AMENDED AND RESTATED
                         REVOLVING LOAN,
                   LETTER OF CREDIT FACILITY AND
              FOREIGN EXCHANGE FACILITIES AGREEMENT


    AGREEMENT  made as of September  27,  1996 by and between  Mestek,  Inc., a
Pennsylvania  corporation  having a principal place of business at 260 North Elm
Street,   Westfield,   Massachusetts  01085  (hereinafter  referred  to  as  the
"Borrower"),  and  BayBank,  N.A.,  a  national  banking  association,  having a
principal place of business at 175 Federal Street,  Boston,  Massachusetts 02110
(hereinafter  referred to as the "Bank")  amends and restates in its entirety an
Amended and  Restated  Loan  Agreement,  Letter of Credit  Facility  and Foreign
Exchange  Facilities  Revolving  Loan  Agreement  and Letter of Credit  Facility
originally dated December 20, 1995.

    In consideration of the mutual covenants herein  contained,  it is agreed as
follows:

         1.   DEFINITIONS AND ACCOUNTING TERMS.

         1.1.  Defined Terms.  As used in this Agreement, the
    following terms have the following meanings (terms defined
    in the singular to have the same meaning when used in the
    plural and vice versa):

         "Affiliate" means any Person (1) which directly or indirectly controls,
    or is  controlled  by, or is under  common  control  with the  Borrower or a
    Subsidiary; (2) which directly or indirectly beneficially owns or holds five
    percent  (5%) or more of any class of voting  stock of the  Borrower  or any
    Subsidiary; or (3) five percent (5%) or more of the voting stock of which is
    directly  or  indirectly  beneficially  owned or held by the  Borrower  or a
    Subsidiary. The term "control" means the possession, directly or indirectly,
    of the power to direct or cause the direction of the management and policies
    of a  Person,  whether  through  the  ownership  of  voting  securities,  by
    contract, or otherwise.

         "Agreement" means this Amended and Restated Revolving
    Loan , Letter of Credit Facility and Foreign Exchange
    Facilities Agreement, as amended, supplemented, or modified
    from time to time.

         "Back-Up L/C Demand Note" shall have the meaning  assigned to such term
    in Section 2.14.

         "Business  Day" means any day other than a Saturday,  Sunday,  or other
    day on which commercial banks in Massachusetts are authorized or required to
    close  under  the laws of The  Commonwealth  of  Massachusetts  and,  if the
    applicable  day relates to a LIBOR Loan,  LIBOR Interest  Period,  or notice
    with respect to a LIBOR Loan, a day on which dealings in Dollar deposits are
    also  carried  on in the  London  interbank  market  and  banks are open for
    business in London.

         "Capitalization" means, as of the date of any
    determination thereof, the sum of (i) Consolidated Funded
    Debt and (ii) Consolidated Net Worth.

         "Capital Lease" or  "Capitalized  Lease" means any lease the obligation
    for rentals with respect to which have been or should be  capitalized on the
    balance sheet of the lessee in accordance with GAAP.

         "Capitalized  Rentals" means, as of the date of any determination,  the
    amount  at which  the  aggregate  Rentals  due and to  become  due under all
    Capitalized Leases of which the Borrower or any Subsidiary is a lessee would
    be  reflected  as a  liability  on the  consolidated  balance  sheet  of the
    Borrower and its Subsidiaries.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
    time and the regulations and published interpretations thereof.

         "Commitment" shall have the meaning set forth in
    Section 2.1 below.

         "Commonly   Controlled   Entity"  means  an  entity,   whether  or  not
    incorporated,  which is under common  control  with the Borrower  within the
    meaning of Section 414(b) or 414(c) of the Code.

         "Consolidated  Current Assets" and "Consolidated  Current  Liabilities"
    means such assets and liabilities of the Borrower and its  Subsidiaries on a
    consolidated  basis  as shall  be  determined  in  accordance  with  GAAP to
    constitute current assets and current liabilities respectively.

         "Consolidated  Net Income" for any period  means the gross  revenues of
    the  Borrower  and its  Subsidiaries  for such period less all  expenses and
    other  proper  charges   (including  taxes  on  income),   determined  on  a
    consolidated  basis in accordance with GAAP  consistently  applied and after
    eliminating   earnings  or  losses  attributable  to  outstanding   Minority
    Interests, but excluding in any event:

              (a) any  gains  or  losses  on the sale or  other  disposition  of
         investments or fixed or capital assets,  and any taxes on such excluded
         gains and any tax  deductions  or credits  on account of such  excluded
         losses;

              (b)  the proceeds of any life insurance policy;

              (c)  net earnings and losses of any Subsidiary
         accrued prior to the date it became a Subsidiary;

              (d) net  earnings  and  losses of any  corporation  (other  than a
         Subsidiary),  substantially  all the assets of which have been acquired
         in any manner,  realized by such other corporation prior to the date of
         such acquisition;

              (e) net  earnings  and  losses of any  corporation  (other  than a
         Subsidiary)  with  which  the  Borrower  or  a  Subsidiary  shall  have
         consolidated  or which shall have merged into or with the Borrower or a
         Subsidiary prior to the date of such consolidation or merger;

              (f) net earnings of any business  entity (other than a Subsidiary)
         in which the  Borrower  or any  Subsidiary  has an  ownership  interest
         unless such net earnings have been actually received by the Borrower or
         the Subsidiary in the form of cash distributions;

              (g)  any portion of the net earnings of any
         Subsidiary which for any reason is unavailable for
         payment of dividends to the Borrower or any other
         Subsidiary;

              (h)  earnings resulting from any reappraisal,
         revaluation or write-up of assets;

              (i) any  deferred or other credit  representing  any excess of the
         equity in any  Subsidiary at the date of  acquisition  thereof over the
         amount invested in such Subsidiary;

              (j)  any gain arising from the acquisition of any
         Securities of the Borrower or any Subsidiary; and

              (k) any reversal of any contingency reserve,  except to the extent
         that provision for such  contingency  reserve shall have been made from
         income arising during such period.

         "Consolidated  Net  Tangible  Assets"  means,  as of  the  date  of any
    determination  thereof,  the total  amount of all assets of the Borrower and
    its Subsidiaries (less depreciation, depletion and other properly deductible
    valuation  reserves)  after deducting (i) all items which in accordance with
    GAAP would be  included  on the  liability  side of a  consolidated  balance
    sheet,  except  capital stock (less  treasury  stock),  surplus and retained
    earnings,  deferred  taxes and  funded  debt,  and (ii)  goodwill,  patents,
    tradenames,  trademarks,   copyrights,  franchises,   experimental  expense,
    organization expense, unamortized debt discount and expense, deferred assets
    other than prepaid insurance and prepaid taxes, the excess of cost of shares
    acquired over book value of the related  assets and such other assets as are
    properly classified as "intangible assets" in accordance with GAAP.

         "Consolidated  Net Worth"  means,  as of the date of any  determination
    thereof,  the aggregate  amount of the capital stock (less treasury  stock),
    surplus and retained  earnings of the Borrower  and its  Subsidiaries  after
    deducting  Minority  Interests to the extent  included in the capital  stock
    accounts of the Borrower,  all as determined on a consolidated  basis by the
    Borrower and its Subsidiaries.

         "Current Debt" of any person means all  Indebtedness for money borrowed
    other than Funded Debt.

         "Default"  means any of the events  specified  in Section 9, whether or
    not any requirement for the giving of notice, the lapse of time, or both, or
    any other condition, has been satisfied.

         "Dollars" and the sign "$" mean lawful money of the
    United States of America.

         "ERISA" means the Employment Retirement Income Security Act of 1974, as
    amended from time to time, and the regulations and published interpretations
    thereof.

         "Event of  Default"  means any of the  events  specified  in Section 9,
    provided that any requirement  for the giving of notice,  the lapse of time,
    or both, or any other condition, has been satisfied.

         "Eurocurrency  Reserve  Requirement"  means, for any LIBOR Loan for any
    Interest  Period  therefor,  the daily  average of the stated  maximum  rate
    (expressed  as  a  decimal)  at  which  reserves  (including  any  marginal,
    supplemental,  or emergency reserves), if any, are required to be maintained
    during  such  Interest  Period  under  Regulation  D  by  the  Bank  against
    "Eurocurrency  Liabilities"  (as  such  term is used  in  Regulation  D) but
    without  benefit or credit of proration,  exemptions,  or offsets that might
    otherwise  be available  to the Bank from time to time under  Regulation  D.
    Without  limiting  the effect of the  foregoing,  the  Eurocurrency  Reserve
    Requirement  shall reflect any other  reserves  required to be maintained by
    the Bank against (1) any category of liabilities  that includes  deposits by
    reference  to  which  the  LIBOR  Interest  Rate  for  LIBOR  Loans is to be
    determined;  or (2) any category of extension of credit or other assets that
    includes LIBOR Loans.

         "Foreign  Exchange  Facility"  or "FX  Facility"  means the facility or
    facilities described in Section 2.18 below.

         "Funded  Debt" of any Person  means (i) all  Indebtedness  for borrowed
    money or which has been  incurred  in  connection  with the  acquisition  of
    assets in each  case  having a final  maturity  of one or more than one year
    from the date of origin  thereof (or which is renewable or extendable at the
    option of the obligor for a period or periods of more than one year from the
    date of origin), excluding all payments in respect thereof that are required
    to be made  within  one year  from the date of any  determination  of Funded
    Debt, whether or not included in Consolidated Current Liabilities;  and (ii)
    all Capitalized Rentals.  "Consolidated" when used as a prefix to any Funded
    Debt shall mean the aggregate amount of such Funded Debt of the Borrower and
    its Subsidiaries on a consolidated basis eliminating intercompany items.

         "GAAP" means  generally  accepted  accounting  principles  consistently
    applied,  in accordance with financial reporting standards from time to time
    in effect among nationally  recognized  certified public accounting firms in
    the United  States,  including the  statements  and  interpretations  of the
    United States Financial Accounting Standards Board and any successor entity.

         "Indebtedness" of any Person means and includes all obligations of such
    Person which in accordance  with GAAP shall be classified on a balance sheet
    of such Person as liabilities of such Person, and in any event shall include
    all (i)  obligations  of such  Person for  borrowed  money or which has been
    incurred in  connection  with the  acquisition  of property or assets,  (ii)
    obligations  secured by any lien or other  charge  upon  property  or assets
    owned by such  Person,  even  though  such  Person has not assumed or become
    liable for the payment of such  obligations,  (iii)  obligations  created or
    arising under any conditional  sale or other title retention  agreement with
    respect to property acquired by such Person,  notwithstanding  the fact that
    the  rights  and  remedies  of the  seller,  lender,  or lessor  under  such
    agreement  in the event of default  are limited to  repossession  or sale of
    property,  (iv) all guaranties of payment or performance of any  obligations
    of others for borrowed  money,  or accrued as liabilities in accordance with
    GAAP, or as shown on Borrower's  financial  statements,  and (v) Capitalized
    Rentals  under  any  Capitalized   Lease.   For  purpose  of  computing  the
    "Indebtedness"  of  any  Person  there  shall  be  excluded  any  particular
    Indebtedness  to the extent  that,  upon or prior to the  maturity  thereof,
    there  shall have been  deposited  with the proper  depository  in trust the
    necessary  funds (or  evidences  of such  Indebtedness,  if permitted by the
    instrument  creating  such  Indebtedness)  for the  payment,  redemption  or
    satisfaction of such  Indebtedness;  and thereafter such funds and evidences
    of Indebtedness so deposited shall not be included in any computation of the
    assets of such Person.

         "Insolvent" The Borrower, its Subsidiaries or any other person shall be
    considered to be  "Insolvent"  when any of the  following  events shall have
    occurred whereby the Borrower or any of its Subsidiaries (a) shall generally
    not pay, or shall be unable to pay, or shall admit in writing its  inability
    to pay its debts as such debts  become due; or (b) shall make an  assignment
    for the benefit of  creditors,  or petition or apply to any tribunal for the
    appointment  of a custodian,  receiver,  or trustee for it or a  substantial
    part  of  its  assets;  or (c)  shall  commence  any  proceeding  under  any
    bankruptcy, reorganization,  arrangement, readjustment of debt, dissolution,
    or liquidation law or statute of any jurisdiction,  whether now or hereafter
    in effect;  or (d) shall have had any such petition or application  filed or
    any such  proceeding  commenced  against  it in which an order for relief is
    entered  or an  adjudication  or  appointment  is made,  and  which  remains
    undismissed  for a period of ninety (90) days or more; or (e) shall take any
    corporate action  indicating its consent to, approval of, or acquiescence in
    any such  petition,  application,  proceeding,  or order  for  relief or the
    appointment of a custodian,  receiver, or trustee for all or any substantial
    part  of its  properties;  or  (f)  shall  suffer  any  such  custodianship,
    receivership, or trusteeship to continue undischarged for a period of ninety
    (90) days or more.

