$170,000,000

                              AMENDED AND RESTATED
                                CREDIT AGREEMENT

                      originally dated as of March 13, 1996

                  and amended and restated as of April 9, 1997

                                      among

                         EXIDE ELECTRONICS GROUP, INC.,

                          The GUARANTORS Party Hereto,

                            The LENDERS Party Hereto,

                        The ISSUING LENDERS Party Hereto,

                   MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
                             as Administrative Agent

                                       and

                               NATIONSBANK, N.A.,
                             as Documentation Agent



                              ABN AMRO BANK, N.V.,
                            BANK OF AMERICA ILLINOIS,
                                       and
                  FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
                                  as Co-Agents



<PAGE>


                                TABLE OF CONTENTS


                                      PAGE

                                    ARTICLE 1
                                   DEFINITIONS

SECTION 1.01.  Definitions........................... .........................1
SECTION 1.02.  Accounting Terms and Determinations.... .......................21

                                    ARTICLE 2
                                  THE CREDITS

SECTION 2.01.  Commitments to Lend............................................22
SECTION 2.02.  Method of Borrowing..................... ......................25
SECTION 2.03.  Notes..........................................................26
SECTION 2.04.  Scheduled Termination of Commitments and Maturity of Loans.....27
SECTION 2.05.  Interest Rates.................................................28
SECTION 2.06.  Fees...........................................................29
SECTION 2.07.  Optional Termination or Reduction of Commitments...............30
SECTION 2.08.  Mandatory Incremental Repayments, and Reduction of Commitments.30
SECTION 2.09.  Optional Prepayments...........................................32
SECTION 2.10.  Method of Electing Interest Rates..............................32
SECTION 2.11.  General Provisions as to Payments..............................34
SECTION 2.12.  Funding Losses.................................................34
SECTION 2.13.  Computation of Interest and Fees...............................35
SECTION 2.14.  Regulation D Compensation......................................35
SECTION 2.15.  Letters of Credit..............................................36
SECTION 2.16.  Assignments and Assumptions on the Amendment Effective Date;
                 Non-Continuing Lenders.......................................39

                                    ARTICLE 3
                                   CONDITIONS

SECTION 3.01.  Amendment Effective Date.......................................41
SECTION 3.02.  Borrowings and Issuances of Letters of Credit..................43

<PAGE>

                                    ARTICLE 4
                         REPRESENTATIONS AND WARRANTIES

SECTION 4.01.  Corporate Existence and Power..................................44
SECTION 4.02.  Corporate and Governmental Authorization; No Contraventions....44
SECTION 4.03.  Binding Effect.................................................44
SECTION 4.04.  Financial Information..........................................45
SECTION 4.05.  Litigation.....................................................46
SECTION 4.06.  Compliance with ERISA..........................................46
SECTION 4.07.  Environmental Matters..........................................47
SECTION 4.08.  Taxes..........................................................47
SECTION 4.09.  Subsidiaries...................................................47
SECTION 4.10.  Regulatory Restrictions on Borrowing...........................48
SECTION 4.11.  Full Disclosure................................................48
SECTION 4.12.  Representations of Guarantors..................................48
SECTION 4.13.  Deltec Acquisition Documents...................................49

                                    ARTICLE 5
                                   COVENANTS

SECTION 5.01.  Information....................................................49
SECTION 5.02.  Payment of Obligations.........................................53
SECTION 5.03.  Maintenance of Property; Insurance.............................53
SECTION 5.04.  Conduct of Business and Maintenance of Existence...............54
SECTION 5.05.  Compliance with Laws...........................................54
SECTION 5.06.  Inspection of Property, Books and Records; Annual Lender
                 Meeting......................................................54
SECTION 5.07.  Mergers and Sales of Assets....................................55
SECTION 5.08.  Use of Proceeds................................................55
SECTION 5.09.  Negative Pledge................................................56
SECTION 5.10.  Limitation on Debt.............................................57
SECTION 5.11.  Restricted Payments............................................58
SECTION 5.12.  Investments and Other Acquisitions.............................59
SECTION 5.13.  Consolidated Capital Expenditures..............................60
SECTION 5.14.  Sale-leaseback Transactions....................................61
SECTION 5.15.  Transactions with Affiliates...................................61
SECTION 5.16.  Hedging Facilities.............................................62
SECTION 5.17.  Further Assurances.............................................62
SECTION 5.18.  Minimum Consolidated Net Worth.................................63
SECTION 5.19.  Fixed Charge Coverage Ratio....................................63
SECTION 5.20.  Leverage Ratio.................................................64
SECTION 5.21.  Amendments of Related Documents................................64
SECTION 5.22.  Limitation on Restrictions Affecting Subsidiaries..............64
SECTION 5.23.  Designated Senior Debt.........................................65

                                    ARTICLE 6
                                    DEFAULTS

SECTION 6.01.  Events of Default..............................................65
SECTION 6.02.  Notice of Default..............................................67
SECTION 6.03.  Cash Cover.....................................................68

<PAGE>

                                    ARTICLE 7
                                   THE AGENT

SECTION 7.01.  Appointment and Authorization..................................68
SECTION 7.02.  Agents and Affiliates..........................................68
SECTION 7.03.  Action by Agents...............................................69
SECTION 7.04.  Consultation with Experts......................................69
SECTION 7.05.  Liability of Agents............................................69
SECTION 7.06.  Indemnification................................................69
SECTION 7.07.  Credit Decision................................................69
SECTION 7.08.  Successor Administrative Agent.................................70
SECTION 7.09.  Agents' Fee....................................................70
SECTION 7.10.  Co-Agents and Documentation Agent..............................70

                                    ARTICLE 8
                            CHANGE IN CIRCUMSTANCES

SECTION 8.01.  Basis for Determining Interest Rate Inadequate or Unfair.......70
SECTION 8.02.  Illegality.....................................................71
SECTION 8.03.  Increased Cost and Reduced Return..............................72
SECTION 8.04.  Taxes..........................................................73
SECTION 8.05.  Base Rate Loans Substituted for Affected Euro-Dollar Loans.....75
SECTION 8.06.  Substitution of Lender.........................................76

                                    ARTICLE 9
                                    GUARANTY

SECTION 9.01.  The Guaranty...................................................76
SECTION 9.02.  Guaranty Unconditional.........................................76
SECTION 9.03.  Discharge Only upon Payment in Full; Reinstatement In Certain
                   Circumstances..............................................77
SECTION 9.04.  Waiver by Each Guarantor.......................................77
SECTION 9.05.  Subrogation and Contribution...................................78
SECTION 9.06.  Stay of Acceleration...........................................78
SECTION 9.07.  Limit of Liability.............................................78

                                   ARTICLE 10
                                  MISCELLANEOUS

SECTION 10.01.  Notices.......................................................78
SECTION 10.02.  No Waivers....................................................79
SECTION 10.03.  Expenses; Indemnification.....................................79
SECTION 10.04.  Sharing of Set-Offs...........................................79
SECTION 10.05.  Amendments and Waivers; Release of Collateral.................80
SECTION 10.06.  Successors and Assigns........................................81
SECTION 10.07.  Collateral....................................................84
SECTION 10.08.  Governing Law; Submission to Jurisdiction.....................84
SECTION 10.09.  Counterparts; Integration.....................................84
SECTION 10.10.  Waiver by Jury Trial..........................................84



<PAGE>

PRICING SCHEDULE

SCHEDULE 1........Existing Letters of Credit
SCHEDULE 2........Assigning Lenders
SCHEDULE 3........Assuming  Lenders
SCHEDULE 4........Certain Payments
SCHEDULE 4.05.....Material Litigation
SCHEDULE 5.10.....Outstanding Indebtedness
SCHEDULE 5.22.....Existing Restrictions Affecting Subsidiaries

EXHIBIT A.........Note
EXHIBIT B.........Security Agreement
EXHIBIT C.........Pledge Agreement
EXHIBIT D.........Opinion of Special North Carolina Counsel for the Obligors
EXHIBIT E-1.......Opinion of Davis Polk & Wardwell, Special New York Counsel to
                  the Agents
EXHIBIT E-2.......Form of Opinion of Special Foreign Counsel to the Agents
EXHIBIT F.........Assignment and Assumption Agreement
EXHIBIT G.........Borrowing Base Certificate 
EXHIBIT H.........Guarantor Addendum


<PAGE>

                      AMENDED AND RESTATED CREDIT AGREEMENT


         AGREEMENT  dated as of April 9, 1997  among  EXIDE  ELECTRONICS  GROUP,
INC., the  GUARANTORS  party hereto,  the LENDERS listed on the signature  pages
hereof, the ISSUING LENDERS parties hereto, MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, as Administrative Agent and NATIONSBANK, N.A., as Documentation Agent.

         Certain parties hereto have entered into a Credit Agreement dated as of
March 13,  1996 and  wish,  upon  satisfaction  of the  conditions  set forth in
Section  3.01 hereof,  to amend and restate  such Credit  Agreement as set forth
herein  (such  amendment  and  restatement,  the  "Amendment";  and such  Credit
Agreement, as in effect from time to time prior to the Amendment Effective Date,
as amended and restated by the Amendment as of the Amendment  Effective Date and
as further amended from time to time thereafter, this "Agreement", provided that
in no event shall the Amendment be deemed to extinguish or constitute a novation
of the obligations  under the Agreement).  The parties hereto therefore agree as
follows:



                                    ARTICLE 1

                                   DEFINITIONS

         SECTION 1.01. Definitions. The following  terms,  as used herein,  have
the following meanings:

         "Acquisition"  shall  mean  any  acquisition  (other  than  the  Deltec
Acquisition), whether in a single transaction or series of related transactions,
by the Borrower or any one or more Subsidiaries,  or any combination thereof, of
(i) all or a substantial part of the assets, or a going business or division, of
any  Person,  whether  through  purchase of assets or  securities,  by merger or
otherwise,  (ii)  control of at least a majority  of  securities  of an existing
corporation  or other Person  ordinarily  (and apart from rights  accruing under
special  circumstances) having the right to vote in the election of directors or
(iii)  control  of a  greater  than  50%  ownership  interest  in  any  existing
partnership, joint venture or other Person.



<PAGE>


         "Additional  Debt  Incurrence"  means the incurrence of any Debt by the
Borrower or any of its  Subsidiaries  after the date hereof of the type referred
to in clauses (i), (ii) or (vii) of the definition of "Debt" herein,  other than
Debt (i)  under  the Loan  Documents,  or the  Subordinated  Notes,  (ii)  which
constitutes a permitted refinancing of Debt hereunder, (iii) which is secured by
a Lien  permitted  by Section  5.09(c) or (iv)  expressly  permitted by Sections
5.10(f) or (g).

         "Administrative  Agent" means Morgan Guaranty Trust Company of New York
in its  capacity  as  administrative  agent for the Lenders  hereunder,  and its
successors in such capacity.

         "Administrative  Questionnaire"  means, with respect to each Lender, an
administrative  questionnaire in the form prepared by the  Administrative  Agent
and submitted to the  Administrative  Agent (with a copy to the  Borrower)  duly
completed by such Lender.

         "Affiliate"  means,  with  respect to any  Person,  (i) any Person that
directly,  or  indirectly  through  one or  more  intermediaries,  controls  the
Borrower (a "Controlling Person") or (ii) any Person (other than the Borrower or
a  Subsidiary)  which  is  controlled  by or is  under  common  control  with  a
Controlling  Person.  As used  herein,  the  term  "control"  means  possession,
directly or indirectly,  of the power to vote 10% or more of any class of voting
securities of a Person or to direct or cause the direction of the  management or
policies of a Person,  whether  through the ownership of voting  securities,  by
contract or otherwise.

         "Agents" means the  Administrative  Agent and the Documentation  Agent,
and "Agent" means either one of the foregoing.

         "Amendment"  has the  meaning  set  forth  in the  second  introductory
paragraph hereof.

         "Amendment  Effective  Date" means the date the Amendment  shall become
effective in accordance with Section 3.01.

         "Applicable  Lending Office" means, with respect to any Lender,  (i) in
the case of its Base Rate Loans,  its  Domestic  Lending  Office and (ii) in the
case of its Euro-Dollar Loans, its Euro-Dollar Lending Office.

         "Asset Sale" means any sale, lease or other disposition  (including any
such transaction  effected by way of merger or consolidation) by the Borrower or
any  of  its  Subsidiaries  of  any  asset,  including  without  limitation  any
sale-leaseback  transaction,  whether  or not  involving  a capital  lease,  but
excluding (i)  dispositions of inventory,  cash, cash equivalents and other cash
management  investments  and  obsolete,  unused  or  unnecessary  equipment  and
undeveloped real estate,  in each case in the ordinary course of business,  (ii)
dispositions to the Borrower or a Subsidiary of the Borrower and (iii) Permitted
Receivables Dispositions.



<PAGE>

         "Assignee" has the meaning set forth in Section 10.06(c).

         "Assigning Lender" means those banks listed on Schedule 2 hereof.

         "Assuming Lender" means those banks listed on Schedule 3 hereof.

         "Available  Cash Flow"  means,  for any fiscal  period,  the sum of (i)
Consolidated  Net Income for such  period  plus (ii) to the extent  deducted  in
determining Consolidated Net Income for such period, depreciation,  amortization
and  other  similar  noncash  charges  plus  (iii)  any  increase  (or minus any
decrease) during such period in deferred tax liabilities of the Borrower and its
Consolidated  Subsidiaries,  taken as a whole,  minus (iv) any gain (or plus any
loss) from Asset  Sales to the extent  included  (or  deducted)  in  determining
Consolidated Net Income for such period.

         "Available  LC Amount"  means at any time an amount equal to the lesser
of (i) $10,000,000,  and (ii) the excess, if any, of the aggregate amount of the
Revolving  Commitments  (or if less,  the  Borrowing  Base)  over the  aggregate
outstanding amount of Revolving Loans and Swing Loans at such time.

         "Base Rate" means, for any day, a rate per annum equal to the higher of
(i) the Prime  Rate for such day and (ii) the sum of 1/2 of 1% plus the  Federal
Funds Rate for such day.

         "Base Rate Loan" means (i) a Loan which bears  interest by reference to
the Base  Rate  pursuant  to the  applicable  Notice of  Borrowing  or Notice of
Interest  Rate  Election or the  provisions  of Article  VIII or (ii) an overdue
amount which was a Base Rate Loan immediately before it became overdue.

         "Base Rate Margin" means a rate per annum determined in accordance with
the Pricing Schedule.

         "Benefit Arrangement" means at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan
and which is maintained or otherwise  contributed  to by any member of the ERISA
Group.

         "Borrower" means Exide Electronics Group, Inc., a Delaware corporation,
and its successors.



<PAGE>


         "Borrower's 1996 Form 10-K" means the Borrower's  annual report on Form
10-K for the Fiscal Year ended  September 30, 1996, as filed with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934.

         "Borrowing" means a borrowing hereunder consisting of Loans made to the
Borrower at the same time by the Lenders  pursuant to Article 2 (or a Swing Loan
made solely by the Swing Lender), all of which (except for Base Rate Loans) have
the same initial Interest Period. A Borrowing is a "Base Rate Borrowing" if such
Loans  are  Base  Rate  Loans,  a  "Euro-Dollar  Borrowing"  if such  Loans  are
Euro-Dollar Loans and a "Swing Borrowing" if such Loan is a Swing Loan.

         "Borrowing  Base" means, at any date of  determination,  the sum of (i)
70% of Eligible  Accounts  Receivable and (ii) 50% of Eligible  Inventories,  in
each case  determined  pursuant to the most recent  Borrowing  Base  Certificate
prepared in accordance with Section 5.01(i).

         "Borrowing Base Certificate" means a certificate,  duly executed by the
chief financial  officer,  treasurer,  assistant  treasurer or controller of the
Borrower,  appropriately  completed and  substantially  in the form of Exhibit G
hereto.

         "Collateral" means collateral subject to the Collateral Documents.

         "Collateral Documents" means,  collectively,  the Pledge Agreement, the
Security  Agreement and any other agreement  pursuant to which an Obligor or any
Subsidiary  of an  Obligor  provides  a  Lien  on its  assets  in  favor  of the
Administrative  Agent for the  benefit  of the  Lenders,  and all  supplementary
assignments,  security agreements,  pledge agreements,  acknowledgments or other
documents  delivered or to be delivered  pursuant to the terms hereof (including
without limitation pursuant to Section 5.17) or of any other Security Document.

         "Commitment"  means a Term  Commitment or a Revolving  Commitment,  and
"Commitments" means any combination of the foregoing.

         "Commitment  Fee Rate" means a rate per annum  determined in accordance
with the Pricing Schedule.

         "Commitment  Schedule" means the Schedule attached hereto identified as
such.

         "Consolidated   Capital   Expenditures"  means,  for  any  period,  the
additions to property, plant and equipment and other capital expenditures of the
Borrower and its Consolidated  Subsidiaries for such period,  as the same are or
would be set forth in a consolidated statement of cash flows of the Borrower and
its Consolidated Subsidiaries for such period.

<PAGE>


         "Consolidated  Debt" means at any date the Debt of the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis as of such date.

         "Consolidated  EBITDA" means,  for any fiscal period,  Consolidated Net
Income for such period plus, to the extent deducted in determining  Consolidated
Net Income for such period,  the aggregate amount of (i)  Consolidated  Interest
Expense,  (ii) income tax expense,  (iii) the aggregate  amount of depreciation,
amortization  and other similar  non-cash  charges,  (iv) solely with respect to
Consolidated  Net Income  determined  for the Fiscal  Quarter  ended on or about
March 31,  1996 and the  Fiscal  Quarter  ended on or about June 30,  1996,  the
amount of one-time  charges taken in connection with the Deltec  Acquisition and
set forth as a separate line item referred to as "Acquisition and  Restructuring
Expense" on the  Borrower's  consolidated  statement  of income for such periods
(but in no event  greater than  $11,621,000  for the Fiscal  Quarter ended on or
about March 31, 1996 and  $3,000,000  for the Fiscal  Quarter  ended on or about
June 30, 1996),  (v) solely with respect to Consolidated  Net Income  determined
for the Fiscal  Quarter ended on or about March 31, 1997, the amount of fees and
expenses  initially  capitalized in connection  with the initial closing of this
Agreement in 1996,  and  expensed  during the Fiscal  Quarter  ended on or about
March 31,  1997  (but in no event  greater  than  $2,500,000,  determined  on an
after-tax basis) and (vi) minority interest expenses deducted in determining the
Borrower's direct or indirect share of net income of Consolidated Subsidiaries.

         "Consolidated  Interest  Expense" means,  for any period,  the interest
expense  of the  Borrower  and its  Consolidated  Subsidiaries  determined  on a
consolidated basis for such period excluding, for the Fiscal Quarter ended on or
about March 31, 1996,  $4,100,000 of interest expense  incurred  pursuant to the
Deltec Purchase Agreement.

         "Consolidated Net Income" means, for any fiscal period,  the net income
of the Borrower and its Consolidated Subsidiaries,  determined on a consolidated
basis for such  period,  exclusive of the effect of any  extraordinary  or other
non-recurring  gain (but not loss) and before the effect of any  dividends  paid
during such period on the Borrower's capital stock.

         "Consolidated   Net   Working   Investment"   means  at  any  date  (i)
consolidated  current assets of the Borrower and its  Consolidated  Subsidiaries
(exclusive  of  cash  and  cash   equivalents)   minus  (ii)  the  sum  (without
duplication) of (x) the consolidated current liabilities of the Borrower and its
Consolidated  Subsidiaries and (y) the current  liabilities of any Person (other
than the Borrower or any of its Consolidated  Subsidiaries) which are Guaranteed
by the Borrower or a  Consolidated  Subsidiary,  in each case exclusive of Debt,
all determined as of such date.



<PAGE>



         "Consolidated  Net Worth" means at any date the sum of the consolidated
stockholders'   equity  of  the  Borrower  and  its  Consolidated   Subsidiaries
determined as of such date (other than any amount attributable to stock which is
required to be redeemed or is redeemable at the option of the holder, if certain
events or conditions occur or exist or otherwise).

         "Consolidated  Rental  Expense"  means,  for any period,  the aggregate
rental expense of the Borrower and its Consolidated Subsidiaries determined on a
consolidated basis for such period.

         "Consolidated  Subsidiary"  means at any date any  Subsidiary  or other
entity the accounts of which would be consolidated with those of the Borrower in
its  consolidated  financial  statements if such  statements were prepared as of
such date.

         "Debt" of any Person means at any date,  without  duplication,  (i) all
obligations  of such Person for borrowed  money,  (ii) all  obligations  of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services,  except  trade  accounts  payable  arising in the  ordinary  course of
business, (iv) all obligations of such Person as lessee which are capitalized in
accordance with generally accepted accounting principles, (v) all non-contingent
obligations  (and, for purposes of Section 5.09 and the  definitions of Material
Debt and Material  Financial  Obligations,  all contingent  obligations) of such
Person to reimburse  any bank or other Person in respect of amounts paid under a
letter of credit or similar  instrument,  (vi) all Debt secured by a Lien on any
asset of such Person,  whether or not such Debt is otherwise  an  obligation  of
such  Person,  (vii) any  Receivables  Financing  and  (viii) all Debt of others
Guaranteed by such Person.

         "Default"  means any condition or event which  constitutes  an Event of
Default  or which  with the  giving of  notice  or lapse of time or both  would,
unless cured or waived, become an Event of Default.

         "Deltec" means Deltec Power Systems, Inc., a Wisconsin corporation, and
its successors.

         "Deltec  Acquisition"  means the  acquisition by the Borrower of Deltec
and all other  transactions  contemplated by the Deltec Purchase Agreement to be
consummated on or before the Original Closing Date.

         "Deltec Acquisition  Documents" means the Deltec Purchase Agreement and
all  agreements,  documents  and  instruments  executed and  delivered  pursuant
thereto or in connection  with the foregoing,  each as amended from time to time
in accordance with the terms hereof and thereof.


<PAGE>



         "Deltec Purchase Agreement" means the Stock Purchase Agreement dated as
of November 16, 1995 among the  Borrower,  Deltec,  Fiskars  Holdings,  Inc. and
Fiskars Holdings, Inc., including the exhibits and schedules thereto, as amended
by  Amendment  No. 1 thereto  dated as of  February  9, 1996 and as the same may
further be amended in accordance with the terms hereof and thereof.


         "Deltec  Seller  Stock" means the 50 shares of Class A Preferred  Stock
held by  Fiskars  Oy Ab,  issued in  connection  with the  closing of the Deltec
Acquisition and redeemable on January 8, 1997.

         "Derivatives  Obligations"  of any Person means all obligations of such
Person in  respect  of any rate  swap  transaction,  basis  swap,  forward  rate
transaction,  commodity  swap,  commodity  option,  equity or equity index swap,
equity or equity index  option,  bond  option,  interest  rate  option,  foreign
exchange transaction,  cap transaction,  floor transaction,  collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar  transaction  (including  any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.

         "Documentation Agent" means NationsBank, N.A. in its capacity as 
documentation agent for the Lenders hereunder, and its successors in such 
capacity.

         "Domestic  Business  Day"  means any day except a  Saturday,  Sunday or
other day on which  commercial  banks in New York City are  authorized by law to
close.

         "Domestic Lending Office" means, as to each Lender,  its office located
at its address set forth in its  Administrative  Questionnaire (or identified in
its  Administrative  Questionnaire as its Domestic Lending Office) or such other
office as such Lender may hereafter  designate as its Domestic Lending Office by
notice to the Borrower and the Administrative Agent.

         "EEIC" means Exide Electronics International Corp., a Delaware 
corporation.



<PAGE>



         "Eligible  Accounts  Receivable"  means,  at any date of  determination
thereof,  the aggregate amount of "Accounts  Receivable" of the Borrower and its
Consolidated  Subsidiaries,  as such amount is shown on the consolidated balance
sheet of the Borrower and its Consolidated  Subsidiaries on such date on a basis
consistent  with  that  used  in the  preparation  of the  financial  statements
referred to in Section  4.04(a) (other than any such amounts that are subject to
a Lien pursuant to a Permitted Receivables  Financing),  all net of reserves and
any "contra" accounts taken or maintained in respect thereof, or such net amount
that would be so shown on such balance sheet on such date if it were so prepared
on such date.

         "Eligible Inventories" means, at any date of determination thereof, the
value  (determined on a basis  consistent  with that used on the date hereof) at
such date of all inventory of the Borrower and its Consolidated Subsidiaries, to
the extent  comprised of readily  marketable  materials of a type  manufactured,
consumed or held for resale, as such amount is shown on the consolidated balance
sheet of the Borrower and its Consolidated  Subsidiaries on such date on a basis
consistent  with  that  used  in the  preparation  of the  financial  statements
referred to in Section 4.04(a),  other than any such amounts that are subject to
a Lien (other than Liens under the Loan Documents),  all net of reserves and any
"contra"  accounts  taken or maintained in respect  thereof,  or such net amount
that would be so shown on such balance sheet on such date if it were so prepared
on such date.

         "Environmental  Laws"  means  any and all  federal,  state,  local  and
foreign statutes,  laws, judicial  decisions,  regulations,  ordinances,  rules,
judgments, orders, decrees, plans, injunctions,  permits,  concessions,  grants,
franchises, licenses, agreements and other governmental restrictions relating to
the environment,  the effect of the environment on human health or to emissions,
discharges  or releases of  pollutants,  contaminants,  Hazardous  Substances or
wastes into the environment including, without limitation,  ambient air, surface
water,  ground  water,  or  land,  or  otherwise  relating  to the  manufacture,
processing,  distribution,  use,  treatment,  storage,  disposal,  transport  or
handling of  pollutants,  contaminants,  Hazardous  Substances  or wastes or the
clean-up or other remediation thereof.

         "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
amended, or any successor statute.

         "ERISA Group" means the Borrower,  any  Subsidiary and all members of a
controlled  group of corporations  and all trades or businesses  (whether or not
incorporated)  under common  control  which,  together  with the Borrower or any
Subsidiary,  are treated as a single  employer under Section 414 of the Internal
Revenue Code.

         "Euro-Dollar  Business  Day" means any  Domestic  Business Day on which
commercial  banks are open for  international  business  (including  dealings in
dollar deposits) in London.



<PAGE>



         "Euro-Dollar  Lending  Office"  means,  as to each Lender,  its office,
branch or  affiliate  located  at its  address  set forth in its  Administrative
Questionnaire  (or  identified  in  its  Administrative   Questionnaire  as  its
Euro-Dollar  Lending  Office) or such other office,  branch or affiliate of such
Lender as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Administrative Agent.

         "Euro-Dollar  Loan"  means  (i)  a  Loan  which  bears  interest  at  a
Euro-Dollar  Rate  pursuant to the  applicable  Notice of Borrowing or Notice of
Interest  Rate Election or (ii) an overdue  amount which was a Euro-Dollar  Loan
immediately before it became overdue.

         "Euro-Dollar  Margin"  means a rate per annum  determined in accordance
with the Pricing Schedule.

         "Euro-Dollar  Rate"  means a rate of  interest  determined  pursuant to
Section 2.05(b) on the basis of a London Interbank Offered Rate.

         "Euro-Dollar  Reserve  Percentage"  means  for any day that  percentage
(expressed  as a decimal)  which is in effect on such day, as  prescribed by the
Board  of  Governors  of the  Federal  Reserve  System  (or any  successor)  for
determining  the maximum  reserve  requirement  for a member bank of the Federal
Reserve System in New York City with deposits  exceeding five billion dollars in
respect of  "Eurocurrency  liabilities"  (or in respect of any other category of
liabilities  which includes  deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets  which  includes  loans by a  non-United  States  office of any Lender to
United States residents).

         "Event of Default" has the meaning set forth in Section 6.01.

         "Excess Cash Flow" means, for any period the excess (if any) of:

                           (A) the  sum of (i)  Available  Cash  Flow  for  such
                  fiscal  period,  and (ii) any  decrease  in  Consolidated  Net
                  Working  Investment  between the beginning and the end of such
                  period;

                           (B) the sum of (i) Consolidated  Capital Expenditures
                  for such period, (ii) any increase in Consolidated Net Working
                  Investment  between the  beginning and the end of such period,
                  (iii) cash dividends paid on capital stock during such period,
                  (iv)  mandatory  reductions of long-term  Debt of the Borrower
                  and its Consolidated Subsidiaries during such period (adjusted
                  to eliminate  the effect of  prepayments  on account of Excess
                  Cash Flow for a prior period) and (v) optional  prepayments of
                  Term Loans during such period pursuant to Section 2.09.



<PAGE>


         "Existing  Credit  Agreement"  means the Credit  Agreement  dated as of
September 30, 1994 among the Borrower, as guarantor, the "Borrowers" referred to
therein,  First  Union  National  Bank of North  Carolina,  as  co-arranger  and
administrative  agent,  BA  Securities,  Inc., as  co-arranger,  Bank of America
Illinois,  as  documentation  agent and the  lenders  referred  to  therein,  as
amended.

         "Federal  Funds Rate" means,  for any day, the rate per annum  (rounded
upward,  if  necessary,  to the  nearest  1/100th  of 1%) equal to the  weighted
average of the rates on overnight Federal funds transactions with members of the
Federal  Reserve  System  arranged  by Federal  funds  brokers  on such day,  as
published by the Federal  Reserve Bank of New York on the Domestic  Business Day
next  succeeding  such  day,  provided  that (i) if such  day is not a  Domestic
Business  Day,  the  Federal  Funds Rate for such day shall be such rate on such
transactions on the next preceding  Domestic Business Day as so published on the
next succeeding  Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding  Domestic  Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to the Administrative  Agent on such day on
such transactions as determined by the Administrative Agent.

         "Fiscal  Quarter"  means  a  fiscal  quarter  in a  Fiscal  Year of the
Borrower.  "First Fiscal Quarter 1996",  "Second Fiscal Quarter 1996" and "Third
Fiscal Quarter  1996",  e.g.,  mean,  respectively,  the fiscal  quarters of the
Borrower  ending most nearly on December 31,  1995,  March 31, 1996 and June 30,
1996.

         "Fiscal  Year" means a fiscal year of the  Borrower,  and "Fiscal Year"
for any  particular  year means the fiscal year of the Borrower  ended or ending
during the specified  calendar year.  "Fiscal Year 1996", e.g., means the fiscal
year of the Borrower ending approximately September 30, 1996.

         "Fixed Charge  Coverage Ratio" means, at any date, the ratio of (i) the
sum of (A) Consolidated  EBITDA plus (B)  Consolidated  Rental Expense minus (C)
Consolidated Capital Expenditures,  in each case for the four consecutive Fiscal
Quarters of the Borrower and its Consolidated  Subsidiaries  ending on such date
(or, in the case of any Fiscal  Quarter  ending prior to March 31, 1997, for the
period  commencing  on April 1, 1996 and  ending on the last day of such  Fiscal
Quarter) to (ii) the sum of (x)  Consolidated  Interest  Expense for such period
plus (y)  Consolidated  Rental  Expense for such  period plus (z) the  aggregate
amount of dividends or distributions  paid by the Borrower on or with respect to
its capital  stock (or by any  Subsidiary  on or with  respect to capital  stock
owned by a Person  other than the  Borrower or another  Subsidiary)  during such
period,  but excluding in any event the redemption of the Deltec Seller Stock in
accordance with the terms thereof.



<PAGE>



         "Group  of  Loans"  or  "Group"  means  at any  time a group  of  Loans
consisting of (i) all Base Rate Loans at such time or (ii) all Euro-Dollar Loans
having the same  Interest  Period at such time;  provided  that, if Loans of any
particular  Lender  are  converted  to or made as Base Rate  Loans  pursuant  to
Article 8, such  Loans  shall be  included  in the same Group or Groups of Loans
from time to time as they would  have been in if they had not been so  converted
or made.

         "Guarantee"  by  any  Person  means  any   obligation,   contingent  or
otherwise,  of such Person directly or indirectly guaranteeing any Debt or other
obligation  of any other  Person and,  without  limiting the  generality  of the
foregoing, any obligation,  direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or  advance or supply  funds for the  purchase or
payment  of)  such  Debt or other  obligation  (whether  arising  by  virtue  of
partnership arrangements,  by agreement to keep-well, to purchase assets, goods,
securities  or services,  to  take-or-pay,  or to maintain  financial  statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the holder of such Debt or other  obligation of the payment thereof
or to protect such holder against loss in respect thereof (in whole or in part),
provided that the term Guarantee shall not include  endorsements  for collection
or deposit in the ordinary course of business.  The term  "Guarantee"  used as a
verb has a corresponding meaning.

         "Guarantor" means each Person listed on the signature pages hereof as a
"Guarantor", together with any Person who shall become a Guarantor in accordance
with Section 5.17(d), and their respective successors.

         "Hazardous  Substances"  means  any  toxic,  radioactive,   caustic  or
otherwise hazardous substance, including petroleum, its derivatives, by-products
and  other  hydrocarbons,  or any  substance  having  any  constituent  elements
displaying any of the foregoing characteristics.

         "Immaterial Subsidiary" means a Subsidiary of the Borrower,  other than
any Obligor,  that at the relevant time of determination  (i) does not, together
with any of its  Subsidiaries,  have assets  (including  capital  stock) with an
aggregate fair market value exceeding  $1,000,000 and (ii) is not performing any
activity significant to the business of the Borrower and its Subsidiaries, taken
as a whole, if the Borrower shall have notified the  Administrative  Agent prior
to the date hereof or any relevant event that such  Subsidiary is an "Immaterial
Subsidiary".  As of the Amendment  Effective Date,  Lortec Power Systems,  Inc.,
International  Power Machines de Mexico,  S.A. de C.V.,  and Exide  Electronics,
B.V. are Immaterial Subsidiaries.

