Document:

EXHIBIT 10.73

                            ASSET PURCHASE AGREEMENT

This Agreement is made and entered into on May 11, 2000, by and between

Spectra Precision AB, reg. no. 556239-9305,  a corporation  organized and
existing under the laws of Sweden (hereinafter referred to as the "Seller"),

                                       and

Trimble  Acquisition  Corp.,  a  corporation  organized  and  existing  under
the laws of  Delaware  (hereinafter  referred  to as the "Purchaser"), on the
other hand.

WHEREAS,   the Seller,  directly and through certain of its subsidiaries,
           is engaged in the  business  of  laser-based  and  sonic-based
           instrumentation   surveying   systems  for  the  construction,
           agricultural  and surveying  industries  in various  countries
           (which  activities,  as currently  conducted by the Seller and
           its   subsidiaries,   are  hereinafter   referred  to  as  the
           "Business"); and

WHEREAS,   the Seller wishes to sell to the Purchaser,  and the Purchaser
           wishes to purchase from the Seller,  the Business,  including,
           without  limitation,  all  right,  title and  interest  of the
           Seller in and to the property and assets of the Business,  and
           in  connection  therewith  the  Purchaser is willing to assume
           certain  liabilities of the Seller relating thereto,  all upon
           the terms and subject to the conditions set forth herein;

NOW,       THEREFORE,  in  consideration  of the  premises and the mutual
           agreements and covenants  hereinafter set forth, the Purchaser
           and the Seller hereby agree as follows:

1.       STOCK AND ASSET PURCHASE AGREEMENT

          Capitalized terms used herein and not otherwise defined shall have the
          meaning given to them in the Stock and Asset Purchase  Agreement
          dated May 11, 2000 between Spectra  Physics  Holdings USA, Inc.,
          Spectra  Precision AB and Spectra  Precision Europe Holdings BV,
          and Trimble  Acquisition  Corp.  (the "Stock and Asset  Purchase
          Agreement").  Subject to the terms and  conditions  contained in
          this Agreement and in the Stock and Asset Purchase Agreement (i)
          the Seller agrees to sell,  assign,  transfer and deliver to the
          Purchaser all of the

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          Seller's  right,  title and  interest in and to each of the SPAB
          Assets (as defined below), and Purchaser agrees to purchase such
          assets on the Closing Date and (ii)  Purchaser  agrees to assume
          the Assumed Liabilities (as defined below) on the Closing Date.

2.       ASSETS TO BE ACQUIRED

          At the Closing, the Seller hereby agrees to sell to the Purchaser, or
          to an  Affiliate  of  Purchaser  designated  by  Purchaser,  and  the
          Purchaser,  or such  Affiliate  designated by the  Purchaser,  hereby
          agrees to acquire  from the  Seller,  free and clear of  Encumbrances
          (other than (i) as  disclosed in Schedules  3.11,  3.12,  3.16(b) and
          3.19 of the Disclosure  Schedules and (ii)  Permitted  Encumbrances),
          the  following  assets and rights of the Seller used  exclusively  or
          primarily in the  Business  (hereinafter  jointly  referred to as the
          "SPAB Assets"):

           (a)      Fixed Assets

                    The  machinery,  vehicles and fixed assets of the Seller set
                    forth in Exhibit 2(a).

           (b)      Inventory etc.

                    All of the Seller's inventory,  work in progress, demo stock
                    and rental inventory set forth in Exhibit 2(b).

          (c)       Assets in Possession of Third Parties

                    All of the Seller's  tools and moduls that are in possession
                    of third  parties,  which tools and  moduls,  as well as the
                    third  parties in whose  possession  they are, are listed in
                    Exhibit 2(c).

           (d)      Contracts

                    All rights  and  benefits  of the Seller  under the sale and
                    purchase orders and the agreements set forth in Exhibit 2(d)
                    (hereinafter   jointly   referred   to   as   the   "Assumed
                    Contracts").

           (e)      Intellectual Property Rights

                     (i)    The Seller's entire right,  title and interest in
                            and to the patents and patent  applications  set
                            forth in Exhibit 2(e)(i) (the "Patents"),

                     (ii)   the Seller's entire right, title and interest in and
                            to the trademarks set forth in  Exhibit 2(e)(ii)
                            (the "Trademarks"),

                     (iii)  all  rights  and  obligations  of the  Seller
                            under the  license  agreements  attached  hereto  as
                            Exhibit  2(e)(iii),  (the "Licenses"); and

                     (iv)   all  rights  of  the  Seller  to  the  domain   name
                            www.spectraprecision.com,  and any other domain name
                            used in the  Business  and/or  owned by the  Seller,
                            other    than    those     containing    the    name
                            "spectraphysics."

                            (The Assets  referred  to in Article 2 (e)  (i)-(iv)
                            are jointly referred to as the "Intellectual
                            Property".)

           (f)      The Spectra Precision and the Geotronics Name

                    The Spectra  Precision and the Geotronics  names,  including
                    all rights to use such names as trademarks, company names or
                    otherwise, provided, however, that the Seller shall have the
                    right to use the Spectra  Precision  name as a company  name
                    and the  Geotronics  name as a secondary name for as long as
                    the Purchaser allows.

           (g)      Employees

                    The Purchaser  shall,  in accordance  with Section 6b of the
                    Employment    Protection   Act   (Sw.   lagen   1982:80   om
                    anstallningsskydd),  take over all  rights  and  obligations
                    relating to the employment  arrangements of all employees of
                    the Business (the "Employees") on the Closing Date, provided
                    that such  employees  do not  refuse to be  employed  by the
                    Purchaser. Exhibit 2(g)(1) contains a list of all Employees,
                    including correct information about their salaries, pensions
                    and all other  employment  benefits.  The parties agree that
                    Gunnar Linde, Niclas Axelsson, Andreas Naeslund, and Kenneth
                    Nilsson  (jointly  referred to as the "Exempted  Employees")
                    are not  Employees  and  that  the  rights  and  obligations
                    relating  to  the  employment  agreements  of  the  Exempted
                    Employees,  consequently,  shall  not be  taken  over by the
                    Purchaser.

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<PAGE>

                    All  costs  relating  to  Employees  who  have  not  refused
                    employment   with   the   Purchaser,    including,   without
                    limitation,  those costs  associated  with pension and other
                    employee welfare benefits, shall be assumed by the Purchaser
                    as from the Closing  Date.  The Seller shall  reimburse  the
                    Purchaser  with an  amount  corresponding  to the  aggregate
                    value  of  the  employment  benefits,   including,   without
                    limitation,  any and all earned pension benefits and holiday
                    pay relating to the  Employees,  attributable  to or accrued
                    prior to the Closing Date but not paid or  exercised,  which
                    the  employees  taken over by  Purchaser  are entitled to in
                    relation to the Purchaser.  The Seller agrees to transfer or
                    sell,  as the  case may be,  all  rights  it may  have  with
                    respect to non-disclosure agreements,  invention agreements,
                    non-compete  agreements and similar agreements in respect of
                    all Employees.

           (h)      Shares

                    All  participation,  interest,  shares, and other securities
                    convertible into,  exchangeable for and/or giving a right to
                    purchase shares, in

                   (i)      Spectra Precision Scandinavia AB, registered in
                            Sweden under number 556127-3680;

                   (ii)     Spectra Precision of Canada Ltd., registered in
                            Canada under number 1019 8605 7;

                   (iii)    Spectra Precision HGmbH, registered in Austria under
                            number FN 100 490f; and

                   (iv)     Spectra Precision SA, registered in France under
                            number RCS Evry B 78522 7422; together with

                   (v)      the Seller's four (4) shares,  and other  securities
                            convertible  into,  exchangeable  for and/or  giving
                            right  to   purchase   shares  in   terraSat   GmbH,
                            registered in Germany under number 97034.

                            (Such  companies  are  jointly  referred  to as  the
                            "Affiliated     Companies"    and    such    shares,
                            participation   and  other  securities  are  jointly
                            referred to as the "Shares")

           (i)      Know-how, Documentation, etc.

                    All know-how,  records and documents of the Seller needed to
                    conduct  or  relating  to the  Business,  including  without
                    limitation customer lists and sales records.

                    To the extent available,  the records and documents referred
                    to in the preceding  paragraph shall also be provided in the
                    form of electronic files.

           (j)      Regulatory Approvals

                    The regulatory approvals set forth in Exhibit 2(j).

           (k)      Receivables

                    All Receivables of the Business as of the Closing.

           (l)      Other Assets

                    The  transfer  shall also  include  all other  assets of the
                    Seller, including,  without limitation,  furniture, that are
                    used  exclusively  or primarily in the Business but have not
                    been specified herein or in the Exhibits hereto,  including,
                    without  limitation,  all goodwill primarily relating to and
                    any of the foregoing SPAB Assets,  the Assumed Contracts and
                    the Business,  as well as additional  assets which have been
                    supplied to the  Business  as of the date of this  agreement
                    until  the  Closing  Date or have  arisen as a result of the
                    ordinary course of the Business during the said period.

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<PAGE>

3.        LIABILITIES TO BE ASSUMED

           At the Closing,  the  Purchaser  hereby  agrees to assume all accrued
           wages and benefits,  trade  payables,  all other  liabilities  of the
           Business, known or unknown,  contingent or otherwise,  including, but
           not limited to warranty claims, and all accrued pension  liabilities,
           and  all  obligations  of the  Seller  under  the  Assumed  Contracts
           (hereinafter  referred to as the  "Assumed  Liabilities");  provided,
           however,  that the Purchaser does not agree to assume any liabilities
           or  obligations  of the Seller as  specified  in Section 2(g) of this
           Agreement.

4.        VALUE ADDED TAX AND OTHER TAXES

           The parties are of the opinion that the sale and purchase of the SPAB
           Assets  is  exempt  from any  value  added  tax (Sw.  mervardesskatt)
           ("VAT"), but to the extent any VAT or other tax is payable due to the
           sale and purchase of any of the Assets,  the Purchaser and the Seller
           shall each pay one half of such VAT or other tax.  The parties  shall
           co-operate  in taking all  reasonable  measures with a view to ensure
           that the sale and purchase of the SPAB Assets is exempt from VAT.

5.        CERTAIN COVENANTS

          (a)       The Assumed Contracts

               (i)  The  Purchaser  and the  Seller  shall  use  reasonable
                    efforts  to,  as  soon  as  possible,  obtain  any  consents
                    required for the assignment of the Assumed  Contracts to the
                    Purchaser pursuant to this Agreement.

               (ii) If the  counterparty  to any Assumed  Contract does not
                    give its consent to the  assignment  of any of the  Seller's
                    rights and obligations under such Assumed Contract, then the
                    Seller shall remain a party to such  Assumed  Contract,  but
                    all  rights  and  benefits  thereunder  shall  belong to the
                    Purchaser,  and the  Purchaser  shall perform and fulfil all
                    the  Seller's  obligations  thereunder.  Provided  that  the
                    Purchaser  performs  and fulfils all such  obligations,  the
                    Seller undertakes to transfer all payments, remuneration and
                    other  benefits  obtained by the Seller  under such  Assumed
                    Contracts to the Purchaser.

        (b)       Customer Claims

                    The  Purchaser  shall be  responsible  for and  rectify  all
                    claims from customers which relate to product complaints due
                    to services rendered or products delivered by the Seller.

        (c)       Manufacturers' Warranties

                    To the extent  permissible,  the Seller  will  assign to the
                    Purchaser all manufacturers'  warranties with respect to the
                    SPAB Assets.  The Seller will assist and co-operate with the
                    Purchaser in the enforcement of any such warranties, and, if
                    necessary,  will  authorize  the  filing  of  suits  against
                    persons  granting such  warranties  with respect to the SPAB
                    Assets to enforce such  warranties  in the Seller's name for
                    the use and benefit of the Purchaser.

        (d)        The Spectra Precision and Geotronics Names

                    The Seller undertakes to, upon the request of the Purchaser,
                    change its company  name so as to exclude the name  "Spectra
                    Precision" and  deregister the secondary name  "Geotronics."
                    Further,  the Seller  undertakes to, at the same time, grant
                    all consents and take all other  actions  necessary to allow
                    the Purchaser,  or an Affiliate designated by Purchaser,  to
                    register with the Swedish Patent and Registration  Office or
                    similar  authority  the  name  "Spectra  Precision  AB" as a
                    company name and the name "Geotronics" as a secondary name.

        (e)  Certain Transfers

                    The Seller  and the  Purchaser  undertake  to use their best
                    efforts,  prior  to the  Closing  Date,  to agree on how the
                    transfer  of (i) the  branch  offices in Dubai and Maila and
                    (ii) the shares in Tianjin  Geotronics  Instrument  Co. Ltd.
                    Shall be effectuated.

6.        MISCELLANEOUS

        (a)        Condition

                    The  consummation  of  the  transactions  pursuant  to  this
                    Agreement is subject to the satisfaction on the Closing Date
                    of the  Conditions  to Closing set forth in Article  VIII of
                    the Stock and Asset Purchase Agreement.

        (b)        Termination

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<PAGE>

                    Should the Stock and Asset Purchase Agreement  terminate for
                    whatever   reason,   this  Agreement   shall   automatically
                    terminate.

        (c)      Assignment

                    This  Agreement  may not be assigned by  operation of law or
                    otherwise  without the express written consent of the Seller
                    and the Purchaser  (which consent may be granted or withheld
                    in the sole  discretion  of the  Seller  or the  Purchaser);
                    provided,  however,  that  the  Purchaser  may  assign  this
                    Agreement and its rights hereunder,  in whole or in part, to
                    one  or  more  other  buyers  that  is an  Affiliate  of the
                    Purchaser.

        (d)        Entire Agreement

                    This  Agreement and the Stock and Asset  Purchase  Agreement
                    embody the entire  agreement and  understanding  between the
                    parties  with  respect  to the  subject  matter  hereof  and
                    supersedes all prior agreements and understandings.

        (e)        Applicable Law

                    This  Agreement  shall in all  respects  be  governed by and
                    construed in  accordance  with Swedish law as such law shall
                    from time to time be in force.

                                       54
<PAGE>

This  Agreement  may be executed in two (2) or more copies,  of which each party
has taken a copy.

Stockholm, Sweden, May ____, 2000

SPECTRA PRECISION AB                                 TRIMBLE ACQUISITION CORP.

by:/s/ Anders Rhodin                                 by: /s/ Steven W. Berglund
  ---------------------                                  ----------------------
       Anders Rhodin                                        Steven W. Berglund
title: President                                     title: President and CEO

by:/s/ Erik Asplund
   -------------------
       Erik Asplund
title: Board Member

                                       55
<PAGE>EXHIBIT 10.74
================================================================================
                                  $200,000,000

                                CREDIT AGREEMENT

                            Dated as of July 14, 2000

                                      among

                           TRIMBLE NAVIGATION LIMITED,
                                 as the Company,

                            the SUBSIDIARY BORROWERS,

                       THE INSTITUTIONS FROM TIME TO TIME

                           PARTIES HERETO AS LENDERS,

                               ABN AMRO BANK N.V.,
                     as Administrative Agent, Issuing Bank,

                              and Swing Line Bank,

                              FLEET NATIONAL BANK,
                              as Syndication Agent,

                                       and

                            THE BANK OF NOVA SCOTIA,
                             as Documentation Agent,

                                   Arranged By

                               ABN AMRO BANK N.V.,
                     as Lead Arranger and Sole Book Runner,

                                       and

                      FLEETBOSTON ROBERTSON STEPHENS INC.,
                                 as Co-Arranger

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

                                       56
<PAGE>

                                TABLE OF CONTENTS

Section                                                                    Page

ARTICLE I
:  DEFINITIONS    63

   1.1   Certain Defined Terms................................................63
   1.2   References...........................................................81
   1.3   Rounding and Other Consequential Changes.............................81

ARTICLE II
: LOAN FACILITIES.81

   2.1   Revolving Loans......................................................81
   2.2   Term Loans...........................................................82
   2.3   Swing Line Loans.....................................................82
   2.4   Rate Options for all Advances; Maximum Interest Periods..............83
   2.5   Optional Payments; Mandatory Prepayments.............................84
   2.6   Reductions in Commitments............................................85
   2.7   Method of Borrowing..................................................86
   2.8   Method of Selecting Types and Interest Periods for Advances..........86
   2.9   Minimum Amount of Each Advance.......................................86
   2.10  Method of Selecting Types and Interest Periods for Conversion
                and Continuation of Advances..................................86
   2.11  Default Rate.........................................................87
   2.12  Method of Payment....................................................87
   2.13  Evidence of Debt.....................................................88
   2.14  Telephonic Notices...................................................88
   2.15  Promise to Pay; Interest and Fees; Interest Payment Dates;
                Interest and Fee Basis; Taxes; Loan and Control Accounts......88
   2.16  Notification of Advances, Interest Rates, Prepayments and
                Aggregate Revolving Loan Commitment Reductions................92
   2.17  Lending Installations................................................92
   2.18  Non-Receipt of Funds by the Administrative Agent.....................92
   2.19  Termination Date.....................................................92
   2.20  Replacement of Certain Lenders.......................................92
   2.21  Alternate Currency Loans.............................................93
   2.22  Judgment Currency....................................................94
   2.23  Market Disruption; Denomination of Amounts in Dollars; Dollar
                Equivalent of Reimbursement Obligations.......................94
   2.24  Subsidiary Borrowers.................................................95
   2.25  Security.............................................................95

ARTICLE III
:  THE LETTER OF CREDIT FACILITY    95

   3.1   Obligation to Issue Letters of Credit................................95
   3.2   Transitional Provision...............................................96
   3.3   Types and Amounts....................................................96
   3.4   Conditions...........................................................96
   3.5   Procedure for Issuance of Letters of Credit..........................96
   3.6   Letter of Credit Participation.......................................96
   3.7   Reimbursement Obligation.............................................97
   3.8   Letter of Credit Fees................................................97
   3.9   Issuing Bank Reporting Requirements..................................98
   3.10  Indemnification; Exoneration.........................................98
   3.11  Cash Collateral......................................................98

ARTICLE IV
:  CHANGE IN CIRCUMSTANCES.99

                                       57
<PAGE>

   4.1   Yield Protection.....................................................99
   4.2   Changes in Capital Adequacy Regulations..............................99
   4.3   Availability of Types of Advances....................................99
   4.4   Funding Indemnification.............................................100
   4.5   Lender Statements; Survival of Indemnity............................100

ARTICLE V
:  CONDITIONS PRECEDENT....100

   5.1   Initial Advances and Letters of Credit..............................100
   5.2   Initial Advance to Each New Subsidiary Borrower.....................102
   5.3   Each Advance and Each Letter of Credit..............................102

ARTICLE VI
:  REPRESENTATIONS AND WARRANTIES   103

   6.1   Organization; Corporate Powers......................................103
   6.2   Authorization and Validity..........................................103
   6.3   No Conflict; Government Consent.....................................103
   6.4   Financial Statements................................................103
   6.5   Material Adverse Change.............................................103
   6.6   Taxes...............................................................103
   6.7   Litigation and Contingent Obligations...............................103
   6.8   Subsidiaries........................................................104
   6.9   ERISA...............................................................104
   6.10  Accuracy of Information.............................................104
   6.11  Regulation U........................................................104
   6.12  Material Agreements.................................................104
   6.13  Compliance With Laws................................................104
   6.14  Ownership of Properties.............................................105
   6.15  Statutory Indebtedness Restrictions.................................105
   6.16  Environmental Matters...............................................105
   6.17  Insurance...........................................................105
   6.18  Labor Matters.......................................................105
   6.19  Solvency............................................................105
   6.20  Default.............................................................105
   6.21  Foreign Employee Benefit Matters....................................105
   6.22  Acquisition Documents...............................................106
   6.23  Collateral Documents................................................106
   6.24  Security............................................................106
   6.25  Subordinated Seller Debt............................................106
   6.26  Subsidiaries........................................................106
   6.27  Representations and Warranties of each Subsidiary Borrower..........106

ARTICLE VII
:  COVENANTS      107

   7.1   Reporting...........................................................107
   7.2   Affirmative Covenants...............................................110
   7.3   Negative Covenants..................................................112
   7.4   Financial Covenants.................................................117

ARTICLE VIII
:  DEFAULTS.......118

   8.1   Defaults............................................................118

ARTICLE IX
:  ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND REMEDIES  119

   9.1   Termination of Revolving Loan Commitments; Acceleration.............119
   9.2   Amendments..........................................................119
   9.3   Preservation of Rights..............................................120

ARTICLE X
:  GUARANTY.......120

                                       58
<PAGE>

   10.1  Guaranty............................................................120
   10.2  Waivers.............................................................120
   10.3  Guaranty Absolute...................................................121
   10.4  Acceleration........................................................121
   10.5  Marshaling; Reinstatement...........................................121
   10.6  Subrogation.........................................................122
   10.7  Termination Date....................................................122

ARTICLE XI
:  GENERAL PROVISIONS......122

   11.1  Survival of Representations.........................................122
   11.2  Governmental Regulation.............................................122
   11.3  Headings............................................................122
   11.4  Entire Agreement....................................................122
   11.5  Several Obligations; Benefits of this Agreement.....................122
   11.6  Expenses; Indemnification...........................................122
   11.7  Numbers of Documents................................................123
   11.8  Accounting..........................................................123
   11.9  Severability of Provisions..........................................123
   11.10 Nonliability of Lenders.............................................123
   11.11 GOVERNING LAW.......................................................123
   11.12 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.............123
   11.13 Other Transactions..................................................124

