Document:

<PAGE>   1
                                                                   EXHIBIT 10.22

                               FOURTH AMENDMENT TO
                              AMENDED AND RESTATED
           REVOLVING CREDIT AND TERM LOAN AGREEMENT AND LIMITED WAIVER

      Fourth Amendment dated as of May 7, 2001, to the Amended and Restated
Revolving Credit and Term Loan Agreement (the "Fourth Amendment"), by and among
THE HOLMES GROUP, INC. (FORMERLY KNOWN AS HOLMES PRODUCTS CORP.), a
Massachusetts corporation (the "Company"), THE RIVAL COMPANY, a Delaware
corporation ("Rival"), HOLMES PRODUCTS (FAR EAST) LIMITED, an entity organized
under the laws of the Bahamas ("Far East"), ESTEEM INDUSTRIES LIMITED, an entity
organized under the laws of Hong Kong ("Esteem"), RAIDER MOTOR CORPORATION, an
entity organized under the laws of the Bahamas ("Raider"), HOLMES PRODUCTS
(EUROPE) LIMITED, an entity organized under the laws of the United Kingdom
("Holmes UK"), BIONAIRE INTERNATIONAL B.V., a private company with limited
liability incorporated under the laws of the Netherlands ("Bionaire BV"), PATTON
ELECTRIC (HONG KONG) LTD. a corporation organized under the laws of Hong Kong
("Patton"), THE HOLMES GROUP CANADA LTD. (THE SURVIVOR OF THE AMALGAMATION OF
THE RIVAL COMPANY OF CANADA AND HOLMES AIR (CANADA) CORP.), a corporation
organized under the laws of Canada ("Holmes Canada" and, collectively with the
Company, Rival, Far East, Esteem, Raider, Holmes UK, Bionaire BV and Patton, the
"Borrowers", and each individually a "Borrower"), FLEET NATIONAL BANK (FORMERLY
KNOWN AS BANKBOSTON, N.A.) and the other lending institutions listed on Schedule
1 to the Credit Agreement (as hereinafter defined) (the "Existing Banks"), and
Fleet National Bank (the "New Bank") amending certain provisions of the Amended
and Restated Revolving Credit and Term Loan Agreement dated as of February 5,
1999 (as amended by the First Amendment to Amended and Restated Revolving Credit
and Term Loan Agreement dated as of August, 1999, the Second Amendment to
Amended and Restated Revolving Credit and Term Loan Agreement dated as of June
30, 2000, the Forbearance Agreement and Third Amendment dated as of April 13,
2001 and as further amended and in effect from time to time, the "Credit
Agreement") by and among the Borrowers, the Existing Banks, FLEET NATIONAL BANK
(FORMERLY KNOWN AS BANKBOSTON, N.A.) in its capacity as administrative agent
(the "Agent"), LEHMAN COMMERCIAL PAPER INC. in its capacity as documentation
agent, BANKBOSTON, N.A. acting through its Hong Kong and London branches as
fronting bank, FLEETBOSTON ROBERTSON STEPHENS INC. (FORMERLY KNOWN AS BANCBOSTON
ROBERTSTON STEPHENS INC.) as syndication agent and arranger and LEHMAN BROTHERS
INC. as co-arranger. Terms not otherwise defined herein which are defined in the
Credit Agreement shall have the same respective meanings herein as therein.

      WHEREAS, the New Bank wishes to become a party to the Credit Agreement as
a Bank; and

      WHEREAS, the Borrowers, the Existing Banks and the New Bank have agreed to
permit the New Bank to become a party to the Credit Agreement and to modify
<PAGE>   2
                                       -2-

certain terms and conditions of the Credit Agreement as specifically set forth
in this Fourth Amendment;

      NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

      SECTION 1. ACCESSION OF NEW BANK; WAIVER OF VOTING RIGHTS. Subject to the
terms and conditions of this Fourth Amendment, the New Bank hereby agrees to
assume, without recourse to the Banks or the Agent, on the Effective Date (as
defined in Section 21 below), a Revolving B Commitment of $40,000,000. The New
Bank hereby agrees to be bound by, and hereby requests the agreement of the
Borrowers and the Agent that the New Bank shall be entitled to the benefits of,
all of the terms, conditions and provisions of the Credit Agreement as if the
New Bank had been one of the lending institutions originally executing the
Credit Agreement as a "Bank"; provided that nothing herein shall be construed as
making the New Bank liable to the Borrowers or the other Banks in respect of any
acts or omissions of any party to the Credit Agreement or in respect of any
other event occurring prior to the Effective Date of this Fourth Amendment and,
provided, further that the New Bank hereby agrees to waive, from and after the
date hereof, its right to vote as a Bank under the Credit Agreement or under any
of the other Loan Documents for purposes of granting consents or waivers or for
purposes of agreeing to amendments or other modifications to any of the Loan
Documents or for purposes of making requests to the Agent pursuant to
Section 13.1 or Section 13.2, and the determination of Majority Banks shall for
all purposes be made without regard to such New Bank's interest in any of the
Revolving Credit B Loans. Notwithstanding anything to the contrary contained in
the immediately preceding proviso, (a) a decrease in the rate of interest on the
Revolving Credit B Notes and loan accounts (other than interest accruing
pursuant to Section 5.11.2 following the effective date of any waiver by the
Majority Banks of the Default or Event of Default relating thereto), any change
in the regularly scheduled or otherwise required payment dates for any amounts
owing under the Loan Documents to the Revolving B Banks, any forgiveness of any
of the Obligations owing to the Revolving B Banks, the waiver of an Event of
Default under Section 13.1(a) or (b) hereof solely as it relates to any payment
owing to the Revolving B Banks, the release of any security interest or lien as
to Collateral constituting all or substantially all of the Collateral (except if
the release or disposition of such Collateral is permitted or provided for in
the provisions of Section 9.5.2. of the Credit Agreement or elsewhere in the
Loan Documents), the release of any Guarantor (except if the release or
disposition of such Guarantor is permitted or provided for in the provisions of
Section 9.5.2 of the Credit Agreement or elsewhere in the Loan Documents), the
amount of the Revolving B Commitment and the amount of the commitment fee on the
Revolving Credit B Loans may not be changed without the written consent of the
Revolving B Bank affected thereby, (b) any change in the order of application of
payments to be made to the Revolving B Banks pursuant to Section 2.12 and
Section 13 of the Credit Agreement may not be made without the written consent
of the Revolving B Bank affected thereby and (c) the Revolving Credit Loan B
Maturity Date may not be postponed without the written consent of the Revolving
B Banks affected thereby. The New Bank represents and warrants that (a) it is
duly and legally authorized to enter into this Fourth Amendment, (b) the
execution, delivery and performance of this
<PAGE>   3
                                      -3-

Fourth Amendment do not conflict with any provision of law or of the charter or
by-laws of the New Bank, or of any agreement binding on the New Bank, (c) all
acts, conditions and things required to be done and performed and to have
occurred prior to the execution, delivery and performance of this Fourth
Amendment, and to render the same the legal, valid and binding obligation of the
New Bank, enforceable against it in accordance with its terms, have been done
and performed and have occurred in due and strict compliance with all applicable
laws. In addition, the New Bank (a) confirms that it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant to Sections 7.4 and 8.4 thereof and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Fourth Amendment; (b) agrees that it will,
independently and without reliance upon the Banks or the Agent and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (c) appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under the Credit Agreement and the other
Loan Documents as are delegated to the Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; and (d) agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of the Credit Agreement are required to be performed by it as a Bank. The
parties hereto further acknowledge that to the extent any Revolving Credit B
Bank assigns any of its Revolving Credit B Loans to those Principals which have
provided the Investor Guaranty, or such Principals otherwise assume the rights
and obligations of any such Revolving Credit B Bank by reason of its subrogation
or other rights under such Investor Guaranty, such Principals shall thereafter
have the rights and obligations of a Revolving Credit B Bank hereunder.

      SECTION 2. AMENDMENT TO SECTION 1.1 OF THE CREDIT AGREEMENT. Section 1.1
of the Credit Agreement is hereby amended as follows:

      (a) The definition of "Applicable Margin" is hereby amended by replacing
the table contained in the definition of Applicable Margin with the following
table:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                  REVOLVING
                                CREDIT A AND      REVOLVING      REVOLVING CREDIT         REVOLVING         COMMITMENT
                                 TERM LOAN A       CREDIT B      A AND TERM LOAN A        CREDIT B              FEE
  LEVEL      LEVERAGE RATIO       BASE RATE       BASE RATE        EUROCURRENCY         EUROCURRENCY            RATE
                                    LOANS           LOANS           RATE LOANS           RATE LOANS
------------------------------------------------------------------------------------------------------------------------
<S>         <C>                 <C>               <C>           <C>                     <C>                 <C>
    I       Greater than or
                equal to            2.00%           1.00%              3.75%                2.75%              0.500%
               4.75:1.00
------------------------------------------------------------------------------------------------------------------------
    II         Less than
             4.75:1.00 but         1.125%           .125%             2.875%               1.875%              0.500%
                greater
             than or equal
              to 4.25:1.00
------------------------------------------------------------------------------------------------------------------------
   III         Less than
             4.25:1.00 but         0.875%              0%             2.625%               1.625%              0.500%
                greater
             than or equal
------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>   4
                                      -4-

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                  REVOLVING
                                CREDIT A AND      REVOLVING      REVOLVING CREDIT         REVOLVING         COMMITMENT
                                 TERM LOAN A       CREDIT B      A AND TERM LOAN A        CREDIT B              FEE
  LEVEL      LEVERAGE RATIO       BASE RATE       BASE RATE        EUROCURRENCY         EUROCURRENCY            RATE
                                    LOANS           LOANS           RATE LOANS           RATE LOANS
------------------------------------------------------------------------------------------------------------------------
<S>         <C>                 <C>               <C>           <C>                     <C>                 <C>
              to 3.75:1.00
------------------------------------------------------------------------------------------------------------------------
    IV         Less than
             3.75:1.00 but         0.625%             0%              2.375%               1.375%              0.375%
                greater
             than or equal
              to 3.25:1.00
------------------------------------------------------------------------------------------------------------------------

    V          Less than           0.625%             0%              2.125%               1.125%              0.375%
               3.25:1.00
------------------------------------------------------------------------------------------------------------------------
</TABLE>

      (b) The definition of "Banks" is hereby amended by deleting such
definition in its entirety and restating it as follows:

            Banks. Fleet and the other lending institutions listed in Schedule 1
      hereto and any other Person who becomes an assignee of any rights and
      obligations of a Bank pursuant to Section 19.

      (c) The definition of "Base Rate Loans" is hereby amended by deleting such
definition in its entirety and restating it as follows:

            Base Rate Loans.  The Loans bearing interest calculated by
      reference to the Base Rate.

      (d) The definition of "Business Day" is hereby amended by deleting such
definition in its entirety and restating it as follows:

            Business Day. Any day other than a Saturday or Sunday on which
      banking institutions in Boston, Massachusetts are open for the transaction
      of banking business and, in addition, if Eurocurrency Rate Loans are
      involved, a day which is also a day in which commercial banks are open for
      international business (including dealings in Dollar deposits) in London
      or such other eurodollar interbank market as may be selected by the Agent
      in its sole discretion acting in good faith.

      (e) The definition of "Commitment" is hereby amended by deleting such
definition in its entirety and restating it as follows:

            Commitment. As to any Bank, its Revolving A Commitment, Revolving B
      Commitment, Term Loan A Commitment and Term Loan B Commitment, as the case
      may be.

      (f) Each of the definitions of "BA Discount Proceeds", "BA Lenders",
"Bankers' Acceptances", "Bankers' Acceptance Notice", "Canadian Base Rate",
"Canadian Dollars or C$", "Canadian Dollar Equivalent", "Canadian Exchange
Rate", "Canadian Fronting Bank", "Canadian Loans", "Commitment Percentage",
"EMU", "EU Treaties", "Euro or e", "Eurocurrency Interbank Market", "Euro
Interbank Rate", "Eurocurrency Offered Rate", "Eurodollar Rate", "Fronted
Loans", "Fronting Bank", "Fronting Loan Event", "International Eurocurrency
Rate", "Limited Forbearance Period", "Multicurrency Loans", "OC Notice",
"Optional Currency", "participating
<PAGE>   5
                                      -5-

member state", "Refunding Bankers' Acceptance", and "Specified Default" is each
hereby deleted in its entirety.

      (g) The definition of "EBITDA" is hereby amended by deleting such
definition in its entirety and restating it as follows:

            EBITDA. With respect to the Company and its Subsidiaries and any
      fiscal period, an amount equal to Consolidated Net Income for such period,
      plus, to the extent deducted in the calculation of Consolidated Net Income
      and without duplication, (a) depreciation and amortization for such
      period, plus, (b) solely for purposes of calculating compliance with the
      financial covenants set forth in Section 10 hereof and to determine the
      Company's EBITDA for purposes of Section 8.29 hereof, (i) any deductions
      to Consolidated Net Income in the second, third and fourth fiscal quarters
      of the 2000 fiscal year attributable to integration expenses associated
      with the Acquisition, up to an aggregate amount not to exceed $3,080,000,
      plus (ii) any reserves and/or charges taken by the Company in the 2000
      fiscal year for Accounts Receivable and obsolete inventory in an aggregate
      amount not to exceed $25,700,000; plus (iii) one time restructuring fees
      and expenses (including, without limitation, legal fees and fees of
      consultants) actually incurred by the Company in the 2001 and 2002 fiscal
      years in connection with the restructuring of this facility; plus (iv) the
      charges (both cash and non-cash) taken and expenses actually incurred in
      the 2001 fiscal year in connection with the closing of the Designated
      Property (including, without limitation, severance fees and relocation and
      hiring expenses) and further selling, general and administrative
      consolidation, in an aggregate amount not to exceed $3,800,000; plus (c)
      other non-cash charges for such period (which charges are exclusive of
      $1,300,000 in non cash charges in connection with the closing of the
      Designated Property included in (b)(iv) above, plus (d) income tax expense
      for such period, plus (e) Consolidated Total Interest Expense paid or
      accrued during such period. For purposes of determining compliance with
      the covenants contained in this Credit Agreement, EBITDA for the months
      ended April 30, 2000 through February 28, 2001 shall be those numbers set
      forth on Exhibit C-1 hereto opposite the relevant dates.

      (h) The definition of "Eligible Assignee" is hereby amended by deleting
subparagraph (b) of such definition and restating it as follows: "Berkshire
Partners, Berkshire Fund IV, Berkshire Fund V, Berkshire Fund IV Investment
Corp., Berkshire Fund V Investment Corp., Berkshire Investors LLC, any Bank and
any Affiliate of any Bank and, with respect to any Bank that is a fund that
invests in loans, any other fund that invests in loans and is managed by the
same investment advisor of such Bank or by an Affiliate of such investment
advisor (and treating all such funds so managed as a single Eligible Assignee).

      (i) The definition of "Eurocurrency Rate" is hereby amended by deleting
such definition in its entirety and restating it as follows:
<PAGE>   6
                                      -6-

            Eurocurrency Rate. For any Interest Period with respect to a
      Eurocurrency Rate Loan, the rate of interest equal to (a) the rate per
      annum (rounded upwards to the nearest 1/16 of one percent) at which the
      applicable Reference Bank's Eurocurrency Lending Office is offered Dollar
      deposits two (2) Business Days prior to the beginning of such Interest
      Period in the interbank eurodollar market where the eurodollar and foreign
      currency and exchange operations of each Eurocurrency Lending Office are
      customarily conducted, for delivery on the first day of such Interest
      Period for the number of days comprised therein and in an amount
      comparable to the amount of the Eurocurrency Rate Loan of the applicable
      Reference Bank to which such Interest Period applies, divided by (b) a
      number equal to 1.00 minus the Eurocurrency Reserve Rate, if applicable.

      (j) The definition of "Fixed Charge Coverage Ratio" is hereby amended by
deleting such definition in its entirety and restating it as follows:

            Fixed Charge Coverage Ratio. As at any date of determination, the
      ratio of (a) EBITDA for the Reference Period most recently ended on such
      date (or, if such date is not a fiscal quarter end date, the period of
      four consecutive fiscal quarters most recently ended) less the aggregate
      amount of Capital Expenditures made by the Company and its Subsidiaries in
      such period (other than (i) Capital Expenditures made prior to the second
      anniversary of the Closing Date up to an aggregate amount not to exceed
      $5,000,000 consisting of systems and upgrade expenses, and (ii) Capital
      Expenditures in respect of restructuring and integration resulting from
      the sales of the Borrowers' commercial, industrial and/or pump lines of
      business funded with up to 10% of the proceeds of such sales), less the
      aggregate amount of taxes paid in cash in such period to (b) the Fixed
      Charges of the Company and its Subsidiaries for such Reference Period (or,
      in the case of the Consolidated Total Interest Expense component of Fixed
      Charges, the Annualized Reference Period), provided, however,
      notwithstanding anything to the contrary contained in this definition, for
      purposes of calculating compliance with the financial covenant contained
      in Section 10.3 hereof for the fiscal quarters ended December 31, 2000
      through and including September 30, 2001, in lieu of deducting the
      aggregate amount of Capital Expenditures made in such period, there shall
      be deducted in subparagraph (a) above the lesser of the aggregate amount
      of Capital Expenditures actually made in such period and $19,000,000. For
      purposes of determining compliance with the covenants contained in this
      Credit Agreement, Capital Expenditures made for the months ended April 30,
      2000 through February 28, 2001 shall be those amounts set forth on Exhibit
      C-1 hereto opposite the relevant dates.

      (k) The definition of "Interest Coverage Ratio" is hereby amended by
inserting immediately at the end of such definition the following sentence: "For
purposes of determining compliance with the covenants contained in this Credit
Agreement, Consolidated Total Interest Expense for the months ended April 30,
2000
<PAGE>   7
                                      -7-

through February 28, 2001 shall be those numbers set forth on Exhibit C-1 hereto
opposite the relevant dates."

      (l) The definition of "Interest Period" is hereby amended by (i) deleting
the text of subparagraph (c) in its entirety and restating it as "(c) if the
applicable Borrower shall fail to give notice as provided in Section 2.7, the
applicable Borrower shall be deemed to have requested a conversion of the
affected Eurocurrency Rate Loan to a Base Rate Loan and the continuation of all
Base Rate Loans as Base Rate Loans on the last day of the then current Interest
Period with respect thereto"; and (ii) deleting the words "Revolving Credit Loan
Maturity Date (if comprising a Revolving Credit Loan)" and substituting in place
thereof the words "Revolving Credit Loan A Maturity Date (if comprising a
Revolving Credit A Loan), Revolving Credit Loan B Maturity Date (if comprising a
Revolving Credit B Loan)".

      (m) The definition of "Loan Documents" is hereby amended by deleting the
words "the Bankers' Acceptances," which appear in such definition and
substituting in place thereof the words "the Investor Guaranty,".

      (n) The definition of "Net Cash Sale Proceeds" is hereby amended by
deleting the words "The net cash proceeds received by the Company" which appear
in the first sentence of such definition and substituting in place thereof the
words: "The gross cash proceeds received by the Company".

      (o) The definition of "Obligations" is hereby amended by deleting the
words "Letters of Credit or Bankers' Acceptances" which appear in such
definition and substituting in place thereof the words "or Letters of Credit".

      (p) The definition of "Overnight Rate" is hereby amended by deleting such
definition in its entirety and restating it as follows:

            Overnight Rate. For any day, the weighed average interest rate
      paid by the Agent for federal funds acquired by the Agent.

      (q) The definition of "Reference Bank" is hereby amended by deleting the
reference to "BankBoston N.A." and substituting in place thereof the words:
"Fleet National Bank, and as to the Revolving Credit B Loans, such financial
institution designated as such in writing to the Agent by the Revolving B Banks
on or before May 7, 2001."

      (r) The definition of "Revolving Credit Loans" is hereby deleted in its
entirety and restated as follows:

            Revolving Credit Loans.  Collectively, the Revolving Credit A
      Loans and the Revolving Credit B Loans.

      (s) The definition of "Revolving Credit Loan Maturity Date" is hereby
amended by deleting such definition in its entirety and restating it as follows:
<PAGE>   8
                                      -8-

            Revolving Credit Loan Maturity Date. As to the Revolving Credit A
      Loans, the Revolving Credit Loan A Maturity Date, and as to the Revolving
      Credit B Loans, the Revolving Credit Loan B Maturity Date.

      (t) The definition of "Revolving Credit Notes" is hereby amended by
deleting such definition in its entirety and restating it as follows:

            Revolving Credit Notes.  Collectively, the Revolving Credit A
      Notes and the Revolving Credit B Notes.

      (u) The definition of "Rival Canada" is hereby amended by deleting such
definition in its entirety and restating it as follows:

            Rival Canada.  The Holmes Group Canada Ltd. (the survivor of the
      amalgamation of The Rival Company of Canada and Holmes Air (Canada)
      Corp), a corporation organized under the laws of Canada.

      (v) The definition of "Same Day Funds" is hereby amended by deleting such
definition in its entirety and restating it as follows:

            Same Day Funds.  Immediately available funds.

      (w) The definition of "Settlement" is hereby amended by deleting such
definition in its entirety and restating it as follows:

            Settlement. The making or receiving of payments in immediately
      available funds, by the Banks, to the extent necessary to cause each
      Bank's actual share of the outstanding amount of Revolving Credit A Loans
      and Revolving Credit B Loans (after giving effect to any Loan Request) to
      be equal to such Bank's Revolving A Commitment Percentage of the
      outstanding amount of such Revolving Credit A Loans and Revolving B
      Commitment Percentage of the outstanding amount of such Revolving Credit B
      Loans, as the case may be (in each case, after giving effect to any Loan
      Request), in any case where, prior to such event or action, the actual
      share is not so equal.

      (x) The definition of "Settlement Date" is hereby amended by deleting
subparagraph (d) in its entirety and restating it as follows: "(d) any Business
Day on which the amount of the Revolving Credit Loans outstanding from the Swing
Line Bank plus the Swing Line Bank's Revolving A Commitment percentage of the
sum of the Maximum Drawing Amount and any Unpaid Reimbursement Obligations is
equal to or greater than the Swing Line Bank's Revolving A Commitment
Percentage."

      (y) The definition of "Total Commitment" is hereby amended by deleting
such definition in its entirety and restating it as follows:

            Total Commitment.  Collectively, the Total Revolving A Commitment
      and the Total Revolving B Commitment.
<PAGE>   9
                                      -9-

      (z) The definition of "Total Percentage" is hereby amended by deleting
such definition in its entirety and restating it as follows:

            Total Percentage. With respect to each Bank, on any date of
      determination, the Revolving A Commitment (or, if the Revolving A
      Commitment is terminated, outstanding Revolving Credit A Loans, Letter of
      Credit Participations in Unpaid Reimbursement Obligations and
      participating interests in the risk relating to outstanding Letters of
      Credit) and outstanding Term Loans A and outstanding Term Loans B held by
      such Bank as a percentage of the sum of the Total Revolving A Commitment
      (or if the Revolving A Commitment is terminated, outstanding Revolving
      Credit A Loans, Letter of Credit Participations in Unpaid Reimbursement
      Obligations and participating interests in the risk relating to
      outstanding Letters of Credit) plus the outstanding Term Loans A and
      outstanding Term Loans B.

      (aa) Section 1.1 of the Credit Agreement is further amended by inserting
the following definitions in the appropriate alphabetical order:

            Borrowing Base. At the relevant time of reference thereto, an amount
      determined by the Agent by reference to the most recent Borrowing Base
      Report delivered to the Banks and the Agent pursuant to Section 8.4(i),
      which is equal to the sum of:

                  (a)   80% of Eligible Accounts Receivable; plus

                  (b)   50% of Eligible Inventory; plus

                  (c)   the Maximum Overadvance effective at such time.

            Borrowing Base Report.  A Borrowing Base Report signed by the
      chief financial officer of the Company and in substantially the form of
      Exhibit I hereto.

            Designated Property.  That certain property identified by the
      Company in writing to the Agent and the Banks prior to May 7, 2001.

            Eligible Accounts Receivable. The aggregate of the unpaid portions
      of Accounts Receivable which are classified as "accounts receivable" on
      the balance sheet of the Company and its Subsidiaries (other than any such
      Accounts Receivable which pertain to any letter of credit discounted and
      sold pursuant to Section 9.1(f)(iv)(2)) and which are net of any credits
      to such Accounts Receivable and net of applicable reserves in accordance
      with generally accepted accounting principles, applied in a manner
      consistent with past practices.

            Eligible Inventory. With respect to the Company or any of its
      Subsidiaries, the net book value of finished goods, work in progress and
      raw materials and component parts inventory owned by the Company or
<PAGE>   10
                                      -10-

      any of its Subsidiaries and which is classified as "inventory" on the
      balance sheet of the Company and its Subsidiaries, which are net of the
      aggregate amount of all applicable inventory reserves in accordance with
      generally accepted accounting principles, applied in a manner consistent
      with past practices.

            Fleet.  Fleet National Bank, a national banking association, in
      its individual capacity.

            Investor Guaranty. That certain Guaranty dated as of May 7, 2001
      from certain of the Principals to the Agent and the Revolving Credit B
      Banks and in form and substance satisfactory to the Revolving Credit B
      Banks.

            Investor Guaranty Reduction Event. The occurrence of either (a) any
      event pursuant to which the Revolving Credit B Banks consent to a
      reduction (in whole or in part) of the amounts to be guaranteed pursuant
      to the Investor Guaranty; or (b) the termination of such Investor
      Guaranty.

            Maximum Initial Amount. As of any date of determination, an amount
      which is equal to the following: (a) for the period of May 7, 2001 through
      and including December 31, 2001, an amount equal to $115,000,000 less the
      amount of proceeds received by the Company or any Subsidiary from any
      Indebtedness incurred, assumed or otherwise issued pursuant to
      Section 9.1(f)(iv)(1) hereof; and (b) at any time thereafter,
      $115,000,000.

            Maximum Overadvance.  For each period set forth in the table
      below, the amount set forth opposite such period:

<TABLE>
<CAPTION>
----------------------------------------------------------------
                        PERIOD                       AMOUNT
----------------------------------------------------------------
<S>                                               <C>
              May 7, 2001 - July 31, 2001         $         0
----------------------------------------------------------------
              August 1, 2001 - August 31,         $ 7,500,000
                         2001
----------------------------------------------------------------
             September 1, 2001 - September        $10,000,000
                       30, 2001
----------------------------------------------------------------
            October 1, 2001 - November 30,        $ 5,000,000
                         2001
----------------------------------------------------------------
                  Any time thereafter             $         0
----------------------------------------------------------------
</TABLE>

            Monthly Fixed Charge Coverage Ratio. As at any date of
      determination, the ratio of (a) EBITDA for the Monthly Reference Period
      most recently ended on such date less the aggregate amount of Capital
      Expenditures made by the Company and its Subsidiaries in such period
      (other than (i) Capital Expenditures made prior to the second anniversary
      of the Closing Date up to an aggregate amount of not more than $5,000,000
      consisting of systems and upgrade expenses, and (ii) Capital Expenditures
      in respect of restructuring and integration resulting from
<PAGE>   11
                                      -11-

      the sales of the Borrowers' commercial, industrial and/or pump lines of
      business funded with up to 10% of the proceeds of such sales), less the
      aggregate amount of taxes paid in cash in such period to (b) the Fixed
      Charges of the Company and its Subsidiaries for such Monthly Reference
      Period, provided, however, notwithstanding anything to the contrary
      contained in this definition, for purposes of calculating compliance with
      the financial covenant contained in Section 10.7 hereof for the fiscal
      months ended December 31, 2000 through and including September 30, 2001,
      in lieu of deducting the aggregate amount of Capital Expenditures made in
      such period, there shall be deducted in subparagraph (a) above the lesser
      of the aggregate amount of Capital Expenditures actually made in such
      period and $19,000,000. For purposes of determining compliance with the
      covenants contained in this Credit Agreement, Capital Expenditures made
      for the months ended April 30, 2000 through February 28, 2001 shall be
      those amounts set forth on Exhibit C-1 hereto opposite the relevant dates.

            Monthly Interest Coverage Ratio. As at any date of determination,
      the ratio of (a) the EBITDA of the Company and its Subsidiaries for the
      Monthly Reference Period ending on such date to (b) Consolidated Total
      Interest Expense for the Monthly Reference Period then ended, less, to the
      extent included in such Consolidated Total Interest Expense, non-cash
      interest expense and amortization or write-off of fees and expenses
      relating to financing activities. For purposes of determining compliance
      with the covenants contained in this Credit Agreement, Consolidated Total
      Interest Expense for the months ended April 30, 2000 through February 28,
      2001 shall be those numbers set forth on Exhibit C-1 hereto opposite the
      relevant dates.

            Monthly Leverage Ratio. As at any date of determination, the ratio
      of (a) Total Funded Indebtedness of the Company and its Subsidiaries
      outstanding on such date to (b) EBITDA of the Company and its Subsidiaries
      for the Monthly Reference Period ended on such date, to be calculated on a
      Pro Forma Basis.

            Monthly Reference Period.  As of any date of determination, the
      period of twelve (12) consecutive calendar months ending on such
      relevant date.

            Operational Consultant.  TRG or any other business consulting
      firm of similar experience, of nationally recognized standing and not
      disapproved by the Majority Banks.

            Revolver A Exposure.  As defined in Section 2.1.1.

            Revolving A Banks. Those Banks listed on Schedule 1 hereto as
      "Revolving A Banks" and which will make the Revolving Credit A Loans to
      the Borrowers pursuant to Section 2.1.1.
<PAGE>   12
                                      -12-

            Revolving A Commitment. With respect to each Revolving A Bank, the
      amount set forth on Schedule 1 hereto as the amount of such Revolving A
      Bank's commitment to make Revolving Credit A Loans to the Borrowers, and
      to participate in the issuance, extension and renewal of Letters of Credit
      for the account of, the Borrowers, as the same may be reduced from time to
      time; or if such commitment is terminated pursuant to the provisions
      hereof, zero.

            Revolving A Commitment Percentage. With respect to each Revolving A
      Bank, the percentage set forth on Schedule 1 hereto as such Revolving A
      Bank's percentage of the aggregate Revolving A Commitments of all the
      Revolving A Banks.

            Revolving B Banks. Those Banks listed on Schedule 1 hereto as
      "Revolving B Banks" and which will make the Revolving Credit B Loans to
      the Borrowers pursuant to Section 2.1.4.

            Revolving B Commitment. With respect to each Revolving B Bank, the
      amount set forth on Schedule 1 hereto as the amount of such Revolving B
      Bank's commitment to make Revolving Credit B Loans to the Borrowers.

            Revolving B Commitment Percentage. With respect to each Revolving B
      Bank, the percentage set forth on Schedule 1 hereto as such Revolving B
      Bank's percentage of the aggregate Revolving B Commitments of all the
      Revolving B Banks.

            Revolving Banks.  Collectively, the Revolving A Banks and the
      Revolving B Banks.

            Revolving Credit A Loans.  Revolving credit loans to be made by
      the Revolving A Banks pursuant to Sections 2.1.1 hereof.

            Revolving Credit A Notes.  See Section 2.4.

            Revolving Credit B Loans. Revolving credit loans to be made by the
      Revolving B Banks pursuant to Sections 2.1.2 hereof.

            Revolving Credit B Notes.  See Section 2.4.

            Revolving Credit Loan A Maturity Date.  February 5, 2005.