         "Indemnitee" has the meaning set forth in Section 10.03(b).



<PAGE>



         "Interest  Period"  means,  with  respect to each  Euro-Dollar  Loan, a
period commencing on the date of Borrowing specified in the applicable Notice of
Borrowing or on the date  specified in the  applicable  Notice of Interest  Rate
Election and ending one, two,  three or six months  thereafter,  as the Borrower
may elect in the applicable Notice; provided that:


                           (a) any Interest  Period which would otherwise end on
                  a day  which  is  not a  Euro-Dollar  Business  Day  shall  be
                  extended  to the  next  succeeding  Euro-Dollar  Business  Day
                  unless such Euro-Dollar Business Day falls in another calendar
                  month,  in which case such  Interest  Period  shall end on the
                  next preceding Euro-Dollar Business Day;

                           (b) any  Interest  Period  which  begins  on the last
                  Euro-Dollar  Business Day of a calendar month (or on a day for
                  which  there  is  no  numerically  corresponding  day  in  the
                  calendar  month  at the end of such  Interest  Period)  shall,
                  subject  to  clause  (c)  below,  end on the last  Euro-Dollar
                  Business Day of a calendar month; and

                           (c) if any Interest Period includes a date on which a
                  payment of  principal of any Loan is required to be made under
                  Section  2.04 or  Section  2.08 but does not end on such date,
                  then (i) the  principal  amount  (if any) of each  Euro-Dollar
                  Loan required to be repaid on such date shall have an Interest
                  Period  ending on such date and (ii) the remainder (if any) of
                  each such  Euro-Dollar  Loan  shall  have an  Interest  Period
                  determined as set forth above.

         "Internal  Revenue  Code" means the Internal  Revenue Code of 1986,  as
amended, or any successor statute.

         "International   Subsidiary"  means  any  Subsidiary  of  the  Borrower
organized under the laws of a jurisdiction,  and conducting substantially all of
its operations outside of, the United States of America.

         "Investment"  means any  investment in any Person,  whether by means of
share purchase, capital contribution, loan, Guarantee, time deposit or otherwise
(but not including any demand deposit).

         "Issuing  Lender" means Morgan Guaranty Trust Company of New York, Bank
of America  Illinois,  and First Union  National Bank of North  Carolina and any
other Lender that may agree to issue letters of credit  hereunder,  in each case
as issuer of a letter of credit hereunder.



<PAGE>



         "Lender"  means each bank listed on the signature  pages  hereof,  each
Assignee  which  becomes  a Lender  pursuant  to  Section  10.06(c),  and  their
respective  successors,  and shall  include,  as the  context may  require,  the
Issuing Lender in such capacity.

         "Letter of Credit"  means a letter of credit to be issued  hereunder by
an Issuing Lender.

         "Letter  of Credit  Fee  Rate"  means a rate per  annum  determined  in
accordance with the Pricing Schedule.

         "Letter of Credit  Liabilities"  means, for any Lender and at any time,
the sum of (i) the amounts then owing to such Lender  (including in its capacity
as an Issuing  Lender) by the  Borrower  to  reimburse  it in respect of amounts
drawn under Letters of Credit and (ii) such Lender's Revolving Percentage of the
aggregate amount then available for drawing under all Letters of Credit.

         "Leverage Ratio" means, for any day, the ratio of (i) Consolidated Debt
on such day to (ii) Consolidated EBITDA for the four consecutive Fiscal Quarters
ending on or most recently prior to such day;  provided that in determining  the
Leverage  Ratio as of any day  prior  to the end of the  Fiscal  Quarter  ending
approximately  on March 31, 1997,  Consolidated  EBITDA for the Fiscal  Quarters
ending September 30, 1995,  December 31, 1995 and March 31, 1996 shall be deemed
to be $14,683,000, $15,223,000 and $12,937,000, respectively.

         "Lien" means,  with respect to any asset, any mortgage,  lien,  pledge,
charge,  security  interest  or  encumbrance  of any kind,  or any other type of
preferential  arrangement  that has the practical  effect of creating a security
interest,  in respect of such asset.  For the  purposes of this  Agreement,  the
Borrower  or any  Subsidiary  shall be deemed to own subject to a Lien any asset
which it has  acquired  or holds  subject to the  interest of a vendor or lessor
under any  conditional  sale  agreement,  capital lease or other title retention
agreement relating to such asset.

         "Loan" means a Base Rate Loan, a Euro-Dollar  Loan or a Swing Loan, and
"Loans"  means  Base  Rate  Loans,  Swing  Loans  or  Euro-Dollar  Loans  or any
combination of the foregoing.

         "Loan  Documents"  means this  Agreement,  the Notes and the Collateral
Documents.

         "London  Interbank  Offered  Rate" has the meaning set forth in Section
2.05(b).



<PAGE>


         "Major Casualty  Proceeds" means (i) the aggregate  insurance  proceeds
received in connection with one or more related events by the Borrower or any of
its Subsidiaries under any insurance policy maintained by the Borrower or any of
its  Subsidiaries  covering  losses with  respect to  tangible  real or personal
property or improvements or losses from business  interruption or (ii) any award
or other  compensation  with  respect to any  condemnation  of property  (or any
transfer or  disposition  of property in lieu of  condemnation)  received by the
Borrower or any of its Subsidiaries, if the amount of such aggregate proceeds or
award or other compensation exceeds $1,000,000.

         "Material  Debt"  means Debt  (other  than the  Notes) of the  Borrower
and/or  one or more of its  Subsidiaries,  arising  in one or  more  related  or
unrelated  transactions,  in an  aggregate  principal  or face amount  exceeding
$5,000,000.

         "Material  Financial  Obligations"  means a principal or face amount of
Debt and/or payment or  collateralization  obligations in respect of Derivatives
Obligations of the Borrower and/or one or more of its  Subsidiaries,  arising in
one or more  related  or  unrelated  transactions,  exceeding  in the  aggregate
$5,000,000.

         "Material  Plan"  means at any time a Plan or  Plans  having  aggregate
Unfunded Liabilities in excess of $1,000,000.

         "Maturity  Date"  means  April  9,  2002,  or,  if  such  day  is not a
Euro-Dollar  Business Day, the next succeeding  Euro-Dollar  Business Day unless
such Euro-Dollar Business Day falls in another calendar month, in which case the
Maturity Date shall be the next preceding Euro-Dollar Business Day.

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

         "Multiemployer Plan" means at any time an employee pension benefit plan
within the  meaning of  Section  4001(a)(3)  of ERISA to which any member of the
ERISA Group is then making or accruing an  obligation to make  contributions  or
has within the preceding five plan years made contributions, including for these
purposes  any Person  which ceased to be a member of the ERISA Group during such
five year period.



<PAGE>



         "Net Cash  Proceeds"  means,  with respect to any Reduction  Event,  an
amount  equal  to the  cash  proceeds  received  by the  Borrower  or any or its
Subsidiaries  from or in respect of such  Reduction  Event  (including  any cash
proceeds  received as income or other  proceeds  of any noncash  proceeds of any
Asset  Sale)  or,  in the  case  of any  Permitted  Receivables  Financing,  the
Receivables  Investment Amount with respect thereto  (including any increases in
the  initial  amount  thereof  from  time to  time,  but  not  with  respect  to
reinvestments  out of  collections  or  proceeds  by the  purchasers  or lenders
thereunder  that do not  result in an  increase  in the  Receivables  Investment
Amount with respect thereto),  (i) less any expenses reasonably incurred by such
Person in respect of such Reduction Event and (ii) if such Reduction Event is an
Asset  Sale,  less (x) the  amount  of any Debt  secured  by a Lien on any asset
disposed of in such Asset Sale and discharged from the proceeds  thereof and (y)
any taxes  actually  paid or to be payable by such  Person  (as  estimated  by a
senior  financial or accounting  officer of the  Borrower,  giving effect to the
overall tax position of the Borrower) in respect of such Asset Sale.


         "Notes" means  promissory  notes of the Borrower,  substantially in the
form of either Exhibit A to this Agreement as in effect  immediately  before the
Amendment Effective Date or Exhibit A to this Agreement as in effect immediately
after the Amendment Effective Date, evidencing the obligation of the Borrower to
repay the Loans,  and the "Note" means any one of such  promissory  notes issued
under this  Agreement  as in effect  immediately  before or after the  Amendment
Effective Date.

         "Notice of Borrowing" has the meaning set forth in Section 2.02.

         "Notice of Interest Rate Election" has the meaning set forth in Section
2.10.

         "Notice of Issuance" has the meaning set forth in Section 2.15(b).

         "Obligor" means the Borrower and each Guarantor.

         "Original  Closing Date" means March 13, 1996,  the date of the initial
Borrowings hereunder.

         "Parent" means, with respect to any Lender, any Person controlling such
Lender.

         "Participant" has the meaning set forth in Section 10.06(b).

         "PBGC" means the Pension  Benefit  Guaranty  Corporation  or any entity
succeeding to any or all of its functions under ERISA.



<PAGE>



         "Permitted Receivables Disposition" means any transfer (by way of sale,
pledge or  otherwise)  by the Borrower or any  Subsidiary to any other Person of
accounts receivable and other rights to payment (whether constituting  accounts,
chattel paper,  instruments,  general intangibles or otherwise and including the
right to payment of interest or finance  charges) and related contract and other
rights and property  (including all general  intangibles,  collections and other
proceeds  relating  thereto,  all security  therefor  (and the property  subject
thereto),  all guarantees  and other  agreements or  arrangements  of whatsoever
character  from time to time  supporting  such right to  payment,  and all other
rights,  title and interest in goods  relating to a sale which gave rise to such
right of payment) in connection with a Permitted Receivables Financing.

         "Permitted  Receivables  Financing" means any Receivables  Financing by
the Borrower or any of its Subsidiaries  which has been approved by the Required
Lenders  (which  Receivables  Financing  shall provide for recourse  against the
transferor  of such  receivables  only for  limited  indemnities  and  breach of
warranty concerning the eligibility of the receivables transferred,  and no such
recourse for  uncollectability of such receivables solely for the failure of the
related  obligors to pay such  receivables),  which such  approval  for any such
transaction shall be considered in good faith. No Receivables Financing or other
transaction  involving the sale,  pledge or other disposition by the Borrower or
any of its Subsidiaries of any account  receivable shall constitute a "Permitted
Receivables  Financing"  unless  the  Required  Lenders  (determined,  for  this
purpose,  without  the  participation  of any  Lender  acting as a  participant,
sponsor or credit support provider in any such Permitted  Receivable  Financing)
have approved in writing (which such approval shall be considered in good faith)
the final form of all  documentation  relating to such  transaction  (including,
without  limitation,  the face amount of the accounts receivable subject thereto
and the  economic  terms) and shall have agreed to such  amendments  to the Loan
Documents,  including, without limitation,  provisions for an "Event of Default"
or similar event hereunder in the event of a wind down or early  amortization of
such financing, and all amendments and waivers relating to such documentation.

         "Person"  means an  individual,  a  corporation,  a  limited  liability
company,  a  partnership,  an  association,  a  trust  or any  other  entity  or
organization,  including a government or political  subdivision  or an agency or
instrumentality thereof.

         "Plan" means at any time an employee pension benefit plan (other than a
Multiemployer  Plan)  which is  covered  by Title IV of ERISA or  subject to the
minimum  funding  standards  under Section 412 of the Internal  Revenue Code and
either (i) is maintained,  or  contributed  to, by any member of the ERISA Group
for  employees  of any member of the ERISA  Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for  employees  of any Person which
was at such time a member of the ERISA Group.



<PAGE>



         "Pledge Agreements" means each Pledge Agreement,  the Share Mortgage or
similar  document dated as of the Original Closing Date between each Pledgor and
the  Administrative  Agent, each substantially in the form of Exhibit C, in each
case with such  modifications and additions as shall be necessary to comply with
applicable law and in each case as amended from time to time.

         "Pledgors" means the Borrower, International Power Machines 
Corporation, EEIC, Exide Electronics USA Holdings Corp., Exide Electronics
Corporation, Deltec Electronics Corp. and Deltec.

         "Pricing  Schedule" means the Schedule  attached  hereto  identified as
such.

         "Prime  Rate"  means the rate of  interest  publicly  announced  by the
Administrative Agent in New York City from time to time as its Prime Rate.

         "Quarterly Date" means the last Euro-Dollar Business Day of each March,
June, September and December.

         "Receivables Financing" means any receivables securitization program or
other type of accounts receivable  financing  transaction by the Borrower or any
of its Subsidiaries.

         "Receivables  Investment Amount" means at any time, with respect to any
Permitted  Receivables  Financing,  the financing amount with respect thereto at
such time,  equal to the  amount  advanced  by the  purchasers  or lenders  with
respect  thereto for the purchase or financing  of assets  transferred  pursuant
thereto, net of repayments or recoveries through liquidation of such assets.

         "Reduction  Amount" means, (i) in respect of an Asset Sale, 100% of the
Net Cash Proceeds  thereof in excess of  $1,000,000 in any Fiscal Year,  (ii) in
respect of an Additional Debt Incurrence or receipt of Major Casualty  Proceeds,
100% of the Net Cash Proceeds thereof, (iii) in respect of Excess Cash Flow, 50%
of the amount thereof,  and (iv) in respect of the issuance of equity securities
not  constituting  Debt,  50% of the Net Cash  Proceeds  thereof  in  excess  of
$200,000 in any Fiscal Year.

         "Reduction  Event" means (i) any Asset Sale,  (ii) any Additional  Debt
Incurrence,  (iii) the issuance of any equity  securities by the Borrower or any
of its Subsidiaries  (other than equity securities issued to the Borrower or any
of its Subsidiaries) or (iv) receipt of Major Casualty Proceeds. The description
of any  transaction as falling within the above  definition  does not affect any
limitation on such transaction imposed by Article 5 of this Agreement.



<PAGE>



         "Reference  Lenders"  means the  principal  London  offices  of Bank of
America NT & SA, First Union National Bank of North Carolina,  NationsBank, N.A.
and Morgan Guaranty Trust Company of New York, and "Reference  Lender" means any
one of such Reference Lenders.

         "Refunded Swing Loans" has the meaning set forth in Section 2.01(d).

         "Refunding Date" has the meaning set forth in Section 2.01(e).

         "Regulation  U" means  Regulation  U of the Board of  Governors  of the
Federal Reserve System, as in effect from time to time.

         "Required  Lenders" means at any time Lenders having, in the aggregate,
at least 51% of the sum of (x) the Revolving Commitments at such time or, if the
Revolving  Commitments  shall  have been  terminated,  the sum of the  aggregate
outstanding  principal  amount  of the  Revolving  Loans  and  Letter  of Credit
Liabilities  plus (y) the  aggregate  outstanding  principal  amount of the Term
Loans  at such  time  or,  if no Term  Loans  are  then  outstanding,  the  Term
Commitments at such time.

         "Restricted  Investment"  means any  Investment by the Borrower and its
Subsidiaries  in any Person,  other than (i)  Investments  in  Guarantors,  (ii)
Temporary Cash  Investments,  (iii)  Investments by Deltec,  Borrower,  EEIC and
Exide Electronic Corporation in FPS Power Systems Oy Ab with a book value at any
time in the  aggregate not to exceed  $5,000,000  collectively,  (v)  Guarantees
permitted   under  clause  (i)  of  Section   5.10(h)  and  (v)  Investments  in
Subsidiaries  other than  Guarantors and in the Japanese Joint Venture,  each of
which  Investments under this clause (v) is in existence on the Original Closing
Date, and in the respective  amounts  thereof on the Original  Closing Date, and
renewals and  extensions  by the obligor  with respect to any of the  foregoing,
provided that any such renewal or extension does not increase the amount of such
Investment.

         "Restricted  Payment" means (i) any dividend or other  distribution  on
any shares of the Borrower's  capital stock (except  dividends payable solely in
shares of its  capital  stock) or (ii) any  payment on account of the  purchase,
redemption,  retirement  or  acquisition  of (a) any  shares  of the  Borrower's
capital stock or (b) any option, warrant or other right to acquire shares of the
Borrower's  capital  stock and (iii) any payment of principal  on, or on account
of, the  purchase,  redemption,  retirement or other  acquisition,  in each case
prior to any scheduled  maturity,  scheduled repayment or scheduled sinking fund
payment of, the Subordinated  Notes and any other Debt (except for repayments in
the ordinary course of business of Debt of International  Subsidiaries permitted
under Section 5.10(g) hereof).



<PAGE>



         "Revolving Commitment" means, (i) with respect to each Lender listed on
the  signature  pages  hereof,  the amount set forth  opposite  the name of such
Lender under the heading "Revolving  Commitment" on the Commitment Schedule, and
(ii) with respect to any  Assignee,  the Revolving  Commitment  assigned to such
Assignee  pursuant  to  Section  10.06(c),  in each case as such  amount  may be
reduced from time to time pursuant to Section 2.07 or 2.08.

         "Revolving  Credit Available Amount" means with respect to each Lender,
at any time, the lesser of (i) the amount of such Lender's Revolving  Commitment
at such  time  and (ii)  the  Borrowing  Base at such  time  multiplied  by such
Lender's Revolving Percentage.

         "Revolving  Credit  Period"  means the period  from and  including  the
Original Closing Date to but not including the Maturity Date.

         "Revolving  Loan"  means a loan made by a Lender  pursuant  to  Section
2.01(b).

         "Revolving   Percentage"  means,  with  respect  to  each  Lender,  the
percentage that such Lender's Revolving Commitment  constitutes of the aggregate
amount of the Revolving Commitments.

         "S&P" means Standard & Poor's Ratings Services.

         "Sale-Leaseback  Transaction"  means any  arrangement  with any  Person
providing  for the leasing by the  Borrower or any  Subsidiary  of any  property
that, or of any property similar to and used for substantially the same purposes
as any other property that, has been or is to be sold, assigned,  transferred or
otherwise  disposed of by the Borrower or any of its Subsidiaries to such Person
with the intention of entering into such a lease.

         "Security Agreement" means the security agreement  substantially in the
form  of  Exhibit  B  hereto   between  each  Obligor   party  thereto  and  the
Administrative  Agent  entered  into as of the  Original  Closing  Date  and any
security agreement entered into pursuant hereto after the Original Closing Date,
in each case as amended from time to time.

         "Series  G  Preferred  Stock"  means the  1,000,000  shares of Series G
Convertible Preferred Stock held by Fiskars Oy Ab, issued in connection with the
closing of the Deltec  Acquisition  and convertible at any time at the option of
the holder,  as in effect on the Original  Closing Date and as amended from time
to time in accordance with the terms hereof and thereof.



<PAGE>



         "Subordinated  Notes" means, at any time, the subordinated notes, in an
aggregate  principal  amount  of not less  than  $75,000,000  and not more  than
$150,000,000,  issued pursuant to the Subordinated Note Agreement on or prior to
the Original Closing Date, having a scheduled maturity not earlier than, and not
requiring any payment of principal  prior to, the date that is 10 years from the
Original Closing Date.

         "Subordinated  Note Agreement"  means the  Subordinated  Note Indenture
dated as of March 13, 1996  between the  Borrower,  the  guarantors  referred to
therein, and the purchasers referred to therein,  with regard to the issuance of
at least $75,000,000 in aggregate  principal amount of subordinated notes of the
Borrower,  substantially  in the  form  delivered  to the  Lenders  prior to the
Original  Closing Date, and as amended from time to time in accordance  with the
terms thereof and hereof.

         "Subsidiary"  means, as to any Person,  any corporation or other entity
of which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons  performing  similar
functions are at the time directly or  indirectly  owned by such Person;  unless
otherwise specified, "Subsidiary" means a Subsidiary of the Borrower.

         "Swing Lender" means Morgan  Guaranty Trust Company of New York, in its
capacity as the Swing Lender under the swing loan facility  described in Section
2.01(c), and its successors in such capacity.

         "Swing Loan" means a Loan made by the Swing Lender  pursuant to Section
2.01(c).

         "Swing Loan  Commitment"  means  $5,000,000  or, if less, the aggregate
amount of the Revolving Commitments.

         "Swing  Loan  Refund  Amount"  has the  meaning  set  forth in  Section
2.01(d).



<PAGE>



         "Temporary  Cash  Investment"  means any  Investment in (i)  securities
issued or  unconditionally  guaranteed  by the  United  States of America or any
agency or  instrumentality  thereof,  backed by the full faith and credit of the
United  States  of  America  and  maturing  within  one  year  from  the date of
acquisition, (ii) securities issued by any state of the United States of America
or any political subdivision or public instrumentality thereof,  maturing within
one year from the date of acquisition and, at the time of acquisition,  having a
rating of at least A- by S&P or the  equivalent  by  Moody's,  (iii)  commercial
paper  issued by any Person  organized  under the laws of the  United  States of
America, maturing no more than one year from the date of acquisition and, at the
time of acquisition,  having a rating of at least A-1 or the equivalent  thereof
by S&P or at least P-1 or the equivalent thereof by Moody's,  (iv) time deposits
and  certificates of deposit that are insured by the Federal  Deposit  Insurance
Corporation (the "FDIC") or any successor  instrumentality  of the government of
the United States of America up to the applicable limit on insurance  granted by
the FDIC or such other  instrumentality  with  respect to such  instruments  (it
being  understood that the amount invested in such instrument may not exceed the
limit on such insurance), maturing within one year from the date of issuance and
issued by a bank or trust company  organized under the laws of the United States
of America or any state  thereof and having  combined  capital and surplus of at
least $500,000,000,  (v) repurchase  obligations with a term not exceeding seven
(7) days with respect to underlying  securities of the types described in clause
(i) above entered into with any bank or trust company meeting the qualifications
specified in clause (iv) above and (vi) money market funds  substantially all of
whose assets are comprised of  securities of the types  described in clauses (i)
through (v) above.

         "Term  Commitment"  means,  with respect to each "Lender" party to this
Agreement on the Original  Closing Date,  the amount set forth opposite the name
of such Lender under the heading "Term  Commitment"  on the  signature  pages of
this Agreement as in effect on the Original Closing Date.

         "Term Loan" means a loan made by a Lender pursuant to Section 2.01(a).

         "Unfunded Liabilities" means, with respect to any Plan at any time, the
amount  (if any) by which (i) the value of all  benefit  liabilities  under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for  purposes of Section  4044 of ERISA,  exceeds  (ii) the fair market
value of all Plan assets allocable to such  liabilities  under Title IV of ERISA
(excluding any accrued but unpaid contributions),  all determined as of the then
most  recent  valuation  date for such Plan,  but only to the  extent  that such
excess  represents  a potential  liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.

         "United  States"  means the United  States of  America,  including  the
States  and  the  District  of  Columbia,  but  excluding  its  territories  and
possessions.



<PAGE>


         SECTION 1.2. Accounting  Terms  and  Determinations.   Unless otherwise
specified  herein,  all accounting  terms used herein shall be interpreted,  all
accounting  determinations hereunder shall be made, and all financial statements
required  to be  delivered  hereunder  shall  be  prepared  in  accordance  with
generally accepted accounting principles as in effect from time to time, applied
on a  basis  consistent  (except  for  changes  concurred  in by the  Borrower's
independent  public  accountants)  with the  most  recent  audited  consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Lenders; provided that, if the Borrower notifies the Administrative Agent
that the Borrower  wishes to amend any  covenant in Article 5 to  eliminate  the
effect  of  any  change  in  generally  accepted  accounting  principles  on the
operation of such covenant (or if the Administrative Agent notifies the Borrower
that the Required  Lenders wish to amend Article 5 for such  purpose),  then the
Borrower's  compliance  with such  covenant  shall be determined on the basis of
generally  accepted  accounting  principles  in effect  immediately  before  the
relevant change in generally  accepted  accounting  principles became effective,
until either such notice is  withdrawn  or such  covenant is amended in a manner
satisfactory to the Borrower and the Required Lenders.


                                    ARTICLE 2

                                   THE CREDITS

         SECTION 2.01.  Commitments to Lend.

          (a) Term Loans.  On the Original  Closing  Date,  each Person that was
initially a Lender  under the  Agreement  on the  Original  Closing  Date made a
single  loan to the  Borrower  on the  Original  Closing  Date  pursuant to this
Section 2.01(a) in an amount not to exceed such Person's Term Commitment.  Loans
made pursuant to this Section 2.01(a) are not revolving in nature and amounts of
such loans repaid or prepaid may not be reborrowed.


<PAGE>



          (b) Revolving Loans.  Each Lender severally  agrees,  on the terms and
conditions set forth in this Agreement,  to make loans to the Borrower  pursuant
to this Section 2.01(b) from time to time during the Revolving  Credit Period in
amounts such that the  aggregate  principal  amount of  Revolving  Loans by such
Lender at any one time outstanding shall not exceed the amount by which (i) such
Lender's  Revolving Credit Available Amount exceeds (ii) an amount equal to such
Lender's Revolving Percentage of the sum at such time of (x) aggregate amount of
all Letter of Credit  Liabilities plus (y) the aggregate  outstanding  principal
amount of Swing Loans.  Each Borrowing under this Section 2.01(b) shall be in an
aggregate principal amount of $5,000,000 (or $1,000,000 in the case of Base Rate
Loans under this Section  2.01(b)) or any larger multiple of $1,000,000  (except
that  any  such  Borrowing  may  be  in  the  aggregate  amount  of  the  unused
Commitments) and shall be made from the several Lenders ratably in proportion to
their  respective  Revolving  Commitments.  Within  the  foregoing  limits,  the
Borrower may borrow under this  Section,  repay,  or to the extent  permitted by
Section  2.09,  prepay  Revolving  Loans and  reborrow  at any time  during  the
Revolving Credit Period under this Section.

          (c) Swing Loans.  During the Revolving Credit Period, the Swing Lender
agrees,  on the terms and conditions set forth in this Agreement,  to make loans
to the Borrower  pursuant to this  Section  2.01(c) from time to time in amounts
such that (i) the aggregate principal amount of Swing Loans does not at any time
exceed the Swing Loan  Commitment and (ii) the sum of the aggregate  outstanding
principal  amount of the  Revolving  Loans and Swing  Loans  plus the  aggregate
amount of all  Letter of Credit  Liabilities  at such time does not  exceed  the
aggregate Revolving  Commitments or, if less, the Borrowing Base. Each Borrowing
under this Section 2.01(c) shall be in an aggregate principal amount of $250,000
or any larger  multiple  thereof  (except that any such  Borrowing may be in the
aggregate  available  amount of Swing Loans  determined in  accordance  with the
immediately  preceding sentence).  Within the foregoing limits, the Borrower may
borrow under this Section 2.01(c),  repay or, to the extent permitted by Section
2.09,  prepay Swing Loans and  reborrow at any time prior to the  Maturity  Date
under this Section 2.01(c).



<PAGE>



          (d) Conversion of Swing Loans to Revolving Loans. The Swing Lender, at
any time and from  time to time in its sole  and  absolute  discretion  may,  on
behalf of the Borrower (which hereby irrevocably directs the Swing Lender to act
on its  behalf),  on notice  given by the Swing Lender no later than 11:00 A.M.,
New York City time, on the proposed  date of Borrowing  for the Revolving  Loans
referred to below, request each Lender to make, and each Lender hereby agrees to
make, a Revolving  Loan, in an amount (with  respect to each Lender,  its "Swing
Loan  Refund  Amount")  equal  to  such  Lender's  Revolving  Percentage  of the
aggregate  principal  amount of the Swing  Loans (the  "Refunded  Swing  Loans")
outstanding on the date of such notice, to repay the Swing Lender. Unless any of
the events  described  in clause (g) or (h) of Section  6.01 with respect to the
Borrower  shall have occurred and be continuing (in which case the procedures of
Section  2.01(e)  shall  apply),  each  Lender  shall make such  Revolving  Loan
available to the Administrative Agent at its address specified in or pursuant to
Section 10.01 in  immediately  available  funds,  not later than 12:00 Noon (New
York City time),  on the date of such  notice.  Each such  Revolving  Loan shall
initially be made as a Base Rate Loan.  The  Administrative  Agent shall pay the
proceeds of such Revolving  Loans to the Swing Lender,  which shall  immediately
apply such  proceeds to repay  Refunded  Swing Loans.  Effective on the day such
Revolving Loans are made, the portion of the Swing Loans so paid shall no longer
be outstanding  as Swing Loans,  shall no longer be due as Swing Loans under the
Note held by the Swing  Lender,  and shall be due as  Revolving  Loans under the
respective  Notes  issued  to  the  Lenders  (including  the  Swing  Lender)  in
accordance with their respective Revolving Percentages  (calculated as set forth
above).  The  Borrower  authorizes  the Swing  Lender to charge  the  Borrower's
accounts with the Administrative  Agent (up to the amount available in each such
account) in order to immediately  pay the amount of such Refunded Swing Loans to
the extent amounts received from the Lenders are not sufficient to repay in full
such Refunded Swing Loans.

          (e) Purchase of  Participations  in Swing Loans.  If prior to the time
Revolving Loans would have otherwise been made pursuant to Section 2.01(d),  one
of the events described in clause (g) or (h) of Section 6.01 with respect to the
Borrower shall have occurred and be continuing,  each Lender shall,  on the date
such Revolving  Loans were to have been made pursuant to the notice  referred to
in Section 2.01(d) (the "Refunding Date"),  purchase an undivided  participating
interest  in the Swing  Loans in an amount  equal to such  Lender's  Swing  Loan
Refund Amount.  On the Refunding  Date,  each Lender shall transfer to the Swing
Lender, in immediately  available funds, such Lender's Swing Loan Refund Amount,
and upon receipt  thereof the Swing Lender shall  deliver to such Lender a Swing
Loan  participation  certificate dated the date of the Swing Lender's receipt of
such funds and in the Swing Loan Refund Amount of such Lender.

          (f) Payments on Participated Swing Loans.  Whenever, at any time after
the Swing Lender has received  from any Lender such  Lender's  Swing Loan Refund
Amount  pursuant to Section  2.01(e),  the Swing Lender  receives any payment on
account of the Swing Loans in which the Lenders  have  purchased  participations
pursuant to Section 2.01(e),  the Swing Lender will promptly  distribute to each
such Lender its ratable share  (determined on the basis of the Swing Loan Refund
Amounts of all of the Lenders) of such payment  (appropriately  adjusted, in the
case of  interest  payments,  to reflect  the period of time  during  which such
Lender's participating interest was outstanding and funded); provided,  however,
that in the event that such payment  received by the Swing Lender is required to
be  returned,  such Lender will return to the Swing  Lender any portion  thereof
previously distributed to it by the Swing Lender.



<PAGE>



          (g)  Obligations to Refund or Purchase  Participations  in Swing Loans
Absolute. Each Lender's obligation to transfer the amount of a Revolving Loan to
the Swing Lender as provided in Section  2.01(d) or to purchase a  participating
interest  pursuant to Section  2.01(e) shall be absolute and  unconditional  and
shall not be affected by any circumstance,  including,  without limitation,  (i)
any set-off, counterclaim, recoupment, defense or other right which such Lender,
the  Borrower or any other Person may have against the Swing Lender or any other
Person,  (ii) the  occurrence or continuance of a Default or an Event of Default
or the termination or reduction of the Commitments,  (iii) any adverse change in
the condition (financial or otherwise) of the Borrower or any other Person, (iv)
any breach of this  Agreement  by the  Borrower,  any other  Lender or any other
Person or (v) any other circumstance,  happening or event whatsoever, whether or
not similar to any of the foregoing.

         SECTION 2.02. Method of Borrowing.  (a)  The  Borrower  shall  give the
Administrative  Agent notice (a "Notice of Borrowing") not later than 11:00 A.M.
(New York City  time) on (x) the date of each  Base Rate  Borrowing  and (y) the
third Euro-Dollar Business Day before each Euro-Dollar Borrowing,  and not later
than 12:00 Noon (New York City  time) on the date of each  Borrowing  of a Swing
Loan, specifying:
                           (i) the  date of such  Borrowing,  which  shall  be a
                  Domestic  Business Day in the case of a Base Rate Borrowing or
                  Swing Borrowing,  or a Euro-Dollar Business Day in the case of
                  a Euro-Dollar Borrowing;

                           (ii) the aggregate amount of such Borrowing;

                           (iii) whether the Loans comprising such Borrowing are
                  to bear  interest  initially at the Base Rate or a Euro-Dollar
                  Rate, provided that all Swing Loans and, initially,  Revolving
                  Loans made  pursuant to Section  2.01(d)  shall bear  interest
                  based on the Base Rate;

                           (iv) whether the Loans comprising such Borrowing are
                  to be Term Loans, Revolving Loans or Swing Loans, and duration

                           (v) in  the  case  of a  Euro-Dollar  Borrowing,  the
                  of the Interest  Period  applicable  thereto,  subject  to the
                  provisions of the definition of Interest Period.

         No more than four Swing Loans may be borrowed during any calendar week.

          (b) Upon receipt of a Notice of Borrowing,  the  Administrative  Agent
shall promptly  notify each Lender of the contents  thereof and of such Lender's
ratable  share  of such  Borrowing  and  such  Notice  of  Borrowing  shall  not
thereafter be revocable by the Borrower.



<PAGE>



          (c) Not later than 12:00 Noon (New York City time) on the date of each
Borrowing  (or  1:00  P.M.  (New  York  City  time)  on the  date of each  Swing
Borrowing),  each Lender (or,  in the case of a Swing  Loan,  the Swing  Lender)
shall make  available  its share of such  Borrowing,  in Federal or other  funds
immediately  available  in New York  City,  to the  Administrative  Agent at its
address referred to in Section 10.01. Unless the Administrative Agent determines
that any applicable condition specified in Article 3 has not been satisfied, the
Administrative  Agent will make the funds so received from the Lenders available
promptly on the date of such  Borrowing  to the  Borrower at the  Administrative
Agent's aforesaid address.

