the holder or holders of such obligation (or a trustee on
         behalf of such holder or holders) to cause, such obligation to become
         due (or to be repurchased by Filtertek, the Company or any Subsidiary)
         prior to any stated maturity, provided that the aggregate amount of
         all obligations as to which such a payment default shall occur and be
         continuing or such a failure or other event causing or permitting
         acceleration (or resale to Filtertek, the Company or any Subsidiary)
         shall occur and be continuing exceeds $500,000; or

                (iv)    any representation or warranty made by Filtertek, the
         Company or any other Transaction Party herein or by Filtertek, the
         Company or any of its Subsidiaries or any of such Person's officers in
         any writing furnished in connection with or pursuant to this Agreement
         shall be false in any material respect on the date as of which made;
         or

                (v)     Filtertek or the Company fails to perform or
         observe any agreement contained in paragraph 5E or 6 (other than
         paragraph 6C(1) with respect to Liens not securing Indebtedness); or

                (vi)    any Transaction Party fails to perform or observe
         any other agreement, term or condition contained herein or in any
         other agreement delivered in connection herewith and such failure
         shall not be remedied within 30 days after any Responsible Officer
         obtains actual knowledge thereof; or

                (vii)   Filtertek, the Company or any Subsidiary makes an
         assignment for the benefit of creditors or is generally not paying its
         debts as such debts become due; or

                (viii)  any decree or order for relief in respect of Filtertek,
         the Company or any Subsidiary is entered under any bankruptcy,
         reorganization, compromise, arrangement, insolvency, readjustment of
         debt, dissolution or liquidation





                                      -17-
<PAGE>   22

         or similar law, whether now or hereafter in effect (herein called the
         "Bankruptcy Law"), of any jurisdiction; or
        
                (ix)    Filtertek, the Company or any Subsidiary petitions
         or applies to any tribunal for, or consents to, the appointment of, or
         taking possession by, a trustee, receiver, custodian, liquidator or
         similar official of Filtertek, the Company or any Subsidiary, or of
         any substantial part of the assets of Filtertek, the Company or any
         Subsidiary, or commences a voluntary case under the Bankruptcy Law of
         the United States or any proceedings (other than proceedings for the
         voluntary liquidation and dissolution of a Subsidiary other than
         Filtertek) relating to Filtertek, the Company or any Subsidiary under
         the Bankruptcy Law of any other jurisdiction; or

                (x)     any such petition or application is filed, or any
         such proceedings are commenced, against Filtertek, the Company or any
         Subsidiary and Filtertek, the Company or such Subsidiary by any act
         indicates its approval thereof, consent thereto or acquiescence
         therein, or an order, judgment or decree is entered appointing any
         such trustee, receiver, custodian, liquidator or similar official, or
         approving the petition in any such proceedings, and such order,
         judgment or decree remains unstayed and in effect for more than 30
         days; or

                (xi)    any order, judgment or decree is entered in any
         proceedings against Filtertek or the Company decreeing the dissolution
         of Filtertek or the Company and such order, judgment or decree remains
         unstayed and in effect for more than 60 days; or

                (xii)   any order, judgment or decree is entered in any
         proceedings against Filtertek, the Company or any Subsidiary decreeing
         a split-up of Filtertek, the Company or such Subsidiary which requires
         the divestiture of assets representing a substantial part, or the
         divestiture of the stock of a Subsidiary whose assets represent a
         substantial part, of the consolidated assets of the Company and its
         Subsidiaries (determined in accordance with generally accepted
         accounting principles) or which requires the divestiture of assets, or
         stock of a Subsidiary, which shall have contributed a substantial part
         of the consolidated net income of the Company and its Subsidiaries
         (determined in accordance with generally accepted accounting
         principles) for any of the three fiscal years then most recently
         ended, and such order, judgment or decree remains unstayed and in
         effect for more than 60 days; or

                (xiii)  a final judgment in an amount in excess of $1,000,000
         (other than an amount the payment of which is





                                      -18-
<PAGE>   23

         covered by insurance from an independent third party insurance company
         that has agreed in writing that it is obligated to pay such amount) is
         rendered against Filtertek, the Company or any Subsidiary and, within
         30 days after entry thereof, such judgment is not discharged or
         execution thereof stayed pending appeal, or within 30 days after the
         expiration of any such stay, such judgment is not discharged; or

                (xiv)   if (a) any Plan shall fail to satisfy the minimum
         funding standards of ERISA or the Code for any plan year or part
         thereof or a waiver of such standards or extension of any amortization
         period is sought or granted under section 412 of the Code, (b) a
         notice of intent to terminate any Plan shall have been or is
         reasonably expected to be filed with the PBGC or the PBGC shall have
         instituted proceedings under ERISA section 4042 to terminate or
         appoint a trustee to administer any Plan or the PBGC shall have
         notified Filtertek, the Company or any ERISA Affiliate that a Plan may
         become a subject of any such proceedings, (c) the aggregate "amount of
         unfunded benefit liabilities" (within the meaning of section
         4001(a)(18) of ERISA) under all Plans, determined in accordance with
         Title IV of ERISA, shall exceed $500,000, (d) Filtertek, the Company
         or any ERISA Affiliate shall have incurred or is reasonably expected
         to incur any liability pursuant to Title I or IV of ERISA or the
         penalty or excise tax provisions of the Code relating to employee
         benefit plans, (e) Filtertek, the Company or any ERISA Affiliate
         withdraws from any Multiemployer Plan, or (f) Filtertek, the Company
         or any Subsidiary establishes or amends any employee welfare benefit
         plan that provides post-employment welfare benefits in a manner that
         would increase the liability of Filtertek, the Company or any
         Subsidiary thereunder; and any such event or events described in
         clauses (i) through (vi) above, either individually or together with
         any such event or events, could reasonably be expected to have a
         material adverse effect on the business, condition (financial or
         otherwise) or operations of the Company and its Subsidiaries taken as
         a whole.

then (a) if such event is an Event of Default specified in clause (i) or (ii)
of this paragraph 7A, the holder of any Note (other than Filtertek, the Company
or any of its Subsidiaries or Affiliates) may at its option, by notice in
writing to Filtertek, declare such Note to be, and such Note shall thereupon be
and become, immediately due and payable at par together with interest accrued
thereon, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by Filtertek, (b) if such event is an Event of
Default specified in clause (viii), (ix) or (x) of this paragraph 7A with
respect to Filtertek or the Company, all of the Notes at the time outstanding
shall automatically become immediately due and payable together with interest
accrued thereon and the Yield-Maintenance Amount, if any, with respect thereto,
without presentment, demand, protest or





                                      -19-
<PAGE>   24

notice of any kind, all of which are hereby waived by Filtertek, and (c) if
such event is any Event of Default, the Required Holder(s) may at its or their
option, by notice in writing to Filtertek, declare all of the Notes to be, and
all of the Notes shall thereupon be and become, immediately due and payable
together with interest accrued thereon and together with the Yield-Maintenance
Amount, if any, with respect to each Note, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by Filtertek.

         7B.    RESCISSION OF ACCELERATION.  At any time after any or all of
the Notes shall have been declared immediately due and payable pursuant to
paragraph 7A, the Required Holder(s) may, by notice in writing to Filtertek,
rescind and annul such declaration and its consequences if (i) Filtertek shall
have paid all overdue interest on the Notes, the principal of and
Yield-Maintenance Amount, if any, payable with respect to any Notes which have
become due otherwise than by reason of such declaration, and interest on such
overdue interest and overdue principal and Yield-Maintenance Amount at the rate
specified in the Notes, (ii) Filtertek shall not have paid any amounts which
have become due solely by reason of such declaration, (iii) all Events of
Default and Defaults, other than non-payment of amounts which have become due
solely by reason of such declaration, shall have been cured or waived pursuant
to paragraph 12C, and (iv) no judgment or decree shall have been entered for
the payment of any amounts due pursuant to the Notes or this Agreement.  No
such rescission or annulment shall extend to or affect any subsequent Event of
Default or Default or impair any right arising therefrom.

         7C.    NOTICE OF ACCELERATION OR RESCISSION.  Whenever any Note shall
be declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, Filtertek
shall forthwith give written notice thereof to the holder of each Note at the
time outstanding.

         7D.    OTHER REMEDIES.  If any Event of Default or Default shall
occur and be continuing, the holder of any Note may proceed to protect and
enforce its rights under this Agreement and such Note by exercising such
remedies as are available to such holder in respect thereof under applicable
law, either by suit in equity or by action at law, or both, whether for
specific performance of any covenant or other agreement contained in this
Agreement or in aid of the exercise of any power granted in this Agreement.  No
remedy conferred in this Agreement upon the holder of any Note is intended to
be exclusive of any other remedy, and each and every such remedy shall be
cumulative and shall be in addition to every other remedy conferred herein or
now or hereafter existing at law or in equity or by statute or otherwise.





                                      -20-
<PAGE>   25

         8.     REPRESENTATIONS, COVENANTS AND WARRANTIES.  Each of Filtertek
and the Company jointly and severally represents, covenants and warrants as
follows:

         8A.    ORGANIZATION; POWER AND AUTHORITY.

         8A(1). ORGANIZATION.  Each of Filtertek and the Company is a
corporation duly organized and existing in good standing under the laws of the
State of Delaware and each other Subsidiary is duly organized and existing in
good standing under the laws of the jurisdiction in which it is incorporated.

         8A(2). POWER AND AUTHORITY.  Filtertek, the Company and each
Subsidiary have all requisite power to conduct its respective business as
currently conducted and as currently proposed to be conducted.  Each
Transaction Party has all requisite power to execute, deliver and perform its
obligations under this Agreement and Filtertek has all requisite power to
execute, deliver and perform its obligations under the Notes.  The execution,
delivery and performance of this Agreement and the Notes has been duly
authorized by all requisite action, this Agreement has been duly executed and
delivered by authorized officers of each Transaction Party, the Notes have been
duly executed by authorized officers of Filtertek and this Agreement is, and
the Notes when delivered on the date of closing will be, the valid obligation
of each Transaction Party a party thereto, legally binding upon and enforceable
against each such Transaction Party in accordance with its respective terms,
except as such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and (ii) general principals of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).