            Revolving Credit Loan B Maturity Date.  July 1, 2002.

            Subdebt Funding Loans.  As defined in Section 8.29 hereof.

            Total Revolving A Commitment.  The sum of the Revolving A
      Commitments of the Revolving A Banks as in effect from time to time.
<PAGE>   13
                                      -13-

            Total Revolving B Commitment.  The sum of the Revolving B
      Commitments of the Revolving B Banks as in effect from time to time.

            Warrants. Those certain warrants from the Company to the Banks other
      than the Revolving B Banks, and in form and substance as set forth in
      Exhibit A to the Warrant Purchase Agreement.

            Warrant Purchase Agreement. That certain warrant purchase agreement,
      dated as of May 7, 2001, between the Company and the Banks, other than the
      Revolving B Banks, relating to the Warrants and the certain co-sale
      agreement dated as of May 7, 2001, between the Company and such Banks.

      SECTION 3. AMENDMENT TO SECTION 2 OF THE CREDIT AGREEMENT. Section 2 of
the Credit Agreement is hereby amended by deleting Section 2 in its entirety and
substituting in place thereof the following:

            2. THE REVOLVING CREDIT FACILITY.

                  2.1 COMMITMENT TO LEND.

                        2.1.1 REVOLVING CREDIT A LOANS TO BORROWERS. Subject to
                  the terms and conditions set forth in this Credit Agreement,
                  each of the Revolving A Banks severally agrees to lend to the
                  Borrowers and the Borrowers may borrow, repay, and reborrow
                  from time to time from the Closing Date up to but not
                  including the Revolving Credit Loan A Maturity Date upon
                  notice by the applicable Borrowers to the Agent given in
                  accordance with Section 2.6, such sums in Dollars as are
                  requested by the applicable Borrowers up to a maximum
                  aggregate amount outstanding (after giving effect to all
                  amounts requested by any Borrower) at any one time equal to
                  such Revolving A Bank's Revolving A Commitment minus such
                  Revolving A Bank's Revolving A Commitment Percentage of the
                  sum of the Maximum Drawing Amount and all Unpaid Reimbursement
                  Obligations, provided that (a) the sum of the outstanding
                  amount of the Revolving Credit A Loans (after giving effect to
                  all amounts requested), plus the Maximum Drawing Amount and
                  all Unpaid Reimbursement Obligations (collectively, the
                  "Revolver A Exposure") shall not at any time exceed the lesser
                  of (i) the Total Revolving A Commitment and (ii) the Borrowing
                  Base minus the aggregate outstanding amount of Revolving
                  Credit B Loans, and (b) (1) the sum of the outstanding amount
                  of all Revolving Credit Loans (after giving effect to all
                  amounts requested) advanced to the Subsidiary Borrowers shall
                  not at any time exceed $20,000,000, with the sum of the
                  outstanding amount of all Revolving Credit Loans (after
<PAGE>   14
                                      -14-

                  giving effect to all amounts requested) advanced to Holmes Far
                  East, Esteem, Raider and Patton HK not to at any time exceed
                  $10,000,000 and the sum of the outstanding amount of all
                  Revolving Credit Loans (after giving effect to all amounts
                  requested) advanced to Holmes UK and Bionaire B.V. not to at
                  any time exceed $10,000,000, and (2) the sum of the
                  outstanding amount of all Revolving Credit Loans (after giving
                  effect to all amounts requested) advanced to the Subsidiary
                  Borrowers plus the Maximum Drawing Amount and all Unpaid
                  Reimbursement Obligations shall not at any time exceed
                  $45,000,000. Notwithstanding anything to the contrary
                  contained herein, the parties hereto hereby acknowledge and
                  agree that (1) at any time in which the Revolver A Exposure is
                  at the Maximum Initial Amount, the Revolving A Banks shall
                  have no obligation to make any additional Revolving Credit A
                  Loans or other extension of credit under this Credit Agreement
                  until such time as the aggregate outstanding principal amount
                  of Revolving Credit B Loans is equal to the Total Revolving B
                  Commitment and (2) from and after the earlier to occur of (x)
                  the Term Loan B Maturity Date and (y) January 31, 2002, the
                  Borrowers shall not request any additional Revolving Credit A
                  Loans or the issuance, extension or renewal of any Letter of
                  Credit (and the Banks shall have no obligation to make any
                  such Revolving Credit A Loans and the Agent shall have no
                  obligation to issue, extend or renew any Letter of Credit) if,
                  after giving effect to any amounts so requested, the Revolver
                  A Exposure would exceed the Maximum Initial Amount. For the
                  avoidance of doubt, the parties hereto hereby acknowledge that
                  to the extent any Borrower is requesting the issuance of any
                  Letter of Credit at a time when the Revolving A Banks are not
                  required to make any additional extensions of credit under
                  this Credit Agreement until such time as the Total Revolving B
                  Loan Commitment has been fully funded, the Borrowers shall be
                  permitted, subject always to compliance with the terms and
                  conditions contained herein, to borrow a Revolving Credit B
                  Loan in the amount of the Maximum Drawing Amount of such
                  requested Letters of Credit, and use the proceeds of such
                  Revolving Credit B Loan to repay the Revolving Credit A Loans
                  in such an amount such that the Revolver A Exposure is reduced
                  (prior to such issuance of such Letter of Credit) to an amount
                  below the Maximum Initial Amount so that such requested Letter
                  of credit can then be issued. The Revolving Credit A Loans
                  shall be made pro rata in accordance with each Revolving A
                  Bank's Revolving A Commitment Percentage. Each request for a
                  Revolving Credit A Loan hereunder shall constitute a
                  representation and warranty by the Borrowers that the
                  conditions set forth in Section 12 have been satisfied on the
                  date of such request. All Revolving Credit A Loans shall be
                  denominated in Dollars.

                        2.1.2. REVOLVING CREDIT B LOANS TO BORROWERS. Subject to
                  the terms and conditions set forth in this Credit Agreement,
                  to the extent the Revolver A Exposure equals the Maximum
                  Initial Amount or if the Revolver A Exposure is less than the
                  Maximum Initial Amount but the Company is requesting a
                  Revolving Credit
<PAGE>   15
                                      -15-

                  B Loan in order to make a payment on the Subordinated Notes
                  which would constitute a Subdebt Funding Loan pursuant to
                  Section 8.29, then each of the Revolving B Banks severally
                  agrees to lend to the Borrowers and the Borrowers may borrow,
                  repay, and reborrow from time to time from the Closing Date up
                  to but not including the Revolving Credit Loan B Maturity Date
                  upon notice by the applicable Borrowers to the Agent given in
                  accordance with Section 2.6, such sums in Dollars as are
                  requested by the applicable Borrowers up to a maximum
                  aggregate amount outstanding (after giving effect to all
                  amounts requested by any Borrower) at any one time equal to
                  such Revolving B Bank's Revolving B Commitment, provided that
                  (a) the sum of the outstanding amount of the Revolving Credit
                  B Loans (after giving effect to all amounts requested) shall
                  not at any time exceed the lesser of (i) the Total Revolving B
                  Commitment and (ii) the Borrowing Base minus the Revolver A
                  Exposure and (b) (1) the sum of the outstanding amount of all
                  Revolving Credit Loans (after giving effect to all amounts
                  requested) advanced to the Subsidiary Borrowers shall not at
                  any time exceed $20,000,000, with the sum of the outstanding
                  amount of all Revolving Credit Loans (after giving effect to
                  all amounts requested) advanced to Holmes Far East, Esteem,
                  Raider and Patton HK not to at any time exceed $10,000,000 and
                  the sum of the outstanding amount of all Revolving Credit
                  Loans (after giving effect to all amounts requested) advanced
                  to Holmes UK and Bionaire B.V. not to at any time exceed
                  $10,000,000, and (2) the sum of the outstanding amount of all
                  Revolving Credit Loans (after giving effect to all amounts
                  requested) advanced to the Subsidiary Borrowers plus the
                  Maximum Drawing Amount and all Unpaid Reimbursement
                  Obligations shall not at any time exceed $45,000,000. The
                  Revolving Credit B Loans shall be made pro rata in accordance
                  with each Revolving B Bank's Revolving B Commitment
                  Percentage. Each request for a Revolving Credit Loan B
                  hereunder shall constitute a representation and warranty by
                  the Borrowers that the conditions set forth in Section 12 have
                  been satisfied on the date of such request. Each Revolving
                  Credit B Loan to the Borrowers shall be denominated in
                  Dollars.

            2.2. COMMITMENT FEE.

                  2.2.1. REVOLVING CREDIT A LOANS COMMITMENT FEE. The Domestic
            Borrowers agree to pay to the Agent for the accounts of the
            Revolving A Banks based on the amount by which each such Revolving A
            Bank's Revolving A Commitment exceeds the sum of such Revolving A
            Bank's daily average outstanding Revolving Credit A Loans plus its
            Revolving A Commitment Percentage of the sum of the Maximum Drawing
            Amount and the Unpaid Reimbursement Obligations a commitment fee
            calculated at the rate of the Commitment Fee Rate per annum on the
            average daily amount during each calendar quarter or
<PAGE>   16
                                      -16-

            portion thereof from the Closing Date to the Revolving Credit Loan A
            Maturity Date by which the Total Revolving A Commitment minus the
            sum of the Maximum Drawing Amount and all Unpaid Reimbursement
            Obligations exceeds the outstanding amount of Revolving Credit A
            Loans during such calendar quarter. The commitment fee shall be
            payable quarterly in arrears on the first day of each calendar
            quarter for the immediately preceding calendar quarter commencing on
            the first such date following the date hereof, with a final payment
            on the Revolving Credit Loan A Maturity Date or any earlier date on
            which the Revolving A Commitments shall terminate.

                  2.2.1. REVOLVING CREDIT B LOANS COMMITMENT FEE. The Domestic
            Borrowers agree to pay to the Agent for the accounts of the
            Revolving B Banks based on the amount by which each such Revolving B
            Bank's Revolving B Commitment exceeds the sum of such Revolving B
            Bank's daily average outstanding Revolving Credit B Loans a
            commitment fee calculated at the rate of the Commitment Fee Rate per
            annum on the average daily amount during each calendar quarter or
            portion thereof from the Closing Date to the Revolving Credit Loan B
            Maturity Date by which the Total Revolving B Commitment exceeds the
            outstanding amount of Revolving Credit B Loans during such calendar
            quarter. The commitment fee shall be payable quarterly in arrears on
            the first day of each calendar quarter for the immediately preceding
            calendar quarter commencing on the first such date following the
            date hereof, with a final payment on the Revolving Credit Loan B
            Maturity Date or any earlier date on which the Revolving B
            Commitments shall terminate.

            2.3. REDUCTION OF COMMITMENTS.

                  2.3.1. REDUCTION OF TOTAL REVOLVING A COMMITMENT. The Company
            shall have the right at any time and from time to time upon seven
            (7) Business Days prior written notice to the Agent to reduce by
            $5,000,000 or an integral multiple of $1,000,000 in excess thereof
            or terminate entirely the Total Revolver A Commitment, whereupon the
            Revolving A Commitments of the Banks shall be reduced pro rata in
            accordance with their respective Revolving A Commitment Percentages
            of the amount specified in such notice or, as the case may be,
            terminated. Promptly after receiving any notice of the Company
            delivered pursuant to this Section 2.3.1, the Agent will notify the
            Banks of the substance thereof. Upon the effective date of any such
            reduction or termination, the Domestic Borrowers shall pay to the
            Agent for the respective accounts of the Banks the full amount of
            any commitment fee then accrued on the amount of the reduction. No
            reduction or termination of the Revolving A Commitments may be
            reinstated.

                  2.3.2. REDUCTION OF TOTAL REVOLVING B COMMITMENT. After such
            time as the Company has voluntarily and permanently reduced the
            Total Revolver A Commitment by an amount of not less than
            $25,000,000 and such Total Revolver A Commitment has been reduced
<PAGE>   17
                                      -17-

            and the Revolver A Exposure is equal to or less than the Maximum
            Initial Amount, the Company shall have the right at any time and
            from time to time upon seven (7) Business Days prior written notice
            to the Agent to reduce by $5,000,000 or an integral multiple of
            $1,000,000 in excess thereof or terminate entirely the Total
            Revolver B Commitment, whereupon the Revolving B Commitments of the
            Banks shall be reduced pro rata in accordance with their respective
            Revolving B Commitment Percentages of the amount specified in such
            notice or, as the case may be, terminated. Promptly after receiving
            any notice of the Company delivered pursuant to this Section 2.3.2,
            the Agent will notify the Banks of the substance thereof. Upon the
            effective date of any such reduction or termination, the Domestic
            Borrowers shall pay to the Agent for the respective accounts of the
            Banks the full amount of any commitment fee then accrued on the
            amount of the reduction. No reduction or termination of the
            Revolving B Commitments may be reinstated.

                  2.4. THE REVOLVING CREDIT NOTES; LOAN ACCOUNTS. The Revolving
            Credit A Loans and Revolving Credit B Loans, as the case may be,
            shall be evidenced by separate promissory notes of the Domestic
            Borrowers in substantially the form of Exhibit A-1 (a "Revolving
            Credit A Note") and Exhibit A-2 hereto (a "Revolving Credit B
            Note"), each dated as of May 7, 2001, and completed with appropriate
            insertions. The obligations of each of the Foreign Borrowers to
            repay all amounts borrowed by it as Revolving Credit Loans, all
            interest thereon and all other amounts payable by it in respect
            thereof shall be evidenced by this Credit Agreement, it being the
            intention of the parties hereto that each Foreign Borrower's
            obligations with respect to the Revolving Credit Loans owed by it is
            evidenced only as stated herein and not by separate promissory notes
            or other instruments. One Revolving Credit Note shall be payable to
            the order of each Bank in a principal amount equal to such Bank's
            Revolving A Commitment Percentage or Revolving B Commitment
            Percentage, as the case may be, or, if less, the outstanding amount
            of all Revolving Credit Loans made by such Bank, plus interest
            accrued thereon, as set forth below. Each of the Borrowers
            irrevocably authorizes each Bank to make or cause to be made, at or
            about the time of the Drawdown Date of any Revolving Credit Loan or
            at the time of receipt of any payment of principal on such Bank's
            Revolving Credit Note or loan account, as the case may be, an
            appropriate notation on such Revolving Bank's Record or record
            pertaining to the loan account (the "Loan Account Record"), as the
            case may be, reflecting the making of such Revolving Credit Loan or
            (as the case may be) the receipt of such payment. The outstanding
            amount of the Revolving Credit Loans set forth on such Bank's
            Records and Loan Account Records shall be prima facie evidence of
            the principal amount thereof owing and unpaid to such Revolving
            Bank, but the failure to record, or any error in so recording, any
            such amount on such Revolving Bank's Records or Loan Account
            Records, as the case may be, shall not limit or otherwise affect the
            obligations of the
<PAGE>   18
                                      -18-

            Borrowers hereunder or under any Revolving Credit Note to make
            payments of principal of or interest on any Revolving Credit Note or
            loan account when due.

                  2.5.  INTEREST ON REVOLVING CREDIT LOANS.  Except as otherwise
            provided in Section 5.11,

                        (a) Each Base Rate Loan shall bear interest for the
                  period commencing with the Drawdown Date thereof and ending on
                  the last day of the Interest Period with respect thereto at
                  the rate per annum equal to the Base Rate plus the Applicable
                  Margin with respect to Base Rate Loans for such Revolving
                  Credit Loan as in effect from time to time, provided, to the
                  extent any Investor Guaranty Reduction Event shall have
                  occurred, on the date of such occurrence, the Applicable
                  Margin applicable to the Revolving Credit B Loans shall be
                  increased to the same amount as the Applicable Margin for
                  Revolving Credit A Loans which are Base Rate Loans.

                        (b) Each Eurocurrency Rate Loan shall bear interest for
                  the period commencing with the Drawdown Date thereof and
                  ending on the last day of the Interest Period with respect
                  thereto at the rate per annum equal to the Eurodollar Rate
                  determined for such Interest Period plus the Applicable Margin
                  with respect to Eurocurrency Rate Loans for such Revolving
                  Credit Loan as in effect from time to time, provided, to the
                  extent any Investor Guaranty Reduction Event shall have
                  occurred, on the date of such occurrence, the Applicable
                  Margin applicable to the Revolving Credit B Loans shall be
                  increased to the same amount as the Applicable Margin for
                  Revolving Credit A Loans which are Eurocurrency Rate Loans.

                        (c) Each Borrower promises to pay interest on each
                  Revolving Credit Loan requested by such Borrower in arrears on
                  each Interest Payment Date with respect thereto.

                        (d) Each Borrower shall be permitted to pay, and each
                  Revolving Credit B Bank shall be permitted to receive, any
                  regularly scheduled payment of interest on the Subdebt Funding
                  Loans so long as at the time of such payment, or after giving
                  effect thereto, no Event of Default has occurred and is
                  continuing pursuant to Section 13.1(a) or (b) of the Credit
                  Agreement as it relates to the Revolving Credit A Loans or the
                  Term Loans. To the extent any Revolving Credit B Bank receives
                  any such payment of interest on the Subdebt Funding Loans
                  while an Event of Default pursuant to Section 13.1(a) or (b)
                  of the Credit Agreement as it relates to the Revolving Credit
                  A Loans or the Term Loans has occurred and is continuing, each
                  such Revolving Credit B Bank will hold in trust and
                  immediately pay over to the Agent, in the same form of payment
                  received, for application to the Loans in the manner
<PAGE>   19
                                      -19-

                  provided in Section 13.5, any amount that the Borrowers pay to
                  the Revolving Credit B Banks on account of the Subdebt Funding
                  Loans.

                  2.6.  REQUESTS FOR REVOLVING CREDIT LOANS.

                        2.6.1. GENERAL. The applicable Borrower shall give to
                  the Agent written notice in the form of Exhibit B hereto (or
                  telephonic notice confirmed in a writing in the form of
                  Exhibit B hereto) of each Revolving Credit Loan requested
                  hereunder (a "Loan Request") no later than (a) one (1)
                  Business Day prior to the proposed Drawdown Date of any Base
                  Rate Loan and (b) three (3) Business Days prior to the
                  proposed Drawdown Date of any Eurocurrency Rate Loan. Each
                  such notice shall specify (i) the principal amount of the
                  Revolving Credit Loan requested and whether such request is
                  for a Revolving Credit A Loan or a Revolving Credit B Loan,
                  (ii) the proposed Drawdown Date of such Revolving Credit Loan,
                  (iii) the Interest Period for such Revolving Credit Loan, and
                  (iv) the Type of such Revolving Credit Loan. Promptly upon
                  receipt of any such notice (but in any event on the day the
                  Agent receives a request for a Revolving Credit Loan by the
                  Domestic Borrowers and by the day following the date the Agent
                  receives a request for a Revolving Credit Loan by a Subsidiary
                  Borrower), the Agent shall notify each of the applicable Banks
                  thereof. Each Loan Request shall be irrevocable and binding on
                  the Borrowers and shall obligate the requesting Borrower to
                  accept the Revolving Credit Loan requested from the applicable
                  Revolving Banks on the proposed Drawdown Date. Each Loan
                  Request shall be in a minimum aggregate amount of $500,000 or
                  an integral multiple of $100,000 in excess thereof. In
                  addition, notwithstanding the notice and minimum amount
                  requirements et forth above, if at any time the sum of the
                  outstanding amount of Revolver A Exposure exceeds the Maximum
                  Initial Amount and the sum of the outstanding amount of all
                  Revolving Credit B Loans is less than the Total B Commitment
                  Percentage, the Borrowers shall have been deemed to have made
                  a Loan Request for a Revolving Credit B Loan in an amount
                  sufficient to repay all Revolving Credit A Loans so that the
                  Revolver A Exposure is equal to the Maximum Initial Amount.

                        2.6.2. SWING LINE. Notwithstanding the notice and
                  minimum amount requirements set forth in Section 2.6.1 but
                  otherwise in accordance with the terms and conditions of this
                  Credit Agreement, the Swing Line Bank (a) shall, and without
                  conferring with the Revolving Banks, make Revolving Credit
                  Loans to the Domestic Borrowers by entry of credits to the
                  Domestic Borrowers' operating account (the "Operating
                  Account") maintained with the Agent to cover checks or other
                  charges which the Domestic Borrowers have drawn or made
                  against such account, but in no
<PAGE>   20
                                      -20-

                  event shall the Swing Line Bank be required to make any such
                  Revolving Credit Loans if, after giving effect to making all
                  such Revolving Credit Loans, the outstanding amount of all
                  such Revolving Credit Loans owned to the Swing Line Bank
                  exceeds such Swing Line Bank's Commitment and (b) may, in its
                  sole discretion and without conferring with the Revolving
                  Banks, make Revolving Credit Loans to the Domestic Borrowers
                  in an amount as otherwise requested by any of the Domestic
                  Borrowers (each Revolving Credit Loan referred to in the
                  foregoing clauses (a) and (b) being referred to herein as a
                  "Swing Line Loan"). Each Domestic Borrower hereby requests and
                  authorizes the Swing Line Bank to make from time to time such
                  Swing Line Loans by means of appropriate entries of such
                  credits sufficient to cover checks and other charges then
                  presented for payment from the Operating Account or as
                  otherwise so requested. Each Domestic Borrower acknowledges
                  and agrees that the making of such Swing Line Loans shall, in
                  each case, be subject in all respects to the provisions of
                  this Credit Agreement as if they were Revolving Credit Loans
                  covered by a Loan Request including, without limitation, the
                  limitations set forth in Section 2.1 and the requirements that
                  the applicable provisions of Section 12 be satisfied. All
                  actions taken by the Swing Line Bank pursuant to the
                  provisions of this Section 2.6.2 shall be conclusive and
                  binding on the Domestic Borrowers and the Revolving Banks
                  absent the Swing Line Bank's gross negligence or willful
                  misconduct. Swing Line Loans made pursuant to this
                  Section 2.6.2 shall be Base Rate Loans denominated in Dollars
                  until converted in accordance with the provisions of the
                  Credit Agreement and, prior to a Settlement, such interest
                  shall be for the account of the Swing Line Bank.

                  2.7.  CONVERSION OPTIONS.

                        2.7.1. CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT
                  LOAN. The Borrowers may elect from time to time to convert any
                  outstanding Revolving Credit Loan to a Revolving Credit Loan
                  of another Type, provided that (a) with respect to any such
                  conversion of a Revolving Credit Loan to a Base Rate Loan, the
                  applicable Borrower shall give the Agent at least one (1)
                  Business Day prior written notice of such election; (b) with
                  respect to any such conversion of a Base Rate Loan to a
                  Eurocurrency Rate Loan, the applicable Borrower shall give the
                  Agent at least three (3) Business Days prior written notice of
                  such election; (c) with respect to any such conversion of a
                  Eurocurrency Rate Loan into a Revolving Credit Loan of another
                  Type, such conversion shall only be made on the last day of
                  the Interest Period with respect thereto and (d) no Revolving
                  Credit Loan may be converted into a Eurocurrency Rate Loan
                  when any Default or Event of Default has occurred and is
                  continuing. The Agent shall promptly notify the applicable
                  Banks of such election (but in any event on the day the
<PAGE>   21
                                      -21-

                  Agent receives an election by the Domestic Borrowers and by
                  the day following the date the Agent receives an election by
                  any Foreign Borrower). On the date on which such conversion is
                  being made each applicable Bank shall take such action as is
                  necessary to transfer its Revolving A Commitment Percentage or
                  Revolving B Commitment Percentage, as the case may be, of such
                  Revolving Credit Loans to its Domestic Lending Office or its
                  Eurocurrency Lending Office, as the case may be. All or any
                  part of outstanding Revolving Credit Loans of any Type may be
                  converted into a Revolving Credit Loan of another Type as
                  provided herein, provided that any partial conversion shall be
                  in an aggregate principal amount of $500,000 or an integral
                  multiple of $100,000 in excess thereof. Each Conversion
                  Request relating to the conversion of a Revolving Credit Loan
                  to a Eurocurrency Rate Loan shall be irrevocable by the
                  applicable Borrower.

                        2.7.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN.
                  Any Revolving Credit Loan of any Type may be continued as a
                  Revolving Credit Loan of the same Type upon the expiration of
                  an Interest Period with respect thereto by compliance by the
                  applicable Borrower with the notice provisions contained in
                  Section 2.7.1; provided that as to any Eurocurrency Rate
                  Loans, no such Eurocurrency Rate Loan may be continued as such
                  when any Default or Event of Default has occurred and is
                  continuing, but shall be automatically converted to a Base
                  Rate Loan on the last day of the first Interest Period
                  relating thereto ending during the continuance of any Default
                  or Event of Default of which officers of the Agent active upon
                  the Company's account have actual knowledge. In the event that
                  the applicable Borrower fails to provide any such notice with
                  respect to the continuation of any Eurocurrency Rate Loan as
                  such, then such Eurocurrency Rate Loan shall be automatically
                  converted to a Base Rate Loan on the last day of the first
                  Interest Period relating thereto. The Agent shall notify the
                  applicable Banks promptly when any such automatic conversion
                  contemplated by this Section 2.7 is scheduled to occur.

                        2.7.3. EUROCURRENCY RATE LOANS. Any conversion to or
                  from Eurocurrency Rate Loans shall be in such amounts and be
                  made pursuant to such elections so that, after giving effect
                  thereto, the aggregate principal amount of all Eurocurrency
                  Rate Loans having the same Interest Period shall not be less
                  than $500,000 or a whole multiple of $100,000 in excess
                  thereof.

                  2.8.  FUNDS FOR REVOLVING CREDIT LOANS.

                        2.8.1. FUNDING PROCEDURES FOR REVOLVING CREDIT LOANS TO
                  BORROWERS. Not later than (a) 1:00 p.m. (Boston time) on the
                  proposed Drawdown Date of any Revolving Credit Loans to be
                  made to the Domestic Borrowers and (b) 11:00 a.m. (local time
<PAGE>   22
                                      -22-

                  with respect to the applicable Subsidiary Borrower) on the
                  proposed Drawdown Date of any Revolving Credit Loans to be
                  made to the Subsidiary Borrowers, each of the applicable
                  Revolving Banks will make available to the Agent to credit to
                  the applicable Borrower's account in Same Day Funds, the
                  amount of such Revolving A Bank's Revolving A Commitment
                  Percentage of the amount of the requested Revolving Credit A
                  Loans or the amount of such Revolving B Bank's Revolving B
                  Commitment Percentage of the amount of the requested Revolving
                  Credit Loan B, as the case may be, at the Agent's Head Office
                  (in the case of Revolving Credit Loans to a Domestic Borrower)
                  or at either the Agent's local branch located in Jardine
                  House, Suites 801-809, One Connaught Place, Central Hong Kong
                  or the Agent's local branch located at 39 Victoria Street,
                  London SW1H OEE, England (in the case of Revolving Credit
                  Loans to Foreign Borrowers). Upon receipt from each applicable
                  Revolving Bank of such amount, and upon receipt of the
                  documents required by Section 12 and the satisfaction of the
                  other conditions set forth therein, to the extent applicable,
                  the Agent will make available to the applicable Borrower the
                  aggregate amount of such applicable Revolving Credit Loans
                  made available to the Agent by the applicable Revolving Banks.
                  The failure or refusal of any Revolving Bank to make available
                  to the Agent at the aforesaid time and place on any Drawdown
                  Date the amount of its Revolving A Commitment Percentage or
                  Revolving B Commitment Percentage, as the case may be, of the
                  requested Revolving Credit A Loans or Revolving Credit B
                  Loans, as the case may be, shall not relieve any other
                  Revolving Bank from its several obligations hereunder to make
                  available to the Agent the amount of such other Revolving
                  Bank's Revolving A Commitment Percentage or Revolving Bank's
                  Revolving B Commitment Percentage, as the case may be, of any
                  requested Revolving Credit Loans.

                        2.8.2. ADVANCES BY AGENT FOR REVOLVING CREDIT LOANS TO
                  BORROWERS. The Agent may, unless notified to the contrary by
                  any applicable Revolving Bank prior to a Drawdown Date, assume
                  that such Revolving Bank has made available to the Agent on
                  such Drawdown Date the amount of such Revolving Bank's
                  Revolving A Commitment Percentage or Revolving Bank's
                  Revolving B Commitment Percentage, as the case may be, of the
                  Revolving Credit A Loans or the Revolving Credit B Loans, as
                  the case may be, to be made on such Drawdown Date, and the
                  Agent may (but it shall not be required to), in reliance upon
                  such assumption, make available to the applicable Borrower a
                  corresponding amount. If any applicable Revolving Bank makes
                  available to the Agent such amount on a date after such
                  Drawdown Date, such Revolving Bank shall pay to the Agent on
                  demand an amount equal to the product of (a) the average
                  computed for the period referred to in clause (c) below, of
                  the Overnight Rate for each day included in
<PAGE>   23
                                      -23-

                  such period, times (b) the amount of such Revolving Bank's
                  Revolving A Commitment Percentage of such Revolving Credit A
                  Loans or of such Revolving Bank's Revolving B Commitment
                  Percentage of such Revolving Credit B Loans, as the case may
                  be, times (c) a fraction, the numerator of which is the number
                  of days that elapse from and including such Drawdown Date to
                  the date on which the amount of such Revolving Bank's
                  Revolving A Commitment Percentage of such Revolving Credit A
                  Loans or of such Revolving Bank's Revolving B Commitment
                  Percentage of such Revolving Credit B Loans, as the case may
                  be, shall become immediately available to the Agent, and the
                  denominator of which is 365. A statement of the Agent
                  submitted to such Revolving Bank with respect to any amounts
                  owing under this paragraph shall be prima facie evidence of
                  the amount due and owing to the Agent by such Revolving Bank.
                  If the amount of such Revolving Bank's Revolving A Commitment
                  Percentage of such Revolving Credit A Loans or of such
                  Revolving Bank's Revolving B Commitment Percentage of such
                  Revolving Credit B Loans, as the case may be, is not made
                  available to the Agent by such Revolving Bank within three (3)
                  Business Days following such Drawdown Date, the Agent shall be
                  entitled to recover such amount from the applicable Borrowers
                  on demand, with interest thereon at the rate per annum
                  applicable to the Revolving Credit Loans made on such Drawdown
                  Date.