         "Interest  Charges" for any period means all  interest  (including  the
    imputed   interest  factor  in  respect  of  Capitalized   Leases)  and  all
    amortization of debt discount and expense on any particular Indebtedness for
    which such calculations are being made.  Computations of Interest Charges on
    a proforma basis for Indebtedness  having a variable  interest rate shall be
    calculated at the rate in effect on the day of any determination.

         "Interest  Period"  means with  respect to any LIBOR  Loan,  the period
    commencing on the Business Day such loan is made and ending, as the Borrower
    may select,  pursuant to Section 2.2, on the  corresponding  day which is no
    more  than  twelve  months  thereafter  provided  that all of the  foregoing
    provisions relating to Interest Periods are subject to the following:

              (a)  No Interest Period may extend beyond the
         Termination Date without prior approval by the Bank;

              (b)  If an  Interest  Period  would  end  on a day  that  is not a
         Business  Day,  such  Interest  Period  shall be  extended  to the next
         Business Day unless such  Business Day would fall in the next  calendar
         month, in which event such Interest Period shall end on the immediately
         preceding Business Day;

              (c) If an Interest  Period is other than the typical  LIBOR market
         interest  period of 7, 14, 21, 30, 60, 90,  180,  270 or 360 days,  the
         Bank  will  nonetheless  facilitate  such  Borrower-requested  atypical
         Interest  Period,  utilizing  reasonable  extrapolation  methodology to
         establish the LIBOR Interest Rate for such Interest Period.

         "Lending Office" means the Bank's office at 1500 Main
    Street, Springfield, Massachusetts 01115.

         "Letter  of  Credit"  means any  documentary,  standby or other type of
    Letter of Credit  issued by the Bank for the account of the  Borrower or any
    Subsidiary as provided in Section 2.14 below.

         "Letter of Credit Facility" means the credit accommodation facility for
    the  issuance of Letters of Credit  being made  available to the Borrower or
    any of its Subsidiaries pursuant to Section 2.14 below.

         "LIBOR  Interest  Rate" means,  for each LIBOR Loan, the rate per annum
    (rounded upward, if necessary,  to the nearest 1/16 of 1%) determined by the
    Bank to be equal to the  quotient of (1) the London  Interbank  Offered Rate
    for  such  LIBOR  Loan  for  such  Interest  Period   utilizing   reasonable
    extrapolation methodology, if necessary,  depending upon the Interest Period
    selected by the Borrower divided by (2) one minus the  Eurocurrency  Reserve
    Requirement, if any, for such Interest Period.

         "LIBOR  Loan" means any Loan when and to the extent  that the  interest
    rate therefor is determined by reference to the LIBOR Interest Rate.

         "Lien" means any mortgage,  deed of trust,  pledge,  security interest,
    hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory
    or  other),  or  preference,   priority,  or  other  security  agreement  or
    preferential  arrangement,  charge,  or  encumbrance  of any kind or  nature
    whatsoever  (including,  without  limitation,  any conditional sale or other
    title retention agreement, any financing lease having substantially the same
    economic  effect as any of the  foregoing,  and the filing of any  financing
    statement  under  the  Uniform  Commercial  Code  or  comparable  law of any
    jurisdiction to evidence any of the foregoing).

         "Loan"  means a LIBOR or Prime Rate  Revolving  Line of Credit  Loan or
    Loans (or, after substitution at Borrower's election,  an Overnight Loan) or
    any  outstanding  reimbursement  obligation  under (i) the  Letter of Credit
    Facility as evidenced by the Back-Up L/C Demand Note or
    otherwise or (ii) the FX Facility as evidenced by the Back-Up FX Demand Note
described in Section 2.18 below.

         "Loan Documents"  means this Agreement,  the Notes, and other documents
    related to the transactions discussed in this Agreement.

         "London Interbank Offered Rate" applicable to any Interest Period for a
    LIBOR  Loan  means  the rate of  interest  per  annum  (rounded  upward,  if
    necessary,  to the nearest 1/16 of 1%) quoted on the applicable  page of the
    Daily  Telerate  Financing  Reporting  Service as the LIBOR Rate or Reuter's
    LIBOR page (or, if such reporting  services are no longer  provided,  at the
    LIBOR Rate published in comparable financial reporting services) offered for
    deposits in immediately available United States Dollars for a period of time
    comparable to the specified  Interest Period, at 11:00 a.m. (London time) on
    the Business Day which is two Business Days preceding the first Business Day
    of the requested LIBOR Loan for such Interest Period.

         "Minority  Interests"  means  any  shares  of stock  of any  class of a
    Subsidiary (other than directors' qualifying shares as required by law) that
    are not  owned  by the  Borrower  and or one or  more  of its  Subsidiaries.
    Minority   Interests   shall  be  valued  by  valuing   Minority   Interests
    constituting  preferred stock at the voluntary or involuntary  value of such
    preferred stock,  whichever is greater,  and by valuing  Minority  Interests
    constituting  common  stock  at  the  book  value  of  capital  and  surplus
    applicable thereto adjusted,  if necessary,  to reflect any changes from the
    book value of such common stock required by the foregoing  method of valuing
    minority interests in preferred stock.

         "Multiemployer Plan" means a Plan described in
    Section 4001(a)(3) of ERISA.

         "Net Income  Available for Fixed Charges"  means, as of the date of any
    determination  thereof,  the sum of the  following  for the twelve (12) full
    consecutive   calendar   months   immediately   preceding   such   date   of
    determination:

              (a)  Consolidated Net Income for such period;
         PLUS
              (b) Income  taxes and excess  profit  taxes paid or accrued by the
Borrower and its Subsidiaries on account of such  Consolidated Net Income during
such periods;
         PLUS
              (c) The sum of (i)  Interest  Charges in  respect of  Consolidated
Funded Debt  during said period  (whether or not paid or payable but only to the
extent deducted in computing  Consolidated  Net Income for such period) and (ii)
the aggregate rentals paid by the Borrower and its Subsidiaries under all leases
(other than Capitalized Leases) during such period.

         "Notes"  mean the  Revolving  Note,  the Back-Up L/C Demand  Note,  the
    Backup  Foreign  Exchange  Facility Note and any other notes executed by the
    Borrower in favor of the Bank from time to time.

         "Obligation"  and  "Obligations"  means  any  and all  liabilities  and
    obligations of the Borrower or any of its  Subsidiaries to the Bank of every
    kind and description, direct or indirect, absolute or contingent, primary or
    secondary,  due  or to  become  due,  now  existing  or  hereafter  arising,
    regardless of how they arise or by what agreement or instrument  they may be
    evidenced or whether evidenced by any agreement or instrument,  and includes
    (i)  obligations  to perform acts and refrain from taking  action as well as
    obligations to pay money, (ii) reimbursement  obligations of the Borrower or
    any  of  its  Subsidiaries   pursuant  to  any  documentation   executed  in
    conjunction  with or related to the  issuance  by the Bank of any Letters of
    Credit or Foreign Exchange Facilities, and (iii) guaranty obligations.

         "Overnight  Lending  Rate" means the rate  designated  as the Overnight
    Federal Funds Rate charged among  commercial  banks for overnight use of one
    million dollars or more and applicable and charged to the Bank as such.

         "Overnight  Loan"  means  any  Loan  when  and to the  extent  that the
    interest rate  therefor is determined by reference to the Overnight  Lending
    Rate.

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

         "Person" means an individual, partnership, corporation, business trust,
    joint stock  company,  trust,  unincorporated  association,  joint  venture,
    governmental authority, or other entity of whatever nature.

         "Plan" means any pension plan which is covered by Title IV of ERISA and
    in  respect of which the  Borrower  or a  Commonly  Controlled  Entity is an
    "employer" as defined in Section 3(5) of ERISA.

         "Prime  Loan" means any Loan when and to the extent  that the  interest
    rate therefor is determined by reference to the Prime Rate.

         "Prime Rate" means that rate announced from time to time by the Bank as
    its Prime Rate, which rate is not necessarily the lowest rate charged by the
    Bank to its customers.

         "Principal Office" means the Bank's office at 175
    Federal Street, Boston, Massachusetts.

         "Pro  Forma  Fixed   Charges"   shall  mean  as  of  the  date  of  any
    determination  thereof  the  sum of  (i)  Interest  Charges  in  respect  of
    Consolidated  Funded  Debt  (other  than  Funded  Debt then  proposed  to be
    retired) for the twelve full consecutive  calendar months period immediately
    preceding  such date of  determination,  plus (ii)  Interest  Charges on all
    Funded  Debt then  proposed  to be issued  for the twelve  full  consecutive
    calendar  months  after such date of  determination,  plus (iii) the maximum
    aggregate  Rentals  payable  during  any period of twelve  full  consecutive
    calendar months after such date of determination  and prior to July 15, 1997
    under all long-term  Leases under which the Borrower or a Subsidiary is then
    lessee.

         "Prohibited Transaction" means any transaction set forth in Section 406
    of ERISA or Section 4975 of the Code.

         "Regulation  D" means  Regulation  D of the Board of  Governors  of the
    Federal Reserve System as amended or supplemented from time to time.

         "Rentals"  means and  includes all fixed rents  (including  as such all
    payments  which the lessee is obligated to make to the lessor on termination
    of the  lease or  surrender  the  property)  payable  by the  Borrower  or a
    Subsidiary, as lessee or sublessee under lease of real or personal property,
    but shall be exclusive of any amounts required to be paid by the Borrower or
    a Subsidiary  (whether or not  designated as rents or  additional  rents) on
    account of maintenance, repairs, insurance, taxes and similar charges. Fixed
    rents under any so-called "percentage lease" shall be computed solely on the
    basis  of the  minimum  rents,  if any,  required  to be paid by the  lessee
    regardless of sales volume or gross revenues.

         "Reportable Event" means any of the events set forth in
    Section 4043 of ERISA.

         "Revolving Line of Credit Loan(s)" or "Revolving  Credit Loan(s)" shall
    have the meaning assigned to such terms in Section 2.1.

         "Revolving  Note"  shall  have the  meaning  assigned  to such  term in
    Section 2.4.

         "Security"  shall  have  the same  meaning  as in  Section  2(1) of the
    Securities Act of 1933, as amended.

         "Subsidiary(ies)"  means,  as to the Borrower,  a corporation  of which
    more than 80% (by number of votes) of shares of stock having ordinary voting
    power (other than stock having such power only by reason of the happening of
    a  contingency)  to elect a  majority  of the  board of  directors  or other
    managers of such  corporation  are at the time owned,  or the  management of
    which is otherwise  controlled,  directly or indirectly  through one or more
    intermediaries, or both, by the Borrower and/or by one or more Subsidiaries.

         "Termination  Date" means April 30, 1997,  but if the Revolving Line of
    Credit  Loan  is  extended  or  renewed,  at  the  Bank's  discretion,   the
    Termination  Date  shall  be  that  date  set  forth  by the  Bank as of the
    extension or renewal as the new Termination Date, or as otherwise determined
    by the Bank.

         1.2.  "Accounting Terms".  All accounting terms not
    specifically defined herein shall be construed in accordance
    with GAAP consistent with those applied in the preparation
    of the financial statements referred to in Section 5.3, and
    all financial data submitted pursuant to this Agreement
    shall be prepared in accordance with such principles.

    2.   AMOUNT AND TERMS OF LOAN.

         2.1.  Revolving  Line of  Credit.  The Bank  agrees,  on the  terms and
    conditions  hereinafter  set forth,  to make loans (the  "Revolving  Line of
    Credit  Loans") to the Borrower from time to time during the period from the
    date of this  Agreement up to but not including the  Termination  Date in an
    aggregate  principal  amount  not  to  exceed  outstanding,   at  any  time,
    Fifty-Five  Million  Dollars   ($55,000,000.00)  (the  "Commitment").   Each
    Revolving  Line of Credit  Loan  which is a LIBOR  Loan and which  shall not
    utilize  the  Commitment  in full  shall be in an amount  not less than Five
    Hundred Thousand Dollars  ($500,000.00) or multiples of One Hundred Thousand
    Dollars  ($100,000.00)  thereabove.  Prime Loans (or Overnight Loans,  after
    that method of interest  calculation has been substituted for the Prime Loan
    method) may be in any amount within the limits of the  Commitment and within
    such limits,  the Borrower  may borrow,  repay  pursuant to Section 2.7, and
    reborrow  under  this  Section  2.1.  On such  terms and  conditions  as are
    contained  herein,  the Loans may be  outstanding  as either Prime Loans (or
    Overnight  Loans,  after  that  method  of  interest  calculation  has  been
    substituted  for the Prime Loan  method) or LIBOR  Loans.  Each type of Loan
    shall be made and  maintained at the Bank's  Lending Office for such type of
    Loan.

