Document:

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                                                                     Exhibit 4.1

                                                                  EXECUTION COPY

                             BANK OF AMERICA, N.A.
                           231 South LaSalle Street
                            Chicago, Illinois 60697

                                April 17, 2001

ABC NACO Inc.
2001 Butterfield Road
Suite 502
Downers Grove, Illinois 60515
Attn: Vaughn W. Makary

Re: Senior Debt Restructuring Amendment
    -----------------------------------

Ladies and Gentlemen:

ABC-NACO Inc., a Delaware corporation (the "Company" or "ABC"), ABC-NACO de
                                            -------      ---
Mexico, S.A. de C.V., a Mexican corporation (the "Mexican Borrower"), Dominion
                                                  ----------------
Castings Limited, an Ontario corporation (the "Canadian Borrower", together with
                                               -----------------
the Company and the Mexican Borrower, the "Borrowers"), the financial
                                           ---------
institutions named as signatories hereto (collectively, the "Lenders") and Bank
                                                             -------
of America, N.A. in its capacities as "Agent" and "Collateral Agent" for the
Lenders (collectively, the "Agent") are parties to that certain Third Amended
                            -----
and Restated Credit Agreement dated as of October 30, 2000, as modified by that
certain letter agreement dated as of January 31, 2001 among such parties (the
"Credit Agreement"), pursuant to which the Lenders have agreed, subject to the
 ----------------
terms and conditions set forth therein, to extend credit to the Borrowers.
Undefined capitalized terms which are used herein shall have the meanings
ascribed to such terms in the Credit Agreement.

The Company has requested that the Agent and the Lenders agree to a
restructuring (the "Restructuring") of its obligations under the Credit
                    -------------
Agreement and related Loan Documents, and the Lenders hereby commit and agree to
enter into a definitive amendment to the Credit Agreement and certain other
related definitive agreements necessary or desirable to effect such
Restructuring, pursuant to the terms and conditions of this letter and the
attached term sheet (the "Term Sheet" and, collectively with this letter, the
                          ----------
"Commitment Letter").
------------------

The commitment of the Agent and the Lenders hereunder is subject to the
satisfaction of each of the following conditions precedent: (a) each of the
terms and conditions set forth herein and in the Term Sheet; (b) the
negotiation, execution and delivery of a definitive amendment to the Credit
Agreement and other definitive documentation for the Restructuring consistent
with the Term Sheet and otherwise satisfactory to the Agent and the Lenders,
including, without limitation, opinions, certificates, resolutions, lien
searches, title insurance and other customary documentation with respect to such
transactions; (c) no change, occurrence or development after
<PAGE>

the date hereof that could reasonably be expected to have Material Adverse
Effect; (d) the Lenders and the Agent not becoming aware after the date hereof
of any information or other matter which in their judgment is inconsistent in a
material and adverse manner with any information or other matter disclosed to
them prior to the date hereof and (e) no "Default" or "Event of Default" (as
such terms are defined in the Credit Agreement), other than "Existing Defaults"
referred to and defined in the Term Sheet, shall have occurred and be
continuing.

Each of the Borrowers hereby represent, warrant and covenant that (a) all
information, other than the "Projections" (defined below), which has been or is
hereafter made available to the Agent or the Lenders by the Borrowers or any of
their advisors or representatives in connection with the Restructuring or any of
the transactions contemplated in connection therewith and described or referred
to in the Term Sheet (the "Information") is and will be complete and correct in
                           -----------
all material respects and does not and will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements contained therein not misleading, and (b) all financial projections
concerning the Borrowers and their respective Subsidiaries that have been or are
hereafter made available to the Agent or the Lenders by the Borrowers or any of
their advisors or representatives (the "Projections") have been or will be
                                        -----------
prepared in good faith based upon assumptions the Borrowers believe to be
reasonable. The Borrowers agree to furnish the Agent and the Lenders with such
Information and Projections as the Agent or any Lender may reasonably request
and to supplement the Information and the Projections from time to time until
the closing date for the Restructuring so that the representation, warranty and
covenant in the preceding sentence is correct on such closing date.

Without limiting the obligations of the Borrowers under the Credit Agreement, by
acceptance of this Commitment Letter, the Borrowers jointly and severally agree
to pay all reasonable out-of-pocket fees and expenses (including reasonable
attorneys' and advisors' fees and expenses) incurred before or after the date
hereof by the Agent and each Lender in connection with the Restructuring and the
other transactions contemplated hereby.

Without limiting the obligations of the Borrowers under the Credit Agreement,
the Borrowers jointly and severally agree to indemnify and hold harmless the
Agent, each Lender and each of their affiliates, directors, officers, employees,
attorneys, advisors and agents (each, an "Indemnified Party") from and against
                                          -----------------
(and will reimburse each Indemnified Party as the same are incurred) any and all
losses, claims, damages, liabilities, and expenses (including, without
limitation, the reasonable fees and expenses of counsel and the allocated cost
of internal counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation or proceeding or preparation of a defense in connection therewith)
the Restructuring or any of the other transactions contemplated hereby, unless
and only to the extent that, as to any Indemnified Party, it shall be determined
in a final, non-appealable judgment by a court of competent jurisdiction that
such losses, claims, damages, liabilities or expenses resulted primarily from
the gross negligence or willful misconduct of such Indemnified Party. No
Indemnified Party shall be liable for any damages arising from the use by others
of Information or other materials obtained through the Internet or other similar
information transmission systems in connection with the Restructuring. In the
case of any investigation, litigation or proceeding to which the indemnity in
this paragraph applies, such

                                       2
<PAGE>

indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by the Borrowers, their shareholders or creditors or an
Indemnified Party and whether or not the Restructuring is consummated. The
Borrowers jointly and severally agree that no Indemnified Party shall have any
liability to any Borrower, or any of their Subsidiaries, affiliates, security
holders or creditors, for any indirect or consequential damages arising out of,
related to or in connection with the Restructuring or any of the other
transactions contemplated hereby.

The terms of this Commitment Letter are confidential and, except for disclosure
on a confidential basis to your accountants, attorneys and other professional
advisors retained by you in connection with the Restructuring or as may be
required by law, may not be disclosed in whole or in part to any other person or
entity without our prior written consent. Without limiting the foregoing, in the
event that you disclose the contents of this Commitment Letter in contravention
of the preceding sentence, you shall be deemed to have accepted the terms of
this Commitment Letter.

The provisions of the immediately preceding three paragraphs shall remain in
full force and effect regardless of whether any definitive documentation for the
Restructuring shall be executed and notwithstanding the termination of this
Commitment Letter or any commitment or undertaking by the Agent or the Lenders
hereunder.

This Commitment Letter shall be governed by laws of the State of Illinois. Each
of the Agent, the Lenders and the Borrowers hereby irrevocably waives all right
to trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Commitment
Letter, the transactions contemplated hereby or the actions of the Agent or any
Lender in the negotiation, performance or enforcement hereof.

This Commitment Letter is the only agreement that have been entered into among
us with respect to the Restructuring and set forth the entire understanding of
the parties with respect thereto. This letter may be modified or amended only by
the written agreement of all of us. This letter is not assignable by you without
the prior written consent of the Agent and each Lender and is intended to be
solely for the benefit of the parties hereto and the Indemnified Parties. This
Commitment Letter shall constitute a "Loan Document" under and as defined in the
Credit Agreement. The Credit Agreement and other Loan Documents are hereby
ratified in all respect by all of the parties hereto.