                  2.9.  INTENTIONALLY OMITTED.

                  2.10.  INTENTIONALLY OMITTED.

                  2.11.  SETTLEMENTS.

                        2.11.1. GENERAL. On each Settlement Date, the Agent
                  shall, not later than 11:00 a.m. (Boston time), give
                  telephonic or facsimile notice (a) to the applicable Revolving
                  Banks and the Company of the respective outstanding amount of
                  Swing Line Loans made by the Swing Line Bank on behalf of the
                  Revolving Banks from the immediately preceding Settlement Date
                  through the close of business on the prior day and the amount
                  of any Eurocurrency Rate Loans to be made (following the
                  giving of notice pursuant to Section 2.6.1(b)) on such date
                  pursuant to a Loan Request and (b) to the applicable Revolving
                  Banks of the amount (a "Settlement Amount") that each
                  Revolving Bank (a "Settling Bank") shall pay to effect a
                  Settlement of any Revolving Credit Loan. A statement of the
                  Agent submitted to the Revolving Banks and the Company or to
                  the Revolving Banks with respect to any amounts owing under
                  this Section 2.11 shall be prima facie evidence of the amount
                  due and owing. Each Settling Bank shall, not later than 3:00
                  p.m. (Boston time) on such Settlement Date, effect a wire
                  transfer of immediately available funds to the Agent in the
                  amount
<PAGE>   24
                                      -24-

                  of the Settlement Amount for such Settling Bank. All funds
                  advanced by any Revolving Bank as a Settling Bank pursuant to
                  this Section 2.11 shall for all purposes be treated as a
                  Revolving Credit A Loan or Revolving Credit B Loan, as the
                  case may be, made by such Settling Bank to the Domestic
                  Borrowers and all funds received by any Revolving Bank
                  pursuant to this Section 2.11 shall for all purposes be
                  treated as repayment of amounts owed with respect to Revolving
                  Credit A Loans or Revolving Credit B Loans, as the case may
                  be, made by such Revolving Bank. In the event that any
                  bankruptcy, reorganization, liquidation, receivership or
                  similar cases or proceedings in which any Domestic Borrower is
                  a debtor prevent a Settling Bank from making any Revolving
                  Credit A Loans or Revolving Credit B Loans, as the case may
                  be, to effect a Settlement as contemplated hereby, such
                  Settling Bank will make such dispositions and arrangements
                  with the other Revolving Banks with respect to such Revolving
                  Credit A Loans or Revolving Credit B Loans, as the case may
                  be, either by way of purchase of participations, distribution,
                  pro tanto assignment of claims, subrogation or otherwise as
                  shall result in each Revolving Bank's share of the outstanding
                  Revolving Credit A Loans or Revolving Credit B Loans, as the
                  case may be, being equal, as nearly as may be, to such
                  Revolving Bank's Revolving A Commitment Percentage or
                  Revolving Bank's Revolving B Commitment Percentage, as the
                  case may be, of the outstanding amount of the Revolving Credit
                  A Loans or Revolving Credit B Loans, as the case may be.

                        2.11.2. FAILURE TO MAKE FUNDS AVAILABLE. The Agent may,
                  unless notified to the contrary by any Settling Bank prior to
                  a Settlement Date, assume that such Settling Bank has made or
                  will make available to the Agent on such Settlement Date the
                  amount of such Settling Bank's Settlement Amount, and the
                  Agent may (but it shall not be required to), in reliance upon
                  such assumption, make available to the Borrowers a
                  corresponding amount. If any Settling Bank makes available to
                  the Agent such amount on a date after such Settlement Date,
                  such Settling Bank shall pay to the Agent on demand an amount
                  equal to the product of (a) the average computed for the
                  period referred to in clause (c) below, of the weighted
                  average interest rate paid by the Agent for federal funds
                  acquired by the Agent during each day included in such period,
                  times (b) the amount of such Settlement Amount, times (c) a
                  fraction, the numerator of which is the number of days that
                  elapse from and including such Settlement Date to the date on
                  which the amount of such Settlement Amount shall become
                  immediately available to the Agent, and the denominator of
                  which is 360. A statement of the Agent submitted to such
                  Settling Bank with respect to any amounts owing under this
                  Section 2.11.2 shall be prima facie evidence of the amount due
                  and owing to the Agent by such Settling Bank. If such Settling
                  Bank's Settlement Amount is not made available to the Agent by
                  such Settling Bank within
<PAGE>   25
                                      -25-

                  three (3) Business Days following such Settlement Date, the
                  Agent shall be entitled to recover such amount from the
                  applicable Borrower on demand, with interest thereon at the
                  rate per annum applicable to the Revolving Credit A Loans of
                  such Settlement Date.

                        2.11.3. NO EFFECT ON OTHER REVOLVING BANKS. The failure
                  or refusal of any Settling Bank to make available to the Agent
                  at the aforesaid time and place on any Settlement Date the
                  amount of such Settling Bank's Settlement Amount shall not (a)
                  relieve any other Settling Bank from its several obligations
                  hereunder to make available to the Agent the amount of such
                  other Settling Bank's Settlement Amount or (b) impose upon any
                  Revolving Bank, other than the Settling Bank so failing or
                  refusing, any liability with respect to such failure or
                  refusal or otherwise increase the Revolving A Commitment
                  Percentage or Revolving B Commitment Percentage, as the case
                  may be, of such other Revolving Bank.

                  2.12.  REPAYMENT OF REVOLVING CREDIT LOANS.

                        2.12.1. MATURITY. Each Domestic Borrower jointly and
                  severally promises to pay on the Revolving Credit Loan A
                  Maturity Date, and there shall become absolutely due and
                  payable on the Revolving Credit Loan A Maturity Date, all of
                  the Revolving Credit A Loans outstanding on such date to the
                  Borrowers, together with any and all accrued and unpaid
                  interest thereon. Each Foreign Borrower jointly and severally
                  promises to pay on the Revolving Credit Loan A Maturity Date,
                  and there shall become absolutely due and payable on the
                  Revolving Credit Loan A Maturity Date, all Revolving Credit A
                  Loans outstanding on such date to the Foreign Borrowers (but
                  not the Domestic Borrowers), together with all accrued and
                  unpaid interest thereon. Each Domestic Borrower jointly and
                  severally promises to pay on the Revolving Credit Loan B
                  Maturity Date, and there shall become absolutely due and
                  payable on the Revolving Credit Loan B Maturity Date, all of
                  the Revolving Credit B Loans outstanding on such date to the
                  Borrowers, together with any and all accrued and unpaid
                  interest thereon. Each Foreign Borrower jointly and severally
                  promises to pay on the Revolving Credit Loan B Maturity Date,
                  and there shall become absolutely due and payable on the
                  Revolving Credit Loan B Maturity Date, all Revolving Credit B
                  Loans outstanding on such date to the Foreign Borrowers (but
                  not the Domestic Borrowers), together with all accrued and
                  unpaid interest thereon, provided, no payment shall be made on
                  any Subdebt Funding Loans until such time as all amounts owing
                  on the Revolving Credit A Loan and the Term Loans (whether
                  principal, interest, fees or any other amounts) have been paid
                  in full in cash. To the extent any Revolving Credit B Bank
                  receives any such payments hereunder
<PAGE>   26
                                      -26-

                  on the Subdebt Funding Loans prior to the repayment in full in
                  cash of all amounts owing on the Revolving Credit A Loans and
                  the Term Loans (whether such amounts are principal, interest,
                  fees or any other amounts), each such Revolving Credit B Bank
                  will hold in trust and immediately pay over to the Agent, in
                  the same form of payment received, for application to the
                  Loans any amount that the Borrowers pay to the Revolving
                  Credit B Banks on account of the Subdebt Funding Loans. The
                  Banks hereby agree that to the extent all or any portion of
                  the Subdebt Fundings Loans are not paid on the Revolving
                  Credit Loan B Maturity Date as a result of the Borrower's
                  agreement not to make such payments until the Revolving Credit
                  A Loans and the Term Loans have been repaid in full in cash,
                  the failure to make such a payment to the Revolving Credit B
                  Banks of such Subdebt Funding Loans shall not be an Event of
                  Default under this Credit Agreement until one (1) Business Day
                  following the latest to occur of the Revolving Credit Loan A
                  Maturity Date, the Term Loan A Maturity Date and the Term Loan
                  B Maturity Date.

                        2.12.2.  MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS.

                        2.12.2.1.  GENERAL PROVISIONS AS TO REVOLVING CREDIT A
                  LOANS.

                  If at any time (a) the Revolver A Exposure exceeds the lesser
                  of (i) the Total Revolving A Commitment and (ii) the Borrowing
                  Base less the outstanding amount of Revolver Credit B Loans,
                  or (b) the Revolver A Exposure exceeds the Maximum Initial
                  Amount and the outstanding Revolving B Loans are in an amount
                  which is less than the Total Revolving B Commitment or (c)
                  after the earlier to occur of the Revolving Credit Loan B
                  Maturity Date and January 31, 2002 the Revolver A Exposure
                  exceeds the Maximum Initial Amount, then the Domestic
                  Borrowers shall immediately pay the amount of such excess to
                  the Agent for the respective accounts of the Revolving A Banks
                  for application: first, to any Swing Line Loans outstanding,
                  second, to any Unpaid Reimbursement Obligations; third, to the
                  Revolving Credit A Loans; and fourth, to provide to the Agent
                  cash collateral for Reimbursement Obligations as contemplated
                  by Section 4.2(b) and (c). Each payment of any Unpaid
                  Reimbursement Obligations or prepayment of Revolving Credit A
                  Loans shall be allocated among the Revolving A Banks, in
                  proportion, as nearly as practicable, to each Reimbursement
                  Obligation or (as the case may be) the respective unpaid
                  principal amount of each Revolving A Bank's Revolving Credit A
                  Note or loan account, as the case may be, with adjustments to
                  the extent practicable to equalize any prior payments or
                  repayments not exactly in proportion.
<PAGE>   27
                                      -27-

                        2.12.2.2.  GENERAL PROVISIONS AS TO REVOLVING CREDIT B
                  LOANS.

                  If at any time (a) the sum of the outstanding amount of the
                  Revolving Credit B Loans exceeds the lesser of (i) the Total
                  Revolving B Commitment and (ii) the Borrowing Base less the
                  Revolver A Exposure, or (b) there are any outstanding
                  Revolving B Loans (other than the Subdebt Funding Loans) at a
                  time when the Revolver A Exposure is less than the Maximum
                  Initial Amount, then the Domestic Borrowers shall immediately
                  pay the amount of such excess to the Agent for the respective
                  accounts of the Revolving B Banks for application: first, to
                  any Swing Line Loans outstanding for the accounts of the
                  Revolving B Banks and second, to the Revolving Credit B Loans.
                  Each prepayment of Revolving Credit B Loans shall be allocated
                  among the Revolving B Banks, in proportion, as nearly as
                  practicable, to the respective unpaid principal amount of each
                  Revolving B Bank's Revolving Credit B Note or loan account, as
                  the case may be, with adjustments to the extent practicable to
                  equalize any prior payments or repayments not exactly in
                  proportion.

                        2.12.2.3.  REPAYMENTS WITH NET CASH SALE PROCEEDS FROM
                  PERMITTED DISPOSITIONS AND NET CASH PROCEEDS FROM EQUITY
                  ISSUANCE.

                        In the event the Company or any of its Subsidiaries
                  receives any (a) Net Cash Sale Proceeds from the sale or other
                  disposition of assets permitted by Section 9.5.2., (b)
                  proceeds of insurance claims which insurance claim proceeds
                  (but not the Net Cash Sale Proceeds for the sale or other
                  disposition of assets) have not been either (i) reinvested by
                  the Company or such Subsidiary in assets which are normally
                  used in the ordinary course of business of the Borrowers,
                  including reinvestments in replacement assets or to repair the
                  asset so damaged, as the case may be, within 360 days of
                  receipt by such Person of such proceeds or (ii) subject to a
                  commitment by the Company or such Subsidiary pursuant to any
                  contract to be used to make such a reinvestment, subject only
                  to customary conditions (other than obtaining financing), on
                  or prior to the 270th day following the Company's or such
                  Subsidiary's receipt of the claimed amount and the claimed
                  amounts contractually committed are so applied within 360 days
                  following receipt of such amounts or (c) Net Cash Proceeds
                  from any Equity Issuances by the Company or its Subsidiaries
                  after the Closing Date (except for Net Cash Proceeds received
                  by the Company from Equity Issuances by the Company (i) made
                  in connection with its Stock Option Plan up to a maximum
                  aggregate amount of not more than $4,000,000 or to members of
                  the Company's management (other than in connection with the
                  sale of Equity Issuances to such members of management in the
                  Initial Public
<PAGE>   28
                                      -28-

                  Offering), (ii) received from any Principal of the Company or
                  other shareholders of the Company existing on the Closing Date
                  (the "Additional Investors") so long as no Event of Default
                  has occurred and is continuing and provided such Net Cash
                  Proceeds are not received in connection with the sale of
                  Equity Issuances to the Principals or such Additional
                  Investors in the Initial Public Offering, or (iii) received
                  from any other Person so long as no Event of Default has
                  occurred and is continuing, such Net Cash Proceeds are not
                  received in connection with the sale of Equity Issuances to
                  such Persons in the Initial Public Offering and provided the
                  aggregate amount of such Net Cash Proceeds are used to finance
                  all or any portion of a Permitted Acquisition), the Company
                  shall, within thirty (30) days of receipt thereof, after
                  repayment in full of the Term Loans as provided in Section
                  3.3, repay the outstanding Revolving Credit Loans in an amount
                  equal to 100% of such Net Cash Sale Proceeds, insurance
                  proceeds or Net Cash Proceeds, as the case may be, with such
                  proceeds being applied first to the Revolving Credit A Loans
                  until such time as the sum of the Revolver A Exposure is equal
                  to the Maximum Initial Amount (with a concurrent reduction on
                  the Total Revolving A Commitment by one hundred percent (100%)
                  of such amount), then any remaining amounts to the Revolving B
                  Loans other than the Subdebt Funding Loans (with a concurrent
                  reduction on the Revolving B Commitment by one hundred percent
                  (100%) of such amount), then to the remaining Revolving Credit
                  A Loans (with a concurrent reduction of the Revolving A
                  Commitment by one hundred percent (100%) of such amount) and
                  then to the Subdebt Funding Loans (with a concurrent reduction
                  on the Revolving B Commitment by one hundred percent (100%) of
                  such amount); provided, however, that notwithstanding the
                  foregoing, in the event the Company receives any Net Cash
                  Proceeds from its Initial Public Offering or any subsequent
                  public offering of its capital stock, the Company shall only
                  be required to repay an amount equal to 50% of the Net Cash
                  Proceeds of such Equity Issuance.

                        2.12.2.4. REPAYMENTS WITH NET CASH SALE PROCEEDS FROM
                  SALE OF DESIGNATED PROPERTY.

                        Notwithstanding anything to the contrary contained in
                  Section 2.12.2.3 above, in the event the Majority Banks
                  consent to the sale by the Company of the Designated Property
                  (provided nothing herein shall in any manner be construed as
                  an agreement or consent by such Banks to such sale) and the
                  Company receives any Net Cash Sale Proceeds from such sale of
                  the Designated Property, such Net Cash Sale Proceeds shall be
                  applied first to the Term Loans in the manner provided for in
                  Section 3.3 hereof and then to the Revolving Credit A Loans.
<PAGE>   29
                                      -29-

                        2.12.2.5.  REPAYMENTS WITH NET CASH SALE PROCEEDS FROM
                  OTHER ASSET DISPOSITIONS.

                        In the event the Company or any of its Subsidiaries
                  receives any Net Cash Sale Proceeds in connection with any
                  Asset Sale not otherwise permitted by Section 9.5.2 but in
                  which the Majority Banks have provided written consent
                  (although nothing contained herein shall be in any manner
                  construed as any willingness on the part of any of the banks
                  to provide such consent), other than the sale of the
                  Designated Property, such Net Cash Sale Proceeds shall be
                  applied (a) first to reduce the Revolver A Exposure to an
                  amount equal to the Maximum Initial Amount (with a concurrent
                  reduction of the Revolving A Commitment Percentage by such
                  amount), (b) second to reduce the Revolving Credit B Loans
                  other than the Subdebt Funding Loans (with a concurrent
                  reduction of the Revolving B Commitment by such amount), (c)
                  third to repay the remaining Revolver A Exposure, the Term
                  Loan A and the Term Loan B on a pro rata basis (with a
                  concurrent reduction of the Revolving A Commitment by the
                  amount of any such repayment to the Revolving Credit A Loans),
                  with any amounts so being applied to the Term Loan A and Term
                  Loan B being applied against remaining scheduled installments
                  due thereon in the inverse order of maturity and (d) fourth to
                  reduce the Subdebt Funding Loans (with a concurrent reduction
                  of the Revolving B Commitment by such amount).

                        2.12.3. CREDIT RECEIVED FOR FUNDS RECEIVED IN
                  CONCENTRATION ACCOUNT. Prior to the occurrence of an Event of
                  Default as to which the account officers of the Agent active
                  upon the Borrower's account have actual knowledge, (a) all
                  funds and cash proceeds in the form of money, checks and like
                  items received in the Fleet Concentration Account as
                  contemplated by Section 8.24 shall be credited, on the same
                  Business Day on which the Agent determines that good collected
                  funds have been received, and, prior to the receipt of good
                  collected funds, on a provisional basis until final receipt of
                  good collected funds, and applied as contemplated by
                  Section 2.12.4, (b) all funds and cash proceeds in the form of
                  a wire transfer received in the Fleet Concentration Account as
                  contemplated by Section 8.24 shall be credited on the same
                  Business Day as the Agent's receipt of such amounts (or up to
                  such later date as the Agent determines that good collected
                  funds have been received), and applied as contemplated by
                  Section 2.12.4, and (c) all funds and cash proceeds in the
                  form of an automated clearing house transfer received in the
                  Fleet Concentration Account as contemplated by Section 8.24
                  shall be credited, on the next Business Day following the
                  Agent's receipt of such amounts (or up to such later date as
                  the Agent determines that good collected funds have been
                  received), and applied as contemplated by Section 2.12.4. For
                  purposes of the foregoing provisions of this Section 2.12.3,
                  the Agent shall not be
<PAGE>   30
                                      -30-

                  deemed to have received any such funds or cash proceeds on any
                  day unless received by the Agent before 2:30 p.m. (Boston
                  time) on such day. The Domestic Borrowers further acknowledge
                  and agree that any such provisional credits or credits in
                  respect of wire or automatic clearing house funds transfers
                  shall be subject to reversal if final collection in good funds
                  of the related item is not received by, or final settlement of
                  the funds transfer is not made in favor of, the Agent in
                  accordance with the Agent's customary procedures and practices
                  for collecting provisional items or receiving settlement of
                  funds transfers.

                        2.12.4.  APPLICATION OF PAYMENTS PRIOR TO EVENT OF
                  DEFAULT.

                        (a) Prior to the occurrence of an Event of Default of
                  which the account officers of the Agent active on the
                  Borrowers' account have knowledge, all funds transferred to
                  the Fleet Concentration Account and for which the Domestic
                  Borrowers have received credits shall be applied to the
                  Obligations as follows:

                              (i) first, to pay amounts of principal, interest,
                        Unpaid Reimbursement Obligations, fees and all other
                        amounts then due and payable under this Credit
                        Agreement, the Notes and the other Loan Documents;

                              (ii) second, to reduce Revolving Credit Loans made
                        by the Swing Line Lender pursuant to Section 2.6.2 and
                        for which Settlement has not then been made;

                              (iii) third, if the Revolver A Exposure is greater
                        than the Maximum Initial Amount, to the Revolving Credit
                        A Loans in an amount of such excess, to be applied first
                        to Base Rate Loans and then to Eurocurrency Rate Loans;

                              (iv) fourth, to the outstanding amount of the
                        Revolving Credit B Loans other than the Subdebt Funding
                        Loans, to be applied first to Base Rate Loans and then
                        to Eurocurrency Rate Loans;

                              (v) fifth, to reduce the remaining Revolving
                        Credit A Loans which are Base Rate Loans;

                              (vi) sixth, to reduce the remaining Revolving
                        Credit A Loans which are Eurocurrency Rate Loans; and

                              (vii) seventh, except as otherwise required by
                        Section 4.2(b) and (c), to the Operating Account.
<PAGE>   31
                                      -31-

                        (b) All prepayments of Eurocurrency Rate Loans prior to
                  the end of an Interest Period shall obligate the applicable
                  Domestic Borrower to pay any breakage costs associated with
                  such Eurocurrency Rate Loans in accordance with Section 5.10.
                  Prior to the occurrence of an Event of Default, the applicable
                  Domestic Borrower may elect to avoid such breakage costs by
                  providing to the Agent cash in an amount sufficient to cash
                  collateralize such Eurocurrency Rate Loans, but in no event
                  shall such Domestic Borrower be deemed to have paid such
                  Eurocurrency Rate Loans until such cash has been paid to the
                  Agent for application to such Eurocurrency Rate Loans. The
                  Agent may elect to cause such cash collateral to be deposited
                  into either (i) a cash collateral account pursuant to the
                  terms of a cash collateral agreement executed by the
                  applicable Domestic Borrower and the Agent and in form and
                  substance satisfactory to the Agent or (ii) the applicable
                  Domestic Borrower's Operating Account with appropriate
                  instructions prohibiting such Domestic Borrower's withdrawal
                  of such funds so long as they remain cash collateral. In each
                  such case, the applicable Domestic Borrower agrees to execute
                  and deliver to the Agent such instruments and documents,
                  including Uniform Commercial Code financing statements and
                  agreements with any third party depository banks, as the Agent
                  may request.

                        (c) All prepayments of the Revolving Credit A Loans or
                  Revolving Credit B Loans, as the case may be, pursuant to this
                  Section 2.12.4 shall be allocated among the Revolving A Banks
                  and the Revolving B Banks, as the case may be, making such
                  Revolving Credit A Loans or Revolving Credit B Loans, as the
                  case may be, in proportion, as nearly as practicable, to the
                  respective unpaid principal amount of such Revolving Credit A
                  Loans or Revolving Credit B Loans, as the case may be,
                  outstanding, with adjustments to the extent practicable to
                  equalize any prior payments or repayments not exactly in
                  proportion. Prior to any Settlement Date, however, all
                  prepayments of the Revolving Credit Loans shall be applied in
                  accordance with this Section 2.12.4, first to outstanding
                  Revolving Credit Loans of the Swing Line Bank.

                        2.12.5. REPAYMENTS OF REVOLVING CREDIT LOANS AFTER EVENT
                  OF DEFAULT. Following the occurrence and during the
                  continuance of an Event of Default of which the account
                  officers of the Agent active on the Borrowers' account have
                  knowledge, all funds transferred to the Fleet Concentration
                  Account and for which the applicable Domestic Borrower has
                  received credits shall be applied to the Obligations in
                  accordance with Section 13.5.

                  2.13. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS. Each of
            the Borrowers shall have the right, at its election, to repay the
            outstanding amount of the Revolving Credit A Loans or Revolving
            Credit
<PAGE>   32
                                      -32-

            B Loans, as the case may be, as a whole or in part, at any time
            without penalty or premium (but subject to Section 5.10); provided,
            however, (a) no prepayment of the Revolving Credit B Loans shall be
            made if at the time of such prepayment the Revolver A Exposure
            exceeds the Maximum Initial Amount, (b) no prepayment of the Subdebt
            Funding Loans shall be made if at the time of such prepayment there
            are any outstanding Revolving Credit A Loans or Term Loans; and (c)
            no prepayment of the Revolving Credit A Loans shall be made if, at
            the time of making such prepayment, the Revolver A Exposure is less
            than or equal to the Maximum Initial Amount and there are any
            outstanding Revolving Credit B Loans other than the Subdebt Funding
            Loans. The applicable Borrower shall give the Agent, no later than
            10:00 a.m., Boston time on the date of any prepayment written notice
            of any proposed prepayment pursuant to this Section 2.13 of Base
            Rate Loans, and two (2) Business Days notice of any proposed
            prepayment pursuant to this Section 2.13 of Eurocurrency Rate Loans,
            in each case specifying the proposed date of prepayment of Revolving
            Credit A Loans or Revolving Credit B Loans, as the case may be, and
            the principal amount to be prepaid. Each such partial prepayment of
            the Revolving Credit Loans shall be in an integral multiple of
            $500,000, shall be accompanied by the payment of accrued interest on
            the principal prepaid to the date of prepayment and shall be
            applied, in the absence of instruction by the applicable Borrower,
            in accordance with Section 2.12.4(a)(iii) hereof. Each partial
            prepayment shall be allocated among the applicable Revolving Banks,
            in proportion, as nearly as practicable, to the respective unpaid
            principal amount of each Revolving Bank's Revolving Credit A Note or
            loan account or Revolving Credit B Note or loan account, as the case
            may be, with adjustments to the extent practicable to equalize any
            prior repayments not exactly in proportion. All repayments of the
            Revolving Credit Loans shall be applied first, to such Loans
            borrowed in compliance with the second paragraph of Section 4.09 of
            the Subordinated Indenture, and second, to such Loans borrowed in
            compliance with the first paragraph of Section 4.09 of the
            Subordinated Indenture.

                  2.14. CHANGE IN BORROWING BASE. The Borrowing Base shall be
            determined monthly by the Agent by reference to the Borrowing Base
            Report delivered to the Revolving Banks and the Agent pursuant to
            Section 8.4(i)."

                  2.15. MAXIMUM OVERADVANCE. The Maximum Overadvance shall
            automatically be reduced or increased, as the case may be, in
            accordance with the table set forth in the definition of "Maximum
            Overadvance", or, if the date specified for such change is not a
            Business Day, the immediately following Business Day. If at any time
            either the Revolver A Exposure or the outstanding amount of the
            Revolving Credit B Loans, as the case may be, exceeds the Borrowing
            Base then in effect at such time (whether as a result in a reduction
            in the Maximum Overadvance as and when specified or otherwise), then
            the Borrowers shall immediately pay the amounts of such excess to
            the Agent for the
<PAGE>   33
                                      -33-

            respective accounts of the Revolving A Banks or Revolving B Banks,
            as the case may be, for application first to any Unpaid
            Reimbursement Obligations (if being repaid to the Revolving A
            Banks), second to the Revolving Credit A Loans or Revolving Credit B
            Loans, as the case may be, and third to provide the Agent cash
            collateral for Reimbursement Obligations if required by Section 4.2
            hereof (if being repaid to the Revolving A Banks).

      SECTION 4. AMENDMENT TO SECTION 2A OF THE CREDIT AGREEMENT. Section 2A of
the Credit Agreement is hereby amended by deleting Section 2A in its entirety
and substituting in place thereof the words "Intentionally Omitted".

      SECTION 5. AMENDMENT TO SECTION 3 OF THE CREDIT AGREEMENT. Section 3.5.1
of the Credit Agreement is hereby amended by deleting such Section 3.5.1 in its
entirety and restating it as follows:

                  3.5.1. INTEREST RATES. Except as otherwise provided
            in Section 5.11, the Term Loans shall bear interest during each
            Interest Period relating to all or any portion of the Term Loans at
            the following rates:

                  (a) to the extent that all or any portion of Term Loan A bears
            interest during such Interest Period at the Base Rate, Term Loan A
            or such portion shall bear interest during such Interest Period at
            the rate per annum equal to the Base Rate plus the Applicable Margin
            for Base Rate Loans.

                  (b) To the extent that all or any portion of Term Loan A bears
            interest during such Interest Period at the Eurocurrency Rate, Term
            Loan A or such portion shall bear interest during such Interest
            Period at the rate per annum equal to the Eurocurrency Rate plus the
            Applicable Margin for Eurocurrency Rate Loans.

                  (c) to the extent that all or any portion of Term Loan B bears
            interest during such Interest Period at the Base Rate, Term Loan B
            or such portion shall bear interest during such Interest Period at
            the rate per annum equal to the Base Rate plus two and one-half of
            one percent (2.50%).

                  (d) To the extent that all or any portion of Term Loan B bears
            interest during such Interest Period at the Eurocurrency Rate, Term
            Loan B or such portion shall bear interest during such Interest
            Period at the rate per annum equal to the Eurocurrency Rate plus
            four and one quarter of one percent (4.25%).
<PAGE>   34
                                      -34-

            Each of the Domestic Borrowers promises to pay interest on the Term
            Loans or any portion thereof outstanding during each Interest Period
            in arrears on each Interest Payment Date applicable to such Interest
            Period."

      SECTION 6. AMENDMENT TO SECTION 4 OF THE CREDIT AGREEMENT. Section 4 of
the Credit Agreement is hereby amended as follows:

      (a) Section 4.1.1 of the Credit Agreement is hereby amended by (i)
deleting each reference to "Banks" contained therein and substituting in place
thereof the words "Revolving A Banks"; (ii) deleting the words "or any Optional
Currency" in the first sentence of Section 4.1.1, and (iii) deleting
subparagraph (e) in its entirety and substituting in place thereof the
following: "(e) the Revolver A Exposure shall not exceed the lesser of (i) the
Total Revolving A Commitment and (ii) the Borrowing Base less the outstanding
amount of Revolving Credit B Loans. In addition, notwithstanding anything to the
contrary contained herein, (1) if at any time the Revolver A Exposure is at the
Maximum Initial Amount, the Agent shall have no obligation to issue any
additional Letters of Credit until such time as the aggregate outstanding
principal amount of the Revolving Credit B Loans is equal to the Total Revolving
B Commitment and (2) from and after the earlier to occur of (x) the Revolving
Credit Loan B Maturity Date and (y) January 31, 2002, the Borrowers shall not
request any additional Letters of Credit if, after giving effect to such request
and without giving effect to any repayment of the Revolving Credit A Loans, the
Revolver A Exposure would exceed the Maximum Initial Amount."

      (b) Section 4.1.3. of the Credit Agreement is hereby amended by deleting
the words "Revolving Credit Loan Maturity Date" contained therein and
substituting in place thereof the words "Revolving Credit Loan A Maturity Date".

      (c) Section 4.1.4 of the Credit Agreement is hereby amended by (i)
deleting each reference to "Bank" contained therein and substituting in place
thereof the words "Revolving A Bank" and (ii) deleting each reference to
"Commitment Percentage" contained therein and substituting in place thereof the
words "Revolving A Commitment Percentage".

      (d) Section 4.2 of the Credit Agreement is hereby amended by (i) deleting
each reference to "Bank" or "Banks" contained therein and substituting in place
thereof the word "Revolving A Bank" or "Revolving A Banks", as the case may be;
(ii) deleting each reference to "Total Commitment" contained in Section 4.2 and
substituting in place thereof the words "Total Revolving A Commitment"; and
(iii) deleting the parenthetical "(in the same currency in which such Letter of
Credit was issued or the Dollar Equivalent thereof)" from Section 4.2(a);

      (e) Sections 4.3 and 4.6 of the Credit Agreement are hereby amended by (i)
deleting each reference to "Bank" or "Banks" contained therein and substituting
in place thereof the words "Revolving A Bank" or "Revolving A Banks", as the
case may be, and (ii) deleting each reference to "Commitment Percentage"
contained therein and substituting in place thereof the words "Revolving A
Commitment Percentage".
<PAGE>   35
                                      -35-

      SECTION 7. AMENDMENT TO SECTION 5 OF THE CREDIT AGREEMENT. Section 5 of
the Credit Agreement is hereby amended as follows:

      (a) Section 5.3.1 of the Credit Agreement is hereby amended by deleting
all the text which immediately follows the words "Boston, Massachusetts area
that the Agent may from time to time designate, in each case in Same Day Funds"
and substitute in place thereof the words "and in Dollars";

      (b) Section 5.3.3 of the Credit Agreement is hereby amended by deleting
Section 5.3.3. in its entirety and substituting in place thereof the words
"Intentionally Omitted";

      (c) Section 5.4 of the Credit Agreement is hereby amended by deleting the
words "Acceptance Fees for Bankers' Acceptances" in the first sentence of
Section 5.4;

      (d) Sections 5.5 and 5.6 of the Credit Agreement is hereby amended by
deleting each of Sections 5.5 and 5.6 in its entirety and restating it as
follows:

            5.5. INABILITY TO DETERMINE EUROCURRENCY RATE. In the event, prior
      to the commencement of any Interest Period relating to any Eurocurrency
      Rate Loan, the Agent shall determine or be notified by the Majority Banks
      that adequate and reasonable methods do not exist for ascertaining the
      Eurocurrency Rate that would otherwise determine the rate of interest to
      be applicable to any Eurocurrency Rate Loan during any Interest Period,
      the Agent shall forthwith give notice of such determination (which shall
      be conclusive and binding on the applicable Borrower and the Banks) to the
      Borrowers and the Banks. In such event (a) any Loan Request or Conversion
      Request with respect to Eurocurrency Rate Loans shall be automatically
      withdrawn and shall be deemed a request for Base Rate Loans, (b) each
      Eurocurrency Rate Loan will automatically, on the last day of the then
      current Interest Period relating thereto, become a Base Rate Loan, and (c)
      the obligations of the Banks to make Eurocurrency Rate Loans shall be
      suspended until the Agent or the Majority Banks determine that the
      circumstances giving rise to such suspension no longer exist, whereupon
      the Agent or, as the case may be, the Agent upon the instruction of the
      Majority Banks, shall so notify the Borrower and the Banks.