         2.2.  Notice and Manner of  Borrowing;  Conversion  and  Renewals.  The
    Borrower may elect from time to time to initiate a Loan, to convert all or a
    part of a Prime  Loan (or  Overnight  Loan,  after that  method of  interest
    calculation  has been  substituted  for the Prime Loan  method) into a LIBOR
    Loan and vice  versa or to renew  all or part of a Loan by  giving  the Bank
    written, telefax or telegraphic notice (effective upon receipt) at least one
    (1) Business Day before the  initiation of or  conversion  into a Prime Loan
    (or  Overnight  Loan,  after that  method of interest  calculation  has been
    substituted  for the Prime Loan  method),  or at least two (2) Business Days
    before the  initiation  of,  conversion  into or  renewal  of a LIBOR  Loan,
    specifying (1) the initial,  renewal or conversion date of the Loan; (2) the
    amount of the Loan to be provided,  converted or renewed; (3) in the case of
    conversions,  a specification  that the Loan is to be converted from a Prime
    Loan (or Overnight Loan, after that method of interest  calculation has been
    substituted for the Prime Loan method) to a LIBOR Loan or vice versa, as the
    case  may  be;  and (4) in the  case of  initiations  of,  renewals  of or a
    conversion into LIBOR Loans, the duration of the Interest Period  applicable
    thereto;  provided  that  (a) the  minimum  principal  amount  of each  Loan
    outstanding  after an  initiation,  a  renewal  or  conversion  shall be One
    Hundred  Thousand  Dollars  ($100,000.00)  in the  case of Prime  Loans  (or
    Overnight  Loans,  after  that  method  of  interest  calculation  has  been
    substituted for the Prime Loan method),  and Five Hundred  Thousand  Dollars
    ($500,000.00)  or  One  Hundred  Thousand  Dollars  ($100,000.00)  multiples
    thereabove in the case of LIBOR Loans; and (b) LIBOR Loans can be renewed or
    converted  only as of the last day of the Interest  Period for such Loan. In
    the absence of Borrower  specifying the type of loan, advances made pursuant
    to any cash management arrangement between the Bank and the Borrower will be
    made as Prime  Loans (or  Overnight  Loans,  after that  method of  interest
    calculation has been substituted by Borrower for the Prime Loan method).

         All notices given under this Section 2.2 shall be irrevocable and shall
    be given not later than  11:00 a.m.  (EST) on the day which is not less than
    the number of Business Days specified above for such notice. If the Borrower
    shall fail to give the Bank the notice as specified above for the renewal or
    conversion  of a LIBOR Loan  prior to the end of the  Interest  Period  with
    respect  thereto,  such LIBOR Loan shall  automatically  be converted into a
    Prime Loan (or Overnight Loan, after that method of interest calculation has
    been  substituted  by Borrower for the Prime Loan method) on the last day of
    the Interest Period for such Loan.

         2.3.  Interest.  The Borrower shall pay interest to the
    Bank on the outstanding and unpaid principal amount of the
    Revolving Line of Credit Loans made under this Agreement at
    a rate per annum as follows:

              (1)(a)  For a Prime Loan at a rate equal to the
              Prime Rate less one percent (1.00%);

              or in  the  alternative  upon  Borrower's  election  prior  to the
              Termination  Date and upon payment of an annual fee of  $25,000.00
              prorated  for the  number  of days  outstanding  from  the date of
              Borrower's election to the Termination Date:

              (b) For an Overnight Loan at a rate equal to the Overnight Lending
              Rate  plus 75  basis  points.  At the  time of such  election  all
              existing Prime Loans shall be converted to Overnight Loans and the
              Prime Rate option shall not be available thereafter;

              (2) For a LIBOR  Loan at a rate equal to the LIBOR  Interest  Rate
              plus an amount  expressed  in terms of "basis  points" or whole or
              fractional    percentage    points   quoted   by   an   authorized
              representative  of  the  Bank,  based  upon  the  Interest  Period
              selected by the Borrower,  the amount of the requested LIBOR Loan,
              the market  conditions and the date of the request,  and confirmed
              in writing to Borrower on the  Business Day  following  Borrower's
              request for a LIBOR Loan or conversion to a LIBOR Loan.

         Any change in the interest rate based on the Prime Rate  resulting from
    a change in the Prime Rate shall be  effective as of the opening of business
    on the day on which such change in the Prime Rate becomes effective.

         Any change in the interest rate based on the Overnight  Rate  resulting
    from a change in the Overnight  Rate shall be effective as of the opening of
    business  on the day on which  such  change in the  Overnight  Rate  becomes
    effective.

         Interest on each Prime Loan,  or  Overnight  Loan,  as the case may be,
    shall be calculated on the basis of a year of 360 days for the actual number
    of days elapsed for any payment period. Interest on each LIBOR Loan shall be
    calculated  on the basis of a year of 360 days for the actual number of days
    elapsed for the Interest Period.

         Interest on the Loans shall be paid in immediately  available  funds at
    the Principal Office or the Lending Office for the account of the applicable
    Lending Office as follows:

              (1) For each Prime Loan, or Overnight Loan, as the case may be, on
         the first day of each month,  commencing  the first such day after such
         Loan and at maturity for such Loan, and

              (2)  For each LIBOR Loan, on the last day of the
         Interest Period with respect thereto and, in the case
         of an Interest  Period greater than one month,  at one-month  intervals
         after the first day of such Interest Period.

         Any principal amount not paid when due (at maturity, by acceleration or
    otherwise)  shall bear interest  thereafter  until paid in full,  payable on
    demand, at a rate per annum equal to:

              (a) For each Prime Loan at a rate equal to the Prime Rate plus one
         percent  (1%)(or,  after the  Overnight  Lending  Rate  method has been
         selected by the Borrower, then at a rate equal to the Overnight Lending
         Rate plus 275 basis points); and

              (b) For each LIBOR Loan at a rate equal to the LIBOR Interest rate
         plus  three  percent  (3%)  from  the time of  default  in  payment  of
         principal until the end of the then current  Interest Period  therefor,
         and thereafter at a rate equal to the Prime Rate plus one percent (1%).

         2.4. The Revolving  Line of Credit Note.  All Revolving  Line of Credit
    Loans made by the Bank  under  this  Agreement  shall be  evidenced  by, and
    repaid with interest in accordance with, a single promissory  Revolving Line
    of Credit Note (the "Revolving  Note") of the Borrower in substantially  the
    form of Exhibit A, duly  completed,  dated the date of this  Agreement,  and
    payable to the Bank,  such Revolving Note to represent the obligation of the
    Borrower to repay the  Revolving  Line of Credit  Loans.  The Bank is hereby
    authorized  by the  Borrower  to endorse  on the  schedule  attached  to the
    Revolving Note the amount and type of each Revolving Line of Credit Loan and
    each renewal,  conversion,  and payment of principal  amount received by the
    Bank for the  account  of the  applicable  Lending  Office on account of the
    Revolving Line of Credit Loans,  which endorsement  shall, in the absence of
    manifest error, be conclusive as to the outstanding balance of the Revolving
    Line of Credit Loans made by the Bank; provided,  however,  that the failure
    to make such notation  with respect to any Revolving  Line of Credit Loan or
    renewal,  conversion,  or payment  shall not limit or  otherwise  affect the
    obligations of the Borrower under this Agreement or the Revolving Note.

         On and after the Termination  Date, the unpaid  principal amount of the
    Revolving Note shall be repaid ON DEMAND.

         2.5.  Cross  Default.  A  material  default  in any of  the  terms  and
    conditions  of (i)  any  other  obligation  of  the  Borrower  to  the  Bank
    (including,   without   limitation,   any   guaranty   obligations   or  any
    reimbursement  obligations  arising  out of the Letter of Credit  Facility),
    shall  constitute a default in the  Revolving  Note,  the Back-Up L/C Demand
    Note, the Foreign Exchange  Facility Notes and any other  obligations of the
    Borrower to the Bank  whether  evidenced  by notes or  otherwise or (ii) the
    obligations   of  the  Borrower   under  any   Indebtedness   to  any  other
    institutional lender shall constitute a default hereunder.  A default in any
    of the terms and  conditions of the Revolving  Note,  the Back-Up L/C Demand
    Note, the Letter of Credit  Facility,  the Back-up Foreign Exchange Notes or
    the Foreign  Exchange  Facility shall constitute a default of this Agreement
    and  any  default  of this  Agreement  shall  constitute  a  default  of the
    Revolving Note, the Back-Up L/C Demand Note, the Letter of Credit  Facility,
    the Back-up Foreign Exchange Notes and the Foreign Exchange Facility.

         2.6. Use of Proceeds. The proceeds of the Loans hereunder shall be used
    by the Borrower (i) to refinance or retire  previously  incurred  debt,  and
    (ii) for working  capital and acquisition  purposes.  The Borrower will not,
    directly or  indirectly,  use any part of such  proceeds  for the purpose of
    purchasing  or carrying any margin stock within the meaning of  Regulation U
    of the Board of Governors of the Federal  Reserve System or to extend credit
    to any Person for the  purpose of  purchasing  or  carrying  any such margin
    stock,  or  for  any  purpose  which  violates,  or  is  inconsistent  with,
    Regulation X of such Board of Governors.

         2.7. Method of Payment. The Borrower shall make each payment under this
    Agreement and under the Revolving Note not later than 1:00 p.m. (EST) on the
    date  when due in  lawful  money  of the  United  States  to the Bank at its
    Principal Office or Lending Office for the account of the applicable Lending
    Office in immediately  available funds.  The Borrower hereby  authorizes the
    Bank, if and to the extent payment is not made when due under this Agreement
    or under the Revolving Note, to charge from time to time against any account
    of the Borrower with the Bank any amount so due.  Whenever any payment to be
    made under this  Agreement or under the Revolving Note shall be stated to be
    due on a day other than a Business  Day,  such payment  shall be made on the
    next succeeding  Business Day, and such extension of time shall in such case
    be included in the  computation  of the payment of interest  except,  in the
    case of a LIBOR  Loan,  if the result of such  extension  would be to extend
    such payment into another calendar month,  such payment shall be made on the
    immediately preceding Business Day.

         2.8. Prepayment. The Borrower may, with respect to Prime Loans only (or
    Overnight  Loans,  after  that  method  of  interest  calculation  has  been
    substituted  by Borrower for the Prime Loan  method),  upon at least one (1)
    Business Day's notice to the Bank,  prepay the Revolving Note in whole or in
    part with  accrued  interest  to the date of such  prepayment  on the amount
    prepaid. LIBOR Loans may not be prepaid.

         2.9.  Late Payment.  Any payment on the Loans received
    more than fifteen (15) days after its due date shall be
    subject to an additional charge of five percent (5.00%) of
    the periodic installment due.

         2.10.   Illegality.   Notwithstanding   any  other  provision  in  this
    Agreement,  if the  Bank  determines  that  any  applicable  law,  rule,  or
    regulation,  or any change therein,  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 the Bank (or its  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
    the Bank (or its Lending Office) to (1) maintain this credit facility,  then
    upon  notice  to the  Borrower  by  the  Bank  this  credit  facility  shall
    terminate;  or (2)  maintain  or fund LIBOR  Loans,  then upon notice to the
    Borrower by the Bank the  outstanding  principal  amount of the LIBOR Loans,
    together with interest accrued thereon, and any other amounts payable to the
    Bank under this  Agreement  shall be repaid or converted to a Prime Loan (or
    Overnight  Loans,  after  that  method  of  interest  calculation  has  been
    substituted  by Borrower  for the Prime Loan  method) (a)  immediately  upon
    demand of the Bank if such change or compliance  with such  request,  in the
    judgment of the Bank, requires immediate repayment; or (b) at the expiration
    of the last Interest  Period to expire before the effective date of any such
    change or request.

         2.11.  Disaster.  Notwithstanding anything to the
    contrary herein, if the Bank determines (which determination
    shall be conclusive) that:

              (1)  Quotations  of  interest  rates  for  the  relevant  deposits
         referred  to in the  definition  of LIBOR  Interest  Rate are not being
         provided in the  relevant  amounts or for the relative  maturities  for
         purposes  of  determining  the  rate of  interest  on a  LIBOR  Loan as
         provided in this Agreement; or

              (2) The relevant  rates of interest  referred to in the definition
         of LIBOR  Interest  Rate,  upon the basis of which the rate of interest
         for any such type of loan is to be determined do not  accurately  cover
         the cost to the Bank of making or maintaining such type of Loans;

    then the Bank shall forthwith give notice thereof to the Borrower, whereupon
    (a) the obligation of the Bank to make LIBOR Loans shall be suspended  until
    the Bank  notifies the Borrower that the  circumstances  giving rise to such
    suspension  no longer  exist;  and (b) the Borrower  shall repay in full, or
    convert to a Prime Loan in full, the then  outstanding  principal  amount of
    each LIBOR Loan together with accrued interest  thereon,  on the last day of
    the then current Interest Period applicable to such Loan.