This offer will expire, and the commitment contemplated hereby shall not become
effective, at 5:00 p.m. Central Standard Time on April 20, 2001, unless each
Borrower and Lender executes and delivers this Commitment Letter and return it
to the Agent prior to that time (which may be by facsimile transmission),
whereupon this Commitment Letter (which may be signed in one or more
counterparts) shall become binding upon each of the parties hereto. Thereafter,
the Commitment Letter and the Lenders' undertakings and commitments hereunder
will expire on the earliest to occur of (a) the closing of the Restructuring,
(b) May 1, 2001, unless definitive

                                       3
<PAGE>

documentation for the Restructuring is executed and delivered prior to such date
and (c) and breach by any Borrower of any of its representations, warranties or
covenants set forth herein.

                                 Very truly yours,

                                 BANK OF AMERICA, N.A., as Agent

                                 By: ___________________________
                                 Name:
                                 Title:

                                 BANK OF AMERICA, N.A., as Lender and Issuing
                                 Lender

                                 By: ___________________________
                                 Name:
                                 Title:

                                       4
<PAGE>

                                 ABN AMRO BANK N.V., as Lender

                                 By: ___________________________
                                 Name:
                                 Title:

                                 By: ___________________________
                                 Name:
                                 Title:

                                       5
<PAGE>

                                 FLEET NATIONAL BANK, as Lender

                                 By: ___________________________
                                 Name:
                                 Title:

                                       6
<PAGE>

                                 BANK ONE, NA (Main Chicago Office), as a Lender

                                 By: ___________________________
                                 Name:
                                 Title:

                                       7
<PAGE>

                                 FIRSTAR BANK, N.A., as Lender

                                 By: ___________________________
                                 Name:
                                 Title:

                                       8
<PAGE>

                                 HARRIS TRUST AND SAVINGS BANK, as Lender

                                 By: ___________________________
                                 Name:
                                 Title:

                                       9
<PAGE>

                                 LASALLE BANK NATIONAL ASSOCIATION, as Lender

                                 By: ___________________________
                                 Name:
                                 Title:

                                       10
<PAGE>

                                 THE NORTHERN TRUST COMPANY, as Lender

                                 By: ___________________________
                                 Name:
                                 Title:

                                       11
<PAGE>

                                        PNC BANK NATIONAL ASSOCIATION, as
                                        Lender

                                        By: ____________________________
                                        Name:
                                        Title:

                                       12
<PAGE>

                                             US BANK NATIONAL ASSOCIATION, as
                                             Lender

                                             By: ___________________________
                                             Name:

                                       13
<PAGE>

Agreed and accepted as of this
__ day of April, 2001:

ABC-NACO INC.
ABC-NACO de MEXICO, S.A. de C.V.
DOMINION CASTINGS LIMITED

By: ___________________________
Name:
Title:

                                       14
<PAGE>

                                                                           FINAL

                              Restructuring Terms
                                      for
                                 ABC-NACO Inc.
                   Senior Secured Revolving Credit Facility

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

The Credit Agreement will be modified pursuant to an amendment and waiver
agreement substantially on the terms and conditions described below (the

"Restructuring"); all references herein to the "closing" shall mean and refer to
--------------
the consummation and effectiveness of the Restructuring.  All other terms and
conditions of the Credit Agreement and related Loan Documents will remain
unchanged and shall be ratified and confirmed.

Maturity/Mandatory Commitment Reductions
----------------------------------------
 .    The final maturity date and commitment termination date will be shortened
     from 7/31/03 to 1/5/03.

 .    The interim, mandatory, scheduled commitment reductions and related
     mandatory prepayments shall be modified so that the aggregate commitments
     and outstandings shall be permanently reduced to $156.5MM as of the closing
     date of the Restructuring, to $152MM as of 12/31/01, and to $150MM as of
     4/15/02. Except as provided below, no other mandatory reductions shall be
     required.

 .    All asset sales (other than with respect to the Flow Sale described below
     which will occur concurrently with or prior to the closing) and proceeds of
     all tax refunds will result in mandatory prepayments and permanent,
     mandatory commitment reductions in amounts equal to 100% of the net cash
     proceeds of such sales and refunds ("applied" toward and in the order of
     the scheduled commitment reductions described in the immediately preceding
     paragraph); provided, however, that (i) no prepayment or commitment
                 --------  -------  ----
     reductions shall be required with respect to sales of inventory in the
     ordinary course of business (other than bulks sales of inventory or sales
     of scrap or obsolete inventory), (ii) no prepayment or commitment
     reductions shall be required with respect to up to $1,500,000, in gross
     consideration after the closing date, for sales and other dispositions of
     obsolete equipment and scrap inventory and (iii) the Signal division
     receivables collections, all proceeds from the Signal sale escrow, and any
     other Signal proceeds, will result in prepayments and commitment reductions
     in the manner and amounts currently provided in the Credit Agreement. The
     Credit Agreement reporting covenants would be modified to provide the
     Lenders with quarterly calculations by ABC as to the status of sales and
     related amounts under clause (ii) above and collections under clause (iii).
                           -----------                             ------------

 .    All equity and funded debt issuances (excluding, the "ING Equity Issuance"
     and "ING Bridge Notes" defined below, and other de minimus carve-outs to be
     determined) will result in mandatory prepayments and permanent, mandatory

<PAGE>

     commitment reductions in amounts equal to 100% of the net cash proceeds of
     such issuances; provided, however, that in the event that ABC is able to
                     --------  -------  ----
     obtain the "Bancomer Financing" (as defined below), prepayment and
     commitment reductions shall be required in an amount equal to the greater
     of $7.5MM and 50% of the net cash proceeds of such financing (subject to
     further due diligence by the Lenders).

 .    A mandatory prepayment and commitment reduction shall be required 105 days
     following the close of ABC's fiscal year 2001, and mandatory prepayments
     and commitment reductions shall occur on the forty-fifth (45th) day
     following the close of ABC's first fiscal quarter during 2002 and following
     each fiscal quarter thereafter, in each case in amounts equal to 70% of
     "Excess Cash Flow" (as defined in Annex A hereto) for such fiscal period.
                                       -------

Pricing
-------
 .    Interest rates on all outstanding loans will be increased to Prime + 2.75%.
     Consistent pricing increases shall be made with respect to letters of
     credit and other financial accommodations. All accrued interest and L/C
     fees shall be payable monthly. The LIBOR pricing option will no longer be
     available other than with respect to interest periods pending as of the
     closing date.

 .    A restructuring fee of $1.5MM will be payable to the Lenders in cash, half
     of which would be due at the closing of the Restructuring and half would be
     due on the earlier of maturity or acceleration. All such fees shall be
     deemed fully-earned and non-refundable at closing.

 .    ABC will issue a stock purchase warrant to the Lenders for 2% of the fully-
     diluted equity of ABC (giving effect to the exercise of all warrants and
     options and the conversion of all convertible securities, in each case
     whether or not then presently exercisable, convertible, vested or "in-the-
     money"). The warrant will have a nominal exercise price, contain
     antidilution provisions, include put provisions (priced at the greater of
     the enterprise value of ABC and an agreed upon fixed amount) demand and
     piggy-back registration rights and tag along rights, and include other
     customary provisions for senior secured lenders' warrants.

 .    Agent's fee to payable to the Agent, for its sole account, in the amount of
     $150,000 in cash at closing and $200,000 in cash on 2/1/02, provided that
     such fees shall be deemed fully-earned and non-refundable at closing.