         8B.    FINANCIAL STATEMENTS.  The Company has furnished each
Purchaser with the following financial statements, identified by a principal
financial officer of the Company:  (i) a consolidated balance sheet of the
Company and its Subsidiaries as at December 31 in each of the years 1990 to
1994, inclusive, and consolidated statements of income, stockholders' equity
and cash flows of the Company and its Subsidiaries for each such year, all
reported on by Arthur Anderson & Co.; and (ii) a consolidated balance sheet of
the Company and its Subsidiaries as at June 30 in each of the years 1994 and
1995 and consolidated statements of income, stockholders' equity and cash flows
for the six-month period ended on each such date, prepared by the Company.
Such financial statements (including any related schedules and/or notes) are
true and correct in all material respects (subject, as to interim statements,
to changes resulting from audits and year-end adjustments), have been prepared
in accordance with generally accepted accounting principles consistently
followed throughout the periods involved and show all liabilities, direct and
contingent, of the Company and its Subsidiaries required to be shown in
accordance with such





                                      -21-
<PAGE>   26

principles.  The balance sheets fairly present the condition of the Company and
its Subsidiaries as at the dates thereof, and the statements of income,
stockholders' equity and cash flows fairly present the results of the
operations of the Company and its Subsidiaries and their cash flows for the
periods indicated.  There has been no material adverse change in the business,
condition (financial or otherwise) or operations of the Company and its
Subsidiaries taken as a whole since December 31, 1994.

         8C.    ACTIONS PENDING.  There is no action, suit, investigation or
proceeding pending or, to the knowledge of Filtertek or the Company, threatened
against Filtertek, the Company or any Subsidiary, or any properties or rights
of Filtertek, the Company or any Subsidiary, by or before any court, arbitrator
or administrative or governmental body which might result in any material
adverse change in the business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries taken as a whole.

         8D.    OUTSTANDING INDEBTEDNESS. Neither Filtertek, the Company nor
any Subsidiary has outstanding any Funded Debt except as permitted by paragraph
6C(2) nor any Priority Debt except as permitted by paragraph 6C(3).  There
exists no default under the provisions of any instrument evidencing any
Indebtedness or of any agreement relating thereto.

         8E.    TITLE TO PROPERTIES.  Each of Filtertek and the Company has
and each Subsidiary has good and indefeasible title to its respective real
properties (other than properties which it leases) and good title to all of its
other respective properties and assets, including the properties and assets
reflected in the balance sheet as at December 31, 1994 referred to in paragraph
8B (other than properties and assets disposed of in the ordinary course of
business), subject to no Lien of any kind except Liens permitted by paragraph
6C(1).  All leases necessary in any material respect for the conduct of the
respective businesses of Filtertek, the Company and any Subsidiary are valid
and subsisting and are in full force and effect.

         8F.    TAXES.  Each of Filtertek and the Company has and each
Subsidiary has filed all federal, state and other income tax returns which, to
the knowledge of the officers of the Company, are required to be filed, and
each has paid all taxes as shown on such returns and on all assessments
received by it to the extent that such taxes have become due, except such taxes
as are being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with generally accepted
accounting principles.

         8G.    CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither Filtertek,
the Company nor any Subsidiary is a party to any contract or agreement or
subject to any charter or other corporate





                                      -22-
<PAGE>   27

restriction which materially and adversely affects its business, property or
assets, or financial condition.  Neither the execution nor delivery of this
Agreement or the Notes, nor the offering, issuance and sale of the Notes, nor
fulfillment of nor compliance with the terms and provisions hereof and of the
Notes will conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a default under, or result in any violation of, or
result in the creation of any Lien upon any of the properties or assets of
Filtertek, the Company or any Subsidiary pursuant to, the charter or by-laws of
Filtertek, the Company or any Subsidiary, any award of any arbitrator or any
agreement (including any agreement with stockholders), instrument, order,
judgment, decree, statute, law, rule or regulation to which Filtertek, the
Company or any Subsidiary is subject.  Neither Filtertek, the Company nor any
Subsidiary is a party to, or otherwise subject to any provision contained in,
any instrument evidencing Indebtedness of Filtertek, the Company or such
Subsidiary, any agreement relating thereto or any other contract or agreement
(including its charter) which limits the amount of, or otherwise imposes
restrictions on the incurring of, Indebtedness of Filtertek of the type to be
evidenced by the Notes except as set forth in the agreements listed in Schedule
8G attached hereto.

         8H.    OFFERING OF NOTES.  Neither Filtertek, the Company nor any
agent acting on their behalf have, directly or indirectly, offered the Notes or
any similar security of Filtertek or the Company for sale to, or solicited any
offers to buy the Notes or any similar security of Filtertek or the Company
from, or otherwise approached or negotiated with respect thereto with, any
Person other than institutional investors, and neither Filtertek, the Company
nor any financial agent or any agent acting on their behalf have taken or will
take any action which would subject the issuance or sale of the Notes to the
provisions of section 5 of the Securities Act or to the provisions of any
securities or Blue Sky law of any applicable jurisdiction.

         8I.    REGULATION G, ETC.  Neither Filtertek, the Company nor any
Subsidiary owns or has any present intention of acquiring any "margin stock" as
defined in Regulation G (12 CFR Part 207) of the Board of Governors of the
Federal Reserve System (herein called "margin stock").  The proceeds of sale of
the Notes will be used to repay existing Indebtedness and for general corporate
purposes.  None of such proceeds will be used, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of purchasing or carrying
any margin stock or for the purpose of maintaining, reducing or retiring any
Indebtedness which was originally incurred to purchase or carry any stock that
is currently a margin stock or for any other purpose which might constitute
this transaction a "purpose credit" within the meaning of such Regulation G.
Neither Filtertek, the Company nor any agent acting on its behalf has taken or
will take any action which might cause this Agreement or the Notes to violate
Regulation G, Regulation T or any other regulation





                                      -23-
<PAGE>   28

of the Board of Governors of the Federal Reserve System or to violate the
Exchange Act, in each case as in effect now or as the same may hereafter be in
effect.

         8J.    ERISA.  No accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the Code), whether or not waived,
exists with respect to any Plan (other than a Multiemployer Plan).  No
liability to the Pension Benefit Guaranty Corporation has been or is expected
by Filtertek, the Company or any ERISA Affiliate to be incurred with respect to
any Plan (other than a Multiemployer Plan) by Filtertek, the Company, any
Subsidiary or any ERISA Affiliate which is or would be materially adverse to
the business, condition (financial or otherwise) or operations of the Company
and its Subsidiaries taken as a whole.  Neither the Company, any Subsidiary nor
any ERISA Affiliate has incurred or presently expects to incur any withdrawal
liability under Title IV of ERISA with respect to any Multiemployer Plan which
is or would be materially adverse to the business, condition (financial or
otherwise) or operations of the Company and its Subsidiaries taken as a whole.
The execution and delivery of this Agreement and the issuance and sale of the
Notes will be exempt from, or will not involve any transaction which is subject
to, the prohibitions of section 406 of ERISA and will not involve any
transaction in connection with which a penalty could be imposed under section
502(i) of ERISA or a tax could be imposed pursuant to section 4975 of the Code.
The representation by Filtertek and the Company in the next preceding sentence
is made in reliance upon and subject to the accuracy of each Purchaser's
representation in paragraph 9B.

         8K.    GOVERNMENTAL CONSENT.  Neither the nature of Filtertek, the
Company or of any Subsidiary, nor any of their respective businesses or
properties, nor any relationship between Filtertek, the Company or any
Subsidiary and any other Person, nor any circumstance in connection with the
offering, issuance, sale or delivery of the Notes is such as to require any
authorization, consent, approval, exemption or other action by or notice to or
filing with any court or administrative or governmental body (other than
routine filings after the date of closing with the Securities and Exchange
Commission and/or state Blue Sky authorities) in connection with the execution
and delivery of this Agreement, the offering, issuance, sale or delivery of the
Notes or fulfillment of or compliance with the terms and provisions hereof or
of the Notes.

         8L.    ENVIRONMENTAL COMPLIANCE.  Filtertek, the Company and each
Subsidiary and all of their respective properties and facilities have complied
at all times and in all respects with all federal, state, local and regional
statutes, laws, ordinances and judicial or administrative orders, judgments,
rulings and regulations relating to protection of the environment except, in
any such case, where failure to comply would not result in a material adverse
effect on the business, condition (financial or





                                      -24-
<PAGE>   29

otherwise) or operations of the Company and its Subsidiaries taken as a whole.
               
         8M.    DISCLOSURE.  Neither this Agreement nor any other document,
certificate or statement furnished to any Purchaser by or on behalf of the
Company or Filtertek in connection herewith contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein not misleading.  There is no fact
peculiar to Filtertek, the Company or any Subsidiary which materially adversely
affects or in the future may (so far as Filtertek or the Company can now
foresee) materially adversely affect the business, property or assets, or
financial condition of Filtertek, the Company or any Subsidiary and which has
not been set forth in this Agreement or in the other documents, certificates
and statements furnished to each Purchaser by or on behalf of the Company prior
to the date hereof in connection with the transactions contemplated hereby.

         9.     REPRESENTATIONS OF EACH PURCHASER.  Each Purchaser represents
as follows:

         9A.    NATURE OF PURCHASE.  Such Purchaser is not acquiring the Notes
to be purchased by it hereunder with a view to or for sale in connection with
any distribution thereof within the meaning of the Securities Act, provided
that the disposition of such Purchaser's property shall at all times be and
remain within its control.

         9B.    SOURCE OF FUNDS.  No part of the funds being used by such
Purchaser to pay the purchase price of the Notes being purchased by such
Purchaser hereunder constitutes assets allocated to any separate account
maintained by such Purchaser in which any employee benefit plan, other than
employee benefit plans identified on a list (if any) which has been furnished
by such Purchaser to the Company, participates to the extent of 10% or more.
For the purpose of this paragraph 9B, the terms "separate account" and
"employee benefit plan" shall have the respective meanings specified in section
3 of ERISA.

         10.    DEFINITIONS.  For the purpose of this Agreement, the terms
defined in the text of any paragraphs hereof shall have the respective meanings
specified therein, and the following terms shall have the meanings specified
with respect thereto below:

         10A.   YIELD-MAINTENANCE TERMS.

                "BUSINESS DAY" shall mean any day other than a Saturday, a
Sunday or a day on which commercial banks in New York City are required or
authorized to be closed.

                "CALLED PRINCIPAL" shall mean, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to paragraph 4B or
purchased by Filtertek pursuant to paragraph 5E or





                                      -25-
<PAGE>   30

is declared to be immediately due and payable pursuant to paragraph 7A, as the
context requires.
               
               "DISCOUNTED VALUE" shall mean, with respect to the Called
Principal of any Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a discount
factor (applied on the same periodic basis as that on which interest on the
Notes is payable) equal to the Reinvestment Yield with respect to such Called
Principal.