         2.12.  Additional Costs;  Regulatory  Changes;  Capital  Adequacy.  The
    Borrower  shall pay to the Bank from time to time such  amounts  as the Bank
    may  reasonably  determine to be necessary  to  compensate  the Bank for any
    costs incurred by the Bank which the Bank determines are attributable to its
    making or maintaining any Loans hereunder or its obligation to make any such
    Loans hereunder, or any reduction in any amount receivable by the Bank under
    this  Agreement or the  Revolving  Note in respect of any such Loans or such
    obligation  (such  increases in costs and  reductions in amounts  receivable
    being herein called "Additional Costs"), resulting from any change after the
    date of this Agreement in U.S. federal, state, municipal, or foreign laws or
    regulations  (including  Regulation D), or the adoption or making after such
    date of any interpretations, directives, or requirements applying to a class
    of banks including the Bank of or under any U.S. federal,  state, municipal,
    or any foreign laws or regulations  (whether or not having the force of law)
    by any  court  or  governmental  or  monetary  authority  charged  with  the
    interpretation or administration  thereof ("Regulatory  Change");  which (1)
    changes the basis of taxation of any amounts  payable to the Bank under this
    Agreement or the Revolving  Note in respect of any of such Loans (other than
    taxes imposed on the overall net income of the Bank or of its Lending Office
    for any of such Loans by the jurisdiction where the Principal Office or such
    Lending Office is located); or (2) imposes or modifies any reserve,  special
    deposit, compulsory loan, or similar requirements relating to any extensions
    of credit or other assets of, or any deposits with or other  liabilities of,
    the Bank  (including  any of such Loans or any  deposits  referred to in the
    definition  of LIBOR  Interest  Rate);  or (3)  requires  an increase in the
    amount of capital  required or expected to be  maintained by the Bank or any
    entity  controlling the Bank, or (4) imposes any other  condition  affecting
    this Agreement or the Revolving Note (or any of such extensions of credit or
    liabilities). The Bank will notify the Borrower of any event occurring after
    the date of this  Agreement  which  will  entitle  the Bank to  compensation
    pursuant to this  Section 2.12 as promptly as  practicable  after it obtains
    knowledge  thereof  and  determines  to  request  such   compensation.   The
    provisions of this Section 2.12 however shall not be applied retrospectively
    or during  any LIBOR  Interest  Period in effect  when a  Regulatory  Change
    resulting in Additional Costs occurs.

         Determinations  by the Bank for  purposes of this  Section  2.12 of the
    effect of any Regulatory  Change on its costs of making or maintaining Loans
    after the date of notification of such Regulatory  Change by the Bank to the
    Borrower  or on amounts  receivable  by it in  respect of Loans,  and of the
    additional  amounts  required  to  compensate  the  Bank in  respect  of any
    Additional Costs, shall be conclusive, provided that such determinations are
    made on a reasonable basis.

         2.13.  Funding Loss Indemnification.  The Borrower
    shall pay to the Bank, upon the request of the Bank, such
    amount or amounts as shall be sufficient (in the reasonable
    opinion of the Bank) to compensate it for any loss, cost, or
    expense incurred as a result of:

         (1)  Any  payment  of a LIBOR Loan on a date other than the last day of
              the Interest Period for such Loan  including,  but not limited to,
              acceleration of the Loans by the Bank pursuant to Section 9; or

         (2)  Any failure by the Borrower to borrow or convert,  as the case may
              be, a LIBOR Loan on the date for borrowing or  conversion,  as the
              case may be,  specified in the  relevant  notice  provision  under
              Sections 2.2.

         2.14.  Letter of Credit Facility.  So long as no Default  hereunder has
    occurred, the Bank shall make available to the Borrower and its Subsidiaries
    a credit  facility (the "Letter of Credit  Facility")  whereby the Bank will
    issue up to an aggregate of Ten Million Dollars  ($10,000,000.00) of letters
    of  credit  (a  "Letter  of  Credit")  for  the  Borrower's  or  one  of its
    Subsidiaries'  account with an  expiration  date on any  specific  Letter of
    Credit no later than the Termination  Date, unless the Bank chooses to issue
    a Letter of Credit to expire  after the  Termination  Date.  The  individual
    Letters of Credit shall be issued in  accordance  with the Bank's  customary
    practices at the time of issuance,  utilizing  documentation  prevailing  at
    such times and,  if drawn upon,  amounts  paid  thereon  will be repaid upon
    demand by the Borrower (and, if applicable, its Subsidiary for whose account
    the Letter of Credit was  issued) in full  reimbursement  to the Bank of all
    such amounts drawn upon under any or all Letters of Credit, pursuant hereto,
    or to such additional  reimbursement  obligations as may be contained in any
    documentation  executed by the Borrower in conjunction  with the issuance of
    such Letter(s) of Credit.

         To the extent repayment of such amounts as are reimbursable to the Bank
    for such drawings against Letters of Credit is not immediately  made, and to
    the extent there is availability sufficient under the Commitment, the amount
    of such drawings shall be charged as Revolving Line of Credit Loans.  To the
    extent  there  is  insufficient  availability  under  the  Commitment,   the
    reimbursement obligations resulting from such drawings shall be evidenced by
    and  subject  to the  terms of a single,  master  back-up  demand  note (the
    "Back-Up L/C Demand Note") in the form attached hereto as Exhibit "B".

           This  Letter  of  Credit  Facility  will be made  available  to those
    Subsidiaries  of Borrower  listed in the attached  Exhibit "C" as well as to
    Borrower and Borrower's  reimbursement  obligations  described  herein shall
    apply  regardless  of whether  Borrower  or one of its  Subsidiaries  is the
    account party of a particular Letter of Credit.

         2.15.  Letter of Credit  Fees.  Whenever  a Letter of Credit is issued,
    extended  or  renewed  for  the  Borrower's  (or  one of its  Subsidiaries')
    account, a per annum fee of three quarters of one percent (.75%) of the face
    amount of the Letter of Credit shall be charged (the "Letter of Credit Fee")
    together with an issuance,  extension or renewal fee of Two Hundred  Dollars
    ($200.00)  covering  document  preparation  costs. An amendment fee of Forty
    Dollars ($40.00) per amendment and a drawing fee equal to the greater of (i)
    one eighth of one percent  (.125%) of the amount  drawn or (ii) Seventy Five
    Dollars  ($75.00),  payable if a draw  occurs,  constitute  additional  fees
    associated with the Letters of Credit.  If a Letter of Credit is returned to
    the Bank prior to twelve (12)  months from its date of issue,  the Bank will
    refund to the  Borrower the pro rata portion of the Letter of Credit Fee for
    that  period  of time  during  which  the  Letter  of Credit is no longer in
    effect.

         2.16.  Uniform  Customs and Practice.  The Uniform Customs and Practice
    for Documentary Credits (1993 Revision),  International  Chamber of Commerce
    Publication  No. 500, and any  subsequent  revisions  thereof  approved by a
    Congress of the International Chamber of Commerce and adhered to by the Bank
    (the "Uniform  Customs and Practice"),  shall be binding on the Borrower and
    the Bank except to the extent otherwise  provided  herein,  in any Letter of
    Credit or in any other credit document.  Anything in the Uniform Customs and
    Practice to the contrary notwithstanding:

              (a)  Neither the Borrower nor any beneficiary of
         any Letter of Credit shall be deemed an agent of the
         Bank.

              (b) With  respect to each  Letter of Credit,  neither the Bank nor
         its  correspondents  shall be responsible for or shall have any duty to
         ascertain:

                   (i)  the genuineness of any signature;

                   (ii)  the validity, form, sufficiency,
              accuracy, genuineness or legal effect of any
              endorsements;

                   (iii) delay in giving, or failure to give, notice of arrival,
              notice of refusal of documents or of  discrepancies  in respect of
              which the Bank refuses the documents or any other  notice,  demand
              or protest;

                   (iv)  the performance by any beneficiary
              under any Letter of Credit of such beneficiary's
              obligations to the Borrower;

                   (v)  inaccuracy in any notice received by the
              Bank;

                   (vi) the validity, form, sufficiency,  accuracy,  genuineness
              or legal effect of any  instrument,  draft,  certificate  or other
              document  required by such Letter of Credit to be presented before
              payment of a draft,  or the office held by or the authority of any
              Person signing any of same; or

                   (vii)  failure of any  instrument  to bear any  reference  or
              adequate  reference  to such  Letter of Credit,  or failure of any
              Person to note the amount of any instrument on the reverse of such
              Letter  of  Credit  or to  surrender  such  Letter of Credit or to
              forward documents in the manner required by such Letter of Credit;

              (c) the occurrence of any of the events referred to in the Uniform
         Customs and Practice or in the  preceding  clauses of this Section 2.16
         shall not affect or prevent the vesting of any of the Bank's  rights or
         powers hereunder or the Borrower's  obligation to make reimbursement of
         amounts  paid  under  any  Letter  of  Credit  or  any  draft  accepted
         thereunder.

              (d) The Borrower will  promptly  examine (i) each Letter of Credit
         (and  any  amendments  thereof)  sent to it by the  Bank  and  (ii) all
         instruments  and  documents  delivered  to it from  time to time by the
         Bank.  The Borrower will notify the Bank of any claim of  noncompliance
         by notice actually received within three Business Days after receipt of
         any of the foregoing documents,  the Borrower being conclusively deemed
         to have waived any such claims against the Bank and its  correspondents
         unless  such  notice is given.  The Bank  shall have no  obligation  or
         responsibility to send any such Letter of Credit or any such instrument
         or document to the Borrower.

              (e) In the event of any conflict  between the  provisions  of this
         Agreement and the Uniform Customs and Practice,  the provisions of this
         Agreement shall govern.

         2.17.  Subrogation.  Upon any  payment  by the Bank under any Letter of
    Credit  and  until  the  reimbursement  of the  Bank  by the  Borrower  (and
    appropriate  Subsidiary)  with  respect to such  payment,  the Bank shall be
    entitled to be  subrogated  to, and to acquire and retain,  the rights which
    the Person to whom such payment is made may have against the  Borrower,  all
    for the  benefit  of the  Bank.  The  Borrower  will  use  all  commercially
    reasonable  efforts to take such action as the Bank may reasonably  request,
    including  requiring the beneficiary of any Letter of Credit to execute such
    documents as the Bank may reasonably  request,  to assure and confirm to the
    Bank such subrogation and such rights,  including the rights, if any, of the
    beneficiary to whom such payment is made in accounts  receivable,  inventory
    and other properties and assets of any obligor.

         2.18. $2,200,000.00 Foreign Exchange Line. In addition to the Revolving
    Line of Credit and the Letter of Credit  Facility  established  hereby,  the
    Bank hereby  establishes a line of credit in Borrower's  favor in the amount
    of $2,200,000.00  (the  "$2,200,000.00  FX Facility") or as otherwise may be
    determined  by the Bank from time to time  which  line of credit may be used
    for the purchases of such foreign  currencies as may be hereafter  agreed to
    by the Bank  pursuant to  contracts  or other  agreements  to purchase  such
    currency  from the Bank (as  principal  or  agent)  (the  "Foreign  Exchange
    Contracts")  with  settlement  dates up to the  Termination  Date;  it being
    understood,  however,  that  the  Foreign  Exchange  Line  is  intended  for
    contracts  necessary for payments to suppliers  rather than for  speculative
    purposes. In the event that the Bank is required to advance funds on account
    of its  obligation (as  Borrower's  principal or agent) to purchase  foreign
    currency,  the Bank may charge Borrower's  account therefor and such charges
    shall be deemed to be advances made under the Revolving Line of Credit.

         To the extent there is insufficient  availability under the Commitment,
    the  reimbursement   obligations  resulting  from  such  drawings  shall  be
    evidenced  by and subject to the terms of a single,  master  back-up  demand
    note (the  "$2,200,000.00  Back-Up Foreign  Exchange  Facility Note") in the
    form attached hereto as Exhibit "D".

    3. CONDITIONS PRECEDENT. The obligation of the Bank to make a Revolving Line
of Credit  Loan,  issue a Letter of Credit or make a Foreign  Exchange  Facility
Loan  shall be  subject  to the  condition  precedent  that the Bank  shall have
received on or before the day of such transaction each of the following, in form
and substance satisfactory to the Bank and its counsel:

         3.1.  Execution of Notes.  The Notes duly executed by
    the Borrower.

         3.2.    Evidence   of   Borrower's    Authority   and   Incumbency   of
    Representatives.  Certified (as of the date of this Agreement) copies of all
    corporate action taken by the Borrower,  including  resolutions of its Board
    of Directors,  authorizing the execution,  delivery,  and performance of the
    Loan  Documents  to  which  it is a party  and  each  other  document  to be
    delivered  pursuant to this Agreement  together with a certificate (dated as
    of the date of this  Agreement)  of the Clerk or  Secretary  of the Borrower
    certifying  the names and true  signatures  of the  officers of the Borrower
    authorized  to sign the Loan  Documents to which it is a party and the other
    documents to be delivered by the Borrower under this Agreement.