            5.6. ILLEGALITY. Notwithstanding any other provisions herein, if any
      present or future law, regulation, treaty or directive or in the
      interpretation or application thereof shall make it unlawful for any Bank
      to make or maintain Eurocurrency Rate Loans, such Bank shall forthwith
      give notice of such circumstances to the Borrowers and the other Banks and
      thereupon (a) the commitment of such Bank to make Eurocurrency Rate Loans
      or convert Loans of another Type to Eurocurrency Rate Loans shall
      forthwith be suspended and (b) such Bank's Revolving Credit Loans then
      outstanding as Eurocurrency Rate Loans, if any, shall be converted
      automatically to Base Rate
<PAGE>   36
                                      -36-

      Loans on the last day of each Interest Period applicable to such
      Eurocurrency Rate Loans or within such earlier period as may be required
      by law. Each Borrower hereby severally and not jointly agrees promptly to
      pay the Agent for the account of such Bank, upon demand by such Bank, any
      additional amounts necessary to compensate such Bank for any costs
      incurred by such Bank in making any conversion in accordance with this
      Section 5.6, including any interest or fees payable by such Bank to
      lenders of funds obtained by it in order to make or maintain its
      Eurocurrency Rate Loans hereunder.

      (e) Section 5.7 of the Credit Agreement is hereby amended by (i) deleting
the words "Bankers' Acceptances" from each place in which it appears in
Section 5.7(a) and (ii) deleting the words "any Bankers' Acceptances" from each
place in which it appears in Section 5.7(d); and

      (f) Section 5.12 of the Credit Agreement is hereby amended by deleting
Section 5.12 in its entirety and substituting in place thereof the words
"Intentionally Omitted".

      SECTION 8. AMENDMENT TO SECTION 8 OF THE CREDIT AGREEMENT. Section 8 of
the Credit Agreement is hereby amended as follows:

      (a) Section 8.4(d) of the Credit Agreement is hereby amended by deleting
the words "simultaneously with the delivery of the financial statements referred
to in subsections (a) and (b) above" and substituting in place thereof the words
"simultaneously with the delivery of the financial statements referred to in
subsections (a), (b) and (c) above";

      (b) Section 8.4 of the Credit Agreement is further amended by inserting
immediately at the end of the text of Section 8.4(h) the following:

            (i) within twenty (20) days at the end of each calendar month or at
      such earlier time as the Agent may reasonably request, a Borrowing Base
      Report setting forth the Borrowing Base as at the end of such calendar
      month or other date so requested by the Agent;

            (j)   within twenty (20) days after the end of each calendar
      month, an Accounts Receivable Aging report;

            (k) by not later than Monday of each calendar week, the Company's
      cash flow forecast for that week and the immediately succeeding next
      12-week period;

            (l) by not later than Monday of each calendar week, the Company's
      one-week cash flow report for the immediately preceding week, together
      with a comparison to the forecast prepared for such week; and
<PAGE>   37
                                      -37-

            (m) as soon as practicable, but in any event not later than thirty
      (30) days after the end of each of the September 30, 2001 and March 31,
      2002 fiscal quarters, such financial information otherwise required by
      Section 8.4(b) for such fiscal quarter ends, together with a Compliance
      Certificate setting forth in reasonable detail computations evidencing
      compliance with the covenants contained in Section 10 hereof.

      (c) Section 8.24.1 of the Credit Agreement is hereby amended by deleting
the date "May 4, 2001" which appears in the first sentence of such Section
8.24.1 and substituting in place thereof the date "May 31, 2001";

      (d) Section 8 of the Credit Agreement is further amended by inserting
immediately after the end of the text of Section 8.24 the following:

            8.25 AUDIT REPORT. The Company shall deliver to the Agent and the
      Banks, by not later than May 11, 2001 the consolidated balance sheet of
      the Company and its Subsidiaries for the fiscal year ended December 31,
      2000 and the related consolidated statement of income and consolidated
      statement of cash flow, prepared in accordance with generally accepted
      accounting principles and certified without qualification by
      PricewaterhouseCoopers LLP, together with a written statement from such
      accountants to the effect that they have read a copy of this Credit
      Agreement, and that, in making the examination necessary to said
      certification, they have obtained no knowledge of any Default or Event of
      Default as it relates to any financial covenant.

            8.26 EMPLOYMENT OF OPERATIONAL CONSULTANT. The Company shall
      continue to engage the services of an Operational Consultant, provided
      that, after March 31, 2002, the Company may discontinue such engagement if
      as of such date: (a) the Agent has received the Company's five-year
      business plan approved by such Operational Consultant and which plan
      demonstrates that all the financial covenants, calculated on a pro forma
      basis, will be complied with when and as required by the Credit Agreement,
      and (b) no Default or Event of Default occurs and is continuing.

            8.27 EMPLOYMENT OF STRATEGIC ADVISOR. The Company shall, by not
      later than May 31, 2001, engage the services of a strategic advisor
      experienced in the area, of nationally recognized standing and not
      disapproved by the Majority Banks to perform such services as are
      necessary in order to enhance capital value.

            8.28. PERIODIC MEETINGS. The Company shall cause to occur (a) a
      meeting among the Company, Berkshire Partners, the strategic advisor
      referred to in Section 8.27, the Agent and the Banks by not later than
      September 30, 2001 pursuant to which the Company and such strategic
      advisor will present to the Agent and the Banks a strategic option plan;
      (b) a meeting by and among the Company, Berkshire Partners, the
      Operational Consultant and the Banks by not later than November 1, 2001,
      to review the Company's business plan and projections for the 2002 fiscal
      year and to review the Company's repayment plan for the Obligations; (c)
      if requested by the Agent or those Banks designated
<PAGE>   38
                                      -38-

      as a steering committee (the "Steering Committee"), one meeting in each
      calendar month among the Company, Berkshire Partners, the Operational
      Consultant, the Agent, the Agent's Special Counsel (if requested), the
      Steering Committee and counsel to the Steering Committee (if requested) to
      review the monthly financial updates and projections of the Company and
      its Subsidiaries; and (d) if requested by the Agent or the Steering
      Committee, one meeting per fiscal quarter (which may be by a telephonic
      conference call) among the Company, Berkshire Partners, the Operational
      Consultant, the Agent and the Banks (and, to the extent so requested by
      the Agent or the Steering Committee, as the case may be, the Agent's
      Special Counsel and counsel to the Steering Committee, as the case may be)
      to provide the Agent and Banks with quarterly financial updates and
      projections of the Company and its Subsidiaries.

            8.29. INTEREST PAYMENTS - SUBDEBT FUNDING LOANS.

            8.29.1. NOVEMBER PAYMENT. The Company agrees that as to the
      regularly scheduled interest payment on the Subordinated Notes due
      November 15, 2001 which the Company elects to make to the holders of such
      Subordinated Notes (and so long as no Event of Default has occurred and is
      continuing hereunder pursuant to which the Agent and the Banks have
      delivered a Payment Blockage Notice (as such term is defined in the
      Subordinated Debt Documents)), (a) to the extent the Company's EBITDA for
      the nine months ended September 30, 2001 is equal to or greater than
      $30,800,000 but less than $32,500,000, unless the Company funds such
      payment with the proceeds of any Equity Issuance or the proceeds of any
      Indebtedness which is consented to by the Majority Banks and containing
      terms and conditions (including subordination provisions) acceptable to
      the Majority Banks, the Company shall make a request for a Revolving
      Credit B Loan in an amount equal to fifty percent (50%) of the amount of
      such interest payment and use the proceeds thereof to fund fifty (50%) of
      such interest payment (with the Company also being permitted, subject to
      compliance with the terms and conditions of the Credit Agreement, to
      request a Revolving Credit Loan in an amount of all or any portion of the
      remaining 50% of such required payment) and (b) to the extent the
      Company's EBITDA for such period is less than $30,800,000, unless the
      Company funds such payment with the proceeds of an Equity Issuance or the
      proceeds of any Indebtedness which is consented to by the Majority Banks
      and containing terms and conditions (including subordination provisions)
      acceptable to the Majority Banks, the Company shall make a request for a
      Revolving Credit B Loan in an amount equal to one hundred percent (100%)
      of the amount of such interest payment and use the proceeds thereof to
      fund one hundred percent (100%) of such interest payment, and the
      Revolving Credit B Banks agree, subject to compliance with the conditions
      of this Credit Agreement, to make such Revolving Credit B Loans to the
      Company (such Revolving Credit B Loans being hereinafter referred to as a
      "November Subdebt Funding Loan"). In the event that, at time of making any
      Loan Request pursuant to this Section 8.29.1, there is no availability
      under the Total Revolving B Commitment but there remains availability
      under the Total Revolving A Commitment, the Company shall be permitted,
      subject to compliance at all times with the terms and conditions of this
      Credit Agreement,
<PAGE>   39
                                      -39-

      to borrow Revolving Credit A Loans in the amount of the November Subdebt
      Funding Loan in order to repay existing Revolving Credit B Loans by such
      amount so as to create availability for the borrowing of such November
      Subdebt Funding Loans under the Total Revolving B Commitment. The
      Revolving Credit B Banks further agree that any such November Subdebt
      Funding Loan (and, during an Event of Default which has occurred and is
      continuing pursuant to Section 13.1(a) or (b) of the Credit Agreement as
      it relates to the Revolving Credit A Loans and the Term Loans, any
      interest thereon) shall be junior in right of payment to the Revolving
      Credit A Loans and the Term Loans, all as more fully set forth in this
      Credit Agreement. The parties hereto agree that to the extent any such
      November Subdebt Funding Loans are made and the Company subsequently
      delivers to the Agent and the Banks its audited financial statements
      evidencing that the Company's EBITDA as of December 31, 2001 for the
      immediately twelve (12) month period is equal to or greater than
      $62,100,000 and, in addition, the Company delivers to the Agent and the
      Banks a Compliance Certificate evidencing compliance with all the
      financial covenants set forth in Section 10 for the fiscal quarter ending
      March 31, 2002 and no other Event of Default has occurred and is
      continuing as of March 31, 2002, the November Subdebt Funding Loans shall
      no longer be considered as such, shall be considered ordinary Revolving
      Credit B Loans and shall no longer be junior in right of payment as set
      forth above in this Credit Agreement.

            8.29.2. MAY PAYMENT. The Company agrees that as to the regularly
      scheduled interest payment on the Subordinated Notes due May 15, 2002
      which the Company elects to make to the holders of such Subordinated
      Notes, (and so long as no Event of Default has occurred and is continuing
      hereunder pursuant to which the Agent and the Banks have delivered a
      Payment Blockage Notice (as such term is defined in the Subordinated Debt
      Documents)), unless the Company funds such payment with the proceeds of an
      Equity Issuance or the proceeds of any Indebtedness which is consented to
      by the Majority Banks and containing terms and conditions (including
      subordination provisions) acceptable to the Majority Banks, the Company
      shall make a request for a Revolving Credit B Loan in an amount equal to
      one hundred percent (100%) of the amount of such interest payment and use
      the proceeds thereof to fund one hundred percent (100%) of such interest
      payment, and the Revolving Credit B Banks agree, subject to compliance
      with the conditions of this Credit Agreement, to make such a Revolving
      Credit B Loans to the Company (such Revolving Credit B Loans being
      hereinafter referred to as a "May Subdebt Funding Loan" and, collectively
      with the November Subdebt Funding Loan, the "Subdebt Funding Loans"). The
      Revolving Credit B Banks hereby agree that any such May Subdebt Funding
      Loan (and, during an Event of Default which has occurred and is continuing
      pursuant to Section 13.1(a) or (b) of the Credit Agreement as it relates
      to the Revolving Credit A Loans and the Term Loans, any interest thereon)
      shall be junior in right of payment to the Revolving Credit A Loans and
      the Term Loans, all as more fully set forth in this Credit Agreement.

            8.30 ENGAGEMENT LETTER. The Company shall, by not later than May 18,
      2001, deliver to the Agent evidence satisfactory to the Agent that the
<PAGE>   40
                                      -40-

      Company and the Operational Consultant have entered into an engagement
      letter detailing the services to be provided by such Operational
      Consultant.

      SECTION 9. AMENDMENT TO SECTION 9 OF THE CREDIT AGREEMENT. Section 9 of
the Credit Agreement is hereby amended as follows:

      (a) Section 9.1(d) of the Credit Agreement is hereby amended by deleting
the number "$15,000,000" which appears in Section 9.1(d) and substituting in
place thereof the number "$500,000."

      (b) Section 9.1(f)(iv) of the Credit Agreement is hereby amended by
deleting clause (iv) thereof and substituting in place thereof the following:

            (iv) Indebtedness (1) of a Subsidiary of the Company which is
      neither a Borrower or a Guarantor hereunder; and (2) incurred in
      connection with the factoring or other discounting of certain letters of
      credit in the ordinary course of business issued in favor of any
      Subsidiary of the Company, provided that the aggregate principal amount of
      all such Indebtedness permitted under this Section 9.1(f)(iv) shall not
      exceed an amount equal to $20,000,000, and provided, further, that the
      proceeds of such Indebtedness shall be used to fund the Company's
      operations and working capital needs in the People's Republic of China;

      (c) Section 9.1(g) of the Credit Agreement is hereby amended by deleting
the number "$5,000,000" which appears in Section 9.1(g) and substituting in
place thereof the number "$500,000."

      (d) Section 9.1(i) of the Credit Agreement is hereby amended by inserting
immediately after the words "Additional Investors" the words "in an aggregate
amount not to exceed $1,100,000 in any calendar year and incurred in connection
with the Company's obtaining the Revolving Credit B Loans";

      (e) Section 9.1(j) of the Credit Agreement is hereby amended by deleting
the text of Section 9.1(j) and substituting in place thereof the words
"Intentionally Omitted";

      (f) Section 9.1 of the Credit Agreement is hereby further amended by
inserting immediately at the end of such Section 9.1 the following words: "; and
provided, further, that the aggregate amount of all Indebtedness incurred under
Sections 9.1(d), (g) and (h) shall not exceed, in the aggregate, $500,000
in any fiscal year."

      (g) section 9.2(h) of the Credit Agreement is hereby amended by inserting
immediately at the end of 9.2(h) the words: "and liens and assets of the
Subsidiary of the Company which is neither a Borrower nor a Guarantor hereunder
to secure the Indebtedness permitted by Section 9.1(f)(iv)(1) hereof."

      (h) Section 9.12 of the Credit Agreement is hereby amended by inserting
immediately after the words "Except for the GE Joint Venture" the words "and
Indebtedness owed pursuant to Section 9.1(i)".
<PAGE>   41
                                      -41-

      SECTION 10. AMENDMENT TO SECTION 10 OF THE CREDIT AGREEMENT. Section 10 of
the Credit Agreement is hereby amended by deleting Section 10 in its entirety
and restating it as follows:

      10. FINANCIAL COVENANTS OF THE BORROWERS.

            Each of the Borrowers covenants and agrees that, so long as any
      Loan, Bankers' Acceptance, Unpaid Reimbursement Obligation, Letter of
      Credit or Note or loan account is outstanding or any Bank has any
      obligation to make any Loans or accept and/or purchase any Bankers'
      Acceptances or the Agent has any obligation to issue, extend or renew any
      Letters of Credit:

            10.1. LEVERAGE RATIO.  The Borrowers will not as of the end of
      any fiscal quarter ending on any date described in the table set forth
      below, permit the Leverage Ratio to exceed the ratio set forth opposite
      such period in such table:

<TABLE>
<CAPTION>
                        Period                           Ratio
                        ------                           -----
<S>                                                   <C>
            June 30, 2001                             7.15:1.00
            September 30, 2001                        8.15:1.00
            December 31, 2001                         6.90:1.00
            March 31, 2002                            6.75:1.00
            June 30, 2002                             6.85:1.00
            any fiscal quarter ending thereafter      4.50:1.00
</TABLE>

            10.2. INTEREST COVERAGE RATIO. The Borrowers will not, as of the end
      of any fiscal quarter ending on any date described in the table set forth
      below, permit the Interest Coverage Ratio to be less than the ratio set
      forth opposite such period in such table:

<TABLE>
<CAPTION>
                        Period                          Ratio
                        ------                          -----
<S>                                                  <C>
            June 30, 2001                            1.33:1.00
            September 30, 2001                       1.175:1.00
            December 31, 2001                        1.38:1.00
            March 31, 2002                           1.38:1.00
            June 30, 2002                            1.35:1.00
            any fiscal quarter ending thereafter     2.25:1.00
</TABLE>

            10.3. FIXED CHARGE COVERAGE RATIO. The Borrowers will not, as of the
      end of any fiscal quarter ending on any date described in the table set
      forth below, permit the Fixed Charge Coverage Ratio to be less than the
      ratio set forth opposite such period in such table:
<PAGE>   42
                                      -42-

<TABLE>
<CAPTION>
                        Period                          Ratio
                        ------                          -----
<S>                                                  <C>
            June 30, 2001                            0.70:1.00
            September 30, 2001                       0.535:1.00
            December 31, 2001                        0.70:1.00
            March 31, 2002                           0.70:1.00
            June 30, 2002                            0.70:1.00
            Any fiscal quarter ending thereafter     1.00:1.00
</TABLE>

            10.4. CAPITAL EXPENDITURES. The Borrowers will not make, or permit
      any Subsidiary of such Borrower to make, during any fiscal year, Capital
      Expenditures (including, without limitation, any Capital Expenditures made
      by the Company or any Subsidiary in connection with any joint venture
      entities) that exceed, in the aggregate, $19,000,000 (of which not more
      than $13,000,000 shall be attributable to Capital Expenditures made in
      connection with the Company's operations in China). However, $1,000,000 of
      Capital Expenditures not spent in a given year may be carried over and
      added to the Capital Expenditures permitted only for the immediately
      following year (after first utilizing the amount of Capital Expenditures
      permitted for such fiscal year), each such carry over not to exceed one
      year.

            10.5. MONTHLY LEVERAGE RATIO. The Borrowers will not as of the end
      of any calendar month ending on any date described in the table set forth
      below, permit the Monthly Leverage Ratio to exceed the ratio set forth
      opposite such period in such table for such month, provided that no Event
      of Default shall occur until such time as the Borrowers have failed to
      comply with the Monthly Leverage Ratio set forth below for two consecutive
      calendar months:

<TABLE>
<CAPTION>
                        Month Ended                     Ratio
                        -----------                     -----
<S>                                                   <C>
            April 30, 2001                            6.95:1.00
            May 31, 2001                              7.15:1.00
            June 30, 2001                             7.15:1.00
            July 31, 2001                             7.20:1.00
            August 31, 2001                           7.45:1.00
            September 30, 2001                        8.15:1.00
            October 31, 2001                          7.65:1.00
            November 30, 2001                         7.10:1.00
            December 31, 2001                         6.90:1.00
            January 31, 2002                          6.85:1.00
            February 28, 2002                         6.85:1.00
            March 31, 2002                            6.75:1.00
            April 30, 2002                            6.80:1.00
            May 31, 2002                              6.85:1.00
            June 30, 2002                             6.85:1.00
            Each month ending thereafter              4.50:1.00
</TABLE>
<PAGE>   43
                                      -43-

            10.6. MONTHLY INTEREST COVERAGE RATIO. The Borrowers will not, as of
      the end of any calendar month ending on any date described in the table
      set forth below, permit the Monthly Interest Coverage Ratio to be less
      than the ratio set forth opposite such period in such table, provided that
      no Event of Default shall occur until such time as the Borrowers have
      failed to comply with the Monthly Interest Coverage Ratio set forth below
      for two consecutive calendar months:

<TABLE>
<CAPTION>
                        Month Ended                     Ratio
                        -----------                     -----
<S>                                                   <C>
            April 30, 2001                            1.40:1.00
            May 31, 2001                              1.35;1.00
            June 30, 2001                             1.33:1.00
            July 31, 2001                             1.35:1.00
            August 31, 2001                           1.25:1.00
            September 30, 2001                        1.175:1.00
            October 31, 2001                          1.25:1.00
            November 30, 2001                         1.35:1.00
            December 31, 2001                         1.38:1.00
            January 31, 2002                          1.35:1.00
            February 28, 2002                         1.35:1.00
            March 31, 2002                            1.38:1.00
            April 30, 2002                            1.35:1.00
            May 31, 2002                              1.35:1.00
            June 30, 2002                             1.35:1.00
            Each month ending thereafter              2.25:1.00
</TABLE>

            10.7. MONTHLY FIXED CHARGE COVERAGE RATIO. The Borrowers will not,
      as of the end of any calendar month ending on any date described in the
      table set forth below, permit the Monthly Fixed Charge Coverage Ratio to
      be less than the ratio set forth opposite such period in such table,
      provided that no Event of Default shall occur until such time as the
      Borrowers have failed to comply with the Monthly Fixed Charge Coverage
      Ratio set forth below for two consecutive calendar months:

<TABLE>
<CAPTION>
                        Month Ended                     Ratio
                        -----------                     -----
<S>                                                   <C>
            April 30, 2001                            0.75:1.00
            May 31, 2001                              0.70:1.00
            June 30, 2001                             0.70:1.00
            July 31, 2001                             0.70:1.00
            August 31, 2001                           0.65:1.00
            September 30, 2001                        0.535:1.00
            October 31, 2001                          0.60:1.00
            November 30, 2001                         0.70:1.00
            December 31, 2001                         0.70:1.00
            January 31, 2002                          0.70:1.00
</TABLE>
<PAGE>   44
                                      -44-

<TABLE>
<S>                                                   <C>
            February 28, 2002                         0.70:1.00
            March 31, 2002                            0.70:1.00
            April 30, 2002                            0.70:1.00
            May 31, 2002                              0.70:1.00
            June 30, 2002                             0.70:1.00
            Each month ending thereafter              1.00:1.00
</TABLE>

      SECTION 11. AMENDMENT TO SECTION 13 OF THE CREDIT AGREEMENT. Section 13 of
the Credit Agreement is hereby amended as follows:

      (a) Section 13.1(c) of the Credit Agreement is hereby amended by inserting
immediately after the references to "8.15 - 8.17," a reference to "8.24 -
8.30,";

      (b) Section 13.2 of the Credit Agreement is hereby amended by (i) deleting
the words "and to accept and/or purchase Bankers' Acceptances from Rival Canada"
in the first sentence thereof; (ii) deleting "the acceptance and/or purchasing
of any Bankers' Acceptances" from the second sentence thereof; and (iii)
deleting "accept and/or purchase Bankers' Acceptances" from the second sentence
thereof;

      (c) Section 13.3 of the Credit Agreement is hereby amended by deleting the
words "Bankers' Acceptances" in each place in which appears in the first
sentence of Section 13.3;

      (d) Section 13.5 of the Credit Agreement is hereby amended by deleting
Section 13.5 in its entirety and restating it as follows:

            13.5. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that,
      following the occurrence or during the continuance of any Default or Event
      of Default, the Agent or any Bank, as the case may be, receives any monies
      in connection with the enforcement of any the Security Documents, or
      otherwise with respect to the realization upon any of the Collateral, such
      monies shall be distributed for application as follows:

            (a) First, to the payment of, or (as the case may be) the
      reimbursement of the Agent for or in respect of all reasonable costs,
      expenses, disbursements and losses which shall have been incurred or
      sustained by the Agent in connection with the collection of such monies by
      the Agent, for the exercise, protection or enforcement by the Agent of all
      or any of the rights, remedies, powers and privileges of the Agent under
      this Credit Agreement or any of the other Loan Documents or in respect of
      the Collateral or in support of any provision of adequate indemnity to the
      Agent against any taxes or liens which by law shall have, or may have,
      priority over the rights of the Agent to such monies;

            (b) Second, to all other Obligations other than the Subdebt Funding
      Loans in such order or preference as to type of Obligations (such as
      interest, principal, fees and expenses) as the Majority Banks may
      determine; provided, however, that (i) distributions shall be made (A)
      pari passu among Obligations with respect to the Agent's fee payable
<PAGE>   45
                                      -45-

      pursuant to Section 5.2 and all other Obligations and (B) with respect to
      each type of Obligation owing to the Banks, such as interest, principal,
      fees and expenses, among the Banks pro rata in accordance with the
      principal amount of each Bank's outstanding Notes, provided, however, the
      Revolving Banks hereby agree that as to the application of any amounts to
      the Revolving Credit Loans, such amounts shall be applied first to repay
      any Revolver A Exposure in an amount in excess of the Maximum Initial
      Amount, second to repay the outstanding amount of the Revolving Credit B
      Loans other than the Subdebt Funding Loans, third to repay the remaining
      Revolver A Exposure;

            (c)   Third, to the Subdebt Funding Loans and all other
      Obligations arising thereunder;

            (d) Fourth, upon payment and satisfaction in full or other
      provisions for payment in full satisfactory to the Banks and the Agent of
      all of the Obligations, to the payment of any obligations required to be
      paid pursuant to Section 9-504(l)(c) of the Uniform Commercial Code of the
      Commonwealth of Massachusetts; and

            (e) Fifth, the excess, if any, shall be returned to the Borrowers or
      to such other Persons as are entitled thereto.

      (e) Section 13 of the Credit Agreement is hereby amended by inserting
immediately after the end of the text of Section 13.5 the following:

            SECTION 13.6.  TRUE UP.

            (a) The provisions of this Section 13.6 apply in the event that the
      Borrower or Rival becomes a debtor under the federal Bankruptcy Code.

            (b) If, on any True Up Date, the Base Percentage of any Bank varies
      from the True Up Date Risk Percentage of such Bank, the Banks, on such
      True Up Date, will make such acquisitions, dispositions and other
      arrangements with one another, whether by way of purchase, sale,
      participation, contribution, distribution, pro tanto assumption or
      assignment of claims, subrogation or otherwise, as shall result in each
      Bank's True Up Date Risk Percentage being equal (as nearly as may be) to
      such Bank's Base Percentage.

            (c) In the event that any Specified Obligations owed to any Bank on
      any True Up Date are contingent and, pursuant to Section 13.6(b), another
      Bank (an "Assuming Bank") assumes all or a portion of the liability of
      such Bank giving rise to such contingent Specified Obligation, the
      Assuming Bank agrees to indemnify and hold the other Bank harmless from
      any against any loss, cost or expense sustained or incurred by the other
      Bank as a result of the failure of the Assuming Bank to satisfy that
      liability.
<PAGE>   46
                                      -46-

            (d) No assignment by any Bank made pursuant to Section 19 of any of
      the Specified Obligations owed to such Bank shall release such Bank from
      its obligations to the other Banks under this Section 13.6.

            (e) For the purposes of this Section 13.6, the following terms have
      the following meanings:

                  (i) "Base Percentage" means, with respect to any Bank, the
            percentage which the Specified Obligations owed to such Bank on May
            1, 2001, bears to the Specified Obligations owed to all of the Banks
            on May 1, 2001.

                  (ii) "Specified Obligations" means Obligations other than
            Obligations comprising principal of and interest on the Revolving
            Credit B Loans and that portion of the Revolving Credit A Loans
            which exceed the Maximum Initial Amount. The term includes Specified
            Obligations which, at the time of reference, are contingent
            obligations, such as Letter of Credit Participations in
            Reimbursement Obligations in respect of undrawn Letters of Credit.

                  (iii) "True Up Date" means (A) 180 days following the date on
            which a petition is filed by or against the Borrower or Rival under
            the federal Bankruptcy Code or, if earlier, the date on which any
            plan of reorganization of the Borrower or Rival under Chapter 11 of
            the federal Bankruptcy Code becomes effective or (B) any later date
            specified by a Bank in a written notice provided to the other Banks
            and the Agent not less than 30 days prior to the date specified in
            such notice and falling not less than 180 days after the immediately
            preceding True Up Date.

                  (iv) "True Up Date Risk Percentage" means, with respect to any
            Bank, the percentage which the Specified Obligations owed to such
            Bank on any True Up Date bears to the Specified Obligations owed to
            all of the Banks on such True Up Date.

            (f) The provisions of this Section 13.6 shall not be amended or
      modified without obtaining the prior written consent of each Bank affected
      thereby.

      SECTION 12. AMENDMENT TO SECTION 14 OF THE CREDIT AGREEMENT. Section 14 of
the Credit Agreement is hereby amended by deleting each reference to "or
Bankers' Acceptances" and "any Bankers' Acceptances" in each place in which they
appear in Section 14.

      SECTION 13. AMENDMENT TO SECTION 15 OF THE CREDIT AGREEMENT. Section 15 of
the Credit Agreement is hereby amended as follows:
<PAGE>   47
                                      -47-

      (a) Section 15.5.3 of the Credit Agreement is hereby amended by (i)
deleting the words "or to purchase a risk participation in any Bankers'
Acceptances" from subparagraph (a) thereof; and (ii) deleting the words
"Bankers' Acceptances" from each place in which they appear in the second and
third sentence of Section 15.5.3;

      (b) Section 15.6 of the Credit Agreement is hereby amended by deleting the
words "or purchaser of any risk participation of any Bankers' Acceptance" from
Section 15.6;

      (c) Section 15.7 of the Credit Agreement is hereby amended by deleting the
words "the Bankers' Acceptances," which appear in such Section 15.7; and

      (d) Section 15.8 of the Credit Agreement is hereby amended by deleting the
words "Bankers' Acceptances" from Section 15.8 thereof.

      SECTION 14. AMENDMENT TO SECTION 16 OF THE CREDIT AGREEMENT. Section 16.2
of the Credit Agreement is hereby amended by inserting immediately at the end of
the text of Section 16.2 the following sentence: "In addition to the foregoing,
each of the Domestic Borrowers and Guarantors hereby agree to indemnify the
Agent and its affiliates and to hold the Agent and its affiliates harmless from
and against any loss, cost or expense incurred or sustained by the Agent or such
affiliate in providing payroll and other cash management services to the Company
and its Subsidiaries. The parties hereto further hereby agree that such
indemnification obligations shall be Obligations under the Credit Agreement and
the other Loan Documents."

      SECTION 15. AMENDMENT TO SECTION 18 OF THE CREDIT AGREEMENT. Section 18 of
the Credit Agreement is hereby amended by (a) deleting the words "the acceptance
and/or purchase of any Bankers' Acceptance" in each place in which such words
appear in Section 18 thereof; and (b) deleting the words "or any Bankers'
Acceptance" which appears in Section 18.