          (d) Unless the Administrative  Agent shall have received notice from a
Lender  prior  to the  date of any  Borrowing  that  such  Lender  will not make
available to the Administrative Agent such Lender's share of such Borrowing, the
Administrative  Agent may assume that such Lender has made such share  available
to the  Administrative  Agent on the date of such  Borrowing in accordance  with
subsection  (c) of this  Section and the  Administrative  Agent may, in reliance
upon  such   assumption,   make  available  to  the  Borrower  on  such  date  a
corresponding  amount.  If and to the extent that such Lender  shall not have so
made such share  available  to the  Administrative  Agent,  such  Lender and the
Borrower  severally  agree to repay to the  Administrative  Agent  forthwith  on
demand such  corresponding  amount together with interest thereon,  for each day
from the date such amount is made  available to the Borrower until the date such
amount  is  repaid  to the  Administrative  Agent,  at (i)  in the  case  of the
Borrower, a rate per annum equal to the higher of the Federal Funds Rate and the
interest rate applicable  thereto  pursuant to Section 2.05 and (ii) in the case
of such  Lender,  the  Federal  Funds Rate.  If such  Lender  shall repay to the
Administrative  Agent such  corresponding  amount,  such amount so repaid  shall
constitute  such Lender's  Loan included in such  Borrowing for purposes of this
Agreement.

         SECTION 2.03.  Notes. (a) The Loans of each Lender shall  be  evidenced
by a single  Note  payable to the order of such  Lender  for the  account of its
Applicable  Lending Office, in an amount equal to the aggregate unpaid principal
amount of such Lender's Loans.

          (b) Each Lender may, by notice to the Borrower and the  Administrative
Agent,  request that its Loans of a particular  type, or its Term Loans,  on the
one hand, and its Revolving Loans and Swing Loans, on the other, be evidenced by
a separate Note in an amount equal to the aggregate  unpaid  principal amount of
such  Loans.  Each such Note  shall be in  substantially  the form of  Exhibit A
hereto with  appropriate  modifications  to reflect  the fact that it  evidences
solely  Loans of the relevant  type.  Each  reference  in this  Agreement to the
"Note" of such Lender shall be deemed to refer to and include any or all of such
Notes, as the context may require.



<PAGE>


          (c) Upon receipt of each Lender's  Note  pursuant to Section  3.01(b),
the  Administrative  Agent shall  forward such Note to such Lender.  Each Lender
shall record the date,  amount and type of each Loan made by it and the date and
amount of each payment of principal  made by the Borrower with respect  thereto,
and may, if such Lender so elects in connection with any transfer or enforcement
of its  Note,  endorse  on the  schedule  forming  a  part  thereof  appropriate
notations to evidence the foregoing  information  with respect to each such Loan
then  outstanding;  provided  that the  failure  of any  Lender to make any such
recordation  or  endorsement  shall not affect the  obligations  of the Borrower
hereunder or under the Notes.  Each Lender is hereby  irrevocably  authorized by
the Borrower so to endorse its Note and to attach to and make a part of its Note
a continuation of any such schedule as and when required.


         SECTION  2.04.  Scheduled  Termination  of Commitments  and Maturity of
Loans.   (a) The Term  Commitments  terminated  at the close of business on  the
Original Closing Date. The Revolving  Commitments and the Swing Commitment shall
terminate on the Maturity  Date, and any Loans then  outstanding  (together with
accrued interest thereon) shall be due and payable on such date.

          (b)  On  the  Amendment  Effective  Date,  the  aggregate  outstanding
principal  amount of Term  Loans is equal to  $45,000,000.  After the  Amendment
Effective Date, the Borrower shall be obligated to repay, and there shall become
due and payable on each Quarterly  Date  occurring  during the periods set forth
below (or on the Maturity Date) an aggregate  principal amount of the Term Loans
equal to the amount set forth below  opposite the period in which such Quarterly
Date  occurs;  provided  that in any event the  outstanding  Term Loans shall be
repaid in full not later than the Maturity Date:

         Period During Which
         Quarterly Date Occurs                        Amount
         ---------------------                       --------
         June 1997 through March 1999                1,750,000
         June 1999 through December 2001             2,000,000
         March 2002                                          0
         Maturity Date                               9,000,000

         (c) Each repayment pursuant to this Section 2.04 shall be made together
with accrued  interest to the date of payment,  and shall be applied  ratably to
payment of the Term Loans of the several  Lenders in proportion to the aggregate
outstanding  principal amounts of their Term Loans.  Within the foregoing limits
of this Section  2.04,  each required  payment or prepayment  shall be made with
respect  to such  outstanding  Group or  Groups  of Loans  as the  Borrower  may
designate to the Administrative  Agent not less than three Euro-Dollar  Business
Days prior to the date required for such payment or prepayment  or, failing such
designation by the Borrower,  as the Administrative  Agent may specify by notice
to the Borrower and the Lenders.



<PAGE>



         SECTION 2.05.  Interest  Rates.   (a) Each Base Rate  Loan  shall  bear
interest on the outstanding principal amount thereof, for each day from the date
such Loan is made until it becomes  due, at a rate per annum equal to the sum of
(x) the Base Rate  Margin  plus (y) the Base Rate for such  day.  Such  interest
shall be  payable in arrears  on the last  Domestic  Business  Day of each month
while such Base Rate Loan is outstanding, beginning with the month in which such
Base Rate Loan is made and,  with  respect to the  principal  amount of any Base
Rate Loan  converted to a Euro-Dollar  Loan, on each date a Base Rate Loan is so
converted. Any overdue principal of or interest on any Base Rate Loan shall bear
interest,  payable on demand,  for each day until paid at a rate per annum equal
to the sum of 2% plus the rate otherwise  applicable to Base Rate Loans for such
day.

         (b) Each  Euro-Dollar  Loan  shall  bear  interest  on the  outstanding
principal  amount thereof,  for each day during each Interest Period  applicable
thereto,  at a rate per annum equal to the sum of (x) the Euro-Dollar Margin for
such day plus (y) the London Interbank  Offered Rate applicable to such Interest
Period.  Such interest shall be payable for each Interest Period on the last day
thereof and, if such Interest  Period is longer than three months,  at intervals
of three months after the first day thereof.

         The "London  Interbank  Offered Rate" applicable to any Interest Period
means the average (rounded upward, if necessary,  to the next higher 1/16 of 1%)
of the  respective  rates per annum at which  deposits in dollars are offered to
each of the Reference  Lenders in the London  interbank  market at approximately
11:00 A.M.  (London time) two Euro-Dollar  Business Days before the first day of
such Interest Period in an amount approximately equal to the principal amount of
the Euro-Dollar  Loan of such Reference  Lender to which such Interest Period is
to apply and for a period of time comparable to such Interest Period.



<PAGE>


          (c) Any overdue principal of or interest on any Euro-Dollar Loan shall
bear  interest,  payable on demand,  for each day until paid at a rate per annum
equal to the  higher of (i) the sum of 2% plus the  Euro-Dollar  Margin for such
day plus the London  Interbank  Offered Rate applicable to such Loan at the time
it became  overdue and (ii) the sum of 2% plus the  Euro-Dollar  Margin for such
day plus the average (rounded upward,  if necessary,  to the next higher 1/16 of
1%) of the  respective  rates per annum at which one day (or, if such amount due
remains unpaid more than three  Euro-Dollar  Business Days,  then for such other
period of time not longer  than  three  months as the  Administrative  Agent may
select)  deposits in dollars in an amount  approximately  equal to such  overdue
payment  due to each of the  Reference  Lenders  are  offered to such  Reference
Lender in the London  interbank market for the applicable  period  determined as
provided  above  (or,  if the  circumstances  described  in clause (a) or (b) of
Section  8.01 shall  exist,  at a rate per annum equal to the sum of 2% plus the
rate applicable to Base Rate Loans for such day).

         (d) Each Swing Loan shall bear  interest on the  outstanding  principal
amount  thereof (and,  in the case of any amount of overdue Swing Loan,  overdue
interest  thereon)  at a rate  for each day  equal  to the  rate  that  would be
applicable to a Revolving Loan that is a Base Rate Loan on such day.

          (e) The  Administrative  Agent  shall  determine  each  interest  rate
applicable to the Loans hereunder.  The  Administrative  Agent shall give prompt
notice to the Borrower and the participating Lenders of each rate of interest so
determined,  and its determination thereof shall be conclusive in the absence of
manifest error.

          (f) Each  Reference  Lender  agrees to use its best efforts to furnish
quotations to the Administrative  Agent as contemplated by this Section.  If any
Reference Lender does not furnish a timely quotation,  the Administrative  Agent
shall  determine  the relevant  interest  rate on the basis of the  quotation or
quotations furnished by the remaining Reference Lender or Lenders or, if none of
such  quotations is available on a timely basis,  the provisions of Section 8.01
shall apply.

         SECTION 2.06.  Fees.

          (a) During the Revolving Credit Period,  the Borrower shall pay to the
Administrative  Agent for the  account of each  Lender a  commitment  fee at the
Commitment Fee Rate (determined  daily in accordance with the Pricing  Schedule)
on the daily amount by which such Lender's Revolving  Commitment exceeds the sum
of (i) the aggregate  outstanding  principal  amount of the Revolving  Loans and
Swing  Loans,  if any,  made by such  Lender  and  (ii)  any  Letter  of  Credit
Liabilities of such Lender.  Such commitment fee shall accrue from and including
the  Original  Closing  Date to but  excluding  the date of  termination  of the
Revolving Commitments in their entirety.

          (b) The  Borrower  shall pay to the  Administrative  Agent (i) for the
account  of the  Lenders  ratably a letter of credit fee  accruing  daily on the
aggregate  amount then  available for drawing under all Letters of Credit at the
Letter of Credit  Fee Rate  (determined  daily in  accordance  with the  Pricing
Schedule)  and (ii) for the  account of each  Issuing  Lender a letter of credit
fronting fee accruing  daily on the aggregate  amount then available for drawing
under all Letters of Credit  issued by such  Issuing  Lender at a rate per annum
equal to 0.25%.



<PAGE>



          (c) Accrued  fees under this  Section  shall be payable  quarterly  in
arrears on each Quarterly Date and on the date of termination of the Commitments
in their  entirety  (and,  if  later,  the date the  amount  of Letter of Credit
Liabilities shall be reduced to zero).


         SECTION 2.07. Optional Termination or Reduction of Commitments.  During
the Revolving  Credit  Period,  the Borrower  may, upon at least three  Domestic
Business Days' notice to the  Administrative  Agent, (i) terminate the Revolving
Commitments at any time, if no Revolving Loans or Swing Loans are outstanding at
such time and no Letter of Credit  Liabilities exist or (ii) ratably reduce from
time to time by an  aggregate  amount of  $10,000,000  or a larger  multiple  of
$1,000,000,  the aggregate amount of the Revolving  Commitments in excess of the
sum of the aggregate outstanding principal amount of the Revolving Loans and the
Swing Loans, plus the aggregate amount of Letter of Credit Liabilities.

         SECTION 2.08.  Mandatory Incremental Repayments, and Reduction of 
Commitments.

          (a) Term Loans  shall be repaid  and  Revolving  Commitments  shall be
reduced in the following amounts:

                           (i) in the  event  that  the  Borrower  or any of its
                  Subsidiaries  shall at any time,  or from time to time,  after
                  the date hereof receive any Net Cash Proceeds of any Reduction
                  Event, an amount equal to the Reduction Amount thereof; and

                           (ii) if the Leverage  Ratio as of the last day of any
                  Fiscal Year ending after the Amendment  Effective  Date is not
                  less  than  3.25:1,  an  amount  equal  to the  sum of (x) the
                  Reduction Amount of Excess Cash Flow for such Fiscal Year plus
                  (y) the  Reduction  Amount of Excess  Cash Flow for each prior
                  Fiscal Year ended after the Amendment Effective Date for which
                  no amounts have  theretofore  been applied to the repayment or
                  reduction  of Loans or  Commitments  pursuant  to this  clause
                  (ii).



<PAGE>



         provided that no repayment or reduction  with respect to the receipt of
any Major  Casualty  Proceeds  shall be required if (i) promptly  after the loss
giving rise to such Major Casualty Proceeds, the Borrower delivers notice to the
Lenders  setting forth in  reasonable  detail the  Borrower's  plans to restore,
repair or replace  the  property  affected  thereby,  and the  Required  Lenders
consent  to such  use of such  proceeds  (such  consent  not to be  unreasonably
withheld,  but which shall be deemed to be withheld  if not  obtained  within 30
days  after the  receipt  of such  proceeds)  and (ii) to the  extent  that such
proceeds are actually so used within one year after such loss.  Such  reductions
and repayments shall be applied,  first, to repay an aggregate  principal amount
of the Term Loans until the Term Loans have been repaid in full and, thereafter,
to reduce the  Revolving  Commitments.  Any  repayment  of Term  Loans  required
pursuant  to this  Section  2.08(a)  shall be  applied  to reduce  the amount of
subsequent  scheduled  repayments  of Term Loans  required  pursuant  to Section
2.04(b) ratably to all such subsequent scheduled repayments.


          (b) The  repayments  and  reductions  required  by clauses  (a)(i) and
(a)(ii) of this Section  shall be required or  effective,  in the case of clause
(a)(i),  forthwith upon receipt by the Borrower or any of its  Subsidiaries,  as
the case may be, of such Net Cash  Proceeds (or in the case of Net Cash Proceeds
from the receipt of any Major  Casualty  Proceeds as to which the  Borrower  has
requested the consent of the Required  Lenders  referred to in clause (a) above,
upon the failure of the  Required  Lenders to grant such consent or, if earlier,
30 days after the receipt  thereof) and, in the case of clause  (a)(ii),  on the
90th day after the end of the related  Fiscal  Year;  provided  that if any such
repayment or reduction in the  Commitments  pursuant to either  clause (a)(i) or
(a)(ii) of this section would otherwise require  prepayment of Euro-Dollar Loans
or portions  thereof prior to the last day of the then current  Interest Period,
such  amount may (unless  the  Required  Lenders  otherwise  direct)  instead be
pledged   with  the   Administrative   Agent  on  terms   satisfactory   to  the
Administrative  Agent (and invested in such  Temporary  Cash  Investments as the
Administrative  Agent shall  select,  with  interest  or income  thereon for the
account of the Borrower), and such prepayment may be deferred to the last day of
the Interest Period next ending after the date of such receipt.

          (c) If at any time (including,  without limitation on the date of each
reduction of Revolving  Commitments  or as a result of a change in the Borrowing
Base), the aggregate  amount of Revolving Credit Available  Amounts is less than
the sum of (i) the aggregate outstanding principal amount of Revolving Loans and
Swing Loans plus (ii) the aggregate amount of Letter of Credit Liabilities,  the
Borrower shall be obligated to prepay or repay  Revolving Loans and Swing Loans,
and  collateralize  outstanding  Letters of Credit,  in such amounts as shall be
necessary so that  immediately  after such payment the sum of (i) the  aggregate
outstanding  principal  amount of Revolving  Loans and Swing Loans plus (ii) the
aggregate  amount of Letter of Credit  Liabilities does not exceed the aggregate
amount of the Revolving  Credit  Available  Amounts  (after giving effect to any
reductions on such day).



<PAGE>



          (d) Each  repayment or prepayment  pursuant to this Section 2.08 shall
be made  together  with  accrued  interest to the date of payment,  and shall be
applied  ratably to payment of the Loans of the several Lenders in proportion to
their Commitments (or, if the Commitments have been terminated, to the aggregate
outstanding  principal  amounts of their Loans).  Within the foregoing limits of
this  Section  2.08,  each  required  payment or  prepayment  shall be made with
respect to such outstanding Group or Groups of Loans (or any Swing Loans) as the
Borrower  may  designate  to  the  Administrative  Agent  not  less  than  three
Euro-Dollar  Business  Days  prior to the date  required  for  such  payment  or
prepayment or, failing such designation by the Borrower,  as the  Administrative
Agent may specify by notice to the Borrower and the Lenders.


         SECTION 2.09. Optional Prepayments. (a)Subject in the case of any Euro-
Dollar  Borrowing to Section 2.12,  the Borrower may, upon at least one Domestic
Business Day's notice to the Administrative Agent, prepay any Group of Base Rate
Loans or Swing Loans or upon at least three Euro-Dollar Business Days' notice to
the Administrative Agent, prepay any Group of Euro-Dollar Loans, in each case in
whole  at any  time,  or from  time to  time  in  part  in  amounts  aggregating
$5,000,000 or any larger  multiple of  $1,000,000  (or, in the case of any Swing
Loan,  $250,000 or any larger multiple thereof),  by paying the principal amount
to be prepaid  together with accrued interest thereon to the date of prepayment.
Each such optional  prepayment  shall be applied to prepay  ratably the Loans of
the several Lenders included in such Group.

         (b) Upon receipt of a notice of  prepayment  pursuant to this  Section,
the  Administrative  Agent shall  promptly  notify  each Lender of the  contents
thereof and of such Lender's  ratable share of such  prepayment  and such notice
shall not thereafter be revocable by the Borrower.

         (c) Any  prepayment  of Term Loans  pursuant to this  Section  shall be
applied to reduce the amount of  subsequent  scheduled  repayments of Term Loans
required by Section 2.04 ratably to all the remaining such repayments.

         SECTION 2.10. Method of Electing Interest Rates. (a) The Loans included
in each Borrowing shall bear interest initially at the type of rate specified by
the Borrower in the applicable Notice of Borrowing. Thereafter, the Borrower may
from time to time elect to change or continue the type of interest rate borne by
each Group of Loans  (subject in each case to the  provisions  of Article 8, and
except for any Swing Loan), as follows:

                           (i) if such Loans are Base Rate Loans,  the  Borrower
                  may elect to convert such Loans to Euro-Dollar Loans as of any
                  Euro-Dollar Business Day; and



<PAGE>



                           (ii)  if  such  Loans  are  Euro-Dollar   Loans,  the
                  Borrower may elect to convert such Loans to Base Rate Loans or
                  elect to  continue  such  Loans as  Euro-Dollar  Loans  for an
                  additional  Interest  Period,  subject to Section  2.12 in the
                  case of any such conversion or  continuation  effective on any
                  day  other  than the last  day of the  then  current  Interest
                  Period applicable to such Loans.


         Each such  election  shall be made by delivering  a  notice (a) "Notice
of Interest  Rate  Election") to the  Administrative  Agent not later than 10:00
A.M.  (New York City  time) on the third  Euro-Dollar  Business  Day  before the
conversion or continuation selected in such notice is to be effective.  A Notice
of Interest Rate  Election  may, if it so specifies,  apply to only a portion of
the aggregate principal amount of the relevant Group of Loans; provided that (i)
such portion is allocated ratably among the Loans comprising such Group and (ii)
the portion to which such Notice applies,  and the remaining portion to which it
does not apply, are each $5,000,000 or any larger multiple of $1,000,000.

          (b)   Each Notice of Interest Rate Election shall specify:

                           (i) the Group of Loans (or portion thereof) to  which
                  such notice applies;

                           (ii) the date on which the conversion or continuation
                  selected in such notice is to be effective, which shall comply
                  with the applicable clause of subsection (a) above;

                           (iii) if the Loans  comprising  such  Group are to be
                  converted,  the new  type of Loans  and,  if the  Loans  being
                  converted  are to be  Euro-Dollar  Loans,  the duration of the
                  next succeeding Interest Period applicable thereto; and

                           (iv) if such Loans are to be continued as Euro-Dollar
                  Loans for an additional  Interest Period, the duration of such
                  additional Interest Period.

         Each  Interest  Period  specified in a Notice of Interest Rate Election
shall comply with the provisions of the definition of Interest Period.

          (c) Upon  receipt  of a Notice  of  Interest  Rate  Election  from the
Borrower  pursuant  to  subsection  (a) above,  the  Administrative  Agent shall
promptly  notify each Lender of the  contents  thereof and such notice shall not
thereafter  be revocable  by the  Borrower.  If the Borrower  fails to deliver a
timely  Notice of Interest  Rate  Election to the  Administrative  Agent for any
Group of Euro-Dollar  Loans,  such Loans shall be converted into Base Rate Loans
on the last day of the then current Interest Period applicable thereto.



<PAGE>


          (d) An  election by the  Borrower  to change or  continue  the rate of
interest  applicable  to any Group of Loans  pursuant to this Section  shall not
constitute a "Borrowing" subject to the provisions of Section 3.02.

         SECTION 2.11.  General  Provisions as to  Payments.    (a) The Borrower
shall make each  payment of  principal  of,  and  interest  on, the Loans and of
Letter of Credit  Liabilities and interest  thereon and of fees hereunder (other
than fees payable  directly to the Issuing  Lenders),  not later than 12:00 Noon
(New York City time) on the date when due, in Federal or other funds immediately
available in New York City, to the Administrative  Agent at its address referred
to in Section 10.01. The Administrative  Agent will promptly  distribute to each
Lender its ratable  share of each such  payment  received by the  Administrative
Agent for the account of the Lenders.  Whenever any payment of principal  of, or
interest on, the Base Rate Loans, or of Letter of Credit Liabilities or interest
thereon or of fees shall be due on a day which is not a Domestic  Business  Day,
the date for payment thereof shall be extended to the next  succeeding  Domestic
Business  Day.  Whenever  any  payment  of  principal  of, or  interest  on, the
Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business Day,
the  date  for  payment  thereof  shall  be  extended  to  the  next  succeeding
Euro-Dollar  Business Day unless such Euro-Dollar  Business Day falls in another
calendar  month,  in which case the date for payment  thereof  shall be the next
preceding  Euro-Dollar Business Day. If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon shall be payable for
such extended time.

          (b) Unless the  Administrative  Agent shall have received  notice from
the  Borrower  prior to the  date on which  any  payment  is due to the  Lenders
hereunder   that  the  Borrower  will  not  make  such  payment  in  full,   the
Administrative  Agent may assume that the Borrower has made such payment in full
to the Administrative  Agent on such date and the  Administrative  Agent may, in
reliance upon such  assumption,  cause to be  distributed to each Lender on such
due date an  amount  equal to the  amount  then due such  Lender.  If and to the
extent that the Borrower shall not have so made such payment,  each Lender shall
repay to the Administrative Agent forthwith on demand such amount distributed to
such Lender  together  with  interest  thereon,  for each day from the date such
amount is  distributed  to such Lender  until the date such  Lender  repays such
amount to the Administrative Agent, at the Federal Funds Rate.



<PAGE>

         SECTION 2.12. Funding  Losses.  If  the  Borrower makes any  payment of
principal  with  respect  to any  Euro-Dollar  Loan or any  Euro-Dollar  Loan is
converted to a Base Rate Loan  (pursuant to Article 2, 6 or 8 or  otherwise)  on
any day other than the last day of an Interest Period applicable thereto, or the
last day of an applicable  period fixed pursuant to Section  2.05(c) , or if the
Borrower  fails to borrow,  prepay,  convert or continue any  Euro-Dollar  Loans
after notice has been given to any Lender in  accordance  with Section  2.02(b),
2.09(c) or 2.10(a),  the Borrower  shall  reimburse  each Lender  within 15 days
after demand for any resulting loss or expense incurred by it (or by an existing
or prospective  Participant in the related Loan), including (without limitation)
any loss incurred in  obtaining,  liquidating  or employing  deposits from third
parties,  but excluding  loss of margin for the period after any such payment or
conversion or failure to borrow, prepay, convert or continue, provided that such
Lender shall have  delivered to the Borrower a  certificate  as to the amount of
such loss or expense,  which  certificate  shall be conclusive in the absence of
manifest error.

         SECTION 2.13. Computation of Interest and Fees.  Interest  based on the
Prime Rate  hereunder  shall be  computed on the basis of a year of 365 days (or
366  days in a leap  year)  and  paid  for the  actual  number  of days  elapsed
(including  the first day but  excluding the last day).  All other  interest and
fees  shall  be  computed  on the  basis  of a year of 360 days and paid for the
actual  number of days elapsed  (including  the first day but excluding the last
day).

         SECTION  2.14.  Regulation  D  Compensation.  For so long as any Lender
maintains reserves against "Eurocurrency  liabilities" (or any other category of
liabilities  which includes  deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets  which  includes  loans by a non-United  States  office of such Lender to
United  States  residents),  and as a  result  the cost to such  Lender  (or its
Euro-Dollar  Lending Office) of making or maintaining  its Euro-Dollar  Loans is
increased,  then such Lender may require the Borrower to pay,  contemporaneously
with each payment of interest on the Euro-Dollar Loans,  additional  interest on
the  related  Euro-Dollar  Loan of such Lender at a rate per annum up to but not
exceeding the excess of (i) (A) the  applicable  London  Interbank  Offered Rate
divided  by (B) one  minus  the  Euro-Dollar  Reserve  Percentage  over (ii) the
applicable  London Interbank Offered Rate. Any Lender wishing to require payment
of  such  additional   interest  (x)  shall  so  notify  the  Borrower  and  the
Administrative  Agent, in which case such additional interest on the Euro-Dollar
Loans of such Lender  shall be payable to such Lender at the place  indicated in
such notice  with  respect to each  Interest  Period  commencing  at least three
Euro-Dollar  Business Days after the giving of such notice and (y) shall furnish
to the Borrower at least five  Euro-Dollar  Business  Days prior to each date on
which  interest is payable on the  Euro-Dollar  Loans an  Officer's  certificate
setting  forth the  amount to which  such  Lender is then  entitled  under  this
Section (which shall be consistent with such Lender's good faith estimate of the
level at which the related reserves are maintained by it). Each such certificate
shall be accompanied by such information as the Borrower may reasonably  request
as to the computation set forth therein.



<PAGE>


         SECTION 2.15. Letters of Credit. (a) On the Original Closing Date, each
letter of credit  listed on Schedule 1 hereto was deemed to be issued under this
Section 2.15(a) and was deemed to be a Letter of Credit for all purposes hereof.
Subject to the terms and conditions hereof,  each Issuing Lender agrees to issue
letters of credit  hereunder  from time to time  before the tenth day before the
Maturity  Date upon the  request of the  Borrower  (the  "Letters  of  Credit");
provided that,  immediately after each Letter of Credit is issued, the aggregate
amount of the Letter of Credit  Liabilities  shall not exceed the  Available  LC
Amount.  Upon the date of issuance  by an Issuing  Lender of a Letter of Credit,
the Issuing Lender shall be deemed,  without further action by any party hereto,
to have sold to each Lender,  and each Lender shall be deemed,  without  further
action by any  party  hereto,  to have  purchased  from the  Issuing  Lender,  a
participation  in such  Letter  of  Credit  and the  related  Letter  of  Credit
Liabilities in proportion to their respective Revolving Percentages.

<PAGE>



          (b) The Borrower  shall give the Issuing  Lender  notice at least five
days prior to the requested  issuance of a Letter of Credit  specifying the date
such Letter of Credit is to be issued,  and  describing the terms of such Letter
of Credit and the  nature of the  transactions  to be  supported  thereby  (such
notice,  including any such notice given in  connection  with the extension of a
Letter of Credit, a "Notice of Issuance"). Upon receipt of a Notice of Issuance,
the Issuing  Lender shall  promptly  notify the  Administrative  Agent,  and the
Administrative  Agent shall promptly notify each Lender of the contents  thereof
and of the amount of such Lender's  participation in such Letter of Credit.  The
issuance by the Issuing  Lender of each Letter of Credit  shall,  in addition to
the  conditions  precedent set forth in Article 3, be subject to the  conditions
precedent  that such  Letter of Credit  shall be in such form and  contain  such
terms as shall be satisfactory to the Issuing Lender and that the Borrower shall
have executed and delivered such other  instruments  and agreements  relating to
such Letter of Credit as the Issuing Lender shall have reasonably requested. The
Borrower  shall also pay to the  Issuing  Lender for its own  account  issuance,
drawing,  amendment  and  extension  charges in the  amounts and at the times as
agreed between the Borrower and the Issuing Lender.  The extension or renewal of
any Letter of Credit shall be deemed to be an issuance of such Letter of Credit,
and if any Letter of Credit contains a provision  pursuant to which it is deemed
to be extended unless notice of termination is given by the Issuing Lender,  the
Issuing  Lender  shall  timely  give such  notice of  termination  unless it has
theretofore  timely  received a Notice of Issuance and the other  conditions  to
issuance of a Letter of Credit have also  theretofore  been met with  respect to
such  extension.  Except as set forth on Schedule 1 hereto,  no Letter of Credit
shall  have a term of more than one year;  provided  that a Letter of Credit may
contain a  provision  pursuant to which it is deemed to be extended on an annual
basis unless  notice of  termination  is given by the Issuing  Lender;  provided
further that no Letter of Credit shall have a term extending or be so extendible
beyond the Maturity Date.

          (c) Upon receipt from the  beneficiary  of any Letter of Credit of any
notice of a drawing under such Letter of Credit, the Issuing Lender shall notify
the Administrative  Agent and the Administrative Agent shall promptly notify the
Borrower  and each other  Lender as to the amount to be paid as a result of such
demand or drawing and the payment date. The Borrower  shall be  irrevocably  and
unconditionally  obligated  forthwith  to reimburse  the Issuing  Lender for any
amounts paid by the Issuing  Lender upon any drawing under any Letter of Credit,
without presentment,  demand, protest or other formalities of any kind. All such
amounts paid by the Issuing  Lender and remaining  unpaid by the Borrower  shall
bear  interest,  payable on demand,  for each day until paid at a rate per annum
equal to the sum of 2% plus the rate applicable to Base Rate Loans for such day.
In addition,  each Lender will pay to the Administrative  Agent, for the account
of the Issuing Lender,  immediately upon the Issuing Lender's demand at any time
during the period commencing after such drawing until reimbursement  therefor in
full by the  Borrower,  an amount equal to such  Lender's  ratable share of such
drawing (in proportion to its participation therein),  together with interest on
such amount for each day from the date of the Issuing  Lender's  demand for such
payment  (or,  if such  demand is made after  12:00 Noon (New York City time) on
such  date,  from  the next  succeeding  Domestic  Business  Day) to the date of
payment by such Lender of such  amount at a rate of interest  per annum equal to
the rate applicable to Base Rate Loans for such period.  The Issuing Lender will
pay  to  each  Lender  ratably  all  amounts  received  from  the  Borrower  for
application in payment of its reimbursement obligations in respect of any Letter
of Credit,  but only to the extent such  Lender has made  payment to the Issuing
Lender in respect of such Letter of Credit pursuant hereto.

          (d) The  obligations of the Borrower and each Lender under  subsection
(c)  above  shall be  absolute,  unconditional  and  irrevocable,  and  shall be
performed  strictly in accordance  with the terms of this  Agreement,  under all
circumstances   whatsoever,   including   without   limitation   the   following
circumstances:

                           (i)  any  lack of validity  or enforceability of this
                  Agreement or any  Letter of  Credit  or  any  document related
                  hereto or thereto;

                           (ii) any  amendment  or waiver of or any  consent  to
                  departure  from all or any of the provisions of this Agreement
                  or any  Letter  of Credit or any  document  related  hereto or
                  thereto;



<PAGE>

                           (iii)  the use  which  may be made of the  Letter  of
                  Credit  by, or any acts or  omission  of, a  beneficiary  of a
                  Letter of Credit (or any Person for whom the  beneficiary  may
                  be acting);

                           (iv) the existence of any claim, set-off,  defense or
                  other  rights that the Borrower may have at any time against a
                  beneficiary  of a Letter of Credit (or any Person for whom the
                  beneficiary may be acting), the Lenders (including the Issuing
                  Lender) or any other Person,  whether in connection  with this
                  Agreement  or the  Letter of Credit  or any  document  related
                  hereto or thereto or any unrelated transaction;

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

                           (vi)  payment  under  a  Letter  of  Credit   against
                  presentation  to the Issuing  Lender of a draft or certificate
                  that does not  comply  with the terms of the Letter of Credit,
                  provided  that  the  Issuing   Lender's   determination   that
                  documents presented under the Letter of Credit comply with the
                  terms thereof shall not have  constituted  gross negligence or
                  willful misconduct of the Issuing Lender; or

                           (vii) any other  act or  omission  to act or delay of
                  any kind by any Lender  (including  the Issuing  Lender),  the
                  Administrative Agent or any other Person or any other event or
                  circumstance  whatsoever that might, but for the provisions of
                  this  subsection  (vii),   constitute  a  legal  or  equitable
                  discharge  of  the  Borrower's  or  the  Lender's  obligations
                  hereunder.