ARTICLE XII
:  THE ADMINISTRATIVE AGENT         124

   12.1  Appointment; Nature of Relationship.................................124
   12.2  Powers..............................................................124
   12.3  General Immunity....................................................125
   12.4  No Responsibility for Loans, Creditworthiness, Recitals, Etc........125
   12.5  Action on Instructions of Lenders...................................125
   12.6  Employment of Agents and Counsel....................................125
   12.7  Reliance on Documents; Counsel......................................125
   12.8  The Administrative Agent's, Issuing Banks', Swing Line Bank's
                and Alternate Currency Banks' Reimbursement and
                Indemnification..............................................125
   12.9  Rights as a Lender..................................................126
   12.10 Lender Credit Decision..............................................126
   12.11 Successor Administrative Agent......................................126
   12.12 No Duties Imposed Upon Syndication Agent, Documentation
                Agent or Arrangers...........................................126
   12.13 Collateral Agent....................................................126

ARTICLE XIII
:  SETOFF; RATABLE PAYMENTS         126

   13.1  Setoff..............................................................126
   13.2  Ratable Payments....................................................127
   13.3  Application of Payments.............................................127
   13.4  Relations Among Lenders.............................................127

ARTICLE XIV
:  BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS 127

   14.1  Successors and Assigns..............................................127
   14.2  Participations......................................................127
   14.3  Assignments.........................................................128
   14.4  Confidentiality.....................................................129
   14.5  Dissemination of Information........................................129

ARTICLE XV
:  NOTICES        130

   15.1  Giving Notice.......................................................130
   15.2  Change of Address...................................................130
   15.3  Authority of Company................................................130

                                       59
<PAGE>

ARTICLE XVI
:  COUNTERPARTS   130

                                       60
<PAGE>

                             EXHIBITS AND SCHEDULES

                                    EXHIBITS

EXHIBIT A       --       Loan Commitments
                         (Definitions) [not submitted in filing]

EXHIBIT A-1     --       Eurocurrency Payment Offices [not submitted in filing]

EXHIBIT B       --       Form of Borrowing/Conversion/Continuation Notice
                         (Section 2.3 and Section 2.8 and Section 2.10) [not
                          submitted in filing]

EXHIBIT C       --       Form of Request for Letter of Credit (Section 3.4)
                         [not submitted in filing]

EXHIBIT D       --       Form of Assignment and Acceptance Agreement
                         (Sections 2.20 and 14.3) [not submitted in filing]

EXHIBIT E       --       Form of Officer's Certificate
                         (Section 7.1(a)(iii)) [not submitted in filing]

EXHIBIT F       --       Form of Compliance Certificate
                         (Section 7.1(a)(iii)) [not submitted in filing]

EXHIBIT G-1     --       Form of Guaranty
                         (Definitions) [not submitted in filing]

EXHIBIT G-2     --       Form of Subordination Agreement
                         (Definitions) [not submitted in filing]

EXHIBIT H       --       Form of Alternate Currency Addendum
                         (Definitions) [not submitted in filing]

EXHIBIT I-1A    --       Form of Tranche A Revolving Loan Note (If Requested)
                         [not submitted in filing]

EXHIBIT I-1B    --       Form of Tranche B Revolving Loan Note (If Requested)
                         [not submitted in filing]

EXHIBIT I-2     --       Form of Term Loan Note (If Requested) [not submitted
                         in filing]

EXHIBIT J       --       Form of Assumption Letter [not submitted in filing]

                                       61
<PAGE>

                                    SCHEDULES

Schedule 1.1.1  --       Permitted Existing Contingent Obligations (Definitions)
                         [not submitted in filing]

Schedule 1.1.2  --       Permitted Existing Indebtedness (Definitions)
                         [not submitted in filing]

Schedule 1.1.3  --       Permitted Existing Investments (Definitions)
                         [not submitted in filing]

Schedule 1.1.4  --       Permitted Existing Liens (Definitions) [not submitted
                         in filing]

Schedule 3.2    --       Transitional Letters of Credit (Section 3.2) [not
                         submitted in filing]

Schedule 6.8    --       Subsidiaries (Section 6.8) [not submitted in filing]

                                       62
<PAGE>

                                CREDIT AGREEMENT

     This  CREDIT  AGREEMENT  dated as of July 14,  2000 is entered  into by and
among, TRIMBLE NAVIGATION LIMITED, a California corporation (the "Company"), the
institutions  from time to time parties hereto as Lenders,  whether by execution
of this Agreement or an Assignment  Agreement pursuant to Section 14.3, ABN AMRO
BANK N.V. in its capacity as administrative agent (the  "Administrative  Agent")
for itself and the other Lenders,  and FLEET NATIONAL BANK, as Syndication Agent
(the "Syndication  Agent") and THE BANK OF NOVA SCOTIA,  as Documentation  Agent
(the "Documentation Agent").

R E C I T A L S:

     A. The Company is party to a certain Stock and Asset Purchase Agreement (as
hereinafter defined),  pursuant to which the Company is purchasing substantially
all of the  assets  and all of the  capital  stock  of the  Seller  and  certain
Subsidiaries  thereof and is modifying the  corporate  structure of the Seller's
European  holdings  for tax  planning  purposes  in a manner  acceptable  to the
Administrative  Agent and pursuant to which  Seller is becoming a Subsidiary  of
the Company (the "Spectra Precision Acquisition").

     B. The Company has requested the Lenders to make  financial  accommodations
to it in the aggregate  principal amount of $200,000,000,  the proceeds of which
the  Company  will use to (a)  partially  finance  the cash  payment  to be made
pursuant to the Stock and Asset Purchase Agreement,  (b) refinance approximately
$30,000,000  of existing  Indebtedness;  (c) pay fees and  expenses  incurred in
connection with the Spectra Precision  Acquisition;  and (d) provide for working
capital  and  other   general   corporate   purposes  of  the  Company  and  its
Subsidiaries.

     C. The Lenders are willing to extend such financial  accommodations  on the
terms and conditions set forth herein.

     NOW,  THEREFORE,  in consideration of the mutual covenants and undertakings
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrowers, the Lenders and the
Administrative Agent hereby agree as follows:

                                  : DEFINITIONS

     Certain  Defined  Terms.  In  addition  to the  terms  defined  above,  the
following  terms  used in this  Agreement  shall  have the  following  meanings,
applicable both to the singular and the plural forms of the terms defined.

     As used in this Agreement:

     "ABN"  means  ABN AMRO  Bank  N.V.,  in its  individual  capacity,  and its
successors.

     "Acquisition" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement,  by which the Company or any
of  its  Subsidiaries  (a)  acquires  any  going  business  concern  or  all  or
substantially  all of the assets of any firm,  corporation or division  thereof,
whether  through  purchase of assets,  merger or  otherwise  or (b)  directly or
indirectly  acquires (in one transaction or as the most recent  transaction in a
series  of  transactions)  at least a  majority  (in  number  of  votes)  of the
securities of a corporation which have ordinary voting power for the election of
directors  (other  than  securities  having  such  power  only by  reason of the
happening of a contingency) or a majority (by percentage of voting power) of the
outstanding equity interests of another Person.

     "Acquisition  Documents" means the Stock and Asset Purchase Agreement,  the
documents  evidencing  the  Subordinated  Seller  Debt and the other  documents,
certificates and agreements  delivered in connection with the Spectra  Precision
Acquisition.

     "Administrative  Agent" means ABN in its capacity as  administrative  agent
for itself and the  Lenders  pursuant  to Article  XII hereof and any  successor
Administrative Agent appointed pursuant to Article XII hereof.

     "Advance" means a borrowing hereunder consisting of the aggregate amount of
the  several  Loan(s)  made  by  some or all of the  Lenders  to the  applicable
Borrower of the same Type and, in the case of  Eurocurrency  Rate  Advances  and
Alternate Currency Loans, in the same currency and for the same Interest Period.

     "Affected Lender" is defined in Section 2.20 hereof.

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     "Affiliate"  of any Person  means any other Person  directly or  indirectly
controlling,  controlled by or under common  control with such Person.  A Person
shall be deemed to  control  another  Person  if the  controlling  Person is the
"beneficial  owner" (as defined in Rule 13d-3 under the Securities  Exchange Act
of 1934)  of  greater  than ten  percent  (10%) or more of any  class of  voting
securities (or other voting  interests) of the  controlled  Person or possesses,
directly  or  indirectly,  the power to direct  or cause  the  direction  of the
management or policies of the controlled  Person,  whether through  ownership of
Capital Stock, by contract or otherwise.

     "Aggregate  Commitment" means, as of any date of determination,  the sum of
(a)  the  Aggregate  Revolving  Loan  Commitment  as of  such  date  and (b) the
Aggregate Term Loan Commitment as of such date.

     "Aggregate   Revolving  Loan   Commitment"   means,   as  of  any  date  of
determination,  the sum of (a) the Aggregate Tranche A Revolving Loan Commitment
as of such date and (b) the Aggregate  Tranche B Revolving Loan Commitment as of
such date.

     "Aggregate Term Loan Commitment" means the aggregate of the Term Loan
Commitments of all the Lenders.  The initial  Aggregate Term Loan  Commitment is
One Hundred Million and 00/100 Dollars ($100,000,000.00).

     "Aggregate  Tranche A Revolving Loan Commitment" means the aggregate of the
Tranche A Revolving Loan Commitments of all the Lenders, as they may be adjusted
from time to time pursuant to the terms hereof.  The initial Aggregate Tranche A
Revolving Loan Commitment is Fifty Million and 00/100 Dollars ($50,000,000.00).

     "Aggregate  Tranche B Revolving Loan Commitment" means the aggregate of the
Tranche B Revolving Loan Commitments of all the Lenders, as they may be adjusted
from time to time pursuant to the terms hereof.  The initial Aggregate Tranche B
Revolving Loan Commitment is Fifty Million and 00/100 Dollars ($50,000,000.00).

     "Agreed Currencies" means (a) Dollars, (b) so long as such currency remains
an  Eligible  Currency,  euro,  and (c) any other  Eligible  Currency  which the
applicable  Borrower requests the  Administrative  Agent to include as an Agreed
Currency hereunder and which is agreed to by all of the Lenders with a Tranche B
Revolving Loan Commitment; provided that the Administrative Agent shall promptly
notify  each such  Lender of each such  request  and each such  Lender  shall be
deemed not to have  agreed to each such  request  unless  and until its  written
consent thereto has been received by the Administrative Agent.

     "Agreement" means this Credit Agreement, as it may be amended,  restated or
otherwise modified and in effect from time to time.

     "Agreement  Accounting  Principles"  means  generally  accepted  accounting
principles  as applied in a manner  consistent  with that used in preparing  the
financial statements of the Company referred to in Section 6.4 hereof; provided,
however,  that for the purposes of  determining  compliance  with the  financial
covenants  set forth in Section 7.4 hereof,  "Agreement  Accounting  Principles"
means generally  accepted  accounting  principles as in effect as of the date of
this Agreement.

     "Alternate  Base Rate" means,  for any day, a fluctuating  rate of interest
per annum equal to in the case of Loans in Dollars,  the higher of (a) the Prime
Rate for such day and (b) the sum of (i) the Federal  Funds  Effective  Rate for
such day and (ii) one half percent  (.50%) per annum and in the case of Loans in
other Eligible Currencies, the comparable rate for such other Eligible Currency,
as reasonably  determined by the Administrative  Agent or the Alternate Currency
Bank, as applicable.

     "Alternate  Currency"  shall  mean any  Eligible  Currency  which is not an
Agreed  Currency  and which the  applicable  Borrower  requests  the  applicable
Alternate  Currency Bank to include as an Alternate Currency hereunder and which
is  acceptable  to the  applicable  Alternate  Currency Bank and with respect to
which an Alternate Currency Addendum has been executed by a Subsidiary  Borrower
or the  Company  and  the  applicable  Alternate  Currency  Bank  in  connection
therewith.

     "Alternate  Currency Addendum" means an addendum  substantially in the form
of Exhibit H hereto with such modifications  thereto as shall be approved by the
applicable Alternate Currency Bank and the Administrative Agent.

     "Alternate  Currency  Bank" means ABN and any other Lender with a Tranche B
Revolving Loan  Commitment (or any Affiliate,  branch or agency  thereof) to the
extent it is party to an Alternate Currency Addendum as the "Alternate  Currency
Bank" thereunder.  If any agency,  branch or Affiliate of such Lender shall be a
party to an Alternate Currency Addendum, such agency, branch or Affiliate shall,
to the extent of any commitment  extended and any Loans made by it,

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have all the rights of such Lender hereunder;  provided, however, that such
Lender shall to the exclusion of such agency,  branch or Affiliate,  continue to
have all the voting rights vested in it by the terms hereof.

     "Alternate  Currency  Borrowing"  means any borrowing  consisting of a Loan
made in an Alternate Currency.

     "Alternate Currency  Commitment" means, for any Alternate Currency Bank for
each Alternate Currency,  the obligation of such Alternate Currency Bank to make
Alternate  Currency  Loans not  exceeding  the  Dollar  Amount  set forth in the
applicable Alternate Currency Addendum, as such amount may be modified from time
to time  pursuant to the terms of this  Agreement and the  applicable  Alternate
Currency Addendum.

     "Alternate Currency Interest Period" means, with respect to any
Alternate  Currency Loan, the Interest  Period as set forth in, or determined in
accordance with, the applicable Alternate Currency Addendum.

     "Alternate  Currency  Loan"  means  any Loan  denominated  in an  Alternate
Currency made by the applicable Alternate Currency Bank to a Subsidiary Borrower
or the Company pursuant to Section 2.21 and an Alternate Currency Addendum.

     "Alternate  Currency  Rate" means,  for any day for any Alternate  Currency
Loan, the per annum rate of interest  selected by the applicable  Borrower under
and as set forth in the applicable Alternate Currency Addendum.

     "Applicable   Commitment  Fee   Percentage"   means,  as  at  any  date  of
determination,  the rate per annum then applicable in the  determination  of the
amount payable under Section 2.15(c)(i) hereof determined in accordance with the
provisions of Section 2.15(d)(ii) hereof.

     "Applicable  Eurocurrency  Margin" means, as at any date of  determination,
the rate per annum then  applicable  to  Eurocurrency  Rate Loans  determined in
accordance with the provisions of Section 2.15(d)(ii) hereof.

     "Applicable  Floating Rate Margin" means, as at any date of  determination,
the rate per  annum  then  applicable  to  Floating  Rate  Loans  determined  in
accordance with the provisions of Section 2.15(d)(ii) hereof.

     "Applicable L/C Fee Percentage"  means, as at any date of determination,  a
rate per annum equal to the Applicable Eurocurrency Margin for Eurocurrency Rate
Loans in effect on such date.

     "Approved  Fund"  means,  with  respect  to any  Lender  that  is a fund or
commingled  investment  vehicle that invests in commercial loans, any other fund
that  invests  in  commercial  loans  and is  managed  or  advised  by the  same
investment advisor as such Lender or by an Affiliate of such investment advisor.

     "Approximate  Equivalent Amount" of any currency with respect to any amount
of Dollars  shall mean the  Equivalent  Amount of such  currency with respect to
such amount of Dollars at such date,  rounded up to the  nearest  amount of such
currency as determined by the Administrative Agent from time to time.

     "Arrangers"  means each of ABN, as Lead Arranger and Sole Book Runner,  and
FleetBoston  Robertson  Stephens  Inc.,  as  Co-Arranger,  in  their  respective
capacities as arrangers for the loan transaction evidenced by this Agreement.

     "Asset  Sale"  means,  with  respect  to  any  Person,   the  sale,  lease,
conveyance,  disposition  or other  transfer by such Person of any of its assets
(including by way of a sale-leaseback  transaction) to any Person other than the
Company or any of its Wholly-Owned Subsidiaries other than (a) the sale or lease
of  Inventory  in the  ordinary  course  of  business,  (b) the  sale  or  other
disposition of any obsolete,  excess,  damaged or worn-out Equipment disposed of
in the  ordinary  course of  business  and (c) the sale or  liquidation  of Cash
Equivalents,  (d)  dispositions  or  transfers  in the  nature of a  license  or
sublicense  of  intellectual  property,  other than  licenses that are exclusive
across  all  regions  and  fields  and (e) other  sales,  dispositions,  leases,
conveyances  or transfers in the ordinary  course of business,  consistent  with
past  practices;  provided  that sales,  dispositions,  leases,  conveyances  or
transfers  described in clauses (b), (d) and (e) shall only be excluded from the
definition  of Asset Sale to the extent that they do not exceed  $16,000,000  in
the fiscal year ending  December 29, 2000 and do not exceed  $10,000,000  in any
subsequent fiscal year.

     "Assignment Agreement" means an assignment and acceptance agreement entered
into in  connection  with an  assignment  pursuant  to  Section  14.3  hereof in
substantially the form of Exhibit D hereto.

     "Assumption Letter" means a letter of a Subsidiary of the Company addressed
to the Lenders in  substantially  the form of Exhibit J hereto pursuant to which
such Subsidiary agrees to become a Subsidiary Borrower and agrees to be bound by
the terms and conditions hereof.

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     "Authorized Officer" means any of the Chairman of the Board, the President,
the Treasurer, any Vice President or the Chief Financial Officer of the Company,
acting singly.

     "Benefit Plan" means a defined  benefit plan as defined in Section 3(35) of
ERISA (other than a Multiemployer  Plan or a Foreign  Employee Benefit Plan) and
in respect of which the Company or any other member of the Controlled  Group is,
or within the immediately  preceding six (6) years was, an "employer" as defined
in Section 3(5) of ERISA.

     "Borrower"  means,  as  applicable,  any of the Company and the  Subsidiary
Borrowers,   together  with  their  respective   successors  and  assigns;   and
"Borrowers" shall mean, collectively, the Company and the Subsidiary Borrowers.

     "Borrowing Date" means a date on which a Loan is made hereunder.

     "Borrowing/Conversion/Continuation Notice" is defined in Section 2.8
hereof.

     "Business  Day" means (a) with  respect to any  borrowing,  payment or rate
selection of Loans bearing interest at the Eurocurrency  Rate, a day (other than
a Saturday or Sunday) on which banks are open for business in Chicago, Illinois,
New York, New York and San Francisco,  California and (i) in addition, for Loans
denominated in Agreed Currencies (other than euro), on which dealings in Dollars
and  the  other  applicable  Agreed  Currencies  are  carried  on in the  London
interbank market and (ii) in addition,  for Loans  denominated in euro, on which
dealings in euro are carried on in Brussels,  Belgium interbank market,  and (b)
for all other  purposes a day (other  than a Saturday  or Sunday) on which banks
are  open  for  business  in  Chicago,  Illinois,  New  York,  New  York and San
Francisco, California.

     "Capital Expenditures" means, without duplication, any expenditures for any
purchase or other  acquisition of any asset which would be classified as a fixed
or  capital  asset  on a  consolidated  balance  sheet of the  Borrower  and its
Subsidiaries   prepared  in  accordance  with  Agreement  Accounting  Principles
excluding (a) the cost of assets acquired with  Capitalized  Lease  Obligations,
(b)  expenditures of insurance  proceeds to rebuild or replace any asset after a
casualty loss and (c) leasehold improvement  expenditures for which the Borrower
or a Subsidiary is reimbursed promptly by the lessor.

     "Capital  Stock" means (a) in the case of a corporation,  corporate  stock,
(b) in the  case of an  association  or  business  entity,  any and all  shares,
interests,  participations,  rights or other equivalents (however designated) of
corporate  stock,  (c) in  the  case  of a  partnership,  partnership  interests
(whether  general or limited) and (d) any other interest or  participation  that
confers on a Person the right to receive a share of the  profits  and losses of,
or  distributions  of assets of, the issuing  Person;  provided,  however,  that
"Capital  Stock" shall not include any debt securities  convertible  into equity
securities prior to such conversion.

     "Capitalized Lease" of a Person means any lease of property by such
Person as lessee which would be  capitalized  on a balance  sheet of such Person
prepared in accordance with Agreement Accounting Principles.

     "Capitalized  Lease  Obligations"  of a  Person  means  the  amount  of the
obligations of such Person under  Capitalized  Leases which would be capitalized
on a  balance  sheet  of such  Person  prepared  in  accordance  with  Agreement
Accounting Principles.

     "Cash  Equivalents"  means  (a)  marketable  direct  obligations  issued or
unconditionally  guaranteed by the government of the United States and backed by
the full faith and credit of the United  States  government;  (b)  domestic  and
Eurocurrency certificates of deposit and time deposits, bankers' acceptances and
floating rate  certificates  of deposit issued by any commercial  bank organized
under  the laws of the  United  States,  any  state  thereof,  the  District  of
Columbia,  any  foreign  bank,  or  its  branches  or  agencies,  the  long-term
indebtedness  of which  institution  at the time of  acquisition is rated A- (or
better)  by  Standard  & Poor's  Ratings  Group  or A3 (or  better)  by  Moody's
Investors  Services,  Inc., and which  certificates of deposit and time deposits
are fully protected  against currency  fluctuations for any such deposits with a
term of more than  ninety  (90)  days;  (c)  shares of money  market,  mutual or
similar funds having assets in excess of  $100,000,000  and the  investments  of
which are limited to (i) investment grade securities (i.e.,  securities rated at
least Baa by  Moody's  Investors  Service,  Inc.  or at least BBB by  Standard &
Poor's  Ratings  Group) and (ii)  commercial  paper of United States and foreign
banks and bank holding  companies and their  subsidiaries  and United States and
foreign finance,  commercial  industrial or utility companies which, at the time
of acquisition,  are rated A-1 (or better) by Standard & Poor's Ratings Group or
P-1 (or  better) by Moody's  Investors  Services,  Inc.  (all such  institutions
being,   "Qualified   Institutions");   (d)   commercial   paper  of   Qualified
Institutions;  provided that the maturities of such Cash  Equivalents  shall not
exceed three hundred sixty-five (365) days from the date of acquisition  thereof
and (e) other Investments properly classified as "cash" or "cash equivalents" in
accordance with Agreement Accounting  Principles and made in accordance with the
Company's  investment  policy,  as approved by the Company's  Board of Directors
from time to time.