Additional Collateral
---------------------

 .    Liens and mortgages will be granted in favor of the Agent, for the benefit
     of the Lenders, on all existing unencumbered domestic real property owned
     in fee simple, on 65% of the outstanding equity of all first tier foreign
     subsidiaries, and, to the extent not in conflict with existing
     organizational documents, on ABC's interest in foreign joint ventures. In
     addition, ABC shall deliver, or cause to be delivered, any additional
     documentation reasonably required by the Agent to perfect its lien and
     security interest on the existing collateral, including, without
     limitation, with respect

                                       16
<PAGE>

     to inventory on consignment, goods held by third parties, instruments and
     securities, and intellectual property.

 .    ABC and its domestic subsidiaries shall maintain all of their deposit and
     other bank accounts with institutions constituting Lenders (or affiliates
     thereof) (except with respect to accounts with aggregate balances which do
     not exceed a de minimus aggregate amount to be determined). With respect to
     accounts at such Lender institutions or affiliates at which ABC and such
     subsidiaries maintain significant balances (in excess of an amount to be
     determined), ABC and such subsidiaries, as applicable, shall use their good
     faith reasonable efforts, as a condition to the Restructuring and as an
     ongoing covenant, to enter into blocked account agreements with such
     institutions substantially in the form of the existing blocked account
     agreements currently in place with LaSalle Bank, N.A.

Convertible Bridge Loan; Preferred Stock
----------------------------------------
 .    At closing, ABC shall have received not less than $13MM of the net cash
     proceeds of the sale to funds sponsored by ING Furman Selz Investments of
     $15MM in aggregate initial principal amount of ABC's notes (the "ING Bridge
                                                                      ----------
     Notes") due in full 11 1/2 months from closing. No other principal payments
     -----
     shall be required with respect to such notes (including, without
     limitation, by right of setoff), and interest accrued thereon shall only be
     payable at the earlier of 1/6/03 and the payment in full of the Credit
     Agreement obligations. All of the indebtedness evidenced by such notes
     shall constitute "Senior Indebtedness" under the terms of ABC's existing
     subordinated debt indenture (the "SubDebt Indenture"), shall not be
                                       -----------------
     subordinated in right of payment to the Credit Agreement debt and shall be
     in form and substance as described in the "ING Commitment" referred to
     below and otherwise in form and substance acceptable to the Lenders. ABC
     shall be permitted to retain the proceeds of the ING Bridge Notes for
     working capital purposes.

 .    The ING Bridge Notes shall be secured by junior liens and security
     interests on the same properties which secure the Credit Agreement and
     related obligations, subject to an intercreditor agreement in form and
     substance acceptable to the Lenders. Without limiting the foregoing, the
     holders of the ING Bridge Notes shall agree, as a condition to the
     Restructuring and pursuant to such intercreditor agreement: (i) to an
     absolute standstill, prior to any insolvency proceeding of ABC or any of
     its subsidiaries, with respect to remedies relating to the enforcement of
     their liens and security interests for so long as any Credit Agreement and
     related obligations remain outstanding, (ii) to release their liens and
     security interests and subsidiary guaranties with respect to any and all
     collateral or subsidiaries disposed by ABC and or its subsidiaries if such
     disposition has been permitted by the Credit Agreement or the Majority
     Lenders, (iii) to release their liens and security interests in the event
     of any refinancing or recapitalization of the Credit Agreement and related
     obligations, or the sale of all or substantially all of the assets or
     equity of ABC and its subsidiaries and (iv) to permit the Agent, upon 30
     days' prior written notice to a representative of such holders, to release
     all such liens and security interests on behalf of such holders following
     the commencement of an insolvency proceeding with respect to ABC or any of
     its

<PAGE>

     subsidiaries unless such holders purchase all of the then outstanding
     Credit Agreement and related obligations prior to the expiration of such
     30-day period (and such holders shall provide the Agent, at the closing of
     the Restructuring, with lien and security interest release instruments
     sufficient to effect such release).

 .    The ING Bridge Notes shall have no financial covenants and minimal
     restrictive covenants, and shall have defaults limited to payment, breach
     of representation, breach of covenant (with customary grace periods),
     insolvency, and a cross acceleration to each of the Credit Agreement debt
     and the SubDebt Indenture notes. The ING Bridge Noes shall be subject to
     the commitment letter and term sheet of even date herewith issued by
     certain ING Furman Selz funds to ABC (the "ING Commitment") and otherwise
                                                --------------
     subject to a definitive loan agreement and related documents in form and
     substance acceptable to the Lenders.

 .    Upon the fulfillment of the following conditions (the "Conversion
                                                            ----------
     Condition"): (i) the successful completion of the "SubDebt Consent" (as
     ---------
     defined below), (ii) ABC's common shareholders approving an increase in the
     number of authorized shares of capital stock of ABC sufficient to permit
     the issuance of ABC's Class C Convertible Preferred Stock and the maximum
     number of shares necessary for the exercise of warrants with respect
     thereto, and (iii) certain other conditions, in each case as provided in a
     Series C Preferred Stock and Common Stock Warrant Purchase Agreement among
     ABC and certain ING Furman Selz funds, in form and substance acceptable to
     the Lenders (the "Equity Purchase Agreement"), all of the ING Bridge Notes
                       -------------------------
     shall be repaid from the proceeds of the sale to the ING Furman Selz funds
     of ABC's Class C Convertible Preferred Stock and warrants pursuant to such
     Equity Purchase Agreement (the "ING Equity Issuance"). No cash payments
                                     -------------------
     with respect to accrued interest on the ING Bridge Notes shall be required
     of ABC at the time of such conversion. ABC's payment, in cash, of any
     termination fees required by the Equity Purchase Agreement upon the
     termination of such agreement shall be prohibited by the terms of the
     Credit Agreement.

 .    It shall not be a condition precedent to the making of the loan to be
     evidenced by the ING Bridge Notes, or to the ING Equity Issuance, that
     ABC's auditors shall have issued an unqualified opinion with respect to
     ABC's year 2000 financial statements.

 .    The resulting ownership of ABC's outstanding equity shall be consistent
     with Annex B and the membership of ABC's resulting board of directors shall
          -------
     be acceptable to the Lenders, in each case both before and after giving
     effect to the ING Equity Issuance.

 .    The Credit Agreement's cross default provision shall be modified to provide
     specifically that it shall be an Event of Default under the Credit
     Agreement if any default shall have occurred under or with respect to the
     ING Bridge Notes. It shall be an additional Event of Default under the
     Credit Agreement if the Conversion Condition shall not have been satisfied
     on or before 7/15/01.

                                       18
<PAGE>

Mexican Refinancing
-------------------
 .    ABC shall exert its good faith reasonable efforts to close, as soon as
     practicable, the financing proposed by Bancomer, S.A. and described in its
     January 30, 2001 proposal letter and term sheets (the "Bancomer
                                                            --------
     Financing"), which financing shall be provided substantially on the terms
     ---------
     described in such letter and shall be otherwise on terms and conditions
     acceptable to the Lenders.

Flow Sale
---------
 .    As a condition precedent to the Restructuring, ABC shall have consummated a
     sale of ABC's Locomotive, Flow and Specialty Products Group,
     buymetalcastings.com, Baltimore Brake Shoe facility and Melrose Park mine
     and mill operations (the "Flow Sale") pursuant to the terms of an Asset
                               ---------
     Purchase Agreement in form and substance acceptable to the Lenders among
     ABC, certain of its subsidiaries and Matrix Metals LLC, and the Lenders
     shall have received for application to the Credit Agreement obligations not
     less than $15.5MM in net cash proceeds from such transaction. It shall be
     an additional conditions precedent to the Restructuring that (i) the
     Lenders shall have received a copy of favorable fairness opinion of Baird
     with respect to such sale and (ii) ABC shall have pledged to the Agent, for
     the benefit of the Lenders, and as additional security for the Credit
     Agreement and related obligations any and all promissory notes issued to
     ABC as part of the consideration payable to ABC for the Flow Sale.