               "REINVESTMENT YIELD" shall mean, with respect to the Called
Principal of any Note, the Specified Spread over the yield to maturity implied
by (i) the yields reported, as of 10:00 a.m. (New York City time) on the
Business Day next preceding the Settlement Date with respect to such Called
Principal, on the display designated as "Page 678" on the Telerate Service (or
such other display as may replace Page 678 on the Telerate Service) for
actively traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date, or
if such yields shall not be reported as of such time or the yields reported as
of such time shall not be ascertainable, (ii) the Treasury Constant Maturity
Series yields reported, for the latest day for which such yields shall have
been so reported as of the Business Day next preceding the Settlement Date with
respect to such Called Principal, in Federal Reserve Statistical Release H.15
(519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date.  Such implied yield
shall be determined, if necessary, by (a) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between yields reported for various
maturities.

               "REMAINING AVERAGE LIFE" shall mean, with respect to the
Called Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining Scheduled
Payment of such Called Principal (but not of interest thereon) by (b) the
number of years (calculated to the nearest one-twelfth year) which will elapse
between the Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment.

               "REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due on or after the Settlement Date with respect
to such Called Principal if no payment of such Called Principal were made prior
to its scheduled due date.





                                      -26-
<PAGE>   31


               "SETTLEMENT DATE" shall mean, with respect to the Called
Principal of any Note, the date on which such Called Principal is to be prepaid
pursuant to paragraph 4B or purchased pursuant to paragraph 5E or is declared
to be immediately due and payable pursuant to paragraph 7A, as the context
requires.

               "SPECIFIED SPREAD" shall mean (i) in the case of the payment
or prepayment of the Notes other than pursuant to paragraph 5E, 0%, and (ii) in
the case of the purchase of the Notes pursuant to paragraph 5E, .50%.

               "YIELD-MAINTENANCE AMOUNT" shall mean, with respect to any
Note, an amount equal to the excess, if any, of the Discounted Value of the
Called Principal of such Note over the sum of (i) such Called Principal plus
(ii) interest accrued thereon as of (including interest due on) the Settlement
Date with respect to such Called Principal.  The Yield-Maintenance Amount shall
in no event be less than zero.

         10B.  OTHER TERMS.
              
               "ADJUSTED NET EARNINGS" shall mean, for any period,
Consolidated Net Earnings for such period, excluding any extraordinary gains
and extraordinary losses taken into account in determining Consolidated Net
Earnings for such period.

               "AFFILIATE" of any Person shall mean any Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such first Person, except a Subsidiary shall not be an Affiliate
of the Company.  A Person shall be deemed to control a corporation if such
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.

               "ANNUAL TRANSFERRED ASSETS" on any date shall mean all assets
of the Company and its Subsidiaries Transferred pursuant to paragraph
6C(7)(iii), and all assets of any Subsidiary the shares of stock or
Indebtedness of which the Company or any Subsidiary sold, otherwise disposed
of, or parted control pursuant to paragraph 6C(5), during the twelve month
period most recently ended on or prior to such date or after the end of such
twelve month period and on or prior to such date.

               "BANK AGREEMENT" shall mean that certain Multicurrency Credit
Agreement and Multicurrency Short Term Credit Agreement, each dated as of June
30, 1995, among the Company, Filtertek, Bank of America National Trust and
Savings Association, as agent, and the other financial institutions party
thereto, as either such agreement shall be amended or otherwise modified or
replaced from time to time.





                                      -27-
<PAGE>   32

                 "BANKRUPTCY LAW" shall have the meaning specified in clause
(viii) of paragraph 7A.

                 "CAPITAL STOCK" means, with respect to any Person, any and all
shares, interest, participations, rights in or other equivalents (however
designated) of such Person's capital stock and any rights (other than debt
securities convertible into or exchangeable for capital stock), warrants or
options exchangeable for or convertible into such capital stock.

                 "CAPITALIZED LEASE OBLIGATION" shall mean any rental
obligation which, under generally accepted accounting principles, would be
required to be capitalized on the books of the Company or any Subsidiary, taken
at the amount thereof accounted for as indebtedness (net of interest expense)
in accordance with such principles.

                 "CHANGE OF CONTROL EVENT"  shall mean the occurrence of any of
the following events:  (i) the Schawk Family shall cease to own, free and clear
of all Liens, at least 51% of the outstanding shares of Voting Stock of the
Company on a fully diluted basis; or (ii) during any period of twelve
consecutive calendar months, individuals who at the beginning of such period
constituted the Company's board of directors (together with any new directors
whose election by the Company's board of directors or whose nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reasons other than death or disability to
constitute a majority of the directors then in office; or (iii) the Company
shall cease to own, free and clear of all Liens, 100% of the outstanding shares
of capital stock of Filtertek.

                 "CLOSING" OR "DATE OF CLOSING" shall have the meaning
specified in paragraph 2.

                 "CODE" shall mean the Internal Revenue Code of 1986, as
amended.

                 "COMPANY" shall have the meaning specified in the introductory
paragraph of this Agreement.

                 "CONSOLIDATED CAPITALIZATION" shall mean, as at any time of
determination thereof, the sum of Consolidated Net Worth at such time plus the
aggregate amount of all Funded Debt of the Company and its Subsidiaries,
determined on a consolidated basis, as of such time.

                 "CONSOLIDATED CURRENT ASSETS" shall mean, as at any time of
determination thereof, the consolidated current assets of the Company and its
Subsidiaries as of such time.





                                      -28-
<PAGE>   33


                 "CONSOLIDATED CURRENT LIABILITIES" shall mean, as at any time
of determination thereof, the consolidated current liabilities of the Company
and its Subsidiaries, excluding current maturities of Funded Debt.

                 "CONSOLIDATED EARNINGS AVAILABLE FOR FIXED CHARGES" shall
mean, with respect to any period, (i) Consolidated Net Earnings for such
period, plus (ii) to the extent deducted in determining Consolidated Net
Earnings for such period, provision for income taxes, plus (iii) Fixed Charges
for such period; provided that, in determining Consolidated Earnings Available
for Fixed Charges, Consolidated Net Earnings with respect to any period shall
be adjusted to exclude the effect on such Consolidated Net Earnings for the
entirety of such period of any Subsidiary or assets that were disposed of
during such period, and shall be adjusted to include the effect that any
Subsidiary (or assets or portion thereof, if constituting an integrated
business) that was acquired during such period would have had on such
Consolidated Net Earnings if such Subsidiary had been acquired on the first day
of such period, provided further, that, with respect to any such acquisition,
the assets, liabilities and business of such Subsidiary shall be substantially
the same at any later date of determination of Consolidated Net Earnings for
Fixed Charges as at the date of such acquisition, and in each case only so long
as such contribution to Consolidated Net Earnings can be reasonably determined.

                 "CONSOLIDATED NET EARNINGS" shall mean, with respect to any
period, the consolidated net earnings of the Company and its Subsidiaries for
such period.  When computing the consolidated net earnings of the Company and
its Subsidiaries for any fiscal year or for any fiscal year within a period,
the consolidated net earnings of the Company and its Subsidiaries for such
fiscal year shall be the consolidated net earnings of the Company and its
Subsidiaries for such fiscal year as reflected on the consolidated statement of
income of the Company and its Subsidiaries for such fiscal year delivered
pursuant to paragraph 5A(ii) and as certified to by independent public
accountants, and when computing the consolidated net earnings of the Company
and its Subsidiaries for any fiscal quarter (other than the last fiscal quarter
in any fiscal year) or for any fiscal quarter (other than the last fiscal
quarter in any fiscal year) within a period less than a fiscal year, the
consolidated net earnings of the Company and its Subsidiaries for any such
fiscal quarter shall be the consolidated net earnings of the Company and its
Subsidiaries for such fiscal quarter as reflected on the consolidated statement
of income of the Company delivered pursuant to paragraph 5A(i) and as certified
by an authorized financial officer of the Company, subject to changes resulting
from year-end adjustments.

                 "CONSOLIDATED NET WORTH" shall mean, as at any time of
determination thereof, the sum of (i) the par value of the





                                      -29-
<PAGE>   34

Company's capital stock of all classes at such time, plus (or minus in the case
of a surplus deficit) (ii) the amount of the Company's consolidated surplus,
whether capital or earned at such time, plus (iii) the amount of the Company's
paid in capital at such time, minus (iv) the amount of any treasury stock and
other contra-equity accounts of the Company at such time.

                 "CUMULATIVE ADJUSTED NET EARNINGS" shall mean, as of any date
of determination thereof, Adjusted Net Earnings for the period beginning on
January 1, 1995 and ending on the last day of the fiscal year (if any) most
recently ended on or prior to such date, taken as one accounting period.

                 "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.

                 "ERISA AFFILIATE" shall mean any corporation which is a member
of the same controlled group of corporations as the Company within the meaning
of section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.

                 "EVENT OF DEFAULT" shall mean any of the events specified in
paragraph 7A, provided that there has been satisfied any requirement in
connection with such event for the giving of notice, or the lapse of time, or
the happening of any further condition, event or act, and "DEFAULT" shall mean
any of such events, whether or not any such requirement has been satisfied.

                 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.

                 "FIXED CHARGES" shall mean for any period the sum of (i) rent
expense for such period for all leases of the Company and its Subsidiaries,
other than Capitalized Lease Obligations, having an original term in excess of
one year, (ii) interest expense of the Company and its Subsidiaries (including
interest expense relating to Capitalized Lease Obligations) for such period and
(iii) amortization for such period of debt discount and expense on all
Indebtedness of the Company and its Subsidiaries, all determined on
consolidated basis.

                 "FUNDED DEBT" shall mean, with respect to any Person, all
Indebtedness of such Person which by its terms or by the terms of any
instrument or agreement relating thereto matures, or which is otherwise payable
or unpaid, more than one year from, or is directly or indirectly renewable or
extendible at the option of the debtor to a date more than one year (including
an option of the debtor under a revolving credit or similar agreement
obligating the lender or lenders to extend credit over a period of more than
one year) from, the date of the creation thereof.





                                      -30-
<PAGE>   35

                 "GUARANTEE" shall mean, with respect to any Person, any direct
or indirect liability, contingent or otherwise, of such Person with respect to
any indebtedness, lease, dividend or other obligation of another, including,
without limitation, any such obligation directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course of
business) or discounted or sold with recourse by such Person, or in respect of
which such Person is otherwise directly or indirectly liable, including,
without limitation, any such obligation in effect guaranteed by such Person
through any agreement (contingent or otherwise) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide funds
for the payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
the solvency or any balance sheet or other financial condition of the obligor
of such obligation, or to make payment for any products, materials or supplies
or for any transportation or services regardless of the non-delivery or
non-furnishing thereof, in any such case if the purpose or intent of such
agreement is to provide assurance that such obligation will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such obligation will be protected against loss in respect
thereof.  The amount of any Guarantee shall be equal to the outstanding
principal amount of the obligation guaranteed or such lesser amount to which
the maximum exposure of the guarantor shall have been specifically limited.