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     "Change" is defined in Section 4.2 hereof.

     "Change of Control" means an event or series of events by which:

     any "person" or "group" (as such terms are used in Sections  13(d) and
     14(d) of the  Exchange  Act of 1934),  becomes the  "beneficial  owner" (as
     defined in Rules 13d-3 and 13d-5 under the Exchange  Act of 1934,  provided
     that a  person  shall  be  deemed  to have  "beneficial  ownership"  of all
     securities that such person has the right to acquire, whether such right is
     exercisable  immediately  or only after the  passage of time),  directly or
     indirectly,  of  twenty-five  percent (25%) or more of the combined  voting
     power of the  Company's  outstanding  Capital Stock  ordinarily  having the
     right to vote at an election of directors; or

     the majority of the board of directors of the Company fails to consist
     of Continuing Directors; or

     the Company  consolidates  with or merges into another  corporation or
     conveys,  transfers or leases all or  substantially  all of its property to
     any  Person,  or any  corporation  consolidates  with or  merges  into  the
     Company, in either event pursuant to a transaction in which the outstanding
     Capital Stock of the Company is  reclassified  or changed into or exchanged
     for cash, securities or other property.

     "Closing  Date"  means  the  date  upon  which  the  applicable  conditions
precedent  set forth in  Article V have been  satisfied  and the  initial  Loans
hereunder made, which shall be on or after July 14, 2000.

     "Code" means the Internal  Revenue  Code of 1986,  as amended,  reformed or
otherwise modified from time to time.

     "Collateral Agent" means the collateral agent for the Lenders, selected
pursuant to Section 12.13.

     "Collateral  Documents" means,  collectively,  (a) the Security Agreements,
the  Mortgages,  the  Pledge  Agreements  and  all  other  security  agreements,
mortgages, deeds of trust, patent and trademark assignments,  lease assignments,
guarantees  and other similar  agreements  between any Borrower or Guarantor and
the Lenders, the Administrative Agent or the Collateral Agent for the benefit of
the Lenders now or hereafter delivered to the Lenders,  the Administrative Agent
or the  Collateral  Agent  pursuant to or in  connection  with the  transactions
contemplated  hereby, and all financing  statements (or comparable documents now
or hereafter  fixed in accordance  with the UCC or  comparable  law) against any
Borrower or  Guarantor  as debtor in favor of the  Lenders,  the  Administrative
Agent or the  Collateral  Agentfor the benefit of the Lenders as secured  party,
and (b) any  amendments,  supplements,  modifications,  renewals,  replacements,
consolidations, substitutions and extensions of any of the foregoing.

     "Commission"  means the  Securities  and Exchange  Commission of the United
States of America and any Person succeeding to the functions thereof.

     "Commitment",  as to  each  Lender,  means  (a)  such  Lender's  Term  Loan
Commitment,  (b) such Lender's  Tranche A Revolving Loan Commitment and (c) such
Lender's Tranche B Revolving Loan Commitment.

     "Company"  means  Trimble  Navigation  Limited,  a California  corporation,
together with its successors and assigns,  including a  debtor-in-possession  on
behalf of the Company.

     "Consolidated  Net  Assets"  means the total  assets of the Company and its
Subsidiaries  on a consolidated  basis  (determined in accordance with Agreement
Accounting   Principles),   but  excluding  therefrom  all  goodwill  and  other
intangible assets under Agreement Accounting Principles.

     "Consolidated Net Worth" means, at a particular date, all amounts which
would be included under shareholders'  equity on the consolidated  balance sheet
for the Company and its consolidated Subsidiaries, in each case as determined in
accordance  with  Agreement  Accounting  Principles  but  excluding the effects,
whether positive or negative, of foreign exchange translation  adjustments after
the Closing Date.

     "Contaminant"  means  any  waste,  pollutant,  hazardous  substance,  toxic
substance,  hazardous  waste,  special  waste,  petroleum  or  petroleum-derived
substance  or  waste,  asbestos,  polychlorinated  biphenyls  ("PCBs"),  or  any
constituent of any such  substance or waste,  and includes but is not limited to
these terms as defined in Environmental, Health or Safety Requirements of Law.

     "Contingent  Obligation",  as applied to any Person,  means any Contractual
Obligation,  contingent  or  otherwise,  of  that  Person  with  respect  to any
Indebtedness of another or other obligation or liability of another,  including,
without

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limitation,  any such  Indebtedness,  obligation  or  liability  of another
directly or indirectly  guaranteed,  endorsed  (otherwise than for collection or
deposit in the ordinary course of business),  co-made or discounted or sold with
recourse  by that  Person,  or in  respect  of which  that  Person is  otherwise
directly or indirectly liable,  including Contractual Obligations (contingent or
otherwise) arising through any agreement to purchase,  repurchase,  or otherwise
acquire such Indebtedness,  obligation or liability or any security therefor, or
to provide  funds for the payment or discharge  thereof  (whether in the form of
loans,  advances,  stock purchases,  capital contributions or otherwise),  or to
maintain solvency,  assets, level of income, or other financial condition, or to
make  payment  other  than for value  received.  The  amount  of any  Contingent
Obligation  shall be equal to the portion of the  obligation  so  guaranteed  or
otherwise supported, in the case of known recurring obligations, and the maximum
reasonably  anticipated liability in respect of the portion of the obligation so
guaranteed  or otherwise  supported  assuming such Person is required to perform
thereunder, in all other cases.

     "Continuing  Director" means,  with respect to any Person as of any date of
determination, any member of the board of directors of such Person who (a) was a
member of such board of  directors on the date hereof or (b) was  nominated  for
election  or  elected  to such  board  of  directors  with the  approval  of the
Continuing  Directors  who  were  members  of  such  board  at the  time of such
nomination or election.

     "Contractual Obligation",  as applied to any Person, means any provision of
any equity or debt securities issued by that Person or any indenture,  mortgage,
deed  of  trust,  security  agreement,  pledge  agreement,  guaranty,  contract,
undertaking,  agreement  or  instrument,  in any case in writing,  to which that
Person is a party or by which it or any of its properties is bound,  or to which
it or any of its properties is subject.

     "Controlled  Group" means the group consisting of (a) any corporation which
is a member of the same controlled group of corporations  (within the meaning of
Section 414(b) of the Code) as the Company;  (b) a partnership or other trade or
business (whether or not incorporated) which is under common control (within the
meaning of Section 414(c) of the Code) with the Company; and (c) a member of the
same affiliated service group (within the meaning of Section 414(m) of the Code)
as the Company, in each case ((a), (b) or (c)) giving effect to the consummation
of the  transactions  contemplated  by the Loan  Documents  and the  Acquisition
Documents.

     "Customary Permitted Liens" means:

(a)      Liens (other than Environmental  Liens and Liens in favor of the IRS or
         the  PBGC)  with  respect  to the  payment  of  taxes,  assessments  or
         governmental  charges in all cases which are not yet due or (so long as
         foreclosure,  distraint,  sale or other similar  proceedings  shall not
         have been  commenced or any such  proceeding  after being  commenced is
         stayed)  which  are  being  contested  in  good  faith  by  appropriate
         proceedings  properly  instituted  and  diligently  conducted  and with
         respect to which adequate reserves or other appropriate  provisions are
         being maintained in accordance with Agreement Accounting Principles;

(b)      Statutory  Liens  of  landlords  and  Liens  of  suppliers,  mechanics,
         carriers, materialmen,  warehousemen,  service providers or workmen and
         other similar  Liens  imposed by law created in the ordinary  course of
         business  for  amounts  not more than sixty (60) days past due or which
         thereafter can be paid without  penalty or which are being contested in
         good  faith  by  appropriate   proceedings   properly   instituted  and
         diligently  conducted  and with respect to which  adequate  reserves or
         other  appropriate  provisions are being  maintained in accordance with
         Agreement Accounting Principles;

     (c)  Liens  arising  with  respect  to  zoning   restrictions,   easements,
     encroachments,  licenses, reservations,  covenants, rights-of-way,  utility
     easements, building restrictions and other similar charges, restrictions or
     encumbrances  on the  use  of  real  property  which  do  not  in any  case
     materially  detract  from the  value of the  property  subject  thereto  or
     materially  interfere  with  the  ordinary  use or  occupancy  of the  real
     property or with the ordinary conduct of the business of the Company or any
     of its Subsidiaries;

     (d) Liens  arising in the  ordinary  course of  business  out of pledges or
     deposits under worker's compensation laws, unemployment insurance,  old age
     pensions,  or other  social  security or  retirement  benefits,  or similar
     legislation;

     (e) Liens  arising from or upon any judgment or award,  provided  that such
     judgment  or award is  being  contested  in good  faith  by  proper  appeal
     proceedings and only so long as execution thereon shall be stayed;

     (f) Deposits to secure the performance of bids, trade contracts (other than
     for Indebtedness for borrowed money), leases, statutory obligations, surety
     bonds, performance bonds and other obligations of a like nature incurred in
     the ordinary course of the Company's or any Subsidiary's business;

                                       68
<PAGE>

     (g) Leases or subleases and licenses and  sublicenses  granted to others in
     the  ordinary  course of the  Company's  business  not  interfering  in any
     material  respect  with the  business of the  Company and its  Subsidiaries
     taken as a whole, and any interest or title of a lessor,  licensor or under
     any lease or license;

     (h) Liens in favor of customs and revenue  authorities  arising as a matter
     of law  to  secure  payment  of  customs  duties  in  connection  with  the
     importation of goods; and

                  (i)   Liens   that  are   subordinate   to  the  Lien  of  the
         Administrative Agent or Lenders which constitute rights of set-off of a
         customary  nature or bankers' liens with respect to amounts on deposit,
         whether arising by operation of law or by contract,  in connection with
         arrangements  entered  into  with  banks  in  the  ordinary  course  of
         business.

     "Default" means an event described in Article VIII hereof.

     "Disqualified  Stock"  means any class or  series of  capital  stock of any
Person that by its terms or otherwise:  (a) is required to be redeemed  prior to
the date  which is six  months  after  the  Facility  Termination  Date,  (b) is
redeemable  at the option of the holder of such class or series of capital stock
at any time prior to the date which is six months after the Facility Termination
Date; or (c) is convertible  into or exchangeable  or  exchangeable  for capital
stock  referred  to in  clause  (a) or (b) or  Indebtedness  having a  scheduled
maturity  prior to the date which is six months after the  Facility  Termination
Date.

     "Documentation  Agent"  means The Bank of Nova  Scotia,  in its capacity as
documentation  agent  for the  loan  transaction  evidenced  by this  Agreement,
together with its successors and assigns.

     "DOL" means the United States Department of Labor and any Person succeeding
to the functions thereof.

     "Dollar" and "$" means dollars in the lawful  currency of the United States
of America.

     "Dollar  Amount" of any  currency  at any date shall mean (a) the amount of
such  currency  if such  currency  is  Dollars or (b) the  Equivalent  Amount of
Dollars if such currency is any currency other than Dollars.

     "Domestic Subsidiary" means a Subsidiary of the Company organized under
the laws of a jurisdiction located in the United States of America.

     "EBITDA" means, for any period, on a consolidated basis for the Company and
its Subsidiaries,  the sum of the amounts for such period,  without duplication,
of (a) Net  Income,  plus (b) cash  Interest  Expense to the extent  deducted in
computing  Net Income,  plus (c) charges  against  income for foreign,  federal,
state and local taxes to the extent  deducted in computing Net Income,  plus (d)
depreciation  expense to the extent  deducted in computing Net Income,  plus (e)
amortization expense,  including,  without limitation,  amortization of goodwill
and other intangible assets to the extent deducted in computing Net Income, plus
(f) other extraordinary non-cash charges to the extent deducted in computing Net
Income,  minus (g) other  extraordinary  cash or non-cash  credits to the extent
added in  computing  Net  Income;  provided,  that the  Company  represents  and
warrants  that  EBITDA for the Company  and its  Subsidiaries  (giving pro forma
effect to the  Spectra  Precision  Acquisition)  for the fiscal  quarters  ended
September  30,  1999,  December  31,  1999 and  March 31,  2000 is  $14,900,000,
$13,600,000 and 16,300,000, respectively.

     "Eligible  Currency"  means any currency other than Dollars with respect to
which the Administrative  Agent or the applicable  Borrower has not given notice
in accordance with Section 2.23 and that is readily available, freely traded, in
which deposits are customarily  offered to banks in the London  interbank market
(or other market where the Administrative  Agent's or Alternate Currency Bank's,
as applicable,  foreign currency operations in respect of such currency are then
being conducted), convertible into Dollars in the international interbank market
available to the Lenders in such market and as to which an Equivalent Amount may
be readily calculated.  If, after the designation  pursuant to the terms of this
Agreement  of any  currency as an Agreed  Currency or  Alternate  Currency,  (a)
currency  control or other  exchange  regulations  are imposed in the country in
which such  currency  is issued  with the result  that  different  types of such
currency are introduced, such country's currency is, in the determination of the
Administrative Agent, no longer readily available or freely traded or (b) in the
determination  of the  Administrative  Agent,  an  Equivalent  Amount  for  such
currency is not readily calculable (each of clause (a) and (b), a "Disqualifying
Event"), then the Administrative Agent shall promptly notify the Lenders and the
Company,  and such country's  currency shall no longer be an Agreed  Currency or
Alternate  Currency  until  such time as the  Disqualifying  Event(s)  no longer
exist,  but in any event within five (5) Business Days of receipt of such notice
from the Administrative Agent, the applicable Borrowers shall repay all Loans in
such currency to which the Disqualifying Event

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<PAGE>

applies  or convert  such Loan into  Loans in  Dollars  or  another  Agreed
Currency or Alternate Currency, subject to the other terms contained in Articles
II and IV.

     "Environmental,   Health  or  Safety   Requirements   of  Law"   means  all
Requirements  of Law derived  from or relating  to foreign,  federal,  state and
local laws or regulations  relating to or addressing  pollution or protection of
the environment,  or protection of worker health or safety,  including,  but not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. ss. 9601 et seq., the Occupational Safety and Health Act of 1970,
29 U.S.C.  ss. 651 et seq.,  and the Resource  Conservation  and Recovery Act of
1976, 42 U.S.C. ss. 6901 et seq., in each case including any amendments thereto,
any successor statutes, and any regulations or guidance promulgated  thereunder,
and any state or local equivalent thereof.

     "Environmental  Lien" means a lien in favor of any  Governmental  Authority
for (a) any liability under Environmental, Health or Safety Requirements of Law,
or (b) damages arising from, or costs incurred by such Governmental Authority in
response  to,  a  Release  or  threatened  Release  of a  Contaminant  into  the
environment.

     "Equipment"  means all of the Company's and its  Subsidiaries'  present and
future (a) equipment, including, without limitation,  machinery,  manufacturing,
distribution,  selling, data processing and office equipment,  assembly systems,
tools, molds, dies,  fixtures,  appliances,  furniture,  furnishings,  vehicles,
vessels,  aircraft,  aircraft  engines,  and trade fixtures,  (b) other tangible
personal property (other than the Company's or its Subsidiaries' Inventory), and
(c) any and all  accessions,  parts  and  appurtenances  attached  to any of the
foregoing or used in connection  therewith,  and any substitutions  therefor and
replacements, products and proceeds thereof.

     "Equity  Interests" means Capital Stock and all warrants,  options or other
rights to  acquire  Capital  Stock  (but  excluding  any debt  security  that is
convertible into, or exchangeable for, Capital Stock).

     "Equivalent Amount" of any currency with respect to any amount of
Dollars at any date shall mean the equivalent in such currency of such amount of
Dollars, calculated on the basis of the arithmetic mean of the buy and sell spot
rates of exchange of the  Administrative  Agent or Alternate  Currency  Bank, as
applicable,   in  the  London  interbank  market  (or  other  market  where  the
Administrative  Agent's or Alternate  Currency  Bank's,  as applicable,  foreign
exchange  operations in respect of such currency are then being  conducted)  for
such other  currency at or about 11:00 a.m.  (local time) two (2) Business  Days
prior to the date on which such  amount is to be  determined,  rounded up to the
nearest  amount of such  currency  as  determined  by the  applicable  Alternate
Currency Bank from time to time; provided,  however,  that if at the time of any
such  determination,  for any  reason,  no such spot rate is being  quoted,  the
Administrative  Agent or Alternate  Currency  Bank, as  applicable,  may use any
reasonable  method it deems  appropriate  to  determine  such  amount,  and such
determination shall be conclusive absent manifest error.

     "ERISA"  means the Employee  Retirement  Income  Security  Act of 1974,  as
amended from time to time including (unless the context otherwise  requires) any
rules or regulations promulgated thereunder.

     "euro"  means  the euro  referred  to in the  Council  Regulation  (EC) No.
1103/97 dated 17 June 1997 passed by the Council of the European  Union,  or, if
different,  the then lawful  currency of the member states of the European Union
that participate in the third stage of the Economic and Monetary Union.

     "Eurocurrency  Base Rate" means,  with respect to a Eurocurrency  Rate Loan
for any specified  Interest Period,  (a) for any  Eurocurrency  Rate Loan in any
Agreed Currency other than euro, either (i) the rate of interest per annum equal
to the rate for deposits in the applicable  Agreed  Currency in the  approximate
amount of the Pro Rata Tranche A Revolving  Share,  Pro Rata Tranche B Revolving
Share or Pro Rata Term Share, as applicable, of the Administrative Agent of such
Eurocurrency Rate Advance with a maturity  approximately  equal to such Interest
Period which appears on Telerate Page 3740 or Telerate Page 3750, as applicable,
or, if there is more than one such rate,  the  average of such rates  rounded to
the nearest  1/100 of 1%, as of 11:00 a.m.  (London  time) two (2) Business Days
prior  to the  first  day of such  Interest  Period  or (ii) if no such  rate of
interest appears on Telerate Page 3740 or Telerate Page 3750, as applicable, for
any specified  Interest  Period,  the rate at which  deposits in the  applicable
Agreed Currency are offered by the Administrative  Agent to first-class banks in
the London interbank  market at  approximately  11:00 a.m. (London time) two (2)
Business Days prior to the first day of such Interest Period, in the approximate
amount of the Pro Rata Tranche A Revolving  Share,  Pro Rata Tranche B Revolving
Share or Pro Rata Term Share, as applicable, of the Administrative Agent of such
Eurocurrency  Rate  Loan  and  having  a  maturity  approximately  equal to such
Interest Period;  and (b) with respect to any Eurocurrency Rate Loan in euro for
any Interest Period, the interest rate per annum equal to the rate determined by
the  Administrative  Agent to be the rate at which  deposits  in euro  appear on
Telerate Page 248 as of 11:00 a.m.  (Brussels time), on the date that is two (2)
TARGET  Settlement  Days  preceding  the  first  day of  such  Interest  Period;
provided,  that if such rate  does not  appear on  Telerate  Page 248,  then the
Eurocurrency  Base  Rate  shall  be an  interest  rate  per  annum  equal to the
arithmetic mean determined by the  Administrative  Agent (rounded upwards to the
nearest  .01%) of the rates per annum at which  deposits  in euro are offered

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<PAGE>

by the three (3)  leading  banks in the  euro-zone  interbank  market on or
about 11:00 a.m. (Brussels time), on the date which is two (2) TARGET Settlement
Days prior to the first day of such  Interest  Period to other  leading banks in
the euro-zone  interbank market. The terms "Telerate Page 3740",  "Telerate Page
3750" and "Telerate Page 248" mean the display  designated as "Page 3740", "Page
3750" and "Page 248", as applicable,  on the Associated Press-Dow Jones Telerate
Service (or such other page as may replace Page 3740,  Page 3750 or Page 248, as
applicable,  on the Associated  Press-Dow  Jones Telerate  Service or such other
service  as  may  be  nominated  by  the  British  Bankers'  Association  as the
information  vendor for the purpose of displaying  British Bankers'  Association
interest rate settlement rates for the relevant Agreed Currency).

     "Eurocurrency  Payment Office" of the Administrative  Agent shall mean, for
each  of  the  Agreed  Currencies,  any  agency,  branch  or  Affiliate  of  the
Administrative  Agent,  specified as the "Eurocurrency  Payment Office" for such
Agreed Currency in Exhibit A-1 hereto or such other agency, branch, Affiliate or
correspondence  bank of the  Administrative  Agent,  as it may from time to time
specify to the applicable  Borrowers and each Lender as its Eurocurrency Payment
Office.

     "Eurocurrency Rate" means, with respect to a Eurocurrency Rate Loan for the
relevant  Interest  Period,  the sum of (a) the quotient of (i) the Eurocurrency
Base Rate  applicable  to such  Interest  Period  divided  by (ii) one minus the
Reserve Requirement plus (b) the then Applicable  Eurocurrency Margin,  changing
as and when the Applicable Eurocurrency Margin changes.

     "Eurocurrency  Rate Advance"  means an Advance which bears  interest at the
Eurocurrency Rate.

     "Eurocurrency  Rate Loan" means a Loan made by a Lender pursuant to Section
2.1, which bears interest at the Eurocurrency Rate.