Covenants; Disclosures
----------------------
 .    A quarterly rolling minimum EBITDA covenant will be added to the Credit
     Agreement (which will build into a cumulative 12-month roll commencing May
     1, 2001), as set forth in Annex C hereto. "EBITDA" shall be defined as
                               -------
     currently provided in the Credit Agreement, provided, that the exclusion
     for "above-the-line" non-cash, non-recurring losses or special charges set
     forth shall be limited to only those charges and losses which are caused by
     the impairment of long term assets of ABC's Calera, Permatrack, Cicero and
     Deco operations.

 .    A loan-to-value covenant will be added to the Credit Agreement testing, on
     a monthly basis, the ratio of outstanding loans and letters of credit to
     values of categories of collateral, as set forth in Annex C hereto.
                                                         -------
     Collateral values for these purposes will be based upon receivables and
     inventory determined in accordance with GAAP, and appraised fair market
     values of real property and orderly liquidation values of machinery and
     equipment existing at closing (as recently appraised in early 2001).
     Maximum ratios and/or asset and loan amounts shall be adjusted to reflect
     the impairment of long term assets with respect to Calera and the Bancomer
     Financing.

 .    A new covenant will be added to the Credit Agreement and tested quarterly,
     as set forth in Annex C hereto, which will limit the aggregate amount of
                     -------
     net losses related to irregular items (i.e., after EBITDA) to the maximum
     cumulative amounts indicated in such annex for each period beginning 4/1/01
     and ending as of the dates set forth therein.

<PAGE>

 .    The capital expenditure covenant of the Credit Agreement will be modified
     as set forth in Annex C hereto to limit the incurrence or payment of
                     -------
     capital expenditures.

 .    All other financial covenants (i.e., leverage ratios, interest coverage
                                    ----
     ratio, minimum net worth and operating coverage ratio tests) will be
     eliminated.

 .    The restrictive covenant regarding asset dispositions shall be revised to
     prohibit all dispositions (other than sales of inventory and equipment
     described in clauses (i) and (ii) of the proviso contained in the asset
                  -----------     ----        -------
     sale mandatory commitment reduction provision set forth above) without the
     prior written consent of the Majority Lenders.

 .    Disclosure schedules of the Credit Agreement will be updated as of the
     closing of the Restructuring.

 .    Reporting covenants will be expanded to require (i) monthly historical
     income statements, balance sheets (including divisional inventory levels),
     cash flow statements, and divisional accounts receivable and accounts
     payable agings and (ii) monthly projected 13-week cash flows.

Majority Lenders
----------------
 .    The definition of "Majority Lenders" shall be revised to mean Lenders
     holding at least 66-2/3% of outstandings. The mandatory, scheduled
     prepayment and commitment reduction schedule described above, and the asset
     sale mandatory prepayment and commitment reduction provision described
     above, may not be waived or modified without the approval of all of the
     Lenders, and the other mandatory prepayment and commitment reductions
     relating to equity and debt issuances and excess cash flow may not be
     modified or waived without the approval of the Majority Lenders.

Consultants
-----------
 .    ABC shall continue to employ the services of DSI (or another comparable
     consultant acceptable to the Lenders) in a manner and scope acceptable to
     the Agent.

 .    E&Y Capital Advisors, LLC, the Lenders' consultants (engaged by Sidley &
     Austin), shall continue to be provided access to such financial and
     operation information of ABC as the Lenders deem reasonably necessary.

Subordinated Notes
------------------
 .    It shall be a condition to the Restructuring that, as of 12/31/00, no
     "Event of Default" or unmatured "Event of Default" shall have occurred or
     be continuing under the SubDebt Indenture, no noncompliance with any
     provision thereof shall have occurred and be continuing; and, as of the
     closing date, no notice of any such noncompliance shall have been given by
     the trustee or any noteholder thereunder to ABC, and no enforcement action
     shall have been taken by such trustee or noteholders. It shall be an

<PAGE>

     additional condition precedent that the Lenders have received a copy of
     ABC's certificate to the trustee with respect to its compliance with such
     indenture as of 12/31/00.

 .    It shall be a condition to the Restructuring that ABC shall have commenced
     material actions and good faith reasonable efforts to commence (and shall
     covenant to exert such efforts to successfully complete thereafter) a
     consent solicitation, in form and substance acceptable to the Agent (the
     "SubDebt Consent"), to the holders of notes issued pursuant to the SubDebt
      ---------------
     Indenture requesting a waiver of any noncompliance by ABC of the financial
     covenants under the SubDebt Indenture with respect to the period ending
     3/31/01, and an amendment with respect thereto for the remaining quarters
     of 2001 and for 2002 to extent ABC's existing projections indicate that a
     material risk of noncompliance with any such financial covenants during any
     such remaining periods may occur. It shall be an additional condition that
     the Lenders receive a copy of any comfort letters provided by Baird to
     ABC's auditors with respect to Baird's confidence of the success of such
     SubDebt Consent.

 .    The Credit Agreement's existing cross-default provision shall be modified,
     to the extent pertaining to the SubDebt Indenture and related notes, such
     that during the period commencing with the Restructuring closing and ending
     on the earlier of 7/15/01 and the successful completion of the SubDebt
     Consent, it shall only be a cross default if the trustee or noteholders
     thereunder shall have taken any action to accelerate or otherwise commence
     any enforcement action or remedy provided for in the SubDebt Indenture
     (other than the delivery of a notice of such noncompliance by the trustee
     to ABC), or commence a legal proceeding to enforce any of ABC's obligations
     thereunder, in any case with respect to any non-compliance or alleged non-
     compliance by ABC under the SubDebt Indenture. It shall be a condition to
     the Restructuring that the Lenders receive a copy of any letter prepared by
     ABC for its auditors summarizing the comments of the trustee during the
     4/12/01 conference call with such auditors regarding the remote likelihood
     of enforcement actions being commenced or recommended by the trustee in the
     event of a financial covenant default so long as interest payments under
     the SubDebt Indenture are being paid currently.

2000 Audit; Projections
-----------------------
 .    As a condition precedent to the Restructuring, ABC's independent auditor
     shall have completed its audit of ABC's year 2000 financial statements. It
     shall not be a condition precedent that such auditors shall have issued an
     unqualified opinion with respect thereto (as to going concern).

 .    At closing, the Lenders shall receive a 13-week rolling cash flow forecast,
     and quarterly projected cash flow statements, income statements, balance
     sheets (including inventory levels by division), loan outstandings,
     accounts receivable and accounts payables agings, in each case through
     2002, in form and scope, and based upon assumptions, acceptable to the
     Lenders.

<PAGE>

Assignments
-----------
 .    The assignment provision of the Credit Agreement shall be modified to
     remove any requirement that ABC's consent would be necessary for any
     assignments by the Lenders of their interests in the Credit Agreement and
     related obligations.