                 "GUARANTORS" shall mean, collectively, the Company, PMC,
Packaging and each other Subsidiary that becomes liable by way of a Guarantee
for all or any portion of the Obligations whether pursuant to paragraph 6E or
otherwise.

                 "INDEBTEDNESS" shall mean, with respect to any Person, without
duplication, (i) all items (excluding items of contingency reserves or of
reserves for deferred income taxes) which in accordance with generally accepted
accounting principles would be included in determining total liabilities as
shown on the liability side of a balance sheet of such Person as of the date on
which Indebtedness is to be determined, (ii) all indebtedness secured by any
Lien on any property or asset owned or held by such Person subject thereto,
whether or not the indebtedness secured thereby shall have been assumed, (iii)
all indebtedness of others with respect to which such Person has become liable
by way of a Guarantee and (iv) all Swaps of such Person.

                 "INVESTMENTS" shall have the meaning specified in paragraph
6C(4).

                 "LIEN" shall mean any mortgage, pledge, security interest,
encumbrance, lien (statutory or otherwise) or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in





                                      -31-
<PAGE>   36

the nature thereof, and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction) or any other
type of preferential arrangement for the purpose, or having the effect, of
protecting a creditor against loss (other than an unsecured guarantee) or
securing the payment or performance of an obligation.

                 "MULTIEMPLOYER PLAN" shall mean any Plan which is a
"multiemployer plan" (as such term is defined in section 4001(a)(3) of ERISA).

                 "NOTE" or "NOTES" shall have the meaning specified in
paragraph 1.

                 "OBLIGATIONS" shall mean all indebtedness, obligations
(including any obligation to perform) and liabilities existing on the date
hereof or arising from time to time hereafter, whether direct or indirect,
joint, several or joint and several, actual, absolute or contingent, matured or
unmatured, liquidated or unliquidated, secured or unsecured, arising by
contract, operation of law or otherwise, of Filtertek to the holders of the
Notes, including, without limitation, the outstanding principal amount of the
Notes and all of the other present or future indebtedness, liabilities and
obligations of Filtertek now or hereafter owed to the holders of the Notes
evidenced by or arising under, by virtue of or pursuant to this Agreement, the
Notes and all renewals and extensions thereof, including, without limitation,
all interest on the Notes and any Yield-Maintenance Amounts and interest on the
Notes accruing before, during or after any bankruptcy, insolvency
reorganization, arrangement, readjustment of debt, liquidation or dissolution
proceeding, and, if interest ceases to accrue by operation of law by reason of
any such proceeding, interest which otherwise would have accrued in the absence
of such proceeding.

                 "OFFICER'S CERTIFICATE" shall mean a certificate signed in the
name of the Company by its President, one of its Vice Presidents or its
Treasurer.

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

                 "PERSON" shall mean and include an individual, a partnership,
limited liability company, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency
thereof.

                 "PLAN" shall mean any "employee pension benefit plan" (as such
term is defined in section 3 of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by Filtertek, the
Company or any ERISA Affiliate.





                                      -32-
<PAGE>   37

                 "PRIORITY DEBT" shall mean (i) Funded Debt and other
Indebtedness for borrowed money (a) of the Company which is secured by a Lien,
(b) of Filtertek which is secured by a Lien and (c) of a Subsidiary, other than
Filtertek, (including a Guarantee of Funded Debt or other Indebtedness of
Filtertek or the Company), whether or not secured by a Lien, and (ii) preferred
stock of a Subsidiary (other than Filtertek), except such preferred stock held
by the Company or a Wholly-Owned Subsidiary, provided, however, that Priority
Debt shall not include any Guarantee of a Subsidiary of any or all Obligations
or, except for the aggregate outstanding amount of all advances and loans made
by the Company or Filtertek to all Subsidiaries that are liable under a
Guarantee with respect to all or any portion of Indebtedness under the Bank
Agreement, any Guarantee of a Subsidiary of Indebtedness under the Bank
Agreement.

                 "PURCHASER" shall have the meaning specified in the 
introductory paragraph of this Agreement.

                 "RELATED PARTY" shall mean (i) any Significant Stockholder,
(ii) all Persons to whom any Significant Stockholder is related by blood,
adoption or marriage and (iii) all Affiliates of the foregoing Persons.

                 "RESPONSIBLE OFFICER" shall mean the chief executive officer,
chief operating officer, chief financial officer or chief accounting officer of
Filtertek or the Company or any other officer of Filtertek or the Company
involved principally in its financial administration or its controllership
function.

                 "REQUIRED HOLDER(S)" shall mean the holder or holders of more
than 50% of the aggregate principal amount of the Notes from time to time
outstanding.

                 "RESTRICTED INVESTMENTS" shall mean any Investment other than
an Investment described in clause (i), (ii), (iii), (iv), (v), (vi), (vii),
(viii), (ix), (x) or (xi) of paragraph 6C(4).

                 "RESTRICTED PAYMENT" shall mean any of the following:

                 (i)    any dividend on any class of the Company's or any
         Subsidiary's capital stock;

                 (ii)   any other distribution on account of any class of the
         Company's or any Subsidiary's capital stock;

                 (iii)  any redemption, purchase or other acquisition, direct or
         indirect, of any shares of the Company's or any Subsidiary's capital
         stock; or

                 (iv)   any Restricted Investment.





                                      -33-
<PAGE>   38

Notwithstanding the foregoing, Restricted Payments shall not include: (A)
dividends paid, or distributions made, in capital stock of the Company; or (B)
dividends paid, or distributions made, by a Subsidiary of the Company to the
Company or to a Wholly-Owned Subsidiary of the Company.  As used in this
definition, the term "capital stock" shall include warrants, rights and options
to purchase capital stock.  Any Restricted Payment made in property other than
cash shall, for the purposes of determining the amount thereof for all purposes
of this Agreement, be valued at the greater of such property's book value or
fair market value at the time such Restricted Payment is made.

                 "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.

                 "SERIES" of Notes shall mean either the Series A Notes or the
Series B Notes.

                 "SERIES A NOTES" shall have the meaning specified in paragraph
1(i).

                 "SERIES B NOTES" shall have the meaning specified in paragraph
1(ii).

                 "SCHAWK FAMILY" means the persons set forth on Schedule 10B(1)
hereto, together with any children or grandchildren of such persons and any
grantor trust under which one of such persons shall be the sole trustee or one
of the co-trustees (and such person retains the sole power to remove any
Capital Stock held by such trust from such trust).

                 "SIGNIFICANT HOLDER" shall mean (i) each Purchaser, so long as
such Purchaser shall hold (or be committed under this Agreement to purchase)
any Note, or (ii) any other holder of at least 5% of the aggregate principal
amount of the Notes from time to time outstanding.

                 "SIGNIFICANT STOCKHOLDER" shall mean and include any Person
who owns, beneficially or of record, directly or indirectly, at any time during
any year with respect to which a computation is being made, either individually
or together with all persons to whom such Person is related by blood, adoption
or marriage, 5% or more of the Voting Stock of the Company.

                 "SUBSIDIARY" shall mean any corporation, the financial
statements of which are required to be consolidated with the financial
statements of the Company for financial reporting purposes in accordance with
generally accepted accounting principles.

                 "SWAPS" shall mean, with respect to any Person, payment
obligations with respect to interest rate swaps or hedges, currency





                                      -34-
<PAGE>   39

swaps or hedges and similar obligations obligating such Person to make
payments, whether periodically or upon the happening of a contingency.  For the
purposes of this Agreement, the amount of the obligation under any Swap shall
be the amount determined in respect thereof as of the end of the then most
recently ended fiscal quarter of such Person, based on the assumption that such
Swap had terminated at the end of such fiscal quarter, and in making such
determination, if any agreement relating to such Swap provides for the netting
of amounts payable by and to such Person thereunder or if any such agreement
provides for the simultaneous payment of amounts by and to such Person, then in
each such case, the amount of such obligation shall be the net amount so
determined.

                 "TRANSFER" shall mean, with respect to any item, the sale,
exchange, conveyance, lease, transfer or other disposition of such item.

                 "TRANSACTION PARTY" shall mean the Company, Filtertek, PMC and
Packaging.

                 "TRANSFEREE" shall mean any direct or indirect transferee of
all or any part of any Note purchased by any Purchaser under this Agreement.

                 "VALUE" of any property shall mean on any date the greater of
the book value of such property on such date or the fair market value of such
property on such date.

                 "VOTING STOCK" shall mean, with respect to any corporation,
any shares of stock of such corporation whose holders are entitled under
ordinary circumstances to vote for the election of directors of such
corporation (irrespective of whether at the time stock of any other class or
classes shall have or might have voting power by reason of the happening of any
contingency).

                 "WHOLLY-OWNED SUBSIDIARY"  shall mean any corporation all of
the stock of every class of which, except directors' qualifying shares, shall,
at the time as of which any determination is being made, be owned by the
Company either directly or through Wholly-Owned Subsidiaries.

         10C.    ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS.  All
references in this Agreement to "generally accepted accounting principles"
shall be deemed to refer to generally accepted accounting principles in effect
in the United States at the time of application thereof.  Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all unaudited financial statements and certificates and reports as to financial
matters required to be furnished hereunder shall be prepared, in accordance
with generally accepted accounting principles, applied on a basis consistent
with the most





                                      -35-
<PAGE>   40

recent audited consolidated financial statements of the Company and its
Subsidiaries delivered pursuant to clause (ii) of paragraph 5A or, if no such
statements have been so delivered, the most recent audited financial statements
referred to in clause (i) of paragraph 8B.

         11.     THE GUARANTEE.  Each of the Company, PMC, Packaging and any
other Person becoming a Guarantor under paragraph 6E or otherwise jointly and
severally agree as follows:

         11A.    GUARANTY OF PAYMENT AND PERFORMANCE OF OBLIGATIONS.  Each
Guarantor, jointly and severally, hereby absolutely, unconditionally and
irrevocably guaranties the full and prompt payment in United States currency
when due (whether at maturity, a stated prepayment date or earlier by reason of
acceleration or otherwise) and at all times thereafter, and the due and
punctual performance, of all Obligations.  Each Guarantor hereby agrees to pay
and to indemnify and save each holder of Notes harmless from and against any
damage, loss, cost or expense (including attorneys' fees) which such Person may
incur or be subject to as a consequence, direct or indirect, of endeavoring to
enforce any rights under this paragraph 11 or to collect all or any part of the
Obligations from, or in pursuing any action against, Filtertek or any Guarantor
or enforcing any rights of any holder of Notes in any security for the
Obligations or the liabilities of any Guarantor hereunder and any taxes, fees
or penalties which may be paid or payable in connection therewith.  This is a
continuing guarantee of payment and performance and not of collection.
Notwithstanding any provision of this paragraph 11, all covenants, obligations,
waivers and agreements of the Guarantors under this paragraph 11 shall be joint
and several.