      SECTION 16. AMENDMENT TO SECTION 19 OF THE CREDIT AGREEMENT. Section 19 of
the Credit Agreement is hereby amended as follows:

      (a) Section 19.1 of the Credit Agreement is hereby amended by deleting the
text of the first sentence of Section 19.1 up to the words "provided that (a)"
and substituting in place thereof the words "Except as provided herein and
subject to Section 13.6 hereof, each Bank may assign to one or, more Eligible
Assignees all or a portion of its interests, rights and obligations under this
Credit Agreement (including all or a portion of its Revolving Credit A
Commitment Percentage, Revolving Credit B Commitment Percentage, Revolving
Credit A Commitment, Revolving Credit B Commitment, Term Loan A Commitment and
Term Loan B Commitment and the same portion of the Loans at the time owing to
it, the Notes held by it and its participating interest in the risk relating to
any Letters of Credit );";

      (b) Section 19.7 of the Credit Agreement is hereby amended by deleting the
words "Bankers' Acceptances" in each place in which they appear in Section 19.7
<PAGE>   48
                                      -48-

      SECTION 17. AMENDMENT TO THE CREDIT AGREEMENT. The Credit Agreement is
hereby amended by deleting each reference to "BankBoston, N.A." and "BKB"
contained therein and substituting in place thereof a reference to "Fleet
National Bank (f/k/a BankBoston, N.A.)" and "Fleet".

      SECTION 18. AMENDMENT TO SCHEDULE 1. Schedule 1 to the Credit Agreement is
hereby amended by deleting Schedule 1 in its entirety and substituting in place
thereof the Schedule 1 attached hereto.

      SECTION 19. LIMITED WAIVER. The Company has informed the Agent and the
Banks that the Company has not been in compliance with the financial covenants
contained in Sections 10.1 and 10.3 of the Credit Agreement from December 31,
2000 through and including the date hereof and, in addition, did not comply with
the financial covenant contained in Section 10.2 of the Credit Agreement for the
fiscal quarters ended December 31, 2000 and March 31, 2001. The Company has also
not complied with the covenant contained in Section 8.24.1 of the Credit
Agreement. In addition, the Company has not delivered its audited financial
statements for the fiscal year ended December 31, 2000 in the time required by
Section 8.4(a) and the Compliance Certificate for such reporting period as set
forth in Section 8.4(c) of the Credit Agreement and as a result the Company is
in default of such covenants and is in default under the Subordinated Debt
Documents as a result of its failure to deliver such financial information as
required thereunder. The Company has requested that the Banks waive, to the
limited extent necessary to permit such noncompliance for the period of December
31, 2000 through the date hereof, the provisions of Sections 10.1 and 10.3 of
the Credit Agreement and, in addition, waive, to the limited extent necessary to
permit such noncompliance for the fiscal quarters ended December 31, 2000 and
March 31, 2001, the provisions of Section 10.2 of the Credit Agreement. The
Company has also requested that the Banks waive, to the limited extent necessary
to permit the noncompliance with Section 8.24.1, the delivery date requirement
contained therein. In addition, the Company has also requested that the Banks
waive, to the limited extent necessary to permit such noncompliance with the
delivery requirements set forth in Section 8.4(a) and (c) of the Credit
Agreement, the provisions of Section 8.4(a) and (c) as it relates to the
December 31, 2000 audited financial statements and the Compliance Certificate
related thereto as well as any Default or Event of Default that may exist as a
result of the corresponding default under the Subordinated Debt Documents.
Subject always to compliance by the Company and its Subsidiaries with the terms
and provisions of the Credit Agreement (as amended hereby) and the other Loan
Documents and the terms and conditions contained herein, on the Effective Date
(as defined in Section 20 hereof) the Banks hereby waive, such waiver being
retroactive to the first date on which any such Event of Default occurred under
the Credit Agreement, the provisions of (a) Section 10.1 and Section 10.3 of the
Credit Agreement solely to the extent necessary to permit the above-referenced
noncompliance, and only with respect to the determination of compliance for the
period of December 31, 2000 through the date hereof; (b) Section 10.2 of the
Credit Agreement solely to the extent necessary to permit the above-referenced
noncompliance, and only with respect to the determination of compliance for the
fiscal quarters ended December 31, 2000 and March 31, 2001; (c) Section 8.24.1
of the Credit Agreement solely to the extent necessary to permit the
above-referenced compliance, and only with respect to the May 4, 2001 delivery
requirement (provided nothing contained herein shall be construed as any waiver
to the new delivery requirement
<PAGE>   49
                                      -49-

contained in Section 8.24.1 by virtue of this Amendment); (d) Sections 8.4(a)
and (c) of the Credit Agreement solely to the extent necessary to permit the
above-referenced noncompliance, only with respect to the fiscal year ended
December 31, 2000 and only so long as the Company agrees to deliver to the Agent
and the Banks each of the financial statements required by Section 8.4(a) for
the fiscal year ended December 31, 2000 and the accompanying Compliance
Certificate by not later than May 11, 2001; and (e) any Event of Default which
may exist as a result of the occurrence of a default under the Subordinated Debt
Documents arising solely as a result of the Company's failure to deliver the
financial information described above, but solely to the extent that each and
every default under the Subordinated Debt Documents is able to be cured by the
express terms of such documents, and the Company cures each such default within
such cure period and in any event by not later than May 15, 2001. Any failure by
the Company to comply with the delivery requirement in the immediately preceding
subparagraph (d) or the cure requirement set forth in the immediately preceding
subparagraph (e) shall constitute an immediate Event of Default under the Credit
Agreement.

      SECTION 20. PAYMENT OF FEE. The Company hereby promises to pay to each
Bank (other than the Revolving B Bank) which consents to this Fourth Amendment
on or before 5:00 p.m. on the Effective Date, in consideration of each such Bank
entering into this Fourth Amendment, an amendment fee consisting of the
following:

      (a) a cash amount equal to 35 basis points on such consenting Bank's
Revolving A Commitment plus the outstanding amount of such consenting Bank's
Term Loans as of such date, which fee shall be earned as of the Effective Date
and shall be payable as follows: (i) on the Effective Date (or if the Fourth
Amendment does not become effective until 5:00 p.m. on such day, the next day),
each such consenting Bank shall receive 25 of the 35 basis point fee earned by
such Bank; and (ii) the remaining portion shall be due and payable on the
earlier to occur of (1) December 31, 2001, (2) payment in full in cash of all
the Obligations and a reduction of the Total Revolving A Commitment to zero; or
(3) an acceleration of the Obligations (whether automatic or otherwise) pursuant
to Section 13.1 of the Credit Agreement; and

      (b) an amount equal to 50 basis points on such consenting Bank's Revolving
A Commitment plus the outstanding amount of such consenting Bank's Term Loans as
of such date, which fee shall be earned as of the Effective Date and such fee
shall be capitalized, and the payment of such fee shall be deferred, with
interest, calculated at the Base Rate plus 2.50% per annum, owing on such
amounts being paid in kind during the deferral period, with such fee becoming
due and payable on the earlier to occur of (1) February 5, 2005, (2) a sale of
all or substantially all of the assets and/or capital stock of the Company or
(3) an acceleration of the Obligations (whether automatic or otherwise) pursuant
to Section 13.1 of the Credit Agreement. If, on or prior to April 30, 2002,
either the Obligations have been repaid in full in cash and the Total Revolving
A Commitment has been reduced to zero or the Borrowers, the Agent and the Banks
have entered into an amendment to the Credit Agreement amending the financial
covenants contained in Section 10 of the Credit Agreement for all periods after
June 30, 2002, that portion of the amendment fee set forth in this paragraph (b)
shall be forgiven on such date.
<PAGE>   50
                                      -50-

      SECTION 21. CONDITIONS TO EFFECTIVENESS. This Fourth Amendment shall
become effective upon satisfaction of the following conditions on or prior to
May 7, 2001 (the "Effective Date"):

      (a)   receipt by the Agent of a counterpart of this Fourth Amendment,
executed by the Borrowers, each Guarantor and the required Banks;

      (b) receipt by the Agent of a Borrowing Base Report and accounts
receivable aging report as of March 31, 2001;

      (c) receipt by the Agent for each the Revolving A Banks and the Revolving
B Banks, duly executed Revolving Credit A Notes and Revolving Credit B Notes, as
the case may be (with each Revolving A Bank returning its original Revolving
Credit Note to the Company);

      (d) receipt by the Agent of the Warrants and the Warrant Purchase
Agreement, in form and substance satisfactory to the Agent, executed by the
Company for each Bank receiving such Warrants;

      (e) evidence satisfactory to the Agent that all necessary corporate or
other similar action has been taken by the Company and its Subsidiaries to
authorize the transaction contemplated hereby;

      (f) evidence satisfactory to the Agent that all conditions required by the
Revolving B Banks to accede to this Credit Agreement have been satisfied and all
conditions to closing set forth by the Revolving B Banks have been satisfied;

      (g)   receipt by the Agent of a legal opinion from counsel to the Company,
which shall be in form and substance satisfactory to the Agent;

      (h) receipt by the Agent of payment in cash of the amendment fee required
by Section 20 above;

      (i) the Borrowers shall have paid to the Agent for the account of the
Agent's Special Counsel all outstanding bills for legal fees and expenses
through April 30, 2001 and, in addition, shall have paid to the Agent, for the
account of Kaye Scholer LLP, as counsel to the Banks, all outstanding bills for
legal fees and expenses though April 30, 2001; and

      (j) evidence satisfactory to the Agent that all bills received for fees
and expenses of the Operational Consultant, Carl Marks Consulting Group and any
other consultants and/or examiners through April 30, 2001 shall have been paid
by the Company.

      SECTION 22. REPRESENTATIONS AND WARRANTIES. Each of the Borrowers hereby
repeats, on and as of the date hereof, each of the representations and
warranties made by it in Section 7 of the Credit Agreement (except to the extent
of changes resulting from transactions contemplated or permitted by the Credit
Agreement and the other Loan Documents and changes occurring in the ordinary
course of business that singly or in
<PAGE>   51
                                      -51-

the aggregate are not materially adverse to the Company and its Subsidiaries
taken as a whole, and to the extent that such representations and warranties
relate expressly to an earlier date), provided, that all references therein to
the Credit Agreement shall refer to such Credit Agreement as amended hereby. In
addition, each of the Borrowers hereby represents and warrants that the
execution and delivery by each Borrower of this Fourth Amendment and the
performance by each Borrower of all of their agreements and obligations under
the Credit Agreement as amended hereby are within the corporate authority of
each Borrower and have been duly authorized by all necessary corporate action on
the part of each Borrower.

      SECTION 23. RATIFICATION, ETC. Except as expressly amended hereby, the
Credit Agreement and all documents, instruments and agreements related thereto
or delivered thereunder, including, but not limited to the Security Documents,
are hereby ratified and confirmed in all respects and shall continue in full
force and effect. The Credit Agreement and this Fourth Amendment shall be read
and construed as a single agreement. All references to the Credit Agreement in
the Credit Agreement or any Loan Document shall hereafter refer to the Credit
Agreement as amended hereby.

      SECTION 24. NO WAIVER. Nothing contained herein shall constitute a waiver
of, impair or otherwise affect any Obligations, any other obligation of the
Borrowers or any rights of the Agent, the Documentation Agent or the Banks
consequent thereon.

      SECTION 25. COUNTERPARTS. This Fourth Amendment may be executed in one or
more counterparts, each of which shall be deemed an original but which together
shall constitute one and the same instrument.

      SECTION 26. GOVERNING LAW. THIS FOURTH AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(WITHOUT REFERENCE TO CONFLICT OF LAWS).

      SECTION 27. EXPENSES. The Borrowers agree to pay to the Agent (a) on
demand by the Agent, an amount equal to any and all reasonable out-of-pocket
costs or expenses (including reasonable legal fees and disbursements of Bingham
Dana LLP and other counsel to the Agent, reasonable fees and expenses of
in-house counsel to the Agent, reasonable legal fees and disbursements of Kaye
Scholer LLP as counsel to the Banks, consulting, accounting, appraisal,
investment banking and similar professional fees and charges) incurred or
sustained by the Agent and the Banks in connection with the negotiation and
preparation of this Fourth Amendment and all related matters and (b) from time
to time any and all reasonable out-of-pocket costs, expenses (including legal
fees and disbursements, consulting, accounting, appraisal, investment banking
and similar professional fees and charges) hereafter incurred or sustained by
the Agent in connection with the administration of credit extended by the Agent
and the Banks to the Borrowers or the preservation of or enforcement of the
Agent's and the Banks' rights under the Loan Documents or in respect of the
Borrowers' or any of their Subsidiaries' other obligations to the Agent and the
Banks. On the Effective Date, this Section 27 shall supercede Section 8
contained in the Forbearance Agreement and Third Amendment dated as of April 13,
2001 (the "Forbearance Agreement").
<PAGE>   52
                                      -52-

      SECTION 28. NO CLAIMS. Each of the Borrowers and the Guarantors hereby
acknowledge and agree that (a) neither the Borrowers nor any of their
Subsidiaries has any claim or cause of action against any of the Banks or the
Agent (or any of their directors, officers, employees, agents or Affiliates)
arising on or prior to the date hereof from any transactions under this Fourth
Amendment, under the Credit Agreement or any of the other Loan Documents; (b)
neither the Borrowers nor any of their Subsidiaries has offset rights,
counterclaims or defenses of any kind against any of their Obligations,
indebtedness or liabilities to the Agent or the Banks; and (c) each of the Banks
and the Agent has heretofore properly performed and satisfied in a timely manner
all of its obligations to the Borrowers and their Subsidiaries. The Agent and
the Banks wish (and each Borrower and Guarantor agrees) to eliminate any
possibility that any past conditions, acts, omissions, events, circumstances or
matters would impair or otherwise adversely affect any of the rights, interests,
contracts, collateral security or remedies of the Agent and the Banks.
Therefore, the Borrowers and each of their Subsidiaries unconditionally
releases, waives and forever discharges (i) any and all liabilities,
obligations, duties, promises or indebtedness of any kind of any of the Banks
and the Agent to the Borrowers and each of their Subsidiaries, except the
obligations to be performed by the Banks or the Agent for the Borrowers
hereafter as expressly stated in this Fourth Amendment and the other Loan
Documents, and (ii) all claims, offsets, causes of action, suits or defenses of
any kind whatsoever (if any), whether known or unknown, which the Borrowers or
any Subsidiary might otherwise have against any of the Banks or the Agent or any
of their directors, officers, employees, agents or Affiliates with respect to
the obligations performed or to be performed by the Agent or any Bank for the
Borrowers as set forth in the Loan Documents, in either case (i) or (ii) above,
on account of any condition, act, omission, event, contract, liability,
obligation, indebtedness, claim, cause of action, defense, circumstance or
matter of any kind whatsoever which existed, arose or occurred at any time prior
to the date hereof. On the Effective Date, this Section 28 shall supercede
Section 10 of the Forbearance Agreement.

      SECTION 29. WAIVER OF JURY TRIAL. EACH OF THE BORROWERS AND THEIR
SUBSIDIARIES HEREBY WAIVES ANY RIGHTS THAT IT MAY HAVE TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS FOURTH AMENDMENT OR ANY OF THE LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS
HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
Except as prohibited by law, each of the Borrowers and their Subsidiaries hereby
waives any right that it may have to claim or recover in any litigation referred
to in the preceding sentence any special, exemplary, punitive or consequential
damages or any damages other than, or in addition to, actual damages. Each of
the Borrowers and their Subsidiaries hereby (a) certifies that no
representative, agent or attorney of the Agent or any Bank has represented,
expressly or otherwise, that the Agent or any Bank would not, in the event of
litigation, seek to enforce the foregoing waivers and (ii) acknowledges that it
has been induced to enter into this Fourth Amendment by, among other things, the
waivers and certifications herein.
<PAGE>   53
      IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment
as a document under seal as of the date first above written.

                                    THE HOLMES GROUP, INC.

                                    By:___________________________________
                                         Title:

                                    THE RIVAL COMPANY

                                    By:___________________________________
                                         Title:

                                    HOLMES PRODUCTS (FAR EAST) LIMITED

                                    By:___________________________________
                                         Title:

                                    ESTEEM INDUSTRIES LIMITED

                                    By:___________________________________
                                         Title:

                                    RAIDER MOTOR CORPORATION

                                    By:___________________________________
                                         Title:

                                    BIONAIRE INTERNATIONAL B.V.

                                    By:___________________________________
                                         Title:

                                    HOLMES PRODUCTS (EUROPE) LIMITED

                                    By:___________________________________
                                         Title:

                                    PATTON ELECTRIC (HONG KONG) LTD.
<PAGE>   54
                                      -54-

                                    By:___________________________________
                                         Title:

                                    THE HOLMES GROUP OF CANADA LTD.

                                    By:___________________________________
                                         Title:
<PAGE>   55
                                      -55-

                                    THE BANKS

                                    FLEET NATIONAL BANK (F/K/A BANKBOSTON, N.A.)

                                    By:___________________________________
                                         Title:

                                    SYNDICATED LOAN FUNDING TRUST
                                    BY: LEHMAN COMMERCIAL PAPER INC., NOT IN ITS
                                        INDIVIDUAL CAPACITY, BUT SOLELY AS ASSET
                                        MANAGER

                                    By:___________________________________
                                         Title:

                                    HELLER FINANCIAL, INC.

                                    By:___________________________________
                                         Title:

                                    LASALLE BANK NATIONAL ASSOCIATION

                                    By:___________________________________
                                    Title:

                                    COMERICA BANK

                                    By:___________________________________
                                         Title:

                                    KEY CORPORATE CAPITAL INC.

                                    By:___________________________________
                                         Title:

                                    CITIZENS BANK OF MASSACHUSETTS, A
                                    MASSACHUSETTS BANK
<PAGE>   56
                                      -56-

                                    By:___________________________________
                                         Title:

                                    STAR BANK, NATIONAL ASSOCIATION

                                    By:___________________________________
                                         Title:

                                    ANTARES CAPITAL CORPORATION

                                    By:___________________________________
                                         Title:

                                    NATIONAL CITY BANK

                                    By:___________________________________
                                         Title:

                                    THE PROVIDENT BANK

                                    By:___________________________________
                                         Title:

                                    FRANKLIN FLOATING RATE TRUST

                                    By:___________________________________
                                         Title:

                                    THE TRAVELERS INSURANCE COMPANY

                                    By:___________________________________
                                         Title:

                                    TRAVELERS CORPORATE LOAN FUND INC.
                                    BY:   TRAVELERS ASSET MANAGEMENT
                                          INTERNATIONAL COMPANY LLC
<PAGE>   57
                                      -57-

                                    By:___________________________________
                                         Title:

                                    MERRILL LYNCH SENIOR FLOATING RATE FUND,
                                    INC.

                                    By:___________________________________
                                         Title:

                                    MAGNETITE ASSET INVESTORS LLC

                                    By:___________________________________
                                         Title:

                                    MERRILL LYNCH PRIME RATE PORTFOLIO

                                    By:___________________________________
                                         Title:
<PAGE>   58
                                      -58-

                                    PILGRIM PRIME RATE TRUST

                                    By:___________________________________
                                         Title:

                                    PILGRIM AMERICA HIGH INCOME INVESTMENTS LTD.

                                    By:___________________________________
                                         Title:

                                    SEQUILS-PILGRIM I, LTD.

                                    By:___________________________________
                                         Title:

                                    CAPTIVA IV FINANCE LTD.
                                    AS ADVISED BY PACIFIC INVESTMENT MANAGEMENT
                                    COMPANY LLC

                                    By:___________________________________
                                         Title:

                                    PILGRIM CLO 1999 - 1 LTD.

                                    By:___________________________________
                                         Title:

                                    GREAT POINT CLO 1999 - 1 LTD.

                                    By:___________________________________
                                         Title:

                                    FIRST MASSACHUSETTS BANK

                                    By:___________________________________
                                         Title:
<PAGE>   59
                                      -59-

                                    SUMMIT BANK

                                    By:___________________________________
                                         Title:

                                    TRANSAMERICA BUSINESS CREDIT CORPORATION

                                    By:___________________________________
                                         Title:

                                    CHASE MANHATTAN BANK NOT IN ITS INDIVIDUAL
                                    CAPACITY, BUT SOLELY AS TRUSTEE OF ANTARES
                                    FUNDING TRUST UNDER THE TRUST AGREEMENT
                                    DATED AS OF NOVEMBER 30, 1999 (THE "TRUST
                                    AGREEMENT") BETWEEN ANTARES FUNDING, L.P.
                                    (THE "DEPOSITOR") AND CHASE MANHATTAN BANK
                                    AS TRUSTEE (THE "TRUSTEE")

                                    By:___________________________________
                                    Title:

                                    VAN KAMPEN SENIOR INCOME TRUST

                                    By:___________________________________
                                    Title:

                                    VAN KAMPEN PRIME RATE INCOME TRUST

                                    By:___________________________________
                                    Title:
<PAGE>   60
                                      -60-

                            RATIFICATION OF GUARANTY

      Each of the undersigned guarantors hereby acknowledges and consents to the
foregoing Fourth Amendment as of May 7, 2001, and agrees that the Amended and
Restated Guaranty dated as of February 5, 1999 from each of Holmes Manufacturing
Corp., Holmes Air (Taiwan) Corp., Holmes Motor Corporation, Patton Electric
Company, Inc., Patton Building Products Inc. and Rival Consumer Sales
Corporation (collectively, the "Guarantors") in favor of the Agent for the
benefit of the Agent and the Revolving Banks and all other Loan Documents to
which each of the Guarantors are a party remain in full force and effect, and
each of the Guarantors confirms and ratifies all of its obligations thereunder.

                                    HOLMES MANUFACTURING CORP.

                                    By:___________________________________
                                    Title:

                                    HOLMES AIR (TAIWAN) CORP.

                                    By:___________________________________
                                    Title:

                                    HOLMES MOTOR CORPORATION

                                    By:___________________________________
                                    Title:

                                    RIVAL CONSUMER SALES CORPORATION

                                    By:___________________________________
                                       Title:
<PAGE>   61
                                    Exhibit C-1
EBITDA

<TABLE>
<CAPTION>
              MONTH ENDED                 EBITDA
           ------------------------------------------
<S>                                     <C>
           April 30, 2000               $ 3,824,000
           May 31, 2000                 $ 2,130,000
           June 30, 2000                $ 3,014,000
           July 31, 2000                $ 2,595,000
           August 31, 2000              $ 5,866,000
           September 30, 2000           $10,379,000
           October 31, 2000             $ 7,040,000
           November 30, 2000            $ 7,635,000
           December 31, 2000            $ 1,243,000
           January 31, 2001             $ 2,565,000
           February 28, 2001            $ 2,145,000
</TABLE>

CONSOLIDATED CASH INTEREST EXPENSE

<TABLE>
<CAPTION>
              MONTH ENDED            CONSOLIDATED CASH
                                     INTEREST EXPENSE
           ------------------------------------------
<S>                                  <C>
           April 30, 2000               $2,613,000
           May 31, 2000                 $2,666,000
           June 30, 2000                $2,859,000
           July 31, 2000                $2,937,000
           August 31, 2000              $3,005,000
           September 30, 2000           $2,943,000
           October 31, 2000             $3,178,000
           November 30, 2000            $3,148,000
           December 31, 2000            $3,066,000
           January 31, 2001             $3,049,000
           February 28, 2001            $2,682,000
</TABLE>

CAPITAL EXPENDITURES

<TABLE>
<CAPTION>
                  MONTH ENDED             CAPITAL
                                        EXPENDITURES
           ------------------------------------------
<S>                                  <C>
           April 30, 2000               $1,818,600
           May 31, 2000                 $1,281,450
           June 30, 2000                $1,263,000
           July 31, 2000                $1,208,700
           August 31, 2000              $5,376,050
</TABLE>
<PAGE>   62
                                      -62-

<TABLE>
<S>                                  <C>
           September 30, 2000           $  915,450
           October 31, 2000             $2,063,650
           November 30, 2000            $1,935,250
           December 31, 2000            $4,149,450
           January 31, 2001             $2,842,000
           February 28, 2001            $1,533,000
</TABLE><PAGE>   1
                                                                   EXHIBIT 10.23

                                                                  EXECUTION COPY

                             THE HOLMES GROUP, INC.
                                 ONE HOLMES WAY
                          MILFORD, MASSACHUSETTS 01757

                           WARRANT PURCHASE AGREEMENT

The Banks referred to below
c/o Fleet National Bank, as Administrative Agent
100 Federal Street
Boston, Massachusetts 02110

                    Dated as of: May 7, 2001

Ladies and Gentlemen:

                  The undersigned, The Holmes Group, Inc., a Massachusetts
corporation (hereinafter, together with its successors and assigns, the
"Company"), proposes to issue and sell to each of Fleet National Bank, Antares
Capital Corporation, Captiva IV Finance Ltd., Chase Manhattan Bank, Citizens
Bank of Massachusetts, Comerica Bank, First Massachusetts Bank, Franklin
Floating Rate Trust, Great Point CLO 1999-1 Ltd., Heller Financial, Inc., Key
Corporate Capital, Inc., LaSalle Bank National Association, Syndicated Loan
Funding Trust, Magnetite Asset Investors LLC, Merrill Lynch Prime Rate
Portfolio, Merrill Lynch Senior Floating Rate Fund, Inc., National City Bank,
Pilgrim America High Income Investments Ltd., Pilgrim CLO 1999-1 Ltd.,
SEQUILS-Pilgrim I, Ltd., Pilgrim Prime Rate Trust, The Provident Bank, Star
Bank, National Association, Transamerica Business Credit Corporation, Travelers
Corporate Loan Fund Inc., The Travelers Insurance Company, Van Kampen Prime Rate
Income Trust and Van Kampen Senior Income Trust (together with their respective
successors and assigns, each a "Bank" and, collectively, the "Banks"), Common
Stock Purchase Warrants of the Company in the form of Exhibit A hereto, on the
terms and subject to the conditions contained in this Agreement.

                  Accordingly, the parties hereto agree as follows:
<PAGE>   2
                                      -2-

                                    ARTICLE I

                              CERTAIN DEFINED TERMS

         As used herein, the following terms shall have the respective meanings
assigned to them in this Article I:

         "Adjusted Net Worth" shall mean, in connection with any liquidation or
sale of assets by the Company, the consolidated net worth of the Common Stock of
the Company, determined in accordance with generally accepted accounting
principles, taking into account (i) the total consideration received by the
Company for such transactions, (ii) the transaction costs, (iii) any liabilities
of the Company to be discharged or assumed by a third party in connection with
such transaction, and (iv) the aggregate liquidation value of any of the then
outstanding shares of Preferred Stock of the Company.

         "Affiliate" means, with respect to any Person, any other Person (i)
that directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such person or (ii) that directly
or indirectly holds a material interest in such person, or in which such person
directly or indirectly holds a material interest.

         "Amendment" shall mean the Fourth Amendment to Amended and Restated
Revolving Credit and Term Loan Agreement and Limited Waiver dated as of the date
hereof among the Company, certain subsidiaries of the Company, Fleet National
Bank, as administrative agent, and certain other financial institutions party
thereto.

         "Articles of Organization" shall have the meaning ascribed to that term
in Section 2.1(a) hereof.

         "Bank" shall have the meaning ascribed to that term in the preamble
hereto.

         "Bank Affiliate" shall have the meaning ascribed to that term in
Article XII hereof.

         "Call Closing Date" shall have the meaning ascribed to that term in
Section 9.1 hereof.

         "Call Notice" shall have the meaning ascribed to that term in
Section 9.1 hereof.

         "Call Repurchase Price" shall have the meaning ascribed to that term in
Section 9.2 hereof.

         "Capital Transaction" means any of the following: (i) one or more
mergers, consolidations, liquidations or sales of more than fifty percent (50%)
of the assets of the Company or other similar corporate actions pursuant to
which the Company or the holders of Common Stock and/or Preferred Stock receive
cash, securities, or other property, or (ii) the Common Stock and/or Preferred
Stock of the Company is sold in a transaction or a series of related
transactions to one or more
<PAGE>   3
                                      -3-

Persons who is not one of the Principals (as defined in the Credit Agreement)
and which Person or Persons hold, in the aggregate, a majority of the voting
power of the capital stock of the Company after the transaction(s).

         "Closing" shall have the meaning ascribed to that term in Article IV
hereof.

         "Closing Date" means the date of the Closing.

         "Closing Price" means, with respect to shares of Common Stock on any
day, (i) the last reported sales price on such day on the principal stock
exchange or Nasdaq National Market System or Nasdaq SmallCap Market on which
such Common Stock is then listed or admitted to trading, as of the end of the
"regular" trading day, (ii) if no sale takes place on such day on any such
exchange, system or market, the average of the last reported closing bid and
asked prices on such day as officially quoted on any such exchange, system or
market, (iii) if the Common Stock is not then listed or admitted to trading on
any stock exchange, the Nasdaq National Market System or the Nasdaq SmallCap
Market, the average of the last reported closing bid and asked prices on such
day in the over-the-counter market, as furnished by the National Association of
Securities Dealers Automated Quotation System or the National Quotation Bureau,
Inc. (or any similar firm then engaged in such business), or (iv) if such prices
in the over-the-counter market are not available, the fair market value set by,
or in a manner established by, the Board of Directors of the Company, acting in
good faith.

         "Commission" means the Securities and Exchange Commission.

         "Common Stock" shall have the meaning ascribed to that term in
Section 2.1(a) hereof.

         "Company" shall have the meaning ascribed to that term in the preamble
hereto.

         "Credit Agreement" shall mean the Amended and Restated Revolving Credit
and Term Loan Agreement, dated as of February 5, 1999, as amended and in effect
from time to time, among the Company, certain subsidiaries of the Company, Fleet
National Bank, as administrative agent, and certain other financial institutions
party thereto.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any federal statute or code which is a successor thereto.

         "Existing Registration Rights Agreement" means the Registration Rights
Agreement dated as of November 26, 1997 among the Company and certain holders of
Common Stock, as amended and in effect from time to time.

         "Fair Market Value" means the fair value per share of the applicable
shares as of the applicable date on the basis of a sale of such shares in an
arms length private sale between a willing buyer and a willing seller, neither
acting under compulsion. In determining such Fair Market Value, no discount
shall be taken for constituting a minority interest and no upward adjustment or
discount shall
<PAGE>   4
                                      -4-

be taken relating to the fact that the shares in question are subject to the
restrictions and entitled to the rights provided hereunder. Such Fair Market
Value shall be determined in good faith by the Board of Directors of the
Company; provided that if the Investors object in writing within fifteen (15)
days of being notified of the Board of Directors' determination of the Fair
Market Value, then the Fair Market Value shall be determined by an independent
appraiser selected by the Company and the Investors. The determination of the
independent appraiser (which determination shall not be less than the
determination of the Company's Board of Directors) shall be delivered to each of
the Company and the Investors within thirty (30) days of such independent
appraiser's selection and shall be conclusive and binding upon the Company and
each of the Investors to which such call relates. All expenses of the
independent appraiser shall be borne 50% by the Company and 50% by the Investors
to which such call relates on a pro rata basis based on the number of shares for
which such Warrants held by each of such Investors are exercisable and the
number of such Warrant Shares held by each of such Investors.

         "Form S-3", "Form S-4" and "Form S-8" means the forms so designated,
promulgated by the Commission for registration of securities under the
Securities Act, and any forms succeeding to the functions of such forms, whether
or not bearing the same designation.

         "Holders" means, collectively, all Investors, including all transferees
of Investors; and the term "Holder" shall mean any one of the Holders.

         "Indemnified Party" shall have the meaning ascribed to that term in
Section 8.6(c) hereof.

         "Indemnifying Party" shall have the meaning ascribed to that term in
Section 8.6(c) hereof.