         3.3.  Opinion.   A favorable opinion of counsel for the
    Borrower, dated the date of the Loan, in such form as is
    acceptable to the Bank and as to such other matters as the
    Bank may reasonable request.

         3.4.  Officer's Certificate, etc.  The following
    statements shall be true and the Bank shall have received a
    certificate signed by a duly authorized officer of the
    Borrower dated the date of the Loan stating that:

                   a)  The representations and warranties
              contained in Section 5 of this Agreement are
              correct on and as of the date of the Loan as
              though made on and as of such date; and

                   b)  No Default or Event of Default has
              occurred and is continuing, or would result from
              the making of the Loan.

         3.5.  Other Related Documents.  The Bank shall have
    received such other approvals, opinions, certificates or
    documents as the Bank may reasonably request.

    4.   PROMISE TO PAY.  Borrower promises to pay:

         4.1.  Obligations.  All Obligations of the Borrower to
    the Bank, including, but not limited to, the Obligations
    evidenced by the Notes of even date with interest at the
    rate set forth or in the manner determined in accordance
    with this Agreement and the Notes.

         4.2.  Taxes.  Any and all taxes,  charges and expenses of every kind or
    description  which are the binding and legal  obligations  of the  Borrower,
    paid or incurred by the Bank (after notice to the Borrower)  with respect to
    the loans or financial  accommodations made or the collection or realization
    upon the same,  together with interest thereon at the highest rate specified
    in Section 2.3 above.

    5.   REPRESENTATIONS AND WARRANTIES OF THE BORROWER.  To
induce the Bank to enter into this Agreement, the Borrower
represents and warrants as follows:

         5.1.  Corporate  Existence;  Authority;  Standing.  The  Borrower  is a
    corporation duly organized,  validly existing and in good standing under the
    laws of The Commonwealth of Pennsylvania.  Borrower has full corporate power
    to own its  properties  and conduct its  business as now  conducted,  and to
    enter into and perform this Agreement.  Borrower is in good standing in each
    jurisdiction in which the failure to qualify would have a material,  adverse
    effect upon its financial condition,  business or properties.  The execution
    and delivery of this Agreement, the Notes and all related documents has been
    duly authorized and evidence valid and binding obligations of the Borrower.

         5.2. Legally Enforceable Agreement.  This Agreement is, and each of the
    other Loan  Documents  when  delivered  under this Agreement will be, legal,
    valid,  and binding  obligations  of the Borrower in  accordance  with their
    respective terms,  except to the extent that such enforcement may be limited
    by  applicable  bankruptcy,  insolvency,  and other  similar laws  affecting
    creditors' rights generally.

         5.3. Financial Statements. The balance sheet of the Borrower and any of
    its Subsidiaries and the related  statements of income and retained earnings
    and cash flow of the  Borrower  and any of its  Subsidiaries  for the fiscal
    year then ended, and the accompanying  footnotes,  together with any interim
    financial statements of the Borrower and any of its Subsidiaries,  copies of
    which have been  furnished to the Bank,  are complete and correct and fairly
    present the financial  condition of the Borrower and any of its Subsidiaries
    as at such dates and the results of the  operations  of the Borrower and any
    of its  Subsidiaries  for the  periods  covered by such  statements,  all in
    accordance with GAAP consistently  applied (subject to year-end  adjustments
    in the case of the  interim  financial  statements),  and  there has been no
    material adverse change in the condition (financial or otherwise), business,
    or operations of the Borrower or any Subsidiary  since the  presentation  to
    the Bank of the most recently dated financial statements,  nor are there any
    liabilities of the Borrower or any  Subsidiary,  fixed or contingent,  which
    are material but are not  reflected in such  financial  statements or in the
    notes  thereto,  other than  liabilities  arising in the ordinary  course of
    business. No information, exhibit or report furnished by the Borrower to the
    Bank in connection  with the  negotiation  of this  Agreement  contained any
    material  misstatement  of fact or omitted  to state a material  fact or any
    fact  necessary  to make the  statement  contained  therein  not  materially
    misleading.

         5.4.  Labor  Disputes  and Acts of God.  Neither the  business  nor the
    properties  of the  Borrower  or any  Subsidiary  are  affected by any fire,
    explosion, accident, strike, lockout or other labor dispute, drought, storm,
    hail,  earthquake,  embargo,  act of God or of the  public  enemy,  or other
    casualty  (whether or not covered by  insurance),  materially  and adversely
    affecting  such  business  or  properties  or  the  operation  or  financial
    condition of the Borrower.

         5.5.  Other  Agreements.  Neither the Borrower nor any  Subsidiary is a
    party to any indenture,  loan or credit agreement,  or to any lease or other
    agreement or instrument,  or subject to any charter or corporate restriction
    which  could have a material  adverse  effect on the  business,  properties,
    assets,  operations, or conditions,  financial or otherwise, of the Borrower
    or any  Subsidiary,  or the  ability  of  the  Borrower  to  carry  out  its
    obligations  under the Loan  Documents  to which it is a party.  Neither the
    Borrower nor any  Subsidiary  is in default in any  material  respect in the
    performance,   observance,   or  fulfillment  of  any  of  the  obligations,
    covenants,  or conditions  contained in any agreement or instrument material
    to its business to which it is a party.

         5.6. Litigation. There is no pending or threatened action or proceeding
    against or  affecting  the  Borrower or any of its  Subsidiaries  before any
    court, governmental agency, or arbitrator,  which may, in any one case or in
    the  aggregate,   materially   adversely  affect  the  financial  condition,
    operations,  properties,  or business of the  Borrower or the ability of the
    Borrower to perform its obligations  under the Loan Documents to which it is
    a party.

         5.7.  No  Defaults.  The  Borrower  and each of its  Subsidiaries  have
    satisfied all  judgments,  and neither the Borrower nor any Subsidiary is in
    default with respect to any  judgment,  writ,  injunction,  decree,  rule or
    regulation of any court, arbitrator,  or Federal, state, municipal, or other
    governmental    authority,    commission,    board,   bureau,   agency,   or
    instrumentality, domestic or foreign.

         5.8. Subsidiaries.  Set forth in Exhibit "C" is a complete and accurate
    list of the  Subsidiaries  of the  Borrower,  showing  the  jurisdiction  of
    incorporation  of  each.  All  of  the  outstanding  capital  stock  of  any
    Subsidiary which is owned by Borrower has been validly issued, is fully paid
    and nonassessable, and is owned by the Borrower free and clear of all Liens.

         5.9. ERISA.  The Borrower and each of its  Subsidiaries are to the best
    of its knowledge in compliance in all material  respects with all applicable
    provisions of ERISA. Neither a Reportable Event nor a Prohibited Transaction
    has occurred and is continuing with respect to any Plan; no notice of intent
    to terminate a Plan has been filed,  nor has any Plan been  terminated,  the
    effect of either of which  would have a  material  adverse  effect  upon the
    Borrower; no circumstances exist which constitute grounds entitling the PBGC
    to institute proceedings to terminate, or appoint a trustee to administer, a
    Plan, nor has the PBGC instituted any such proceedings; neither the Borrower
    nor any Commonly  Controlled  Entity has  completely or partially  withdrawn
    from a Multiemployer Plan such that Borrower has any outstanding  withdrawal
    liability;  the Borrower and each Commonly  Controlled Entity have met their
    minimum funding  requirements under ERISA with respect to all of their Plans
    and the present value of all vested benefits under each Plan does not exceed
    the fair market  value of all Plan assets  allocable  to such  benefits,  as
    determined on the most recent  valuation  date of the Plan and in accordance
    with the  provisions  of ERISA;  and neither the  Borrower  nor any Commonly
    Controlled  Entity has incurred any outstanding  liability to the PBGC under
    ERISA.

         5.10. Operation of Business.  The Borrower and each of its Subsidiaries
    possess all licenses, permits, franchises, patents, copyrights,  trademarks,
    and trade names, or rights thereto,  to conduct their respective  businesses
    substantially  as now conducted  and as presently  proposed to be conducted,
    and the  Borrower  and any of its  Subsidiaries  are not in violation of any
    valid rights of others with respect to any of the foregoing  that would have
    a material adverse effect on Borrower.

         5.11.  Taxes. The Borrower and each of its Subsidiaries  have filed all
    tax returns  (Federal,  state, and local) required to be filed and have paid
    all taxes,  assessments,  and governmental  charges and levies thereon to be
    due,  including interest and penalties unless such taxes are being contested
    in good faith by appropriate  action with adequate  reserves  established on
    Borrower's financial statements.

         5.12. Debt. Set forth in the financial  statements  referred to in this
    Agreement, to the extent required by GAAP, is a complete and correct list of
    all credit agreements,  indentures, purchase agreements, guaranties, Capital
    Leases, and other  investments,  agreements,  and arrangements  presently in
    effect  providing  for  or  relating  to  extensions  of  credit  (including
    agreements  and  arrangements  for the  issuance of letters of credit or for
    acceptance  financing) in respect of which the Borrower or any Subsidiary is
    in any manner directly or contingently obligated;  and the maximum principal
    or face amounts of the credit in question,  which are  outstanding and which
    can be outstanding,  are correctly stated, and all Liens of any nature given
    or  agreed to be given as  security  therefor  are  correctly  described  or
    indicated in such financial statements.

         5.13.  Environment.  To the best of Borrower's knowledge,  the Borrower
    and each of its Subsidiaries  have duly complied with, and their businesses,
    operations, assets, equipment, property, leaseholds, or other facilities are
    in  compliance  with,  the  provisions  of all  Federal,  state,  and  local
    environmental,  health, and safety laws, codes and ordinances, and all rules
    and regulations promulgated thereunder. The Borrower and any Subsidiary have
    been issued (or have  applications  pending) and will  maintain all required
    Federal,  state, and local permits,  licenses,  certificates,  and approvals
    relating  to  (1)  air  emissions;   (2)  discharges  to  surface  water  or
    groundwater;  (3) noise emissions;  (4) solid or liquid waste disposal;  (5)
    the  use,  generation,  storage,  transportation,  or  disposal  of toxic or
    hazardous substances or wastes (intended hereby and hereafter to include any
    and all such materials  listed in any Federal,  state, or local law, code or
    ordinance, and all rules and regulations promulgated thereunder as hazardous
    or potentially  hazardous);  or (6) other  environmental,  health, or safety
    matters. Neither the Borrower nor any Subsidiary has received notice of, nor
    knows of, or suspects,  facts which might constitute any material violations
    of any Federal, state, or local environmental, health, or safety laws, codes
    or ordinances,  and any rules or  regulations  promulgated  thereunder  with
    respect  to  its  businesses,   operations,   assets,  equipment,  property,
    leaseholds,  or  other  facilities.   Except  in  accordance  with  a  valid
    governmental permit, license,  certificate,  or approval,  there has been no
    emission,  spill, release, or discharge into or upon (1) the air; (2) soils,
    or any improvements  located thereon;  (3) surface water or groundwater;  or
    (4) the sewer, septic system or waste treatment,  storage or disposal system
    servicing the premises, of any toxic or hazardous substances or wastes at or
    from the premises;  and  accordingly the premises of the Borrower and any of
    its  Subsidiaries  are free of all such  toxic or  hazardous  substances  or
    wastes. There has been no complaint,  order, directive,  claim, citation, or
    notice by any governmental authority or any person or entity with respect to
    (1)  air  emissions;   (2)  spills  releases,  or  discharges  to  soils  or
    improvements  located  thereon,  surface  water,  groundwater  or the sewer,
    septic system or waste treatment,  storage or disposal systems servicing the
    premises;  (3) noise emissions;  (4) solid or liquid waste disposal; (5) the
    use, generation, storage, transportation,  or disposal of toxic or hazardous
    substances or waste; or (6) other  environmental,  health, or safety matters
    affecting  the  Borrower or its  business,  operations,  assets,  equipment,
    property,  leaseholds, or other facilities.  Neither the Borrower nor any of
    its Subsidiaries have any indebtedness,  obligation, or liability,  absolute
    or  contingent,  matured  or not  matured,  with  respect  to  the  storage,
    treatment,  cleanup,  or disposal of any solid wastes,  hazardous wastes, or
    other toxic or hazardous  substances  (including without limitation any such
    indebtedness,   obligation,   or  liability  with  respect  to  any  current
    regulation, law, or statute regarding such storage,  treatment,  cleanup, or
    disposal).