     "Excess  Cash  Flow"  means,  for  any  period,  for  the  Company  and its
Subsidiaries on a consolidated  basis, (a) the sum of (i) Net Income,  plus (ii)
amortization,  depreciation and other non-cash charges, minus (b) the sum of (i)
Capital  Expenditures,  plus (ii)  principal  payments made on all  Indebtedness
(exclusive  of  mandatory  prepayments  made for Excess  Cash Flow  during  such
period), and minus (c) the increase (or plus the decrease,  as the case may be),
as of the last day of a fiscal  year  from the last day of the  previous  fiscal
year in the excess of Current Assets over Current  Liabilities.  For purposes of
this definition, "Current Assets" means all accounts receivable and Inventory of
the  Company and its  Subsidiaries,  calculated  in  accordance  with  Agreement
Accounting  Principles,  excluding  cash  and  Cash  Equivalents  and  excluding
Accounts due from Affiliates and "Current  Liabilities" means all liabilities of
the Company and its  Subsidiaries  which should,  in accordance  with  Agreement
Accounting  Principles,  be classified as current liabilities,  and in any event
shall  include  all  Indebtedness  payable on demand or within one year from the
date of determination without any option on the part of the obligor to extend or
renew  beyond  such year,  all  accruals  for federal or other taxes based on or
measured by income and  payable  within  such year,  and the current  portion of
long-term  Indebtedness  required  to be paid  within  one year  (excluding  the
Revolving Credit Obligations).

     "Facility Termination Date" is defined in Section 2.19.

     "Federal  Funds  Effective  Rate" means,  for any day, an interest rate per
annum equal to the  weighted  average of the rates on  overnight  Federal  funds
transactions  with  members of the Federal  Reserve  System  arranged by Federal
funds  brokers on such day, as published  for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York,  or, if such rate is not so  published  for any day which is a
Business  Day, the average of the  quotations at  approximately  11:00 a.m. (New
York time) on such day on such transactions received by the Administrative Agent
from  three  Federal  funds  brokers  of  recognized  standing  selected  by the
Administrative Agent in its sole discretion.

     "Fee Letter"  means that certain fee letter,  dated as of May 15, 2000,  by
and between the Company and the Administrative Agent.

     "Fixed Charge Coverage Ratio" means, as of any date of  determination,  the
ratio of (a)  EBITDA to (b) Fixed  Charges  in each case for the  period of four
fiscal quarters ending on such date.

     "Fixed Charges" means,  with respect to the Company and its Subsidiaries on
a  consolidated  basis,  as of any  date of  determination,  (a)  cash  interest
expenses paid on outstanding Indebtedness for the period of four fiscal quarters
ending on the date of determination,  plus (b) scheduled  principal  payments on
Indebtedness  (other than the Subordinated Seller Note) made during such period,
plus (c) dividends paid on stock, plus (d) Capital Expenditures made during such
period.

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<PAGE>

     "Fixed-Rate   Advance"  means  an  Advance  which  bears  interest  at  the
Eurocurrency Rate or at a fixed Alternate Currency Rate.

     "Fixed-Rate Loans" means, collectively, the Eurocurrency Rate Loans and the
Alternate Currency Loans.

     "Floating Rate" means,  for any day for any Loan, a rate per annum equal to
(a) in the case of Loans in  Dollars,  the  Alternate  Base  Rate for such  day,
changing when and as the Alternate Base Rate changes,  plus the then  Applicable
Floating Rate Margin,  and (b) in the case of Alternate Currency Loans, the rate
specified as such in the applicable Alternate Currency Addendum.

     "Floating  Rate  Advance"  means an Advance  which  bears  interest  at the
Floating Rate.

     "Floating Rate Loan" means a Loan, or portion thereof, which bears interest
at the Floating Rate.

     "Foreign  Employee Benefit Plan" means any employee benefit plan as defined
in Section 3(3) of ERISA which is maintained or  contributed  to for the benefit
of the employees of the Company,  any of its  Subsidiaries or any members of its
Controlled Group and is not covered by ERISA pursuant to ERISA Section 4(b)(4).

     "Foreign  Subsidiary"  means a  Subsidiary  of the  Company  which is not a
Domestic Subsidiary.

     "Foreign  Pension  Plan" means any  employee  benefit  plan as described in
Section 3(3) of ERISA which (a) is maintained or  contributed to for the benefit
of  employees  of the  Company,  any of its  Subsidiaries  or any  member of its
Controlled  Group,  (b) is not covered by ERISA  pursuant to Section  4(b)(4) of
ERISA,  and (c) under  applicable  local law, is required to be funded through a
trust or other funding vehicle.

     "Governmental Acts" is defined in Section 3.10(a) hereof.

     "Governmental  Authority"  means any  nation or  government,  any  federal,
state,  local or other political  subdivision  thereof and any entity exercising
executive,  legislative,  judicial,  regulatory or  administrative  authority or
functions of or  pertaining  to  government,  including  any  authority or other
quasi-governmental entity established to perform any of such functions.

     "Guaranteed Obligations" is defined in Section 10.1 hereof.

     "Guarantor" means each Domestic Subsidiary of the Company that from time to
time is party to a Guaranty.

     "Guaranty"  means  each  of (a)  that  certain  Guaranty  (and  any and all
supplements thereto) executed from time to time by each Subsidiary Borrower that
is a Domestic  Subsidiary and each other  Domestic  Subsidiary of the Company as
required pursuant to Section 7.2(k) in favor of the Administrative Agent for the
benefit of itself and the Holders of Obligations,  in substantially  the form of
Exhibit G-1 attached  hereto,  and (b) the guaranty by the Company of all of the
Obligations  of the  Subsidiary  Borrowers  pursuant to this  Agreement  and the
Alternate Currency Addenda, in each case as amended,  restated,  supplemented or
otherwise modified from time to time.

     "Hedging Agreements" is defined in Section 7.3(o) hereof.

     "Hedging  Obligations"  of a Person means any and all  obligations  of such
Person,  whether  absolute or contingent and howsoever and  whensoever  created,
arising,   evidenced  or  acquired  (including  all  renewals,   extensions  and
modifications  thereof  and  substitutions  therefor),  under  (a)  any  and all
agreements,  devices  or  arrangements  designed  to protect at least one of the
parties  thereto from the  fluctuations  of interest  rates,  commodity  prices,
exchange rates or forward rates  applicable to such party's assets,  liabilities
or exchange transactions,  including, but not limited to,  dollar-denominated or
cross-currency  interest rate exchange  agreements,  forward  currency  exchange
agreements,  interest  rate cap or collar  protection  agreements,  forward rate
currency  or  interest  rate  options,  puts and  warrants,  and (b) any and all
cancellations,  buy backs, reversals,  terminations or assignments of any of the
foregoing.

     "Holders of Obligations"  means the holders of the Obligations from time to
time and shall include (a) each Lender in respect of its Loans, (b) each Issuing
Bank in respect of Reimbursement  Obligations owed to it, (c) the Administrative
Agent,  the Lenders and the  Issuing  Banks in respect of all other  present and
future  obligations and liabilities of the Company or any of its Subsidiaries of
every type and description arising under or in connection with this Agreement or
any other Loan Document,  (d) each  Indemnitee in respect of the obligations and
liabilities of the Company or any of its  Subsidiaries to such Person  hereunder
or  under  the  other  Loan  Documents,  and (e)  their  respective  successors,
transferees and assigns.

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<PAGE>

     "Indebtedness" of a Person means,  without  duplication,  such Person's (a)
obligations  for  borrowed  money,  (b)  obligations  representing  the deferred
purchase price of property or services  (other than accounts  payable arising in
the ordinary course of such person's  business payable on terms customary in the
trade), (c) obligations,  whether or not assumed, secured by Liens on or payable
out of the  proceeds or  production  from  property  now or  hereafter  owned or
acquired  by  such  Person,  (d)  obligations  which  are  evidenced  by  notes,
acceptances,  or other similar  instruments,  (e) Capitalized Lease Obligations,
(f) Hedging Obligations,  (g) Contingent Obligations,  (h) actual and contingent
reimbursement  obligations in respect of letters of credit,  and (i) the implied
debt  component of synthetic  leases of which such Person is lessee or any other
off-balance sheet financing  arrangements  (including,  without limitation,  any
such arrangements  giving rise to any Off-Balance Sheet  Liabilities);  provided
that the term  "Indebtedness"  shall not  include  any (a)  accrued or  deferred
interest or other  expenses,  unless  capitalized  in accordance  with Agreement
Accounting Principles, or (b) lease properly classified as an operating lease in
accordance  with  Agreement  Accounting  Principles.  The  amount of any item of
Indebtedness, except for any item of Indebtedness described in clause (h), shall
be the amount of any liability in respect  thereof  appearing on a balance sheet
properly  prepared in accordance with Agreement  Accounting  Principles,  except
that the  amount of any item of  Indebtedness  described  in clause (g) shall be
determined in accordance  with the definition of Contingent  Obligations and the
amount of any item of  Indebtedness  described  in clause (i) above shall be the
"principal-equivalent" amount of such obligation.

     "Interest Expense" means, for any period, the total interest expense of the
Company and its consolidated  Subsidiaries,  whether paid or accrued  (including
the  interest  component of  Capitalized  Leases,  commitment  fees and fees for
stand-by  letters of credit),  all as determined in  conformity  with  Agreement
Accounting Principles.

     "Interest  Period" means (a) with respect to Alternate  Currency Loans, any
Alternate  Currency  Interest Period and (b) with respect to a Eurocurrency Rate
Loan,  a period of one (1),  two (2),  three (3) or six (6) months or,  with the
consent of all of the  Lenders,  nine (9) months,  commencing  on a Business Day
selected by the applicable Borrower on which a Eurocurrency Rate Advance is made
to such Borrower  pursuant to this Agreement.  Such Interest Period described in
clause  (b)  above  shall  end  on  (but  exclude)  the  day  which  corresponds
numerically  to such  date  one,  two,  three,  six or nine  months  thereafter;
provided,  however,  that if there is no such numerically  corresponding  day in
such next,  second,  third or sixth succeeding month, such Interest Period shall
end on the last  Business Day of such next,  second,  third or sixth  succeeding
month.  If an  Interest  Period  would  otherwise  end on a day  which  is not a
Business  Day, such Interest  Period shall end on the next  succeeding  Business
Day, provided, however, that if said next succeeding Business Day falls in a new
calendar  month,  such Interest  Period shall end on the  immediately  preceding
Business Day.

     "Inventory" shall mean any and all goods,  including,  without  limitation,
goods in transit,  wheresoever located,  whether now owned or hereafter acquired
by the Company or any of its  Subsidiaries,  which are held for sale,  rental or
lease, furnished under any contract of service or held as raw materials, work in
process or supplies,  and all materials  used or consumed in the business of the
Company or any of its  Subsidiaries,  and shall  include  all  right,  title and
interest of the Company or any of its  Subsidiaries  in any property the sale or
other  disposition  of which has given  rise to  Receivables  and which has been
returned  to or  repossessed  or stopped in transit by the Company or any of its
Subsidiaries.

     "Investment"  means, with respect to any Person,  (a) any purchase or other
acquisition  by that  Person  of any  Indebtedness,  Equity  Interests  or other
securities, or of a beneficial interest in any Indebtedness, Equity Interests or
other securities, issued by any other Person, (b) any purchase by that Person of
all or  substantially  all of the assets of a business  (whether  of a division,
branch, unit operation,  or otherwise)  conducted by another Person, and (c) any
loan,  advance  (other than deposits with financial  institutions  available for
withdrawal  on  demand,  prepaid  expenses,  accounts  receivable,  advances  to
employees and similar items made or incurred in the ordinary course of business)
or  capital  contribution  by that  Person to any other  Person,  including  all
Indebtedness to such Person arising from a sale of property by such Person other
than in the ordinary course of its business.

     "IRS" means the Internal  Revenue Service and any Person  succeeding to the
functions thereof.

     "Issuing  Banks" means ABN, Fleet National Bank, The Bank of Nova Scotia or
any of their  respective  Affiliates  in its  separate  capacity as an issuer of
Letters of Credit  pursuant to Section 3.1 and ABN or Fleet National Bank in its
separate capacity as an issuer of Letters of Credit pursuant to Section 3.2.

     "L/C Documents" is defined in Section 3.4 hereof.

     "L/C Draft" means a draft drawn on an Issuing Bank  pursuant to a Letter of
Credit.

     "L/C Interest" shall have the meaning  ascribed to such term in Section 3.6
hereof.

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<PAGE>

     "L/C Obligations" means, without duplication, an amount equal to the
sum of (a) the  aggregate  amount then  available  for drawing under each of the
Letters  of  Credit,   (b)  the  face  amount  of  all  outstanding  L/C  Drafts
corresponding  to the Letters of Credit,  which L/C Drafts have been accepted by
the  applicable  Issuing  Bank,  (c) the  aggregate  outstanding  amount  of all
Reimbursement Obligations at such time and (d) the aggregate amount equal to the
face  amount of all Letters of Credit  requested  by the  Borrowers  but not yet
issued (unless the request for an unissued Letter of Credit has been denied).

     "Lenders" means the lending  institutions  listed on the signature pages of
this Agreement, and their successors and assigns.

     "Lending   Installation"   means,   with   respect   to  a  Lender  or  the
Administrative Agent, any office, branch, subsidiary or Affiliate of such Lender
or the Administrative Agent.

     "Letter of Credit" means standby  letters of credit to be (a) issued by the
Issuing Banks pursuant to Section 3.1 hereof or (b) deemed issued by the Issuing
Banks pursuant to Section 3.2 hereof.

     "Leverage Ratio" means, as of any date of  determination,  the ratio of (a)
Total Indebtedness (not including the Seller  Subordinated Debt) on such date of
determination  to (b) EBITDA for the most  recently  ended period of four fiscal
quarters (including any fiscal quarters ending on the date of determination.)

     "Lien"   means  any  lien   (statutory   or   other),   mortgage,   pledge,
hypothecation,  assignment,  deposit  arrangement,  encumbrance  or  preference,
priority  or security  agreement  of any kind or nature  whatsoever  (including,
without  limitation,  the interest of a vendor or lessor  under any  conditional
sale, Capitalized Lease or other title retention agreement); provided that in no
event shall the lessor's  interest  under any lease  properly  classified  as an
operating lease in accordance with Agreed Accounting  Principles be a "Lien" for
purposes of this definition.

     "Loan(s)"  means,  (a) in the case of any Lender,  such Lender's portion of
any Advance made  pursuant to Section 2.1 hereof,  in the case of any  Alternate
Currency Bank,  any Alternate  Currency Loan made by it pursuant to Section 2.21
and the applicable  Alternate  Currency  Addendum,  and in the case of the Swing
Line Bank,  any Swing Line Loan made by it  pursuant  to  Section  2.3,  and (b)
collectively,  all Revolving Loans,  Term Loans,  Alternate  Currency Loans, and
Swing Line Loans.

     "Loan Account" is defined in Section 2.13(a) hereof.

     "Loan Documents"  means this Agreement,  each Alternate  Currency  Addendum
executed hereunder,  each Assumption Letter executed  hereunder,  the Collateral
Documents,  the Guaranty,  the Subordination  Agreement,  the Fee Letter and all
other  documents,  instruments,  notes and  agreements  executed  in  connection
therewith  or  contemplated  thereby,  as the same may be  amended,  restated or
otherwise modified and in effect from time to time.

     "Loan Parties" means each of the Company, each Subsidiary Borrower and each
of the Guarantors.

     "Margin  Stock" shall have the meaning  ascribed to such term in Regulation
U.

     "Material  Adverse  Effect"  means a material  adverse  effect upon (a) the
business,   condition   (financial  or  otherwise),   operations,   performance,
properties  or  prospects  of the Company or the  Company and its  Subsidiaries,
taken as a whole,  (b) the ability of the Company or any of its  Subsidiaries to
perform  their  respective  obligations  under  the Loan  Documents,  or (c) the
ability of the Lenders or the Administrative Agent to enforce the Obligations.

     "Mortgages"  means  one  or  more  deeds  of  trust,  mortgages,  leasehold
mortgages,  assignments of rents or similar documents,  satisfactory in form and
substance to the Administrative Agent, executed and delivered by the Company and
its Domestic  Subsidiaries  pursuant to or in connection  with the  transactions
contemplated  hereby,  as the same may be  amended,  supplemented  or  otherwise
modified from time to time.

     "Multiemployer  Plan"  means a  "Multiemployer  Plan" as defined in Section
4001(a)(3) of ERISA which is, or within the immediately  preceding six (6) years
was, or was required to be,  contributed  to by either the Company or any member
of the Controlled Group.

     "National  Currency Unit" means the unit of currency (other than a euro) of
each member state of the European Union that  participates in the third stage of
Economic and Monetary Union.

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<PAGE>

     "Net Income" means, for any period, the net income (or loss) after taxes of
the Company and its  Subsidiaries on a consolidated  basis for such period taken
as a single accounting period determined in conformity with Agreement Accounting
Principles.

     "Net Proceeds" means (a) with respect to any Asset Sale, the sum of cash or
readily  marketable  cash  equivalents  received  (including  by  way  of a cash
generating sale or discounting of a note or receivable,  but excluding any other
consideration received in the form of assumption by the acquiring Person of debt
or other  obligations  relating  to the  properties  or assets so disposed of or
received  in any other  non-cash  form)  therefrom,  whether at the time of such
disposition or subsequent  thereto,  or (b) with respect to any sale or issuance
of any debt or equity  securities  of any Borrower,  cash or readily  marketable
cash  equivalents  received (but excluding any other  non-cash form)  therefrom,
whether at the time of such disposition, sale or issuance or subsequent thereto,
net, in either case, of all legal, title and recording tax expenses, commissions
and other fees and all costs and expenses incurred and all federal, state, local
and other taxes  required to be paid or accrued as a liability as a  consequence
of such transactions.

     "Notice of Assignment" is defined in Section 14.3(b) hereof.

     "Obligations"   means  all  Loans,   L/C  Obligations,   advances,   debts,
liabilities,  obligations, covenants and duties owing by the Borrowers or any of
their Subsidiaries to the Administrative Agent, any Lender, the Swing Line Bank,
any  Arranger,  any  Affiliate of the  Administrative  Agent or any Lender,  any
Issuing  Bank or any  Indemnitee,  of any kind or  nature,  present  or  future,
arising under this Agreement, the L/C Documents, any Alternate Currency Addendum
or any other Loan  Document,  whether or not evidenced by any note,  guaranty or
other  instrument,  whether or not for the payment of money,  whether arising by
reason of an extension of credit,  loan,  guaranty,  indemnification,  or in any
other  manner,   whether  direct  or  indirect   (including  those  acquired  by
assignment),  absolute  or  contingent,  due or to become due,  now  existing or
hereafter arising and however acquired.  The term includes,  without limitation,
all  interest,   charges,   expenses,   fees,  reasonable  attorneys'  fees  and
disbursements,  reasonable  paralegals'  fees  (in  each  case  whether  or  not
allowed), and any other sum chargeable to the Company or any of its Subsidiaries
under this Agreement or any other Loan Document.

     "Obligor" is defined in Section 10.1 hereof.

     "Off-Balance Sheet Liabilities" of a Person means (i) any repurchase
obligation or liability of such Person or any of its  Subsidiaries  with respect
to  Receivables  sold  by  such  Person  or any of its  Subsidiaries,  (ii)  any
liability of such Person or any of its Subsidiaries under any sale and leaseback
transactions  which do not create a liability on the consolidated  balance sheet
of such Person,  (iii) any  liability of such Person or any of its  Subsidiaries
under any financing lease or so-called  "synthetic" lease  transaction,  or (iv)
any obligations of such Person or any of its  Subsidiaries  arising with respect
to any other  transaction  which is the  functional  equivalent  of or takes the
place of borrowing but which does not constitute a liability on the consolidated
balance sheets of such Person and its Subsidiaries.

     "Other Taxes" is defined in Section 2.15(e)(ii) hereof.

     "Participants" is defined in Section 14.2(a) hereof.

     "Payment  Date"  means  the last day of each  March,  June,  September  and
December,  the date on which the  Aggregate  Commitment  shall  terminate  or be
cancelled, and the Facility Termination Date.

     "PBGC" means the Pension  Benefit  Guaranty  Corporation,  or any successor
thereto.

     "Permitted Acquisition" is defined in Section 7.3(f) hereof.

     "Permitted   Existing   Contingent   Obligations"   means  the   Contingent
Obligations of the Company and its  Subsidiaries  identified as such on Schedule
1.1.1 to this Agreement.

     "Permitted Existing Indebtedness" means the Indebtedness of the Company and
its Subsidiaries identified as such on Schedule 1.1.2 to this Agreement.

     "Permitted  Existing  Investments" means the Investments of the Company and
its Subsidiaries identified as such on Schedule 1.1.3 to this Agreement.

     "Permitted Existing Liens" means the Liens on assets of the Company and its
Subsidiaries identified as such on Schedule 1.1.4 to this Agreement.

                                       75
<PAGE>

     "Person" means any individual,  corporation, firm, enterprise, partnership,
trust,  incorporated or unincorporated  association,  joint venture, joint stock
company,  limited  liability  company  or  other  entity  of  any  kind,  or any
government or political subdivision or any agency, department or instrumentality
thereof.

     "Plan"  means an employee  benefit  plan  defined in Section 3(3) of ERISA,
other than a  Multiemployer  Plan, in respect of which the Company or any member
of the Controlled  Group is, or within the  immediately  preceding six (6) years
was, an "employer" as defined in Section 3(5) of ERISA.