No Additional Defaults or MAC
-----------------------------
 .    As a condition precedent to the Restructuring, (i) except with respect to
     the existing defaults described in Annex D (collectively, the "Existing
                                        -------                     --------
     Defaults"), no Event of Default or Default shall have occurred and be
     --------
     continuing, and no event or condition shall exist or occur and be
     continuing which could reasonably result in Material Adverse Effect since
     12/31/00 (including, without limitation, any materially adverse change in
     ABC's trade credit support or customer support) and (ii) no litigation or
     governmental proceedings shall have been commenced or threatened with
     respect to any of the transactions contemplated by this term sheet.

Waivers
-------
 .    Upon the effectiveness of the Restructuring, the Existing Defaults will be
     waived by the Lenders.

Release
-------
 .    As a condition precedent to the Restructuring, ABC and its subsidiaries
     party to any loan document shall release, hold harmless and indemnify the
     Agent, the Lenders and their respective agents, advisors and employees with
     respect to any and all claims and causes of actions arising prior to the
     closing date with respect to all actions, omissions and alleged actions and
     omissions, by any such parties with respect to, or in any way related to,
     the Credit Agreement, this term sheet, or the transactions contemplated
     thereby or hereby.

Professional Expenses
---------------------
 .    Agent's out-of-pocket expenses incurred in connection with the
     Restructuring, including professional fees, shall be paid at closing.

                                    * * * *

                                       22
<PAGE>

                                                                         ANNEX A
                                                                         -------

A.  Excess Cash Flow Definitions

          "Excess Cash Flow" means, with respect to any fiscal period of the
           ----------------
Company:  (a) the Company's Adjusted Net Earnings from Operations for such
period; minus (b) the sum of (i) all regularly scheduled installments of
        -----
Indebtedness (and, without duplication, mandatory reductions to the Lender's
Commitments) which were actually paid in cash (or made effective, in the case of
commitment reductions) by the Company during such fiscal period; (ii) bank
charges and deferred financing fees and bank agency fees paid in cash during
such period, (iii) Capital Expenditures which were actually paid in cash by the
Company and its Subsidiaries during such fiscal period to the extent permitted
hereunder, other than any such payments already deducted in the computation of
the Company's Adjusted Net Earnings from Operations or pursuant to clause (i)
                                                                   ----------
above; plus (c) the sum of (i) any depreciation and amortization expense
       ----
deducted in determining net income for such fiscal period; (ii) other non-cash
charges deducted in computing such net income; (iii) any decrease in the
Company's current assets other than cash during such period; and (iv) any
increase in the Company's current liabilities during such period; minus (d) the
                                                                  -----
sum of (i) any increase in such Company's current assets other than cash during
such period; and (ii) any decrease in such Company's current liabilities during
such period.

          "Adjusted Net Earnings from Operations" means, with respect to any
           -------------------------------------
fiscal period of the Company, the net income of such Company and its
Subsidiaries on a consolidated basis after provision for income taxes for such
fiscal period, as determined in accordance with GAAP and reported on its
financial statements for such fiscal period, less any and all of the following
                                             ----
included in such net income:  (a) gain or loss arising from the sale of any
capital asset; (b) gain arising from any write-up in the book value of any
asset; (c) earnings of any business entity, substantially all the assets of
which have been acquired in any manner, or which has merged or otherwise
consolidated with and into the Company or any Subsidiary to the extent realized
by such other business entity prior to the date of such acquisition, merger or
consolidation; (d) earnings of any business entity (other than a Subsidiary) in
which the Company or any Subsidiary has an ownership interest unless (and only
to the extent) such earnings shall actually have been received by the Company or
such Subsidiary in the form of cash distributions; (e) earnings of any Person to
which assets of the Company or any Subsidiary shall have been sold, transferred
or disposed of, or into which the Company or any Subsidiary shall have been
merged, or which has been a party with the Company or any Subsidiary to any
consolidation or other form of reorganization in which the Company or such
Subsidiary is not the surviving entity, after the date of such transaction; (f)
gain arising from the acquisition of debt or equity securities of the Company or
any Subsidiary or from cancellation or forgiveness of Indebtedness; and (g) gain
arising from extraordinary items including restructuring charges, as determined
in accordance with GAAP, or from any other non-recurring transaction.

                                       23<PAGE>

                                                                     Exhibit 4.2

                            ING Furman Investments
                             55 East 52/nd/ Street
                              New York, NY  10055

                                                        April 17, 2001

ABC-NACO Inc.
2001 Butterfield Road, Suite 502
Downers Grove, Illinois 60515

                        Senior Second Secured Financing
                        -------------------------------

Ladies and Gentlemen:

          You have requested that ING Furman Selz Investors III LP,  ING Barings
U.S. Leveraged Equity Plan LLC, ING Barings Global Leveraged Equity Plan Ltd.,
Furman Selz Investors II LP, FS Employee Investors LLC and FS Parallel Fund LP
("the Investors") provide you with their financing commitment for $15 million of
Senior Second Secured Financing as described in this letter and in the summary
of terms and conditions attached as Exhibit A (the "Summary of Terms" and,
                                    ---------
together with this letter, this "Commitment Letter).

          We understand that you are negotiating with your lenders (the
"Lenders") under the Third Amended and Restated Credit Agreement dated as of
October 30, 2000 (the "Credit Agreement") among ABC-NACO Inc. (referred to
herein as "you" or the "Borrower"), ABC-NACO de Mexico S.A. de C.V., Dominion
Castings Limited, Bank of America Canada, Bank of America National Trust and
Savings Association, as agent ("Agent") and the Lenders with respect to certain
defaults under the Credit Agreement and have requested certain amendments to the
Credit Agreement from the Lenders to cure such defaults and provide other
changes to the Credit Agreement (the "Proposed Credit Agreement Amendments")
which amendments are described in a commitment letter and term sheet dated as of
April 17, 2001 from the Agent and the Lenders (the "Lender Commitment Letter")
in the form attached hereto as Exhibit B.  We further understand that you intend
                               ---------
to request certain amendments from U.S. Bank National Association (the
"Trustee") as trustee under the Indenture dated as of January 15, 1997 pursuant
to which you have issued your 10 1/2% Senior Subordinated Notes, Series A due
2004 in the original principal amount of $50,000,000 (the "Series A Notes") and
your 10 1/2% Senior Subordinated Notes, Series B, due 2004 in the original
principal amount of $25,000,000 (the "Series B Notes" and, together with the
Series A Notes, the "Subordinated Notes") with respect to your obligations under
the Subordinated Notes and the transactions contemplated hereby.
<PAGE>

                                       2

          We are pleased to commit to provide, subject to and upon the terms and
conditions set forth herein and in the Summary of Terms, $15 million of second
secured senior financing (the "Financing") on the terms and conditions set forth
herein and in the Summary of Terms.  Fees payable to the Investors shall be
payable as described in the fee letter (the "Fee Letter") executed
simultaneously herewith and may be deducted from the principal amount of the
Financing.  The obligations of the Investors shall be several and not joint and
shall be in the amounts set forth on Schedule 1 attached hereto.

          As a part of the transactions contemplated by this letter Matrix
Metals LLC ("Matrix") is entering into an Asset Purchase Agreement dated as of
April 17, 2001 (the "Asset Purchase Agreement") among the Borrower, NACO, Inc.,
National Castings, Inc., BuyMetal Castings, Inc., National Engineered Products
Company, Inc. and Matrix providing for the purchase of certain assets by Matrix
from the parties thereto The Asset Purchase Agreement will be signed at the time
of the execution of this Commitment Letter.