    6.   AFFIRMATIVE COVENANTS.  So long as any Loan shall
remain unpaid or any credit accommodation or commitment remains
in effect hereunder, the Borrower will:

         6.1.  Maintenance of Existence.  Except as otherwise  permitted herein,
    preserve and maintain,  and cause each  Subsidiary to preserve and maintain,
    its  corporate  existence  and  good  standing  in the  jurisdiction  of its
    incorporation, and qualify and remain qualified, and cause any Subsidiary to
    qualify and remain qualified,  as a foreign corporation in each jurisdiction
    in which such qualification is required.

         6.2.  Maintenance of Records.  Keep, and cause each Subsidiary to keep,
    adequate  records and books of account,  in which  complete  entries will be
    made in accordance with GAAP consistently applied,  reflecting all financial
    transactions of the Borrower and any of its Subsidiaries.

         6.3. Maintenance of Properties.  Maintain,  preserve and keep, and will
    cause each Subsidiary to maintain,  preserve and keep, its properties  which
    are used or useful in the conduct of its business (whether owned in fee or a
    leasehold  interest) in good repair and working  order and from time to time
    will make all  necessary  repairs,  replacements,  renewals and additions so
    that at all times the efficiency thereof shall be maintained.

         6.4.  Conduct of Business.  Except as otherwise
    permitted herein, continue, and cause each Subsidiary to
    continue, to engage in an efficient and economical manner in
    a business of the same general type as conducted by it on
    the date of this Agreement.

         6.5. Maintenance of Insurance.  Maintain and will cause each Subsidiary
    to maintain,  insurance coverage by financially sound and reputable insurers
    in such  forms and  amounts  and  against  such risks as are  customary  for
    corporations  of  established  reputation  engaged  in the same or a similar
    business and owning and operating similar properties.

         6.6.  Compliance  With Laws.  Promptly pay and discharge and will cause
    each Subsidiary promptly to pay and discharge, all lawful taxes, assessments
    and  governmental  charges  or  levies  imposed  upon the  Borrower  or such
    Subsidiary,  respectively,  or upon or in  respect of all or any part of the
    property or business of the Borrower or such Subsidiary,  all trade accounts
    payable in  accordance  with usual and  customary  business  terms,  and all
    claims for work, labor or materials,  which if unpaid might become a lien or
    charge upon any  property of the Borrower or such  Subsidiary;  provided the
    Borrower  or such  Subsidiary  shall  not be  required  to pay any such tax,
    assessment,  charge,  levy,  account  payable or claim if (i) the  validity,
    applicability  or  amount  thereof  is  being  contested  in good  faith  by
    appropriate actions or proceedings which will prevent the forfeiture or sale
    of  any  property  of the  Borrower  or  such  Subsidiary  or  any  material
    interference  with the use thereof by the Borrower or such  Subsidiary,  and
    (ii) the Borrower or such Subsidiary shall set aside on its books,  reserves
    deemed by it to be adequate with respect thereto. The Borrower will promptly
    comply and will cause each Subsidiary to comply with all laws, ordinances or
    governmental rules and regulations to which it is subject, including without
    limitation,  the  Occupational  Safety  and  Heath Act of 1970,  ERISA,  the
    Americans with Disabilities Act and all laws, ordinances, governmental rules
    and  regulations  relating to  environmental  protection  in all  applicable
    jurisdictions,  the violation of which would materially and adversely affect
    the properties,  business,  prospects,  profits or condition of the Borrower
    and its Subsidiaries or would result in any lien or charge upon any property
    of the Borrower or any Subsidiary.

         6.7. Right of Inspection. At any reasonable time and from time to time,
    permit the Bank or any agent or  representative  thereof to examine and make
    copies of and abstracts  from the records and books of account of, and visit
    the  properties  of, the  Borrower  and any  Subsidiary,  and to discuss the
    affairs,  finances, and accounts of the Borrower and any Subsidiary with any
    of their  respective  officers and directors and the Borrower's  independent
    accountants.

         6.8.  Environment.  Be and remain,  and cause each Subsidiary to be and
    remain,  in compliance with the provisions of all federal,  state, and local
    environmental,  health, and safety laws, codes and ordinances, and all rules
    and regulations issued thereunder; notify the Bank immediately of any notice
    of a  hazardous  discharge  or  environmental  complaint  received  from any
    governmental  agency or any other party;  notify the Bank immediately of any
    hazardous discharge from or affecting its premises;  immediately contain and
    remove the same, in compliance  with all applicable  laws;  promptly pay any
    fine or penalty assessed in connection therewith, except such assessments as
    are being contested in good faith, against which adequate reserves have been
    established;  permit  the Bank to inspect  the  premises,  to conduct  tests
    thereon,  and to inspect all books,  correspondence,  and records pertaining
    thereto; and at the Bank's request, and at the Borrower's expense, provide a
    report of a qualified environmental engineer mutually acceptable to the Bank
    and the Borrower,  satisfactory in scope, form, and content to the Bank, and
    such other and further assurances  reasonably  satisfactory to the Bank that
    the condition has been corrected.

         6.9.  Place of  Business.  Promptly  notify  the Bank in writing of any
    addition to, change in, or  discontinuance of its place of business as shown
    in  this  subsection.  The  Borrower  has its  chief  executive  office  and
    principal  place  of  business  only at 260  North  Elm  Street,  Westfield,
    Massachusetts.

         6.10. Principal Depositary. Conduct its principal banking business with
    the Bank, including maintaining the Bank as its principal depository for its
    funds,  including  deposits  for payroll  taxes and income  taxes,  savings,
    certificates  of deposit,  general  demand deposit  account,  and such other
    accounts as may be permitted.

    7.   NEGATIVE COVENANTS.  So long as any Loan shall remain
unpaid or any credit accommodation or commitment remains in
effect hereunder, neither the Borrower nor any Subsidiary will:

         7.1.  Liens.  Create, incur, assume, or suffer to
    exist, or permit any Subsidiary to create, incur, assume, or
    suffer to exist, any Lien upon or with respect to any of its
    properties, now owned or hereafter acquired, except:

              7.1.1.  Liens in favor of the Bank;

              7.1.2.  Liens for taxes or assessments or other
         government charges or levies if not yet due and payable
         or, if due and payable, if they are being contested in
         good faith by appropriate proceedings and for which
         appropriate reserves are maintained;

              7.1.3.  Liens imposed by law, such as  mechanics',  materialmen's,
         landlords',  warehousemen's,  and  carriers'  Liens,  and other similar
         Liens, securing obligations incurred in the ordinary course of business
         which  are not past due for more  than  fifteen  (15) days or which are
         being contested in good faith by appropriate  proceedings and for which
         appropriate reserves have been established;

              7.1.4.  Liens under workers' compensation,
         unemployment insurance, Social Security, or similar
         legislation;

              7.1.5.  Liens,  deposits,  or pledges to secure the performance of
         bids,  tenders,  contracts  (other  than  contracts  for the payment of
         money), leases (permitted under the terms of this Agreement), public or
         statutory obligations,  surety, stay, appeal, indemnity, performance or
         other  similar  bonds,  or other  similar  obligations  arising  in the
         ordinary course of business;

              7.1.6. Judgment and other similar Liens arising in connection with
         court proceedings,  provided the execution or other enforcement of such
         Liens is effectively  stayed and the claims  secured  thereby are being
         actively contested in good faith and by appropriate proceedings;

              7.1.7. Easements,  rights-of-way,  restrictions, and other similar
         encumbrances which, in the aggregate,  do not materially interfere with
         the occupation, use, and enjoyment by the Borrower or any Subsidiary of
         the property or assets  encumbered  thereby in the normal course of its
         business  or  materially  impair  the  value  of the  property  subject
         thereto; and

              7.1.8.  Liens securing obligations of a Subsidiary
         to the Borrower or another Subsidiary.

              7.1.9.  Liens which the Borrower grants or assumes  pursuant to or
         by  reason  of any  merger,  stock  acquisition  or  asset  acquisition
         otherwise permitted hereby.

         7.2.  Indebtedness.  Create, incur, assume, or suffer
    to exist, or permit any Subsidiary to create, incur, assume,
    or suffer to exist, any Indebtedness, except:

              7.2.1.  Indebtedness of the Borrower under this
         Agreement or the Note;

              7.2.2.  Indebtedness of up to Forty Million
         Dollars ($40,000,000) excluding current liabilities
         except for the current portion of long-term debt, and
         other than Indebtedness to the Bank;

              7.2.3.  Indebtedness of the Borrower subordinated
         on terms satisfactory to the Bank to the Borrower's
         obligations under this Agreement and the Note; and

              7.2.4.  Accounts  payable to trade creditors for goods or services
         which are not aged more than one hundred and twenty (120) days from the
         billing date and current operating liabilities (other than for borrowed
         money)  which are not more than sixty (60) days past due,  in each case
         incurred in the ordinary  course of business,  as presently  conducted,
         and paid within the specified time,  unless contested in good faith and
         by appropriate proceedings.

              7.2.5.  Indebtedness  which Borrower assumes or which is otherwise
         includable as a liability on its financial statements pursuant to or by
         reason of any merger, stock acquisition or asset acquisition  otherwise
         permitted hereby.

         7.3.  Mergers, Etc.

              (a) (i) consolidate  with or be a party to a merger with any other
         corporation,  or (ii) sell,  lease or  otherwise  dispose of all or any
         substantial  part of the assets of the Borrower  and its  Subsidiaries,
         provided, however that:

              (1) any  Subsidiary  may  merge  or  consolidate  with or into the
              Borrower or any  wholly-owned  Subsidiary so long as in any merger
              or consolidation involving the Borrower, the Borrower shall be the
              surviving or continuing corporation;

              (2)  the  Borrower  may   consolidate  or  merge  with  any  other
              corporation  if  (i)  the  Borrower  shall  be  the  surviving  or
              continuing corporation,  (ii) at the time of such consolidation or
              merger  and after  giving  effect  thereto  no Default or Event of
              Default  shall have  occurred and be  continuing,  and (iii) after
              giving  effect to such  consolidation  or merger the Borrower on a
              consolidated  basis is in full  compliance  with the covenants set
              forth in Section 8.2 below.

              (3) any Subsidiary may sell, lease or otherwise  dispose of all or
              any  substantial  part  of  its  assets  to  the  Borrower  or any
              wholly-owned Subsidiary.

              (b) permit any  Subsidiary to issue or sell any shares of stock of
         any class (including as "stock" for the purpose of this Section 7.3 any
         warrants,  rights or options to purchase or otherwise  acquire stock or
         other  Securities  exchangeable  for  or  convertible  into  stock)  of
         Borrower or such Subsidiary to any Person other than
         the Borrower, a Subsidiary or to the  management-employees  of Borrower
         or a  Subsidiary,  except for the purpose of qualifying  directors,  or
         except in satisfaction of the validly pre-existing preemptive rights of
         minority  shareholders in connection with the simultaneous  issuance of
         stock to the Borrower  and/or a Subsidiary  whereby the Borrower and/or
         such  Subsidiary   maintain  their   proportionate   interest  in  such
         Subsidiary.

              (c)  sell, transfer or otherwise dispose of any
         shares of stock in any Subsidiary (except to qualifying
         directors  or  other  Subsidiaries  or  the  management-employees  of a
         Subsidiary) or any Indebtedness of any Subsidiary,  and will not permit
         any Subsidiary to sell, transfer or otherwise dispose of (except to the
         Borrower, a Subsidiary or the management-employees of a Subsidiary) any
         shares of stock or any  Indebtedness of any other  Subsidiary,  without
         the  consent of the Bank,  which will not be  unreasonably  withheld or
         delayed unless:

              (1) simultaneously with such sale, transfer,  or disposition,  all
              shares of stock and all  Indebtedness  of such  Subsidiary  at the
              time owned by the Borrower and by every other  Subsidiary shall be
              sold, transferred or disposed of as an entirety;

              (2) the Board of Directors of the Borrower shall have  determined,
              as evidenced by a resolution  thereof,  that the retention of such
              stock and  Indebtedness  is no longer in the best  interest of the
              Borrower;

              (3) such stock and Indebtedness is sold,  transferred or otherwise
              disposed  of to a Person,  for a cash  consideration  and on terms
              reasonably  deemed by the Board of  Directors  to be adequate  and
              satisfactory;

              (4) the Subsidiary being disposed of shall not have any continuing
              investment  in the  Borrower  or any  other  Subsidiary  not being
              simultaneously disposed of; and

              (5) such sale or other  disposition does not involve a substantial
              part (as  hereinafter  defined) of the assets of the  Borrower and
              its Subsidiaries.