<PAGE>

          (e) The Borrower  hereby  indemnifies  and holds  harmless each Lender
(including  each Issuing Lender) and the  Administrative  Agent from and against
any and all claims, damages, losses,  liabilities,  costs or expenses which such
Lender or the Administrative Agent may incur (including, without limitation, any
claims, damages, losses, liabilities, costs or expenses which the Issuing Lender
may incur by reason of or in connection  with the failure of any other Lender to
fulfill or comply with its  obligations  to such Issuing  Lender  hereunder (but
nothing herein  contained  shall affect any rights the Borrower may have against
such defaulting Lender)),  and none of the Lenders (including an Issuing Lender)
nor the Administrative Agent nor any of their officers or directors or employees
or agents shall be liable or responsible, by reason of or in connection with the
execution  and  delivery  or  transfer of or payment or failure to pay under any
Letter  of  Credit,  including  without  limitation  any  of  the  circumstances
enumerated  in  subsection  (d)  above,  as  well as (i)  any  error,  omission,
interruption  or delay in  transmission  or delivery of any  messages,  by mail,
cable,  telegraph,  telex or  otherwise,  (ii) any  error in  interpretation  of
technical  terms,  (iii) any loss or delay in the  transmission  of any document
required  in  order  to make a  drawing  under a  Letter  of  Credit,  (iv)  any
consequences  arising  from causes  beyond the  control of the  Issuing  Lender,
including  without  limitation any government  acts, or any other  circumstances
whatsoever  in making or failing to make  payment  under such  Letter of Credit;
provided that the Borrower shall not be required to indemnify the Issuing Lender
for any  claims,  damages,  losses,  liabilities,  costs  or  expenses,  and the
Borrower shall have a claim for direct (but not  consequential)  damage suffered
by it, to the extent caused by (x) the willful misconduct or gross negligence of
the Issuing Lender in determining  whether a request  presented under any Letter
of Credit  complied  with the terms of such  Letter of Credit or (y) the Issuing
Lender's  failure to pay under any Letter of Credit after the presentation to it
of a request  strictly  complying with the terms and conditions of the Letter of
Credit.  Nothing in this  subsection (e) is intended to limit the obligations of
the  Borrower  under any other  provision of this  Agreement.  To the extent the
Borrower  does not indemnify an Issuing  Lender as required by this  subsection,
the  Lenders  agree  to  do  so  ratably  in  accordance  with  their  Revolving
Commitments.


         SECTION 2.16.  Assignments and Assumptions on the Amendment Effective
Date; Non-Continuing Lenders.

          (a) On and  effective as of the  Amendment  Effective  Date,  (i) each
Assigning  Lender hereby assigns and sells to the Assuming  Lenders  (ratably in
accordance  with the aggregate  amounts  thereof  purchased and accepted by each
such Assuming Lender  hereunder  pursuant to clause (ii) below) a portion of its
Revolving  Commitment  (including without limitation rights and obligations with
respect to  outstanding  Letters of Credit) and each of its Revolving  Loans and
Term Loans outstanding as of immediately prior to the Amendment  Effective Date,
and (ii) each Assuming  Lender  hereby  purchases and accepts from the Assigning
Lenders (ratably in accordance with the respective  amounts thereof assigned and
sold by each such Assigning  Lender pursuant to clause (i) above),  a portion of
such Revolving Commitments  (including without limitation rights and obligations
with  respect to  outstanding  Letters of Credit) and  Revolving  Loans and Term
Loans outstanding as of immediately  prior to the Amendment  Effective Date (the
"Assigned Amounts"), such that after giving effect to all such transactions:



<PAGE>



                           (x) each  Assigning  Lender  shall  have a  Revolving
                  Commitment  and an outstanding  principal  amount of Revolving
                  Loan and Term Loan in the  respective  amounts set forth under
                  the applicable  heading opposite such Assigning  Lender's name
                  on Schedule 2 hereto; and

                           (y) each  Assuming  Lender shall (i) if such Assuming
                  Lender  was not a Lender  immediately  prior to the  Amendment
                  Effective  Date,  become a "Lender" for all purposes under the
                  Agreement  and (ii) in any case,  have a Revolving  Commitment
                  and an outstanding principal amount of Revolving Loan and Term
                  Loan in the respective  amounts set forth under the applicable
                  heading  opposite  such  Assuming  Lender's name on Schedule 3
                  hereto.  A  Person  may be both  an  Assigning  Lender  and an
                  Assuming Lender.

          (b) The  transactions  referred to in clause (a) shall be effective as
of the Amendment  Effective Date upon (i) payment by each Assuming Lender to the
Administrative  Agent,  for the  account  of the  several  Assigning  Lenders in
accordance with clause (a) above of the respective amounts on Part 1 of Schedule
4 hereto  opposite such Assuming  Lender's name under the heading  "Amount To Be
Paid by Assuming Lenders" (representing the principal amount of, without accrued
interest on, the Term Loans and the Revolving Loans, respectively,  purchased by
such  Assuming  Lender)  and  (ii)  receipt  by  each  Assigning  Lender  of the
respective  amounts  on Part 2 of  Schedule  4 hereto  opposite  such  Assigning
Lender's  name under the heading  "Amount To Be Received by  Assigning  Lenders"
(representing  the principal  amount of, without  accrued  interest on, the Term
Loans and the  Revolving  Loans,  respectively,  transferred  by such  Assigning
Lender).

         (c) It is understood that fees pursuant to Section 2.06(a) and (b) with
respect to the portion of the Revolving Commitments, and interest on the portion
of the  Revolving  Loans and Term Loans,  assigned  hereunder by each  Assigning
Lender  accruing  prior to the Amendment  Effective  Date are for the account of
such Assigning Lender, and such fees and interest with respect to the portion of
the Revolving  Commitments,  Revolving Loans and Term Loans assumed hereunder by
each Assuming  Lender  accruing from and including the Amendment  Effective Date
are for the account of such  Assuming  Lender.  Each  Assigning  Lender and each
Assuming  Lender  hereby  agrees  that if it  receives  any  amount  under  this
Agreement  which is for the account of any other party hereto,  it shall receive
the same for the account of such other party to the extent of such other party's
interest therein and shall promptly pay the same to such other party.



<PAGE>



         (d) Each Loan that is  outstanding  immediately  prior to the Amendment
Effective  Date shall  continue to bear interest at the rate provided for in the
Agreement as in effect immediately prior to the Amendment Effective Date, except
that the  margin  applicable  to the  pricing of any such Loan shall be, for the
period on and after the Amendment Effective Date, the applicable margin provided
for herein. As soon as practicable  following the Amendment  Effective Date, the
Borrower shall reimburse each Assigning Lender (and any Person that was a Lender
immediately  prior to the Amendment  Effective  Date) in accordance with Section
2.12 for any funding  losses  incurred in  connection  with the  purchase of any
Loans on the Amendment  Effective  Date as if such Loans had been prepaid on the
Amendment Effective Date.

         (e) Each  Assigning  Lender  makes no  representation  or  warranty  in
connection with, and shall have no responsibility with respect to, the solvency,
financial  condition,  or  statements  of  the  Borrower,  or the  validity  and
enforceability  of the  obligations  of the  Borrower  in  respect  of any  Loan
Document.  Each Assuming  Lender  acknowledges  that it has,  independently  and
without  reliance  on any  Assigning  Lender,  and based on such  documents  and
information  as it has  deemed  appropriate,  made its own credit  analysis  and
decision to enter into this  Agreement and will continue to be  responsible  for
making its own  independent  appraisal of the  business,  affairs and  financial
condition of the Borrower.  Each Assigning  Lender  represents  that, other than
pursuant to this Agreement, it has not transferred any interest in or caused any
Lien  to be  created  with  respect  to  the  Assigned  Amounts  assigned  by it
hereunder.

         (f) Any  Assigning  Lender  whose  principal  amount of Term  Loans and
Revolving  Commitment  are  zero  after  giving  effect  to  this  Agreement  (a
"Non-Continuing Lender") shall upon the effectiveness of its assignment pursuant
to clause (b) above and receipt of all amounts due from the  Borrower in respect
of interest and fees accrued to but  excluding  the  Amendment  Effective  Date,
cease to be a Lender party to the  Agreement;  provided  that the  provisions of
Section 2.12,  Article 8 and Section 10.03 of the  Agreement  shall  continue to
inure to the benefit of each such Non-Continuing Lender.

         (g) The parties  hereto agree that the  transactions  described in this
Section shall be deemed to be assignments  effective in accordance  with Section
10.06(c).



                                    ARTICLE 3

                                   CONDITIONS

         SECTION  3.1.  Amendment  Effective  Date.   The Amendment shall become
effective upon the date upon which each of the following  events shall have been
satisfied (in the case of each document to be received, each dated the Amendment
Effective Date unless otherwise indicated):



<PAGE>



                  (a) receipt by the Administrative Agent of counterparts hereof
         signed by each of the  parties  hereto (or, in the case of any party as
         to which an executed counterpart shall not have been received,  receipt
         by the Administrative  Agent in form satisfactory to it of telegraphic,
         telex or other written  confirmation  from such party of execution of a
         counterpart hereof by such party);

                  (b)  receipt by the  Administrative  Agent of a duly  executed
         original  Note for the account of each Lender  becoming a Lender on the
         Amendment  Effective  Date,  complying  with the  provisions of Section
         2.03;

                  (c)  receipt  by the  Administrative  Agent  of duly  executed
         counterparts of an amendment of each Collateral Document, to the extent
         any such amendment is necessary or advisable,  or evidence satisfactory
         to the  Administrative  Agent that adequate  arrangements for execution
         and  delivery  of any such  amendments  have been made (and all Lenders
         hereby consent to all such amendments);

                  (d) receipt by the Administrative Agent of an opinion of Smith
         Helms Mulliss & Moore, L.L.P., counsel for the Obligors,  substantially
         in the form of Exhibit D hereto and covering  such  additional  matters
         relating  to the  transactions  contemplated  hereby  as  the  Required
         Lenders may reasonably request;

                  (e) receipt by the  Administrative  Agent of (i) an opinion of
         Davis Polk & Wardwell,  special New York counsel for the Administrative
         Agent,  substantially  in the form of  Exhibit  E-1  hereto and (ii) an
         opinion or memorandum of special  counsel for the Agents in each of the
         United Kingdom,  Hong Kong, Finland,  Germany, the U.S. Virgin Islands,
         France,  Canada and Mexico,  in the forms  attached as Exhibit E-2, and
         each  covering such  additional  matters  relating to the  transactions
         contemplated  hereby as the Agents may reasonably  request, or evidence
         satisfactory to the Administrative Agent that adequate arrangements for
         the delivery of any such opinion or  memorandum  under clause (ii) have
         been made;

                  (f)   receipt  by  the   Administrative   Agent  of   evidence
         satisfactory  to it that all accrued  interest,  fees and other amounts
         payable  under  the  Agreement  as in effect  immediately  prior to the
         Amendment Effective Date (including Section 2.06 thereof, but excluding
         Section 2.12 thereof) have been paid in full;



<PAGE>



                  (g) receipt by the Administrative Agent of the consent to this
         Amendment  of each  Person that was a Lender  immediately  prior to the
         Amendment  Effective Date but is not a Lender on or after the Amendment
         Effective  Date (which  consent may be evidenced by such Person being a
         signatory hereto);

                  (h)  receipt  by the  Administrative  Agent  of a  certificate
         signed by the chief  financial  officer or  treasurer  of the  Borrower
         certifying  that,  immediately  before and after  giving  effect to the
         transaction contemplated hereby on the Amendment Effective Date, (i) no
         Default   shall  have   occurred  and  be   continuing   and  (ii)  the
         representations  and  warranties  of the  Obligors  contained  in  this
         Agreement shall be true;

                  (i) receipt by the Administrative Agent, for  its own  account
         and for the accounts of the Lenders, of all fees payable  on  or before
         the Amendment Effective Date;

                  (j) receipt by the  Administrative  Agent of all documents the
         Administrative  Agent may reasonably  request relating to the existence
         of the Obligors,  the  corporate  authority for and the validity of the
         Loan  Documents  and the  Deltec  Acquisition,  and any  other  matters
         relevant  hereto,  all  in  form  and  substance  satisfactory  to  the
         Administrative Agent.

The  Administrative  Agent shall promptly notify the Borrower and the Lenders of
the Amendment Effective Date, and such notice shall be conclusive and binding on
all parties hereto.

         SECTION 3.02.  Borrowings and Issuances of Letters of Credit. The 
obligation of any Lender to make a Loan on the occasion of any  Borrowing  other
than a Refunding  Swing Loan,  and of an Issuing Lender to issue (which shall be
deemed to include any renewal or extension of the term of) a Letter of Credit on
the occasion of a request therefor  (including,  without limitation,  any of the
foregoing  to  occur  on  the  Amendment  Effective  Date)  is  subject  to  the
satisfaction of the following conditions:

                  (a)   the fact that the Amendment Effective Date  shall  have
         occurred on or prior to April 30, 1997;

                  (b)  receipt  by  the  Administrative  Agent  of a  Notice  of
         Borrowing as required by Section 2.02 or receipt by the Issuing  Lender
         of a Notice of Issuance as required by Section 2.15(b);

                  (c)  receipt by the  Administrative  Agent of the most  recent
         Borrowing Base Certificate required to be delivered pursuant to Section
         5.01(i) hereof;



<PAGE>

                  (d)  the  fact  that,  immediately  after  such  Borrowing  or
         issuance of a Letter of Credit,  the sum of the  aggregate  outstanding
         principal  amount  of the  Revolving  Loans  and  Swing  Loans  and the
         aggregate  amount of Letter of Credit  Liabilities  will not exceed the
         aggregate Revolving Credit Available Amounts;

                  (e) the fact that, immediately before and after such Borrowing
         or issuance of a Letter of Credit,  no Default  shall have occurred and
         be continuing; and

                  (f) the fact that the  representations  and  warranties of the
         Obligors contained in this Agreement shall be true.

         Each  Borrowing and issuance of a Letter of Credit  hereunder  shall be
deemed to be a  representation  and warranty by the Borrower on the date of such
Borrowing as to the facts specified in clauses (d), (e) and (f) of this Section.



                                    ARTICLE 4

                         REPRESENTATIONS AND WARRANTIES

         The  Borrower  represents and warrants,  and each Guarantor represents
and  warrants,  with  respect to itself  only,  as to the  matters  set forth in
Section 4.12,  (including,  in the case of any such  representation and warranty
made or deemed made before the  consummation of the Deltec  Acquisition,  at the
time such  representation  and  warranty is made or deemed made and  immediately
after giving effect to the consummation of the Deltec Acquisition), that:

         SECTION  4.01. Corporate  Existence  and  Power.   The  Borrower  is  a
corporation duly  incorporated,  validly existing and in good standing under the
laws of the jurisdiction of its incorporation,  and has all corporate powers and
all material  governmental  licenses,  authorizations,  consents  and  approvals
required to carry on its business as now conducted.



<PAGE>



         SECTION 4.02. Corporate and Governmental Authorization; No
Contraventions.  The execution,  delivery and  performance by  the  Borrower  of
the Loan Documents to which it is a party are within the corporate powers of the
Borrower,  have been duly authorized by all necessary corporate action,  require
no action by or in respect of, or filing with, any governmental  body, agency or
official and do not contravene,  or constitute a default under, any provision of
applicable law or regulation or of the certificate of  incorporation  or by-laws
of the Borrower or of any  agreement,  judgment,  injunction,  order,  decree or
other instrument  binding upon the Borrower or any of its Subsidiaries or result
in the  creation  or  imposition  of any Lien  (other  than Liens under the Loan
Documents) on any asset of the Borrower or any of its Subsidiaries.

         SECTION 4.03. Binding Effect. The Loan Documents (other than the Notes)
to which the Borrower is a party constitute valid and binding  agreements of the
Borrower and each Note,  when  executed and  delivered in  accordance  with this
Agreement,  will constitute a valid and binding  obligation of the Borrower,  in
each case  enforceable in accordance with its terms except (i) as may be limited
by bankruptcy,  insolvency or similar laws affecting creditors' rights generally
and (ii) as rights of acceleration  and the  availability of equitable  remedies
may be limited by equitable principles of general applicability.

         SECTION 4.04. Financial Information. (a) The  (i) consolidated  balance
sheet of the Borrower and its Consolidated Subsidiaries as of September 30, 1996
and the related consolidated  statements of income and cash flows for the Fiscal
Year then  ended,  reported  on by Arthur  Andersen  & Co.  and set forth in the
Borrower's  1996 Form 10-K,  a copy of which has been  delivered  to each of the
Lenders,  and  (ii)  consolidating   balance  sheet  of  the  Borrower  and  its
Consolidated Subsidiaries as of September 30, 1996 and the related consolidating
statements  of income for the Fiscal Year then ended,  each fairly  present,  in
conformity with generally accepted  accounting  principles,  the consolidated or
consolidating  (as  applicable)  financial  position  of the  Borrower  and  its
Consolidated Subsidiaries as of such date and their consolidated or consolidated
(as  applicable)  results of  operations  and  consolidated  cash flows for such
Fiscal Year.

         (b) Since September 30, 1996, there has been no material adverse change
in the business,  financial position,  results of operations or prospects of the
Borrower and its Consolidated  Subsidiaries,  considered as a whole (both before
and after giving effect to the Deltec Acquisition,  and including Deltec and its
Subsidiaries after the Deltec Acquisition).

         (c) The  consolidated  balance  sheet of  Deltec  and its  consolidated
Subsidiaries as of September 30, 1995 and the related consolidated statements of
income and cash flows for the nine months then ended,  copies of which have been
delivered to each of the Lenders,  fairly present,  in conformity with generally
accepted accounting  principles,  the consolidated  financial position of Deltec
and its consolidated Subsidiaries as of such date and their consolidated results
of operations and cash flows for such period.

         (d) From  September 30, 1995 to the Original  Closing  Date,  there has
been no material adverse change in the business,  financial position, results of
operations or prospects of Deltec and its Subsidiaries, considered as a whole.



<PAGE>



         (e) The pro forma  balance  sheet of the Borrower and its  Consolidated
Subsidiaries  as of  December  31,  1995 with  respect to the  Borrower  and its
Consolidated  Subsidiaries,  copies of which have been  delivered to each of the
Lenders,  fairly  presents,  in conformity  with generally  accepted  accounting
principles applied on a basis consistent with the financial  statements referred
to in Section 4.04(a),  the consolidated  financial position of the Borrower and
its  Consolidated  Subsidiaries as of such date,  adjusted to give effect (as if
such events had occurred on such date) to (A) the Deltec  Acquisition  and other
transactions contemplated by the Deltec Acquisition Documents, (B) the making of
the Loans and the  issuance of the Letters of Credit to be made or issued on the
Original Closing Date, (C) the issuance of the  Subordinated  Notes on or before
the  Original  Closing  Date,  (D) the  application  of the  proceeds  from  the
foregoing as contemplated by the Deltec  Acquisition  Documents,  this Agreement
and the Subordinated Note Agreement and (E) the payment of all legal, accounting
and  other  fees  related  thereto  to  the  extent  known  at the  time  of the
preparation of such balance sheet.  As of the date of such balance sheet and the
date  hereof,  the Borrower and its  Consolidated  Subsidiaries  (on a pro forma
basis as aforesaid)  had and (except as incurred  since the date of such balance
sheet  in the  ordinary  course  of  business)  have  no  material  liabilities,
contingent or otherwise,  including  liabilities for taxes,  long-term leases or
forward or  long-term  commitments,  which are not  properly  reflected  on such
balance sheet.


         SECTION 4.05.  Litigation.  Except  as  set forth  on  Schedule   4.05,
there is no action,  suit or proceeding pending against,  or to the knowledge of
the  Borrower  threatened  against  or  affecting,  the  Borrower  or any of its
Subsidiaries  before any court or arbitrator or any governmental body, agency or
official in which there is a reasonable possibility of an adverse decision which
could materially adversely affect the business,  consolidated financial position
or  consolidated  results of  operations  of the Borrower  and its  Consolidated
Subsidiaries,  considered as a whole, or which in any manner draws into question
the validity or  enforceability  of the Loan  Documents or challenges the Deltec
Acquisition.


<PAGE>



         SECTION 4.06.  Compliance  with  ERISA.  Each member of the ERISA Group
has fulfilled its obligations  under the minimum funding  standards of ERISA and
the Internal  Revenue Code with respect to each Plan and is in compliance in all
material  respects  with the  presently  applicable  provisions of ERISA and the
Internal  Revenue Code with  respect to each Plan.  No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal  Revenue  Code  in  respect  of any  Plan,  (ii)  failed  to  make  any
contribution or payment to any Plan or  Multiemployer  Plan or in respect of any
Benefit  Arrangement,  or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the posting of
a bond or other  security  under  ERISA or the  Internal  Revenue  Code or (iii)
incurred  any  liability  under Title IV of ERISA other than a liability  to the
PBGC for premiums under Section 4007 of ERISA.

         SECTION 4.07. Environmental  Matters. In  the  ordinary  course  of its
business, the Borrower conducts an ongoing review of the effect of Environmental
Laws  on the  business,  operations  and  properties  of the  Borrower  and  its
Subsidiaries,  in the course of which it  identifies  and  evaluates  associated
liabilities and costs (including,  without limitation,  any capital or operating
expenditures  required  for  clean-up  or closure  of  properties  presently  or
previously owned, any capital or operating  expenditures  required to achieve or
maintain compliance with environmental protection standards imposed by law or as
a condition  of any  license,  permit or contract,  any related  constraints  on
operating  activities,  including  any  periodic  or  permanent  shutdown of any
facility  or  reduction  in the level of or change in the  nature of  operations
conducted thereat, any costs or liabilities in connection with off-site disposal
of wastes or Hazardous  Substances,  and any actual or potential  liabilities to
third parties,  including employees, and any related costs and expenses). On the
basis of this review, the Borrower has reasonably concluded that such associated
liabilities  and costs,  including  the costs of compliance  with  Environmental
Laws, are unlikely to have a material adverse effect on the business,  financial
condition,   results  of  operations  or  prospects  of  the  Borrower  and  its
Consolidated Subsidiaries, considered as a whole.

         SECTION 4.08. Taxes. The Borrower and its Subsidiaries have  filed  all
United  States  Federal  income tax returns and all other  material  tax returns
which are  required to be filed by them and have paid all taxes due  pursuant to
such  returns or pursuant  to any  assessment  received  by the  Borrower or any
Subsidiary.  The charges, accruals and reserves on the books of the Borrower and
its Subsidiaries in respect of taxes or other  governmental  charges are, in the
opinion of the Borrower, adequate.

<PAGE>



         SECTION 4.09.  Subsidiaries.  Each  of  the  Borrower's  corporate
Subsidiaries is a corporation  duly  incorporated,  validly existing and in good
standing  under  the  laws of its  jurisdiction  of  incorporation,  and has all
corporate  powers  and  all  material  governmental  licenses,   authorizations,
consents  and  approvals  required to carry on its  business  as now  conducted,
except for any of the  foregoing  the  failure of which to have could not in the
aggregate have a material  adverse effect on the business,  financial  position,
results  of  operations  or  prospects  of the  Borrower  and  its  Consolidated
Subsidiaries,  considered as a whole,  or the rights and remedies of the Lenders
under the Loan Documents.  On the Original  Closing Date and after giving effect
to the Deltec Acquisition,  (i) each of the Subsidiaries of the Borrower,  other
than  International  Subsidiaries,  is a Guarantor and (ii) the Borrower and its
Subsidiaries (other than International  Subsidiaries) have pledged,  pursuant to
the Pledge Agreements,  all of the capital stock of the Borrower's  Subsidiaries
other than (x) the Deltec  Seller  Stock,  (y) up to 35% of the capital stock of
each  International  Subsidiary owned by the Borrower or a Subsidiary other than
an  International  Subsidiary  and  (z)  capital  stock  of  each  International
Subsidiary owned by an International Subsidiary.

         SECTION  4.10.  Regulatory   Restrictions  on  Borrowing.  The Borrower
is not an "investment  company" within the meaning of the Investment Company Act
of 1940,  as  amended,  a "holding  company"  within  the  meaning of the Public
Utility  Holding  Company Act of 1935, as amended,  or otherwise  subject to any
regulatory scheme which restricts its ability to incur debt.

         SECTION 4.11. Full Disclosure.   All information  heretofore  furnished
by the Borrower to any Agent or any Lender for purposes of or in connection with
this  Agreement  or  any  transaction  contemplated  hereby  is,  and  all  such
information  hereafter furnished by the Borrower to the Agent or any Lender will
be,  true and  accurate  in all  material  respects on the date as of which such
information is stated or certified. The Borrower has disclosed to the Lenders in
writing any and all facts which  materially  and adversely  affect or may affect
(to  the  extent  the  Borrower  can  now  reasonably  foresee),  the  business,
operations  or  financial   condition  of  the  Borrower  and  its  Consolidated
Subsidiaries,  taken as a whole, or the ability of the Obligors to perform their
obligations under the Loan Documents.



<PAGE>



         SECTION 4.12.   Representations  of  Guarantors.  Each  Guarantor  is a
corporation duly  incorporated,  validly existing and in good standing under the
laws of the jurisdiction of its incorporation,  and has all corporate powers and
all material  governmental  licenses,  authorizations,  consents  and  approvals
required to carry on its business as now conducted. The execution,  delivery and
performance  by each  Guarantor of the Loan Documents to which it is a party are
within such  Guarantor's  corporate  powers,  have been duly  authorized  by all
necessary  corporate  action,  require no action by or in respect  of, or filing
with,  any  governmental  body,  agency or official  and do not  contravene,  or
constitute a default under,  any provision of applicable law or regulation or of
the  certificate  of  incorporation  or  by-laws  of  such  Guarantor  or of any
agreement,  judgment, injunction, order, decree or other instrument binding upon
such  Guarantor or result in the creation or imposition of any Lien on any asset
of such  Guarantor.  The Loan  Documents  to  which  each  Guarantor  is a party
constitute  valid  and  binding  agreements  of such  Guarantor,  in  each  case
enforceable  against such Guarantor in accordance  with their  respective  terms
except (i) as may be limited by bankruptcy, insolvency or similar laws affecting
creditors'  rights  generally  and  (ii)  as  rights  of  acceleration  and  the
availability  of equitable  remedies may be limited by equitable  principles  of
general  applicability.  Each  of  the  representations  and  warranties  of the
Obligors contained in the Collateral Documents is true and correct.

         SECTION 4.13.  Deltec  Acquisition  Documents.  The representations and
warranties contained in the Deltec Acquisition Documents of the Borrower and, to
the best knowledge of the Borrower,  each other party thereto are, and shall be,
true in all material respects on the date hereof and the Original Closing Date.


                                    ARTICLE 5

                                    COVENANTS

         The Borrower agrees that, so long  as  any  Lender  has  any Commitment
hereunder or any amount payable under any Note or any Letter of Credit Liability
remains unpaid:

         SECTION 5.01. Information. The  Borrower  will  deliver  to each of the
Lenders:

                  (a) as soon as available and in any event within 90 days after
         the end of each Fiscal Year, a consolidated and  consolidating  balance
         sheet of the Borrower and its  Consolidated  Subsidiaries as of the end
         of such  Fiscal  Year and the related  consolidated  and  consolidating
         statements of income and consolidated  statement of cash flows for such
         Fiscal Year,  setting forth in the case of such consolidated  financial
         statements  in  comparative  form the figures for the  previous  Fiscal
         Year, all certified by the chief financial  officer or chief accounting
         officer of the  Borrower  as to  fairness  of  presentation,  generally
         accepted accounting principles and consistency and, in the case of such
         consolidated  financial statements,  reported on in a manner acceptable
         to the Securities and Exchange  Commission by Arthur  Andersen & Co. or
         other independent public accountants of nationally recognized standing;



<PAGE>



                  (b) as soon as available and in any event within 45 days after
         the end of each of the first three  quarters of each Fiscal Year of the
         Borrower, an unaudited  consolidated and consolidating balance sheet of
         the Borrower and its  Consolidated  Subsidiaries  as of the end of such
         quarter and the related  consolidated and  consolidating  statements of
         income and consolidated cash flows for such quarter and for the portion
         of the Borrower's Fiscal Year ended at the end of such quarter, setting
         forth in the case of such  consolidated  statements  of income and cash
         flows, in comparative  form the figures for the  corresponding  quarter
         and the corresponding  portion of the Borrower's  previous Fiscal Year,
         all certified  (subject to normal year-end  adjustments) as to fairness
         of  presentation,   generally   accepted   accounting   principles  and
         consistency  by the chief  financial  officer  or the chief  accounting
         officer of the Borrower;

                  (c) as soon as available and in any event within 30 days after
         the end of each month of the  Borrower  (or,  in the case of the months
         ending March 31, 1996,  April 30, 1996 and May 31, 1996,  45 days after
         the end of each such month), an unaudited summary  consolidated balance
         sheet of the Borrower and its  Consolidated  Subsidiaries as of the end
         of such month and the related summary consolidated statements of income
         and cash  flows for such month and for the  portion  of the  Borrower's
         Fiscal  Year  ended  at  the  end  of  such  month,  setting  forth  in
         comparative  form  the  figures  for the  corresponding  month  and the
         corresponding  portion of the  Borrower's  previous  Fiscal  Year,  all
         certified (subject to normal quarterly and year-end  adjustments) as to
         fairness of presentation,  generally accepted accounting principles (as
         applicable) and consistency by the chief financial officer or the chief
         accounting officer of the Borrower;

                  (d) simultaneously  with the delivery of each set of financial
         statements  referred to in clauses (a) and (b) above,  a certificate of
         the chief  financial  officer  or the chief  accounting  officer of the
         Borrower  (i)  setting  forth in  reasonable  detail  the  calculations
         required to establish  whether the Borrower was in compliance  with the
         requirements of Sections 5.07, 5.09 through 5.14,  inclusive,  and 5.18
         through 5.20, inclusive, on the date of such financial statements, (ii)
         if such certificate is delivered with financial  statements referred to
         in clause (a),  setting forth in reasonable  detail the  computation of
         Excess Cash Flow for the Fiscal Year to which such financial statements
         relate,   certified  as  having  been  prepared  from  such   financial
         statements in accordance with this Agreement, (iii) stating whether any
         Subsidiary  has been  created or acquired,  and whether any  Immaterial
         Subsidiary  has  ceased  to  be an  Immaterial  Subsidiary,  since  the
         delivery of the last such certificate (or in the case of the first such
         certificate, since the date hereof) and describing in reasonable detail
         any such  Subsidiary and (iv) stating whether any Default exists on the
         date of such certificate and, if any Default then exists, setting forth
         the  details  thereof  and the action  which the  Borrower is taking or
         proposes to take with respect thereto;



<PAGE>


                  (e) simultaneously  with the delivery of each set of financial
         statements  referred to in clause (a) above, a statement of the firm of
         independent  public  accountants  which reported on such statements (i)
         whether  anything has come to their  attention to cause them to believe
         that  any  Default  existed  on the  date of such  statements  and (ii)
         confirming  the  calculations  set forth in the  officer's  certificate
         delivered simultaneously therewith pursuant to clause (d) above;

                  (f) within five days after any officer of the Borrower obtains
         knowledge  of any  Default,  if  such  Default  is then  continuing,  a
         certificate  of the chief  financial  officer  or the chief  accounting
         officer of the  Borrower  setting  forth the  details  thereof  and the
         action  which the  Borrower is taking or proposes to take with  respect
         thereto;

                  (g) promptly upon the mailing  thereof to the  shareholders of
         the Borrower generally, copies of all financial statements, reports and
         proxy statements so mailed;

                  (h)  promptly   upon  the  filing   thereof,   copies  of  all
         registration  statements  (other  than  the  exhibits  thereto  and any
         registration  statements on Form S-8 or its  equivalent) and reports on
         Forms  10-K,  10-Q and 8-K (or their  equivalents)  which the  Borrower
         shall have filed  with the  Securities  and  Exchange  Commission,  and
         copies of (i) all  financial  statements,  reports,  notices  and proxy
         statements  that any Obligor shall send or make available  generally to
         its  stockholders,  (ii) all  registration  statements and prospectuses
         that any  Obligor  shall  render  to or file  with the  Securities  and
         Exchange Commission,  the National Association of Securities Dealers or
         any national securities exchange,  (iii) all material reports and other
         statement  (other than routine reports  prepared in the ordinary course
         of  business  that would not  result in any  adverse  action)  that any
         Obligor  may render to or file with any other  governmental  authority,
         including,  without limitation, the Environmental Protection Agency and
         state and federal environmental and health authorities and agencies and
         (iv) all press  releases and other  statements  that any Obligor  shall
         make available  generally to the public concerning  developments in the
         business of the Borrower or any of its  Subsidiaries,  other than press
         releases or statements issued in the ordinary course of business;



<PAGE>



                  (i) at  each  of the  following  dates,  determined  as of the
         following dates specified:  a Borrowing Base Certificate (x) as soon as
         available  (and in any event within fifteen days) after the last day of
         each calendar month of the Borrower, determined as of the last business
         day of such calendar month, and (y) within five days after receipt of a
         request  therefor  (which  may be given  from  time to  time)  from the
         Required Lenders,  determined as of the date of such request;  provided
         that  in the  case  of  clause  (y)  above,  the  determination  of the
         Borrowing Base shall be an estimate by the Borrower,  subject to normal
         month-end  adjustments  and  determined in good faith using  reasonable
         methods  consistent  with the accounting  methods used in the financial
         statements  most  recently  delivered  pursuant  to Section  4.04(a) or
         5.01(a);

                  (j) if and when any member of the ERISA  Group (i) gives or is
         required  to give  notice  to the PBGC of any  "reportable  event"  (as
         defined in Section  4043 of ERISA) with respect to any Plan which might
         constitute  grounds  for a  termination  of such Plan under Title IV of
         ERISA, or knows that the plan administrator of any Plan has given or is
         required to give  notice of any such  reportable  event,  a copy of the
         notice of such  reportable  event  given or required to be given to the
         PBGC; (ii) receives notice of complete or partial withdrawal  liability
         under  Title IV of ERISA or notice  that any  Multiemployer  Plan is in
         reorganization,  is  insolvent or has been  terminated,  a copy of such
         notice;  (iii) receives notice from the PBGC under Title IV of ERISA of
         an intent to terminate, impose liability (other than for premiums under
         Section  4007 of  ERISA)  in  respect  of,  or  appoint  a  trustee  to
         administer  any Plan, a copy of such notice;  (iv) applies for a waiver
         of the minimum  funding  standard  under  Section  412 of the  Internal
         Revenue Code, a copy of such application; (v) gives notice of intent to
         terminate  any Plan  under  Section  4041(c)  of ERISA,  a copy of such
         notice and other  information filed with the PBGC; (vi) gives notice of
         withdrawal  from any Plan pursuant to Section 4063 of ERISA,  a copy of
         such notice;  or (vii) fails to make any payment or contribution to any
         Plan or Multiemployer Plan or in respect of any Benefit  Arrangement or
         makes  any  amendment  to any Plan or  Benefit  Arrangement  which  has
         resulted or could result in the  imposition of a Lien or the posting of
         a bond or other security,  a certificate of the chief financial officer
         or the chief  accounting  officer of the Borrower setting forth details
         as to such  occurrence  and  action,  if any,  which  the  Borrower  or
         applicable member of the ERISA Group is required or proposes to take;

                  (k) as soon as  practicable  and in any  event  within 60 days
         after the close of each Fiscal  Year,  an annual  budget  prepared on a
         quarterly basis for the Borrower and its  Subsidiaries  and projections
         for the Borrower for the Fiscal Year then  beginning,  all prepared (in
         the case of  projections)  on a basis  consistent  with  the  financial
         statements described in subsection (a) and (b) above,  accompanied by a
         statement of the chief financial officer or chief accounting officer of
         the  Borrower to the effect  that,  to the best of his  knowledge,  the
         budget and  projections  are a  reasonable  estimates  thereof  for the
         periods covered thereby; and



<PAGE>



                  (l) from time to time such  additional  information  regarding
         the financial position or business of the Borrower and its Subsidiaries
         or any  Guarantor  as the  Agent,  at the  request of any  Lender,  may
         reasonably request.