         "Investor Consent" means, at any particular date, the consent, approval
or vote of the Majority Investors.

         "Investor Shares" means, in relation to any Investor at any particular
date, (i) all shares of Common Stock held of record by such Investor (other
than, with respect to Fleet National Bank, the shares of Common Stock acquired
by FSC Corp. prior to the date hereof) on such date, and (ii) all shares of
Common Stock issuable by the Company to such Investor upon conversion of or in
exchange for or upon exercise of rights under all other capital stock or other
securities (including the Warrants and any other warrants and options) of the
Company held of record by such Investor on such date; and, in this Agreement,
each Investor shall be deemed to hold of record on any particular date the total
number of shares of Common Stock issuable by the Company upon conversion of or
in exchange for or upon exercise of rights under all capital stock or other
securities (including the Warrants and any other warrants or options) of the
Company then held of record by such Investor.

         "Investors" means, collectively, (i) each of the Banks so long as such
Banks shall continue to own and hold of record any of the Securities, (ii) each
transferee
<PAGE>   5
                                      -5-

of any of the Banks so long as such transferee shall continue to own and hold of
record any of the Securities, and (iii) each transferee of any other Investor so
long as such transferee shall continue to own and hold of record any of the
Securities; provided that the term Investors shall not include any transferee
which acquires Securities pursuant to an effective registration statement or in
an open market transaction pursuant to Rule 144.

         "Majority Investors" means, in relation to the Investors at any
particular date, Investors holding of record or deemed to be holding of record,
at such date, at least fifty-one percent (51%) of the total number of all
Investor Shares then held or deemed held of record by all Investors on such
date.

         "Majority of Registrable Securities" means, in relation to any
registration, more than fifty percent (50%) of all Registrable Securities
included or to be included in such registration.

         "Nasdaq" means the National Association of Securities Dealers automated
quotation system.

         "Person" means an individual, corporation, partnership, joint venture,
limited liability company, trust, or unincorporated organization, or a
government or any agency or political subdivision thereof.

         "Piggyback Registration" shall have the meaning ascribed to that term
in Section 8.1(c) hereof.

         "Preferred Capital Stock" shall have the meaning ascribed to that term
in Section 7.5(b) hereof.

         "Preferred Stock" shall have the meaning ascribed to that term in
Section 2.1(a) hereof.

         "Prospectus" means the prospectus included in any Registration
Statement, as amended or supplemented by any Prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement and all other amendments and supplements
to the prospectus, including post-effective amendments, and all material
incorporated by reference in such prospectus.

         "Put Repurchase Price" shall have the meaning ascribed to that term in
Section 9.1 hereof.

         "Qualified Public Offering" shall mean the Company's underwritten
public offering pursuant to an effective registration statement under the
Securities Act covering the offer and sale of shares of Common Stock in which
not less than $20,000,000 of gross proceeds from such public offering are
received by the Company for the account of the Company.

         "register, registered and registration" refers to a registration
effected by preparing and filing a Registration Statement in compliance with the
Securities
<PAGE>   6
                                      -6-

Act and the declaration or ordering by the Commission of effectiveness of such
Registration Statement.

         "Registrable Securities" means, in relation to the Holders at any
particular time: (A) all shares of Common Stock issuable upon conversion of or
in exchange for or upon exercise of rights under any capital stock or other
securities (including, without limitation, options and warrants) of the Company
held of record by Holders at such time; and (B) all shares of Common Stock held
of record at such time by Holders (other than, with respect to Fleet National
Bank, the shares of Common Stock acquired by FSC Corp. prior to the date
hereof).

         "Registration Expenses" shall have the meaning ascribed to that term in
Section 8.6(a) hereof.

         "Registration Period" shall have the meaning ascribed to that term in
Section 8.1(g) hereof.

         "Registration Statement" means any Registration Statement of the
Company which covers any of the Registrable Securities pursuant to the
provisions of this Agreement including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective amendments,
all exhibits and all material incorporated by reference in such Registration
Statement.

         "Rule 144" means Rule 144 issued by the Commission under the Securities
Act, or any subsequent rule pertaining to the disposition of securities without
registration.

         "Securities" means the Warrants and the Warrant Shares.

         "Securities Act" means the Securities Act of 1933, as amended, or any
federal statute or code which is a successor thereto.

         "Stock Option Plan" means the Company's 1997 Stock Option Plan, as
amended from time to time.

         "Subsidiary" means, in relation to the Company at any particular time,
any other corporation at least fifty percent (50%) of the outstanding voting
shares in the capital of which shall be owned or controlled (whether directly or
indirectly) by the Company and/or by any one or more of the Company's other
Subsidiaries.

         "Trading Day" shall mean any day on which trading takes place (a) if
the Common Stock is then listed or admitted to trading on the Nasdaq National
Market, on the Nasdaq National Market, (b) if the Common Stock is then listed or
admitted to trading on the Nasdaq SmallCap Market, on the Nasdaq SmallCap
Market, (c) if the Common Stock is then listed or admitted to trading on a
national securities exchange, on the principal national securities exchange on
which the Common Stock is then listed or admitted to trading or (d) otherwise,
in the over-the-counter market and prices reflecting such trading are published
by the National Association of Securities Dealers Automated Quotation System or
the National Quotation Bureau, Inc.
<PAGE>   7
                                      -7-

         "Underwriters' Maximum Number" shall have the meaning ascribed to that
term in Section 8.1(e) hereof.

         "underwritten registration" or "underwritten offering" refers to any
registration in which securities of the Company are sold or to be sold pursuant
to a firm commitment underwriting.

         "Warrants" shall have the meaning ascribed to that term in Section
2.2(a) hereof and shall in any event include all other warrants delivered in
exchange or in substitution therefor.

         "Warrant Shares" means the shares of Common Stock issuable upon
exercise of any of the Warrants.

                                   ARTICLE II

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company represents and warrants to the Banks as follows:

         SECTION 2.1. CAPITALIZATION OF COMPANY.

         (a) The authorized capital stock of the Company consists of: 25,000,000
shares of common stock, par value $.001 per share (the "Common Stock"). The
Common Stock has the voting powers, rights, and privileges stated therefor in
the Company's Articles of Organization, as amended (the "Articles of
Organization").

         (b) The Company's issued and outstanding securities consist of
20,336,567 shares of Common Stock. All of such shares of Common Stock have been
duly and validly issued and are fully paid and non-assessable.

         (c) Except for the Warrants, the Company has not granted or issued any
options, warrants or other rights to acquire any shares of Preferred Stock or
Common Stock, and there are no outstanding agreements of the Company for the
purchase or sale of any shares of Preferred Stock or Common Stock or outstanding
securities exercisable for or convertible into shares of Preferred Stock or
Common Stock, other than options granted under the Stock Option Plan exercisable
for up to 4,232,765 shares of Common Stock.

         SECTION 2.2. AUTHORIZATION OF WARRANTS.

         (a) The Board of Directors of the Company has duly and properly
authorized (i) the issuance to the Banks of the Company's Common Stock Purchase
Warrants in the form of Exhibit A annexed hereto (the "Warrants") evidencing
rights to subscribe for and purchase from the Company 1,293,123 shares of the
Company's Common Stock constituting in the aggregate 5% of the issued and
outstanding Common Stock determined on a fully-diluted basis (including, but not
limited to, issued options) as of May 7, 2001 and (ii) the issuance to the
holders of the Warrants of the shares of Common Stock issuable
<PAGE>   8
                                      -8-

by the Company upon exercise of the Warrants. Upon the issuance of the shares of
Common Stock issuable by the Company upon exercise of the Warrants, such shares
shall be duly and validly issued, fully paid and nonassessable.

         (b) Subject to the prior expiration of the Warrants pursuant to Section
2.4 of the Warrants, the Warrants will be exercisable at a price, subject to
adjustment as therein provided, of $5.04 per Warrant Share. The Warrants will be
in the form of Exhibit A annexed to this Agreement.

         SECTION 2.3. APPROVALS; NO CONFLICTS, ETC.

         (a) No approval, consent, authorization or other order of, and no
designation, filing, registration, qualification or recording with, any
governmental authority, domestic or foreign, stock exchange or similar governing
body is required for the Company's performance of this Agreement or the
consummation of the transactions contemplated hereby, other than approvals,
filings and registrations with the Commission, Nasdaq, and similar governmental
authorities or governing bodies in connection with the exercise of registration
rights under Article VIII hereof.

         (b) The execution and delivery of this Agreement by the Company, and
the performance of its obligations hereunder and the consummation of the
transactions contemplated hereby, do not result in any breach or violation of,
or any default under, any term or provision of (i) the Company's Articles of
Organization or By-laws, (ii) any indenture, mortgage, deed of trust, voting
trust agreement, stockholders agreement, note agreement, debt instrument or
other agreement or instrument to which it is a party or by which it is bound or
to which any of its property is subject, or (iii) any statute, judgment, decree,
order, rule or regulation applicable to the Company or of any arbitrator, court,
regulatory body, administrative agency or any other governmental agency or body,
domestic or foreign, having jurisdiction over the Company or any of its
respective activities or properties.

         (c) There is no action, suit, proceeding or investigation pending or,
to the knowledge of the Company, threatened, against the Company before or by
any court, regulatory body or administrative agency or any other governmental
agency or body, domestic or foreign, which challenges the validity of any action
taken or to be taken pursuant to or in connection with this Agreement or the
issuance of the Warrants or the Warrant Shares.

         SECTION 2.4. OFFERING. Subject to the representations and warranties of
the Banks in Article VI hereof, the offer, sale and issuance of the Securities
as contemplated by this Agreement are not subject to the registration
requirements of the Securities Act, and neither the Company, nor anyone acting
on its behalf, has taken or will take any action that would cause such
registration requirements to be applicable.

         SECTION 2.5. REGISTRATION RIGHTS. Except for the Existing Registration
Rights Agreement, the Company is not under any obligation to register under the
<PAGE>   9
                                      -9-

Securities Act any of its currently outstanding securities or any of its
securities which may hereafter be issued.

                                   ARTICLE III

                              SALE AND PURCHASE OF
                               WARRANTS AT CLOSING

         At the Closing hereunder, the Company will issue and sell to the Banks
or their designees, and, subject to the terms and conditions hereof and in
reliance upon the written representations and warranties of the Company, the
Banks or their designees will severally purchase from the Company, the Warrants,
in the respective amounts set forth on Schedule 3.1 attached hereto. The
aggregate purchase price for the Warrants shall be the Banks entering into the
Amendment, and no additional consideration shall be payable to the Company with
respect to the issuance of the Warrants.

                                   ARTICLE IV

                                   THE CLOSING

         The closing under this Agreement (the "Closing") will take place at the
offices of Bingham Dana LLP, 150 Federal Street, Boston, Massachusetts at 10:00
a.m., local time, on May 7, 2001, or at such other time and on such other date
as may be mutually agreed upon in writing by the Banks and the Company. At the
Closing, the Company will (among other things) deliver to the Banks the Warrants
purchased by the Banks hereunder, duly executed by the Company, and the Banks
will deliver to the Company the aggregate purchase price payable by the Banks
for the Warrants by executing and delivering to the Company the Amendment. In
addition, at the Closing, the Company will deliver to the Banks an opinion of
counsel in form and substance satisfactory to the Banks.

                                    ARTICLE V

                      ADDITIONAL REPRESENTATIONS OF COMPANY

         The Company hereby repeats, on and as of the date hereof, each of the
representations and warranties made by it in Section 7 of the Credit Agreement
(except to the extent of changes resulting from transactions contemplated or
permitted by the Credit Agreement and changes occurring in the ordinary course
of business that singly or in the aggregate are not materially adverse to the
Company, and to the extent that such representations and warranties relate
expressly to an earlier date).

                                   ARTICLE VI

                          REPRESENTATIONS OF THE BANKS

         Each of the Banks represents and warrants to the Company that:
<PAGE>   10
                                      -10-

         (a) Such Bank is purchasing Warrants from the Company in accordance
with the terms hereof for such Bank's own account without a view to any
distribution thereof in violation of the Securities Act, but, subject,
nevertheless, to any requirement of law that the disposition of such Bank's
property shall at all times be within such Bank's control. Such Bank has been
informed and understands that the Securities have not been registered pursuant
to the provisions of Section 5 of the Securities Act and must be held
indefinitely unless such Securities are subsequently registered under the
provisions of the Securities Act or an exemption from such registration is
available.

         (b) Such Bank is an "accredited investor" within the meaning of Rule
501(a) promulgated under the Securities Act.

         (c) Such Bank understands that each stock certificate or instrument
representing or evidencing any Securities shall bear a legend in or
substantially in the following form:

         "THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN
         REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
         MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
         OR AN EXEMPTION THEREFROM UNDER SUCH ACT OR ANY APPLICABLE STATE
         SECURITIES LAW.

         ThIS WARRANT AND THE SHARES ISSUABLE HEREUNDER ARE SUBJECT TO A
         CALL RIGHT OF THE COMPANY AND CERTAIN OTHER RESTRICTIONS CONTAINED
         IN A WARRANT PURCHASE AGREEMENT DATED AS OF MAY 7, 2001 AMONG THE
         COMPANY AND CERTAIN HOLDERS OF WARRANTS OF THE COMPANY. UPON
         WRITTEN REQUEST TO THE COMPANY'S SECRETARY, A COPY OF THE WARRANT
         PURCHASE AGREEMENT WILL BE PROVIDED WITHOUT CHARGE TO APPROPRIATELY
         INTERESTED PERSONS.

                                   ARTICLE VII

                              COVENANTS OF COMPANY

         The Company hereby covenants with each of the Investors that, except as
otherwise expressly permitted or provided, in any particular instance, by a
written Investor Consent:

         SECTION 7.1. RECORDS AND ACCOUNTS. The Company will (i) keep, and cause
each of its Subsidiaries to keep, true and accurate records and books of account
in which full, true and correct entries will be made in accordance with
generally accepted accounting principles and (ii) maintain adequate accounts and
reserves for all taxes (including income taxes), depreciation, depletion,
obsolescence and amortization of its properties and the properties of its
Subsidiaries, contingencies, and other reserves.
<PAGE>   11
                                      -11-

         SECTION 7.2. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The
Company will deliver to each of the Investors:

                           (a) as soon as practicable, but in any event not
                  later than ninety (90) days after the end of each fiscal year
                  of the Company, the consolidated balance sheet of the Company
                  and its Subsidiaries and the consolidating balance sheet of
                  the Company and its Subsidiaries (with any reference to
                  consolidating statements of Subsidiaries in this Section 7.2
                  to mean that term as applied to the accounts and financial
                  statements, as applicable, of business lines), each as at the
                  end of such year, and the related consolidated statement of
                  income and consolidated statement of cash flow and
                  consolidating statement of income for such year, each setting
                  forth in comparative form the figures for the previous fiscal
                  year and all such consolidated and consolidating statements to
                  be in reasonable detail, prepared in accordance with generally
                  accepted accounting principles, and certified without
                  qualification by PricewaterhouseCoopers LLP or by other
                  independent certified public accountants of nationally
                  recognized standing selected by the Company;

                           (b) as soon as practicable, but in any event not
                  later than (i) forty-five (45) days after the end of each
                  fiscal quarter of the Company and (ii) sixty (60) days after
                  the end of the last fiscal quarter of the Company, copies of
                  the unaudited consolidated balance sheet of the Company and
                  each of its Subsidiaries and the unaudited consolidating
                  balance sheet of the Company and each of its Subsidiaries,
                  each as at the end of such quarter, and the related
                  consolidated statement of income and consolidated statement of
                  cash flow and consolidating statement of income for the
                  portion of the Company's fiscal year then elapsed, each
                  setting forth in comparative form the figures for the previous
                  fiscal year and a comparison setting forth the corresponding
                  figures from the budgeted or projected figures for such
                  period, all in reasonable detail and prepared in accordance
                  with generally accepted accounting principles, together with a
                  certification by the principal financial or accounting officer
                  of the Company that the information contained in such
                  financial statements fairly presents the financial position of
                  the Company and its Subsidiaries on the date thereof (subject
                  to year-end adjustments);

                           (c) as soon as practicable, but in any event within
                  (i) thirty (30) days after the end of each of the first two
                  (2) months in each fiscal quarter of the Company, (ii)
                  forty-five (45) days after the end of the last month in each
                  fiscal quarter, other than the last month of any year, and
                  (iii) sixty (60) days after the end of the last month in each
                  fiscal year of the Company, unaudited monthly consolidated
                  financial statements of the Company and its Subsidiaries for
                  such month and unaudited monthly consolidating financial
                  statements of the Company and its Subsidiaries for such month,
                  each setting forth in comparative form the figures for the
                  previous fiscal year and a comparison setting forth the
                  corresponding figures from the budgeted
<PAGE>   12
                                      -12-

                  or projected figures for such period and prepared in
                  accordance with generally accepted accounting principles,
                  together with a certification by the principal financial or
                  accounting officer of the Company that the information
                  contained in such financial statements fairly presents the
                  financial condition of the Company and its Subsidiaries on the
                  date thereof (subject to year-end adjustments);

                           (d) contemporaneously with the filing or mailing
                  thereof, copies of all materials filed with the Commission or
                  sent to the stockholders of the Company; and

                           (e) from time to time such other financial data and
                  information (including accountants' management letters) as any
                  Investor may reasonably request.

         So long as the Credit Agreement remains in effect, the Company may
satisfy its obligations under this Section 7.2 by delivering to the Agent (as
defined in the Credit Agreement), for the benefit of each Investor, the
information which it is required to deliver to the Banks under the corresponding
covenants contained in the Credit Agreement at the times required by such
covenants. In the event the Credit Agreement is no longer in effect, the Company
may satisfy its obligations under this Section 7.2 by delivering to the
Investors the information required under Section 7.2 (a) and (b) hereof or,
contemporaneously with the filing thereof, copies of the Company 's Form 10-Q
and Form 10-K filed with the Commission.

         SECTION 7.3. INSPECTION.

         (a) The Company shall permit the Investors, through any of their duly
authorized representatives, to visit and inspect any of the properties of the
Company or any of its Subsidiaries, to examine the books of account of the
Company and its Subsidiaries (and to make copies thereof and extracts
therefrom), and to discuss the affairs, finances and accounts of the Company and
its Subsidiaries with, and to be advised as to the same by, its and their
officers, all at such reasonable times and intervals as any Investor may
reasonably request. Any information concerning the Company or any of its
Subsidiaries obtained by any Investor in connection with any such visit,
inspection or examination will be kept confidential by such Investor.

         SECTION 7.4. ISSUANCE OF PREFERRED CAPITAL STOCK, ETC.

         (a) The Company will not at any time after the Closing Date issue
(whether by way of a dividend payment or otherwise), sell or grant to any Person
or Persons, (i) any shares of Preferred Capital Stock, (ii) any securities
convertible into or exchangeable for or carrying any rights to acquire any
shares of Preferred Capital Stock, or (iii) any options, warrants or any other
rights to acquire any shares of Preferred Capital Stock; provided, however, that
the Company may issue Preferred Capital Stock to (A) the holders of any note or
other indebtedness of the Company in exchange for the cancellation of such note
or other indebtedness provided that the aggregate liquidation preference of such
Preferred Capital Stock does not exceed the face amount of such note or other
indebtedness, (B) any
<PAGE>   13
                                      -13-

Person in exchange for cash equal to or greater than the liquidation preference
for such Preferred Capital Stock, (C) any Person in connection with the purchase
of assets from such Person provided that the number of shares of Preferred
Capital Stock issued in connection therewith is equal to the quotient obtained
by dividing the amount of the purchase price to be paid in Preferred Capital
Stock by the Fair Market Value of a share of Preferred Capital Stock, and (D)
any Person in connection with a merger or consolidation with such Person
provided that the number of shares of Preferred Capital Stock issued in
connection therewith is equal to the quotient obtained by dividing the amount of
the consideration to be paid in Preferred Capital Stock by the Fair Market Value
of a share of Preferred Capital Stock.

         (b) The term "Preferred Capital Stock" shall mean: any class or any
series of any class of the capital stock of the Company: (i) which shall be
entitled, upon any distribution of any assets of the Company, whether by
dividend or by liquidation or by redemption, to any preference ranking prior or
superior to the Common Stock; or (ii) which shall be entitled, upon any
redemption of any shares of such capital stock, whether at the option of the
Company, at the option of the holders thereof, or upon the happening of any
specified events, to any preference in redemption payments ranking prior or
superior to the Common Stock; or (iii) the holders of which shall be or may
become entitled, at any time or upon the happening of any specified events or
conditions, to more than one vote for each share of such capital stock held by
such holders; or (iv) which shall be convertible into, or exchangeable for,
whether at the option of the Company, at the option of the holders thereof, or
upon the happening of any specified events or conditions, any shares of
Preferred Capital Stock of any class or series.

         SECTION 7.5. AMENDMENTS TO CHARTER DOCUMENTS; ETC. The Company may
modify, amend or supplement the Company's Articles of Organization or By-laws
provided the rights of each stockholder of the Company are similarly affected by
such modification, amendment or supplement.

                                  ARTICLE VIII

                               REGISTRATION RIGHTS

         The Company hereby grants to the Investors certain rights to
participate with the Company in any registration by the Company of Common Stock
under the Securities Act. The provisions governing such registration rights are
set out in this Article VIII. The Company and the Investors hereby absolutely
and unconditionally agree to be bound and governed by, and specifically make and
adopt, all of the terms and provisions contained in this Article VIII. A Holder
shall, for all purposes of this Article VIII, unless the context shall otherwise
require, be deemed to hold, at any particular time, all shares of Common Stock
issuable upon conversion of or in exchange for or upon exercise of rights under
all capital stock or other securities (including, without limitation, options
and warrants) of the Company held of record by such Holder at such time.

         SECTION 8.1. PIGGYBACK REGISTRATIONS.
<PAGE>   14
                                      -14-

         (a) Rights to Piggyback.

                  (i) If (and on each occasion that) the Company proposes to
         register any of its securities under the Securities Act, either for the
         Company's own account or for the account of any of its securityholders
         (other than the Holders of Registrable Securities in their capacity as
         Holders) (each such registration being herein called a "Piggyback
         Registration"), the Company will give written notice to all Holders of
         Registrable Securities of the Company's intention to effect such
         Piggyback Registration not later than the earlier to occur of (A) the
         tenth day following the receipt by the Company of notice of exercise of
         any registration rights by any Persons (other than the Holders of
         Registrable Securities in their capacities as Holders), and (B) thirty
         (30) days prior to the anticipated filing date of such Piggyback
         Registration. The Holders of Registrable Securities shall not make any
         public disclosure that the Company proposes to register any of its
         securities prior to the time such information is publicly available.

                  (ii) Subject to the provisions contained in paragraphs (c) and
         (d) of this Section 8.1 and in the last sentence of this clause (ii),
         (A) the Company will be obligated and required to include in each
         Piggyback Registration all Registrable Securities with respect to which
         the Company shall receive from Holders of Registrable Securities,
         within thirty (30) days after the date on which the Company shall have
         given written notice of such Piggyback Registration to all Holders of
         Registrable Securities pursuant to Section 8.1(a)(i) hereof, the
         written requests of such Holders for inclusion in such Piggyback
         Registration, and (B) the Company will use its best efforts in good
         faith to effect promptly the registration of all such Registrable
         Securities. The Holders of Registrable Securities shall be permitted to
         withdraw all or any part of the Registrable Securities of such Holders
         from any Piggyback Registration at any time prior to the effective date
         of such Piggyback Registration. The Company will not be obligated or
         required to include any Registrable Securities in any registration
         effected solely to implement an employee benefit plan or a transaction
         to which Rule 145 of the Commission is applicable.

         (b) Piggyback Registration Expenses. The Company will pay all
Registration Expenses of each Piggyback Registration attributable to Registrable
Securities or otherwise incurred or sustained in connection with or arising out
of the inclusion in each such Piggyback Registration of Registrable Securities.

         (c) Priority on Piggyback Registrations. If a Piggyback Registration is
an underwritten registration, and the managing underwriters shall give written
advice to the Company that, in the reasonable opinion of such managing
underwriters, marketing factors require a limitation on the total number of
securities to be underwritten (the "Underwriters' Maximum Number"), then: (i)
the Company shall include in such registration that number of securities which
the Company (or other securityholder for whose account the registration is made)
proposes to offer and sell in such registration and which does not exceed the
Underwriters' Maximum Number; (ii) if the registration is made for the account
of a
<PAGE>   15
                                      -15-

securityholder exercising its registration rights and the Underwriters' Maximum
Number exceeds the number of securities which such securityholder proposes to
offer and sell in such registration, then the Company shall be entitled to
include in such registration that number of securities which the Company
proposes to offer and sell for its own account in such registration and which
does not exceed the Underwriters' Maximum Number, (iii) if the Underwriters'
Maximum Number exceeds sum of the number of securities which the Company shall
be required to include in such registration for the account of the
securityholder requesting such registration and the number of securities which
the Company proposes to offer and sell for its own account in such registration,
then the Company will be obligated and required to include in such registration
the number of securities requested to be included in such registration by the
Holders of Registrable Securities and any other securityholders of the Company
having piggyback rights to the extent that such number does not exceed such
excess, and such securities shall be allocated pro rata among such Holders of
Registrable Securities and other securityholders on the basis of the number of
securities requested to be included therein by each such Holder of Registrable
Securities and other securityholder; and (iv) if the Underwriters' Maximum
Number exceeds the sum of the number of securities which the Company shall be
required to include in such registration pursuant to clauses (i) and (iii) and
the number of securities which the Company proposes to offer and sell for its
own account in such registration, then the Company may include in such
registration that number of other securities which persons shall have requested
be included in such registration and which shall not be greater than such
excess.

         (d) Selection of Underwriters. In any Piggyback Registration, the
Company shall (unless the Company shall otherwise agree) have the right to
select the investment bankers and managing underwriters in such registration.

         SECTION 8.2. LOCKUP AGREEMENTS.

         (a) Restrictions on Public Sale by Holders of Registrable Securities.
Each Holder of Registrable Securities, if the Company or the managing
underwriters so request in connection with such registration, will not, without
the prior written consent of the Company or such underwriters, effect any public
sale or other distribution of any equity securities of the Company, including
any sale pursuant to Rule 144, during the seven (7) days prior to, and during
the one hundred eighty (180) day period (such period not to exceed 90 days if
such registration is other than the Company's initial public offering)
commencing on, the effective date of such underwritten registration, except in
connection with such underwritten registration, except, in each case, to the
extent such Holder is prohibited by applicable law or exercise of fiduciary
duties from agreeing to withhold Registrable Securities from sale or is acting
in its capacity as a fiduciary or investment adviser as set forth in an opinion
of counsel provided to the Company; provided that each officer and director of
the Company and each holder of more than one percent (1%) of the issued and
outstanding shares of Common Stock shall enter into similar agreements. Without
limiting the scope of the term "fiduciary", a Holder shall be deemed to be
acting as a fiduciary or an investment adviser if its actions or the Registrable
Securities to be sold are subject to the Employee Retirement Income Security Act
of 1974, as amended, or the Investment Company Act of 1940, as
<PAGE>   16
                                      -16-

amended, or if such Registrable Securities are held in a separate account under
applicable insurance law or regulation.

         (b) Restrictions on Public Sale by Company. The Company agrees not to
effect any public sale or other distribution of its equity securities, or any
securities convertible into or exchangeable or exercisable for such equity
securities, during the period commencing on the seventh day prior to, and ending
on the one hundred and eightieth day following (such period not to exceed 90
days if such registration is other than the Company's initial public offering),
the effective date of any underwritten Piggyback Registration, except in
connection with any such underwritten registration and except for any offering
pursuant to an employee benefit plan and registered on Form S-8 or a transaction
registered on Form S-4.

         SECTION 8.3. REGISTRATION PROCEDURES. Whenever the Holders of
Registrable Securities have requested that any Registrable Securities be
registered pursuant to this Agreement, the Company will use its best efforts to
effect the registration and the sale of such Registrable Securities in
accordance with the intended method of disposition thereof, and pursuant thereto
the Company will as expeditiously as possible:

         (a) prepare and file with the Commission a Registration Statement with
respect to such Registrable Securities and use its best efforts to cause such
Registration Statement to become effective (provided, that before filing a
Registration Statement or Prospectus or any amendments or supplements thereto,
the Company will furnish to counsel selected by the Holders of Registrable
Securities covered by such Registration Statement, copies of all such documents
proposed to be filed, which documents will be subject to the timely review of
such counsel and the Company will not file any Registration Statement or
amendment thereto or any Prospectus or any supplement thereto, including
documents incorporated by reference, to which the Holders of a Majority of the
Registrable Securities covered by such Registration Statement shall reasonably
object);

         (b) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective for
not more than six (6) months and, comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
Registration Statement during such effective period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
Registration Statement and cause the Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 under the Securities Act;

         (c) upon request, furnish to each seller of Registrable Securities such
number of copies of such Registration Statement, each amendment and supplement
thereto, the Prospectus included in such Registration Statement (including each
preliminary Prospectus and each Prospectus filed under Rule 424 of the
Securities Act) and such other documents as each such seller may reasonably
request in order to facilitate the disposition of the Registrable
<PAGE>   17
                                      -17-

Securities owned by each such seller (it being understood that the Company
consents to the use of the Prospectus and any amendment or supplement thereto by
such seller in connection with the offering and sale of the Registrable
Securities covered by the Prospectus or any amendment or supplement thereto);

         (d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests, use its best efforts to keep each such
registration or qualification effective, including through new filings,
amendments or renewals, during the period such Registration Statement is
required to be kept effective, and do any and all other acts and things which
may be reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller; provided that the Company will not be required (i) to qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subparagraph (d), (ii) to subject itself to taxation in any
such jurisdiction or (iii) to consent to general service of process in any such
jurisdiction;

         (e) notify each seller of such Registrable Securities, at any time when
a Prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event as a result of which the Prospectus included
in such Registration Statement contains an untrue statement of a material fact
or omits any fact necessary to make the statements therein not misleading, and,
at the request of any such seller, the Company will promptly prepare (and, when
completed, give notice to each seller of Registrable Securities) a supplement or
amendment to such Prospectus so that, as thereafter delivered to the purchasers
of such Registrable Securities, such Prospectus will not contain an untrue
statement of a material fact or omit to state any fact necessary to make the
statements therein not misleading; provided that upon such notification by the
Company, each seller of such Registrable Securities will not offer or sell such
Registrable Securities until the Company has notified such seller that it has
prepared a supplement or amendment to such Prospectus and delivered copies of
such supplement or amendment to such seller;

         (f) cause all such Registrable Securities to be listed, prior to the
date of the first sale of such Registrable Securities pursuant to such
registration, on each securities exchange on which similar securities issued by
the Company are then listed and, if not so listed, to be listed on the Nasdaq
National Market System;

         (g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such Registration Statement;

         (h) enter into all such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the Holders of
a Majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (including, without limitation, effecting a stock split
or a combination of shares);
<PAGE>   18
                                      -18-

         (i) make available for inspection on a confidential basis by any
seller, any underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney, accountant or other agent retained by
any such seller or underwriter (in each case after reasonable prior notice), all
financial and other records, pertinent corporate documents and properties of the
Company, and cause the Company's officers, directors, employees and independent
accountants to supply on a confidential basis all information reasonably
requested by any such seller, underwriter, attorney, accountant or agent in
connection with such Registration Statement;

         (j) permit any Holder of Registrable Securities which Holder, in its
sole and exclusive judgment, might be deemed to be an underwriter or a
controlling person of the Company within the meaning of Section 15 of the
Securities Act, to participate in the preparation of such registration or
comparable statement and to permit the insertion therein of material, furnished
to the Company in writing, which in the reasonable judgment of such Holder and
its counsel should be included, provided that such material shall be furnished
under such circumstances as shall cause it to be subject to the indemnification
provisions provided pursuant to Section 8.6(b) hereof;

         (k) in the event of the issuance of any stop order suspending the
effectiveness of a Registration Statement, or of any order suspending or
preventing the use of any related Prospectus or suspending the qualification of
any Registrable Securities included in such Registration Statement for sale in
any jurisdiction, the Company will use its best efforts promptly to obtain the
withdrawal of such order;

         (l) if requested by the managing underwriter or underwriters or any
holder of Registrable Securities in connection with any sale pursuant to a
Registration Statement, promptly incorporate in a Prospectus supplement or
post-effective amendment such information relating to such underwriting as the
managing underwriter or underwriters or such Holder reasonably requests to be
included therein, and make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after being notified of the
matters incorporated in such Prospectus supplement or post-effective amendment;

         (m) cooperate with the Holders of Registrable Securities and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legends)
representing Registrable Securities to be sold under such registration, and
enable such Registrable Securities to be in such denominations and registered in
such names as the managing underwriter or underwriters, if any, or such Holders
may request;

         (n) use its best efforts to cause the Registrable Securities to be
registered with or approved by such other governmental agencies or authorities
within the United States and having jurisdiction over the Company as may
reasonably be necessary to enable the seller or sellers thereof or the
underwriter or underwriters, if any, to consummate the disposition of such
Registrable Securities;
<PAGE>   19
                                      -19-

         (o) use its best efforts to obtain:

                  (i) at the time of effectiveness of each registration, a
         "comfort letter" from the Company's independent certified public
         accountants covering such matters of the type customarily covered by
         "cold comfort letters" as the Holders of a Majority of the Registrable
         Securities covered by such registration and the underwriters reasonably
         request; and

                  (ii) at the time of any underwritten sale pursuant to a
         Registration Statement, a "bring-down comfort letter", dated as of the
         date of such sale, from the Company's independent certified public
         accountants covering such matters of the type customarily covered by
         comfort letters as the Holders of a Majority of the Registrable
         Securities covered by such Registration Statement and the underwriters
         reasonably request;

         (p) use its best efforts to obtain, at the time of effectiveness of
each Piggyback Registration and at the time of any sale pursuant to each
registration, an opinion or opinions, favorable in form and scope to the Holders
of a Majority of the Registrable Securities covered by such registration, from
counsel to the Company in customary form; and

         (q) otherwise comply with all applicable rules and regulations of the
Commission, and make generally available to its securityholders (as contemplated
by Section 11(a) under the Securities Act) an earnings statement satisfying the
provisions of Rule 158 under the Securities Act no later than ninety (90) days
after the end of the twelve month period beginning with the first month of the
Company's first fiscal quarter commencing after the effective date of the
Registration Statement, which statement shall cover said twelve month period.