         As used in this  Section  7.3 a sale,  lease  or other  disposition  of
    assets  shall be  deemed  to be a  "substantial  part" of the  assets of the
    Borrower and its Subsidiaries only (i) if the book value of such assets when
    added to the book  value of all  other  assets  sold,  leased  or  otherwise
    disposed of by the Borrower and its Subsidiaries (other than in the ordinary
    course of  business)  during the same  fiscal  year,  exceeds 33 1/3% of the
    Consolidated  Net  Tangible  Assets  of the  Borrower  and its  Subsidiaries
    determined as of the end of the immediately  preceding  fiscal year and (ii)
    the proceeds of such sale, lease or other  disposition are not reinvested in
    the purchase of assets of comparable  value.  Sales or other  realization on
    (i)  delinquent  receivables  and (ii) land held for  investment or disposal
    purposes  as of the date of this  Agreement  shall  not be  included  in any
    computation of sales or other dispositions hereunder.

         7.4.  Leases.

              (a)  become  obligated,  as lessee,  to any Person  other than the
         Borrower or a Subsidiary  or an  Affiliate  under any  long-term  Lease
         unless at the time of entering into any such long-term  Lease and after
         giving  effect  thereto,  the average of the Net Income  Available  for
         Fixed  Charges for any two of the three  immediately  preceding  fiscal
         years  shall  have been at least  250% of the  average of the Pro Forma
         Fixed  Charges for such two fiscal years and Net Income  Available  for
         Fixed  Charges for such two fiscal years and Net Income  Available  for
         Fixed Charges for the immediately preceding fiscal year shall have been
         at least 250% of Pro Forma Fixed Charges for such fiscal year.

              (b)  enter  into  any  arrangement  whereby  the  Borrower  or any
         Subsidiary shall sell or transfer any property owned by the Borrower or
         any  Subsidiary  to any Person  other than the Borrower or a Subsidiary
         and  thereupon  the  Borrower  or  Subsidiary  shall lease or intend to
         lease, as lessee, the same or substantially the same property.

         7.5. No Loans or  Investments.  Make any loans to or investments in any
    individual or entity,  other than in normal  course of business  without the
    prior approval of the Bank, which will not be unreasonably withheld;  except
    loans to or  investments  (i) in EAFCO,  Inc.,  (ii) in H.B.  Smith Company,
    Inc.,  (iii)  in  joint  ventures  to a  maximum  to  $10,000,000.00  in the
    aggregate and (iv) as otherwise  permitted herein or reasonably  approved by
    the Bank.

         7.6.  Guaranties,  Etc. Assume,  guaranty,  endorse, or otherwise be or
    become  directly  or  contingently  responsible  or  liable,  or permit  any
    Subsidiary to assume, guaranty,  endorse, or otherwise be or become directly
    or  contingently  responsible or liable  (including,  but not limited to, an
    agreement to purchase any obligation,  stock, assets, goods, or services, or
    to supply or advance any funds, assets, goods, or services of any person, or
    an agreement to maintain or cause such Person to maintain a minimum  working
    capital or net worth,  or  otherwise  to assure  the  creditors  of any such
    Person  against loss) for  obligations of any Person,  except  guaranties by
    endorsement of negotiable  instruments  for deposit or collection or similar
    transactions in the ordinary  course of business,  guaranties of obligations
    of a Subsidiary, or guaranties for the benefit of the Bank.

         7.7.   Transactions  With  Affiliates.   Enter  into  any  transaction,
    including,  without limitation,  the purchase, sale, or exchange of property
    or the  rendering  of  any  service,  with  any  Affiliate,  or  permit  any
    Subsidiary to enter into any transaction, including, without limitation, the
    purchase,  sale,  or exchange of property or the  rendering  of any service,
    with any  Affiliate,  except in the  ordinary  course of and pursuant to the
    reasonable  requirements of the Borrower's or such Subsidiary's business and
    upon fair and  reasonable  terms no less  favorable  to the Borrower or such
    Subsidiary than would obtain in a comparable arm's-length transaction with a
    Person not an Affiliate.

         7.8.  Dividends.

              (a) declare or pay any dividends,  either in cash or property,  on
         any shares of its capital stock of any class (except dividends or other
         distributions  payable  solely  in  shares  of  capital  stock  of  the
         Borrower); or

              (b) directly or indirectly,  or through any Subsidiary,  purchase,
         redeem or retire  any shares of its  capital  stock of any class or any
         warrants,  rights or options to  purchase  or acquire any shares of its
         capital stock (other than in exchange for or out of the net proceeds to
         the Borrower from the  substantially  concurrent issue or sale of other
         shares of capital stock of the Borrower or warrants,  rights or options
         to purchase or acquire any shares of its capital stock); or

              (c)  make any other payment or distribution,
         either directly or indirectly or through any
         Subsidiary, in respect of its capital stock;

(such  declarations  or  payments  of  dividends,   purchases,   redemptions  or
retirements of capital stock and warrants, rights or options, and all such other
distributions being herein collectively called "Restricted Payments"),  if after
giving effect  thereto the aggregate  amount of Restricted  Payments made during
the period from and after  December  31, 1990 to and  including  the date of the
making of the Restricted  Payment in question,  would exceed 50% of Consolidated
Net Income for such  period,  computed  on a  cumulative  basis for said  entire
period (or if such Consolidated Net Income is a deficit figure,  then minus 100%
of such deficit).

              (d) declare any dividend  which  constitutes a Restricted  Payment
         payable  more  than  sixty  (60)  days  after  the date of  declaration
         thereof.

         For the  purposes  of this  Section  7.8 the  amount of any  Restricted
Payment  declared,  paid or  distributed  in property of the  Borrower  shall be
deemed to be the greater of the book value or fair market  value (as  determined
in good faith by the Board of Directors of the Borrower) of such property at the
time of the making of the Restricted Payment in question.

    8. FINANCIAL COVENANTS. The following financial covenants may, at the Bank's
discretion,  be altered,  amended, or revised, prior to the Termination Date, to
reflect or address changes in Borrower's  Capitalization  and capital structure,
including its Funded Debt. So long as any Loan shall remain unpaid or any credit
accommodation or commitment remains in effect hereunder:

         8.1.  Reporting Requirements.  The Borrower and any of
    its Subsidiaries will furnish to the Bank:

              8.1.1.  Quarterly Statements.  As soon as
         available and in any event within 45 days after the end
         of each quarterly fiscal period (except the last) of
         each fiscal year, duplicate copies of:

                   (1)  consolidated  and  consolidating  balance  sheets of the
              Borrower  and its  Subsidiaries  as of the  close of such  quarter
              setting forth in comparative form the amount for the corresponding
              period of the preceding fiscal year,

                   (2) consolidated and  consolidating  statements of income and
              retained  earnings of the Borrower and its  Subsidiaries  for such
              quarterly period, setting forth in comparative form the amount for
              the corresponding period of the preceding fiscal year, and

                   (3) consolidated  statements of cash flow of the Borrower and
              its  Subsidiaries  of the  portion of the fiscal  year ending with
              such quarter, setting forth in comparative form the amount for the
              corresponding period of the preceding fiscal year,all in 
              reasonable detail and certified as complete and
              correct, by an authorized financial officer of the Borrower.

              8.1.2.  Annual Statements.  As soon as available
         and in any event within 105 days after the close of
         each fiscal year of the Borrower, duplicate copies of:

                   (1)  consolidated balance sheets of the
              Borrower and its Subsidiaries as of the close of
              such fiscal year, and

                   (2)  consolidated statements of income and
              retained earnings and cash flow of the Borrower
              and its Subsidiaries for such fiscal year,

         in each case setting forth in comparative form the consolidated figures
         for the preceding fiscal year, all in reasonable detail and accompanied
         by an opinion  thereon of a firm of independent  public  accountants of
         recognized  national  standing  selected by the  Borrower to the effect
         that the  consolidated  financial  statements  have  been  prepared  in
         accordance  with GAAP  consistently  applied  (except  for  changes  in
         application  in which such  accountants  concur) and present fairly the
         financial  condition of the Borrower and its  Subsidiaries and that the
         examination  of such  accountants  in  connection  with such  financial
         statements has been made in accordance with generally accepted auditing
         standards  and  accordingly,  includes  such  tests  of the  accounting
         records and such other auditing procedures as were considered necessary
         in the circumstances; and

              (3) a consolidating statement of the Borrower and its Subsidiaries
         prepared  by the  Borrower  in support of the  consolidated  statements
         referred to in clauses (1) and (2) above.

         The financial  statements  delivered pursuant to paragraphs (a) and (b)
    above  shall set forth the amounts  charged in each of the periods  involved
    for  depreciation,  interest  expense and Rentals  payable  under  long-term
    Leases;

              8.1.3.  Audit Reports.  Promptly upon receipt
         thereof, one copy of each interim or special audit made
         by independent accountants of the books of the Borrower
         or any Subsidiary;

              8.1.4.  SEC  and  Other  Reports.  Promptly  upon  their  becoming
         available,  one copy of each  financial  statement,  report,  notice or
         proxy statement sent by the Borrower to  stockholders  generally and of
         each  regular or periodic  report,  and any  registration  statement or
         prospectus  filed by the Borrower or any Subsidiary with any securities
         exchange or the  Securities  and Exchange  Commission  or any successor
         agency,  and  copies  of any  orders  in any  proceedings  to which the
         Borrower  or  any  of  its  Subsidiaries  is a  party,  issued  by  any
         governmental  agency,  Federal or state,  having  jurisdiction over the
         Borrower or any of its Subsidiaries;

              8.1.5.  Requested Information.  With reasonable
         promptness, such other data and information as the Bank
         may reasonably request;

              8.1.6.  Officers'  Certificates.  Within the  periods  provided in
         Sections  8.1.1  and  8.1.2  above,  a  certificate  of  an  authorized
         financial  officer of the  Borrower  stating  that he has  reviewed the
         provisions of this Agreement and setting forth: (i) the information and
         computations  (in  sufficient  detail)  required in order to  establish
         whether the Borrower was in compliance with the requirements of Section
         8.2.1 through 8.2.4, inclusive, at the end of the period covered by the
         financial  statements  then being  furnished,  and (ii)  whether  there
         existed as of the date of such financial statements and whether, to the
         best of his knowledge,  there exists on the date of the  certificate or
         existed  at any  time  during  the  period  covered  by such  financial
         statements  any Default or Event of Default and, if any such  condition
         or event exists on the date of the  certificate,  specifying the nature
         and period of  existence  thereof and the action the Borrower is taking
         and proposes to take with respect thereto;

              8.1.7.  Accountant's  Certificates.  Within the period provided in
         Sections 8.1.2 above, a certificate  of the  accountants  who render an
         opinion with respect to such  financial  statements,  stating that they
         have reviewed this  Agreement  and stating  further,  whether in making
         their audit, such accountants have become aware of any Default or Event
         of  Default  under any of the  terms or  provisions  of this  Agreement
         insofar  as  any  such  terms  or  provisions  pertain  to  or  involve
         accounting  matters or  determinations,  and if any such  condition  or
         event then  exists,  specifying  the  nature  and  period of  existence
         thereof;

              8.1.8.  Notice of  litigation.  Promptly  after  the  commencement
         thereof, notice of all actions, suits, and proceedings before any court
         or governmental  department,  commission,  board,  bureau,  agency,  or
         instrumentality,  domestic or foreign,  affecting  the  Borrower or any
         Subsidiary,  which,  if  determined  adversely  to the Borrower or such
         Subsidiary,  could  have a  material  adverse  effect on the  financial
         condition,   properties,   or   operations  of  the  Borrower  or  such
         Subsidiary;

              8.1.9.  Notice  of  Defaults  and  Events of  Default.  As soon as
         possible and in any event within five (5) days after the  occurrence of
         each Default or Event of Default,  a written  notice  setting forth the
         details of such  Default or Event of  Default  and the action  which is
         proposed to be taken by the Borrower with respect thereto;

              8.1.10.  ERISA  reports.  As soon as  possible,  and in any  event
         within thirty (30) days after the Borrower  knows or has reason to know
         that any circumstances exist that constitute grounds entitling the PBGC
         to  institute  proceedings  to  terminate a Plan  subject to ERISA with
         respect to the Borrower or any Commonly Controlled Entity, and promptly
         but in any  event  within  two  (2)  Business  Days of  receipt  by the
         Borrower  or any  Commonly  Controlled  Entity of notice  that the PBGC
         intends to  terminate  a Plan or appoint a trustee  to  administer  the
         same,  and promptly  but in any event within five (5) Business  Days of
         the Receipt of notice concerning the imposition of withdrawal liability
         (in excess of  $10,000.00  with respect to the Borrower or any Commonly
         Controlled  Entity, the Borrower will deliver to the Bank a certificate
         of the  chief  financial  officer  of the  Borrower  setting  forth all
         relevant  details and the action  which the  Borrower  proposes to take
         with respect thereto;

              8.1.11. Reports to other creditors.  Promptly after the furnishing
         thereof, copies of any statement or report furnished to any other party
         pursuant  to the  terms of any  indenture,  loan,  credit,  or  similar
         agreement  and not  otherwise  required  to be  furnished  to the  Bank
         pursuant to any other clause of this Section; and

         8.2.   Financial Covenants.  For purposes of the
    following financial covenants the Borrower and its
    Subsidiaries shall be treated on a consolidated basis, and
    all ratios, except as otherwise specified, will be tested on
    a quarterly basis:

              8.2.1.  Debt to Net Worth; Leverage Ratio.  The
         ratio of the Borrower's total Indebtedness and all
         other liabilities to its tangible Consolidated Net
         Worth shall be maintained at or less than 3.00 to 1.00:

              8.2.2.  Current Ratio.  The ratio of combined
         tangible Consolidated Current Assets of the Borrower to
         the combined Current Liabilities of the Borrower shall
         at all times be not less than 1.25 to 1.00.