     "Pledge  Agreements" means one or more pledge agreements,  each in form and
substance  satisfactory to the Administrative  Agent,  executed and delivered by
the Company and/or certain of its Subsidiaries pursuant to or in connection with
the transactions  contemplated hereby, as the same may be amended,  supplemented
or otherwise modified from time to time.

     "Prime Rate" means the "prime rate" of interest  announced by ABN from time
to time at its Chicago office, changing when and as said prime rate changes.

     "Pro  Rata  Revolving  Share"  means,  with  respect  to  any  Lender,  the
percentage  obtained by dividing (a) such Lender's  Revolving Loan Commitment at
such time (as adjusted  from time to time in accordance  with the  provisions of
this Agreement) by (b) the Aggregate  Revolving Loan Commitment at such time (as
adjusted from time to time in accordance with the provisions of this Agreement);
provided,  however, that if all of the Revolving Loan Commitments are terminated
pursuant to the terms of this Agreement,  then "Pro Rata Revolving Share" means,
with respect to any Lender,  the percentage  obtained by dividing (i) the sum of
(A)  such  Lender's  Revolving  Loans,  plus  (B)  such  Lender's  share  of the
obligations to purchase  participations in Alternate  Currency Loans and Letters
of Credit plus (C) such Lender's share of the  obligations to refund or purchase
participations  in  Swing  Line  Loans,  by (ii)  the  sum of (A) the  aggregate
outstanding  amount of all Revolving Loans,  plus (B) the aggregate  outstanding
amount of all Alternate  Currency Loans and all Letters of Credit,  plus (C) the
aggregate outstanding amount of all Swing Line Loans.

     "Pro Rata Share" means, with respect to any Lender, the percentage obtained
by dividing (a) such Lender's  Commitment at such time (as adjusted from time to
time in accordance  with the provisions of this  Agreement) by (b) the Aggregate
Commitment at such time (as adjusted  from time to time in  accordance  with the
provisions of this Agreement);  provided,  however, that if all of the Revolving
Loan  Commitments are terminated  pursuant to the terms of this Agreement,  then
"Pro Rata Share" means, with respect to any Lender,  the percentage  obtained by
dividing  (i) the sum of (A)  such  Lender's  Revolving  Loans,  plus  (B)  such
Lender's Term Loans, plus (C) such Lender's share of the obligations to purchase
participations  in Alternate  Currency Loans and Letters of Credit plus (D) such
Lender's share of the obligations to refund or purchase  participations in Swing
Line  Loans,  by (ii) the sum of (A) the  aggregate  outstanding  amount  of all
Revolving Loans,  plus (B) the aggregate  outstanding  amount of all Term Loans,
plus (C) the aggregate  outstanding  amount of all Alternate  Currency Loans and
all Letters of Credit,  plus (D) the aggregate  outstanding  amount of all Swing
Line Loans.

     "Pro Rata Term Share"  means,  with respect to any Lender,  the  percentage
obtained by dividing such Lender's  Term Loan  Commitment by the Aggregate  Term
Loan Commitment.

     "Pro Rata Tranche A Revolving Share" means, with respect to any Lender, the
percentage  obtained  by dividing  (a) such  Lender's  Tranche A Revolving  Loan
Commitment at such time (as adjusted  from time to time in  accordance  with the
provisions  of this  Agreement) by (b) the  Aggregate  Tranche A Revolving  Loan
Commitment at such time (as adjusted  from time to time in  accordance  with the
provisions of this Agreement);  provided,  however, that if all of the Tranche A
Revolving  Loan  Commitments  are  terminated  pursuant  to the  terms  of  this
Agreement,  then "Pro Rata Tranche A Revolving Share" means, with respect to any
Lender,  the  percentage  obtained by dividing (i) the sum of (A) such  Lender's
Tranche A Revolving  Loans,  plus (B) such Lender's share of the  obligations to
purchase participations in Letters of Credit plus (C) such Lender's share of the
obligations to refund or purchase participations in Swing Line Loans by (ii) the
sum of (A) the aggregate  outstanding  amount of all Tranche A Revolving  Loans,
plus (B) the aggregate outstanding amount of all Letters of Credit, plus (C) the
aggregate outstanding amount of all Swing Line Loans.

     "Pro Rata Tranche B Revolving Share" means, with respect to any Lender, the
percentage  obtained  by dividing  (a) such  Lender's  Tranche B Revolving  Loan
Commitment at such time (as adjusted  from time to time in  accordance  with the
provisions  of this  Agreement) by (b) the  Aggregate  Tranche B Revolving  Loan
Commitment at such time (as adjusted  from time to time in  accordance  with the
provisions of this Agreement);  provided,  however, that if all of the Tranche B
Revolving  Loan  Commitments  are  terminated  pursuant  to the  terms  of  this
Agreement,  then "Pro Rata Tranche B Revolving Share" means, with respect to any
Lender,  the  percentage  obtained by dividing (i) the sum of (A) such  Lender's
Tranche B Revolving  Loans plus (B) such Lender's  share of the  obligations  to
purchase  Alternate  Currency  Loans,  by  (ii)  the  sum of (A)  the  aggregate
outstanding  amount of all Tranche B  Revolving  Loans,  plus (B) the  aggregate
outstanding amount of all Alternate Currency Loans.

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<PAGE>

     "Purchasers" is defined in Section 14.3(a) hereof.

     "Rate  Option"  means  the  Eurocurrency  Rate,  the  Floating  Rate or the
Alternate Currency Rate, as applicable.

     "Receivable(s)"   means  and  includes  all  of  the   Company's   and  its
Subsidiaries'  presently  existing and hereafter  arising or acquired  accounts,
accounts receivable,  notes receivable, and all present and future rights of the
Company or its Subsidiaries,  as applicable, to payment for goods sold or leased
or for services  rendered  (except  those  evidenced by  instruments  or chattel
paper),  whether or not they have been earned by performance,  and all rights in
any  merchandise or goods which any of the same may  represent,  and all rights,
title, security and guaranties with respect to each of the foregoing, including,
without limitation, any right of stoppage in transit.

     "Register" is defined in Section 14.3(c) hereof.

     "Regulation T" means  Regulation T of the Board of Governors of the Federal
Reserve  System  as from  time to time in  effect  and any  successor  or  other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by and to brokers and dealers of securities  for the purpose
of purchasing or carrying margin stock (as defined therein).

     "Regulation U" means  Regulation U of the Board of Governors of the Federal
Reserve  System  as from  time to time in  effect  and any  successor  or  other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks,  non-banks and non-broker  lenders for the purpose
of purchasing or carrying Margin Stock applicable to member banks of the Federal
Reserve System.

     "Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).

     "Reimbursement Obligation" is defined in Section 3.7 hereof.

     "Release" means any release, spill, emission,  leaking, pumping, injection,
deposit, disposal,  discharge,  dispersal, leaching or migration into the indoor
or outdoor environment, including the movement of Contaminants through or in the
air, soil, surface water or groundwater.

     "Replacement Lender" is defined in Section 2.20 hereof.

     "Reportable  Event" means a reportable  event as defined in Section 4043 of
ERISA and the  regulations  issued under such  section,  with respect to a Plan,
excluding,  however, such events as to which the PBGC by regulation or otherwise
waived the  requirement of Section  4043(a) of ERISA that it be notified  within
thirty (30) days after such event occurs,  provided,  however, that a failure to
meet the minimum funding standards of Section 412 of the Code and of Section 302
of ERISA shall be a  Reportable  Event  regardless  of the  issuance of any such
waiver of the notice  requirement in accordance  with either Section  4043(a) of
ERISA or Section 412(d) of the Code.

     "Required  Lenders" means Lenders  hereunder whose Pro Rata Shares,  in the
aggregate, are at least fifty-one percent (51%).

     "Requirements  of Law" means, as to any Person,  the charter and by-laws or
other organizational or governing documents of such Person, and any law, rule or
regulation,  or determination of an arbitrator or a court or other  Governmental
Authority,  in each case applicable to or binding upon such Person or any of its
property  or to which such Person or any of its  property is subject  including,
without  limitation,  the Securities Act of 1933, the Securities Exchange Act of
1934,  Regulations T, U and X, ERISA,  the Fair Labor  Standards Act, the Worker
Adjustment and Retraining  Notification Act, the Americans with Disabilities Act
of  1990,  and  any  certificate  of  occupancy,  zoning  ordinance,   building,
environmental  or land  use  requirement  or  permit  or  environmental,  labor,
employment,  occupational  safety or health law, rule or  regulation,  including
Environmental, Health or Safety Requirements of Law.

     "Reserve  Requirement  " shall  mean,  at any  time,  the  maximum  reserve
requirement,  as the prescribed by the Board of Governors of the Federal Reserve
System (or any  successor)  with  respect to  "Eurocurrency  liabilities"  or in
respect  of any  other  category  of  liabilities  which  includes  deposits  by
reference to which the interest rate on Eurocurrency Rate Loans is determined or
category of  extensions  of credit or other  assets  which  includes  loans by a
non-United States office of any Lender to United States residents.

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<PAGE>

     "Restricted  Payment" means (a) any dividend or other distribution,  direct
or  indirect,  on account of any Equity  Interests  of the Company or any of its
Subsidiaries now or hereafter  outstanding,  except a dividend payable solely in
the Company's or such  Subsidiaries'  Equity  Interests other than  Disqualified
Stock or in options, warrants or other rights to purchase such common stock, (b)
any redemption,  retirement,  purchase or other acquisition for value, direct or
indirect,  of any Equity Interests of the Company or any of its Subsidiaries now
or hereafter outstanding, other than in exchange for Equity Interests other than
Disqualified Stock of the Company, and (c) any redemption, purchase, retirement,
defeasance,  prepayment or other acquisition for value,  direct or indirect,  of
any Indebtedness subordinated to the Obligations.

     "Revolving Credit Obligations" means, at any particular time, the sum
of (a) the Tranche A Revolving  Credit  Obligations  at such time,  plus (b) the
Tranche B Revolving Credit Obligations at such time.

     "Revolving Loan" is defined in Section 2.1 hereof.

     "Revolving Loan Commitment"  means, for each Lender,  the aggregate of such
Lender's  Tranche  A  Revolving  Loan  Commitment  and such  Lender's  Tranche B
Revolving Loan Commitment.

     "Revolving Loan Termination Date" means July 14, 2003.

     "Sale and Leaseback Transaction" shall mean any lease, whether an operating
lease or a  Capitalized  Lease,  of any  property  (whether  real or personal or
mixed),  (a) which the Company or one of its Subsidiaries sold or transferred or
is to sell or transfer to any other  Person,  or (b) which the Company or one of
its Subsidiaries intends to use for substantially the same purposes as any other
property which has been or is to be sold or transferred by the Company or one of
its Subsidiaries to any other Person in connection with such lease.

     "Securities  Act" means the Securities Act of 1933, as amended from time to
time.

     "Security  Agreements" means one or more security agreements,  each in form
and substance  satisfactory to the Administrative  Agent, executed and delivered
by the Company and its Domestic  Subsidiaries  pursuant to or in connection with
the transactions  contemplated hereby, as the same may be amended,  supplemented
or otherwise modified from time to time.

     "Seller" means Spectra Precision Holdings, Inc. and each party to the Stock
and Asset Purchase Agreement, other than the Company.

     "Single  Employer  Plan" means a Benefit Plan  maintained by the Company or
any member of the Controlled Group for employees of the Company or any member of
the Controlled Group.

     "Solvent" means, when used with respect to any Person,  that at the time of
determination:

                  (a) the fair value of its assets (both at fair  valuation  and
         at present fair  saleable  value) is equal to or in excess of the total
         amount of its liabilities,  including,  without limitation,  contingent
         liabilities; and

                  (b) it is then able and expects to be able to pay its debts as
         they mature; and

                  (c) it has capital sufficient to carry on its business as
         conducted and as proposed to be conducted.

With respect to  contingent  liabilities  (such as  litigation,  guarantees  and
pension  plan  liabilities),  such  liabilities  shall be computed at the amount
which,  in  light of all the  facts  and  circumstances  existing  at the  time,
represent  the amount which can be reasonably be expected to become an actual or
matured liability.

     "Spectra  Precision  Acquisition"  is  defined  in  the  Recitals  to  this
Agreement.

     "Stock and Asset  Purchase  Agreement"  means that certain  Stock and Asset
Purchase Agreement dated May 11, 2000 by and among the Company,  Spectra Physics
Holdings USA, Inc.,  Spectra Precision AB and Spectra Precision Europe Holdings,
BV, as amended.

     "Subordinated Seller Debt" means the Indebtedness of the Company to Spectra
Physics  Holdings USA, Inc.,  evidenced by the Seller  Subordinated  Note, which
Indebtedness is subordinated to the Obligations.

     "Subordinated Seller Note" means the $80,000,000  promissory note issued to
Spectra  Physics  Holdings  USA,  Inc. by the Company  pursuant to the Stock and
Asset Purchase Agreement.

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<PAGE>

     "Subordination  Agreement" means that certain Subordination  Agreement (and
any and all supplements  thereto)  executed from time to time by each Subsidiary
of the Company  which may now or in the future  have any claim  against any Loan
Party and each other  Subsidiary of the Company as required  pursuant to Section
7.2(k) in favor of the  Administrative  Agent for the  benefit of itself and the
Holders  of  Obligations,  in  substantially  the form of Exhibit  G-2  attached
hereto, as the same may be amended, restated, supplemented or otherwise modified
from time to time.

     "Subsidiary" of a Person means (a) any corporation more than fifty (50%) of
the  outstanding  securities  having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one or
more of its Subsidiaries or by such Person and one or more of its  Subsidiaries,
or (b) any partnership, association, limited liability company, joint venture or
similar  business  organization  more than fifty  percent (50%) of the ownership
interests having ordinary voting power of which shall at the time be so owned or
controlled.  Unless otherwise  expressly  provided,  all references  herein to a
"Subsidiary" mean a Subsidiary of the Company.

     "Subsidiary  Borrower"  means each  Subsidiary of the Company  (whether now
existing or hereafter formed) duly designated by the Company pursuant to Section
2.24 to request Advances hereunder, which Subsidiary shall have delivered to the
Administrative  Agent an Assumption  Letter in accordance  with Section 2.24 and
such other documents as may be required pursuant to this Agreement, in each case
together   with   its   respective   successors   and   assigns,   including   a
debtor-in-possession on behalf of such Subsidiary Borrower.

     "Swing Line Bank" means ABN.

     "Swing Line Commitment" means the obligation of the Swing Line Bank to make
Swing Line Loans up to a maximum principal amount of $10,000,000 at any one time
outstanding.

     "Swing  Line Loan"  means a Loan made to the Company by the Swing Line Bank
pursuant to Section 2.3 hereof.

     "Syndication   Agent"  means  Fleet  National  Bank,  in  its  capacity  as
syndication agent for the loan transaction evidenced by this Agreement, together
with its successors and assigns.

     "TARGET Settlement Day" means any day on which the Trans-European
Automated Real-Time Gross Settlement Express Transfer (TARGET) System is open.

     "Taxes" is defined in Section 2.15(e)(i) hereof.

     "Term  Loan"  means a term loan made by a Lender  pursuant  to Section  2.2
hereof and, collectively, all such term loans.

     "Term Loan Commitment"  means, for each Lender,  (a) prior to the making of
the Term Loans, the amount set forth on Exhibit A to this Agreement opposite its
name thereon under the heading "Term Loan  Commitment"  and (b) after the making
of the Term Loans, the outstanding principal balance of its Term Loan.

     "Term Loan Maturity Date" means July 14, 2005.

     "Termination  Event"  means (a) a  Reportable  Event  with  respect  to any
Benefit Plan;  (b) the withdrawal of the Company or any member of the Controlled
Group  from a  Benefit  Plan  during a plan year in which  the  Company  or such
Controlled  Group  member  was a  "substantial  employer"  as defined in Section
4001(a)(2)  of  ERISA  or the  cessation  of  operations  which  results  in the
termination of employment of twenty  percent (20%) of Benefit Plan  participants
who are employees of the Company or any member of the Controlled  Group; (c) the
imposition of an obligation on the Company or any member of the Controlled Group
under Section 4041 of ERISA to provide affected parties written notice of intent
to  terminate  a Benefit  Plan in a distress  termination  described  in Section
4041(c)  of  ERISA;  (d) the  institution  by the  PBGC or any  similar  foreign
governmental  authority  of  proceedings  to terminate a Benefit Plan or Foreign
Pension Plan; (e) any event or condition which constitutes grounds under Section
4042 of ERISA which are reasonably  likely to lead to the termination of, or the
appointment  of a trustee to  administer,  any Benefit Plan;  (f) that a foreign
governmental  authority  shall  appoint or  institute  proceedings  to appoint a
trustee  to  administer  any  Foreign  Pension  Plan in  place  of the  existing
administrator,  or (g) the partial or complete  withdrawal of the Company or any
member of the  Controlled  Group from a  Multiemployer  Plan or Foreign  Pension
Plan.

     "Total Indebtedness"  means, without duplication,  (a) all Indebtedness for
borrowed money of the Company and its  Subsidiaries,  on a  consolidated  basis,
plus, without duplication, (b) (i) the face amount of all outstanding letters of
credit  (including  Letters of  Credit)  in respect of which the  Company or any
Subsidiary has any actual or contingent reimbursement obligation,  plus (ii) the
principal  amount of all  Indebtedness  of any  Person in  respect  of which the
Company

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or any Subsidiary has a Contingent  Obligation,  plus (iii) Indebtedness
of the Company and its Subsidiaries  evidenced by notes,  acceptances or similar
instruments,  plus (iv)  Capitalized  Lease  Obligations  of the Company and its
Subsidiaries,  plus (v) the implied debt component of synthetic  leases of which
the Company or any of its Subsidiaries is lessee,  plus (vi) Hedging Obligations
of the Company and its subsidiaries.

     "Tranche  A  Advance"  means an Advance  comprised  of Tranche A  Revolving
Loans.

     "Tranche A Revolving  Credit  Availability"  means, at any particular time,
the amount by which (a) the  Aggregate  Tranche A Revolving  Loan  Commitment at
such time  exceeds  (b) the  Dollar  Amount of the  Tranche A  Revolving  Credit
Obligations outstanding at such time.

     "Tranche A Revolving Credit Obligations" means, at any particular time,
the  sum of (a)  the  outstanding  principal  Dollar  Amount  of the  Tranche  A
Revolving  Loans at such time,  plus (b) the outstanding L/C Obligations at such
time, plus (c) the outstanding  principal amount of all Swing Line Loans at such
time.

     "Tranche A Revolving Loan" is defined in Section 2.1 hereof.

     "Tranche  A  Revolving  Loan  Commitment"   means,  for  each  Lender,  the
obligation  of such  Lender  to make  Tranche A  Revolving  Loans,  to  purchase
participations  in Letters of Credit and to refund or  participate in Swing Line
Loans not exceeding the amount set forth on Exhibit A to this Agreement opposite
its name thereon under the heading  "Tranche A Revolving Loan Commitment" or the
signature  page of the  assignment and acceptance by which it became a Lender as
such  amount may be  modified  from time to time  pursuant  to the terms of this
Agreement or to give effect to any applicable assignment and acceptance.

     "Tranche  B  Advance"  means an Advance  comprised  of Tranche B  Revolving
Loans.

     "Tranche B Revolving  Credit  Availability"  means, at any particular time,
the amount by which (a) the  Aggregate  Tranche B Revolving  Loan  Commitment at
such time  exceeds  (b)(i) the Dollar  Amount of the Tranche B Revolving  Credit
Obligations  outstanding at such time, plus (ii) the aggregate  unused Alternate
Currency Commitments at such time.

     "Tranche B Revolving Credit Obligations" means, at any particular time, (a)
the outstanding principal Dollar Amount of the Tranche B Revolving Loans at such
time,  plus (b) the Dollar  Amount of the  outstanding  principal  amount of the
Alternate Currency Loans at such time.

     "Tranche B Revolving Loan" is defined in Section 2.1 hereof.

     "Tranche  B  Revolving  Loan  Commitment"   means,  for  each  Lender,  the
obligation of such Lender to make Tranche B Revolving  Loans and to  participate
in Alternate  Currency  Loans not exceeding the amount set forth on Exhibit A to
this Agreement  opposite its name thereon under the heading "Tranche B Revolving
Loan Commitment" or the signature page of the assignment and acceptance by which
it became a Lender as such amount may be modified  from time to time pursuant to
the terms of this Agreement or to give effect to any  applicable  assignment and
acceptance.

     "Transferee" is defined in Section 14.5 hereof.

     "Trigger  Event  Date"  means  the date on which  the  Company  shall  have
demonstrated to the reasonable satisfaction of the Administrative Agent that (a)
no Default or Unmatured  Default  then exists and (b) the Leverage  Ratio of the
Company and its Subsidiaries, as reflected in the financial statements delivered
pursuant to Section  7.1(a)(i)  and (ii) shall have been less than 2.00 for four
consecutive fiscal quarters after the Closing Date.

     "Type" means,  with respect to any Loan, its nature as a Floating Rate Loan
or a Eurocurrency Rate Loan.

     "UCC"  means  the  Uniform  Commercial  Code as in  effect  in the State of
Illinois.

     "Unfunded Liabilities" means (a) in the case of Single Employer Plans,
the  amount  (if any) by which the  aggregate  accumulated  benefit  obligations
exceeds the aggregate  fair market value of assets of all Single  Employer Plans
as of the most recent measurement date for which actuarial  valuations have been
completed and certified to the Company, all as determined under FAS 87 using the
methods and assumptions used by the Company for financial  accounting  purposes,
and (b) in the case of Multiemployer  Plans, the withdrawal liability that would
be  incurred by the  Controlled  Group if all  members of the  Controlled  Group
completely withdrew from all Multiemployer Plans.