         SECTION  5.02.   Payment  of  Obligations.  The  Borrower  will pay and
discharge,  and will cause each  Subsidiary to pay and  discharge,  at or before
maturity, all their respective material obligations and liabilities  (including,
without limitation, tax liabilities and claims of materialmen,  warehousemen and
the like  which if unpaid  might by law give rise to a Lien),  except  where the
same  may be  contested  in good  faith  by  appropriate  proceedings,  and will
maintain,  and will  cause each  Subsidiary  to  maintain,  in  accordance  with
generally accepted accounting  principles,  appropriate reserves for the accrual
of any of the same.

         SECTION 5.03. Maintenance of Property; Insurance.  (a)  The   Borrower 
will keep,  and will cause each  Subsidiary  to keep,  all  property  useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted.

         (b) The  Borrower  will  maintain,  and will cause each  Subsidiary  to
maintain,  (i) physical damage insurance on all real and personal property on an
all risks basis  (including the perils of flood and quake),  covering the repair
and replacement  cost of all such property and  consequential  loss coverage for
business  interruption  and  extra  expense,  (ii)  public  liability  insurance
(including  products/completed  operations  liability coverage) in an amount not
less than  $22,000,000 and (iii) such other  insurance  coverage in such amounts
and with respect to such risks as the Required  Lenders may reasonably  request.
All  such  insurance   shall  be  provided  by  insurers  having  an  A.M.  Best
policyholders  rating of not less than B+ or such other insurers as the Required
Lenders may approve in writing.



<PAGE>



         (c) The  Borrower  will  deliver to the  Lenders (i) on the date of the
first Borrowing  hereunder,  a certificate from the Borrower's  insurance broker
dated such date showing the amount of coverage as of such date,  and  certifying
that such policies will include  effective  waivers  (whether under the terms of
any such  policy or  otherwise)  by the  insurer  of all  claims  for  insurance
premiums  against  all loss  payees and  additional  insureds  and all rights of
subrogation against all loss payees and additional insureds,  and that if all or
any part of such policy is  canceled,  terminated  or expires,  the insurer will
forthwith give notice thereof to each additional insured and loss payee and that
no  cancellation,  reduction  in amount or material  change in coverage  thereof
shall be  effective  until at least 10 days  after  receipt  by each  additional
insured  and loss  payee of written  notice  thereof,  (ii) upon  request of any
Lender through the  Administrative  Agent from time to time, full information as
to the insurance  carried,  (iii) within five days of receipt of notice from any
insurer a copy of any notice of cancellation or material change in coverage from
that existing on the date of this  Agreement and (iv)  forthwith,  notice of any
cancellation  or  nonrenewal  of  coverage by the  Borrower.  Not later than the
Original Closing Date, the Borrower shall cause the  Administrative  Agent to be
named as an additional  insured and loss payee on each insurance policy required
to be maintained pursuant to this Section 5.03.


         SECTION 5.04.  Conduct of Business and  Maintenance of  Existence.  The
Borrower will preserve,  renew and keep in full force and effect, and will cause
each  Subsidiary  to  preserve,  renew and keep in full force and  effect  their
respective  corporate  existence and their  respective  rights,  privileges  and
franchises  necessary or desirable in the normal  conduct of business;  provided
that nothing in this Section shall prohibit (i) the merger of a Subsidiary  into
the  Borrower,  the  merger of a  Guarantor  with  another  Person if the Person
surviving  such  merger is a  Guarantor  or the merger or  consolidation  of any
Subsidiary  that  is  not a  Guarantor  with  or  into  another  Person  if  the
corporation  surviving such  consolidation  or merger is a Subsidiary and if, in
each case,  after giving effect  thereto,  no Default shall have occurred and be
continuing  or  (ii)  the  failure  to  maintain  any of the  foregoing  rights,
privileges or franchises that could not in the aggregate have a material adverse
affect on the business,  financial position,  results of operations or prospects
of the Borrower and its Consolidated  Subsidiaries,  taken as a whole, or on the
rights of the Lenders under the Loan Documents,  or (iii) the termination of the
corporate  existence of any Subsidiary other than a Guarantor if the Borrower in
good faith  determines  that such  termination  is in the best  interest  of the
Borrower and is not materially disadvantageous to the Lenders.

         SECTION  5.05.  Compliance  with  Laws.  The  Borrower will comply, and
cause each  Subsidiary to comply,  in all material  respects with all applicable
laws,  ordinances,   rules,   regulations,   and  requirements  of  governmental
authorities (including, without limitation, Environmental Laws and ERISA and the
rules and  regulations  thereunder)  except where the  necessity  of  compliance
therewith is contested in good faith by appropriate proceedings.

         SECTION 5.06. Inspection of Property,  Books and Records; Annual Lender
Meeting.

         (a) The  Borrower  will keep,  and will cause each  Subsidiary to keep,
proper books of record and account in which full, true and correct entries shall
be made of all  dealings  and  transactions  in  relation  to its  business  and
activities;  and  will  permit,  and  will  cause  each  Subsidiary  to  permit,
representatives  of any Lender at such Lender's expense to visit and inspect any
of their respective properties,  to examine and make abstracts from any of their
respective books and records and to discuss their respective  affairs,  finances
and accounts with their respective  officers,  employees and independent  public
accountants,  all at such  reasonable  times and as often as may  reasonably  be
desired.



<PAGE>



         (b) Unless  otherwise  instructed  by the  Administrative  Agent in its
discretion, within 120 days after the end of each Fiscal Year, the Borrower will
conduct a meeting of the Lenders to discuss such fiscal  year's  results and the
financial  condition  of the  Borrower  at which  shall  be  present  the  chief
executive officer and the chief financial officer of the Borrower and such other
officers  of the  Borrower  as the  Borrower's  chief  executive  officer  shall
designate.  Such  meetings  shall be held at a time and place  convenient to the
Lenders and the Borrower, and shall be in person unless the Administrative Agent
in its  discretion  notifies  the  Borrower  that any such  meeting  shall be by
telephone conference.


         SECTION  5.07.  Mergers  and  Sales of Assets.  (a) The  Borrower  will
not, and will not permit any  Subsidiary  to,  consolidate or merge with or into
any other Person, provided that (i) the Borrower or any Guarantor may each merge
with  another  Person  if  it is  the  corporation  surviving  such  merger  and
immediately  after giving effect to such merger,  no Default shall have occurred
and be continuing, and (ii) any Subsidiary other than a Guarantor may merge with
any other Person if the  corporation  surviving  the merger is the Borrower or a
Subsidiary of the Borrower and  immediately  after giving effect to such merger,
no Default shall have occurred and be continuing.

         (b) The Borrower will not, and will not permit any of its  Subsidiaries
to,  make any Asset Sale,  other than (i) Asset  Sales the fair market  value of
which, when combined with all other such Asset Sales previously made during each
Fiscal Year,  does not exceed  $1,000,000,  and (ii) any Asset Sale in which (x)
the consideration therefor is not less than the fair market value of the related
asset  (as  determined  in good  faith by the  chief  financial  officer  of the
Borrower),  (y) the  consideration  received  therefor  consists  solely of cash
payable at the closing  thereof and (z) after giving  effect to such Asset Sale,
the aggregate fair market value of the assets  disposed of in all Asset Sales in
such Fiscal Year does not exceed $2,500,000.

         (c) Without  limitation  of the  foregoing,  the Borrower will not, and
will not permit its Subsidiaries to, sell, lease or otherwise transfer, directly
or indirectly,  all or  substantially  all of the assets of the Borrower and its
Subsidiaries, taken as a whole, to any other Person.



<PAGE>



         SECTION 5.08.  Use of Proceeds.  The proceeds of the Term Loans will be
used by the  Borrower to finance a portion of the  purchase  price of the Deltec
Acquisition  and  to  refinance  a  portion  of  the  approximately  $80,000,000
aggregate principal amount of existing Debt under the Existing Credit Agreement.
The  proceeds of the  Revolving  Loans will be used by the Borrower to refinance
the  balance  of the  aggregate  principal  amount of  existing  Debt  under the
Existing  Credit  Agreement,  and to provide  working  capital  and for  general
corporate  purposes.  The Letters of Credit issued under this  Agreement will be
issued in the ordinary course for general corporate purposes, but not to support
Debt for borrowed  money.  None of the proceeds of any of the foregoing  will be
used, directly or indirectly, for the purpose, whether immediate,  incidental or
ultimate,  of buying or  carrying  any  "margin  stock"  within  the  meaning of
Regulation U.

         SECTION 5.09. Negative Pledge.  Neither the Borrower nor any Subsidiary
will  create,  assume  or  suffer  to exist  any Lien on any  asset now owned or
hereafter acquired by it, except:

         (a)  Liens  existing  on the  date  of  this  Agreement  securing  Debt
outstanding  on the date of this  Agreement  in an  aggregate  principal or face
amount not exceeding $5,000,000;

         (b) any  Lien  existing on any asset  of any  Person  at  the time such
Person becomes a Subsidiary and not created in contemplation of such event;

         (c) any Lien on any fixed asset  securing  Debt incurred or assumed for
the purpose of  financing  all or any part of the cost of  acquiring  such fixed
asset (including  through capital leases),  in an aggregate  principal amount of
such Debt at any time  outstanding  not greater than  $5,000,000,  provided that
such Lien attaches to such fixed asset concurrently with or within 90 days after
the acquisition thereof;

         (d) any  Lien on any  asset of any  Person  existing  at the time  such
Person is merged or  consolidated  with or into the Borrower or a Subsidiary and
not created in contemplation of such event;

         (e) any Lien existing on any asset prior to the acquisition  thereof by
the  Borrower  or  a  subsidiary  and  not  created  in  contemplation  of  such
acquisition.

         (f) any Lien arising out  of  the  refinancing,  extension,  renewal or
refunding  of any Debt  secured by any Lien  permitted  by any of the  foregoing
clauses of this  Section,  provided  that such Debt is not  increased and is not
secured by any additional assets;

         (g) Liens arising in the ordinary course of its  business  which (i) do
not secure Debt or Derivatives Obligations, (ii) do not secure any obligation in
an amount  exceeding  $5,000,000  and (iii) do not in the  aggregate  materially
detract from the value of its assets or materially impair the use thereof in the
operation of its business;


<PAGE>


         (h) Liens created in connection with Permitted Receivables  Financings,
including,  without limitation,  Liens on proceeds in any form and bank accounts
in which any such proceeds are deposited;  provided that,  except for the assets
transferred  pursuant to Permitted  Receivables  Dispositions made in connection
with such  Permitted  Receivables  Financings,  no such  Lien may  extend to any
assets of the Borrower or any Subsidiary;

         (i)   Liens  on  cash  and  cash   equivalents   securing   Derivatives
Obligations,  provided  that the aggregate  amount of cash and cash  equivalents
subject to such Liens may at no time exceed $5,000,000;

         (j) Liens created by the Loan Documents;

         (k) Liens  securing  Debt  of  International  Subsidiaries  incurred in
compliance with Section 5.10(g); and

         (l) any Lien on any inventory securing  obligations (whether contingent
or matured) under trade or documentary letters of credit incurred or assumed for
the  purpose  of  financing  all or any  part  of the  cost  of  acquiring  such
inventory,  which such  obligations  do not exceed in the  aggregate at any time
$2,000,000.

         Notwithstanding the foregoing, no Obligor will create, assume or suffer
to exist any Lien on any  Collateral  other than Liens  described in clause (b),
(c), (d), (e) or (g) above, or Liens described in clause (f) above relating to a
Lien  described in clause (b), (c),  (d), (e) or (g) above,  which do not in the
aggregate materially detract from the value of the Collateral.

         SECTION 5.10.  Limitation on Debt.  The Borrower will not, and will not
permit any of its Subsidiaries to, incur or at any time be liable  with  respect
to any Debt except:

         (a)   Debt under the Loan Documents;

         (b)  the  Subordinated   Notes  and  Guarantees   thereof  provided  by
Guarantors,  each such Guarantee thereof  subordinated to the obligations of the
respective Guarantor under the Loan Documents on substantially the same basis as
the obligations of the Borrower under the Subordinated Notes are subordinated to
the obligations of the Borrower under the Loan Documents;



<PAGE>

         (c) Debt of the Borrower and the  Guarantors  (other than Debt referred
to in clauses (a) and (b) above) outstanding on the Original Closing Date not in
excess of $8,300,000 in aggregate  principal  amount and  identified on Schedule
5.10, including the Guarantees referred to on such Schedule, and any refinancing
by the  obligor  with  respect  thereto of such Debt (and,  without  limitation,
renewals or extensions of such  Guarantees),  provided that any such refinancing
does not increase the principal amount or shorten the maturity of any payment of
principal of such Debt;

         (d) Debt secured by Liens permitted by Section  5.09(c) or 5.09(l),  in
an  aggregate  principal  or  obligation  amount  at any  time  outstanding  not
exceeding the amount permitted  pursuant to such Section 5.09(c) or 5.09(l),  as
the case may be;

         (e)  Debt of the Guarantors owing to the Borrower or another Guarantor;

         (f) Debt of the Borrower and the Guarantors not otherwise  permitted by
this Section incurred after the Original Closing Date in an aggregate  principal
amount at any time outstanding not to exceed $5,000,000;

         (g) (i) Debt of International Subsidiaries incurred for working capital
purposes in an aggregate  principal amount at any time outstanding not to exceed
$25,000,000;  and (ii) Debt of  International  Subsidiaries  outstanding  on the
Original Closing Date not in excess of $8,300,000 in aggregate  principal amount
and identified on Schedule 5.10, and any refinancing by the obligor of such Debt
under this clause (ii), provided that any such refinancing does not increase the
principal  amount or shorten the  maturity of any payment of  principal  of such
Debt;

         (h) Guarantees by (i) the Borrower of Debt referred to in subclause (i)
of clause  (g) above and (ii)  Deltec of Debt of FPS Power  Systems Oy Ab at any
time  outstanding  otherwise  permitted  by this  Section  5.10 in an  aggregate
principal amount not to exceed $8,000,000; and

         (i) Debt pursuant to a Permitted Receivables Financing.

         SECTION 5.11.  Restricted Payments.    Neither  the  Borrower  nor  any
Subsidiary will declare or make any Restricted Payment other than:

          (a) any  Restricted  Payments  required  to be  made  by the  Borrower
pursuant to the terms of employee benefit plans and stock options,  in each case
as in effect on the Original Closing Date and as modified  thereafter,  provided
that the aggregate  amount of Restricted  Payments  permitted by this clause (a)
shall not exceed  $1,000,000  in any Fiscal Year or  $3,000,000 in the aggregate
for all periods after the Original Closing Date;

         (b) any regularly scheduled dividends payable on the Series G Preferred
Stock in accordance with the terms thereof;  provided that both before and after
giving effect thereto no Default shall have occurred and be continuing;



<PAGE>

         (c)  Restricted  Payments of the type referred to in clause (i) or (ii)
of the  definition  of  Restricted  Payments  (other  than those  referred to in
clauses (a) and (b) above),  to the extent that (x) both before and after giving
effect  thereto no Default shall have  occurred and be continuing  and (y) after
giving  effect to such  Restricted  Payment,  the  aggregate  amount of all such
Restricted  Payments declared or made in any Fiscal Year does not exceed the sum
of (A)  $500,000  plus (B) the  amount  of Net  Cash  Proceeds  received  by the
Borrower from the issuance of stock options and other equity in such Fiscal Year
in an amount not to exceed  $500,000  in Fiscal  Year 1996,  $750,000 in each of
Fiscal Years 1997 and 1998 and $1,000,000 in each of Fiscal Years 1999, 2000 and
2001 (but in no event,  in any Fiscal Year,  greater than the amount of such Net
Cash Proceeds minus any payments thereof required under Section 2.08); and

         (d) Restricted  Payments of the type referred to in clause (iii) of the
definition of Restricted Payments,  solely to the extent that Subordinated Notes
are tendered as payment of the exercise price of warrants issued pursuant to the
Subordinated  Note  Agreement and no  consideration  other than shares of common
stock of the Borrower are issued or paid therefor; and

         (e) Restricted  Payments of the type referred to in clause (iii) of the
definition of Restricted  Payments  (other than those  referred to in clause (d)
above),  to the extent that (x) both before and after giving effect  thereto (I)
no Default shall have occurred and be continuing  and (II) the Leverage Ratio at
such  time is not  greater  than  3.00:1  and (y)  after  giving  effect to such
Restricted  Payment,  the  aggregate  amount  of all  such  Restricted  Payments
declared or made in any Fiscal Year does not exceed $10,000,000.

         SECTION  5.12.   Investments   and  Other   Acquisitions.   Neither the
Borrower  nor any  Subsidiary  will (a) hold,  make or  acquire  any  Restricted
Investment  in  any  Person  or  (b)  consummate  or  agree  to  consummate  any
Acquisition, unless:


<PAGE>

                           (i) immediately after any such Restricted  Investment
                  is made or acquired or any such  Acquisition is consummated or
                  agreed to, the sum of (A) the aggregate amount expended by the
                  Borrower and its  Subsidiaries  with  respect to  Acquisitions
                  (including  the value of capital stock of the Borrower used to
                  make  Acquisitions)  after the Original  Closing Date plus (B)
                  the  aggregate  net book value of all  Restricted  Investments
                  does  not in the  aggregate  exceed  the sum of (x) an  amount
                  equal to 50% of the  aggregate  amount of Excess Cash Flow for
                  each Fiscal Year ending after the  Original  Closing Date (any
                  such  incremental  amount  pursuant  to this  clause (x) to be
                  added  on the  date of  receipt  of the  financial  statements
                  referred to in Section 5.01 for such Fiscal  Year),  but in no
                  event  more  than  $5,000,000  in any  Fiscal  Year and (y) an
                  additional  amount equal to  $3,000,000  in any Fiscal Year or
                  $10,000,000 for all periods after the Original Closing Date;


                           (ii) both before and immediately  after giving effect
                  to such Acquisition or Restricted Investment, no Default shall
                  have occurred and be continuing; and

                           (iii) in the case of any  Acquisition,  the  Borrower
                  would be in  compliance  with Sections 5.19 and 5.20 after the
                  Fixed  Charge  Coverage  Ratio  and  Leverage  Ratio  are each
                  adjusted  with  respect  to such  Acquisition  on the  date of
                  consummation   or   proposed    consummation    thereof   (the
                  "Transaction  Date") as follows:  in calculating  Consolidated
                  EBITDA,  Consolidated  Interest Expense,  Consolidated  Rental
                  Expense  and  Consolidated  Capital   Expenditures,   (1)  the
                  incurrence  of any  Debt  incurred  in  connection  with  such
                  Acquisition  and the  application  of the  proceeds  therefrom
                  shall be  assumed  to have  occurred  on the  first day of the
                  period of four  consecutive  Fiscal Quarters (or other period)
                  for which  such  amounts  are  required  to be  determined  in
                  accordance with the definitions of Fixed Charge Coverage Ratio
                  and Leverage  Ratio (the  "Reference  Period"),  (2) pro forma
                  effect   shall  be  given   to  the   Acquisition   (including
                  adjustments  to  operating  results  permitted  to be  made in
                  accordance  with  generally  accepted  accounting  principles)
                  which occur during the  Reference  Period or subsequent to the
                  Reference  Period and prior to the Transaction Date as if such
                  Acquisition  had  occurred  on the first day of the  Reference
                  Period,  (3) the  incurrence  of any Debt during the Reference
                  Period or subsequent to the Reference  Period and prior to the
                  Transaction Date and the application of the proceeds therefrom
                  shall be  assumed  to have  occurred  on the first day of such
                  Reference  Period  and  (4)   Consolidated   Interest  Expense
                  attributable to any Debt (whether  existing or being incurred)
                  computed on a pro forma basis and bearing a floating  interest
                  rate shall be computed as if the rate in effect on the date of
                  computation had been the applicable rate for the entire period
                  unless such Person or any of its  Subsidiaries is a party to a
                  interest party swap or cap or similar  agreement  (which shall
                  remain  in  effect  for the  twelve  month  period  after  the
                  Transaction  Date) which has the effect of fixing the interest
                  rate on the date of  computation,  in  which  case  such  rate
                  (whether higher or lower) shall be used.



<PAGE>

         SECTION 5.13.  Consolidated Capital Expenditures.  Consolidated Capital
Expenditures will not, for any of the fiscal periods set forth below, exceed the
amount indicated opposite such period:

         Fiscal Period                         Amount
         -------------                       ---------
         Fiscal Year 1996                   $16,000,000
         Fiscal Year 1997                    16,000,000
         Fiscal Year 1998                    17,500,000
         Fiscal Year 1999                    18,000,000
         Fiscal Year 2000                    18,500,000
         Fiscal Year 2001                    20,000,000
         First Fiscal Quarter 2002            6,000,000
         Second Fiscal Quarter 2002           6,000,000


         SECTION 5.14.  Sale-leaseback  Transactions.   Neither the Borrower nor
any of its Subsidiaries will engage in any  Sale-Leaseback  Transactions  unless
the  Borrower  or such  Subsidiary  would be  entitled,  pursuant  to the  other
provisions  of  Article  5, to incur Debt with a  principal  amount  equal to or
exceeding the Value of such Sale-Leaseback  Transaction secured by a Lien on the
property to be leased (after giving similar  effect to all other  Sale-Leaseback
Transactions  in effect at such time).  For  purposes of this  Section,  "Value"
means,  with respect to a  Sale-Leaseback  Transaction,  at any time, the amount
equal to the  greater of (i) the net  proceeds  of the sale or  transfer  of the
property  leased pursuant to such  Sale-Leaseback  Transaction and (ii) the fair
value in the opinion of the Board of Directors of the Borrower of such  property
at the time of entering  into such  Sale-Leaseback  Transaction,  in either case
divided  first by the  number  of full  years of the term of the  lease and then
multiplied  by the  number of full years of such term  remaining  at the time of
determination,  without regard to any renewal or extension  options contained in
the lease.



<PAGE>



         SECTION 5.15. Transactions with Affiliates.  The Borrower will not, and
will not permit any Subsidiary to,  directly or indirectly,  pay any funds to or
for the account  of, make any  investment  (whether by  acquisition  of stock or
indebtedness,  by  loan,  advance,  transfer  of  property,  guarantee  or other
agreement to pay,  purchase or service,  directly or  indirectly,  any Debt,  or
otherwise)  in,  lease,  sell,  transfer  or  otherwise  dispose of any  assets,
tangible or intangible,  to, or participate in, or effect, any transaction with,
any Affiliate  except on an arms-length  basis on terms at least as favorable to
the Borrower or such  Subsidiary  Affiliate than could have been obtained from a
third party who was not an Affiliate;  provided that the foregoing provisions of
this Section  shall not  prohibit  any such Person from  declaring or paying any
lawful  dividend or other payment ratably in respect of all of its capital stock
of the relevant class so long as, after giving effect thereto,  no Default shall
have occurred and be continuing.

         SECTION 5.16.  Hedging Facilities.  Not  later  than 30  days after the
Original  Closing  Date the  Borrower  will  have  entered  into and  thereafter
maintain in full force and effect  interest rate  agreements in such amounts and
on such terms as shall result in  effectively  limiting to a rate  acceptable to
the  Administrative  Agent  the  interest  cost to the  Borrower  of the  London
Interbank  Offered Rate on the Loans in an aggregate  principal  amount not less
than  $65,000,000 for a period of two years beginning on such date, all on terms
and conditions  satisfactory to the Required Lenders. The Borrower will not, and
will not permit any of its  Subsidiaries  to, incur any Derivatives  Obligations
except for purposes of hedging and not for speculative purposes.

         SECTION 5.17. Further Assurances.  (a)  The  Borrower  will,  and  will
cause each of the other  Obligors to, at the  Borrower's  sole cost and expense,
do, execute,  acknowledge and deliver all such further acts, deeds, conveyances,
mortgages,   assignments,   notices  of   assignment   and   transfers   as  the
Administrative Agent shall from time to time request,  which may be necessary in
the reasonable judgment of the Administrative Agent from time to time to assure,
perfect,  convey,  assign and transfer to the Administrative  Agent the property
and rights conveyed or assigned pursuant to the Collateral  Documents,  or which
may facilitate the performance of the terms of the Collateral Documents,  or the
filing, registering or recording of the Collateral Documents.

         (b) All costs and expenses in connection with the grant of any security
interests  under  the  Collateral   Documents,   including  without   limitation
reasonable legal fees and other reasonable costs and expenses in connection with
the granting,  perfecting and  maintenance of any security  interests  under the
Collateral  Documents or the preparation,  execution,  delivery,  recordation or
filing  of  documents  and  any  other  acts  as the  Administrative  Agent  may
reasonably request in connection with the grant of such security interests shall
be paid by the Borrower promptly upon demand.

         (c) The Borrower will not, and will not permit any of its  Subsidiaries
to,  enter into or become  subject to any  agreement  which would  impair  their
ability to comply, or which would purport to prohibit them from complying,  with
the provisions of this Section.



<PAGE>

         (d)  Substantially   simultaneously   with  acquiring  or  forming  any
Subsidiary or Subsidiaries,  Borrower will cause such Subsidiary or Subsidiaries
(but excluding any Subsidiary which is an International  Subsidiary) to become a
party  hereto  as a  "Guarantor"  and/or a party to the  Security  Agreement  by
executing and delivering to the Administrative Agent an agreement  substantially
in the form of Exhibit H hereto appropriately completed with respect to such new
Guarantor (a "Guarantor Addendum") and to cause each such Subsidiary (other than
any International Subsidiary) to become a party to one or more pledge agreements
in substance  consistent  with the Pledge  Agreements to secure its  obligations
hereunder.  Within  30 days  after  acquiring  or  forming  such  Subsidiary  or
Subsidiaries (other than any International Subsidiary),  the Borrower will cause
such   Subsidiary  or  Subsidiaries  to  (i)  execute  and  deliver  such  other
supplements  and documents  creating  security  interests as the  Administrative
Agent may specify,  (ii) do all other things which may be necessary or which the
Administrative  Agent may reasonably request in order to confer upon and confirm
to the Lenders the  benefits of such  security  required to be granted and (iii)
deliver such legal  opinions,  certificates,  evidences  of corporate  action or
other documents as the Administrative  Agent may reasonably request, all in form
and  substance  satisfactory  to  the  Administrative  Agent,  relating  to  the
satisfaction of the Borrower's obligations under this Section.


         SECTION 5.18.   Minimum Consolidated Net Worth.  Consolidated Net Worth
will at no time be less than the sum of (i) $82,000,000 and (ii) an amount equal
to 75% of Consolidated Net Income for each Fiscal Quarter of the Borrower ending
after  December 31, 1996 and on or prior to the date of  determination,  in each
case,  for which Consolidated Net Income is  positive  (but with no deduction on
account  of  negative  Consolidated  Net  Income  for any  Fiscal Quarter of the
Borrower)  plus  (iii)  75%  of  the aggregate net proceeds,  including the fair
market value of property other than  cash  (as determined in good  faith  by the
Board of Directors of the Borrower),  received by the Borrower from the issuance
and sale after December 31, 1996  of  any  capital  stock of the Borrower (other
than the proceeds of any issuance and  sale  of  any  capital  stock  (x)  to  a
Subsidiary of the  Borrower  or (y)  which is required  to be  redeemed,  or  is
redeemable at the  option of the holder,  at any time) or in connection with the
conversion or  exchange of any  Debt of the  Borrower into  capital stock of the
Borrower after December 31, 1996.

         SECTION 5.19.  Fixed Charge Coverage Ratio.  As of the last day of each
Fiscal Quarter of the Borrower set forth below,  the Fixed Charge Ratio will not
be less than the ratio set forth below opposite such Fiscal Quarter:

         Fiscal Quarter                     Ratio
         --------------                     -----
         Third Fiscal Quarter 1996          1.05:1
         Fourth Fiscal Quarter 1996         1.45:1
         First Fiscal Quarter 1997          1.30:1
         Second Fiscal Quarter 1997         1.30:1
         Third Fiscal Quarter 1997          1.35:1
         Fourth Fiscal Quarter 1997         1.50:1
         First Fiscal Quarter 1998          1.60:1


<PAGE>


         Second Fiscal Quarter 1998         1.70:1
         Third Fiscal Quarter 1998          1.80:1
         Fourth Fiscal Quarter 1998
          and thereafter                    2.00:1

         SECTION 5.20. Leverage  Ratio.   As  of  the  last  day  of each Fiscal
Quarter of the  Borrower set forth below and at all times  thereafter  until the
last day of the next such Fiscal  Quarter,  the Leverage  Ratio shall not exceed
the ratio set forth below opposite such Fiscal Quarter:

         Fiscal Quarter                     Ratio
         --------------                     -----
         Third Fiscal Quarter 1996          4.75:1
         Fourth Fiscal Quarter 1996         4.25:1
         First Fiscal Quarter 1997          4.15:1
         Second Fiscal Quarter 1997         4.25:1
         Third Fiscal Quarter 1997          4.00:1
         Fourth Fiscal Quarter 1997         3.75:1
         First Fiscal Quarter 1998          3.50:1
         Second Fiscal Quarter 1998         3.25:1
         Third Fiscal Quarter 1998          3.15:1
         Fourth Fiscal Quarter 1998
          and thereafter                    3.00:1

         SECTION 5.21. Amendments of Related  Documents.  The Borrower shall not
and shall not permit its  Subsidiaries  to, without the prior written consent of
the  Required  Lenders,  modify or amend,  or waive any  provision  or condition
contained in, any of the Deltec  Acquisition  Documents,  the Subordinated  Note
Agreement, the Subordinated Notes or the Series G Preferred Stock from the forms
of each of the foregoing  heretofore  delivered to the Lenders and the Agents in
any manner that could reasonably be expected to be adverse to the Lenders.

<PAGE>



         SECTION 5.22. Limitation on Restrictions Affecting Subsidiaries.
Neither the Borrower nor any of its  Subsidiaries  will enter into, or suffer to
exist,  any  agreement  with any Person,  other than the Loan  Documents and the
Subordinated Note Indenture and guarantees with respect thereto, which prohibits
or limits  the  ability of any  Subsidiary  to (a) pay  dividends  or make other
distributions or pay any Debt owed to the Borrower or any other Subsidiary,  (b)
make loans or advances to the Borrower or any other  Subsidiary  or (c) transfer
any of its  properties  or  assets  to the  Borrower  or any  other  Subsidiary,
provided that the foregoing  shall not prohibit (i) such  restrictions  as exist
today and set  forth in the  agreements  identified  on  Schedule  5.22 and (ii)
customary net worth and financial leverage tests in agreements governing Debt in
effect on the date of this Agreement of International  Subsidiaries incurred and
outstanding in compliance with this Agreement.

         SECTION 5.23.  Designated Senior  Debt.  Without  the  consent  of  the
Required  Lenders,  the Borrower  shall not designate any Debt,  other than Debt
under the Loan Documents,  as "Designated  Senior Debt", as such term is defined
in the Subordinated Note Indenture as in effect on the Original Closing Date, or
any  comparable  designation  that confers upon the holders of such Debt (or any
Person acting on their behalf) the right to initiate  blockage periods under the
Subordinated Note Indenture.