          Please note that the terms and conditions of this commitment are not
limited to those set forth in this Commitment Letter.  Those matters that are
not covered or made clear herein or in the attached Summary of Terms are subject
to mutual agreement of the parties.  The terms and conditions of this commitment
may be modified only in writing.  In addition, this commitment is subject to (a)
the preparation, execution and delivery of mutually acceptable loan
documentation, including a loan agreement incorporating substantially the terms
and conditions outlined herein and in the Summary of Terms, and (b) the absence
of a material adverse change in the business, financial condition, operations,
performance, prospects, properties, assets, liabilities (contingent or
otherwise) or value (a "Material Adverse Change") of the Borrower and its
subsidiaries, taken as a whole since December 31, 2000 except as previously
disclosed in writing to the Investors.  The Investors' commitments set forth in
this Commitment Letter will terminate on July 15, 2001 unless the transactions
contemplated hereby (including the Proposed Credit Agreement Amendments set
forth in the Lender Commitment Letter, the acquisition contemplated in the Asset
Purchase Agreement and the purchase of the equity securities as set forth in the
next succeeding paragraph) close on or before such date.  Furthermore, if the
Investors discover information not known to them on the date of this letter
which the Investors reasonably believe constitutes or will constitute a Material
Adverse Change (including any information that the holders of Subordinated Notes
are not likely to approve the amendments to the Subordinated Notes required to
prevent an event of default from occurring thereunder as a result of the
violation of the financial covenants set forth therein and other amendments
necessary to permit the transactions contemplated thereby or that the other
conditions under the Stock Purchase Agreement (as defined below) will not be
timely satisfied or that the Borrower's shareholders are unlikely to approve the
issuance of additional equity contemplated hereby), the Investors may, in their
sole discretion suggest alternative financing amounts or structures that assure
adequate protection for their investment or decline to provide or participate in
the proposed financing.  The Investors shall not be responsible or liable for
any consequential damages which may be alleged as a result of their failure to
provide the Financing.
<PAGE>

                                       3

          Pursuant to, and in accordance with and subject to the terms and
conditions contained in the Preferred Stock and Common Stock Warrant Purchase
Agreement dated as of April 17, 2001 among the Borrower, the Investors and the
other parties thereto (the "Stock Purchase Agreement"), the Investors have
agreed that following the consummation of the Financing, they will agree to
purchase certain equity securities of the Borrower and the proceeds of such
securities will be used to repay the Financing subject to the terms and
conditions set forth therein.  Such conditions include (a) appropriate approvals
of shareholders of the Borrower, and (b) amendments to the Subordinated Notes to
waive any financial covenant defaults and to amend the financial covenants as to
future periods and such further amendments as are necessary for the equity
transactions contemplated in the Stock Purchase Agreement to take place as more
fully set forth in the Stock Purchase Agreement.

          To induce the Investors to issue this letter and to continue with
their efforts to close the transactions described herein, you hereby agree that
all reasonable out-of-pocket fees and expenses (including the reasonable fees
and expenses of counsel and consultants) of the Investors and their affiliates
arising in connection with this letter and in connection with the Financing and
the other transactions described herein shall be for your account.  In addition,
you hereby agree to pay when and as due the fees described in the Fee Letter.
You further agree to indemnify and hold harmless the Investors and each
director, officer, employee and affiliate thereof (each an "Indemnified Person")
from and against any and all actions, suits, proceedings (including any
investigations or inquiries), claims, losses, damages, liabilities or expenses
of any kind or nature whatsoever which may be incurred by or asserted against or
involve any such Indemnified Person as a result of or arising out of or in any
way related to or resulting from this letter, the transactions described herein
or the extension of the Financing contemplated by this letter, or in any way
arising from any use or intended use of this letter or the proceeds of the
Financing contemplated by this letter, and you agree to reimburse each
Indemnified Person upon demand for any legal or other out-of-pocket expenses
incurred in connection with investigating, defending or preparing to defend any
such action, suit, proceeding (including any inquiry or investigation) or claim
(whether or not any Investors or any such other Indemnified Person is a party to
any action or proceeding out of which any such expenses arise) (collectively, an
"Action"); provided, however, that you shall not have to indemnify any
Indemnified Person against any loss, claim, damage, expense or liability to the
extent finally determined by a court of competent jurisdiction to have resulted
directly and primarily from the gross negligence or willful misconduct of such
Indemnified Person.

          The Investors reserve the right to employ the services of their
affiliates in providing services contemplated by this letter and to allocate, in
whole or in part, to such affiliates certain fees payable to the Investors in
such manner as the Investors and such affiliates may agree in their sole
discretion.  You acknowledge that the Investors may share with any of its
affiliates, and such affiliates may share with the Investors, any information
related to you, any of your subsidiaries or any of the matters contemplated
hereby in connection with the transactions contemplated hereby on a confidential
basis.
<PAGE>

                                       4

          The provisions of the immediately preceding two paragraphs shall
survive any termination of this letter.

          You represent and warrant (to the best of your knowledge) that (a) all
information (other than financial projections) that has been or will hereafter
be made available by or on behalf of you or by any of your representatives in
connection with the transactions contemplated hereby to the Investors or any of
their affiliates is and will be complete and correct in all material respects
and does not and will not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained therein not misleading in light of the circumstances under which such
statements were or are made and (b) all financial projections, if any, that have
been or will be prepared by you or on your behalf or by any of your
representatives and made available to the Investors or any of their affiliates
or representatives in connection with the transactions contemplated hereby have
been or will be prepared in good faith based upon reasonable assumptions (it
being understood that such projections are subject to significant uncertainties
and contingencies, many of which are beyond your control, and that no assurance
can be given that any particular projections will be realized).  You agree to
supplement the information and projections from time to time so that the
representations and warranties contained in this paragraph remain complete and
correct.

          In issuing this commitment, the Investors are relying on the accuracy
of the information furnished to it by you or on your behalf (collectively, the
"Pre-Commitment Information").  The obligations of the Investors under this
Commitment Letter are made solely for your benefit and may not be relied upon or
enforced by any other person or entity.

          You are not authorized to show or circulate this letter to any other
person or entity (other than (i) your legal, accounting and financial advisors
in connection with your evaluation hereof, (ii) the Agent and the Lenders (iii)
the Trustee and (iv) as required by law or stock exchange requirements) until
such time as you have accepted this letter as provided in the immediately
succeeding paragraph.  If this letter is not accepted by you as provided in the
immediately succeeding paragraph, you are to immediately return this letter (and
any copies hereof) to the undersigned.  This letter may be executed in any
number of counterparts, and by the different parties hereto on separate
counterparts, each of which counterpart shall be an original, but all of which
shall together constitute one and the same instrument.

          If you are in agreement with the foregoing, please sign and return to
the Investor (including by way of facsimile transmission) the enclosed copy of
this letter, together with the Fee Letter, no later than 5:00 p.m., New York
time, on April 17, 2001.  Our commitment set forth in this letter shall
terminate at the time and on the date referenced in the immediately preceding
sentence unless this letter and the Fee Letter are executed and returned by you
as provided in such sentence.

          This letter and the Fee Letter shall be governed by, and construed in
accordance with the laws of the state of New York, and any right to trial by
jury with respect to any claim,
<PAGE>

                                       5

action, suit or proceeding arising out of or contemplated by this letter and/or
the related Fee Letter is hereby waived. The parties hereto hereby submit to the
non-exclusive jurisdiction of the federal and New York State courts located in
the City of New York in connection with any dispute related to this letter or
the Fee Letter or any matters contemplated hereby or thereby. Delivery of an
executed counterpart of this Commitment Letter by telecopier shall be effective
as delivery of a manually executed counterpart of this Commitment Letter.