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     "Unmatured  Default" means an event which, but for the lapse of time or the
giving of notice, or both, would constitute a Default.

     "Wholly-Owned  Subsidiary"  of a Person means (a) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly,  by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more  Wholly-Owned  Subsidiaries of
such Person,  or (b) any partnership,  limited liability  company,  association,
joint venture or similar business  organization 100% of the ownership  interests
having  ordinary  voting  power  of  which  shall  at the  time be so  owned  or
controlled,  in each case,  other than director  qualifying  shares.  Unless the
context  otherwise  requires,  "Wholly-Owned  Subsidiary"  means a  wholly-owned
subsidiary of the Company.

     The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined  terms.  Any  accounting  terms used in
this Agreement which are not specifically defined herein shall have the meanings
customarily  given  them  in  accordance  with  generally  accepted   accounting
principles in existence as of the date hereof.

     References.  Any references to Subsidiaries of the Company set forth herein
shall not in any way be construed as consent by the Administrative  Agent or any
Lender to the  establishment,  maintenance  or  acquisition  of any  Subsidiary,
except as may otherwise be permitted hereunder.

     Rounding and Other Consequential  Changes.  Without prejudice to any method
of conversion or rounding prescribed by any legislative  measures of the Council
of the European Union,  each reference in this Agreement to a fixed amount or to
fixed amounts in a National Currency Unit to be paid to or by the Administrative
Agent shall be replaced by a reference to such  comparable and convenient  fixed
amount or fixed  amounts  in euro as the  Administrative  Agent may from time to
time  specify  unless such  National  Currency  Unit remains  available  and the
Company and the  Administrative  Agent agree to use such National  Currency Unit
instead of the euro.

                                : LOAN FACILITIES

         Revolving Loans.

         Upon the satisfaction of the conditions precedent set forth in Sections
         5.1, 5.2 and 5.3, as  applicable,  from and  including the Closing Date
         and prior to the Revolving Loan Termination Date, each Lender severally
         and not jointly  agrees,  on the terms and conditions set forth in this
         Agreement,  to make revolving  loans to the Borrowers from time to time
         (i) in Dollars, in a Dollar Amount not to exceed such Lender's Pro Rata
         Tranche A Revolving Share of Tranche A Revolving Credit Availability at
         such time  (each  individually,  a  "Tranche  A  Revolving  Loan"  and,
         collectively,  the "Tranche A Revolving Loans"); and (ii) in Dollars or
         any Agreed Currency, in a Dollar Amount not to exceed such Lender's Pro
         Rata  Tranche  B  Revolving   Share  of  Tranche  B  Revolving   Credit
         Availability  at such time (each  individually,  a "Tranche B Revolving
         Loan," collectively, the "Tranche B Revolving Loans" and, together with
         the  Tranche A  Revolving  Loans,  the  "Revolving  Loans");  provided,
         however,  that (i) at no time shall the Dollar  Amount of the Tranche A
         Revolving Credit  Obligations  exceed the Aggregate Tranche A Revolving
         Loan Commitment; (ii) at no time shall the Dollar Amount of the Tranche
         B Revolving Credit Obligations exceed the Aggregate Tranche B Revolving
         Loan  Commitment;  (iii) at no time  shall  the  Dollar  Amount  of the
         Revolving  Credit  Obligations  of any  Subsidiary  Borrower  that is a
         Domestic  Subsidiary  exceed  $40,000,000;  (iv) at no time  shall  the
         aggregate  Dollar Amount of the  Revolving  Credit  Obligations  of all
         Foreign  Subsidiaries  exceed  $30,000,000  and (v) Tranche A Revolving
         Loans shall not be made to any Borrower  which is not  organized  under
         the laws of a  jurisdiction  located in the United  States of  America.
         Subject to the terms of this Agreement, the Borrowers may borrow, repay
         and  reborrow  Revolving  Loans  at any  time  prior  to the  Revolving
         Termination  Date.  Revolving  Loans  shall  be,  at the  option of the
         applicable  Borrower,  selected in accordance  with Section  2.10,  and
         shall be either Floating Rate Loans or Eurocurrency  Rate Loans. On the
         Revolving Loan Termination  Date, each Borrower shall repay in full the
         outstanding  principal balance of Revolving Loans made to it. Tranche A
         Revolving  Loans shall be made by each Lender  ratably in proportion to
         such Lender's respective Pro Rata Tranche A Revolving Share and Tranche
         B Revolving Loans shall be made by each Lender ratably in proportion to
         such Lender's respective Pro Rata Tranche B Revolving Share.

         Making of Tranche A  Revolving  Loans.  Promptly  after  receipt of the
         Borrowing/  Conversion/Continuation Notice under Section 2.8 in respect
         of Tranche A Revolving  Loans,  the  Administrative  Agent shall notify
         each  Lender  with a Tranche A Revolving  Loan  Commitment  by telex or
         telecopy,  or other  similar  form of  transmission,  of the  requested
         Tranche A Revolving  Loan.  Each Lender with a Tranche A Revolving Loan
         Commitment  shall  make  available  its  Tranche  A  Revolving  Loan in
         accordance with the terms of Section 2.7. The Administrative Agent will
         promptly make the funds so received  from the Lenders  available to the
         applicable  Borrower at the Administrative  Agent's office in New York,
         New York on the  applicable  Borrowing  Date and  shall  disburse  such

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<PAGE>

         proceeds in  accordance  with the  applicable  Borrower's  disbursement
         instructions   set  forth  in  such   Borrowing/Conversion/Continuation
         Notice. The failure of any Lender to deposit the amount described above
         with the  Administrative  Agent on the applicable  Borrowing Date shall
         not relieve any other Lender of its  obligations  hereunder to make its
         Tranche A Revolving Loan on such Borrowing Date.

         (c) Making of Tranche B Revolving Loans.  Promptly after receipt of the
         Borrowing/Conversion/Continuation  Notice under  Section 2.8 in respect
         of Tranche B Revolving  Loans,  the  Administrative  Agent shall notify
         each  Lender  with a Tranche B Revolving  Loan  Commitment  by telex or
         telecopy,  or other  similar  form of  transmission,  of the  requested
         Tranche B Revolving  Loan.  Each Lender with a Tranche B Revolving Loan
         Commitment  shall  make  available  its  Tranche  B  Revolving  Loan in
         accordance with the terms of Section 2.7. The Administrative Agent will
         promptly make the funds so received  from the Lenders  available to the
         applicable  Borrower at the Administrative  Agent's office in New York,
         New York on the  applicable  Borrowing  Date and  shall  disburse  such
         proceeds in  accordance  with the  applicable  Borrower's  disbursement
         instructions   set  forth  in  such   Borrowing/Conversion/Continuation
         Notice. The failure of any Lender to deposit the amount described above
         with the  Administrative  Agent on the applicable  Borrowing Date shall
         not relieve any other Lender of its  obligations  hereunder to make its
         Tranche B Revolving Loan on such Borrowing Date.

         Term Loans.

         (a) Upon the  satisfaction  of the  conditions  precedent  set forth in
         Section 5.1, each Lender severally and not jointly agrees, on the terms
         and conditions set forth in this Agreement,  to make a single term loan
         to the Company on the  Closing  Date,  in Dollars,  in an amount not to
         exceed such Lender's Term Loan  Commitment.  Amounts borrowed as a Term
         Loan which are repaid or prepaid by the Company may not be  reborrowed.
         The Company shall repay all  outstanding  principal and all accrued but
         unpaid interest on the Term Loan Maturity Date.

         (b) Term Loan  Amortization.  The Term Loan shall be payable in
             quarterly  installments  in the amounts and on the dates,
             ommencing March 31, 2001, as follows:

                PAYMENT DATE                        AMOUNT

                March 31, 2001                       $4,000,000
                June 30, 2001                        $4,000,000
                September 30, 2001                   $4,000,000
                December 31, 2001                    $4,000,000
                March 31, 2002                       $5,000,000
                June 30, 2002                        $5,000,000
                September 30, 2002                   $5,000,000
                December 31,2002                     $5,000,000
                March 31, 2003                       $6,000,000
                June 30, 2003                        $6,000,000
                September 30, 2003                   $6,000,000
                December 31, 2003                    $6,000,000
                March 31, 2004                       $6,000,000
                June 30, 2004                        $6,000,000
                September 30, 2004                   $7,000,000
                December 31, 2004                    $7,000,000
                March 31, 2005                       $7,000,000
                July 14, 2005                        $7,000,000  or
                                                     such  other  amount  as
                                                     shall  then be outstanding

         Swing Line Loans.

         Amount of Swing Line Loans.  Upon the  satisfaction  of the  conditions
         precedent  set forth in Section 5.1, 5.2 and 5.3, as  applicable,  from
         and  including  the  Closing  Date  and  prior  to the  Revolving  Loan
         Termination  Date,  the  Swing  Line  Bank  agrees,  on the  terms  and
         conditions set forth in this  Agreement,  to make revolving  swing line
         loans (each,  individually,  a "Swing Line Loan" and collectively,  the
         "Swing  Line  Loans")  to the  Company  from  time to time in  Dollars;
         provided,  however,  that at no time  shall the  aggregate  outstanding
         principal  amount  of all  Swing  Line  Loans  exceed  the  Swing  Line
         Commitment;  and provided  further that, at no time shall the Amount of
         the Tranche A Revolving Credit Obligations exceed the Aggregate Tranche
         A Revolving Loan  Commitment;  and

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         provided,  further,  that  at  no  time  shall  the  sum  of  (i)  the
         outstanding  principal  amount of the Swing  Line  Loans plus (ii) the
         Dollar  Amount of the Swing Line  Bank's Pro Rata  Tranche A Revolving
         Share  of  the  amount  equal  to  the  Tranche  A  Revolving   Credit
         Obligations less the outstanding principal amount of Swing Line Loans,
         exceed the Swing Line Bank's  Tranche A Revolving  Loan  Commitment at
         such time.

         Borrowing/Conversion/Continuation  Notice;  Interest  Rate. The Company
         and/or the  applicable  Borrower  shall  deliver to the  Administrative
         Agent  and  the  Swing  Line  Bank a  Borrowing/Conversion/Continuation
         Notice,  signed by it, not later than 12:00 noon (Chicago  time) on the
         Borrowing Date of each Swing Line Loan (or at such later time as may be
         acceptable to the Swing Line Bank in its sole  discretion),  specifying
         (i) the  applicable  Borrowing Date (which date shall be a Business Day
         and    which    may   be   the    same    date   as   the    date   the
         Borrowing/Conversion/Continuation  Notice is given,  (ii) the aggregate
         amount of the requested  Swing Line Loan,  the amount of which shall be
         not  less  than  $1,000,000  and  (iii)  payment  instructions  for the
         disbursement of such Loans. The Swing Line Loans shall bear interest at
         the Floating Rate.

         Making of Swing Line Loans. Not later than 3:00 p.m.  (Chicago time) on
         the applicable Borrowing Date, the Swing Line Bank shall make available
         its Swing Line Loan, in funds  immediately  available in New York,  New
         York to the  Administrative  Agent at its address specified pursuant to
         Article XV. The  Administrative  Agent will  promptly make the funds so
         received  from the Swing  Line Bank  available  to the  Company  on the
         Borrowing Date at the Administrative Agent's aforesaid address.

         Repayment  of Swing Line  Loans.  Each Swing Line Loan shall be paid in
         full by the Company on or before the seventh  (7th)  Business Day after
         the  Borrowing  Date for such Swing Line Loan.  The  Company may at any
         time pay, without penalty or premium, all outstanding Swing Line Loans.
         In addition,  the Administrative  Agent (i) may at any time in its sole
         discretion with respect to any outstanding  Swing Line Loan, (ii) shall
         at any  time  upon  the  request  of the  Swing  Line  Bank in its sole
         discretion,  or (iii) shall on the seventh (7th) Business Day after the
         Borrowing  Date of any Swing  Line  Loan,  require  (by  giving  notice
         thereof to each Lender with a Tranche A Revolving  Loan  Commitment not
         later than 10:00 a.m.  (Chicago  time) one Business Day before the date
         of such Loan) each Lender with a Tranche A  Revolving  Loan  Commitment
         (including  the Swing Line Bank) to make a Tranche A Revolving  Loan in
         the amount of such Lender's Pro Rata Tranche A Revolving  Share of such
         Swing Line Loan,  for the  purpose of repaying  all or any  outstanding
         portion  of such Swing  Line  Loan.  Not later than 2:00 p.m.  (Chicago
         time) on the  date of any  notice  received  pursuant  to this  Section
         2.3(d),  each  Lender  shall  make  available  its  required  Tranche A
         Revolving  Loan,  in funds  immediately  available  in  Chicago  to the
         Administrative  Agent at its address specified  pursuant to Article XV.
         Tranche A Revolving  Loans made  pursuant to this Section  2.3(d) shall
         initially  be Floating  Rate Loans and  thereafter  may be continued as
         Floating Rate Loans or converted  into  Eurocurrency  Rate Loans in the
         manner provided in Section 2.10 and subject to the other conditions and
         limitations  therein set forth and set forth in this Article II. Unless
         a Lender shall have  notified the Swing Line Bank,  prior to its making
         any Swing Line Loan, that any applicable  condition precedent set forth
         in  Sections  5.1,  5.2 and  5.3,  as  applicable,  had not  then  been
         satisfied,  such Lender's  obligation to make Tranche A Revolving Loans
         pursuant  to this  Section  2.3(d) to repay  Swing Line Loans  shall be
         unconditional,  continuing,  irrevocable  and absolute and shall not be
         affected by any circumstances,  including,  without limitation, (a) any
         set-off,  counterclaim,  recoupment,  defense or other right which such
         Lender may have against the  Administrative  Agent, the Swing Line Bank
         or any other Person, (b) the failure to satisfy any condition set forth
         herein or the  occurrence  or  continuance  of a Default  or  Unmatured
         Default,  (c)  any  adverse  change  in  the  condition  (financial  or
         otherwise) of the Company, or (d) any other circumstances, happening or
         event whatsoever. In the event that any Lender fails to make payment to
         the  Administrative  Agent of any amount due under this Section 2.3(d),
         the Administrative Agent shall be entitled to receive, retain and apply
         against such obligation the principal and interest otherwise payable to
         such Lender  hereunder  until the  Administrative  Agent  receives such
         payment  from  such  Lender  or  such  obligation  is  otherwise  fully
         satisfied.  In addition to the foregoing,  if for any reason any Lender
         fails to make  payment  to the  Administrative  Agent of any amount due
         under this Section  2.3(d) or may not make any Revolving  Loan required
         by this Section 2.3, such Lender shall be deemed,  at the option of the
         Administrative  Agent or the Swing Line Bank,  to have  unconditionally
         and irrevocably purchased from the Swing Line Bank, without recourse or
         warranty,  an undivided  interest and  participation  in the Swing Line
         Loan in the  amount  of such  Revolving  Loan,  and such  interest  and
         participation  shall be paid by such  Lender  upon  demand by the Swing
         Line Bank together with interest thereon at the Federal Funds Effective
         Rate for each day during the  period  commencing  on the date of demand
         and ending on the date such amount is received.  On the Revolving  Loan
         Termination  Date,  the  Company  shall  repay in full the  outstanding
         principal balance of the Swing Line Loans.

     Rate Options for all  Advances;  Maximum  Interest  Periods.  The Revolving
Loans  and Term  Loans  may be  Floating  Rate  Advances  or  Eurocurrency  Rate
Advances,  or a combination  thereof,  selected by the Company or the applicable
Borrower in accordance with Section 2.9;  provided that until the earlier of (a)
the date on which syndication of the Aggregate  Commitment has been completed to
the  satisfaction  of the  Administrative  Agent and (b) three  months after the
Closing  Date,  the  Revolving  Loans  and Term  Loans  shall be  Floating  Rate
Advances;  provided further that Loans

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<PAGE>

denominated  in euros may not be  Floating  Advances.  The  Company  or the
applicable Borrower may select, in accordance with Section 2.9, Rate Options and
Interest Periods  applicable to portions of the Revolving Loans,  Term Loans and
Alternate Currency Loans;  provided that there shall be no more than twelve (12)
Interest  Periods in effect with respect to all of the Loans at any time (unless
otherwise provided in the applicable Alternate Currency Addendum with respect to
Alternate  Currency Loans).  Each Alternate Currency Loan shall bear interest on
the outstanding  principal  amount thereof,  for the Interest Period  applicable
thereto, at the Alternate Currency Rate as set forth in the applicable Alternate
Currency Addendum.

         Optional Payments; Mandatory Prepayments.

         Optional Payments. The Company or the applicable Borrower may from time
         to time and at any time  upon at least  one (1)  Business  Day's  prior
         written  notice repay or prepay  without  penalty or premium all or any
         part of  outstanding  Floating  Rate  Advances in an aggregate  minimum
         amount of $5,000,000 and in integral  multiples of $1,000,000 in excess
         thereof.  Eurocurrency  Rate  Advances  may be  voluntarily  repaid  or
         prepaid  prior  to the  last  day of the  applicable  Interest  Period,
         subject to the  indemnification  provisions  contained  in Section 4.4,
         provided that the  applicable  Borrower may not so prepay  Eurocurrency
         Rate Advances  unless it shall have provided at least four (4) Business
         Days'  prior  written  notice  to  the  Administrative  Agent  of  such
         prepayment.  Each Subsidiary Borrower may, upon prior written notice to
         the Administrative  Agent and to the applicable Alternate Currency Bank
         as  prescribed  in  the  applicable  Alternate  Currency  Addendum  and
         specifying  that it is  prepaying  all or a  portion  of its  Alternate
         Currency  Loans,  prepay its Alternate  Currency  Loans in whole at any
         time,  or from  time to time  in part in a  Dollar  Amount  aggregating
         $5,000,000 or any larger  multiple  Dollar Amount of $1,000,000  (or as
         otherwise  specified in the applicable  Alternate Currency Addendum) by
         paying the  principal  amount to be paid  together with all accrued and
         unpaid interest thereon to and including the date of payment;  provided
         that any such payment  occurring  prior to the last day of any Interest
         Period related to such Alternate  Currency Loan shall be subject to the
         indemnification provisions contained in Section 4.4.

         Mandatory  Prepayments of Loans.  (i) If at any time and for any reason
         (other than  fluctuations in currency exchange rates) the Dollar Amount
         of the Tranche A Revolving  Credit  Obligations  or Tranche B Revolving
         Credit  Obligations  is greater than the Aggregate  Tranche A Revolving
         Loan Commitment or the Aggregate  Tranche B Revolving Loan  Commitment,
         respectively,  the Company shall immediately make or cause to be made a
         mandatory  prepayment of the Tranche A Revolving Credit  Obligations or
         the Tranche B Revolving Credit  Obligations,  as the case may be, in an
         amount equal to such excess.

         (ii) On the last Business Day of each month, the  Administrative  Agent
shall  calculate the Dollar Amount of all outstanding  Alternate  Currency Loans
and  Tranche B  Revolving  Credit  Obligations  using,  for each  currency,  the
arithmetic mean of the buy and sell spot rates of exchange of the Administrative
Agent in the London interbank  market (or other market where the  Administrative
Agent's foreign  exchange  operations in respect of such currency are then being
conducted) and if, on such Business Day:

         (A) the Dollar  Amount of the  Tranche B Revolving  Credit  Obligations
exceeds one hundred  percent  (100%) of the Aggregate  Tranche B Revolving  Loan
Commitment as a result of fluctuations in currency exchange rates, the Borrowers
shall  immediately  prepay Tranche B Revolving Loans in an aggregate amount such
that after giving  effect  thereto the Dollar  Amount of the Tranche B Revolving
Credit  Obligations  is less than or equal to the Aggregate  Tranche B Revolving
Loan Commitment; or

         (B) the Dollar Amount of the aggregate  outstanding principal amount of
Alternate  Currency Loans in the same Alternate  Currency  exceeds the aggregate
Alternate Currency  Commitments with respect thereto as a result of fluctuations
in currency  exchange rates, the applicable  Borrowers shall on such date prepay
Alternate  Currency Loans in such Alternate Currency in an aggregate amount such
that after giving effect  thereto the Dollar  amount of all  Alternate  Currency
Loans is less than or equal to the aggregate Alternate Currency Commitments with
respect thereto.

         (iii) The Company shall make all mandatory  prepayments  required under
Section 2.6.

         (iv) At any time  prior to the  Trigger  Event  Date and so long as any
Term Loans are  outstanding,  the  Company  shall  prepay the Loans in an amount
equal to 100% of (A) the Net Proceeds  realized  upon any Asset Sale made by the
Company or its Subsidiaries,  (B) any insurance proceeds received by the Company
or its Subsidiaries in respect of any casualty  involving such Person's property
and  (C)  any  payments  received  by the  Company  or its  Subsidiaries  from a
condemnation of such Person's  property,  to the extent any of the foregoing Net
Proceeds  are not applied (or  committed  to be applied)  within one hundred and
twenty (120) days after the consummation or receipt thereof,  as applicable,  to
the purchase of similar  assets that are not  classified as current assets under
Agreement  Accounting  Principles  and are used or useful in the business of the
Company or its  Subsidiaries  or to the repair or  restoration of the Borrowers'
property.  If the

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<PAGE>

Company does intend to so reinvest any such  amounts,  it shall give notice
of such intent (and the amount intended to be reinvested) to the  Administrative
Agent upon  receipt of such  proceeds.  Pending such  reinvestment,  the Company
shall use such Net Proceeds to pay down the  principal  amount of the  Revolving
Loans to the extent thereof (but without a permanent  reduction of the Revolving
Loan  Commitments).  If the  Company  does not  intend to so  reinvest  such Net
Proceeds  or if the  period  set  forth in the  immediately  preceding  sentence
expires  without the Company having  reinvested  such Net Proceeds,  the Company
shall prepay the Term Loans  (within one (1) Business Day of the  expiration  of
said one  hundred  and twenty  (120) day  period) in an amount  equal to the Net
Proceeds of such Asset  Disposition  after  giving  effect to all  reinvestments
permitted by this subsection.