                                    ARTICLE 6

                                    DEFAULTS

         SECTION 6.01. Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:

          (a) the Borrower  shall fail to pay (i) when due any  principal of any
Loan or any  reimbursement  obligation under any Letter of Credit or (ii) within
two Domestic  Business Days after the same shall become due, any interest on any
Loan or any fees or any other amount payable hereunder;

         (b) the  Borrower  shall  fail  to  observe  or  perform  any  covenant
contained  in Article 5, other than those  contained  in Sections  5.01  through
5.06;

         (c) any  Obligor  shall  fail to observe or  perform  any  covenant  or
agreement  contained in the Loan  Documents  (other than those covered by clause
(a) or (b)  above)  for 30 days  after  notice  thereof  has  been  given to the
Borrower by the Administrative Agent at the request of any Lender;

         (d) any  representation,  warranty,  certification or statement made by
any Obligor in any Loan Document or in any certificate,  financial  statement or
other document  delivered pursuant to any Loan Document shall prove to have been
incorrect in any material respect when made (or deemed made);

         (e) the Borrower or any Subsidiary  shall fail to make any  payment  in
respect of any Material Financial  Obligations when due or within any applicable
grace period;

         (f)  any  event  or  condition   shall  occur  which   results  in  the
acceleration  of the  maturity of any  Material  Debt or enables  (or,  with the
giving of notice or lapse of time or both, would enable) the holder of such Debt
or any Person acting on such holder's behalf to accelerate the maturity thereof;



<PAGE>



         (g)  the  Borrower  or  any   Subsidiary   (other  than  an  Immaterial
Subsidiary)  shall  commence  a  voluntary  case  or  other  proceeding  seeking
liquidation,  reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the  appointment  of a trustee,  receiver,  liquidator,  custodian or
other similar official of it or any substantial  part of its property,  or shall
consent to any such relief or to the appointment of or taking  possession by any
such official in an involuntary case or other proceeding  commenced  against it,
or shall make a general  assignment for the benefit of creditors,  or shall fail
generally  to pay its debts as they  become  due,  or shall  take any  corporate
action to authorize any of the foregoing;

         (h) an involuntary case or other proceeding shall be commenced  against
the Borrower or any  Subsidiary  (other than an Immaterial  Subsidiary)  seeking
liquidation,  reorganization  or other  relief  with  respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the  appointment  of a trustee,  receiver,  liquidator,  custodian or
other similar official of it or any substantial  part of its property,  and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered  against the Borrower
or any  Subsidiary  under the federal  bankruptcy  laws as now or  hereafter  in
effect;

         (i) any member of the ERISA  Group shall fail to pay when due an amount
or amounts aggregating in excess of $1,000,000 which it shall have become liable
to pay under Title IV of ERISA; or notice of intent to terminate a Material Plan
shall be filed  under  Title IV of ERISA by any member of the ERISA  Group,  any
plan  administrator  or any  combination  of the  foregoing;  or the PBGC  shall
institute proceedings under Title IV of ERISA to terminate,  to impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or to cause
a trustee to be appointed to administer any Material Plan; or a condition  shall
exist  by  reason  of which  the  PBGC  would  be  entitled  to  obtain a decree
adjudicating  that any Material Plan must be terminated;  or there shall occur a
complete or partial withdrawal from, or a default, within the meaning of Section
4219(c)(5)  of ERISA,  with  respect to, one or more  Multiemployer  Plans which
could cause one or more  members of the ERISA  Group to incur a current  payment
obligation in excess of $1,000,000;

         (j)  judgments  or  orders  for the  payment  of  money  in  excess  of
$3,000,000  shall be rendered  against the Borrower or any  Subsidiary  and such
judgments or orders shall continue  unsatisfied  and unstayed for a period of 10
days;



<PAGE>

         (k) the Guarantee of any Guarantor under Article 9 shall for any reason
be revoked or invalidated, or otherwise cease to be in full force and effect, or
any Guarantor, or any Person on behalf of any Guarantor, shall deny or disaffirm
its  obligations  under  such  Guarantee,  or  any  Lien  created  by any of the
Collateral  Documents  shall at any time fail to  constitute a valid and (to the
extent required by the Collateral  Documents)  perfected Lien on any substantial
part of the Collateral purported to be subject thereto, securing the obligations
purported  to be  secured  thereby,  with  the  priority  required  by the  Loan
Documents, or any Obligor shall assert any of the foregoing in writing;

         (l) any person or group of persons (within the meaning of Section 13 or
14 of the  Securities  Exchange  Act of 1934,  as amended)  shall have  acquired
beneficial  ownership  (within  the  meaning  of Rule 13d-3  promulgated  by the
Securities  and  Exchange  Commission  under said Act) of 33-1/3% or more of the
outstanding shares of common stock of the Borrower;  or, during any period of 12
consecutive  calendar months,  individuals who were directors of the Borrower on
the first day of such period  shall cease to  constitute a majority of the board
of directors of the Borrower;  or there shall occur any "Change of Control",  as
such term is  defined in the  Subordinated  Note  Indenture  as in effect on the
Original  Closing  Date,  or any similar  event that  permits the holders of the
Subordinated  Notes  (or any  Person  acting  on  their  behalf)  the  right  to
accelerate  the  maturity  of the  Subordinated  Notes or demand any  payment or
redemption thereof or with respect thereto;

then, and in every such event, the  Administrative  Agent shall (i) if requested
by Lenders  having  more than 50% in  aggregate  amount of the  Commitments,  by
notice to the  Borrower  terminate  the  Commitments  and they  shall  thereupon
terminate,  and (ii) if requested by Lenders holding more than 50% of the sum of
the  aggregate   principal  amount  of  the  Loans  and  the  Letter  of  Credit
Liabilities,  by  notice to the  Borrower  declare  the Loans and the  Letter of
Credit Liabilities (together with accrued interest thereon) to be, and the Loans
and the Letter of Credit Liabilities shall thereupon become, immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower; provided that in the case of any of the
Events of Default  specified in clause  6.01(g) or 6.01(h) above with respect to
the  Borrower,  without  any  notice  to the  Borrower  or any  other act by the
Administrative  Agent or the Lenders,  the Commitments shall thereupon terminate
and the  Loans  and the  Letter of Credit  Liabilities  (together  with  accrued
interest thereon) shall become immediately due and payable without  presentment,
demand,  protest or other notice of any kind,  all of which are hereby waived by
the Borrower.



<PAGE>


         SECTION  6.02.  Notice of  Default.   The  Administrative  Agent  shall
give notice to the Borrower under Section 6.01 promptly upon being  requested to
do so by any Lender and shall  thereupon  notify all the Lenders  thereof.  Upon
receipt  by the  Administrative  Agent of any notice of  acceleration  under the
Subordinated Note Agreement,  the Administrative Agent shall promptly notify the
Lenders thereof.

         SECTION 6.03. Cash  Cover.  The  Borrower  agrees,  in  addition to the
provisions  of Section  6.01  hereof,  that upon the  occurrence  and during the
continuance   of  any  Event  of  Default,   it  shall,   if  requested  by  the
Administrative Agent upon the instruction of the Lenders having more than 50% in
aggregate amount of the Revolving  Commitments (or, if the Revolving Commitments
shall have been  terminated,  holding more than 50% of the  aggregate  Letter of
Credit  Liabilities),  pay to the Administrative  Agent an amount in immediately
available   funds  (which  funds  shall  be  held  as  collateral   pursuant  to
arrangements  satisfactory to the  Administrative  Agent) equal to the aggregate
amount  available  for drawing under all Letters of Credit then  outstanding  at
such time,  provided that, upon the occurrence of any Event of Default specified
in Section  6.01(g) or 6.01(h) with respect to the Borrower,  the Borrower shall
pay such amount  forthwith  without any notice or demand or any other act by any
Agent or the Lenders.


                                    ARTICLE 7

                                    THE AGENT

         SECTION 7.01.  Appointment and Authorization.   Each Lender irrevocably
appoints and authorizes the Administrative  Agent and the Documentation Agent to
enter into and act as its agent in connection with the Collateral  Documents and
to take such action as agent on its behalf and to exercise such powers under the
Loan  Documents  as are  delegated to the Agents by the terms hereof or thereof,
together with all such powers as are reasonably  incidental thereto. Each Lender
hereby agrees to be bound by the  provisions of the  Collateral  Documents  and,
without limitation of the foregoing or of any other provision hereof,  agrees to
the  provisions  set forth in Section 10 of the Share  Mortgage  dated as of the
Original  Closing Date entered  into between EEIC and the  Administrative  Agent
whereby EEIC pledges 66% of the stock of MPL Powerware Systems,  Ltd., as though
such provisions were set forth fully herein.

         SECTION   7.02.   Agents   and   Affiliates.   Each of the Agents shall
have the same rights and powers under the Loan Documents as any other Lender and
may  exercise  or  refrain  from  exercising  the same as though it were not the
Agent,  and each Agent and its affiliates may accept  deposits from,  lend money
to,  and  generally  engage in any kind of  business  with the  Borrower  or any
Subsidiary or affiliate of the Borrower as if it were not an Agent.

<PAGE>



         SECTION  7.03.  Action by Agents.   The  obligations  of  the  Agents
hereunder  are only those  expressly  set forth  herein.  Without  limiting  the
generality of the foregoing,  the Administrative  Agent shall not be required to
take any action with  respect to any Default,  except as  expressly  provided in
Article 6.

         SECTION 7.04. Consultation with Experts. Each of the Agents may consult
with legal  counsel  (who may be counsel for any  Obligor),  independent  public
accountants  and other  experts  selected  by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in  accordance  with the
advice of such counsel, accountants or experts.

         SECTION 7.05. Liability of Agents.   Neither  of the  Agents nor any of
their  affiliates nor any of their  respective  directors,  officers,  agents or
employees  shall be liable for any action taken or not taken by it in connection
herewith (i) with the consent or at the request of the Required  Lenders or (ii)
in the absence of its own gross negligence or willful misconduct.  Neither Agent
nor any of their  affiliates nor any of their  respective  directors,  officers,
agents or  employees  shall be  responsible  for or have any duty to  ascertain,
inquire into or verify (i) any  statement,  warranty or  representation  made in
connection  with  the  Loan  Documents  or any  borrowing  hereunder;  (ii)  the
performance  or observance of any of the covenants or agreements of any Obligor;
(iii) the  satisfaction of any condition  specified in Article 3, except receipt
of  items  required  to  be  delivered  to  the   Documentation   Agent  or  the
Administrative Agent; or (iv) the validity,  effectiveness or genuineness of the
Loan  Documents  or any other  instrument  or writing  furnished  in  connection
herewith.  No Agent shall  incur any  liability  by acting in reliance  upon any
notice, consent,  certificate,  statement, or other writing (which may be a bank
wire,  telex,  facsimile  transmission or similar writing)  believed by it to be
genuine or to be signed by the proper party or parties.
        
         SECTION  7.06.  Indemnification.  Each  Lender  shall,  ratably  in
accordance with its Commitment,  indemnify each Agent,  its affiliates and their
respective  directors,  officers,  agents  and  employees  (to  the  extent  not
reimbursed by the Borrower) against any cost,  expense  (including  counsel fees
and  disbursements),  claim,  demand,  action, loss or liability (except such as
result from such indemnitees' gross negligence or willful  misconduct) that such
indemnitees  may suffer or incur in  connection  with the Loan  Documents or any
action taken or omitted by such indemnitees thereunder.


<PAGE>


         SECTION 7.07.  Credit  Decision.  Each Lender acknowledges that it has,
independently and without reliance upon any Agent or any other Lender, and based
on such  documents and  information as it has deemed  appropriate,  made its own
credit  analysis  and  decision to enter into this  Agreement.  Each Lender also
acknowledges that it will,  independently and without reliance upon any Agent or
any other Lender,  and based on such documents and  information as it shall deem
appropriate at the time,  continue to make its own credit decisions in taking or
not taking any action under the Loan Documents.

         SECTION  7.08.  Successor  Administrative  Agent.   The  Administrative
Agent may resign at any time by giving  notice  thereof to the  Lenders  and the
Borrower.  Upon any such resignation,  the Required Lenders shall have the right
to appoint a successor  Administrative  Agent.  If no  successor  Administrative
Agent  shall have been so  appointed  by the  Required  Lenders,  and shall have
accepted  such  appointment,  within 30 days after the  retiring  Administrative
Agent gives notice of resignation,  then the retiring  Administrative Agent may,
on behalf of the Lenders,  appoint a successor Administrative Agent, which shall
be a commercial  bank  organized or licensed under the laws of the United States
of America or of any State thereof and having a combined  capital and surplus of
at least  $50,000,000.  Upon the acceptance of its appointment as Administrative
Agent   hereunder  by  a  successor   Administrative   Agent,   such   successor
Administrative  Agent shall thereupon  succeed to and become vested with all the
rights  and  duties  of the  retiring  Administrative  Agent,  and the  retiring
Administrative  Agent  shall be  discharged  from  its  duties  and  obligations
hereunder.  After any retiring  Administrative  Agent's resignation hereunder as
Administrative  Agent, the provisions of this Article shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Administrative
Agent.

         SECTION 7.09. Agents' Fee.  The  Borrower  shall  pay to each Agent for
its own  account  fees in the amounts  and at the times  previously  agreed upon
between the Borrower and such Agent.

         SECTION  7.10.  Co-Agents  and  Documentation  Agent.   The  Co-Agents
referred to on the signature pages hereof and the  Documentation  Agent referred
to on the cover page hereof, in their respective  capacities as such, shall have
no duties or obligations of any kind under the Loan Documents.


                                    ARTICLE 8

                             CHANGE IN CIRCUMSTANCES

         SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Interest Period for any Euro-Dollar Loan:



<PAGE>


                           (a)  the  Administrative  Agent  is  advised  by  the
                  Reference  Lenders that deposits in dollars (in the applicable
                  amounts) are not being offered to the Reference Lenders in the
                  London interbank market for such Interest Period, or


                           (b)  Lenders  having  50% or  more  of the  aggregate
                  principal   amount   of  the   affected   Loans   advise   the
                  Administrative Agent that the London Interbank Offered Rate as
                  determined by the Administrative Agent will not adequately and
                  fairly  reflect  the cost to such  Lenders  of  funding  their
                  Euro-Dollar Loans for such Interest Period,

the Administrative Agent shall forthwith give notice thereof to the Borrower and
the Lenders, whereupon until the Administrative Agent notifies the Borrower that
the  circumstances  giving  rise to such  suspension  no longer  exist,  (i) the
obligations of the Lenders to make Euro-Dollar Loans shall be suspended and (ii)
each  outstanding  Euro-Dollar  Loan shall be converted into a Base Rate Loan on
the last day of the then current Interest Period applicable thereto.  Unless the
Borrower notifies the  Administrative  Agent at least two Domestic Business Days
before the date of any Euro-Dollar Borrowing for which a Notice of Borrowing has
previously  been given that it elects not to borrow on such date, such Borrowing
shall instead be made as a Base Rate Borrowing.



<PAGE>



         SECTION  8.02.  Illegality. If, on or after the Original  Closing Date,
the adoption of any  applicable  law, rule or  regulation,  or any change in any
applicable  law,  rule or  regulation,  or any change in the  interpretation  or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration  thereof, or compliance
by any Lender (or its Euro-Dollar  Lending Office) with any request or directive
(whether or not having the force of law) of any such authority,  central bank or
comparable  agency shall make it unlawful or  impossible  for any Lender (or its
Euro-Dollar  Lending Office) to make, maintain or fund its Euro-Dollar Loans and
such Lender shall so notify the Administrative  Agent, the Administrative  Agent
shall  forthwith  give notice  thereof to the other  Lenders  and the  Borrower,
whereupon until such Lender notifies the Borrower and the  Administrative  Agent
that the  circumstances  giving rise to such  suspension  no longer  exist,  the
obligation of such Lender to make  Euro-Dollar  Loans, or to continue or convert
outstanding  Loans as or into  Euro-Dollar  Loans,  shall be  suspended.  Before
giving any notice to the  Administrative  Agent  pursuant to this Section,  such
Lender  shall  designate  a  different   Euro-Dollar   Lending  Office  if  such
designation  will avoid the need for  giving  such  notice and will not,  in the
judgment of such Lender,  be otherwise  disadvantageous  to such Lender. If such
notice is given,  each Euro-Dollar Loan of such Lender then outstanding shall be
converted  to a Base Rate Loan  either  (a) on the last day of the then  current
Interest Period  applicable to such Euro-Dollar Loan if such Lender may lawfully
continue to maintain and fund such Loan to such day or (b)  immediately  if such
Lender shall  determine  that it may not lawfully  continue to maintain and fund
such Loan to such day.

         SECTION 8.03.  Increased Cost and Reduced  Return.  (a)  If on or after
the  Original  Closing  Date,  the  adoption  of any  applicable  law,  rule  or
regulation,  or any change in any  applicable  law, rule or  regulation,  or any
change in the  interpretation  or  administration  thereof  by any  governmental
authority,  central bank or comparable agency charged with the interpretation or
administration  thereof,  or compliance by any Lender (or its Applicable Lending
Office) with any request or  directive  (whether or not having the force of law)
of any such authority, central bank or comparable agency shall impose, modify or
deem applicable any reserve (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve  System,  but excluding
any  such  requirement  with  respect  to  which  such  Lender  is  entitled  to
compensation  during the relevant  interest period under Section 2.14),  special
deposit, insurance assessment or similar requirement against assets of, deposits
with or for the account of, or credit extended by, any Lender (or its Applicable
Lending Office) or shall impose on any Lender (or its Applicable Lending Office)
or the London  interbank  market any other  condition  affecting its Euro-Dollar
Loans or its obligations  hereunder in respect of Letters of Credit, its Note or
its obligation to make  Euro-Dollar  Loans or issue or participate in any Letter
of Credit,  and the result of any of the  foregoing  is to increase  the cost to
such Lender (or its  Applicable  Lending  Office) of making or  maintaining  any
Euro-Dollar Loan or of issuing or  participating in any Letter of Credit,  or to
reduce the  amount of any sum  received  or  receivable  by such  Lender (or its
Applicable  Lending  Office) under this Agreement or under its Note with respect
thereto, by an amount deemed by such Lender to be material, then, within 15 days
after  demand by such  Lender  (with a copy to the  Administrative  Agent),  the
Borrower  shall pay to such  Lender  such  additional  amount or amounts as will
compensate such Lender for such increased cost or reduction.
<PAGE>


         (b) If any  Lender  shall  have  determined  that,  after the  Original
Closing Date, the adoption of any applicable  law, rule or regulation  regarding
capital  adequacy,  or any change in any such law,  rule or  regulation,  or any
change in the  interpretation  or  administration  thereof  by any  governmental
authority,  central bank or comparable agency charged with the interpretation or
administration  thereof,  or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority,  central bank or
comparable  agency,  has or would have the effect of reducing the rate of return
on capital of such  Lender (or its  Parent) as a  consequence  of such  Lender's
obligations  hereunder  to a level  below that which such Lender (or its Parent)
could have achieved but for such adoption,  change, request or directive (taking
into  consideration  its policies with respect to capital adequacy) by an amount
deemed by such  Lender to be  material,  then from time to time,  within 15 days
after  demand by such  Lender  (with a copy to the  Administrative  Agent),  the
Borrower  shall pay to such  Lender  such  additional  amount or amounts as will
compensate such Lender (or its Parent) for such reduction.

         (c)  Each   Lender  will   promptly   notify  the   Borrower   and  the
Administrative Agent of any event of which it has knowledge, occurring after the
Original Closing Date,  which will entitle such Lender to compensation  pursuant
to  this  Section  and  will  designate  a  different  Lending  Office  if  such
designation will avoid the need for, or reduce the amount of, such  compensation
and will not, in the judgment of such Lender,  be otherwise  disadvantageous  to
such  Lender.  A  certificate  of any Lender  claiming  compensation  under this
Section and setting forth in reasonable detail its calculation of the additional
amount or amounts to be paid to it hereunder  shall be conclusive in the absence
of  manifest  error.  In  determining  such  amount,  such  Lender  may  use any
reasonable  averaging and  attribution  methods.  Notwithstanding  the foregoing
subsections  (a)  and (b) of this  Section  8.03,  the  Borrower  shall  only be
obligated to compensate any Lender for any amount arising or accruing during (i)
any time or period  commencing not more than (x) in the case of subsection  (a),
six months and (y) in the case of subsection  (b),  three  months,  prior to the
date on which such Lender  notifies  the  Administrative  Agent and the Borrower
that  it  proposes  to  demand  such   compensation   and   identifies   to  the
Administrative  Agent and the Borrower the  statute,  regulation  or other basis
upon  which the  claimed  compensation  is or will be based and (ii) any time or
period during which,  because of the  retroactive  application  of such statute,
regulation or other basis, such Lender did not know that such amount would arise
or accrue.

         SECTION 8.04.  Taxes.  (a)  For  the purposes of this Section 8.04, the
following terms have the following meanings:

         "Taxes"  means any and all  present or future  taxes,  duties,  levies,
imposts, deductions,  charges or withholdings with respect to any payment by the
Borrower or any  Guarantor,  as the case may be,  pursuant to this  Agreement or
under any Note, and all liabilities with respect  thereto,  excluding (i) in the
case of each Lender and each Agent,  taxes imposed on its income,  and franchise
or similar taxes imposed on it, by a  jurisdiction  under the laws of which such
Lender or such Agent (as the case may be) is organized or in which its principal
executive  office  is  located  or,  in the case of each  Lender,  in which  its
Applicable  Lending  Office is located and (ii) in the case of each Lender,  any
United  States  withholding  tax imposed on such payments but only to the extent
that such Lender is subject to United  States  withholding  tax at the time such
Lender first becomes a party to this Agreement.


<PAGE>


         "Other  Taxes" means any present or future stamp or  documentary  taxes
and any other  excise or property  taxes,  or similar  charges or levies,  which
arise from any payment made pursuant to this Agreement or under any Note or from
the execution or delivery of, or otherwise with respect to, any Loan Document.

         (b) Any and all payments by the Borrower or any Guarantor to or for the
account  of any  Lender or any Agent  hereunder  or under any Note shall be made
without  deduction for any Taxes or Other Taxes;  provided that, if the Borrower
or any  Guarantor  shall be  required  by law to deduct any Taxes or Other Taxes
from any such  payments,  (i) the sum payable shall be increased as necessary so
that after making all required deductions  (including  deductions  applicable to
additional  sums payable  under this  Section)  such Lender or the Agent (as the
case may be) receives an amount  equal to the sum it would have  received had no
such deductions  been made, (ii) the Borrower or any Guarantor,  as the case may
be, shall make such  deductions,  (iii) the Borrower or such  Guarantor,  as the
case may be,  shall  pay the  full  amount  deducted  to the  relevant  taxation
authority or other  authority in  accordance  with  applicable  law and (iv) the
Borrower shall furnish to the Documentation Agent, at its address referred to in
Section 10.01, the original or a certified copy of a receipt  evidencing payment
thereof.

         (c) The Borrower agrees to indemnify each Lender and each Agent for the
full amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes  imposed or asserted by any  jurisdiction  on amounts  payable under
this  Section)  paid by such  Lender or such  Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto.  This  indemnification  shall be paid within 15 days after such
Lender or such Agent (as the case may be) makes demand therefor.

         (d) Each Lender organized under the laws of a jurisdiction  outside the
United  States,  on or prior to the date of its  execution  and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which  it  becomes  a Lender  in the case of each  other
Lender, and from time to time thereafter if requested in writing by the Borrower
(but only so long as such Lender remains  lawfully able to do so), shall provide
the Borrower and the  Administrative  Agent with Internal  Revenue  Service form
1001 or 4224, as  appropriate,  or any successor form prescribed by the Internal
Revenue  Service,  certifying  that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party which exempts the Lender
from United States  withholding  tax or reduces the rate of  withholding  tax on
payments of  interest  for the  account of such  Lender or  certifying  that the
income receivable  pursuant to this Agreement is effectively  connected with the
conduct of a trade or business in the United States.


<PAGE>

         (e) For any period with respect to which a Lender has failed to provide
the Borrower or the  Administrative  Agent with the appropriate form pursuant to
Section  8.04(d)  (unless  such  failure  is due to a change in  treaty,  law or
regulation  occurring  subsequent to the date on which such form  originally was
required to be provided),  such Lender shall not be entitled to  indemnification
under Section 8.04(b) or (c) with respect to Taxes imposed by the United States;
provided  that if a Lender,  which is  otherwise  exempt  from or  subject  to a
reduced rate of withholding tax, becomes subject to Taxes because of its failure
to deliver a form required hereunder, the Borrower shall take such steps as such
Lender shall reasonably request to assist such Lender to recover such Taxes.

         (f) If the  Borrower or any  Guarantor  is  required to pay  additional
amounts to or for the account of any Lender pursuant to this Section,  then such
Lender will change the jurisdiction of its Applicable  Lending Office if, in the
judgment  of such  Lender,  such  change (i) will  eliminate  or reduce any such
additional  payment  which  may  thereafter  accrue  and  (ii) is not  otherwise
disadvantageous to such Lender.

         SECTION  8.05. Base Rate Loans  Substituted  for  Affected  Euro-Dollar
Loans. If (i) the  obligation  of any Lender to make  Euro-Dollar  Loans,  or to
convert or continue  outstanding  Loans  into  or  as  Euro-Dollar   Loans,  has
been  suspended  pursuant  to  Section  8.02 or (ii)  any  Lender  has  demanded
compensation  under Section 8.03 or 8.04 with respect to its  Euro-Dollar  Loans
and the Borrower shall, by at least five Euro-Dollar Business Days' prior notice
to  such  Lender  through  the  Administrative  Agent,  have  elected  that  the
provisions  of this Section shall apply to such Lender,  then,  unless and until
such Lender  notifies the Borrower  that the  circumstances  giving rise to such
suspension or demand for compensation no longer exist:

         (a) all  Loans  which  would  otherwise  be made by such  Lender as (or
continued as or converted  into)  Euro-Dollar  Loans shall  instead be Base Rate
Loans (on which interest and principal shall be payable  contemporaneously  with
the related Euro-Dollar Loans of the other Lenders); and

         (b) after each of its  Euro-Dollar  Loans has been repaid (or converted
to a Base Rate Loan), all payments of principal which would otherwise be applied
to repay such  Euro-Dollar  Loans  shall be applied to repay its Base Rate Loans
instead.

If such Lender notifies the Borrower that the circumstances  giving rise to such
notice no longer apply,  the principal  amount of each such Base Rate Loan shall
be converted  into a  Euro-Dollar  Loan on the first day of the next  succeeding
Interest  Period  applicable  to the  related  Euro-Dollar  Loans  of the  other
Lenders.

<PAGE>

         SECTION  8.06.   Substitution  of  Lender. If (i) the obligation of any
Lender to make  Euro-Dollar  Loans has been suspended  pursuant to Section  8.02
or (ii) any Lender has demanded  compensation  under  Section 8.03 or 8.04,  the
Borrower shall  have  the  right, with the  assistance  of  the   Administrative
Agent,  to  seek  one  or  more   mutually  satisfactory   substitute  financial
institutions  (which  may be  one or  more  of the Lenders) to purchase the Note
and assume the Commitments of such Lender.

                                    ARTICLE 9

                                    GUARANTY

         SECTION  9.01.  The Guaranty.  Each  Guarantor  hereby  unconditionally
guarantees,  jointly and severally  with  each  other  Guarantor,  the  full and
punctual payment (whether at stated  maturity, upon acceleration  or  otherwise)
of the principal of and interest on each Note and the full  amount of all Letter
of Credit Liabilities under this Agreement, and the full and punctual payment of
all other  amounts  payable  by the Borrower or any other Obligor under the Loan
Documents, and all Hedging Obligations (as defined  in  the  Security  Agreement
of even date herewith). Upon failure by the Borrower or any other Obligor to pay
punctually any  such  amount,  each  Guarantor shall forthwith on demand pay the
amount not so paid at the place and in the manner  specified  in this  Agreement
or the other Loan Documents.

         SECTION  9.02.  Guaranty   Unconditional.   The  obligations  of  each
Guarantor  hereunder shall be  unconditional  and absolute and, without limiting
the generality of the foregoing, shall not be released,  discharged or otherwise
affected by:
                           (i) any extension,  renewal, settlement,  compromise,
                  waiver or release in respect of any obligation of the Borrower
                  or any other Obligor under the Loan Documents, by operation of
                  law or otherwise;

                           (ii) any modification or amendment of  or  supplement
                  to the Loan Documents;

                           (iii)  any  release,  impairment,  non-perfection  or
                  invalidity  of  any  direct  or  indirect   security  for  any
                  obligation of the Borrower or any other Obligor under the Loan
                  Documents;



<PAGE>

                           (iv) any change in the corporate existence, structure
                  or  ownership  of the  Borrower or any other  Obligor,  or any
                  insolvency,   bankruptcy,   reorganization  or  other  similar
                  proceeding affecting the Borrower,  any other Obligor or their
                  respective assets or any resulting release or discharge of any
                  obligation of the Borrower or any other  Obligor  contained in
                  the Loan Documents;

                           (v) the  existence  of any  claim,  set-off  or other
                  rights which such  Guarantor  may have at any time against the
                  Borrower,  any other  Obligor,  any  Agent,  any Lender or any
                  other Person,  whether in connection herewith or any unrelated
                  transactions,  provided that nothing  herein shall prevent the
                  assertion  of any such claim by  separate  suit or  compulsory
                  counterclaim;

                           (vi) any invalidity or  unenforceability  relating to
                  or against the Borrower or any other Obligor for any reason of
                  the Loan  Documents,  or any  provision of  applicable  law or
                  regulation  purporting to prohibit the payment by the Borrower
                  or any other  Obligor of the  principal  of or interest on any
                  Note or any other amount  payable by the Borrower or any other
                  Obligor under the Loan Documents; or

                           (vii) any other  act or  omission  to act or delay of
                  any kind by the Borrower,  any other Obligor,  any Agent,  any
                  Lender  or  any  other   Person  or  any  other   circumstance
                  whatsoever  which  might,  but  for  the  provisions  of  this
                  paragraph,  constitute a legal or  equitable  discharge of the
                  Guarantor's obligations hereunder.

         SECTION  9.03.  Discharge  Only upon Payment in Full;  Reinstatement In
Certain  Circumstances.  Each Guarantor's  obligations hereunder shall remain in
full force and  effect  until the  Commitments  shall  have  terminated  and the
principal  of and  interest  on the Notes and all other  amounts  payable by the
Obligors under the Loan  Documents  shall have been paid in full. If at any time
any payment of the  principal  of or  interest  on any Note or any other  amount
payable  by the  Obligors  under  the Loan  Documents  is  rescinded  or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization
of any Obligor or otherwise, each Guarantor's obligations hereunder with respect
to such payment shall be reinstated at such time as though such payment had been
due but not made at such time.

<PAGE>

         SECTION  9.04.  Waiver by Each Guarantor.  Each  Guarantor  irrevocably
waives  acceptance  hereof,  presentment,  demand,  protest  and any  notice not
provided for herein,  as well as any requirement  that at any time any action be
taken by any Person  against the  Borrower or any other  Guarantor  or any other
Person.

         SECTION 9.05.  Subrogation and Contribution. Each Guarantor irrevocably
waives any and all rights to which it may be  entitled,  by  operation of law or
otherwise,  upon making any payment hereunder (i) to be subrogated to the rights
of the payee  against the  Borrower  with respect to such payment or against any
direct or indirect security therefor, or otherwise to be reimbursed, indemnified
or exonerated  by or for the account of the Borrower in respect  thereof or (ii)
to receive any payment,  in the nature of  contribution or for any other reason,
from any other Guarantor with respect to such payment.

         SECTION 9.06.  Stay  of  Acceleration.  If acceleration of the time for
payment of any amount  payable by any Obligor under the Loan Documents is stayed
upon insolvency,  bankruptcy or reorganization of the Borrower, all such amounts
otherwise  subject  to  acceleration  under  the terms of this  Agreement  shall
nonetheless  be payable by each Guarantor  hereunder  forthwith on demand by the
Agent made at the request of the requisite  proportion of the Lenders  specified
in Article 6 of the Agreement.

         SECTION 9.07. Limit of  Liability.   The  obligations of each Guarantor
shall be limited to an aggregate  amount equal to the largest  amount that would
not render its obligations  hereunder  subject to avoidance under Section 548 of
the United States Bankruptcy Code or any comparable provisions of any applicable
state law.
<PAGE>
                                   ARTICLE 10

                                  MISCELLANEOUS

         SECTION 10.01.  Notices. All notices, requests and other communications
to any  party  hereunder  shall  be in  writing  (including  bank  wire,  telex,
facsimile transmission or similar writing) and shall be given to such party: (a)
in the  case  of the  Borrower  or the  Administrative  Agent,  at its  address,
facsimile number or telex number set forth on the signature pages hereof, (b) in
the  case of any  Guarantor,  in care of the  Borrower,  (c) in the  case of any
Lender,  at its  address,  facsimile  number  or telex  number  set forth in its
Administrative  Questionnaire  or (d) in the  case  of  any  party,  such  other
address,  facsimile  number or telex number as such party may hereafter  specify
for the purpose by notice to the  Administrative  Agent and the  Borrower.  Each
such notice,  request or other  communication shall be effective (i) if given by
telex,  when such telex is  transmitted  to the telex  number  specified in this
Section and the appropriate  answerback is received,  (ii) if given by facsimile
transmission, when transmitted to the facsimile number specified in this Section
and confirmation of receipt is received,  (iii) if given by mail, 72 hours after
such  communication  is deposited in the mails with first class postage prepaid,
addressed as aforesaid  or (iv) if given by any other means,  when  delivered at
the  address   specified  in  this   Section;   provided  that  notices  to  the
Administrative  Agent or any Issuing  Lender under  Article 2 or Article 8 shall
not be effective until received.

         SECTION  10.02.  No  Waivers.  No  failure or delay by any Agent or any
Lender in exercising any right,  power or privilege  hereunder or under any Note
shall  operate as a waiver  thereof  nor shall any  single or  partial  exercise
thereof  preclude any other or further  exercise  thereof or the exercise of any
other right,  power or privilege.  The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.

         SECTION  10.03.  Expenses;   Indemnification.   (a)  The Borrower shall
pay (i) all  out-of-pocket  expenses of the Agents  (including  the  Syndication
Agent referred to on the cover page hereof), including fees and disbursements of
special counsel for the Administrative Agent, in connection with the preparation
and  administration of the Loan Documents,  any waiver or consent  thereunder or
any amendment  thereof or any Default or alleged Default  thereunder and (ii) if
an Event of Default occurs,  all  out-of-pocket  expenses incurred by the Agents
and each Lender,  including (without  duplication) the fees and disbursements of
outside  counsel and the allocated cost of inside  counsel,  in connection  with
such  Event  of  Default  and  collection,   bankruptcy,  insolvency  and  other
enforcement proceedings resulting therefrom.