         SECTION 8.4. COOPERATION BY PROSPECTIVE SELLERS, ETC.

         (a) Information Requests. Each prospective seller of Registrable
Securities will furnish to the Company in writing such information as the
Company may reasonably require from such seller in connection with any
Registration Statement with respect to such Registrable Securities.

         (b) Failure to Cooperate. The failure of any prospective seller of
Registrable Securities to furnish any information or documents in accordance
with any provision contained in this Article VIII shall not affect the
obligations of the Company under this Article VIII to any remaining sellers who
furnish such information and documents unless, in the reasonable opinion of
counsel to the Company or the underwriters, such failure impairs or may impair
the viability of the offering or the legality of the Registration Statement or
the underlying offering.

         (c) Suspension of Sales. The Holders of Registrable Securities included
in any Registration Statement will not (until further notice) effect sales
thereof after receipt of telegraphic or written notice from the Company to
suspend sales to permit the Company to correct or update such Registration
Statement or Prospectus; but the obligations of the Company with respect to
maintaining any
<PAGE>   20
                                      -20-

Registration Statement current and effective shall be extended by a period of
days equal to the period such suspension is in effect.

         (d) Removal of Shares from Registration. At the end of any period
during which the Company is obligated to keep any Registration Statement current
and effective as provided by Section 8.3 hereof (and any extensions thereof
required by the preceding paragraph (c) of this Section 8.4), the Holders of
Registrable Securities included in such Registration Statement shall discontinue
sales of shares pursuant to such Registration Statement upon receipt of notice
from the Company of its intention to remove from registration the shares covered
by such Registration Statement which remain unsold, and such Holders shall
notify the Company of the number of shares registered which remain unsold
promptly after receipt of such notice from the Company.

         (e) Warrants or Options. Notwithstanding any other provision herein to
the contrary, no Holder of Registrable Securities which constitute warrants or
options shall be required to exercise such warrants or options in connection
with any registration until the actual sale of the shares of Common Stock
issuable upon exercise of such warrants or options. The Company shall enter into
such agreements and shall otherwise cooperate with the Holders of Registrable
Securities in order to ensure that such Holders are not required to exercise any
warrants or options prior to the date of the actual sale of the shares of Common
Stock issuable upon exercise of such warrants or options.

         SECTION 8.5. REGISTRATION EXPENSES.

         (a) Expenses Borne by the Company. All costs and expenses incurred or
sustained in connection with or arising out of each registration pursuant to
Section 8.2 hereof, including, without limitation, all registration and filing
fees, fees and expenses of compliance with securities or Blue Sky laws
(including reasonable fees and disbursements of counsel for the underwriters in
connection with the Blue Sky qualification of Registrable Securities), printing
expenses, messenger, telephone and delivery expenses, fees and disbursements of
counsel for the Company and of counsel for the sellers of Registrable Securities
(subject to the limitations contained in paragraph (b) of this Section 8.5),
fees and disbursements of all independent certified public accountants
(including the expenses relating to the preparation and delivery of any special
audit or "cold comfort" letters required by or incident to such registration),
and fees and disbursements of underwriters (excluding discounts and commissions,
but including underwriters' liability insurance if the Company or if the
underwriters so require), the reasonable fees and expenses of any special
experts retained by the Company of its own initiative or at the request of the
managing underwriters in connection with such registration, and fees and
expenses of all (if any) other Persons retained by the Company (all such costs
and expenses being herein called, collectively, the "Registration Expenses"),
will be borne and paid by the Company. The Company will, in any case, pay its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit, the expense of liability insurance referred to above, and
the fees and expenses incurred in connection with the
<PAGE>   21
                                      -21-

listing of the securities to be registered on each securities exchange on which
similar securities of the Company are then listed.

         (b) Attorneys' Fees; Taxes. In connection with each registration of
Registrable Securities pursuant to this Article VIII, the Company will reimburse
the Holders of Registrable Securities being registered in such registration for
the reasonable fees and disbursements of one law firm which acts as counsel
chosen by the Holders of a Majority of Registrable Securities. The Company will
not bear the cost of nor pay for any stock transfer taxes imposed in respect of
the transfer of any Registrable Securities to any purchaser thereof by any
Holder of Registrable Securities in connection with any registration of
Registrable Securities pursuant to this Article VIII.

         (c) Payment by Holder. To the extent that Registration Expenses
incident to any registration are, under the terms of this Article VIII, not
required to be paid by the Company, each Holder of Registrable Securities
included in such registration will pay all Registration Expenses which are
clearly solely attributable to the registration of such Holder's Registrable
Securities so included in such registration, and all other Registration Expenses
not so attributable to one Holder will be borne and paid by all sellers of
securities included in such registration in proportion to the number of
securities so included by each such seller.

         SECTION 8.6. INDEMNIFICATION.

         (a) Indemnification by Company. The Company will indemnify each Holder
requesting or joining in a registration and each underwriter of the securities
so registered, the officers, directors and partners of each such Person and each
Person who controls any thereof (within the meaning of the Securities Act),
against any and all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of any material fact contained in any Prospectus, offering
circular or other document incident to any registration, qualification or
compliance (or in any related Registration Statement, notification or the like)
or any omission (or alleged omission) to state therein any material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of any rule or regulation
promulgated under the Securities Act applicable to the Company and relating to
any action or inaction required of the Company in connection with any such
registration, qualification or compliance, and the Company will reimburse each
such Holder, officer, director, partner, controlling Person, and underwriter for
any legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such claim, loss, damage or liability arises out of or is based
on any untrue statement or omission based upon written information furnished to
the Company in an instrument duly executed by such Holder, officer, director,
partner, controlling Person, or underwriter and stated to be exclusively and
specifically for use therein.

         (b) Indemnification by Each Holder. Each Holder requesting or joining
in a registration will indemnify each underwriter of the securities so
registered, the
<PAGE>   22
                                      -22-

Company and its officers and directors and each Person, if any, who controls any
thereof (within the meaning of the Securities Act) and their respective
successors in title and assigns against any and all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of any material fact contained in
any Prospectus, offering circular or other document incident to any
registration, qualification or compliance (or in any related Registration
Statement, notification or the like) or any omission (or alleged omission) to
state therein any material fact required to be stated therein or necessary to
make the statement therein not misleading, and such Holder will reimburse each
underwriter, the Company and each other Person indemnified pursuant to this
paragraph (b) for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action; provided, however, that this paragraph (b) shall apply only
if (and only to the extent that) such statement or omission was made in reliance
upon information furnished to the Company in any instrument duly executed by
such Holder and stated to be specifically for use in such Prospectus, offering
circular or other document (or related Registration Statement, notification or
the like) or any amendment or supplement thereto. The maximum liability under
this paragraph (b) of each Holder joining in any registration shall be limited
to the aggregate amount of all sales proceeds actually received by such Holder
upon the sale of such Holder's Registrable Securities in connection with such
registration.

         (c) Indemnification Proceedings. Each party entitled to indemnification
pursuant to this Section 8.6 (the "Indemnified Party") shall give notice to the
party required to provide indemnification pursuant to this Section 8.6 (the
"Indemnifying Party") promptly after such Indemnified Party acquires actual
knowledge of any claim as to which indemnity may be sought, and shall permit the
Indemnifying Party (at its expense) to assume the defense of any claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
acceptable to the Indemnified Party, and the Indemnified Party may participate
in such defense at such party's expense; and provided further, that if any
Indemnified Party shall have reasonably concluded that there may be one or more
legal defenses available to such Indemnified Party which are different from or
additional to and are inconsistent with those available to the Indemnifying
Party, or that such claim or litigation involves or could have an effect upon
matters beyond the scope of the indemnity agreement provided in this Section
8.6, the Indemnifying Party shall not have the right to assume the defense of
such action on behalf such Indemnified Party and such Indemnifying Party shall
reimburse such Indemnified Party and any Person controlling such Indemnified
Party for that portion of the fees and expenses of any counsel retained by the
Indemnified Party which are reasonably related to the matters covered by the
indemnity agreement provided in this Section 8.6; and provided, further, that
the failure by any Indemnified Party to give notice as provided in this
paragraph (c) shall not relieve the Indemnifying Party of its obligations under
this Section 8.6 except to the extent that the failure results in a failure of
actual notice to the Indemnifying Party and such Indemnifying Party is damaged
(or the indemnification liability of such Indemnifying Party hereunder would be
increased) solely as a result of the failure to give notice. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each
<PAGE>   23
                                      -23-

Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation. The reimbursement required by this
Section 8.7 shall be made by periodic payments during the course of the
investigation or defense, as and when bills are received or expenses incurred.

         (d) Contribution in Lieu of Indemnification. If the indemnification
provided for in this Section 8.6 from the Indemnifying Party is unavailable to
an Indemnified Party hereunder in respect of any losses, claims, damages,
liabilities or expense (or actions in respect thereof) referred to therein, then
the Indemnifying Party in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party and indemnified parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative fault of such indemnifying and indemnified parties
shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact,
has been made by, or relates to information supplied by, such Indemnifying Party
or indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action; provided,
however, that in no event shall the liability of any Holder hereunder be greater
in amount than the difference between the dollar amount of the proceeds received
by such Holder upon the sale of the Registrable Securities giving rise to such
contribution obligation and all amounts previously contributed by such Holder
with respect to such losses, claims, damages, liabilities and expenses referred
to above shall be deemed to include, any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.

         The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8.6(d) were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.

         SECTION 8.7. RULE 144 REQUIREMENTS; FORM S-3. The Company will make
every effort in good faith to take all steps necessary to ensure that the
Company will be eligible to register securities on Form S-3 (or any comparable
form adopted by the Commission), and to make publicly available and available to
the Holders of Registrable Securities, pursuant to Rule 144 or Rule 144A of the
Commission under the Securities Act, such information as shall be necessary to
enable the Holders of Registrable Securities to make sales of Registrable
Securities pursuant to such Rules. The Company will furnish to any Holder of
Registrable Securities, upon request made by such Holder at any time, a written
statement signed by the Company, addressed to such Holder, describing briefly
the action the Company
<PAGE>   24
                                      -24-

has taken or proposes to take to comply with the current public information
requirements of Rule 144 or Rule 144A. The Company will, at the request of any
Holder of Registrable Securities, upon receipt from such Holder of a certificate
certifying (i) that such Holder has held such Registrable Securities for a
period of not less than one (1) year, and (ii) that such Holder has not been an
affiliate (as defined in Rule 144) of the Company for more than the ninety (90)
preceding days, remove from the stock certificates representing such Registrable
Securities that portion of any restrictive legend which relates to the
registration provisions of the Securities Act.

         SECTION 8.8. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may
participate in any underwritten registration pursuant to this Article VIII
unless such Person (a) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved by the Persons entitled,
under the provisions contained in this Article VIII, to approve such
arrangements, and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required by the terms of such underwriting arrangements, provided, however, that
no such indemnities or underwriting agreements shall provide for indemnification
or contribution obligations of any Holder to a greater extent than the
obligations of such Holder set forth in Section 8.6(b) hereof. Any Holder of
Registrable Securities to be included in any underwritten registration shall be
entitled at any time to withdraw such Registrable Securities from such
registration in the event that such Holder shall disapprove of any of the terms
of the related underwriting agreement.

         SECTION 8.9. NO INCONSISTENT AGREEMENTS. Except for the Existing
Registration Rights Agreement, the Company will not, at any time after the
effective date of this Agreement, enter into any agreement or contract (whether
written or oral) with respect to any of its securities which is inconsistent in
any respect with the registration rights granted by the Company to Investors
pursuant to Article VIII of this Agreement or otherwise conflicts with the
provisions hereof.

         SECTION 8.10. REGISTRABLE SECURITIES HELD BY THE COMPANY. Whenever the
consent or approval of Holders of Registrable Securities is required pursuant to
this Article VIII, Registrable Securities held by the Company shall not be
counted in determining whether such consent or approval was duly and properly
given by such Holders pursuant to and in compliance with any of the terms of
Article VIII of this Agreement.

         SECTION 8.11. TERM. The agreements of the Company contained in this
Article VIII shall continue in full force and effect so long as any Holder holds
any Registrable Securities.

                                   ARTICLE IX

                              PUT AND CALL OPTIONS

         SECTION 9.1. RIGHT TO PUT SECURITIES; PUT CLOSING. The Company will
give each Investor at least thirty (30) days' prior written notice of any
Capital Transaction.
<PAGE>   25
                                      -25-

Each Investor may, at their option, by giving the Company at least five (5) days
notice before such Capital Transaction, sell and the Company shall be required
to repurchase all of such Investor's Securities then outstanding and the
repurchase price (the "Put Repurchase Price"), for purposes of this Section 9.1,
shall be equal to (a) in the case of each portion of any Warrant exercisable for
one Warrant Share, the Put Repurchase Price per Warrant Share as determined
pursuant to clause (b) below less the exercise price for such share and (b) in
the case of each Warrant Share, (i) in the case of a merger or any other stock
transaction, the highest price per share received by any holder of Common Stock
in connection with such transaction, and (ii) in the case of any liquidation or
sale of assets, the quotient of (A) the Adjusted Net Worth of the Company
immediately prior to such liquidation or immediately after such sale, as
applicable, divided by (B) the sum of the number of shares of Common Stock then
outstanding plus the number of shares of Common Stock then issuable upon the
exercise of then outstanding warrants, options or convertible securities, in
each case to the extent then exercisable.

         SECTION 9.2. RIGHT TO CALL SECURITIES; CALL CLOSING. The Company may,
by notice to each of the Investors (the "Call Notice") elect to purchase from
such Investors (and each of the Investors hereby agrees to sell to the Company)
out of funds legally available therefor, at the Repurchase Price, all but not
less than all of the Securities as are then outstanding and have not been sold
pursuant to an effective Registration Statement on a date specified in such
notice not fewer than thirty (30) nor more than ninety (90) days after the date
of the Call Notice. The closing under this Section 9.2 shall take place at the
offices of the Company at 10:00 a.m. local time on the date so specified or at
such other time and place as the Company and the Investors may agree upon (the
"Call Closing Date"). At the closing, each of the Investors will deliver to the
Company a certificate or certificates evidencing the Warrant Shares and/or the
Warrant or Warrants owned by such Investor, to be repurchased by the Company
pursuant to such call (properly endorsed or accompanied by stock powers or
assignments with signature(s) guaranteed or similar appropriate documentation of
authority to transfer), and the Company shall pay such Investor the Repurchase
Price for such Warrants and/or Warrant Shares in cash or in immediately
available funds. The repurchase price (the "Call Repurchase Price"), for
purposes of this Section 9.2, shall be an amount equal to the greater of (i) in
the case of each portion of any Warrant exercisable for one Warrant Share, (a)
the Fair Market Value per share less the exercise price per share and (b) $20.00
per share less the exercise price per share, and (ii) in the case of each
Warrant Share, the Fair Market Value per share and $20.00 per share.

         SECTION 9.3. PAYMENT. The Company shall be required to pay the Put
Repurchase Price simultaneously with the consummation of the Capital Transaction
and the payment of the Put Repurchase Price shall be a condition precedent to
the closing of such Capital Transaction. The Company agrees not close such
Capital Transaction without paying the Put Repurchase Price to the Investors.
The Company shall be required to pay the Call Repurchase Price at any closing
under Section 9.2 hereof. Each such repurchase price shall be paid out of funds
legally available therefor in cash or immediately available funds. In the event
that any portion of the aggregate Call Repurchase Price is not paid as a result
of any insufficiency of legally available funds, the failure to obtain any
consent required
<PAGE>   26
                                      -26-

the Credit Agreement or otherwise, the call under Section 9.2 hereof shall
automatically be rescinded as to all holders. The Company may assign its call
rights to an Affiliate provided such Affiliate agrees in writing to be bound by
the terms and provisions of this Agreement.

         SECTION 9.4. TERMINATION OF PUT & CALL. Each Investor's right to put
Securities pursuant to Section 9.1 and the Company's right to call Securities
pursuant to Section 9.2 shall terminate on the completion of a Qualified Public
Offering.

                                    ARTICLE X

                  SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION.

         SECTION 10.1. SURVIVAL OF REPRESENTATIONS. The representations and
warranties of the Company and of the Banks and the Investors contained in this
Agreement, or any agreement, instrument or document delivered pursuant to any of
the provisions of this Agreement, shall survive the execution and delivery of
this Agreement, any examination or investigation conducted by or on behalf of
the Company or the Banks, and the Closing hereunder.

         SECTION 10.2. INDEMNIFICATION FOR MISREPRESENTATIONS. The Company
agrees to indemnify and hold each of the Banks harmless from and against, and to
pay to each of the Banks, on demand by any Bank from time to time, the full
amount of any loss, claim, damage, liability, cost or expense (including
reasonable attorneys' fees) resulting to any Bank from any false, incorrect or
misleading representation or warranty of the Company contained in this
Agreement, or any agreement, instrument or document delivered by the Company to
any Bank pursuant to any of the provisions of this Agreement.

         SECTION 10.3. EXPENSES. Whether or not all or any of the arrangements
or transactions contemplated by this Agreement or by any of the Warrants shall
be consummated, the Company agrees to pay to the Investors, on demand by the
Investors at any time and as often as the occasion therefor may require: (a) all
of the reasonable legal fees, plus all reasonable out-of-pocket expenses and
disbursements, of Bingham Dana LLP, special counsel for Fleet National Bank,
which have been or shall be incurred or sustained at any time in connection with
the preparation, negotiation, execution or delivery of this Agreement, any of
the Warrants or any other agreements, instruments or documents relating thereto;
and (b) all reasonable out-of-pocket costs and expenses which shall be incurred
or sustained by any Investor at any time in connection with any modifications or
amendments to or consents, approvals or waivers under this Agreement or any of
the Warrants, or in connection with any litigation, proceeding or dispute
arising out of or relating to this Agreement or any of the Warrants or
relationships created thereby, or in connection with any action or proceeding
taken by any Investor to protect or preserve all or any of the rights, remedies,
powers or privileges of such Investor under any of such documents or to enforce
any of the covenants, agreements or obligations of the Company under any of such
documents (including, without limitation, all of the reasonable fees and
disbursements of legal counsel for each Investor).
<PAGE>   27
                                      -27-

                                   ARTICLE XI

                                  MISCELLANEOUS

         SECTION 11.1. NOTICES.

         (a) All notices and other communications pursuant to this Agreement
shall be in writing, either delivered in hand, mailed by United States
registered or certified first-class mail, postage prepaid, sent by overnight
courier, or sent by telegraph, telecopy, facsimile or telex and confirmed by
delivery via courier or postal service, addressed as follows:

                  (i) if to the Company, at the address of the Company set forth
         on the first page hereof, or at such other address as shall have been
         furnished to each of the Investors in writing by the Company, and a
         copy thereof shall in any event be simultaneously transmitted to Donald
         Siegel, P.C., Posternak Blankstein & Lund, L.L.P., 100 Charles River
         Plaza, Boston, Massachusetts 02114-2723; or

                  (ii) if to any Investor, at such addresses (in each case) as
         shall have been furnished to the Company and to the other Investors by
         such Investor in writing, and a copy thereof shall in any event be
         simultaneously transmitted to Edwin A. Smith, Esq., Bingham Dana LLP,
         150 Federal Street, Boston, MA 02110.

         (b) Any notice or other communication pursuant to this Agreement shall
be deemed to have been duly given or made and to have become effective (i) if
delivered by hand, overnight courier or facsimile to a responsible officer of
the party to which it is directed, at the time of receipt thereof by such
officer or the sending of such facsimile or (ii) if sent by registered or
certified first-class mail, postage prepaid, on the third business day following
the mailing thereof.

         SECTION 11.2. GOVERNING LAW. THIS AGREEMENT IS INTENDED TO TAKE EFFECT
AS A SEALED INSTRUMENT. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.

         SECTION 11.3. AMENDMENTS AND WAIVERS.

         (a) Except as otherwise provided by paragraph (b) of this Section 11.3,
and except as otherwise expressly required by any other provisions of this
Agreement, none of the terms or provisions contained in this Agreement, and none
of the agreements, obligations or covenants of the Company contained in this
Agreement, may be amended, modified, supplemented, waived or terminated unless
(i) the Company shall execute an instrument in writing agreeing or consenting to
such amendment, modification, supplement, waiver or termination, and (ii) the
Company shall receive a prior written Investor Consent therefor.
<PAGE>   28
                                      -28-

         (b) Each of the terms and provisions contained in this Section 11.3 or
in the definitions of Investor Consent or Majority Investors contained in
Article I hereof may be amended, modified, supplemented, waived or terminated
only by a written instrument or consent signed by the Company and by each of the
Investors holding of record any Securities at the effective date thereof.

         (c) In connection with any action taken or to be taken pursuant to
paragraph (a) of this Section 11.3, there shall be no obligation or requirement
on the part of the Company, any of the Investors or any other Persons (i) to
solicit or to attempt to solicit from all of the Investors the consent or
approval of all of the Investors for such action, or (ii) to submit any notices
of any kind to all of the Investors in advance of any action proposed to be
taken pursuant to paragraph (a) of this Section 11.3. However, copies of all
written consents or approvals given by Investors in connection with any action
taken or to be taken pursuant to and in compliance with paragraph (a) of this
Section 11.3 shall be sent by the Company, promptly after the receipt thereof by
the Company, to each Investor who shall have failed or refused to give a written
consent or approval for such action.

         (d) Any action taken pursuant to and in compliance with paragraph (a)
of this Section 11.3 shall be binding upon the Company and upon all of the
Investors, including all of the Investors who shall have failed or refused to
give a written consent or approval for such action.

         SECTION 11.4. PROPORTIONAL ADJUSTMENTS. There are references in this
Agreement to a specific price per share of the Company's Common Stock or to a
specific number of shares in the capital of the Company. The specific price per
share and the specific number of shares so stated are effective as of the
Closing Date. The specific price per share and the specific number of shares so
stated shall (in each case) be proportionally adjusted from time to time if (and
on each occasion that) there shall be effected by the Company any stock
dividend, stock split, subdivision of shares, combination of shares,
reclassification, recapitalization or other similar corporate reorganization
affecting the Common Stock of the Company. The exact amount and the effective
date of each adjustment effected pursuant to this Section 11.4 shall be
determined in good faith and on a reasonable basis by the Board of Directors of
the Company. The Company shall promptly notify each Investor in writing of each
such adjustment.

         SECTION 11.5. INTEGRATION. Annexed to this Agreement is Exhibit A. Such
Exhibit is an integral part of this Agreement and are hereby incorporated by
reference.

         SECTION 11.6. RIGHTS AND OBLIGATIONS SEVERAL. The rights and
obligations of each of the parties hereto shall be several (and not joint),
except as otherwise expressly provided by this Agreement.

         SECTION 11.7. NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on
the part of any Investor in exercising any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy hereunder. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
<PAGE>   29
                                      -29-

         SECTION 11.8. ENTIRE AGREEMENT. This Agreement and the Warrants
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof and supersede any prior understandings or agreements
concerning the subject matter hereof.

         SECTION 11.9. SEVERABILITY. The invalidity or unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.

         SECTION 11.10. BINDING EFFECT. All of the covenants and agreements of
the Company contained in, and all of the rights granted by the Company pursuant
to, this Agreement, shall inure to the benefit of each Investor, including each
of the transferees of such Investor. Each Investor may assign or transfer any
portion of such rights to any Affiliate or any Bank and all of such rights to
any other Person provided that such other Person is not substantially engaged in
the business of manufacturing, selling or distributing small portable kitchen
appliances or small portable home comfort or personal care appliances.

         SECTION 11.11. COUNTERPARTS. This Agreement may be executed
simultaneously in several counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same agreement.
In making proof of this Agreement, it shall not be necessary to produce or
account for more than one such counterpart signed by each of the parties hereto.

                                   ARTICLE XII

                             REGULATORY RESTRICTIONS

Any other provisions hereof to the contrary notwithstanding, no Person which is
a bank holding company or a subsidiary of a bank holding company (a "Bank
Affiliate") as defined in the Bank Holding Company Act of 1956, as amended, or
other applicable banking laws of the United States of America and the rules and
regulations promulgated thereunder shall be entitled to exercise the right under
the Warrants to purchase any share or shares of Common Stock if, under any law
or under any regulation, rule or other requirement of any governmental authority
at any time applicable to such Bank Affiliate, (a) as a result of such purchase,
such Bank Affiliate would own, control or have power to vote a greater quantity
of securities of any kind than the Bank Affiliate shall be permitted to own,
control or have power to vote, or (b) such purchase would not be permitted. For
purposes of this Article XII, a written statement of the Bank Affiliate
exercising the Warrant, delivered upon surrender of the Warrant pursuant to the
terms thereof, to the effect that the Bank Affiliate is legally entitled to
exercise its rights under the Warrant to purchase securities and that such
purchase will not violate the prohibitions set forth in the preceding sentence,
shall be conclusive and binding upon the Company and shall obligate the Company
to deliver certificates representing the shares of Common Stock so purchased in
accordance with the other provisions hereof and shall relieve the Company of any
liability under this Article XII.
<PAGE>   30
                                      -30-

         If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this Agreement and return such
counterpart to the undersigned, whereupon this Agreement, as so accepted by you,
shall become a binding agreement under seal between you and the undersigned.

                                          Very truly yours,

                                          THE HOLMES GROUP, INC.

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

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

                                          Dated as of: May __, 2001

         The foregoing Warrant Purchase Agreement with The Holmes Group, Inc. is
hereby accepted by the undersigned on and as of the date thereof.

INVESTORS:

FLEET NATIONAL BANK (F/K/A BANKBOSTON, N.A.)

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

Address:
             --------------------------

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

SYNDICATED LOAN FUNDING TRUST

By: LEHMAN COMMERCIAL PAPER INC., not in its individual
    capacity, but solely as Asset Manager

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

Address:
             --------------------------

             --------------------------
<PAGE>   31
                                      -2-

HELLER FINANCIAL, INC.

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

Address:
             --------------------------

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

LASALLE BANK NATIONAL ASSOCIATION

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

Address:
             --------------------------

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

COMERICA BANK

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

Address:
             --------------------------

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

KEY CORPORATE CAPITAL INC.

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

Address:
             --------------------------

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

CITIZENS BANK OF MASSACHUSETTS,
a Massachusetts Bank

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

Address:
             --------------------------

             --------------------------
<PAGE>   32
                                      -3-

STAR BANK, NATIONAL ASSOCIATION

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

Address:
             --------------------------

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

ANTARES CAPITAL CORPORATION

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

Address:
            --------------------------

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

NATIONAL CITY BANK

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

Address:
             --------------------------

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

THE PROVIDENT BANK

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

Address:
             --------------------------

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

FRANKLIN FLOATING RATE TRUST

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

Address:
             --------------------------

             --------------------------
<PAGE>   33
                                      -4-

THE TRAVELERS INSURANCE COMPANY

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

Address:
             --------------------------

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

TRAVELERS CORPORATE LOAN FUND INC.
By: Travelers Asset Management International Company LLC

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

Address:
             --------------------------

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

MERRILL LYNCH SENIOR FLOATING RATE FUND, INC.

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

Address:
             --------------------------

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

MAGNETITE ASSET INVESTORS LLC

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

Address:
             --------------------------

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

MERRILL LYNCH PRIME RATE PORTFOLIO

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

Address:
             --------------------------

             --------------------------
<PAGE>   34
                                      -5-

PILGRIM PRIME RATE TRUST

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

Address:
             --------------------------

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

PILGRIM AMERICA HIGH INCOME INVESTMENTS LTD.

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

Address:
             --------------------------

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

SEQUILS-PILGRIM I, LTD.

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

Address:
             --------------------------

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

CAPTIVA IV FINANCE LTD.
as advised by Pacific Investment Management Company LLC

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

Address:
             --------------------------

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

PILGRIM CLO 1999 - 1 LTD.

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

Address:
             --------------------------

             --------------------------
<PAGE>   35
                                      -6-

GREAT POINT CLO 1999 - 1 LTD.