         Upon an Event of Default specified in clause (i) or (ii) of paragraph
7A, any holder of a Note may, and upon any Event of Default, the Required
Holders may, at its or their sole election and without notice, proceed directly
and at once against any Guarantor to seek and enforce performance of, and to
collect and recover, the Obligations, or any portion thereof, without first
proceeding against Filtertek, any other Guarantor or any other Person, or any
security for the Obligations or for the liability of any such other Person or
any Guarantor hereunder.  The holders of Notes shall have the exclusive right
to determine the application of payments and credits, if any, from any
Guarantor, Filtertek, or from any other Person on account of the Obligations or
otherwise.  The obligations under this paragraph 11 and all covenants and
agreements of each Guarantor contained herein shall continue in full force and
effect and shall not be discharged until such a time as all of the Obligations
shall be paid or otherwise performed in full.

         Notwithstanding anything contained in this paragraph 11 to the
contrary, at all times, if any, during which any Guarantor is the





                                      -36-
<PAGE>   41

obligor hereunder, each Guarantor and by its acceptance hereof each holder of
any Note hereby confirms that it is the intention of all such parties that the
guarantee by such Guarantor pursuant to this paragraph 11 not constitute a
fraudulent transfer or conveyance for purposes of any bankruptcy law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar Federal or state law.  To effectuate the foregoing intention, the
obligations of each Guarantor under this paragraph 11 shall be limited to the
maximum amount as will result in the obligations of such Guarantor under this
paragraph 11 not constituting such fraudulent transfer or conveyance.

         11B.    OBLIGATIONS UNCONDITIONAL.  The obligations of each Guarantor
under this paragraph 11 shall be continuing, absolute and unconditional,
irrespective of (i) the invalidity or unenforceability of the Note Agreement
or any Note or any provision of any thereof; (ii) the absence of any attempt by
any holder of a Note to collect the Obligations or any portion thereof from
Filtertek, any other guarantor of all or any portion of the Obligations or any
other Person or other action to enforce the same; (iii) any action taken by any
holder of a Note whether or not authorized by this paragraph 11; (iv) any
failure by any holder of a Note to acquire, perfect or maintain any security
interest or lien in, or take any steps to preserve its rights to, any security
for the Obligations or any portion thereof or for the liability of any
Guarantor hereunder or the liability of any other guarantor of any or all of
the Obligations; (v) any defense arising by reason of any disability or other
defense (other than a defense of payment, unless the payment on which such
defense is based was or is subsequently invalidated, declared to be fraudulent
or preferential, otherwise avoided and/or required to be repaid to Filtertek or
any Guarantor, as the case may be, or the estate of any such party, a trustee,
receiver or any other Person under any bankruptcy law, state or federal law,
common law or equitable cause, in which case there shall be no defense of
payment with respect to such payment) of Filtertek or any other Person liable
on the Obligations or any portion thereof; (vi) any election by a holder of any
Note in any proceeding instituted under Chapter 11 of Title 11 of the Federal
Bankruptcy Code (11 U.S.C. Section 101 et seq.) (the "Bankruptcy Code"), of the
application of Section 1111(b)(2) of the Bankruptcy Code; (vii) any borrowing
or grant of a security interest to any holder of a Note by Filtertek, as
debtor-in-possession, or extension of credit, under Section 364 of the
Bankruptcy Code; (viii) the disallowance or avoidance of all or any portion of
any claim(s) of a holder of a Note for repayment of the Obligations under the
Bankruptcy Code or any similar state law or the avoidance, invalidity or
unenforceability of any Lien securing the Obligations or the liability of any
Guarantor hereunder or of any other guarantor of all or any part of the
Obligations; (ix) any amendment to, waiver or modification of, or consent,
extension, indulgence or other action or inaction under or in respect of the
Note Agreement or the Notes, including, without limitation, any





                                      -37-
<PAGE>   42

increase in the interest rate on any Obligations; (x) any change in any
provision of any applicable law or regulation; (xi) any order, judgment, writ,
award or decree of any court, arbitrator or governmental authority, domestic or
foreign, binding on or affecting any Guarantor or Filtertek or any of their
assets; (xii) the charter or by-laws of any Guarantor or Filtertek; (xiii) any
mortgage, indenture, lease, contract, or other agreement (including, without
limitation, any agreement with stockholders), instrument or undertaking to
which any Guarantor or Filtertek is a party or which purports to be binding on
or affect such Person or any of its assets; (xiv) any bankruptcy, insolvency,
readjustment, composition, liquidation or similar proceeding with respect to
Filtertek, any other Guarantor or any other guarantor of all or any portion of
any Obligations or such Persons's property and any failure by any holder of a
Note to file or enforce a claim against Filtertek or such other Person in any
such proceeding; (xv) any failure on the part of Filtertek for any reason to
comply with or perform any of the terms of any other agreement with any
Guarantor; or (xvi) any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor or surety.

         11C.    OBLIGATIONS UNIMPAIRED.  Each holder of a Note is authorized,
without demand or notice, which demand and notice are hereby waived, and
without discharging or otherwise affecting the obligations of any Guarantor
hereunder (which shall remain absolute and unconditional notwithstanding any
such action or omission to act), from time to time to (i) renew, extend,
accelerate or otherwise change the time for payment of, or other terms relating
to, the Obligations or any portion thereof, including, without limitation,
increasing the interest rate on any Obligations, or otherwise modify, amend or
change the terms of the Note Agreement or the Notes; (ii) accept partial
payments on the Obligations; (iii) take and hold security for the Obligations
or any portion thereof or any other liabilities of Filtertek, the obligations
of any Guarantor under this paragraph 11 and the obligations under any other
guaranties and sureties of all or any of the Obligations, and exchange,
enforce, waive, release, sell, transfer, assign, abandon, fail to perfect,
subordinate or otherwise deal with any such security; (iv) apply such security
and direct the order or manner of sale thereof as such holder may determine in
its sole discretion; (v) settle, release, compromise, collect or otherwise
liquidate the Obligations or any portion thereof and any security therefor or
guarantee thereof in any manner; (vi) extend additional loans, credit and
financial accommodations to Filtertek or any Guarantor and otherwise create
additional Obligations; (vii) waive strict compliance with the terms of the
Note Agreement or the Notes and otherwise forbear from asserting such holder's
rights and remedies thereunder; (viii) take and hold additional guarantees or
sureties and enforce or forbear from enforcing any guarantee or surety of any
other guarantor or surety of the Obligations, any portion thereof or release or
otherwise take any action with respect to any such guarantor or surety; (ix)
assign the





                                      -38-
<PAGE>   43

obligations hereunder in part or in whole in connection with any assignment of
the Obligations or any portion thereof; (x) exercise or refrain from exercising
any rights against Filtertek or any Guarantor; and (xi) apply any sums, by
whomsoever paid or however realized, to the payment of the Obligations as such
holder of a Note in its sole discretion may determine.

         11D.    WAIVERS OF GUARANTOR.  Each Guarantor waives for the benefit
of each holder of a Note:

         (i)     any right to require any holder of a Note, as a condition of
payment or performance by such Guarantor or otherwise, to (a) proceed against
Filtertek, any other Guarantor or other guarantor of the Obligations or any
other Person, (b) proceed against or exhaust any security given to or held by
any holder of a Note in connection with the Obligations or any other guarantee,
or (c) pursue any other remedy available to any holder of a Note whatsoever;

         (ii)    any defense arising by reason of (a) the incapacity, lack of
authority or any disability or other defense of Filtertek, including, without
limitation, any defense based on or arising out of the lack of validity or the
unenforceability of the Obligations or any agreement or instrument relating
thereto, (b) the cessation of the liability of Filtertek from any cause other
than indefeasible payment in full of the Obligations, or (c) any act or
omission of any holder of a Note or any other Person which directly or
indirectly, by operation of law or otherwise, results in or aids the discharge
or release of Filtertek or any security given to or held by any holder of a
Note in connection with the Obligations or any other guarantee;

         (iii)   any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor
in other respects more burdensome than that of the principal;

         (iv)    any defense based upon any holder's errors or omissions in the
administration of the Obligations;

         (v)     (a) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms of this paragraph
11 and any legal or equitable discharge of such Guarantor's or any other
Guarantor's obligations hereunder, (b) the benefit of any statute of
limitations affecting the Obligations or such Guarantor's or any other
Guarantor's liability hereunder or the enforcement hereof, (c) any rights to
set-offs, recoupments and counterclaims, and (d) promptness, diligence and any
requirement that any holder of a Note protect, maintain, secure, perfect or
insure any Lien or any property subject thereto;





                                      -39-
<PAGE>   44

         (vi)    notices (a) of nonperformance or dishonor, (b) of acceptance
of this paragraph 11 by such Guarantor or any other Guarantor, (c) of default
under the provisions of this paragraph 11 by any other Guarantor or in respect
of the Obligations or any other guarantee, (d) of the existence, creation or
incurrence of new or additional indebtedness, arising either from additional
loans extended to Filtertek or otherwise, (e) that the principal amount, or any
portion thereof, and/or any interest or Yield-Maintenance Amount on any
document or instrument evidencing all or any part of the Obligations is due,
(f) of any and all proceedings to collect from Filtertek, any Guarantor or any
other guarantor of all or any part of the Obligations, or from any other
Person, (g) of exchange, sale, surrender or other handling of any security or
collateral given to any holder of a Note to secure payment of the Obligations
or any guarantee therefor, (h) of renewal, extension or modification of any of
the Obligations, (i) of assignment, sale or other transfer of any Note to
another Person, or (j) of any of the matters referred to in paragraph 11B and
any right to consent to any thereof;

         (vii)  presentment, demand for payment or performance and protest and
notice of protest with respect to the Obligations or any guarantee with respect
thereto; and

         (viii)  any defenses or benefits that may be derived from or afforded
by law which limit the liability of or exonerate guarantors or sureties, or
which may conflict with the terms of this paragraph 11.

          Each Guarantor agrees that no holder of a Note shall be under any
obligation to marshall any assets in favor of any Guarantor or against or in
payment of any or all of the Obligations.

         No Guarantor will exercise any rights which it may have acquired by
way of subrogation under this paragraph 11, by any payment made hereunder or
otherwise, or accept any payment on account of such subrogation rights, or any
rights of contribution, reimbursement, indemnity, exoneration or any rights or
recourse to any security for the Obligations unless at the time of a
Guarantor's exercise of any such right there shall have been performed and
indefeasibly paid in full all of the Obligations.