         (v) At any time prior to the Trigger Event Date and so long as any Term
Loans are  outstanding,  within  ninety  (90) days after the end of each  fiscal
year,  the  Company  shall  prepay  the Term  Loans in an amount  equal to fifty
percent (50%) of the Excess Cash Flow, if any,  generated by the Company and its
Subsidiaries during the immediately preceding fiscal year of the Company.

          (vi) At any time  prior to the  Trigger  Event Date and so long as any
          Term Loans are  outstanding,  if the Company or any  Subsidiary  shall
          issue new Equity Interests or receive any capital  contributions other
          than Equity Interests issued to the Company or another  Subsidiary and
          capital contributions received from the Company or another Subsidiary,
          the Company  shall  promptly  notify the  Administrative  Agent of the
          estimated  Net  Proceeds  of such  issuance  to be received in respect
          thereof.  Promptly  upon,  and in no event later than one (1) Business
          Day after,  receipt by the Company or such  Subsidiary of Net Proceeds
          of such issuance, the Company shall prepay the Term Loans in an amount
          equal to 50% of such Net  Proceeds  (unless  a  Default  or  Unmatured
          Default  shall  have  occurred  and be  continuing,  in which case the
          Company  shall prepay the Loans in an amount equal to 100% of such Net
          Proceeds).  The Company  shall have no  obligation  to prepay the Term
          Loans  pursuant  to this  Section  2.5(b)(vi)  to the extent  that the
          Company has an  obligation to prepay the Seller  Subordinated  Note in
          accordance with Section 4.2 of the Seller  Subordinated Note (but only
          to the extent otherwise  permitted by the subordination  provisions of
          the Seller Subordinated Note).

          (vii) At any time prior to the  Trigger  Event Date and so long as any
          Term Loans are outstanding,  the Company shall immediately  prepay the
          Term  Loans  in an  amount  equal to 100% of the Net  Proceeds  of any
          Indebtedness  incurred  by the  Company or any  Subsidiary  (excluding
          Indebtedness permitted pursuant to Section 7.3(c)).

         (viii)  All  of  the   mandatory   prepayments   made   under   Section
2.5(b)(i)-(iii)  shall be applied to the Tranche A Revolving Credit  Obligations
or Tranche B Revolving Credit Obligations, as applicable, first to Floating Rate
Loans and to any Eurocurrency  Rate Loans and Alternate  Currency Loans maturing
on such  date and then to  subsequently  maturing  Eurocurrency  Rate  Loans and
Alternate Currency Loans in order of maturity.

         (ix) Any  prepayments  pursuant to Sections  2.5(b)(iv)-(vii)  shall be
applied to the  outstanding  principal  balance of the Term  Loans  against  all
remaining scheduled principal installments in inverse order of maturity.

     Reductions  in  Commitments.  The  Company may  permanently  reduce (i) the
Aggregate Tranche A Revolving Loan Commitment in whole, or in part ratably among
the Lenders with a Tranche A Revolving Loan Commitment,  in an aggregate minimum
amount of $5,000,000  and in integral  multiples of $1,000,000 in excess of that
amount (unless the Aggregate  Tranche A Revolving Loan  Commitment is reduced in
whole),  (ii) the Aggregate  Tranche B Revolving Loan Commitment in whole, or in
part ratably among the Lenders with a Tranche B Revolving Loan Commitment, in an
aggregate  minimum amount of $5,000,000 and in integral  multiples of $1,000,000
in excess  of that  amount  (unless  the  Aggregate  Tranche  B  Revolving  Loan
Commitment is reduced in whole), (iii) the Swing Line Commitments in whole or in
part in amounts of  $1,000,000  upon at least  three (3)  Business  Day's  prior
written notice to the Administrative Agent and the Swing Line Bank, which notice
shall  specify the amount of any such  reduction or (iv) in whole and  terminate
the Aggregate Term Loan  Commitment upon any reduction in whole of the Aggregate
Revolving  Loan  Commitment;  provided,  however,  that  (a) the  amount  of the
Aggregate  Tranche A  Revolving  Loan  Commitment  may not be reduced  below the
aggregate  principal Dollar Amount of the outstanding Tranche A Revolving Credit
Obligations or below the aggregate  amount of the Swing Line  Commitment and (b)
the amount of the  Aggregate  Tranche B  Revolving  Loan  Commitment  may not be
reduced below the aggregate principal Dollar Amount of the outstanding Tranche B
Revolving  Obligations  or below  the  aggregate  amount of  Alternate  Currency
Commitments.  All accrued commitment fees shall be payable on the effective date
of any  termination  of all or any part the  obligations  of the Lenders to make
Loans  hereunder.  Each  Subsidiary  Borrower  may, upon three (3) Business Days
prior written notice to the Administrative Agent and to the applicable Alternate
Currency Bank,  terminate entirely at any time or reduce from time to time by an
aggregate  amount of $5,000,000 or any larger  multiple of $1,000,000 (or as set
forth on the applicable Alternate Currency Addendum), the unused portions

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<PAGE>

of  the  applicable  Alternate  Currency  Commitment  as  specified  by the
applicable  Subsidiary  Borrower in such notice to the Administrative  Agent and
the applicable Alternate Currency Bank; provided, however, that at no time shall
the  Alternate  Currency  Commitment  of any Lender in respect of any  Alternate
Currency  be  reduced  to an amount  less than the total  outstanding  principal
amount of all  Alternate  Currency  Loans of such Lender made in such  Alternate
Currency.

     Method of  Borrowing.  Not later  than  2:00  p.m.  (Chicago  time) on each
Borrowing  Date,  each  Lender  shall  make  available  its  Revolving  Loan  in
immediately   available   funds  in  the  applicable   Agreed  Currency  to  the
Administrative Agent at its address specified on its signature page hereto or as
otherwise specified pursuant to Article XV, unless the Administrative  Agent has
notified  the Lenders that such Loan is to be made  available to the  applicable
Borrower at the  Administrative  Agent's  Eurocurrency  Payment office, in which
case each Lender shall make  available its Loan or Loans,  in funds  immediately
available to the  Administrative  Agent at its Eurocurrency  Payment Office, not
later than  12:00 noon  (local  time in the city of the  Administrative  Agent's
Eurocurrency   Payment  Office)  in  the  Agreed  Currency   designated  by  the
Administrative  Agent. The Administrative  Agent will promptly make the funds so
received  from  the  Lenders  available  to  the  applicable   Borrower  at  the
Administrative  Agent's  aforesaid  address or Eurocurrency  Payment Office,  as
applicable.

     Method of Selecting Types and Interest Periods for Advances. The applicable
Borrower shall select the Type of Advance and, in the case of each  Eurocurrency
Rate Advance,  the Interest Period,  Agreed Currency and/or  Alternate  Currency
applicable to each Advance from time to time. The applicable Borrower shall give
the Administrative Agent irrevocable notice in substantially the form of Exhibit
B hereto (a  "Borrowing/Conversion/Continuation  Notice")  not later  than 11:00
a.m.  (Chicago  time) (a) one (1) Business Day before the Borrowing Date of each
Floating Rate Advance, and (b) three (3) Business Days before the Borrowing Date
for each  Eurocurrency  Rate  Advance  to be made in  Dollars,  and (c) four (4)
Business Days before the Borrowing Date for each Eurocurrency Rate Advance to be
made in any Agreed  Currency  other than Dollars and (d) three (3) Business Days
before the Borrowing Date for each Alternate Currency Loan (or such other period
as may be agreed to by the  Administrative  Agent and the applicable  Borrower),
and the applicable  Borrower shall give the applicable  Alternate  Currency Bank
irrevocable  notice by 11:00 a.m.  (local time) three (3) Business Days prior to
the Borrowing Date for such Alternate Currency Loan (or such other period as may
be agreed to by the  applicable  Alternate  Currency  Bank or  specified  in the
applicable  Alternate  Currency  Addendum),  specifying:  (i) the Borrowing Date
(which shall be a Business  Day) of such Advance;  (ii) the aggregate  amount of
such Advance; (iii) the Type of Advance selected;  (iv) whether the Advance will
be a  Tranche A Advance  or a  Tranche  B  Advance;  and (v) in the case of each
Eurocurrency  Rate Loan,  the Interest  Period and Agreed  Currency or Alternate
Currency applicable thereto. Each Floating Rate Advance, each Alternate Currency
Loan bearing a fluctuating  Alternate  Currency Rate and all  Obligations  other
than Loans shall bear interest from and including the date of the making of such
Advance,  in the case of Loans, and the date such Obligation is due and owing in
the case of such other Obligations, to (but not including) the date of repayment
thereof at the Floating Rate or Alternate Currency Rate, as applicable, changing
when and as such  Floating  Rate or  Alternate  Currency  Rate,  as  applicable,
changes.  Changes  in the  rate of  interest  on  that  portion  of any  Advance
maintained  as a Floating  Rate Loan will take effect  simultaneously  with each
change in the  Alternate  Base  Rate.  Changes  in the rate of  interest  on any
portion of any Alternate Currency Loan bearing a fluctuating  Alternate Currency
Rate will take effect simultaneously with each change in such Alternate Currency
Rate. Each  Eurocurrency Rate Advance shall bear interest from and including the
first day of the Interest Period  applicable  thereto to (but not including) the
last day of such Interest  Period at the interest rate  determined as applicable
to such  Eurocurrency  Rate Advance and shall change as and when the  Applicable
Eurocurrency Margin changes.

     Minimum  Amount of Each  Advance.  Each  Advance  (other than an Advance to
repay a Swing Line Loan or  Reimbursement  Obligation)  shall be in the  minimum
Dollar Amount of $5,000,000 (or the Approximate  Equivalent Amount of any Agreed
Currency  other than Dollars or any  Alternate  Currency)  and in Dollar  Amount
multiples of  $1,000,000  (or the  Approximate  Equivalent  Amount of any Agreed
Currency other than Dollars or any Alternate  Currency) if in excess thereof (or
such other  amounts as may be specified  in the  applicable  Alternate  Currency
Addendum),  provided,  however,  that any  Floating  Rate  Advance may be in the
amount of the unused Aggregate  Tranche A Revolving Loan Commitment or Tranche B
Revolving Loan Commitment, as the case may be.

          Method of Selecting  Types and  Interest  Periods for  Conversion  and
          Continuation of Advances.

          Right to Convert. The applicable Borrower may elect from time to time,
          subject to the  provisions  of Section 2.4 and this Section  2.10,  to
          convert  all or any part of a Loan  (other  than a Swing Line Loan) of
          any Type into any  other  Type or Types of Loans  (other  than a Swing
          Line Loan);  provided  that any  conversion of any  Eurocurrency  Rate
          Advance  shall be made on, and only on,  the last day of the  Interest
          Period applicable thereto.

          Automatic  Conversion  and  Continuation.  Floating  Rate Loans  shall
          continue as Floating  Rate Loans unless and until such  Floating  Rate
          Loans are converted into  Eurocurrency  Rate Loans.  Eurocurrency Rate
          Loans shall continue as  Eurocurrency  Rate Loans until the end of the
          then  applicable   Interest  Period  therefor,   at  which  time

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<PAGE>

          such  Eurocurrency  Rate Loans shall be  automatically  converted into
          Floating   Rate  Loans  unless  the  Company   shall  have  given  the
          Administrative   Agent  notice  in  accordance  with  Section  2.10(d)
          requesting that, at the end of such Interest Period, such Eurocurrency
          Rate  Loans   continue  as  a   Eurocurrency   Rate  Loan.   Unless  a
          Borrowing/Conversion/Continuation  Notice shall have timely been given
          in accordance with the terms of this Section 2.10,  Eurocurrency  Rate
          Advances  in an Agreed  Currency  other  than  Dollars  and  Alternate
          Currency  Loans  shall  automatically  continue as  Eurocurrency  Rate
          Advances in the same Agreed  Currency or Alternate  Currency  Loans in
          the same Alternate Currency, as applicable, with an Interest Period of
          one (1) month.

          No Conversion Post-Default or Post-Unmatured Default.  Notwithstanding
          anything  to the  contrary  contained  in  Section  2.10(a) or Section
          2.10(b),  no Loan may be converted into or continued as a Eurocurrency
          Rate Loan (except with the consent of the Required  Lenders)  when any
          Default or Unmatured Default has occurred and is continuing.

          Borrowing/Conversion/Continuation  Notice.  The Company shall give the
          Administrative Agent a  Borrowing/Conversion/Continuation  Notice with
          respect to each conversion of a Floating Rate Loan into a Eurocurrency
          Rate Loan or continuation  of a Eurocurrency  Rate Loan not later than
          11:00 a.m.  (Chicago  time) (i) three (3)  Business  Days prior to the
          date of the requested conversion or continuation,  with respect to any
          Loan to be  converted  or  continued  as a  Eurocurrency  Rate Loan in
          Dollars,  (ii)  four  (4)  Business  Days  prior  to the  date  of the
          requested  conversion or  continuation  with respect to any Loan to be
          converted  or  continued  as a  Eurocurrency  Rate  Loan in an  Agreed
          Currency  other than Dollars,  and (iii) five (5) Business Days before
          the date of the requested  conversion or  continuation  Borrowing Date
          with  respect  to the  conversion  or  continuation  of any  Alternate
          Currency  Loan  (or  such  other  period  as may be  agreed  to by the
          Administrative  Agent), and the applicable  Subsidiary  Borrower shall
          give the  applicable  Alternate  Currency Bank  irrevocable  notice by
          11:00  a.m.  (local  time)  three  (3)  Business  Days  prior  to  the
          conversion or  continuation  of such Alternate  Currency Loan (or such
          other period as may  specified in the  applicable  Alternate  Currency
          Addendum),  specifying:  (x) the  requested  date  (which  shall  be a
          Business Day) of such conversion or  continuation;  (y) the amount and
          Type of the Loan to be converted or  continued;  and (z) the amount of
          Eurocurrency   Rate  Loan(s)  or  Alternate   Currency   Loan(s),   as
          applicable,  into which such Loan is to be converted or continued, the
          Agreed Currency or Alternate Currency, as applicable, and the duration
          of the Interest Period applicable thereto.

          Notwithstanding anything herein to the contrary, (i) Eurocurrency Rate
          Advances in an Agreed Currency may be continued as  Eurocurrency  Rate
          Advances only in the same Agreed  Currency,  (ii)  Alternate  Currency
          Loans in an Alternate  Currency may be continued as Alternate Currency
          Loans only in the same  Alternate  Currency,  (iii) Tranche A Advances
          may only be  continued  as  Tranche  A  Advances  and (iv)  Tranche  B
          Advances may only be continued as Tranche B Advances.

     Default Rate. After the occurrence and during the continuance of a Default,
each  outstanding Loan shall bear interest at a rate equal to the rate otherwise
applicable thereto (giving effect to the provisions of Section 2.15(d)(ii)) plus
2% per annum.

     Method of Payment. All payments of principal,  interest, fees, commissions,
and other amounts payable hereunder shall be made, without setoff,  deduction or
counterclaim in immediately  available funds to the Administrative  Agent (a) at
the Administrative Agent's address specified pursuant to Article XV with respect
to  Advances  or  other  Obligations  denominated  in  Dollars  and  (b)  at the
Administrative  Agent's  Eurocurrency Payment Office with respect to any Advance
or other Obligations denominated in an Agreed Currency other than Dollars, or at
any other Lending  Installation of the Administrative Agent specified in writing
by the Administrative  Agent to the Company,  by 1:00 p.m. (Chicago time) on the
date when due and shall be applied  ratably  among the  applicable  Lenders with
respect to any principal and interest due in connection with Loans. Each Advance
shall be repaid or prepaid in the  Agreed  Currency  in which it was made in the
amount  borrowed  and  interest  payable  thereon  shall  also  be  paid in such
currency.  Each payment delivered to the Administrative Agent for the account of
any Lender  shall be  delivered  promptly  by the  Administrative  Agent to such
Lender in the same type of funds which the Administrative  Agent received at its
address  specified  pursuant  to  Article  XV or  at  any  Lending  Installation
specified in a notice received by the Administrative Agent from such Lender. The
Company authorizes the Administrative Agent to charge the account of the Company
maintained with ABN for each payment of principal,  interest,  fees, commissions
and  L/C  Obligations  as it  becomes  due  hereunder.  Each  reference  to  the
Administrative  Agent in this  Section  2.12 shall also be deemed to refer,  and
shall apply equally,  to each Issuing Bank, in the case of payments  required to
be made by the Company to any Issuing Bank pursuant to Article III.

     All  payments  to be made by the  Borrowers  hereunder  in  respect  of any
Alternate Currency Loans shall be made in the currencies in which such Loans are
denominated  and in funds  immediately  available,  at the office or branch from
which

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<PAGE>

the Loan was made  pursuant to Section 2.20 and the  applicable  Alternate
Currency  Addendum  not later than 3:00 p.m.  (local  time) on the date on which
such  payment  shall  become  due.  Promptly,  and in any event  within  two (2)
Business  Days after  receipt,  upon  receipt of any payment of principal of the
Alternate  Currency  Loans the  applicable  Alternate  Currency  Bank shall give
written notice to the  Administrative  Agent by telex or telecopy of the receipt
of such payment.

     Notwithstanding  the foregoing  provisions  of this Section,  if, after the
making of any Advance in any currency  other than Dollars,  currency  control or
exchange  regulations  are  imposed in the  country  which  issues  such  Agreed
Currency or Alternate  Currency,  as applicable,  with the result that different
types of such Agreed Currency or Alternate  Currency,  as applicable,  (the "New
Currency") are introduced and the type of currency in which the Advance was made
(the  "Original  Currency") no longer exists or any Borrower is not able to make
payment to the Administrative  Agent for the account of the Lenders or Alternate
Currency Bank, as applicable, in such Original Currency, then all payments to be
made  by  the  Borrowers  hereunder  in  such  currency  shall  be  made  to the
Administrative  Agent or Alternate Currency Bank, as applicable,  in such amount
and such type of the New  Currency  or  Dollars  as shall be  equivalent  to the
amount of such payment  otherwise  due  hereunder in the Original  Currency,  it
being the intention of the parties  hereto that the Borrowers  take all risks of
the  imposition  of any  such  currency  control  or  exchange  regulations.  In
addition,  notwithstanding the foregoing  provisions of this Section,  if, after
the making of any Advance in any currency  other than  Dollars,  the  applicable
Borrower is not able to make payment to the Administrative Agent for the account
of the Lenders or the applicable Alternate Currency Bank in the type of currency
in which such Advance was made because of the  imposition  of any such  currency
control or exchange  regulation,  then such Advance shall instead be repaid when
due in Dollars in a principal  amount equal to the Dollar Amount (as of the date
of repayment) of such Advance.

          Evidence of Debt.

          Each Lender shall  maintain in accordance  with its usual  practice an
          account or accounts (a "Loan Account")  evidencing the indebtedness of
          the  Borrowers  owing  to such  Lender  hereunder  from  time to time,
          including  the amounts of principal  and interest  payable and paid to
          such Lender from time to time hereunder.

          The  Register  maintained  by the  Administrative  Agent  pursuant  to
          Section 14.3(c) shall reflect (i) the date and the amount of each Loan
          made  hereunder,  the Type  thereof and the Interest  Period,  if any,
          applicable thereto,  (ii) the amount and the currency of any principal
          or  interest  due and  payable or to become due and  payable  from the
          Borrowers  to each  Lender  hereunder,  (iii) the  effective  date and
          amount of each  Assignment  Agreement  delivered to and accepted by it
          and the parties  thereto  pursuant to Section 14.3, (iv) the amount of
          any sum received by the Administrative Agent hereunder for the account
          of the  Lenders and each  Lender's  share  thereof,  and (v) all other
          appropriate   debits  and  credits  as  provided  in  this  Agreement,
          including,   without  limitation,  all  fees,  charges,  expenses  and
          interest.

          The  entries  made in the Loan  Account,  the  Register  and the other
          accounts maintained pursuant to subsections (a) or (b) of this Section
          shall be  presumptively  correct  for all  purposes,  absent  manifest
          error;  provided that the failure of any Lender or the  Administrative
          Agent to maintain  such accounts or any error therein shall not in any
          manner affect the obligation of the Borrowers to repay the Obligations
          in accordance with the terms of this Agreement.

          Any Lender may request that the Tranche A Revolving Loans, the Tranche
          B Revolving  Loans or the Term Loan made by it each be  evidenced by a
          promissory note in  substantially  the forms of Exhibit I-1A,  Exhibit
          I-1B or Exhibit I-2, respectively, to evidence such Lender's Tranche A
          Revolving   Loans,   Tranche  B  Revolving  Loans  or  Term  Loan,  as
          applicable.  In such event,  the  applicable  Borrower  shall promptly
          prepare, execute and deliver to such Lender a promissory note for such
          Loans  payable to the order of such  Lender and in a form  approved by
          the  Administrative  Agent  and  consistent  with  the  terms  of this
          Agreement. Thereafter, the Loans evidenced by such promissory note and
          interest  thereon  shall  at all  times  (including  after  assignment
          pursuant to Section  14.3) be  represented  by one or more  promissory
          notes in such form payable to the order of the payee named therein.