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

Address:
             --------------------------

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

FIRST MASSACHUSETTS BANK

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

Address:
              --------------------------

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

TRANSAMERICA BUSINESS CREDIT CORPORATION

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

Address:
             --------------------------

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

CHASE MANHATTAN BANK not in its individual capacity, but solely as Trustee of
Antares Funding Trust under the Trust Agreement dated as of November 30, 1999
(the "Trust Agreement") between Antares Funding, L.P. (the "Depositor") and
Chase Manhattan Bank as trustee (the "Trustee")

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

Address:
             --------------------------

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

VAN KAMPEN SENIOR INCOME TRUST

By:
    ----------------------------------------
    Name:
<PAGE>   36
                                      -7-

    Title:

Address:
              --------------------------

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

VAN KAMPEN PRIME RATE INCOME TRUST

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

Address:
             --------------------------

             --------------------------
<PAGE>   37
                                  SCHEDULE 3.1

<TABLE>
<CAPTION>
                                                        Number of shares of Common
                                                        Stock for which the Warrants
                                                        may be exercised (such numbers
                                                        are subject to adjustment as
                  Bank                                  provided in the Warrants)
                  ----                                  -------------------------
<S>                                                     <C>
         Fleet National Bank                                      175,865
         Antares Capital Corporation                               32,328
         Captiva IV Finance Ltd.                                   19,397
         Chase Manhattan Bank                                      28,449
         Citizens Bank of Massachusetts                           108,622
         Comerica Bank                                             56,897
         First Massachusetts Bank                                  18,104
         Franklin Floating Rate Trust                              10,345
         Great Point CLO 1999-1 LTD                                24,569
         Heller Financial, Inc.                                    90,519
         Key Corporate Capital, Inc.                               62,070
         LaSalle Bank National Association                         72,415
         Lehman Commercial Paper, Inc.                             68,536
         Magnetite Asset Investors LLC                             24,569
         Merrill Lynch Prime Rate Portfolio                        47,846
         Merrill Lynch Senior Floating Rate Fund, Inc.             20,690
         National City Bank                                        36,207
         Pilgrim America High Income Investment Ltd.               15,517
         Pilgrim CLO 1999-1 LTD                                    24,569
         SEQUILS-Pilgrim I, Ltd.                                   27,156
         Pilgrim Prime Rate Trust                                  19,397
         Provident Bank                                            19,397
         Star Bank                                                 56,897
         Transamerica Business Credit Corporation                 104,743
         Travelers Corporate Loan Fund Inc.                        10,345
         Travelers Insurance Company                               45,259
         Van Kampen Prime Rate Income Trust                        24,569
         Van Kampen Senior Income Trust                            47,846
</TABLE>
<PAGE>   38
                                                                       EXHIBIT A

                                                                  EXECUTION COPY

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT OR ANY
APPLICABLE STATE SECURITIES LAWS.

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER ARE SUBJECT TO PUT AND CALL
RIGHTS AND CERTAIN OTHER RESTRICTIONS CONTAINED IN A WARRANT PURCHASE AGREEMENT
DATED AS OF MAY 7, 2001 AMONG THE COMPANY AND CERTAIN HOLDERS OF WARRANTS OF THE
COMPANY. UPON WRITTEN REQUEST TO THE COMPANY'S SECRETARY, A COPY OF THE WARRANT
PURCHASE AGREEMENT WILL BE PROVIDED WITHOUT CHARGE TO APPROPRIATELY INTERESTED
PERSONS.

                             THE HOLMES GROUP, INC.

                          COMMON STOCK PURCHASE WARRANT

No. W-___

           The Holmes Group, Inc., a Massachusetts corporation, (together with
any corporation which shall succeed to or assume the obligations of The Holmes
Group, Inc. hereunder, the "Company"), hereby certifies that, for value
received, ______________________________ ("Bank"), or its assigns, is entitled,
subject to the terms set forth below, to purchase from the Company at any time
or from time to time after the date hereof, until the expiration hereof pursuant
to Section 2.4 hereof, up to shares of Common Stock, at an initial purchase
price per share of $5.04 (such price per share as adjusted from time to time as
provided herein is referred to herein as the "Exercise Price"). The number and
character of such shares of Common Stock and the Exercise Price are subject to
adjustment as provided herein.

           This Warrant is one of a series of warrants issued pursuant to the
Warrant Purchase Agreement (as amended and in effect from time to time, the
"Warrant Purchase Agreement"), dated as of May 7, 2001, among the Company, the
Bank and certain other holders of warrants of the Company, a copy of which is on
file at the
<PAGE>   39
                                      -2-

principal office of the Company. The holder of this Warrant shall be entitled to
all of the benefits and shall be subject to all of the obligations of the
Warrant Purchase Agreement. In the event of any conflict between the terms of
this Warrant and the terms of the Warrant Purchase Agreement, the terms of this
Warrant shall be controlling.

1.         DEFINITIONS. Terms defined in the Warrant Purchase Agreement and not
otherwise defined herein are used herein with the meanings so defined. Certain
terms are used in this Warrant as specifically defined in Section 13 hereof.

2.         EXERCISE OF WARRANT.

           2.1. Exercise. This Warrant may be exercised at any time or from time
to time prior to its expiration pursuant to Section 2.4 hereof by the holder
hereof, by surrender of this Warrant, with the form of subscription attached
hereto duly executed by such holder, to the Company at its principal office,
accompanied by payment, by certified or official bank check payable to the order
of the Company or by wire transfer to its account, in the amount obtained by
multiplying the number of shares of Common Stock for which this Warrant is then
being exercised by the Exercise Price then in effect. In the event the Warrant
is not exercised in full, the Company, at its expense, will forthwith issue and
deliver to or upon the order of the holder hereof a new Warrant or Warrants of
like tenor, in the name of the holder hereof or as such holder (upon payment by
such holder of any applicable transfer taxes) may request, calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
equal (without giving effect to any adjustment therein) to the number of such
shares called for on the face of this Warrant minus the number of such shares
(without giving effect to any adjustment therein) for which this Warrant shall
have been exercised. Upon any exercise of this Warrant, in whole or in part, the
holder hereof may pay the aggregate Exercise Price with respect to the shares of
Common Stock for which this Warrant is then being exercised in immediately
available funds or, in lieu of such payment, the holder may convert this
Warrant, in whole or in part, into a number of Warrant Shares determined as
follows:

                     X = Y(A-B)/A
where:
                     X = the number of Warrant Shares to be issued to the
Holder.

                     Y = the number of Warrant Shares with respect to which this
Warrant is being exercised.

                     A = the Fair Market Value (as determined below) of one
Warrant Share.
<PAGE>   40
                                      -3-

                     B = the Exercise Price.

For purposes of this Section 2.1, the fair market value ("Fair Market Value") of
a Warrant Share shall mean (a) if the Common Stock of the Company is traded on a
nationally recognized securities exchange or over the counter market, the
closing price of a share of Common Stock reported for the business day
immediately preceding the date of holder's exercise of the Warrant, and (b) if
the Common Stock is not traded on a nationally recognized securities exchange or
over the counter market, the Fair Market Value as determined in good faith by
the Company's Board of Directors.

           2.2. Conflict With Other Laws. Any other provisions hereof to the
contrary notwithstanding, no Bank Affiliate shall be entitled to exercise the
right under this Warrant to purchase any share or shares of Common Stock if,
under any law or under any regulation, rule or other requirement of any
governmental authority at any time applicable to such Bank Affiliate, (a) as a
result of such purchase, such Bank Affiliate would own, control or have power to
vote a greater quantity of securities of any kind than the Bank Affiliate shall
be permitted to own, control or have power to vote, or (b) such purchase would
not be permitted. For purposes of this Section 2.2, a written statement of the
Bank Affiliate exercising this Warrant, delivered upon surrender of the Warrant
pursuant to the Warrant Purchase Agreement, to the effect that the Bank
Affiliate is legally entitled to exercise its right under this Warrant to
purchase securities and that such purchase will not violate the prohibitions set
forth in the preceding sentence, shall be conclusive and binding upon the
Company and shall obligate the Company to deliver certificates representing the
shares of Common Stock so purchased in accordance with the other provisions
hereof and shall relieve the Company of any liability under this Section 2.2.

           2.3. Warrant Agent. In the event that a bank or trust company shall
have been appointed as trustee for the holder of the Warrant pursuant to Section
7.2 hereof, such bank or trust company shall have all the powers and duties of a
warrant agent appointed pursuant to Section 14 hereof and shall accept, in its
own name for the account of the Company or such successor entity as may be
entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 2.

           2.4. Expiration. This Warrant shall expire upon the earliest to occur
of (i) exercise in full, (ii) May 7, 2006, (iii) in the event that all of the
obligations of the Company and its Subsidiaries under the Credit Agreement have
been repaid in cash (whether pursuant to a payment in full or pursuant to a
discounted payment which has been offered and accepted by all obligees under
such obligations), and the commitments to extend credit thereunder cancelled, on
the date of such repayment and cancellation or (iv) upon a sale of the Company
for cash or cash equivalents provided
<PAGE>   41
                                      -4-

the Bank has not otherwise elected to put its Securities pursuant to Section 9.1
of the Warrant Purchase Agreement.

3.         PUT AND CALL OPTIONS; REGISTRATION RIGHTS. The holder of this Warrant
has the right to require the Company to purchase this Warrant and/or Warrant
Shares and the Company has the option to purchase this Warrant and/or Warrant
Shares, at the times and in the manner specified in Article IX of the Warrant
Purchase Agreement. The holder of this Warrant has the right to cause the
Company to register Warrant Shares, and any shares issued upon exercise hereof,
under the Securities Act and any blue sky or securities laws of any
jurisdictions within the United States at the time and in the manner specified
in Article VIII of the Warrant Purchase Agreement.

4.         DELIVERY OF STOCK CERTIFICATES ON EXERCISE.

           4.1. Delivery. As soon as practicable after the exercise of this
Warrant in full or in part, and in any event within ten (10) days thereafter,
the Company, at its expense (including the payment by it of any applicable issue
taxes), will cause to be issued in the name of and delivered to the holder
hereof, or as such holder (upon payment by such holder of any applicable
transfer taxes) may direct, a certificate or certificates for the number of
fully paid and non-assessable shares of Common Stock (or Other Securities) to
which such holder shall be entitled on such exercise, together with any other
stock or other securities and property (including cash, where applicable) to
which such holder is entitled upon such exercise.

           4.2. Fractional Shares. In the event that the exercise of this
Warrant, in full or in part, results in the issuance of any fractional share of
Common Stock, then in such event the holder of this Warrant shall be entitled to
cash equal to the fair market value of such fractional share as determined in
good faith by the Company's Board of Directors.

5.         MAINTENANCE OF WARRANT REGISTER; ASSIGNMENT AND TRANSFER AND
REPLACEMENT.

           5.1 Registered Holders. The Company will maintain a register
containing the name and address of the holder of this Warrant. The "registered
holder" of this Warrant shall be the Person in whose name such Warrant is
registered in said warrant register. Any registered holder of this Warrant may
change such holder's address as shown on the warrant register by written notice
to the Company requesting such change. Any notice or written communication
required or permitted to be given to the registered holder of this Warrant shall
be mailed by first class registered or certified mail, postage prepaid, or sent
by overnight courier (or sent in the form of a telex or telecopy) or delivered
to such registered holder at its address as shown on the warrant register.
<PAGE>   42
                                      -5-

           5.2 Assignment and Transfer of the Warrant. This Warrant has not been
registered under the Securities Act, and neither this Warrant nor the rights
evidenced hereby shall be assigned, pledged, transferred or otherwise disposed
of unless either (a) this Warrant first shall have been registered under the
Securities Act, or (b) such sale or transfer is an exempted transaction under
the Securities Act. The registered holder of this Warrant may assign or transfer
any portion of this Warrant to an Affiliate or any Bank and the entire Warrant
to any other Person provided that such other Person is not substantially engaged
in the business of manufacturing, selling or distributing small portable kitchen
appliances or small portable home comfort or personal care appliances. Upon
surrender of this Warrant to the Company (or any warrant agent appointed
pursuant to Section 14 hereof) for transfer as an entirety by the registered
holder (as permitted by this Section) at the offices of the Company, with the
form of assignment attached hereto completed and duly executed by the registered
holder, the Company shall, at the Company's expense, issue a new Warrant of the
same denomination to the assignee.

           5.3 Replacement. In case this Warrant shall be mutilated, lost,
stolen, or destroyed, the Company shall issue a new Warrant of like tenor and
denomination and deliver the same (a) in exchange and substitution for and upon
surrender and cancellation of the mutilated Warrant, or (b) in lieu of the
Warrant lost, stolen or destroyed, upon receipt of (i) a reasonably detailed
affidavit with respect to the circumstances of any loss, theft or destruction,
and (ii) an indemnity satisfactory to the Company.

           5.4 Negotiation. This Warrant, when endorsed in blank, shall be
deemed negotiable, and the holder hereof, when this Warrant shall have been so
endorsed, may be treated by the Company and all other Persons dealing with this
Warrant as the absolute owner hereof for any purpose and as the Person entitled
to exercise the rights represented by this Warrant, or to the transfer hereof on
the books of the Company, any notice to the contrary notwithstanding; but until
such transfer on such books, the Company may treat the registered holder hereof
as the owner hereof for all purposes.

6.         ADJUSTMENT FOR DIVIDENDS, DISTRIBUTIONS AND RECLASSIFICATIONS. In
case at any time or from time to time, the holders of Common Stock shall have
received, or (on or after the record date fixed for the determination of
shareholders eligible to receive) shall have become entitled to receive, without
payment therefor:

                      (a) other or additional stock, other securities, cash or
           property by way of dividend; or
<PAGE>   43
                                      -6-

                      (b) other or additional (or less) stock or other
           securities or property (including cash) by way of spin-off, split-up,
           reclassification, recapitalization, combination of shares or similar
           corporate restructuring;

other than additional shares of Common Stock issued as a stock dividend or in a
stock-split (adjustments in respect of which are provided for in Section 8
hereof), then and in each such case the holder of this Warrant, on the exercise
hereof as provided in Section 2 hereof, shall be entitled to receive the amount
of stock and other securities and property (including cash in the case referred
to in subsection (b) of this Section 6) which such holder would have received
prior to or would have held on the date of such exercise if on the date hereof
it had been the holder of record of the number of shares of Common Stock called
for on the face of this Warrant and had thereafter, during the period from the
date hereof to and including the date of such exercise, retained such shares and
all such other or additional stock and other securities and property (including
cash in the case referred to in subsection (b) of this Section 6) receivable by
such holder as aforesaid during such period, giving effect to all further
adjustments called for during such period by Sections 7 and 8 hereof.

7.         ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC.

           7.1. Certain Adjustments. In case at any time or from time to time,
the Company shall (i) effect a capital reorganization, reclassification or
recapitalization, (ii) consolidate with or merge into any other Person, or (iii)
transfer all or substantially all of its properties or assets to any other
Person under any plan or arrangement contemplating the dissolution of the
Company, then in each such case, the holder of this Warrant, on the exercise
hereof as provided in Section 2 hereof at any time after the consummation of
such reorganization, recapitalization, consolidation or merger or the effective
date of such dissolution, as the case may be, shall receive, in lieu of the
Common Stock (or Other Securities) issuable on such exercise prior to such
consummation or effective date, the stock and other securities and property
(including cash) to which such holder would have been entitled upon such
consummation or in connection with such dissolution, as the case may be, if such
holder had so exercised this Warrant immediately prior thereto, all subject to
further adjustment thereafter as provided in Sections 6 and 8 hereof.

           7.2. Appointment of Trustee for Warrant Holders Upon Dissolution. In
the event of any dissolution of the Company following the transfer of all or
substantially all of its properties or assets, the Company, prior to such
dissolution, shall, at its expense, deliver or cause to be delivered the stock
and other securities and property (including cash, where applicable) receivable
by the holders of the Warrant after the effective date of such dissolution
pursuant to this Section 7 to a bank or trust company, as trustee for the holder
or holders of the Warrant.
<PAGE>   44
                                      -7-

           7.3. Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 7, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the Person acquiring all or substantially all of the
properties or assets of the Company, whether or not such Person shall have
expressly assumed the terms of this Warrant as provided in Section 9 hereof.

8.         ADJUSTMENTS FOR STOCK EVENTS.

           8.1. General. If at any time there shall occur any stock split, stock
dividend, reverse stock split or other subdivision of the Company's Common Stock
("Stock Event"), then the number of shares of Common Stock to be received by the
holder of this Warrant shall be appropriately adjusted such that the proportion
of the number of shares issuable hereunder to the total number of shares of the
Company (on a fully diluted basis) prior to such Stock Event is equal to the
proportion of the number of shares issuable hereunder after such Stock Event to
the total number of shares of the Company (on a fully-diluted basis) after such
Stock Event. No adjustment to the Exercise Price shall be made in connection
with any adjustment of the number of shares of Common Stock receivable upon
exercise of this Warrant, except that the Exercise Price shall be
proportionately decreased or increased upon the occurrence of any stock split or
other subdivision of the Common Stock; provided that in no event will the
Exercise Price be less than the par value of the Common Stock.

           8.2. Other Securities. In case any Other Securities shall have been
issued, or shall then be subject to issue upon the conversion or exchange of any
stock (or Other Securities) of the Company (or any other issuer of Other
Securities or any other entity referred to in Section 7 hereof) or to
subscription, purchase or other acquisition pursuant to any rights or options
granted by the Company (or such other issuer or entity), the holder hereof shall
be entitled to receive upon exercise hereof such amount of Other Securities (in
lieu of or in addition to Common Stock) as is determined in accordance with the
terms hereof, treating all references to Common Stock herein as references to
Other Securities to the extent applicable, and the computations, adjustments and
readjustments provided for in this Section 8 with respect to the number of
shares of Common Stock issuable upon exercise of this Warrant shall be made as
nearly as possible in the manner so provided and applied to determine the amount
of Other Securities from time to time receivable on the exercise of the Warrant,
so as to provide the holder of the Warrant with the benefits intended by this
Section 8 and the other provisions of this Warrant.
<PAGE>   45
                                      -8-

           8.3 Other Common Stock Issuances. In case the Company shall issue
additional shares of Common Stock, (or shall be deemed to have issued Common
Stock, as provided in (a) below) at a Net Consideration Per Share (as defined
below) which is less than the Exercise Price in effect at the time of such
issuance, the Exercise Price shall be adjusted so that the same shall equal the
price determined by multiplying the Exercise Price in effect immediately prior
thereto by a fraction, of which the numerator shall be the number of shares of
Common Stock outstanding or deemed outstanding on the date immediately prior to
such issuance plus the number of additional shares of Common Stock which could
be purchased in connection with such issuance at the Exercise Price then in
effect and of which the denominator shall be the number of shares of Common
Stock outstanding or deemed outstanding immediately prior to such issuance plus
the number of such additional shares of Common Stock issued or deemed issued in
connection with such issuance.

           (a) For the purposes of this section 8.3 the issuance of any
           warrants, options, subscriptions or purchase rights with respect to
           shares of Common Stock and the issuance of any securities convertible
           into or exchangeable for shares of Common Stock (or the issuance of
           any warrants, options or any rights with respect to such convertible
           or exchangeable securities) shall be deemed to be an issuance of such
           Common Stock at such time. Any unconditional obligation, agreement or
           undertaking to issue warrants, options, subscriptions or purchase
           rights or convertible or exchangeable securities at any time in the
           future shall be deemed to be an issuance at the time such obligation,
           agreement or undertaking is made or arises. No adjustment of the
           Exercise Price shall be made under this section 8.3 upon the issuance
           of any shares of Common Stock or convertible or exchangeable
           securities which are issued pursuant to the exercise of any warrants,
           options, subscriptions or purchase rights or pursuant to the exercise
           of any conversion or exchange rights in any convertible or
           exchangeable securities if any adjustment shall previously have been
           made upon the issuance of any such warrants, options or subscriptions
           or purchase rights or upon the issuance of any convertible securities
           (or upon the issuance of any warrants, options or any rights
           therefor) as above provided unless any downward price adjustments or
           rate adjustments are made with respect to such warrants, options,
           subscriptions or other purchase rights or convertible or exchangeable
           securities subsequent to the date the Exercise Price was initially
           adjusted. Any adjustment of the Exercise Price pursuant to this
           section 8.3 which relates to warrants, options, subscriptions or
           purchase rights with respect to shares of Common Stock shall be
           recomputed if, as, and when such warrants, options, subscriptions or
           purchase rights expire or are canceled without being exercised, so
           that the Exercise Price effective immediately upon such cancellation
           or expiration shall be equal to the Exercise Price in effect
           immediately prior to the time of the issuance of the expired or
           canceled
<PAGE>   46
                                      -9-

           warrants, options, subscriptions or purchase rights, adjusted as if
           the expired or canceled warrants, options, subscriptions or purchase
           rights had not been issued.

           (b) For purposes of this Section 8.3 the "Net Consideration Per
           Share" received by the Company shall mean the amount equal to the
           total amount of consideration, if any, received by the Company for
           the issuance of such Common Stock, or for the issuance of such
           warrants, options, subscriptions or other purchase rights or
           convertible or exchangeable securities, plus the minimum amount of
           consideration, if any, payable to the Company upon full exercise,
           exchange or conversion thereof, divided by the aggregate number of
           shares of Common Stock that would be issued if all such warrants,
           options, subscriptions or other purchase rights or convertible or
           exchangeable securities were exercised, exchanged or converted. The
           "Net Consideration Per Share" which may be received by the Company
           shall be determined in each instance as of the date of issuance of
           warrants, options, subscriptions or other purchase rights or
           convertible or exchangeable securities ; provided, however, that the
           "Net Consideration Per Share" shall be adjusted to reflect any
           downward price adjustments or rate adjustments which occur with
           respect to such warrants, options, subscriptions or other purchase
           rights or convertible or exchangeable securities. If a part or all of
           the consideration received by the Company in connection with the
           issuance of shares of Common Stock or any of the securities described
           in this paragraph consists of property other than cash, the Board of
           Directors of the Company shall in its good faith discretion value
           such property at fair market value, whereupon such value shall be
           recorded on the books of the Company as consideration for the
           property so received.

           (c) This Section 8.3 shall not apply and no adjustment in the
           Exercise Price shall be made hereunder upon a stock dividend, stock
           split or other event described in Sections 8.1 and 8.2 (in such
           instances, adjustments to the Exercise Price shall be governed by
           Sections 8.1 and 8.2).

           (d) Anything in paragraph to the contrary notwithstanding, the
           Company shall not be required to make any adjustment of the Exercise
           Price as set forth in this Section 8.3 in the case of shares of
           Common Stock issued or deemed issued: (a) pursuant to a dividend,
           split, subdivision or other event described in sections 8.1 or 8.2
           hereof (in such instances, adjustments to the Exercise Price shall be
           governed by Sections 8.1 and 8.2); (b) pursuant to the Company's
           employee incentive plans provided such issuances do not exceed an
           aggregate amount of 6,232,765 shares (inclusive of the 4,232,765
           options outstanding on May 7, 2001) of Common Stock (which number
           shall be equitably adjusted for any stock split, stock dividend,
           reclassification of shares or other similar event affecting the
           Common Stock);
<PAGE>   47
                                      -10-

           (d) No adjustment of the Exercise Price shall be made under this
           section 8.3 if the amount of such adjustment shall be less than $.001
           per share, but in such case any adjustment that would otherwise be
           required then to be made shall be carried forward and shall be made
           at the time of and together with the next subsequent adjustment,
           which, together with any adjustment so carried forward, shall amount
           to not less than $.001 per share.

           (f) Upon each adjustment of the Exercise Price pursuant to this
           section 8.3, the number of shares of Common Stock purchasable upon
           exercise of this Warrant shall be adjusted to the number of shares of
           Common Stock, calculated to the nearest one hundredth of a share,
           obtained by multiplying the number of shares of Common Stock
           purchasable immediately prior to such adjustment upon the exercise of
           this Warrant by the Exercise Price in effect prior to such adjustment
           and dividing the product so obtained by the new Exercise Price.

9.         NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of its
Articles of Organization or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of the Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holder of the
Warrant set forth herein. Without limiting the generality of the foregoing, the
Company (i) will not increase the par value of any shares of stock receivable on
the exercise of the Warrant above the amount payable therefor on such exercise,
(ii) will take all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and non-assessable shares
of stock on the exercise of the Warrant from time to time outstanding, (iii)
will not transfer all or substantially all of its properties and assets to any
other entity (corporate or otherwise), or consolidate with or merge into any
other entity or permit any such entity to consolidate with or merge into the
Company (if the Company is not the surviving entity), unless such other entity
shall expressly assume in writing and will be bound by all the terms of this
Warrant and the Warrant Purchase Agreement.

10.        ACCOUNTANTS' CERTIFICATE AS TO ADJUSTMENTS. In each case of any event
that may require any adjustment or readjustment in the shares of Common Stock
issuable on the exercise of this Warrant, the Company at its expense will
promptly prepare a certificate setting forth such adjustment or readjustment, or
stating the reasons why no adjustment or readjustment is being made, and
showing, in detail, the facts upon which any such adjustment or readjustment is
based, including a statement of (i) the number of shares of the Company's Common
Stock then outstanding on a fully diluted basis, and (ii) the number of shares
of Common Stock to
<PAGE>   48
                                      -11-

           be received upon exercise of this Warrant, in effect immediately
           prior to such adjustment or readjustment and as adjusted and
           readjusted (if required by Section 8) on account thereof. The Company
           will forthwith mail a copy of each such certificate to each holder of
           a Warrant, and will, on the written request at any time of any holder
           of a Warrant, furnish to such holder a like certificate setting forth
           the calculations used to determine such adjustment or readjustment.
           At its option, the Majority Investors holding Warrants may confirm
           the adjustment noted on the certificate by causing such adjustment to
           be computed by an independent certified public accountant at the
           expense of the Company.

11.        NOTICES OF RECORD DATE.  In the event of:

                     (a) any taking by the Company of a record of the holders of
           any class of securities for the purpose of determining the holders
           thereof who are entitled to receive any dividend or other
           distribution, or any right to subscribe for, purchase or otherwise
           acquire any shares of stock of any class or any other securities or
           property, or to receive any other right; or

                      (b) any capital reorganization of the Company, any
           reclassification or recapitalization of the capital stock of the
           Company or any transfer of all or substantially all the assets of the
           Company to or any consolidation or merger of the Company with or into
           any other Person; or

                      (c) any voluntary or involuntary dissolution, liquidation
           or winding-up of the Company; or

                     (d) any proposed issue or grant by the Company of any
           shares of stock of any class or any other securities, or any right or
           option to subscribe for, purchase or otherwise acquire any shares of
           stock of any class or any other securities (other than the issue of
           Common Stock on the exercise of this Warrant),

then, and in each such event, the Company will mail or cause to be mailed to the
holder of this Warrant a notice specifying (i) the date on which any such record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, (ii)
the date on which any such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up is
anticipated to take place, and the time, if any is to be fixed, as of which the
holders of record of Common Stock (or Other Securities) shall be entitled to
exchange their shares of Common Stock (or Other Securities) for securities or
other property deliverable on such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up and (iii) the amount and character of any stock or other
<PAGE>   49
                                      -12-

securities, or rights or options with respect thereto, proposed to be issued or
granted, the date of such proposed issue or grant and the Persons or class of
Persons to whom such proposed issue or grant is to be offered or made. Such
notice shall be mailed at least twenty (20) days prior to the date specified in
such notice on which any such action is to be taken.

12.        RESERVATION OF STOCK ISSUABLE ON EXERCISE OF WARRANT. The Company
will at all times reserve and keep available, solely for issuance and delivery
on the exercise of this Warrant, a number of shares of Common Stock equal to the
total number of shares of Common Stock from time to time issuable upon exercise
of this Warrant and, from time to time, will take all steps necessary to amend
its Articles of Organization to provide sufficient reserves of shares of Common
Stock issuable upon exercise of this Warrant.

13.        DEFINITIONS. As used herein the following terms, unless the context
otherwise requires, have the following respective meanings:

           13.1. The term Common Stock means (i) the Company's Common Stock,
$.001 par value per share, (ii) any other capital stock of any class or classes
(however designated) of the Company, the holders of which shall have the right,
without limitation as to amount, either to all or to a share of the balance of
current dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference, and (iii) any other
securities into which or for which any of the securities described in clauses
(i) or (ii) above have been converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.

           13.2. The term Other Securities refers to any stock (other than
Common Stock) and other securities of the Company or any other entity (corporate
or otherwise) (i) which the holder of this Warrant at any time shall be entitled
to receive, or shall have received, on the exercise of this Warrant, in lieu of
or in addition to Common Stock, or (ii) which at any time shall be issuable or
shall have been issued in exchange for or in replacement of Common Stock or
Other Securities, in each case pursuant to Section 6 or 7 hereof.

14.        WARRANT AGENT. The Company may, by written notice to the holder of
this Warrant, appoint an agent for the purpose of issuing Common Stock on the
exercise of this Warrant pursuant to Section 2 hereof, and exchanging or
replacing this Warrant pursuant to the Warrant Purchase Agreement, or any of the
foregoing, and thereafter any such issuance, exchange or replacement, as the
case may be, shall be made at such office by such agent.
<PAGE>   50
                                      -13-

15.        REMEDIES. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.

16.        NOTICES. All notices and other communications from the Company to the
holder of this Warrant shall be mailed by first class registered or certified
mail, postage prepaid, or sent by overnight courier (or sent in the form of a
telex or telecopy) at such address as may have been furnished to the Company in
writing by such holder or, until any such holder furnishes to the Company an
address, then to, and at the address of, the last holder of this Warrant who has
so furnished an address to the Company.

17.        MISCELLANEOUS. In case any provision of this Warrant shall be
invalid, illegal or unenforceable, or partially invalid, illegal or
unenforceable, the provision shall be enforced to the extent, if any, that it
may legally be enforced and the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby. This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by a statement in writing signed by the party against which enforcement of
such change, waiver, discharge or termination is sought. This Warrant and the
rights evidenced hereby shall inure to the benefit of and be binding upon the
respective successors and assigns of the Company and the holder hereof. The
provisions of this Warrant are intended to be for the benefit of all holders of
this Warrant from time to time and shall be enforceable by any such holder of
this Warrant. This Warrant shall be governed by and construed in accordance with
the internal laws (and not the conflict of law rules) of the Commonwealth of
Massachusetts. The headings in this Warrant are for purposes of reference only,
and shall not limit or otherwise affect any of the terms hereof.
<PAGE>   51
           IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its duly authorized officer.

Dated: May 7, 2001

                                                    THE HOLMES GROUP, INC.

                                                    By:
                                                       ------------------------
                                                              Name:
                                                              Title:
<PAGE>   52

                              FORM OF SUBSCRIPTION

                   (To be signed only on exercise of Warrant)

TO:        The Holmes Group, Inc.

           The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder shares of Common
Stock of The Holmes Group, Inc. and herewith makes payment of $ therefor, and
requests that the certificates for such shares be issued in the name of, and
delivered to __________________, whose address is_____________ .

Dated: ___________________                    _________________________________
                                              (Signature must conform in all
                                              respects to name of the holder as
                                              specified on the face of the
                                              Warrant)

                                              _________________________________
                                                        (Address)
<PAGE>   53
                               FORM OF ASSIGNMENT
                   (To be signed only on transfer of Warrant)

           For value received, the undersigned hereby sells, assigns, and
transfers unto ____________ the right represented by the within Warrant to
purchase shares_________ of Common Stock of The Holmes Group, Inc., to which the
within Warrant relates, and appoints attorney____________ to transfer such right
on the books of The Holmes Group, Inc., with full power of substitution in the
premises.

                                                _______________________________
                                                (Name of holder)

Dated:                                  By:
       ________________                       _________________________________

                                        Title:
                                              _________________________________

Signed in the presence of:

__________________________

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