                                  Very truly yours,

                                  ING Furman Selz Investors III LP
                                  ING Barings U.S. Leveraged Equity Plan LLC
                                  ING Barings Global Leveraged Equity Plan Ltd.

                                  BY:  FS Private Investments III LLC

                                  By________________________
                                     Name:
                                     Title:

                                  Furman Selz Investors II LP
                                  FS Employee Investors LLC
                                  FS Parallel Fund LP

                                  BY:  FS Private Investments LLC

                                  By________________________
                                     Name:
                                     Title:

Agreed to and Accepted this
17th day of April, 2001

ABC-NACO Inc.

By________________________
   Name:
   Title:
<PAGE>

                                                                       EXHIBIT A
                                                                       ---------

                  SUMMARY OF CERTAIN TERMS AND CONDITIONS/1/
                  ------------------------------------------

I.        The Parties
          -----------

Borrower:                     ABC-NACO Inc.

Investors:                    ING Furman Selz Investors III LP
                              ING Baring U.S. Leveraged Equity Plan LLC
                              ING Barings Global Leveraged Equity Plan
                              Furman Selz Investors II LP
                              FS Employee Investors LLC
                              FS Parallel Fund LP

Guarantors:                   All obligations under the Financing shall be
                              unconditionally guaranteed by each of the
                              Borrower's direct and indirect wholly-owned
                              subsidiaries (other than any entity that is a
                              controlled foreign corporation ("CFC") under
                              Section 957 of the Internal Revenue Code (all of
                              such subsidiaries being, collectively, the
                              "Guarantors"), subject to customary exceptions and
                              exclusions and release mechanics for transactions
                              of this type.

II.       Description of the Financing
          ----------------------------
III.
Senior Notes                  $15 million Senior Second Secured Notes (the
                              "Senior Notes"), to be issued pursuant to a loan
                              agreement (the "Loan Agreement") acceptable to the
                              Investors and the Borrower including the terms of
                              this Summary of Terms and the Commitment Letter.

Maturity:                     The final maturity of the Senior Notes (the
                              "Maturity Date") shall be the earlier of 350 days
                              after the Closing Date and the day of the closing
                              under the Stock Purchase Agreement.

Use of Proceeds:              The proceeds of the Senior Notes shall be utilized
                              (a) to pay fees and expenses incurred in
                              connection with the transactions contemplated
                              hereby and (b) to finance the Borrower's and its
                              subsidiaries' working capital

______________________
/1/       Capitalized terms used herein and not defined herein shall have the
          meanings provided in the commitment letter (the "COMMITMENT LETTER")
          to which this summary is attached.
<PAGE>

                              requirements and other general corporate purposes.

III.      Terms Applicable to the Financing

Closing Date for the          On or before May 1, 2001.
Fianacing

Security:                     The Borrower and its Domestic Subsidiaries shall
                              grant to ING Furman Selz Investors III LP as agent
                              for the Investors (the "Investor Agent") a valid
                              and perfected second priority lien and security
                              interest in all of the following (subject to the
                              liens of the Agent and the Lenders and to certain
                              exceptions to be set forth in the loan
                              documentation):

                                   a.    All shares of capital stock of (or
                              other ownership interests in) and intercompany
                              debt of each present and future subsidiary of the
                              Borrower or such Guarantor, limited, in the case
                              of each CFC, to 66% of the voting stock of such
                              entity.

                                   b.    All present and future property and
                              assets, real and personal, of the Borrower or such
                              Guarantor, including, but not limited to,
                              machinery and equipment, inventory and other
                              goods, accounts receivable, owned real estate,
                              leaseholds, fixtures, bank accounts, general
                              intangibles, license rights, patents, trademarks,
                              tradenames, copyrights, chattel paper, insurance
                              proceeds, contract rights, hedge agreements,
                              documents, instruments, indemnification rights,
                              tax refunds and cash.

                                   c.    All proceeds and products of the
                              property and assets described in clauses (a) and
                              (b) above.

                              At the reasonable request of the Borrower made
                              prior to the Closing Date, assets will be excluded
                              from the collateral in circumstances where the
                              Investors and the Borrower determine that the
                              economic detriment to the Borrower of entering
                              into such guarantee or security arrangement or
                              taking security interests in such assets would be
                              excessive in view of the related benefits to be
                              received by the Investors or the consent of third
                              parties thereto cannot be obtained through
                              reasonably commercial efforts. The Borrower and
                              its Subsidiaries shall not be required to grant a
                              security interest to the Investor Agent in any
                              property which is not pledged to the Agent to
                              secure the obligations under the Credit Agreement

Interest Rates:               The Senior Notes will bear interest at the rate of
                              7% per annum (based on a 360 days year) for the
                              first 90 days and 18% per annum thereafter which
                              interest will be payable on January 6, 2003 or
                              such earlier date as all amounts payable under the
                              Credit Agreement have been paid in full.
<PAGE>

Fees:                         The Investors shall receive such fees as have been
                              separately agreed upon with the Borrower which
                              fees and all expenses incurred by the Investors in
                              connection with the transactions contemplated
                              hereby shall be deducted from the proceeds of the
                              Senior Notes.

Mandatory                     Proceeds from the sale of the equity interests
Prepayment:                   contemplated by the Stock Purchase Agreement shall
                              be applied by the Borrower as set forth in the
                              Commitment Letter to repay the Senior Notes and
                              not to pay the obligations under the Credit
                              Agreement.

Documentation:                The Investors' commitment will be subject to the
                              negotiation, execution and delivery of definitive
                              financing agreements (and related security
                              documentation, guaranties, etc.) consistent with
                              the terms of this letter, in each case prepared by
                              counsel to the Investor.

Conditions Precedent          Those customarily found in credit agreements for
 to Initial Extension         similar secured financings and others appropriate
 of Credit                    in the judgment of the Investors, including
                              without limitation, the following:

                                   a.    The final terms and conditions of the
                              transactions, including, without limitation, the
                              documentation relating thereto and all legal
                              aspects thereof, shall be (i) as described in the
                              Commitment Letter and the exhibits hereto and
                              otherwise consistent with the description thereof
                              received in writing as part of the Pre-Commitment
                              Information and (ii) otherwise reasonably
                              satisfactory to the Investor.

                                   b.    The Proposed Credit Agreement
                              Amendments to the Credit Agreement shall have been
                              completed substantially as contemplated by the
                              Lender Commitment Letter in form and substance
                              reasonably satisfactory to the Investors and
                              following such amendments no event of default
                              shall have occurred and be continuing under the
                              Credit Agreement.

                                   c.    The acquisition contemplated by the
                              Asset Purchase Agreement shall be completed on or
                              prior to the closing date of the Financing.

                                   d.    There shall exist no action, suit,
                              investigation, litigation or proceeding pending
                              or, to the Borrower's knowledge, as applicable,
                              threatened in any court or before any arbitrator
                              or governmental or regulatory agency or authority
                              that (i) could reasonably be expected to (A) have
                              a material adverse effect on the business,
                              financial condition, operations, performance,
                              prospects, properties, assets, liabilities
                              (contingent or otherwise) or value of the Borrower
                              and its subsidiaries, taken as a whole, (B)
                              adversely affect the ability of the Borrower or
                              any Guarantor to perform its obligations under the
                              loan documentation or (C) adversely affect the
                              rights and remedies of the Investor under the loan
                              documentation (collectively, a "Material Adverse
                              Effect") or
<PAGE>

                              (ii) purports to adversely affect the transactions
                              contemplated hereby.