              8.2.3.  Minimum Consolidated Net Worth.  At all
         times the Borrower will maintain Consolidated Net Worth
         at an amount not less than $75,000,000.

              8.2.4.  Working Capital.  At all times Borrower's
         Consolidated Current Assets shall exceed its
         Consolidated Current Liabilities by $25,000,000.00.

    9.   EVENTS OF DEFAULT.  If any of the following events
         shall occur:

         9.1.  The Borrower shall fail to pay the principal of,
    or interest on, the Notes or any other payment Obligations
    of Borrower to the Bank, or any amount of a commitment or
    other fee, as and when due and payable;

         9.2. Any representation or warranty made or deemed made by the Borrower
    in this  Agreement  or  which is  contained  in any  certificate,  document,
    opinion,  or financial or other statement  furnished at any time under or in
    connection  with any Loan  Document  shall  prove  to have  been  incorrect,
    incomplete,  or misleading in any material respect on or as of the date made
    or deemed made;

         9.3. The Borrower shall fail, after thirty (30) days of notice thereof,
    to perform or observe any term,  covenant,  or  agreement  contained  herein
    (other than  failure  under  Section 9.1 or 9.2 above for which no notice is
    required);

         9.4.  Dissolution, merger or consolidation of the
    Borrower (other than as permitted in this Agreement);

         9.5.  The  Borrower  or  any  of  its  Subsidiaries  shall,  after  the
    expiration of any applicable  notice or grace  periods,  (a) fail to pay any
    Indebtedness  for  borrowed  money to Persons  other  than the Bank,  or any
    interest  or premium  thereon,  when due  (whether  by  scheduled  maturity,
    required  prepayment,  acceleration,  demand, or otherwise),  or (b) fail to
    perform  or  observe  any term,  covenant,  or  condition  on its part to be
    performed or observed under any agreement or instrument relating to any such
    Indebtedness,  when  required to be performed or observed,  if the effect of
    such  failure  to perform  or  observe  is to  accelerate,  or to permit the
    acceleration  of after the giving of notice or passage of time, or both, the
    maturity  of such  Indebtedness,  whether or not such  failure to perform or
    observe  shall be waived by the  holder  of such  Indebtedness;  or any such
    Indebtedness  shall be  declared  to be due and  payable,  or required to be
    prepaid (other than by a regularly scheduled required prepayment),  prior to
    the stated maturity thereof;

         9.6.  The Borrower or any of its Subsidiaries shall
    become Insolvent (and, in the case of Insolvency of a
    Subsidiary, such Insolvency has a material adverse effect
    upon Borrower);

         9.7. One or more judgments, decrees, or orders for the payment of money
    in excess of One Hundred  Thousand  Dollars  ($100,000.00)  in the aggregate
    shall be rendered against the Borrower or any of its Subsidiaries,  and such
    judgments, decrees, or orders shall continue unsatisfied and in effect for a
    period of ninety (90)  consecutive  days without being vacated,  discharged,
    satisfied, or stayed or bonded pending appeal;

         9.8. This Agreement  shall at any time after its execution and delivery
    and for any reason cease to be in full force and effect or shall be declared
    null and void, or the validity or enforceability  thereof shall be contested
    by the Borrower,  or the Borrower shall deny it has any further liability or
    obligation under this Agreement;

         9.9. Any of the  following  events shall occur or exist with respect to
    the Borrower and any Commonly  Controlled Entity under ERISA: any Reportable
    Event shall occur;  complete or partial  withdrawal  from any  Multiemployer
    Plan shall take place; any Prohibited  Transaction  shall occur; a notice of
    intent to terminate a Plan shall be filed, or a Plan shall be terminated; or
    circumstances  shall exist which  constitute  grounds  entitling the PBGC to
    institute  proceedings to terminate a Plan, or the PBGC shall institute such
    proceedings; and in each case above, such event or condition,  together with
    all other events or  conditions,  if any,  could subject the Borrower to any
    tax,  penalty,  or other  liability  which in the  aggregate  may exceed One
    Hundred Thousand Dollars ($100,000.00);

then, and in any such event,  the Bank may,  notwithstanding  any time or credit
allowed by any instrument  evidencing a liability,  without notice or demand (i)
refuse  to make any  additional  advances  or Loans,  and/or  (ii)  declare  the
outstanding Note, all interest thereon, and all other amounts payable under this
Agreement  to be  forthwith  due and  payable,  whereupon  the  Note,  all  such
interest,  and all such amounts  shall become and be forthwith  due and payable.
Upon the occurrence and during the continuance of any Event of Default, the Bank
is hereby  authorized  at any time and from  time to time,  without  notice,  to
exercise  any or all of its rights and  remedies  provided in this  Agreement or
otherwise permitted by law, including all rights of set-off.

    10. DEPOSITS.  Any and all deposits or other sums at any time credited by or
due from the Bank to Borrower,  and any securities or other property of Borrower
being held by the Bank or on account of  Borrower,  may at all times be held and
treated as collateral  for any and all  obligations of the Borrower to the Bank,
whether direct or indirect,  absolute or  contingent,  due or to become due, now
existing or hereafter  arising.  The Bank may apply or set-off such  deposits or
other sums against any obligations at any time,  whether or not said obligations
or other security held by the Bank is considered by the Bank to be adequate. The
Bank,  on or after an Event of Default,  may sell any such  securities  or other
property held as collateral for the repayment or performance of such obligations
in a commercially reasonable manner.

    11.  WAIVERS.  The  Borrower  waives  demand,  notice,  protest,  notice  of
acceptance of this  Agreement,  notice of loans made,  credit  extended,  or any
action  taken in  reliance  hereon,  and all  other  demands  and  notice of any
description.  With respect to liabilities, the Borrower assents to any extension
or postponement  of the time of payment or any other  indulgence to the addition
or  release  of any party or person  primarily  or  secondarily  liable,  to the
acceptance of partial payments thereon and the settlement  thereof,  all in such
manner  and at such  time or times as the Bank may deem  advisable.  No delay or
omission  on the part of the Bank in  exercising  any right  shall  operate as a
waiver of such right or any other right.  A waiver on any one occasion shall not
be  construed  as a bar to or waiver of any right on any  future  occasion.  All
rights  and  remedies  of the  Bank,  whether  evidenced  hereby or by any other
instrument  or papers,  shall be cumulative  and may be exercised  singularly or
concurrently.

    12.  MISCELLANEOUS

         12.1.  Amendments,  Etc. No amendment,  modification,  termination,  or
    waiver of any  provision  of any Loan  Document  to which the  Borrower is a
    party,  nor consent to any  departure by the Borrower from any Loan Document
    to which it is a party,  shall in any  event be  effective  unless  the same
    shall be in writing and signed by the Bank,  and then such waiver or consent
    shall  be  effective  only in the  specific  instance  and for the  specific
    purpose for which given.

         12.2. Notices,  Etc. All notices and other communications  provided for
    under  this  Agreement  and  under  the other  Loan  Documents  to which the
    Borrower is a party shall be in writing (including  telegraphic,  telex, and
    facsimile  transmissions) and mailed or transmitted or delivered,  if to the
    Borrower, at its address at 260 North Elm Street,  Westfield,  Massachusetts
    01085, Attention: John E. Reed, Chairman, and if to the Bank, at its address
    at 1500 Main Street,  Springfield,  Massachusetts 01115,  Attention: M. Dale
    Janes, Executive Vice President; or, as to each party, at such other address
    as shall be designated by such party in a written  notice to the other party
    complying  as to  delivery  with the  terms of this  Section.  Except  as is
    otherwise  provided in this Agreement,  all such notices and  communications
    shall be effective when deposited in the mails or delivered to the telegraph
    company, or sent, answerback received, respectively, addressed as aforesaid.

         12.3.  Survival.  All representations, warranties,
    covenants, and agreements contained herein shall survive the
    execution and delivery of this Agreement, the Note and any
    other agreements or documents required for this transaction.

         12.4.  Successors and Assigns. This Agreement shall be binding upon and
    inure to the  benefit  of the  Borrower  and the Bank and  their  respective
    successors and assigns,  except that the Borrower may not assign or transfer
    any of its rights  under any Loan  Document to which the Borrower is a party
    without the prior written consent of the Bank.

         12.5. Costs,  Expenses, and Taxes. The Borrower agrees to pay on demand
    all reasonable  costs and expenses,  incurred by the Bank in connection with
    the preparation, execution, delivery, filing, and administration of the Loan
    Documents,  and of any  amendment,  modification,  or supplement to the Loan
    Documents,   including,   without   limitation,   the  reasonable  fees  and
    out-of-pocket  expenses of counsel for the Bank incurred in connection  with
    advising  the Bank as to its  rights  and  responsibilities  hereunder.  The
    Borrower  also agrees to pay all such costs and  expenses,  including  court
    costs, incurred in connection with enforcement of the Loan Documents, or any
    amendment,  modification,  or supplement  thereto,  whether by  negotiation,
    legal proceedings, or otherwise. In addition, the Borrower shall pay any and
    all stamp and other taxes and fees  payable or  determined  to be payable in
    connection with the execution, delivery, filing, and recording of any of the
    Loan Documents and the other  documents to be delivered  under any such Loan
    Documents,  and agree to hold the Bank harmless from and against any and all
    liabilities  with  respect  to or  resulting  from any  delay in  paying  or
    omission  to  pay  such  taxes  and  fees.   This  provision  shall  survive
    termination of this Agreement.

         12.6.  Integration.  This Agreement and the Loan
    Documents contain the entire agreement between the parties
    relating to the subject matter hereof and supersede all oral
    statements and prior writings with respect thereto.

         12.7. Indemnity.  The Borrower hereby agrees to defend,  indemnify, and
    hold the  Bank  harmless  from  and  against  any and all  claims,  damages,
    judgments, penalties, costs, and expenses (including attorney fees and court
    costs now or  thereafter  arising  from the  aforesaid  enforcement  of this
    clause)  arising  directly or indirectly from the activities of the Borrower
    and any of its Subsidiaries,  its predecessors in interest, or third parties
    with  whom  it  has  a  contractual   relationship  (with  respect  to  that
    contractual  relationship),  or  arising  directly  or  indirectly  from the
    violation of any  environmental  protection,  health, or safety law, whether
    such claims are  asserted by any  governmental  agency or any other  person.
    This indemnity shall survive termination of this Agreement.

         12.8.  Governing Law.  This Agreement and the Notes
    shall be governed by, and construed in accordance with, the
    laws of The Commonwealth of Massachusetts.

         12.9.  Severability  of  Provision.  Any provision of any Loan Document
    which is prohibited or unenforceable  in any jurisdiction  shall, as to such
    jurisdiction,   be  ineffective  to  the  extent  of  such   prohibition  or
    unenforceability  without invalidating the remaining provisions of such Loan
    Document or affecting the validity or  enforceability  of such  provision in
    any other jurisdiction.

         12.10.  Captions, Counterparts and Modifications.  The
    captions of this Agreement are for convenience only and
    shall not affect the construction hereof.  This Agreement
    may be executed in several counterparts, each of which shall
    be deemed an original, but may not be terminated or modified
    orally.

         12.11. Jury Trial Waiver.  THE BANK AND THE BORROWER HEREBY WAIVE TRIAL
    BY JURY IN ANY  ACTION,  PROCEEDING,  CLAIM,  OR  COUNTERCLAIM,  WHETHER  IN
    CONTRACT OR TORT, AT LAW OR IN EQUITY,  ARISING OUT OF OR IN ANY WAY RELATED
    TO THIS  AGREEMENT  OR THE  LOAN  DOCUMENTS.  NO  OFFICER  OF THE  BANK  HAS
    AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS PROVISION.

    IN WITNESS  WHEREOF,  the parties have hereunto set their hands and seals to
this Agreement the day and year first above written.

In the presence of:

                        Mestek, Inc.


                        By /s/ Stephen M. Shea  
                        Stephen M. Shea
                        Its  Sr.Vice President - Finance

                        BayBank, N.A.


                        By /s/ Dale Janes
                        Dale Janes   
                        Its Executive Vice President