         11E.    REVIVAL.  Each Guarantor agrees that, if any payment made by
Filtertek or any other Person is applied to the Obligations and is at any time
annulled, set aside, rescinded, invalidated, declared to be fraudulent or
preferential or otherwise required to be refunded or repaid, or the proceeds of
any security are required to be returned by any holder of a Note to Filtertek
or its estate, trustee, receiver or any other Person, including, without
limitation, any Guarantor, under any bankruptcy law, state or federal law,
common law or equitable cause, then, to the extent of such payment or
repayment, each Guarantor's liability hereunder





                                      -40-
<PAGE>   45

(and any Lien or other collateral securing such liability) shall be and remain
in full force and effect, as fully as if such payment had never been made, or,
if prior thereto the obligations under this paragraph 11 shall have been
canceled or surrendered (and if any Lien or other collateral securing such
Guarantor's liability hereunder shall have been released or terminated by
virtue of such cancellation or surrender), the obligations under this paragraph
11 (and such Lien or other collateral) shall be reinstated and returned in full
force and effect, and such prior cancellation or surrender shall not diminish,
release, discharge, impair or otherwise affect the obligations of any Guarantor
in respect of the amount of such payment (or any Lien or other collateral
securing such obligation).

         11F.    OBLIGATION TO KEEP INFORMED.  Each Guarantor shall be
responsible for keeping itself informed of the financial condition of Filtertek
and any other Persons primarily or secondarily liable on the Obligations or any
portion thereof, and of all other circumstances bearing upon the risk of
nonpayment of the Obligations or any portion thereof, and each Guarantor
agrees that no holder of a Note shall have a duty to advise such Guarantor of
information known to such holder regarding such condition or any such
circumstance.  If any holder of a Note, in its discretion, undertakes at any
time or from time to time to provide any such information to any Guarantor,
such holder shall not be under any obligation (i) to undertake any
investigation, whether or not a part of its regular business routine, (ii) to
disclose any information which such holder wishes to maintain confidential, or
(iii) to make any other or future disclosures of such information or any other
information to such or any other Guarantor.

         11G.    BANKRUPTCY.  Upon an Event of Default specified in clause
(viii), (ix) or (x) of paragraph 7A with respect to Filtertek or the Company,
any and all obligations of each Guarantor hereunder shall forthwith become due
and payable without notice.

         12.     MISCELLANEOUS.

         12A.    NOTE PAYMENTS.  Filtertek agrees that, so long as any
Purchaser shall hold any Note, it will make payments of principal of, interest
on and any Yield-Maintenance Amount payable with respect to such Note, which
comply with the terms of this Agreement, by wire transfer of immediately
available funds for credit (not later than 12:00 noon, New York City time, on
the date due) to such Purchaser's account or accounts as specified in the
Purchaser Schedule attached hereto, or such other account or accounts in the
United States as such Purchaser may designate in writing, notwithstanding any
contrary provision herein or in any Note with respect to the place of payment.
Each Purchaser agrees that, before disposing of any Note, such Purchaser will
make a notation thereon (or on a schedule attached thereto) of all principal
payments previously made thereon and of the date to which





                                      -41-
<PAGE>   46

interest thereon has been paid.  Filtertek agrees to afford the benefits of
this paragraph 12A to any Transferee which shall have made the same agreement
as each Purchaser has made in this paragraph 12A.

         12B.    EXPENSES.  Filtertek and the Company jointly and severally
agree, whether or not the transactions contemplated hereby shall be
consummated, to pay, and save each Purchaser and any Transferee harmless
against liability for the payment of, all out-of-pocket expenses arising in
connection with such transactions, including (i) all document production and
duplication charges and the fees and expenses of any special counsel engaged by
such Purchaser or such Transferee in connection with this Agreement, the
transactions contemplated hereby and any subsequent proposed modification of,
or proposed consent under, this Agreement, whether or not such proposed
modification shall be effected or proposed consent granted, (ii) the cost of
obtaining private placement numbers with respect to the Notes and (ii) the
costs and expenses, including attorneys' fees, incurred by such Purchaser or
such Transferee in enforcing (or determining whether or how to enforce) any
rights under this Agreement or the Notes or in responding to any subpoena or
other legal process or informal investigative demand issued in connection with
this Agreement or the transactions contemplated hereby or by reason of such
Purchaser's or such Transferee's having acquired any Note, including without
limitation costs and expenses incurred in any bankruptcy case.  The obligations
of Filtertek and the Company under this paragraph 12B shall survive the
transfer of any Note or portion thereof or interest therein by any Purchaser or
any Transferee and the payment of any Note.

         12C.    CONSENT TO AMENDMENTS.  This Agreement may be amended, and
Filtertek or the Company, as the case may be, and with respect to paragraph 11
hereof, the Guarantors, may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, if Filtertek or the
Company, as the case may be, and, with respect to paragraph 11 hereof, the
Guarantors, shall obtain the written consent to such amendment, action or
omission to act, of the Required Holder(s) except that without the written
consent of the holder or the holders of all Notes at the time outstanding, no
amendment to this Agreement shall change the maturity of any Note or change or
affect the principal thereof, or change or affect the rate or time of payment
of interest or Yield-Maintenance Amount payable with respect to any Note or
affect the time, amount or allocation or any prepayments or release the Company
from its Guarantee under paragraph 11 or change the proportion of the principal
amount of the Notes required with respect to any consent, amendment, waiver or
declaration, or the rights of any individual holder of Notes to declare Notes
to be due and payable.  Each holder of any Note at the time or thereafter
outstanding shall be bound by any consent authorized by this paragraph 12C,
whether or not such Note shall have been marked to





                                      -42-
<PAGE>   47

indicate such consent, but any Notes issued thereafter may bear a notation
referring to any such consent.  No course of dealing between Filtertek or any
Guarantor and the holder of any Note nor any delay in exercising any rights
hereunder or under any Note shall operate as a waiver of any rights of any
holder of such Note.  As used herein and in the Notes, the term "this
Agreement" and references thereto shall mean this Agreement as it may from time
to time be amended or supplemented.

         12D.    FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST
NOTES.  The Notes are issuable as registered notes without coupons in
denominations of at least $100,000, except as may be necessary to reflect any
principal amount not evenly divisible by $100,000.  Filtertek shall keep at its
principal office a register in which Filtertek shall provide for the
registration of Notes and of transfers of Notes.  Upon surrender for
registration of transfer of any Note at the principal office of Filtertek,
Filtertek shall, at its expense, execute and deliver one or more new Notes of
like tenor and of a like aggregate principal amount, registered in the name of
such transferee or transferees.  At the option of the holder of any Note, such
Note may be exchanged for other Notes of like tenor and of any authorized
denominations, of a like aggregate principal amount, upon surrender of the Note
to be exchanged at the principal office of Filtertek.  Whenever any Notes are
so surrendered for exchange, Filtertek shall, at its expense, execute and
deliver the Notes which the holder making the exchange is entitled to receive.
Every Note surrendered for registration of transfer or exchange shall be duly
endorsed, or be accompanied by a written instrument of transfer duly executed,
by the holder of such Note or such holder's attorney duly authorized in
writing.  Any Note or Notes issued in exchange for any Note or upon transfer
thereof shall carry the rights to unpaid interest and interest to accrue which
were carried by the Note so exchanged or transferred, so that neither gain nor
loss of interest shall result from any such transfer or exchange.  Upon receipt
of written notice from the holder of any Note of the loss, theft, destruction
or mutilation of such Note and, in the case of any such loss, theft or
destruction, upon receipt of such holder's unsecured indemnity agreement, or in
the case of any such mutilation upon surrender and cancellation of such Note,
Filtertek will make and deliver a new Note, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Note.

         12E.    PERSONS DEEMED OWNERS; PARTICIPATIONS.  Prior to due
presentment for registration of transfer, Filtertek may treat the Person in
whose name any Note is registered as the owner and holder of such Note for the
purpose of receiving payment of principal of, interest on and any
Yield-Maintenance Amount payable with respect to such Note and for all other
purposes whatsoever, whether or not such Note shall be overdue, and Filtertek
shall not be affected by notice to the contrary.  Subject to the preceding
sentence, the holder of any Note may from time to time grant participations in
such Note to any Person on such terms and conditions as may be





                                      -43-
<PAGE>   48

determined by such holder in its sole and absolute discretion, provided that
any such participation shall be in a principal amount of at least $100,000.

         12F.    SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein or made in writing by or on
behalf of any Transaction Party in connection herewith shall survive the
execution and delivery of this Agreement and the Notes, the transfer by any
Purchaser of any Note or portion thereof or interest therein and the payment of
any Note, and may be relied upon by any Transferee, regardless of any
investigation made at any time by or on behalf of any Purchaser or any
Transferee.  Subject to the preceding sentence, this Agreement and the Notes
embody the entire agreement and understanding between the Purchasers and the
Transaction Parties and supersede all prior agreements and understandings
relating to the subject matter hereof.

         12G.    SUCCESSORS AND ASSIGNS.  All covenants and other agreements in
this Agreement contained by or on behalf of any of the parties hereto shall
bind and inure to the benefit of the respective successors and assigns of the
parties hereto (including, without limitation, any Transferee) whether so
expressed or not.

         12H.    NOTICES.  All written communications provided for hereunder
shall be sent by first class mail or nationwide overnight delivery service
(with charges prepaid) and (i) if to any Purchaser, addressed to such Purchaser
at the address specified for such communications in the Purchaser Schedule
attached hereto, or at such other address as such Purchaser shall have
specified to Filtertek or the Company in writing, (ii) if to any other holder
of any Note, addressed to such other holder at such address as such other
holder shall have specified to Filtertek or the Company in writing or, if any
such other holder shall not have so specified an address to Filtertek or the
Company, then addressed to such other holder in care of the last holder of such
Note which shall have so specified an address to Filtertek or the Company, and
(iii) if to the Company, Filtertek or any Guarantor, addressed to it at 1695
River Road, Des Plaines, Illinois 60018, Attention: Clarence W. Schawk, with a
copy to A. Alex Sarkisian at such address and to John McEnroe at Vedder, Price,
Kaufman and Kammholz, 222 North LaSalle Street, Chicago, Illinois  60601-1003
or at such other address as the Company shall have specified to the holder of
each Note in writing; provided, however, that any such communication to any
such Person may also, at the option of the holder of any Note, be delivered by
any other means either to the Company or Filtertek at its address specified
above or to any officer of the Company or Filtertek.

         12I.    PAYMENTS DUE ON NON-BUSINESS DAYS.  Anything in this Agreement
or the Notes to the contrary notwithstanding, any payment of principal of or
interest on any Note that is due on a date other





                                      -44-
<PAGE>   49

than a Business Day shall be made on the next succeeding Business Day.  If the
date for any payment is extended to the next succeeding Business Day by reason
of the preceding sentence, the period of such extension shall be included in
the computation of the interest payable on such Business Day.