                                   e.   All governmental and third party
                              consents and approvals necessary in connection
                              with the transactions contemplated hereby shall
                              have been obtained (without the imposition of any
                              conditions that are not acceptable to the
                              Investor) and shall remain in effect (other than
                              any such consents and approvals the absence of
                              which, either individually or in the aggregate,
                              would not be reasonably likely to result in a
                              Material Adverse Effect); and no law or regulation
                              shall be applicable in the judgment of the
                              Investors that restrains, prevents or imposes
                              materially adverse conditions upon the
                              transactions contemplated hereby.

                                   f.   The Investors shall have received (i)
                              reasonably satisfactory opinions of counsel for
                              the Borrower and the Guarantors and of local
                              counsel for the Investors as to the transactions
                              contemplated hereby (including, without
                              limitation, the tax aspects thereof and compliance
                              with all applicable securities laws) and (ii) such
                              corporate resolutions, certificates and other
                              documents as the Investors shall reasonably
                              request.

                                   g.   There shall exist no default under any
                              of the loan documentation, and the representations
                              and warranties of the Borrower, each of the
                              Guarantors and each of their respective
                              subsidiaries therein shall be true and correct in
                              all material respects immediately prior to, and
                              after giving effect to, the initial extension of
                              credit under the loan documentation.

                                   h.   No event shall have occurred which
                              makes it unlikely in the Investors' reasonable
                              judgement that (i) the holders of the Subordinated
                              Notes will not consent to amendments to the
                              Indentures relating thereto which would cure
                              events of default relating to the financial
                              covenants set forth therein and other
                              modifications necessary to permit the transactions
                              contemplated hereby, (ii) that Borrower's
                              shareholders will not consent to the transactions
                              relating to Borrower's capital stock contemplated
                              by the Stock Purchase Agreement or (iii) the other
                              conditions set forth in the Stock Purchase
                              Agreement for the purchase of the equity interests
                              will not be timely satisfied.

                                   i.   Concurrently with the execution of this
                              Commitment Letter the Borrower will enter into an
                              Exchange Agreement with the Investors providing
                              for the exchange of its Series B Preferred Stock
                              for its Series B-1 Preferred Stock.

                                   j.   The Lenders will permit the Borrower to
                              pay an $1,100,000 dividend to the holders of its
                              Series B Preferred Stock on the closing date for
                              the Financing so long as the total of amount the
                              Financing less such dividend and all of the
                              Investor's fees and expenses of the financing paid
                              by the Borrower exceeds $13 million.

                                   k.   All accrued fees and expenses of the
                              Investors (including the
<PAGE>

                              reasonable fees and expenses of counsel for the
                              Investors) shall have been paid.

                                   l.   The Investors and the Lenders shall have
                              entered into an intercreditor agreement reasonably
                              acceptable to the Investors.

                                   m.   A voting agreement between the Borrower
                              and the Seher Family Limited Partnership shall
                              have been executed and shall be in full force and
                              effect.

                              Those customarily found in credit agreements for
                              similar secured financings and others appropriate
                              in the judgment of the Investors for the
                              transactions contemplated hereby (with exceptions
                              and caveats similar to those in the Credit
                              Agreement to be agreed upon such that such
                              representations and warranties are not more
                              restrictive to the Borrower and its Subsidiaries
                              than those set forth in the Credit Agreement),
                              including, without limitation, absence of any
                              material adverse change in the business, financial
                              condition, operations, performance or properties
                              of the Borrower and its subsidiaries, taken as a
                              whole.

Covenants:                    Those affirmative and negative covenants
                              (applicable to the Borrower and its subsidiaries)
                              customarily found in credit agreements for similar
                              secured financings and others appropriate in the
                              judgment of the Investors for the Finanacing (with
                              exceptions, thresholds and caveats similar to
                              those in the Credit Agreement to be agreed upon
                              such that such covenants are no more restrictive
                              to the Borrower and its Subsidiaries than those
                              set forth in the Credit Agreement), including,
                              without limitation, the following:

                                   a.   Affirmative Covenants - (i) Compliance
                                        ---------------------
                              with laws and regulations (including, without
                              limitation, ERISA and environmental laws); (ii)
                              payment of taxes and other obligations; (iii)
                              maintenance of appropriate and adequate insurance;
                              (iv) preservation of corporate existence, rights
                              (charter and statutory), franchises, permits,
                              licenses and approvals; (v) visitation and
                              inspection rights; (vi) keeping of proper books in
                              accordance with generally accepted accounting
                              principles; (vii) maintenance of properties;
                              (viii) performance of leases, related documents
                              and other material agreements; (ix) further
                              assurances as to perfection and priority of
                              security interests; and (x) customary financial
                              and other reporting requirements (including,
                              without limitation, audited annual financial
                              statements and quarterly unaudited financial
                              statements, in each case prepared on a
                              consolidated and a consolidating basis, notices of
                              defaults, compliance certificates, annual business
                              plans and forecasts, reports to shareholders and
                              other creditors and other business and financial
                              information as the Investors shall reasonably
                              request).

                                   b.   Negative Covenants - Restrictions on (i)
                                        ------------------
                              loans, acquisitions, joint ventures and other
                              investments; (ii) dividends share repurchases and
                              other distributions to stockholders; (iii)
                              creating new subsidiaries; (iv) prepaying,
<PAGE>

                              redeeming or repurchasing any debt subordinated to
                              the Senior Notes; (v) changing the nature of its
                              business; (vi) amending organizational documents,
                              or amending or otherwise modifying any
                              subordinated debt, any related document or any
                              other material agreement; and (vii) transactions
                              with affiliates.

                                   c.   Financial Covenants - None
                                        -------------------

Events of Default             Those customarily found in credit agreements for
                              similar secured financings and others appropriate
                              in the judgment of the Investors for the
                              transactions contemplated hereby (but no more
                              restrictive to the Borrower and its subsidiaries
                              than those set forth in the Credit Agreement),
                              including, without limitation, (a) failure to pay
                              principal when due, or to pay interest or other
                              amounts within five business days after the same
                              becomes due, under the loan documentation; (b) any
                              representation or warranty proving to have been
                              materially incorrect when made or confirmed; (c)
                              failure to perform or observe covenants set forth
                              in the loan documentation within a specified
                              period of time, where customary and appropriate,
                              after notice or knowledge of such failure; (d)
                              cross-accelerations to other indebtedness in an
                              amount to be agreed in the loan documentation; (e)
                              bankruptcy and insolvency defaults (with grace
                              period for involuntary proceedings); (f) monetary
                              judgment defaults in an amount to be agreed in the
                              loan documentation; (g) impairment of loan
                              documentation or security; (h) change of ownership
                              control; and (i) standard ERISA defaults.

Expenses:                     The Borrower shall pay Investors' reasonable out-
                              of-pocket expenses (including the fees and
                              expenses of counsel for the Investors), whether or
                              not any of the transactions contemplated hereby
                              are consummated. The Borrower shall also pay the
                              expenses of the Investors in connection with the
                              enforcement of any of the loan documentation.

Indemnity:                    The Borrower will indemnify and hold harmless the
                              Investors, and each of their affiliates and their
                              officers, directors, employees, agents and
                              advisors from claims and losses relating to
                              transactions contemplated hereby.

Governing Law:                New York.

Counsel for the               Dechert.
 Investors:

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