         (b) The Borrower agrees to indemnify the Agents and each Lender,  their
respective  affiliates  and  the  respective  directors,  officers,  agents  and
employees  of the  foregoing  (each an  "Indemnitee")  and hold each  Indemnitee
harmless from and against any and all liabilities,  losses,  damages,  costs and
expenses of any kind,  including,  without  limitation,  the reasonable fees and
disbursements of counsel, which may be incurred by such Indemnitee in connection
with any investigative,  administrative or judicial  proceeding  (whether or not
such  Indemnitee  shall be  designated a party  thereto)  brought or  threatened
relating to or arising out of the Loan  Documents  or any actual or proposed use
of proceeds of Loans hereunder; provided that no Indemnitee shall have the right
to be  indemnified  hereunder  for such  Indemnitee's  own gross  negligence  or
willful misconduct.

<PAGE>



         SECTION  10.04.  Sharing  of  Set-Offs.  Each  Lender agrees that if it
shall, by exercising any right of set-off or counterclaim or otherwise,  receive
payment of a proportion  of the  aggregate  amount of principal and interest due
with respect to any Note held by it and any Letter of Credit  Liabilities  which
is greater  than the  proportion  received by any other Lender in respect of the
aggregate  amount of  principal  and  interest  due with respect to any Note and
Letter of Credit  Liabilities  held by such other Lender,  the Lender  receiving
such  proportionately  greater payment shall purchase such participations in the
Notes and Letter of Credit Liabilities held by the other Lenders, and such other
adjustments  shall be made,  as may be  required  so that all such  payments  of
principal  and  interest  with  respect  to  the  Notes  and  Letter  of  Credit
Liabilities  held by the  Lenders  shall be  shared  by the  Lenders  pro  rata;
provided  that nothing in this  Section  shall impair the right of any Lender to
exercise  any  right of  set-off  or  counterclaim  it may have and to apply the
amount  subject to such exercise to the payment of  indebtedness  of any Obligor
other than its  indebtedness  hereunder.  Each  Obligor  agrees,  to the fullest
extent it may  effectively  do so under  applicable  law,  that any  holder of a
participation in a Note or Letter of Credit Liabilities, whether or not acquired
pursuant  to the  foregoing  arrangements,  may  exercise  rights of  set-off or
counterclaim and other rights with respect to such  participation as fully as if
such holder of a  participation  were a direct  creditor of such  Obligor in the
amount of such participation.

     SECTION  10.05.  Amendments  and Waivers;  Release of  Collateral.  (a) Any
provision  of this  Agreement or the Notes may be amended or waived if, but only
if, such amendment or waiver is in writing and is signed by the Borrower and the
Required Lenders (and, if the rights or duties of the  Documentation  Agent, the
Administrative Agent or an Issuing Lender are affected thereby, by such affected
Agent or Issuing Lender, as relevant); provided that no such amendment or waiver
shall:

                           (i)  unless  signed  by all the  Lenders  with a Term
                  Commitment,  increase or decrease the Term Commitments (except
                  for a ratable decrease in all the Term  Commitments),  subject
                  any such Lender to any additional obligation,  or postpone the
                  date  fixed  for  the  scheduled   termination   of  any  Term
                  Commitment;

                           (ii) unless signed by all Lenders holding Term Loans,
                  reduce the principal of or rate of interest on any Term Loans,
                  postpone the date fixed for any scheduled payment of principal
                  of or interest on any Term Loans,  or decrease  the  aggregate
                  amount by which  Term Loans are  required  to be repaid on any
                  date  scheduled  pursuant to Section  2.04(b) or postpone  any
                  date for such repayment;



<PAGE>

                           (iii)  unless  signed by all Lenders with a Revolving
                  Commitment,  increase or  decrease  any  Revolving  Commitment
                  (except  for  a  ratable   decrease   in  all  the   Revolving
                  Commitments),  subject  any  such  Lender  to  any  additional
                  obligation,   postpone  the  date  fixed  for  any   scheduled
                  reduction or termination of any Revolving  Commitment,  reduce
                  the principal of or rate of interest on any Revolving  Loan or
                  the amount to be reimbursed in respect of any Letter of Credit
                  or any interest  thereon,  extend any Letter of Credit  expiry
                  date beyond the Maturity  Date, or postpone the date fixed for
                  scheduled payment of principal of, and dates fixed for payment
                  of interest on, any Revolving Loan;


                           (iv) unless  signed by all the Lenders,  postpone the
                  date fixed for any  payment of any fees  hereunder  or release
                  any Guarantor from its obligations hereunder;

                           (v) unless  signed by the Swing Lender and each other
                  Lender affected  thereby,  increase the Swing Loan Commitment,
                  postpone the date fixed for the  termination of the Swing Loan
                  Commitment   or   otherwise   affect  any  of  its  rights  or
                  obligations hereunder; and

                           (vi)  unless  signed by all the  Lenders,  change the
                  percentage  of  the  Commitments  or of the  aggregate  unpaid
                  principal  amount  of the  Notes  and  the  Letter  of  Credit
                  Liabilities, or the number of Lenders, which shall be required
                  for the  Lenders or any of them to take any action  under this
                  Section or any other provision of this Agreement.

Any provision of the Collateral  Documents may be amended or waived if, but only
if, such amendment or waiver is in writing and is signed by the relevant Obligor
or  Obligors  and the  Administrative  Agent with the  consent  of the  Required
Lenders;  provided that no such amendment or waiver shall,  unless signed by all
the  Lenders,  effect  or permit a release  of all or  substantially  all of the
Collateral.

         (b)  Notwithstanding   anything  to  the  contrary  in  the  Collateral
Documents,  Collateral  shall  be  released  from  the  Lien  of the  Collateral
Documents  from time to time as necessary to effect any sale or pledge of assets
permitted by the Loan  Documents.  The  Administrative  Agent shall, at the sole
expense of the Borrower,  execute and deliver all release  documents  reasonably
requested to evidence any release pursuant to this subsection (b).

         SECTION  10.06.  Successors  and  Assigns.(a) The  provisions  of  this
Agreement  shall be binding upon and inure to the benefit of the parties  hereto
and their  respective  successors and assigns,  except that the Borrower may not
assign or otherwise  transfer any of its rights under this Agreement without the
prior written consent of all Lenders.



<PAGE>

         (b) Any  Lender  may at any time  grant  to one or more  banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans and  Letter of Credit  Liabilities.  In the event of any
such grant by a Lender of a participating interest to a Participant,  whether or
not upon  notice to the  Borrower  and the  Agents,  such  Lender  shall  remain
responsible for the performance of its obligations hereunder,  and the Borrower,
the Issuing  Lenders and the Agents  shall  continue to deal solely and directly
with such Lender in connection with such Lender's  rights and obligations  under
this  Agreement.  Any  agreement  pursuant  to which any Lender may grant such a
participating  interest  shall  provide  that such Lender  shall retain the sole
right and  responsibility  to enforce the obligations of the Borrower  hereunder
including, without limitation, the right to approve any amendment,  modification
or waiver of any provision of this Agreement;  provided that such  participation
agreement  may  provide  that such  Lender  will not agree to any  modification,
amendment or waiver of this Agreement  described in clause (i),  (ii),  (iii) or
(iv) of, or in the proviso in the last sentence of, Section 10.05(a) without the
consent of the Participant.  The Borrower agrees that each Participant shall, to
the extent provided in its participation  agreement, be entitled to the benefits
of Section  2.14 or Article 8 with  respect to its  participating  interest.  An
assignment or other  transfer  which is not  permitted by subsection  (c) or (d)
below shall be given effect for purposes of this Agreement only to the extent of
a participating interest granted in accordance with this subsection (b).

         (c) Any  Lender  may at any time  assign to one or more  banks or other
institutions  (each an "Assignee") all, or a pro rata part of all, of its rights
and obligations under this Agreement with respect to either:

                           (i)  its outstanding Term Loans, or

                           (ii) its Revolving Commitment and outstanding 
                  Revolving Loans and Letter of Credit Liabilities,

and such  Assignee  shall  assume  such rights and  obligations,  pursuant to an
Assignment  and  Assumption  Agreement  in  substantially  the form of Exhibit F
hereto executed by such Assignee and such transferor  Lender,  with (and subject
to) the subscribed consent of the Borrower and the Administrative  Agent and, if
such  assignment  includes  amounts  pursuant to clause (ii) above,  the Issuing
Lenders and Swing Lender, none of which consents shall be unreasonably withheld;
provided that:

                           (A) if an Assignee is an affiliate of such transferor
                  Lender or was a Lender  immediately  prior to such assignment,
                  no such consent of the Borrower shall be required; and



<PAGE>

                           (B) if such transferor Lender assigns a part (but not
                  all) of its Term  Loans  or of its  Revolving  Commitment  and
                  outstanding  Revolving Loans, then, (I) unless the Assignee is
                  an  affiliate  of  such  transferor  Lender  or  was a  Lender
                  immediately  prior  to  such  assignment,  the  sum of (x) the
                  aggregate  outstanding principal amount of Term Loans (if any)
                  and  (y)  the  amount  of  Revolving  Commitment  (or,  if the
                  Revolving  Commitments  have been  terminated,  the  aggregate
                  outstanding  principal  amount of  Revolving  Loans)  (if any)
                  assigned to such Assignee shall be at least  $5,000,000,  and,
                  (II) after giving effect to such partial  assignment,  the sum
                  of (x) the  aggregate  outstanding  principal  amount  of Term
                  Loans (if any) and (y) the amount of Revolving Commitment (or,
                  if  the  Revolving  Commitments  have  been  terminated,   the
                  aggregate outstanding principal amount of Revolving Loans) (if
                  any)  retained  by the  transferor  Lender  shall  be at least
                  $5,000,000.

Upon  execution and delivery of such  instrument and payment by such Assignee to
such  transferor  Lender of an amount equal to the purchase price agreed between
such transferor Lender and such Assignee,  such Assignee shall be a Lender party
to this Agreement and shall have all the rights and obligations of a Lender with
a Commitment as set forth in such  instrument of assumption,  and the transferor
Lender  shall be released  from its  obligations  hereunder  to a  corresponding
extent,  and no further  consent or action by any party shall be required.  Upon
the  consummation  of any  assignment  pursuant  to  this  subsection  (c),  the
transferor  Lender,  the  Administrative  Agent  and  the  Borrower  shall  make
appropriate  arrangements  so that,  if  required,  a new Note is  issued to the
Assignee.  In connection with any such assignment,  the transferor  Lender shall
pay to the  Administrative  Agent  an  administrative  fee for  processing  such
assignment in the amount of $3,500.  If the Assignee is not  incorporated  under
the laws of the United States of America or a state thereof, it shall deliver to
the Borrower and the  Administrative  Agent  certification  as to exemption from
deduction or withholding of any United States federal income taxes in accordance
with Section 8.04.

         (d) Any Lender may at any time  assign all or any portion of its rights
under this Agreement and its Note to a Federal  Reserve Bank. No such assignment
shall release the transferor Lender from its obligations hereunder.


<PAGE>


         (e) No Assignee, Participant or other transferee of any Lender's rights
shall be entitled to receive any greater payment under Section 8.03 or 8.04 than
such  Lender  would have been  entitled  to receive  with  respect to the rights
transferred,  unless such  transfer is made with the  Borrower's  prior  written
consent or by reason of the  provisions of Section 8.02,  8.03 or 8.04 requiring
such Lender to designate a different  Applicable  Lending  Office under  certain
circumstances  or at a time when the  circumstances  giving rise to such greater
payment did not exist.

         SECTION  10.07.  Collateral.  Each  of  the  Lenders represents to the
Agents and each of the other  Lenders  that it in good faith is not relying upon
any "margin  stock" (as defined in  Regulation U) as collateral in the extension
or maintenance of the credit provided for in this Agreement.

         SECTION  10.08.   Governing  Law;  Submission  to  Jurisdiction.   This
Agreement and each Note shall be governed by and  construed in  accordance  with
the  laws  of  the  State  of New  York.  Each  Obligor  hereby  submits  to the
nonexclusive  jurisdiction  of the United States District Court for the Southern
District  of New York and of any New York State  court  sitting in New York City
for  purposes  of all  legal  proceedings  arising  out of or  relating  to this
Agreement or the  transactions  contemplated  hereby.  Each Obligor  irrevocably
waives,  to the fullest extent  permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such  proceeding  brought in
such a court and any claim that any such proceeding  brought in such a court has
been brought in an inconvenient forum.

         SECTION 10.09.  Counterparts; Integration. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the  signatures  thereto and hereto were upon the same  instrument.
This Agreement  constitutes  the entire  agreement and  understanding  among the
parties hereto and supersedes any and all prior  agreements and  understandings,
oral or written, relating to the subject matter hereof.

         SECTION 10.10.  Waiver by Jury Trial. EACH OF THE BORROWER,  THE AGENTS
AND THE LENDERS HEREBY  IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY  LEGAL  PROCEEDING  ARISING  OUT OF OR  RELATING  TO THIS  AGREEMENT  OR THE
TRANSACTIONS CONTEMPLATED HEREBY.


<PAGE>


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

                          EXIDE ELECTRONICS GROUP, INC.

                          By /s/ Marty R. Kittrell
                           Title: Vice President & Chief Financial Officer
                           Address:   8609 Six Forks Road
                                      Raleigh, NC 27615
                           Facsimile: 919/870-3100


                          GUARANTORS


                          EXIDE ELECTRONICS CORPORATION

                          By /s/ Marty R. Kittrell
                           Title: Vice President & Chief Financial Officer
                           Address:   8609 Six Forks Road
                                      Raleigh, NC 27615
                           Facsimile: 919/870-3100


                          EXIDE ELECTRONICS INTERNATIONAL CORP.

                          By /s/ Marty R. Kittrell
                           Title: Vice President & Chief Financial Officer
                           Address:   8609 Six Forks Road
                                      Raleigh, NC 27615
                           Facsimile: 919/870-3100


<PAGE>


                          INTERNATIONAL POWER MACHINES CORPORATION

                          By /s/ Marty R. Kittrell
                           Title: Vice President & Chief Financial Officer
                           Address:   8609 Six Forks Road
                                      Raleigh, NC 27615
                           Facsimile: 919/870-3100


                          DELTEC POWER SYSTEMS, INC.

                          By /s/ Marty R. Kittrell
                           Title: Vice President & Chief Financial Officer
                           Address:   8609 Six Forks Road
                                      Raleigh, NC 27615
                           Facsimile: 919/870-3100


                          LECTRO PRODUCTS, INC.

                          By /s/ Marty R. Kittrell
                           Title: Vice President & Chief Financial Officer
                           Address:   8609 Six Forks Road
                                      Raleigh, NC 27615
                           Facsimile: 919/870-3100


<PAGE>


                          DATATRAX ACQUISITION CORPORATION


                          By /s/ Marty R. Kittrell
                           Title: Vice President & Chief Financial Officer
                           Address:   8609 Six Forks Road
                                      Raleigh, NC 27615
                           Facsimile: 919/870-3100


                          EXIDE ELECTRONICS USA HOLDINGS CORP.

                          By /s/ Marty R. Kittrell
                           Title: Vice President & Chief Financial Officer
                           Address:   8609 Six Forks Road
                                      Raleigh, NC 27615
                           Facsimile: 919/870-3100


                           DELTEC ELECTRONICS CORP.

                           By /s/ Marty R. Kittrell
                            Title: Vice President & Chief Financial Officer
                            Address:   8609 Six Forks Road
                                       Raleigh, NC 27615
                            Facsimile: 919/870-3100


<PAGE>





                          LORTEC POWER SYSTEMS, INC.

                          By /s/ Marty R. Kittrell
                           Title: Vice President & Chief Financial Officer
                           Address:   8609 Six Forks Road
                                      Raleigh, NC 27615
                           Facsimile: 919/870-3100


<PAGE>



                          AGENTS


                          MORGAN GUARANTY TRUST COMPANY OF NEW YORK

                          By /s/ John M. Mikolay
                           Title: Vice President


                          NATIONSBANK, N.A.

                          By /s/ Richard G. Parkhurst, Jr.
                           Title: Vice President


                          CO-AGENTS


                          ABN AMRO BANK, N.V.

                          By /s/ Robert A. Budnek
                           Title: Assistant Vice President
                          By /s/ Linda K. Davis
                           Title: Vice President


                          BANK OF AMERICA ILLINOIS

                          By /s/ Michael J. McKenney
                           Title: Vice President


                          FIRST UNION NATIONAL BANK OF NORTH CAROLINA

                          By /s/ Jorge Gonzalez
                           Title: Senior Vice President




<PAGE>





                          OTHER LENDERS


                          BRANCH BANKING & TRUST COMPANY

                          By /s/ Richard E. Fowler
                           Title: Senior Vice President


                          BANQUE PARIBAS

                          By /s/ Mary T. Finnegan
                           Title: Group Vice President

                          By /s/ John J. McCormick, III
                           Title: Vice President


                          CREDIT LYONNAIS NEW YORK BRANCH

                          By /s/ Mark Koneval
                           Title: Vice President


                          CREDIT LYONNAIS ATLANTA BRANCH

                          By /s/ Robert Ivosevich
                           Title: Senior Vice President


                          LTCB TRUST COMPANY

                          By /s/ John J. Sullivan
                           Title: Executive Vice President






<PAGE>





                          SOCIETE GENERALE

                          By /s/ Ralph Saheb
                           Title: Vice President


                          MERITA BANK LTD, NEW YORK BRANCH

                          By /s/ Anu Seppala
                           Title: Vice President

                          By /s/ John Kehnle
                           Title: Vice President


                          THE FUJI BANK, LIMITED, ATLANTA AGENCY

                          By /s/ Toshihiro Mitsui
                           Title: Vice President and Manager


                          VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME TRUST

                          By /s/ Kathleen A. Zarn
                           Title: Vice President


                          BANK OF TOKYO-MITSUBISHI TRUST COMPANY

                          By /s/ Nicholas J. Campbell
                           Title: Vice President


                          THE DAI-ICHI KANGYO BANK, LIMITED, ATLANTA AGENCY

                          By /s/ Toshiaki Kurihara
                           Title: Joint General Manager



<PAGE>





                          THE YASUDA TRUST & BANKING CO., LTD., NEW YORK BRANCH

                          By /s/ Prince I. Chenault
                           Title: First Vice President


                          NON-CONTINUING LENDERS


                          BANQUE FRANCAISE DU COMMERCE EXTERIEUR

                          By /s/ Brian J. Cumberland
                           Title: Assistant Treasurer

                          By /s/ Frederick K. Kammler
                           Title: Vice President


                          THE MITSUBISHI TRUST AND BANKING CORPORATION

                          By /s/ Patricia Loret de Mola
                           Title: Senior Vice President


                          SOUTHERN PACIFIC THRIFT & LOAN ASSOCIATION

                          By /s/ Chris Kelleher
                           Title: Vice President


<PAGE>





                          THE BANK OF TOKYO-MITSUBISHI, LTD.

                          By /s/ Hiroaki Fuchida
                           Title: Senior Vice President & Manager












<PAGE>





                          MORGAN GUARANTY TRUST COMPANY OF NEW YORK, 
                            as Administrative Agent, Issuing Lender and
                            Swing Lender

                          By /s/ John M. Mikolay
                           Title: Vice President
                           Address:    60 Wall Street
                                       New York, NY 10260-0060
                           Facsimile:  (212) 648-5348


                          NATIONSBANK, N.A., as Documentation Agent

                          By /s/ Richard G. Parkhurst, Jr.
                           Title: Vice President
                           Address:    NationsBank Corporate Center
                                       100 North Tryon Street NC1-007-08-07
                                       Charlotte, NC 28255
                           Facsimile:  (704) 386-1270


<PAGE>



                               COMMITMENT SCHEDULE

<TABLE>
<CAPTION>
------------------------------------------ -------------------------------- ---------------------------------

                 Lenders                        Revolving Commitments                  Term Loans
------------------------------------------ -------------------------------- ---------------------------------
<S>                                        <C>                              <C>    
------------------------------------------ -------------------------------- ---------------------------------

Administrative Agent
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

Morgan Guaranty Trust Company of                    $9,926,470.59                    $3,573,529.41
New York
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

Documentation Agent
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

NationsBank, N.A.                                   $9,926,470.59                    $3,573,529.41
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

Co-Agents
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

ABN AMRO Bank, N.V.                                 $9,558,823.53                    $3,441,176.47
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

Bank of America Illinois                            $9,558,823.53                    $3,441,176.47
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

First Union National Bank of North                  $9,558,823.53                    $3,441,176.47
Carolina
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

Other Lenders
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

Branch Banking & Trust Company                      $9,558,823.53                    $3,441,176.47
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

Banque Paribas                                      $9,007,352.94                    $3,242,647.06
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------
</TABLE>
<PAGE>

                          COMMITMENT SCHEDULE (CONT.)
<TABLE>
<CAPTION>


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

                 Lenders                        Revolving Commitments                  Term Loans
------------------------------------------ -------------------------------- ---------------------------------
<S>                                        <C>                              <C>    
Credit Lyonnais New York Branch and                 $9,007,352.94                    $3,242,647.06
Credit Lyonnais Atlanta Branch
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

LTCB Trust Company                                  $9,007,352.94                    $3,242,647.06
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

Societe Generale                                    $9,007,352.94                    $3,242,647.06
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

Merita Bank Ltd                                     $6,617,647.06                    $2,382,352.94
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

The Fuji Bank, Limited, Atlanta Agency              $6,617,647.06                    $2,382,352.94
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

Van Kampen American Capital Prime Rate              $6,617,647.06                    $2,382,352.94
Income Trust
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

Bank of Tokyo-Mitsubishi Trust Company              $3,676,470.59                    $1,323,529.41
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

The Dai-Ichi Kangyo Bank, Limited,                  $3,676,470.59                    $1,323,529.41
Atlanta Agency
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

The Yasuda Trust & Banking Co., Ltd.,               $3,676,470.59                    $1,323,529.41
New York Branch
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

Non-Continuing Lenders
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

Banque Francaise Du Commerce Exterieur                  $0.00                            $0.00
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

The Mitsubishi Trust and Banking                        $0.00                            $0.00
Corporation
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

Southern Pacific Thrift & Loan                          $0.00                            $0.00
Association
------------------------------------------ -------------------------------- ---------------------------------
------------------------------------------ -------------------------------- ---------------------------------

The Bank of Tokyo-Mitsubishi, Ltd.                      $0.00                            $0.00
------------------------------------------ -------------------------------- ---------------------------------
</TABLE>

<PAGE>


--------------------------------------------------------------------------------
                                PRICING SCHEDULE
--------------------------------------------------------------------------------

          Each of "Euro-Dollar  Margin",  "Base Rate Margin",  "Letter of Credit
Fee Rate" and  "Commitment  Fee Rate" means,  for any date,  the rates set forth
below in the row  opposite  such  term and in the  column  corresponding  to the
"Pricing Level" that applies at such date:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------

                 Level I      Level II      Level III     Level IV       Level V      Level VI
--------------------------------------------------------------------------------------------------
<S>             <C>           <C>          <C>           <C>            <C>          <C>
--------------------------------------------------------------------------------------------------

Euro-Dollar           0.45%        0.625%        0.875%         1.00%         1.25%         1.50%
Margin
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------

Letter of             0.45%        0.625%        0.875%         1.00%         1.25%         1.50%
Credit Fee
Rate
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------

Base Rate             0%              0%            0%          0%            0.25%         0.50%
Margin
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------

Commitment            0.15%         0.20%         0.25%         0.25%         0.30%        0.375%
Fee Rate
--------------------------------------------------------------------------------------------------
</TABLE>

         For purposes of this Schedule,  the following  terms have the following
meanings:

         "Applicable  Leverage Ratio" means,  for any day, the Leverage Ratio as
at the last day of the Fiscal  Quarter of the Borrower most recently ended prior
to such date for which the Borrower has delivered financial  statements pursuant
to Section 5.01(a) or 5.01(b), as the case may be; provided that if the Borrower
shall fail to timely deliver the financial  statements  required to be delivered
by it pursuant to Section 5.01(a) or 5.01(b), as the case may be, the Applicable
Leverage  Ratio  for each  date  from  and  including  the  date on  which  such
statements  are required to be delivered to but excluding the date on which such
statements are delivered shall be deemed to be greater than 4.0.

         "Level I Pricing" applies at any date if the Applicable  Leverage Ratio
for such date is less than 2.0.

         "Level II Pricing" applies at any date if the Applicable Leverage Ratio
for such date is greater than or equal to 2.0 and less than 2.5.

         "Level  III  Pricing"  applies at any date if the  Applicable  Leverage
Ratio for such date is greater than or equal to 2.5 and less than 3.0.

         "Level IV Pricing" applies at any date if the Applicable Leverage Ratio
for such date is greater or equal to 3.0 and less than 3.5.



<PAGE>


         "Level V Pricing" applies at any date if the Applicable  Leverage Ratio
for such date is greater than or equal to 3.5 and less than 4.0.

         "Level VI Pricing" applies at any date if the Applicable Leverage Ratio
for such date is greater than or equal to 4.0.

         "Pricing Level" refers to the  determination of which of Level I, Level
II, Level III, Level IV, Level V or Level VI Pricing applies at any date.



<PAGE>



                                   SCHEDULE 1:

                           Existing Letters of Credit
<TABLE>
<CAPTION>

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

ISSUING LENDER                  ORIGINAL ISSUE DATE    MATURITY DATE            AMOUNT

------------------------------- ---------------------- ------------------------ ------------------------------
<S>                             <C>                    <C>                      <C>                       
------------------------------- ---------------------- ------------------------ ------------------------------

First Union National Bank of     5/25/95                6/1/96                  $230,999
North Carolina ("FUNB")
------------------------------- ---------------------- ------------------------ ------------------------------
------------------------------- ---------------------- ------------------------ ------------------------------

FUNB                             5/25/95                6/1/96                  $69,001
------------------------------- ---------------------- ------------------------ ------------------------------
------------------------------- ---------------------- ------------------------ ------------------------------

FUNB                             5/24/93                9/1/97                  $49,652
------------------------------- ---------------------- ------------------------ ------------------------------
------------------------------- ---------------------- ------------------------ ------------------------------

FUNB                             7/8/92                 6/26/96                 $32,400
------------------------------- ---------------------- ------------------------ ------------------------------
</TABLE>


<PAGE>


                                   SCHEDULE 2:

                                Assigning Lenders
<TABLE>
<CAPTION>

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

Assigning Lenders                     Term Loan           Revolving            Revolving Loans
                                                          Commitment
------------------------------------- ------------------- -------------------- --------------------
<S>                                   <C>                 <C>                  <C>    
------------------------------------- ------------------- -------------------- --------------------

Other Lenders
------------------------------------- ------------------- -------------------- --------------------
------------------------------------- ------------------- -------------------- --------------------

Merita Bank Ltd                            $2,382,352.94        $6,617,647.06        $3,600,000.00
------------------------------------- ------------------- -------------------- --------------------
------------------------------------- ------------------- -------------------- --------------------

Non-Continuing Lenders
------------------------------------- ------------------- -------------------- --------------------
------------------------------------- ------------------- -------------------- --------------------

Banque Francaise Du Commerce                       $0.00                $0.00                $0.00
Exterieur
------------------------------------- ------------------- -------------------- --------------------
------------------------------------- ------------------- -------------------- --------------------

The Mitsubishi Trust and Banking                   $0.00                $0.00                $0.00
Corporation
------------------------------------- ------------------- -------------------- --------------------
------------------------------------- ------------------- -------------------- --------------------

Southern Pacific Thrift & Loan                     $0.00                $0.00                $0.00
Association
------------------------------------- ------------------- -------------------- --------------------
------------------------------------- ------------------- -------------------- --------------------

The Bank of Tokyo-Mitsubishi, Ltd.                 $0.00                $0.00                $0.00
------------------------------------- ------------------- -------------------- --------------------
</TABLE>


<PAGE>



                                   SCHEDULE 3:

                                Assuming Lenders
<TABLE>
<CAPTION>
---------------------------------------------- -------------------- -------------------- --------------------

Assuming Lenders                               Term Loan            Revolving            Revolving Loans
                                                                    Commitment
---------------------------------------------- -------------------- -------------------- --------------------
<S>                                            <C>                  <C>                  <C>                   
---------------------------------------------- -------------------- -------------------- --------------------

Administrative Agent
---------------------------------------------- -------------------- -------------------- --------------------
---------------------------------------------- -------------------- -------------------- --------------------

Morgan Guaranty Trust Company of New York            $3,573,529.41        $9,926,470.59        $5,400,000.00
---------------------------------------------- -------------------- -------------------- --------------------
---------------------------------------------- -------------------- -------------------- --------------------

Documentation Agent
---------------------------------------------- -------------------- -------------------- --------------------
---------------------------------------------- -------------------- -------------------- --------------------

NationsBank, N.A.                                    $3,573,529.41        $9,926,470.59        $5,400,000.00
---------------------------------------------- -------------------- -------------------- --------------------
---------------------------------------------- -------------------- -------------------- --------------------

Co-Agents
---------------------------------------------- -------------------- -------------------- --------------------
---------------------------------------------- -------------------- -------------------- --------------------

ABN AMRO Bank, N.V.                                  $3,441,176.47        $9,558,823.53        $5,200,000.00
---------------------------------------------- -------------------- -------------------- --------------------
---------------------------------------------- -------------------- -------------------- --------------------

Bank of America Illinois                             $3,441,176.47        $9,558,823.53        $5,200,000.00
---------------------------------------------- -------------------- -------------------- --------------------
---------------------------------------------- -------------------- -------------------- --------------------

First Union National Bank of North Carolina          $3,441,176.47        $9,558,823.53        $5,200,000.00
---------------------------------------------- -------------------- -------------------- --------------------
---------------------------------------------- -------------------- -------------------- --------------------

Other Lenders
---------------------------------------------- -------------------- -------------------- --------------------
---------------------------------------------- -------------------- -------------------- --------------------

Branch Banking & Trust Company                       $3,441,176.47        $9,558,823.53        $5,200,000.00
---------------------------------------------- -------------------- -------------------- --------------------
---------------------------------------------- -------------------- -------------------- --------------------

Banque Paribas                                       $3,242,647.06        $9,007,352.94        $4,900,000.00
---------------------------------------------- -------------------- -------------------- --------------------
---------------------------------------------- -------------------- -------------------- --------------------

Credit Lyonnais New York Branch and Credit           $3,242,647.06        $9,007,352.94        $4,900,000.00
Lyonnais Atlanta Branch
---------------------------------------------- -------------------- -------------------- --------------------
---------------------------------------------- -------------------- -------------------- --------------------

LTCB Trust Company                                   $3,242,647.06        $9,007,352.94        $4,900,000.00
---------------------------------------------- -------------------- -------------------- --------------------
---------------------------------------------- -------------------- -------------------- --------------------

Societe Generale                                     $3,242,647.06        $9,007,352.94        $4,900,000.00
---------------------------------------------- -------------------- -------------------- --------------------
---------------------------------------------- -------------------- -------------------- --------------------
</TABLE>
<PAGE>

                               SCHEDULE 3: (CONT.)

                                Assuming Lenders
<TABLE>
<CAPTION>
---------------------------------------------- -------------------- -------------------- --------------------

Assuming Lenders                               Term Loan            Revolving            Revolving Loans
                                                                    Commitment
---------------------------------------------- -------------------- -------------------- --------------------
<S>                                            <C>                  <C>                  <C>   
The Fuji Bank, Limited, Atlanta Agency               $2,382,352.94        $6,617,647.06        $3,600,000.00
---------------------------------------------- -------------------- -------------------- --------------------
---------------------------------------------- -------------------- -------------------- --------------------

Van Kampen American Capital Prime Rate               $2,382,352.94        $6,617,647.06        $3,600,000.00
Income Trust
---------------------------------------------- -------------------- -------------------- --------------------
---------------------------------------------- -------------------- -------------------- --------------------

Bank of Tokyo-Mitsubishi Trust Company               $1,323,529.41        $3,676,470.59        $2,000,000.00
---------------------------------------------- -------------------- -------------------- --------------------
---------------------------------------------- -------------------- -------------------- --------------------

The Dai-Ichi Kangyo Bank, Limited, Atlanta           $1,323,529.41        $3,676,470.59        $2,000,000.00
Agency
---------------------------------------------- -------------------- -------------------- --------------------
---------------------------------------------- -------------------- -------------------- --------------------

The Yasuda Trust & Banking Co., Ltd., New            $1,323,529.41        $3,676,470.59        $2,000,000.00
York Branch
---------------------------------------------- -------------------- -------------------- --------------------
</TABLE>
<PAGE>
                CERTAIN PAYMENTS ON THE AMENDMENT EFFECTIVE DATE

Part 1: Amount to be Paid by Assuming Lenders
<TABLE>
<CAPTION>

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

Assuming Lenders                                        Term Loan             Revolving Loans
------------------------------------------------------- --------------------- -----------------------
<S>                                                     <C>                   <C>                
------------------------------------------------------- --------------------- -----------------------

Administrative Agent
------------------------------------------------------- --------------------- -----------------------
------------------------------------------------------- --------------------- -----------------------

Morgan Guaranty Trust Company of New York                        $294,959.74             $445,714.80
------------------------------------------------------- --------------------- -----------------------
------------------------------------------------------- --------------------- -----------------------

Documentation Agent
------------------------------------------------------- --------------------- -----------------------
------------------------------------------------------- --------------------- -----------------------

NationsBank, N.A.                                                $359,243.32             $542,856.57
------------------------------------------------------- --------------------- -----------------------
------------------------------------------------------- --------------------- -----------------------

Co-Agents
------------------------------------------------------- --------------------- -----------------------
------------------------------------------------------- --------------------- -----------------------

ABN AMRO Bank, N.V.                                              $226,890.37             $342,856.58
------------------------------------------------------- --------------------- -----------------------
------------------------------------------------------- --------------------- -----------------------

Bank of America Illinois                                         $194,747.60             $294,285.54
------------------------------------------------------- --------------------- -----------------------
------------------------------------------------------- --------------------- -----------------------

First Union National Bank of North Carolina                      $194,747.77             $294,285.54
------------------------------------------------------- --------------------- -----------------------
------------------------------------------------------- --------------------- -----------------------

Other Lenders
------------------------------------------------------- --------------------- -----------------------
------------------------------------------------------- --------------------- -----------------------

Branch Banking & Trust Company                                   $869,747.60           $1,314,285.54
------------------------------------------------------- --------------------- -----------------------
------------------------------------------------------- --------------------- -----------------------

Banque Paribas                                                   $671,218.20           $1,014,285.53
------------------------------------------------------- --------------------- -----------------------
------------------------------------------------------- --------------------- -----------------------

Credit Lyonnais New York Branch and Credit Lyonnais              $671,218.20           $1,014,285.53
Atlanta Branch
------------------------------------------------------- --------------------- -----------------------
------------------------------------------------------- --------------------- -----------------------

LTCB Trust Company                                               $671,218.20           $1,014,285.53
------------------------------------------------------- --------------------- -----------------------
------------------------------------------------------- --------------------- -----------------------

Societe Generale                                                 $671,218.20           $1,014,285.53
------------------------------------------------------- --------------------- -----------------------
------------------------------------------------------- --------------------- -----------------------
</TABLE>
<PAGE>
            CERTAIN PAYMENTS ON THE AMENDMENT EFFECTIVE DATE (CONT.)