         12J.    SATISFACTION REQUIREMENT.  If any agreement, certificate or
other writing, or any action taken or to be taken, is by the terms of this
Agreement required to be satisfactory to any Purchaser or to the Required
Holder(s), the determination of such satisfaction shall be made by such
Purchaser or the Required Holder(s), as the case may be, in the sole and
exclusive judgment (exercised in good faith) of the Person or Persons making
such determination.

         12K.    GOVERNING LAW.  This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the law
of the State of Illinois.

         12L.    INDEPENDENCE OF COVENANTS.  All covenants hereunder shall be
given independent effect so that if a particular action or condition is
prohibited by any one of such covenants, the fact that it would be permitted by
an exception to, or otherwise be in compliance within the limitations of,
another covenant shall not (i) avoid the occurrence of a Default or an Event of
Default if such action is taken or such condition exists or (ii) in any way
prejudice an attempt by a holder or the holders of the Notes to prohibit
(through equitable action or otherwise) the taking of any action by Filtertek,
the Company or a Subsidiary which would result in any Event of Default or
Default.

         12M.    SEVERABILITY.  Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

         12N.    DESCRIPTIVE HEADINGS.  The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.

         12O.    COUNTERPARTS.  This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together
shall constitute one instrument.

         12P. SEVERALTY OF OBLIGATIONS.  The sales of Notes to the Purchasers
are to be several sales, and the obligations of the Purchasers under this
Agreement are several obligations.  Except as provided in paragraph 3H, no
failure by any Purchaser to perform its obligations under this Agreement shall
relieve any other





                                      -45-
<PAGE>   50

Purchaser or Filtertek of any of its obligations hereunder, and no Purchaser
shall be responsible for the obligations of, or any action taken or omitted by,
any other Purchaser hereunder.

         12Q.    DISCLOSURE TO OTHER PERSONS.  Each Purchaser agrees to use its
best efforts to hold in confidence and not disclose any Confidential
Information; provided that nothing herein shall prevent a Purchaser from
delivering or disclosing (and the Transaction Parties acknowledge that any
Purchaser may deliver or disclose) any financial statements and other documents
delivered to it, and any other information disclosed to it (including, but not
limited to, Confidential Information), by or on behalf of the Company or any
Subsidiary in connection with or pursuant to this Agreement to (i) its
directors, officers, employees, agents and professional consultants, (ii) any
other holder of any Note, (iii) any Person to which it offers to sell any Note
or any part thereof, (iv) any Person to which it sells or offers to sell a
participation in all or any part of any Note, (v) any Person from which it
offers to purchase any security of the Company or Filtertek, (vi) any federal
or state regulatory authority having jurisdiction over it, (vii) the National
Association of Insurance Commissioners or any similar organization or (viii)
any other Person to which such delivery or disclosure may be necessary or
appropriate (a) to effect compliance with any law, rule, regulation or order
applicable to such Purchaser, (b) in response to any subpoena or other legal
process, (c) in connection with any litigation to which it is a party or (d) in
order to protect its investment in any Note; provided, however, that no
Confidential Information shall be disclosed to any Person described in clause
(ii), (iii), (iv) or (v) unless such Person has agreed to the provisions of
this paragraph 12Q.  "CONFIDENTIAL INFORMATION" shall mean, with respect to any
Purchaser, any written information delivered or made available by or on behalf
of the Company or any Subsidiary to such Purchaser pursuant to this Agreement
which is clearly marked or labeled as being confidential information, but in no
event shall include information (i) which was publicly known or otherwise known
to such Purchaser at the time of disclosure, (ii) which subsequently becomes
publicly known through no act or omission by such Purchaser, or (iii) which
otherwise becomes known to such Purchaser, other than through disclosure by or
on behalf of the Company or any Subsidiary.

         12R.    INDEPENDENT CREDIT INVESTIGATION.  No Purchaser, nor any of
its directors, officers, agents or employees, shall be responsible to any of
the other Purchasers for the solvency or financial condition of Filtertek, the
Company or any Guarantor, the ability of Filtertek to repay any of the Notes or
the ability of Filtertek, the Company or any Guarantor to perform its
obligations under this Agreement, or the statements of Filtertek, the company
or any Guarantor, oral or written, or for the validity, sufficiency or
enforceability of any of the Notes, or this Agreement or any document or
agreement executed or delivered in connection with or





                                      -46-
<PAGE>   51

pursuant to any of the foregoing.  Each Purchaser has entered into this
Agreement or its respective financial agreements with Filtertek, the Company
and the Guarantors based upon its own independent investigation, and makes no
warranty or representation to the other Purchasers, nor does it rely upon any
representation by any of the other Purchasers, with respect to the matters
identified or referred to in this paragraph.

                           [Signature page to follow]





                                      -47-
<PAGE>   52


         If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterparts of this letter and return the same to
the Company, whereupon this letter shall become a binding agreement among
Filtertek, the Company, the other Guarantors and the Purchasers.

                                        Very truly yours,

                                        SCHAWK, INC.


                                        By:
                                           ---------------------------------
                                        Title: Executive Vice President

                                        FILTERTEK USA, INC.


                                        By:
                                           ---------------------------------
                                        Title: Executive Vice President

                                        PLASTIC MOLDED CONCEPTS, INC.


                                        By:
                                           ---------------------------------
                                        Title: Executive Vice President

                                        TEK PACKAGING GROUP, INC.


                                        By:
                                           ---------------------------------
                                        Title: Executive Vice President
<PAGE>   53


The foregoing Agreement is
hereby accepted as of the
date first above written.


THE PRUDENTIAL INSURANCE COMPANY OF AMERICA


By: 
         --------------------------
         Vice President


PRUCO LIFE INSURANCE COMPANY


By: 
         --------------------------
         Assistant Vice President


AID ASSOCIATION FOR LUTHERANS


By:
         --------------------------
         Title:              
<PAGE>   54



                               PURCHASER SCHEDULE



<TABLE>
<CAPTION>
                                                                                            Aggregate
                                                                                            Principal
                                                                                            Amount of
                                                                                            Notes to be              Note Denom-
                                                                                            Purchased                ination(s) 
                                                                                           -----------              -----------
         <S>                                                                              <C>                       <C>
         THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
                                                                                          $29,000,000 of            $26,000,000
                                                                                          Series B Notes            $3,000,000
</TABLE>

(1)     All payments on account of Notes held by such purchaser shall be
         made by wire transfer of immediately available funds for credit
         to:

         Account No. 050-54-526 (in the case of payments on account of
                  the Note originally issued in the principal amount of
                  $26,000,000)

         Account No. 001-01-159 (in the case of payments on account of
                  the Note originally issued in the principal amount of
                  $3,000,000)

         Morgan Guaranty Trust Company
           of New York
         23 Wall Street
         New York, New York 10015
         (ABA No.:  021-000-238)

         Each such wire transfer shall set forth the name of Filtertek, a
         reference to "6.98% Series B Senior Notes due August 18, 2005,
         Security No. !INV 5152!" (in the case of payments on account of
         the Note originally issued in the principal amount of
         $26,000,000), and Security No. "!INV 5153!" (in the case of
         payments on account of the Note originally issued in the
         principal amount of $3,000,000) and the due date and application
         (as among principal, interest and Yield-Maintenance Amount) of
         the payment being made.
<PAGE>   55

(2)     Address for all notices relating to payments:

        The Prudential Insurance Company
          of America
        c/o Prudential Capital Group
        Gateway Center Three
        100 Mulberry Street
        Newark, New Jersey 07102

        Attention:  Manager, Investment
           Operations Group
        Telephone:  (201) 802-5260
        Telecopy:  (201) 802-8055


(3)     Address for all other communications and notices:

        The Prudential Insurance Company
          of America
        c/o Prudential Capital Group
        Two Prudential Plaza
        Suite 5600
        Chicago, Illinois 60601

        Attention:  Managing Director
        Telecopy:  (212) 540-4222

(4)     Recipient of telephonic prepayment notices:

        Manager, Investment Structuring
          and Pricing
        Telecopy:  (201) 802-9425
        Telephone:  (201) 802-6660

(5)     Tax Identification No.:  22-1211670





                                      -2-
<PAGE>   56




<TABLE>
<CAPTION>
                                                                                            Aggregate
                                                                                            Principal
                                                                                            Amount of
                                                                                            Notes to be              Note Denom-
                                                                                            Purchased                ination(s) 
                                                                                            -----------              -----------
         <S>                                                                              <C>                       <C>
         PRUCO LIFE INSURANCE COMPANY                                                     $1,000,000 of             $1,000,000
                                                                                          Series B Notes
</TABLE>

(1)      All payments on account of Notes held by such purchaser shall be
         made by wire transfer of immediately available funds for credit
         to:

         Account No. 000-55-455

         Morgan Guaranty Trust Company
           of New York
         23 Wall Street
         New York, New York 10015
         (ABA No.:  021-000-238)

         Each such wire transfer shall set forth the name of Filtertek, a
         reference to "6.98% Series B Senior Notes due August 18, 2005,
         Security No. !INV 5154!", and the due date and application (as
         among principal, interest and Yield-Maintenance Amount) of the
         payment being made.

(2)      Address for all notices relating to payments:

         Pruco Life Insurance Company
         c/o Prudential Capital Group
         Gateway Center Three
         100 Mulberry Street
         Newark, New Jersey 07102

         Attention:  Manager, Investment
            Operations Group
         Telephone: (201) 802-5260
         Telecopy:  (201) 802-8055


<PAGE>   57


(3)     Address for all other communications and notices:

        Pruco Life Insurance Company
        c/o Prudential Capital Group
        Two Prudential Plaza
        Suite 5600
        Chicago, Illinois 60601

        Attention:  Managing Director
        Telecopy:  (212) 540-4222

(4)     Recipient of telephonic prepayment notices:

        Manager, Investment Structuring
           and Pricing
        Telecopy:  (201) 802-9425
        Telephone:  (201) 802-6660

(5)     Tax Identification No.:  22-1944557


                                     -2-
<PAGE>   58

<TABLE>
<CAPTION>
                                                                                            Aggregate
                                                                                            Principal
                                                                                            Amount of
                                                                                            Notes to be            Note Denom-
                                                                                            Purchased              ination(s) 
                                                                                            -----------            -----------
         <S>                                                                              <C>                       <C>
         AID ASSOCIATION FOR LUTHERANS
                                                                                          $10,000,000 of            $10,000,000
                                                                                          Series A Notes
</TABLE>

(1)     All payments on account of Notes held by such purchaser shall be
        made by wire transfer of immediately available funds for credit
        to:

        Account No. 109-211-3

        Harris Trust and Savings Bank
        111 West Monroe Street
        Chicago, Illinois  60690-0755

        (ABA No.:  071 000 288)

        Each such wire transfer shall set forth the name of Filtertek, a
        reference to "6.58% Series A Senior Notes due August 18, 2000,
        PPN 31732# AA4," and the due date and application (as among
        principal, interest and Yield-Maintenance Amount) of the payment
        being made.

(2)     Address for all notices relating to payments:

        Aid Association for Lutherans
        4321 North Ballard Road
        Appleton, Wisconsin  54919

        Attention:  Investment Accounting

        with a copy to:

        Harris Trust and Savings Bank
        Institutional Custody - 5E
        111 West Monroe Street
        Chicago, Illinois  60690-0755


<PAGE>   59


(3)     Address for all other communications and notices:

        Aid Association for Lutherans
        4321 North Ballard Road
        Appleton, Wisconsin  54919

        Attention:  Investment Department

(4)     Recipient of telephonic prepayment notices:

        Investment Accounting
        (414) 734-5721

(5)     Tax Identification No.:  39-0123480

                                     -2-

<PAGE>   60

                                                                     EXHIBIT A-1


                            [FORM OF SERIES A NOTE]

                              FILTERTEK USA, INC.

                6.58% SERIES A SENIOR NOTE DUE __________, 2000


No. _____                                      [Date]
$________


         FOR VALUE RECEIVED, the undersigned, Filtertek USA, Inc. (herein
called the "Company"), a corporation organized and existing under the laws of
the State of ______________, hereby promises to pay to
____________________________ ___________________________, or registered
assigns, the principal sum of _________________________ DOLLARS on _________,
2000, with interest (computed on the basis of a 360-day year--30-day month) (a)
on the unpaid balance thereof at the rate of 6.58% per annum from the date
hereof, payable quarterly on the eighteenth day of February, May, August and
November in each year, commencing with the February, May, August and November
next succeeding the date hereof, until the principal hereof shall have become
due and payable, and (b) on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Yield-Maintenance Amount (as defined in the Note Agreement
referred to below), payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 8.58% or (ii) 2.0% over the rate of interest
publicly announced by Morgan Guaranty Trust Company of New York from time to
time in New York City as its Prime Rate.

         Payments of principal of, interest on and any Yield-Maintenance Amount
payable with respect to this Note are to be made at _______________ or at such
other place as the holder hereof shall designate to the Company in writing, in
lawful money of the United States of America.

         This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Agreement, dated as of __________, 1995
(herein called the "Agreement"), among the Company and the Guarantors (as
defined therein) and the original purchasers of the Notes named in the
Purchaser Schedule attached thereto and is entitled to the benefits thereof.

         This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the
registered holder hereof or such holder's attorney duly authorized in writing,
a new Note for a like principal amount will be issued to, and registered in the
name of,
<PAGE>   61

the transferee. Prior to due presentment for registration of transfer, the
Company may treat the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other purposes, and the
Company shall not be affected by any notice to the contrary.

         The Company agrees to make required prepayments of principal on the
dates and in the amounts specified in the Agreement.  This Note is also subject
to optional prepayment, in whole or from time to time in part, on the terms
specified in the Agreement.  This Note is guarantied by certain parties to the
Agreement.

         In case an Event of Default, as defined in the Agreement, shall occur
and be continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner and with the effect provided in the
Agreement.

         This Note is intended to be performed in the State of Illinois and
shall be construed and enforced in accordance with the law of such State.

                                        FILTERTEK USA, INC.



                                        By:
                                           -----------------------------------
                                        Title:
                                              --------------------------------
<PAGE>   62

                                                                     EXHIBIT A-2


                            [FORM OF SERIES B NOTE]

                               FILTERTEK USA, INC

                6.98% SERIES B SENIOR NOTE DUE __________, 2005


No. _____                                      [Date]
$________


         FOR VALUE RECEIVED, the undersigned, Filtertek USA, Inc. (herein
called the "Company"), a corporation organized and existing under the laws of
the State of ______________, hereby promises to pay to
____________________________ ___________________________, or registered
assigns, the principal sum of _________________________ DOLLARS on __________,
2005, with interest (computed on the basis of a 360-day year--30-day month) (a)
on the unpaid balance thereof at the rate of 6.98% per annum from the date
hereof, payable quarterly on the eighteenth day of February, May, August and
November in each year, commencing with the February, May, August and November
next succeeding the date hereof, until the principal hereof shall have become
due and payable, and (b) on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Yield-Maintenance Amount (as defined in the Note Agreement
referred to below), payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 8.98% or (ii) 2.0% over the rate of interest
publicly announced by Morgan Guaranty Trust Company of New York from time to
time in New York City as its Prime Rate.

         Payments of principal of, interest on and any Yield-Maintenance Amount
payable with respect to this Note are to be made at the main office of Morgan
Guaranty Trust Company of New York in New York City or at such other place as
the holder hereof shall designate to the Company in writing, in lawful money of
the United States of America.

         This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Agreement, dated as of __________, 1995
(herein called the "Agreement"), among the Company, the Guarantors (as defined
therein) and the original purchasers of the Notes named in the Purchaser
Schedule attached thereto and is entitled to the benefits thereof.

         This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the
registered holder hereof or such holder's
<PAGE>   63

attorney duly authorized in writing, a new Note for a like principal amount
will be issued to, and registered in the name of, the transferee.  Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.

         The Company agrees to make required prepayments of principal on the
dates and in the amounts specified in the Agreement.  This Note is also subject
to optional prepayment, in whole or from time to time in part, on the terms
specified in the Agreement.  This Note is guarantied by certain parties to the
Agreement.

         In case an Event of Default, as defined in the Agreement, shall occur
and be continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner and with the effect provided in the
Agreement.

         This Note is intended to be performed in the State of Illinois and
shall be construed and enforced in accordance with the law of such State.

                                        FILTERTEK USA, INC.



                                        By:
                                           ------------------------------------
                                        Title:
                                              ---------------------------------
<PAGE>   64

                                                                       EXHIBIT B


                     [FORM OF OPINION OF COMPANY'S COUNSEL]


                [Letterhead of Vedder Price Kaufman & Kammholz]

                                       [Date of Closing]



[Names and addresses of Purchasers]


Ladies and Gentlemen:

         We have acted as counsel for Schawk, Inc. (the "Company"), Filtertek
USA, Inc. ("Filtertek"), Plastic Molded Concepts, Inc. ("Plastic") and Tek
Packaging Group, Inc. ("Packaging"; the Company, Filtertek, PMC and Packaging
are referred to herein collectively as the "Transaction Parties" and
individually as a "Transaction Party") in connection with the Note Agreement,
dated as of ______________, 1995, among the Transaction Parties and you (the
"Note Agreement"), pursuant to which Filtertek has issued to you today 6.58%
Series A Senior Notes due __________, 2000 of Filtertek in the aggregate
principal amount of $10,000,000 and 6.98% Series B Senior Notes due __________,
2005 of Filtertek in the aggregate principal amount of $30,000,000.  All terms
used herein that are defined in the Note Agreement have the respective meanings
specified in the Note Agreement.  This letter is being delivered to you in
satisfaction of the condition set forth in paragraph 3B of the Note Agreement
and with the understanding that you are purchasing the Notes in reliance on the
opinions expressed herein.

         In this connection, we have examined such certificates of public
officials, certificates of officers of the Transaction Parties and copies
certified to our satisfaction of corporate documents and records of the
Transaction Parties and of other papers, and have made such other
investigations, as we have deemed relevant and necessary as a basis for our
opinion hereinafter set forth.  We have relied upon such certificates of public
officials and of officers of the Transaction Parties with respect to the
accuracy of material factual matters contained therein which were not
independently established.  With respect to the opinion expressed in paragraph
3 below, we have also relied upon the representation made by each of you in
paragraph 9A of the Note Agreement.
<PAGE>   65

         Based on the foregoing, it is our opinion that:

                 1.       Each of the Company, Filtertek and Packaging is a
corporation duly organized and validly existing in good standing under the laws
of the State of Delaware and PMC is a corporation duly organized and validly
existing in good standing under the laws of Wisconsin.  Each of the Transaction
Parties has the corporate power and authority, and the legal right, to own its
property, to carry on its business as now being conducted and to execute,
deliver and perform its obligations under the Note Agreement and, with respect
to Filtertek, the Notes.

                 2.       The Note Agreement and the Notes have been duly
authorized by all requisite corporate action and duly executed and delivered by
authorized officers of each Transaction Party that is a party thereto, and are
valid obligations of each such Transaction Party, legally binding upon and
enforceable against such Transaction Party in accordance with their respective
terms, except as such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

                 3.       It is not necessary in connection with the offering,
issuance, sale and delivery of the Notes under the circumstances contemplated
by the Note Agreement to register the Notes under the Securities Act or to
qualify an indenture in respect of the Notes under the Trust Indenture Act of
1939, as amended.

                 4.       The extension, arranging and obtaining of the credit
represented by the Notes do not result in any violation of Regulation G, T or X
of the Board of Governors of the Federal Reserve System.

                 5.       The execution and delivery of the Note Agreement and
the Notes, the offering, issuance and sale of the Notes and fulfillment of and
compliance with the respective provisions of the Note Agreement and the Notes
do not conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a default under, or result in any violation of, or
result in the creation of any Lien upon any of the properties or assets of any
Transaction Party or any Subsidiary pursuant to, or require any authorization,
consent, approval, exemption or other action by or notice to or filing with any
court, administrative or governmental body or other Person (other than routine
filings after the date hereof with the Securities and Exchange Commission
and/or state Blue Sky authorities) pursuant to, the charter or by-laws of the
Transaction Party or any Subsidiary, any applicable law (including any
securities or Blue Sky law), statute, rule or regulation or (insofar as is
known to us after having made due inquiry with respect thereto) any agreement
(including, without limitation, any





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<PAGE>   66

agreement listed in Schedule 8G to the Note Agreement), instrument, order,
judgment or decree to which any Transaction Party or any Subsidiary is a party
or otherwise subject.

                 6.       No Transaction Party is (a) is a "holding company"
or a "public utility company", or a "subsidiary company" or an "affiliate" of a
"holding company", as such terms are defined under the Public Utility Holding
Company Act of 1935, as amended; (b) an "investment company" or a company
"controlled" by an "investment company," as such terms are defined under the
Investment Company Act of 1940, as amended; or (c) a "public utility" as such
term is defined under the Federal Power Act, as amended.


                                        Very truly yours,





                                      -3-