Part 1: Amount to be Paid by Assuming Lenders
<TABLE>
<CAPTION>

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

Assuming Lenders                                        Term Loan             Revolving Loans
------------------------------------------------------- --------------------- -----------------------
<S>                                                     <C>                   <C>  
The Fuji Bank, Limited, Atlanta Agency                         $1,096,639.05           $1,657,143.45
------------------------------------------------------- --------------------- -----------------------
------------------------------------------------------- --------------------- -----------------------

Van Kampen American Capital Prime Rate Income Trust              $582,352.94             $880,000.00
------------------------------------------------------- --------------------- -----------------------
------------------------------------------------------- --------------------- -----------------------

Bank of Tokyo-Mitsubishi Trust Company                         $1,323,529.41           $2,000,000.00
------------------------------------------------------- --------------------- -----------------------
------------------------------------------------------- --------------------- -----------------------

The Dai-Ichi Kangyo Bank, Limited, Atlanta Agency                 $37,815.52              $57,143.45
------------------------------------------------------- --------------------- -----------------------
------------------------------------------------------- --------------------- -----------------------

The Yasuda Trust & Banking Co., Ltd., New York Branch             $37,815.52              $57,143.45
------------------------------------------------------- --------------------- -----------------------
</TABLE>
<PAGE>



Part 2: Amount to be Received by Assigning Lenders
<TABLE>
<CAPTION>

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

Assigning Lenders                                    Term Loan             Revolving Loans
---------------------------------------------------- --------------------- -----------------------
<S>                                                  <C>                   <C>            
---------------------------------------------------- --------------------- -----------------------

Other Lenders
---------------------------------------------------- --------------------- -----------------------
---------------------------------------------------- --------------------- -----------------------

Merita Bank Ltd                                      $189,075.92           $285,714.47
---------------------------------------------------- --------------------- -----------------------
---------------------------------------------------- --------------------- -----------------------

Non-Continuing Lenders
---------------------------------------------------- --------------------- -----------------------
---------------------------------------------------- --------------------- -----------------------

Banque Francaise Du Commerce Exterieur                      $2,057,142.96           $3,108,571.58
---------------------------------------------------- --------------------- -----------------------
---------------------------------------------------- --------------------- -----------------------

The Mitsubishi Trust and Banking Corporation                $2,571,428.86           $3,885,714.47
---------------------------------------------------- --------------------- -----------------------
---------------------------------------------------- --------------------- -----------------------

Southern Pacific Thrift & Loan Association                  $1,800,000.00           $2,720,000.00
---------------------------------------------------- --------------------- -----------------------
---------------------------------------------------- --------------------- -----------------------

The Bank of Tokyo-Mitsubishi, Ltd.                          $1,285,713.89           $1,942,856.55
---------------------------------------------------- --------------------- -----------------------
</TABLE>


<PAGE>


                                 SCHEDULE 4.05:

                                   Litigation

         On August 21, 1995, a case entitled National Broadcasting Company, Inc.
and CNBC, Inc. vs.  International Power Machine/LorTec  Systems,  Inc. et al, as
filed in the Supreme Court of New York, New York County.  The plaintiffs  allege
that International Power Machines  Corporation ("IPM") negligently  manufactured
and installed an uninterruptible  power supply product that caused them property
and   compensatory   damages  when  the  equipment   malfunctioned   during  the
installation of the product by third-party contractors.  The plaintiffs included
seven  causes of  action,  each of which  seeks  damages  in the  amount of $1.1
million.  Three of those  causes of action  also seek $3.0  million in  punitive
damages. Claims of this nature are generally covered by the Borrower's insurance
and its  insurer has  accepted  general  defense of the matter.  The insurer has
notified the Borrower that while claims based on IPM's negligent  manufacture or
design are covered by the insurance  policy,  damages,  if any,  caused by IPM's
intentional  or careless  decision to install a known  defective  and  dangerous
product would be subject to certain exclusions under the policy. While discovery
is at an early stage, the Borrower believes at this time, based on the advise of
its defense  counsel,  that no evidence has yet been presented that supports any
allegation of  intentional  or careless  conduct.  IPM also believes that is has
meritorious  defenses and counter-claims  against the third-party  co-defendants
who IPM alleges  defectively  installed the product.  The Borrower believes that
the final outcome of this matter will not have a material  adverse effect on the
business or the financial position of the Borrower and its subsidiaries taken as
a whole.


<PAGE>




                                 SCHEDULE 5.10:

                Existing Debt of the Borrower and the Guarantors

1. Revolving  Credit Facility for up to FF 25,000,000 made to Exide  Electronics
S.A. by ABN-AMRO Bank N.V., guaranteed by Exide Electronics Corporation.

2.  Working  Capital  Loan  for  DEM  2,000,000,   made  to  Exide   Electronics
International G.m.b.H. by NBD Bank, guaranteed by Exide Electronics Corporation.

3.  Revolving  Credit  Facility for up to BP  3,350,000,  made to MPL  Powerware
Systems Limited by NationsBank,  N.A.,  guaranteed by Exide  Electronics  Group,
Inc., Exide Electronics Corporation and Exide Electronics International Corp.

4. Revolving  Credit Facility made to Exide  Electronics  Canada Inc. by Bank of
Montreal  for  $2,500,000,  guaranteed  by  Exide  Electronics  Group,  Inc.
  
5. Promissory Note from Exide Electronics  Group,  Inc., to MasTec,  Inc. in the
original principal amount of $450,000.

6. Equipment Loan from  Associates  Commercial  Corporation to Lectro  Products,
Inc. in the original principal amount of $393,448.86.

7. Tekes  government  loan to FPS Power  Systems  Oy Ab  granted as support  for
research and development  projects in the original principal amount of 5,500,000
Finnish Marks.


<PAGE>

                                  SCHEDULE 5.22

                  Existing Restrictions Affecting Subsidiaries

Such  restrictions  as exist on the Amendment  Effective  Date  contained in the
documents  that  evidence  and/or  govern  the  credit  facilities  set forth in
Schedule 5.10.


<PAGE>


                                    EXHIBITS



<PAGE>
                                                                       EXHIBIT A

                                           
                                                             New York, New York
                                                            ___________ __, 199_
 
                                      NOTE


              For value  received,  EXIDE  ELECTRONICS  GROUP,  INC., a Delaware
corporation   (the   "Borrower"),    promises   to   pay   to   the   order   of
______________________ (the "Lender"), for the account of its Applicable Lending
Office,  the  unpaid  principal  amount of each  Loan made by the  Lender to the
Borrower pursuant to the Credit Agreement referred to below on the maturity date
and from time to time on  earlier  repayment  dates  referred  to in the  Credit
Agreement.  The Borrower promises to pay interest on the unpaid principal amount
of each  such Loan on the  dates  and at the rate or rates  provided  for in the
Credit  Agreement.  All such payments of principal and interest shall be made in
lawful  money of the United  States in Federal  or other  immediately  available
funds at the  office of  Morgan  Guaranty  Trust  Company  of New York,  60 Wall
Street, New York, New York.

              All Loans made by the Lender,  the respective types and maturities
thereof and all  repayments  of the  principal  thereof shall be recorded by the
Lender  and,  if the  Lender  so  elects  in  connection  with any  transfer  or
enforcement hereof,  appropriate notations to evidence the foregoing information
with respect to each such Loan then outstanding may be endorsed by the Lender on
the schedule  attached hereto, or on a continuation of such schedule attached to
and made a part hereof; provided that the failure of the Lender to make any such
recordation  or  endorsement  shall not affect the  obligations  of the Borrower
hereunder or under the Credit Agreement.

              This note is one of the Notes referred to in the Credit  Agreement
originally  dated as of March 13, 1996 and amended and  restated as of April __,
1997 among the Borrower, the Guarantors party thereto, the lenders listed on the
signature  pages thereof,  the issuing  lenders party thereto,  Morgan  Guaranty
Trust Company of New York, as  Administrative  Agent and  NationsBank,  N.A., as
Documentation  Agent (as the same may be amended from time to time,  the "Credit
Agreement"). Terms defined in the Credit Agreement are used herein with the same
meanings.  Reference  is made to the Credit  Agreement  for  provisions  for the
prepayment hereof and the acceleration of the maturity hereof.

              The  payment in full of the  principal  and  interest on this note
has,  pursuant to the provisions of the Credit Agreement,  been  unconditionally
guaranteed by the Guarantors referred to therein.


                                                  EXIDE ELECTRONICS GROUP, INC.

                                                  By____________________
                                                  Name:
                                                  Title:
<PAGE>


                         LOANS AND PAYMENTS OF PRINCIPAL


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

             Amount        Type          Amount of
             of            of            Principal       Maturity       Notation
Date         Loan          Loan          Repaid          Date           Made by
--------------------------------------------------------------------------------

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


<PAGE>

                                                                       EXHIBIT B


                                        SECURITY AGREEMENT


<PAGE>

                                                                       EXHIBIT C


                                         PLEDGE AGREEMENT


<PAGE>






                                   OPINION OF
                            COUNSEL FOR THE OBLIGORS




                                                                  April __, 1997


To the Lenders and the Administrative Agent
  Referred to Below
c/o Morgan Guaranty Trust Company of New York
  as Administrative Agent
60 Wall Street
New York, New York 10260

Gentlemen and Ladies:

              We have acted as counsel  for Exide  Electronics  Group,  Inc.,  a
Delaware corporation ("Borrower") and Exide Electronics Corporation,  a Delaware
corporation,  Exide  Electronics  International  Corp., a Delaware  corporation,
International Power Machines  Corporation,  a Delaware  corporation,  and [other
Guarantors],  (collectively,  the "Guarantors"  and together with Borrower,  the
"Obligors"),  in connection with (i) the Credit Agreement originally dated as of
March 13,  1996 and  amended  and  restated  as of April __,  1997 (the  "Credit
Agreement") among Borrower, the Guarantors,  the lenders listed on the signature
pages thereof  (including any such Lender in its capacity as Issuing Lender,  as
defined therein, the "Lenders"), Bank of America Illinois as Documentation Agent
for the Lenders and Morgan Guaranty Trust Company of New York as  Administrative
Agent for the Lenders (the "Agents") and (ii) the Notes (the documents  referred
to in clauses  (i) and (ii) are  referred  to herein  collectively  as the "Loan
Documents").  Terms defined in the Credit  Agreement  and not otherwise  defined
herein are used herein as therein defined.

              We have  examined  originals  or copies,  certified  or  otherwise
identified  to  our  satisfaction,   of  such  documents,   corporate   records,
certificates of public  officials and other  instruments and have conducted such
other  investigations  of fact and law as we have deemed  necessary or advisable
for purposes of this opinion.



<PAGE>


              Upon the basis of the foregoing, we are of the opinion that:

              1. [Each of the]  Obligors  is a  corporation  duly  incorporated,
validly  existing and in good standing  under the laws of the State of Delaware,
and  has  all  corporate   powers  and  all  material   governmental   licenses,
authorizations,  consents and approvals required to carry on its business as now
conducted.

              2. The execution,  delivery and performance by each Obligor of the
Loan  Documents to which it is a party are within the  corporate  powers of such
Obligor, have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with,  any  governmental  body,  agency or
official and do not contravene,  or constitute a default under, any provision of
applicable law or regulation or of the certificate of  incorporation  or by-laws
of such Obligor or of any  agreement,  judgment,  injunction,  order,  decree or
other instrument  binding upon such Obligor or any of its Subsidiaries or result
in the  creation  or  imposition  of any Lien  (other  than Liens under the Loan
Documents  (as such term is defined in the  Credit  Agreement))  on any asset of
such Obligor or any of its Subsidiaries.

              3. The Loan Documents (other than the Notes) to which the Borrower
is a party  constitute  valid and binding  agreements  of the  Borrower and each
Note,  when  executed and  delivered in  accordance  with this  Agreement,  will
constitute  a valid  and  binding  obligation  of the  Borrower,  in  each  case
enforceable  in  accordance  with its  terms  except  (i) as may be  limited  by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(ii) as rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability.  The Loan Documents to
which each Guarantor is a party constitute valid and binding  agreements of such
Guarantor,  in each case  enforceable  against the Borrower in  accordance  with
their respective terms except (i) as may be limited by bankruptcy, insolvency or
similar  laws  affecting  creditors'  rights  generally  and (ii) as  rights  of
acceleration  and the  availability  of  equitable  remedies  may be  limited by
equitable principles of general applicability.

              4.  [Except as set forth on  Schedule  4.05,]  there is no action,
suit  or  proceeding  pending  against,  or to the  knowledge  of  the  Borrower
threatened against or affecting,  the Borrower or any of its Subsidiaries before
any court or arbitrator or any  governmental  body,  agency or official in which
there is a reasonable  possibility of an adverse decision which could materially
adversely affect the business,  consolidated  financial position or consolidated
results  of  operations  of the  Borrower  and  its  Consolidated  Subsidiaries,
considered  as a whole,  or which in any manner draws into question the validity
or enforceability of the Loan Documents.

              5. The  Obligations  under  the  Credit  Agreement  and the  Notes
constitute  "Secured  Obligations" as defined in the Security  Agreement and the
Pledge Agreement.



<PAGE>


              6. None of the Agents or the Lenders is required to pay any tax or
be  qualified to do business or file any  designation  for service of process or
file any reports in the State of [North  Carolina] or comply with any  statutory
or regulatory  rule or  requirement  applicable  only to financial  institutions
chartered or qualified to do business in the State of [North Carolina] solely by
reason of its execution  and delivery or acceptance of the Loan  Documents or by
reason of its participation in any of the transactions  under or contemplated by
the Loan Documents,  including,  without limitation, the making of any Loan, and
the purchase and holding of any Note  contemplated  thereby,  and the making and
receipt of any payments pursuant thereto, and the validity and enforceability of
the Loan Documents will not be affected by any failure to so qualify or file.

              7. No taxes  or  other  charges,  including,  without  limitation,
intangible, documentary, stamp, mortgage, transfer or recording taxes or similar
charges,  are payable to the State of [North  Carolina]  or to any  jurisdiction
therein on account of the execution, delivery or ownership of the Loan Documents
or the creation of the indebtedness  (including,  without limitation,  the Loans
and the indebtedness evidenced by the Notes) evidenced or secured thereby.

              8. The  choice of New York law to  govern  the Loan  Documents  in
which such choice is stipulated is a valid and effective choice of law under the
laws of the  State of  [North  Carolina]  and  adherence  to  existing  judicial
precedents  would  require a court  sitting in the State of [North  Carolina] to
abide by such choice of law.

              [To the  extent  that any of the  foregoing  opinions  concerns  a
matter of New York law, we have  assumed  that the laws of the State of New York
are  identical  to the  laws of the  State  of North  Carolina  in all  relevant
respects.]


                                Very truly yours,


<PAGE>



                                   OPINION OF
                             DAVIS POLK & WARDWELL,
                         SPECIAL COUNSEL FOR THE AGENTS




                                                         ________________,  199_


To the Lenders and the Agents
  Referred to Below
c/o Morgan Guaranty Trust Company
 of New York, as Administrative Agent
60 Wall Street
New York, New York  10260

Dear Sirs:

              We have  participated in the  preparation of the Credit  Agreement
(the "Credit  Agreement")  originally dated as of March 13, 1996 and amended and
restated  as of April __,  1997 among the Exide  Electronics  Group,  Inc.  (the
"Borrower"),  the Guarantors party thereto,  the lenders listed on the signature
pages  thereof  (the  "Lenders"),  the issuing  lenders  party  thereto,  Morgan
Guaranty  Trust Company of New York, as  Administrative  Agent and  NationsBank,
N.A., as Documentation  Agent (the "Agents"),  and have acted as special counsel
for the Agents for the purpose of  rendering  this  opinion  pursuant to Section
3.01(e) of the Credit Agreement.  Terms defined in the Credit Agreement are used
herein as therein defined.

              We have  examined  originals  or copies,  certified  or  otherwise
identified  to  our  satisfaction,   of  such  documents,   corporate   records,
certificates of public  officials and other  instruments and have conducted such
other  investigations  of fact and law as we have deemed  necessary or advisable
for purposes of this opinion.

              Upon the basis of the foregoing, we are of the opinion that:

              1. The execution,  delivery and performance by the Borrower of the
Credit Agreement and of the Notes are within the Borrower's corporate powers and
have been duly authorized by all necessary corporate action.


<PAGE>


              2. The Credit Agreement  constitutes a valid and binding agreement
of the Borrower and each Note constitutes a valid and binding  obligation of the
Borrower,  in each case  enforceable in accordance  with its terms except as the
same  may be  limited  by  bankruptcy,  insolvency  or  similar  laws  affecting
creditors' rights generally and by general principles of equity.

              We are  members  of the  Bar of the  State  of New  York  and  the
foregoing  opinion is limited to the laws of the State of New York,  the federal
laws of the United  States of America  and the  General  Corporation  Law of the
State of Delaware.  In giving the foregoing opinion, we express no opinion as to
the  effect  (if any) of any law of any  jurisdiction  (except  the State of New
York) in which any Lender is located which limits the rate of interest that such
Lender may charge or collect.

              This  opinion is  rendered  solely to you in  connection  with the
above  matter.  This opinion may not be relied upon by you for any other purpose
or relied upon by any other person without our prior written consent.

                                Very truly yours,


<PAGE>



                           OPINION OF SPECIAL COUNSEL
                                  FOR THE AGENT




                                                         ________________,  199_


To the Lenders and the Agents
  Referred to Below
c/o Morgan Guaranty Trust Company
  of New York, as Administrative Agent
60 Wall Street
New York, New York  10260

Dear Sirs:

              [To come -- negotiated separately with each foreign
              counsel.]



<PAGE>



                       ASSIGNMENT AND ASSUMPTION AGREEMENT


              AGREEMENT  dated as of  _________,  19__ among {NAME OF  ASSIGNOR}
(the "Assignor"),  {NAME OF ASSIGNEE} (the "Assignee"), EXIDE ELECTRONICS GROUP,
INC.  (the  "Borrower")  and  MORGAN  GUARANTY  TRUST  COMPANY  OF NEW YORK,  as
Administrative Agent (the "Agent").

              WHEREAS,   this   Assignment   and   Assumption   Agreement   (the
"Agreement")  relates to the Credit  Agreement  originally dated as of March 13,
1996 and amended and  restated  as of April __,  1997 (the  "Credit  Agreement")
among the Borrower,  the Guarantors party thereto, the Lenders party thereto, as
Lenders, the issuing lenders party thereto, Morgan Guaranty Trust Company of New
York, as Administrative Agent and NationsBank, N.A., as Documentation Agent;

              WHEREAS, Term Loans made to the Borrower by the Assignor under the
Credit   Agreement  in  the  aggregate   principal  amount  of  $__________  are
outstanding at the date hereof;

              WHEREAS, as provided under the Credit Agreement,  the Assignor has
a  Revolving  Commitment  in the  amount of  $_______________,  under  which the
Assignor has outstanding Revolving Loans in the aggregate amount of $___________
at the date hereof;

              [WHEREAS,  the Assignor  proposes to assign to the Assignee all of
the rights of the Assignor  under the Credit  Agreement in respect of a pro-rata
portion of each of its Term Loans in an amount equal to  $__________  (the "Term
Assigned  Amount"),  and the Assignee proposes to accept such assignment of such
rights and assume the corresponding obligations from the Assignor;]

              [WHEREAS,  the Assignor  proposes to assign to the Assignee all of
the rights of the Assignor under the Credit Agreement in respect of a portion of
its  Revolving  Commitment  in an amount equal to  $__________  (the  "Revolving
Commitment Assigned Amount"),  together with a corresponding  portion of each of
its Revolving Loans, and the Assignee proposes to accept such assignment of such
rights and assume the corresponding obligations from the Assignor;]

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


<PAGE>

              SECTION 1.  Definitions.   All  capitalized  terms  not o therwise
defined  herein  shall  have the  respective  meanings  set forth in the  Credit
Agreement.

              SECTION 2.  Assignment.  [The Assignor hereby assigns and sells to
the Assignee all of the rights of the Assignor  under the Credit  Agreement with
respect  to its Term Loans to the extent of the Term  Assigned  Amount,  and the
Assignee hereby accepts such assignment from the Assignor and assumes all of the
obligations of the Assignor under the Credit Agreement to the extent of the Term
Assigned Amount,  including the purchase from the Assignor of a pro-rata portion
of the principal amount of each of the Term Loans of the Assignor outstanding at
the date hereof.] [The Assignor  hereby assigns and sells to the Assignee all of
the  rights of the  Assignor  under the  Credit  Agreement  with  respect to its
Revolving  Commitment to the extent of the Revolving Commitment Assigned Amount,
and the Assignee  hereby accepts such  assignment  from the Assignor and assumes
all of the obligations of the Assignor under the Credit  Agreement to the extent
of the Revolving  Commitment  Assigned  Amount,  including the purchase from the
Assignor of a pro-rata portion of the principal amount of each Revolving Loan of
the Assignor  outstanding  at the date  hereof.] Upon the execution and delivery
hereof by the Assignor,  the Assignee, the Borrower, the Administrative Agent [,
each  Issuing  Lender  and the Swing  Lender]  and the  payment  of the  amounts
specified  in Section 3 required to be paid on the date hereof [(i) the Assignee
shall, as of the date hereof,  succeed to the rights and be obligated to perform
the  obligations of a Lender under the Credit  Agreement with  outstanding  Term
Loans in an  aggregate  amount  equal to the Term  Assigned  Amount,  [(ii)  the
Assignee shall, as of the date hereof, succeed to the rights and be obligated to
perform the obligations of a Lender under the Credit  Agreement with a Revolving
Commitment in an amount equal to the Revolving  Commitment  Assigned Amount, and
(iii) the Revolving  Commitment of the Assignor shall, as of the date hereof, be
reduced by a like amount and the Assignor  released from its  obligations  under
the Credit  Agreement  to the extent such  obligations  have been assumed by the
Assignee].  The assignment  provided for herein shall be without recourse to the
Assignor.



<PAGE>
              SECTION 3.  Payments.  As  consideration  for  the  assignment and
sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on
the date hereof in Federal funds the amount  heretofore agreed between them.1 It
is understood  that  commitment  and/or facility fees accrued to the date hereof
are for the account of the Assignor and such fees  accruing  from and  including
the date hereof are for the account of the  Assignee.  Each of the  Assignor and
the  Assignee  hereby  agrees  that if it receives  any amount  under the Credit
Agreement  which is for the account of the other party hereto,  it shall receive
the same for the account of such other party to the extent of such other party's
interest therein and shall promptly pay the same to such other party.

              SECTION 4. Consent of the Borrower,  the Administrative  Agent and
the Issuing  Lenders.  This  Agreement  is  conditioned  upon the consent of the
Borrower,  the Administrative  Agent and each Issuing Lender pursuant to Section
10.06(c)  of the  Credit  Agreement.  The  execution  of this  Agreement  by the
Borrower,  the Administrative  Agent and each Issuing Lender is evidence of this
consent.  Pursuant  to Section  10.06(c),  the  Borrower  agrees to execute  and
deliver a Note payable to the order of the  Assignee to evidence the  assignment
and  assumption  provided for herein and the  Assignor  agrees to provide to the
Borrower the Note so assigned marked cancelled.

              SECTION  5.  Non-Reliance  on  Assignor.  The  Assignor  makes  no
representation  or warranty in connection with, and shall have no responsibility
with  respect  to, the  solvency,  financial  condition,  or  statements  of any
Obligor, or the validity and enforceability of the obligations of any Obligor in
respect of the Credit Agreement or any Note. The Assignee  acknowledges  that it
has,  independently  and  without  reliance on the  Assignor,  and based on such
documents  and  information  as it has deemed  appropriate,  made its own credit
analysis  and  decision  to enter into this  Agreement  and will  continue to be
responsible  for making its own independent  appraisal of the business,  affairs
and financial condition of the Obligors.

              SECTION 6.  Governing Law.  This  Agreement  shall  be governed by
and construed in accordance with the laws of the State of New York.

              SECTION  7.  Counterparts.  This  Agreement  may be  signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.


           1 Amount should combine  principal  together with accrued interest
     and breakage  compensation,  if any, to be paid by the Assignee, net of any
     portion of any upfront fee to be paid by the Assignor to the  Assignee.  It
     may  be  preferable  in  an  appropriate  case  to  specify  these  amounts
     generically or by formula rather than as a fixed sum.

<PAGE>


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


                               [NAME OF ASSIGNOR]


                                By_________________________
                                  Name:
                                  Title:


                               [NAME OF ASSIGNEE]


                                By__________________________
                                  Name:
                                  Title:


                                EXIDE ELECTRONICS GROUP, INC.


                                By__________________________
                                  Name:
                                  Title:


                                MORGAN GUARANTY TRUST COMPANY
                                 OF NEW YORK, as Administrative Agent


                                By__________________________
                                  Name:
                                  Title:


                                [ISSUING LENDER(S)], as Issuing Lender


                                By__________________________
                                  Name:
                                  Title:


<PAGE>

                       FORM OF BORROWING BASE CERTIFICATE


          I, ________________, the ____________ of EXIDE ELECTRONICS GROUP, INC.
(the "Borrower"), DO HEREBY CERTIFY, pursuant to the Credit Agreement originally
dated as of March 13,  1996 and  amended  and  restated as of April __, 1997 (as
amended  from time to time,  the "Credit  Agreement")  among the  Borrower,  the
Guarantors party thereto, the Lenders referred to therein, Morgan Guaranty Trust
Company  of  New  York,  as  Administrative  Agent  and  NationsBank,  N.A.,  as
Documentation  Agent,  that attached  hereto as Exhibit A is a true and accurate
calculation of the Borrowing Base of Borrower as of __________, 19__, determined
in accordance with the requirements of the Credit Agreement.

          Capitalized  terms used herein and not otherwise  defined  herein have
the meanings assigned to them in the Credit Agreement.

          IN WITNESS WHEREOF,  I have signed this certificate as of this ___ day
of ____________, 19__.




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



<PAGE>


                                    Exhibit A
                                       to

                           BORROWING BASE CERTIFICATE


                           (all numbers in thousands)

                            As at ____________, 19__


          ************************************************************



ACCOUNTS RECEIVABLE


Gross Accounts Receivable of the Borrower
and its Consolidated Subsidiaries                    ________

Less:

(a)      Receivables for which have
         been established a contra
         account, but only to the
         extent of such account                      ________

(b)      Receivables subject to a Lien
              pursuant to a Permitted
              Receivables Financing                  ________

     (c) Receivables against which a
              reserve has been taken                 ________



Total Eligible Receivables                                    $_________



ELIGIBLE RECEIVABLES                                 $________ X 70% = _________
                                                                       ---------


<PAGE>


INVENTORY

     Value (determined
     on a basis consistent
     with that used in the
     preparation of the financial
     statements referred to in
         Section 4.04(a) of the Credit
     Agreement) of all
     Inventory owned by the
     Borrower and its Consolidated
     Subsidiaries                                    _________

         Less:

     (a) Inventory that is subject
                      to a Lien (other than
                      Liens created pursuant to
                      the Loan Documents)            _________

     (b) Inventory against which
                      a reserve has been taken       _________

     (c) Inventory for which has
                      been established a contra
                      account, but only to the
                      extent of such account         _________


Total Eligible Inventory                                              $_________


ELIGIBLE INVENTORY                                 $_________ X 50% = $_________



BORROWING BASE TOTAL                               $_________

REVOLVING LOANS OUTSTANDING                        $_________


<PAGE>


                               GUARANTOR ADDENDUM

                          (ADDENDUM TO LOAN DOCUMENTS)


              ADDENDUM  dated  as of  ____________,  ____  to  CREDIT  AGREEMENT
originally  dated as of March 13, 1996 and amended and  restated as of April __,
1997 (as amended and  supplemented  from time to time,  the "Credit  Agreement")
entered  into  among  Exide  Electronics  Group,  Inc.  (the  "Borrower"),   the
Guarantors  party thereto,  the lenders  listed on the signatory  pages thereof,
NationsBank,  N.A. as  Documentation  Agent and MORGAN GUARANTY TRUST COMPANY OF
NEW YORK as  Administrative  Agent for the Lenders referred to therein (together
with its successors in such capacity,  the "Agent").  Capitalized terms used but
not defined herein are used as defined in the Credit Agreement.

              [Name  of new  Guarantor]  (the  "New  Guarantor"),  has  become a
Subsidiary of the Borrower, and the New Guarantor and the Company wish to comply
with the terms of the Credit  Agreement  referred to therein.  The New Guarantor
accordingly agrees as follows:

              1. The New Guarantor hereby agrees that it is (and hereby becomes)
a  "Guarantor"  party to the  Credit  Agreement  and an  "Obligor"  party to the
Security  Agreement,  in each case for all  purposes  as though a  Guarantor  or
Obligor (as the case may be) originally signatory thereto.

              2.  Without limitation of the foregoing:

              (a)  In  order  to  secure  the  full  and  punctual  payment  and
performance of the Secured Obligations in accordance with the terms thereof, the
New Guarantor  hereby grants to the Agent for the ratable benefit of the Secured
Parties (as defined in the Security Agreement) a continuing security interest in
and to all of the Collateral  (as defined in the Security  Agreement) of the New
Guarantor.



<PAGE>


              (b) The New Guarantor hereby  unconditionally  guarantees the full
and  punctual  payment  (whether  at  stated  maturity,   upon  acceleration  or
otherwise)  of the principal of and interest on each Note and the full amount of
all Letter of Credit  Liabilities under the Credit  Agreement,  and the full and
punctual  payment  of all other  amounts  payable by the  Borrower  or any other
Obligor under the Loan  Documents,  [including  without  limitation all interest
accruing  before and after the  commencement  of any  bankruptcy,  insolvency or
similar  proceedings,  whether or not  allowed or  allowable  as a claim in such
proceedings].  Upon  failure  by  the  Borrower  or  any  other  Obligor  to pay
punctually any such amount,  each Guarantor agrees jointly and severally that it
shall  forthwith  on demand  pay the  amount not so paid at the place and in the
manner specified in the Credit Agreement or the other Loan Documents.


              (c)  The New Guarantor represents that:

              (i) The New Guarantor has been duly organized, is validly existing
     as a corporation, limited liability company or other business entity and is
     in good standing under the laws of its jurisdiction of  organization,  with
     full corporate or other entity powers to carry on its business as presently
     conducted.

         (ii) The  execution,  delivery and  performance by the New Guarantor of
     this  Addendum and each other Loan Document to which the New Guarantor is a
     party are within the New Guarantor's corporate or other entity powers, have
     been duly  authorized  by all necessary  corporate or other entity  action,
     require no action by or in respect  of, or filing  with,  any  governmental
     body,  agency or official and do not  contravene,  or  constitute a default
     under,  any provision of applicable law or regulation or of the certificate
     of  organization  or  by-laws  of the New  Guarantor  or of any  agreement,
     judgment,  injunction,  order,  decree or other instrument binding upon the
     New  Guarantor or result in the creation or  imposition  of any Lien on any
     asset of the New Guarantor or any of its Subsidiaries.

        (iii)  This  Addendum  and each  other  Loan  Document  to which the New
     Guarantor is a party  constitutes a valid and binding  agreement of the New
     Guarantor,  enforceable  in  accordance  with its  terms  except as (i) the
     enforceability  hereof may be limited by bankruptcy,  insolvency or similar
     laws affecting  creditors' rights generally and (ii) rights of acceleration
     and the  availability  of  equitable  remedies  may be limited by equitable
     principles of general applicability.



<PAGE>


              IN WITNESS WHEREOF,  the New Guarantor has caused this Addendum to
be duly  executed  by its duly  authorized  officer as of the day and year first
above written.


                             [NAME OF NEW GUARANTOR]



                             By____________________________
                              Title:



Accepted and Acknowledged as of the date first written above:

MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
  as Administrative Agent



                             By___________________________
                              Title