     Telephonic   Notices.   The   Borrowers   authorize  the  Lenders  and  the
Administrative Agent to extend Loans, effect selections of Types of Advances and
to transfer funds based on telephonic  notices made by any person or persons the
Administrative Agent or any Lender in good faith believes to be acting on behalf
of the  applicable  Borrower.  The  Borrowers  agree to deliver  promptly to the
Administrative Agent a written confirmation, signed by an Authorized Officer. If
the written  confirmation  differs in any material respect from the action taken
by the Administrative  Agent and the Lenders,  the records of the Administrative
Agent and the Lenders shall govern absent manifest error.

     Promise to Pay; Interest and Fees; Interest Payment Dates; Interest and Fee
Basis; Taxes; Loan and Control Accounts.

                                       88
<PAGE>

          Promise to Pay. Each Borrower unconditionally promises to pay when due
          the principal amount of each Loan and all other  Obligations  incurred
          by it, and to pay all unpaid interest accrued  thereon,  in accordance
          with the terms of this Agreement and the other Loan Documents.

          Interest  Payment Dates.  Interest  accrued on each Floating Rate Loan
          and each  Alternate  Currency  Loan  bearing a  fluctuating  Alternate
          Currency Rate shall be payable on each Payment Date,  commencing  with
          the  first  such  date to  occur  after  the  date  hereof,  upon  any
          prepayment  whether by  acceleration  or  otherwise,  and at  maturity
          (whether  by  acceleration  or  otherwise).  Interest  accrued on each
          Fixed-Rate  Loan shall be  payable  on the last day of its  applicable
          Interest Period,  on any date on which the Fixed-Rate Loan is prepaid,
          whether  by  acceleration  or  otherwise,  and at  maturity.  Interest
          accrued on each  Fixed-Rate Loan having an Interest Period longer than
          three months shall also be payable on the last day of each three-month
          interval  during  such  Interest  Period.   Interest  accrued  on  the
          principal balance of all other Obligations shall be payable in arrears
          (i) on the last day of each  calendar  month,  commencing on the first
          such day  following  the  incurrence  of such  Obligation,  (ii)  upon
          repayment  thereof  in full or in part,  and (iii) if not  theretofore
          paid in full,  at the  time  such  other  Obligation  becomes  due and
          payable (whether by acceleration or otherwise).

          Fees.

               (i) The Company shall pay to the Administrative Agent (A) for the
          account of the  Lenders in  accordance  with their Pro Rata  Tranche A
          Revolving Shares,  from and after the date of this Agreement until the
          Facility  Termination  Date, a commitment  fee accruing at the rate of
          the  then  Applicable  Commitment  Fee  Percentage  on the  unutilized
          portion of such Lender's Tranche A Revolving Loan Commitment (treating
          Letters of Credit, but not Swing Line Loans, as usage) and (B) for the
          account of the  Lenders in  accordance  with their Pro Rata  Tranche B
          Revolving Shares,  from and after the date of this Agreement until the
          Facility  Termination  Date, a commitment  fee accruing at the rate of
          the  then  Applicable  Commitment  Fee  Percentage  on the  unutilized
          portion of such Lender's Tranche B Revolving Loan (treating  Alternate
          Currency  Loans as  usage).  The  commitment  fee shall be  payable in
          arrears on each Payment Date hereafter,  and, in addition, on any date
          on which  the  Tranche  A  Revolving  Loan  Commitment  or  Tranche  B
          Revolving Loan Commitment, as applicable, shall be terminated in whole
          or, with respect to such terminated amount, in part.

               (ii) The Company agrees to pay to the  Administrative  Agent, for
          the sole account of the Administrative  Agent (unless otherwise agreed
          between the Administrative Agent and any Lender) the fees set forth in
          the Fee  Letter,  payable  at the times and in the  amounts  set forth
          therein.

               (iii) The  applicable  Borrower  agrees to pay to each  Alternate
          Currency Bank, for its sole account,  a fronting fee equal to 0.25% of
          the average daily outstanding  Dollar Amount of all Alternate Currency
          Loans made by such Alternate Currency Bank.

          Interest and Fee Basis;  Applicable  Floating Rate Margin,  Applicable
          Eurocurrency Margin and Applicable Commitment Fee Percentage.

               (i)  Interest  on  all  Fixed-Rate   Loans  (except  as  provided
          otherwise in the applicable Alternate Currency Addendum in the case of
          an Alternate  Currency  Loan) and fees shall be calculated  for actual
          days elapsed on the basis of a 360-day year.  Interest on all Floating
          Rate Loans shall be calculated for actual days elapsed on the basis of
          a 365-, or when appropriate 366-, day year.  Interest shall be payable
          for  the  day an  Obligation  is  incurred  but not for the day of any
          payment on the amount paid if payment is  received  prior to 3:00 p.m.
          (local  time) at the place of payment.  If any payment of principal of
          or interest on a Loan or any  payment of any other  Obligations  shall
          become due on a day which is not a Business Day, such payment shall be
          made  on the  next  succeeding  Business  Day  and,  in the  case of a
          principal  payment,  such  extension  of time  shall  be  included  in
          computing  interest,  fees and  commissions  in  connection  with such
          payment.

               (ii)The Applicable Floating Rate Margin,  Applicable Eurocurrency
          Margin and Applicable  Commitment  Fee Percentage  shall be determined
          from time to time on the basis of the then  applicable  Leverage Ratio
          in accordance with the following table:

                                       89
<PAGE>

<TABLE>
<CAPTION>
===================================== =================== ================================= ==========================
                                          APPLICABLE

                                        FLOATING RATE                                         APPLICABLE COMMITMENT

           LEVERAGE RATIO                   MARGIN         APPLICABLE EUROCURRENCY MARGIN        FEE PERCENTAGE
------------------------------------- ------------------- --------------------------------- --------------------------
------------------------------------- ------------------- --------------------------------- --------------------------
<S>                                        <C>                        <C>                           <C>
           Less than 1.50                   0.25%                      1.25%                         0.375%
------------------------------------- ------------------- --------------------------------- --------------------------
1.50 or greater, but less than 2.00         0.75%                      1.75%                         0.375%
------------------------------------- ------------------- --------------------------------- --------------------------
2.00 or greater, but less than 2.50         1.25%                      2.25%                         0.500%
------------------------------------- ------------------- --------------------------------- --------------------------
          2.50 or greater                   1.75%                      2.75%                         0.500%
===================================== =================== ================================= ==========================
</TABLE>

                  The Applicable Floating Rate Margin,  Applicable  Eurocurrency
         Margin and Applicable  Commitment Fee Percentage shall be 1.75%,  2.75%
         and 0.500%,  respectively,  until the Administrative Agent has received
         the  Company's  financial  statements  for the  fiscal  quarter  ending
         December 31, 2000. Thereafter, upon receipt of the financial statements
         to be delivered by the Company in accordance with Section  7.1(a)(i) or
         (ii),  as  applicable,  for any fiscal  quarter  or, if  earlier,  upon
         receipt of the Company's  audited  financial  statements for any fiscal
         year,  the  Applicable  Floating Rate Margin,  Applicable  Eurocurrency
         Margin and Applicable Commitment Fee Percentage shall be adjusted, such
         adjustment  being  effective  five  (5)  Business  Days  following  the
         Administrative  Agent's  receipt of such  financial  statements and the
         compliance certificate required to be delivered in connection therewith
         pursuant to Section  7.1(a)(iii);  provided,  that if the Company shall
         not have timely  delivered its financial  statements in accordance with
         Section  7.1(a)(i) or (ii), as applicable,  then commencing on the date
         upon which such  financial  statements  should have been  delivered and
         continuing until such financial  statements are actually delivered,  it
         shall be assumed for purposes of determining  the  Applicable  Floating
         Rate Margin,  Applicable  Eurocurrency Margin and Applicable Commitment
         Fee  Percentage  that the Leverage  Ratio was greater than 2.50 to 1.0.
         Notwithstanding  the  foregoing,  for so long as any Default shall have
         occurred  and be  continuing,  the  Applicable  Floating  Rate  Margin,
         Applicable Eurocurrency Margin and Applicable Commitment Fee Percentage
         shall  be the  highest  Applicable  Floating  Rate  Margin,  Applicable
         Eurocurrency  Margin and Applicable  Commitment Fee Margin set forth in
         the foregoing table.

         Taxes.

                  (i) Any and all payments by the Borrowers  hereunder  (whether
         in respect of principal,  interest,  fees or  otherwise)  shall be made
         free and clear of and  without  deduction  for any and all  present  or
         future taxes, levies, imposts,  deductions,  charges or withholdings or
         any  interest,  penalties  and  liabilities  with  respect  thereto but
         excluding,  in the case of each  Lender and the  Administrative  Agent,
         such taxes (including  income taxes,  franchise taxes and branch profit
         taxes)  as  are  imposed  on  or  measured  by  such  Lender's  or  the
         Administrative  Agent's,  as the case may be,  net income by the United
         States of America or any  Governmental  Authority  of the  jurisdiction
         under the laws of which such Lender or the Administrative Agent, as the
         case  may be,  is  organized  (all  such  non-excluded  taxes,  levies,
         imposts, deductions,  charges,  withholdings, and liabilities which the
         Administrative  Agent or a Lender  determines  to be applicable to this
         Agreement,  the other Loan Documents,  the Revolving Loan  Commitments,
         the Loans or the  Letters of Credit  being  hereinafter  referred to as
         "Taxes").  If any  Borrower  shall  be  required  by law to  deduct  or
         withhold  any Taxes from or in respect of any sum payable  hereunder or
         under the other  Loan  Documents  to any  Lender or the  Administrative
         Agent,  (i) the sum payable  shall be  increased as may be necessary so
         that after making all required  deductions or  withholdings  (including
         deductions  applicable  to  additional  sums payable under this Section
         2.15(e))  such Lender or Agent (as the case may be)  receives an amount
         equal to the sum it  would  have  received  had no such  deductions  or
         withholdings  been made,  (ii) the applicable  Borrower shall make such
         deductions or withholdings, and (iii) the applicable Borrower shall pay
         the full amount deducted or withheld to the relevant taxation authority
         or other authority in accordance with applicable law.

                  (ii) In addition,  the  Borrowers  agree to pay any present or
         future  stamp or  documentary  taxes or any other  excise  or  property
         taxes,  charges,  or similar  levies  which arise from any payment made
         hereunder,  from the issuance of Letters of Credit  hereunder,  or from
         the execution,  delivery or registration  of, or otherwise with respect
         to,  this  Agreement,  the other Loan  Documents,  the  Revolving  Loan
         Commitments,  the Loans or the Letters of Credit (hereinafter  referred
         to as "Other Taxes").

                  (iii) The Company and each Subsidiary Borrower shall indemnify
         each Lender and the  Administrative  Agent for the full amount of Taxes
         and Other  Taxes  (including,  without  limitation,  any Taxes or Other
         Taxes imposed by any  Governmental  Authority on amounts  payable under
         this Section 2.15(e)) paid by such Lender or the  Administrative  Agent
         (as the case may be) and any liability (including penalties,  interest,
         and expenses) arising therefrom or with respect thereto, whether or not
         such Taxes or Other  Taxes were  correctly  or

                                       90
<PAGE>

         legally  asserted.  This  indemnification  shall be made within thirty
         (30) days after the date such Lender or the  Administrative  Agent (as
         the case may be) makes written  demand  therefor.  A certificate as to
         any  additional  amount  payable to any  Lender or the  Administrative
         Agent under this Section 2.15(e) submitted to the applicable  Borrower
         and the  Administrative  Agent (if a Lender is so  submitting) by such
         Lender or the Administrative Agent shall show in reasonable detail the
         amount payable and the calculations  used to determine such amount and
         shall,  absent manifest  error, be final,  conclusive and binding upon
         all parties hereto.

                  (iv) Within  thirty (30) days after the date of any payment of
         Taxes or Other Taxes by the  Company or any  Subsidiary  Borrower,  the
         Company  shall  furnish to the  Administrative  Agent the original or a
         certified copy of a receipt evidencing payment thereof.

                  (v) Without  prejudice to the survival of any other  agreement
         of the Company and the Subsidiary Borrowers  hereunder,  the agreements
         and  obligations  of the  Borrowers  contained in this Section  2.15(e)
         shall survive the payment in full of all  Obligations,  the termination
         of the Letters of Credit and the termination of this Agreement.

                  (vi)  Each  Lender   (including  any  Replacement   Lender  or
         Purchaser)  that is not  created  or  organized  under  the laws of the
         United  States of America or a political  subdivision  thereof  (each a
         "Non-U.S.  Lender") shall deliver to the Company and the Administrative
         Agent on or before the Closing  Date,  or, if later,  the date on which
         such Lender becomes a Lender  pursuant to Section 12.3 hereof (and from
         time  to  time  thereafter  upon  the  request  of the  Company  or the
         Administrative  Agent, but only for so long as such Non-U.S.  Lender is
         legally  entitled  to do so),  either  (A) (I) two (2)  duly  completed
         copies of either (x) IRS Form  W-8BEN (or,  if  delivered  on or before
         December  31,  1999,  IRS Form  1001),  or (y) IRS Form  W-8ECI (or, if
         delivered on or before  December 31, 1999, IRS Form 4224), or in either
         case an  applicable  successor  form,  and  (II) for  periods  prior to
         January  1,  2000,  a duly  completed  copy of IRS  Form  W-8 or W-9 or
         applicable successor form; or (B) in the case of a Non-U.S. Lender that
         is not  legally  entitled  to  deliver  either  form  listed  in clause
         (vi)(A)(I),  (I) a  certificate  of a duly  authorized  officer of such
         Non-U.S.  Lender to the effect that such  Non-U.S.  Lender is not (x) a
         "bank" within the meaning of Section  881(c)(3)(A)  of the Code,  (y) a
         "10  percent  shareholder"  of the Company or any  Subsidiary  Borrower
         within  the  meaning  of  Section  881(c)(3)(B)  of the Code,  or (z) a
         controlled foreign corporation receiving interest from a related person
         within  the  meaning  of  Section   881(c)(3)(C)   of  the  Code  (such
         certificate,   an  "Exemption  Certificate")  and  (II)  two  (2)  duly
         completed copies of IRS Form W-8BEN or applicable  successor form. Each
         such  Lender   further  agrees  to  deliver  to  the  Company  and  the
         Administrative  Agent from time to time a true and accurate certificate
         executed in duplicate by a duly authorized  officer of such Lender in a
         form satisfactory to the Company and the Administrative  Agent,  before
         or promptly upon the occurrence of any event  requiring a change in the
         most recent certificate  previously  delivered by it to the Company and
         the Administrative Agent pursuant to this Section 2.15(e)(vi). Further,
         each  Lender  which  delivers a form or  certificate  pursuant  to this
         clause  (vi)  covenants  and agrees to deliver to the  Company  and the
         Administrative  Agent within  fifteen (15) days prior to the expiration
         of such form, for so long as this Agreement is still in effect, another
         such  certificate   and/or  two  (2)  accurate  and  complete  original
         newly-signed  copies of the  applicable  form (or any successor form or
         forms required under the Code or the applicable regulations promulgated
         thereunder).

                  Each  Lender  shall  promptly  furnish to the  Company and the
         Administrative  Agent such  additional  documents as may be  reasonably
         required by any Borrower or the  Administrative  Agent to establish any
         exemption  from or reduction of any Taxes or Other Taxes required to be
         deducted or withheld and which may be obtained without undue expense to
         such  Lender.  Notwithstanding  any  other  provision  of this  Section
         2.15(e), no Borrower shall be obligated to gross up any payments to any
         Lender  pursuant  to Section  2.15(e)(i),  or to  indemnify  any Lender
         pursuant to Section  2.15(e)(iii),  in respect of United States federal
         withholding  taxes to the extent imposed as a result of (x) the failure
         of such Lender to deliver to the  Company  the form or forms  and/or an
         Exemption  Certificate,  as  applicable  to such  Lender,  pursuant  to
         Section  2.15(e)(vi),  or (y)  such  form  or  forms  and/or  Exemption
         Certificate  not  establishing a complete  exemption from U.S.  federal
         withholding  tax or the information or  certifications  made therein by
         the Lender  being  untrue or  inaccurate  on the date  delivered in any
         material respect, provided, however, that the applicable Borrower shall
         be obligated  to gross up any  payments to any such Lender  pursuant to
         Section  2.15(e)(i),  and to  indemnify  any such  Lender  pursuant  to
         Section  2.15(e)(iii),  in respect of United States federal withholding
         taxes  if (x)  any  such  failure  to  deliver  a form or  forms  or an
         Exemption Certificate or the failure of such form or forms or exemption
         certificate  to  establish  a  complete  exemption  from  U.S.  federal
         withholding  tax or inaccuracy or untruth  contained  therein  resulted
         from a change in any applicable  statute,  treaty,  regulation or other
         applicable law or any interpretation of any of the foregoing  occurring
         after the date  hereof,  which  change  rendered  such Lender no longer
         legally entitled to deliver such form or forms or Exemption Certificate
         or otherwise  ineligible  for a complete  exemption  from U.S.  federal
         withholding tax, or rendered the information or the certifications made
         in such form or forms or Exemption  Certificate untrue or inaccurate in
         any material respect, or (y) the obligation to gross up payments to any
         such Lender  pursuant to

                                       91
<PAGE>

         Section  2.15(e)(i),  or to  indemnify  any such  Lender  pursuant  to
         Section  2.15(e)(iii),  is with respect to a Purchaser  that becomes a
         Purchaser  as a result of an  assignment  made at the  request  of the
         Company.

     Notification  of  Advances,   Interest  Rates,  Prepayments  and  Aggregate
Revolving  Loan  Commitment  Reductions.  Promptly  after receipt  thereof,  the
Administrative  Agent will notify each Lender of the contents of each  Aggregate
Revolving Loan Commitment  reduction  notice,  Borrowing/Conversion/Continuation
Notice, and repayment notice received by it hereunder.  The Administrative Agent
will notify the Company or  applicable  Borrower and each Lender of the interest
rate and Agreed  Currency  applicable  to each  Fixed-Rate  Loan  promptly  upon
determination  of such  interest  rate and  Agreed  Currency  and will give each
Lender prompt notice of each change in the Alternate Base Rate.

     Lending Installations.  Each Lender may book its Loans or Letters of Credit
at any Lending  Installation  selected by such Lender and may change its Lending
Installation  from time to time. All terms of this Agreement  shall apply to any
such Lending  Installation.  Each Lender may, by written or facsimile  notice to
the  Administrative  Agent and the  Company,  designate  a Lending  Installation
through  which  Loans  will be made by it and for whose  account  Loan  payments
and/or payments of L/C Obligations are to be made.

     Non-Receipt of Funds by the  Administrative  Agent.  Unless a Borrower or a
Lender, as the case may be, notifies the Administrative  Agent prior to the date
on which it is scheduled to make payment to the  Administrative  Agent of (a) in
the case of a Lender, the proceeds of a Loan or (b) in the case of any Borrower,
a payment of principal, interest fees or other Obligations to the Administrative
Agent for the  account  of any of the  Lenders,  that it does not intend to make
such  payment,  the  Administrative  Agent may assume that such payment has been
made.  The  Administrative  Agent may, but shall not be  obligated  to, make the
amount of such payment available to the intended recipient in reliance upon such
assumption.  If such Lender or the applicable Borrower,  as the case may be, has
not in fact made such payment to the Administrative Agent, the recipient of such
payment  shall,   on  demand  by  the   Administrative   Agent,   repay  to  the
Administrative Agent the amount so made available together with interest thereon
in respect of each day during the period  commencing on the date such amount was
so made available by the Administrative  Agent until the date the Administrative
Agent  recovers  such  amount  at a rate per  annum  equal to (i) in the case of
payment by a Lender,  the Federal Funds  Effective  Rate for such day or (ii) in
the case of payment by a Borrower,  the interest rate applicable to the relevant
Loan.

     Termination  Date.  This Agreement  shall be effective  until the date (the
"Facility  Termination  Date") upon which (a) all of the Obligations (other than
contingent  indemnity  obligations)  shall have been fully and indefeasibly paid
and satisfied,  (b) all  commitments  of the Lenders to extend credit  hereunder
have expired or have been  terminated and (c) all of the Letters of Credit shall
have expired, been canceled or terminated. Notwithstanding the occurrence of the
Facility  Termination Date,  obligations of the Borrowers and other terms hereof
which by the terms of this  Agreement  survive  termination  shall  survive  the
Facility Termination Date.

     Replacement of Certain Lenders.  In the event a Lender ("Affected  Lender")
shall have:  (a) failed to fund its Pro Rata  Tranche A  Revolving  Share or Pro
Rata  Tranche B  Revolving  Share of any  Advance  requested  by the  applicable
Borrower, or to make payment in respect of any Alternate Currency Loan purchased
by such Lender  pursuant to Section  2.21(e),  which such Lender is obligated to
fund under the terms of this Agreement and which failure has not been cured, (b)
requested  compensation from any Borrower under Sections 2.15(e),  4.1 or 4.2 to
recover  Taxes,  Other Taxes or other  additional  costs incurred by such Lender
which are not being  incurred  generally by the other Lenders except as provided
under any  applicable  Alternate  Currency  Addendum,  or (c) delivered a notice
pursuant  to  Section  4.3  claiming  that  such  Lender  is  unable  to  extend
Eurocurrency  Rate Loans to the Company for reasons not generally  applicable to
the other Lenders,  then, in any such case,  after the engagement of one or more
"Replacement   Lenders"   (as  defined   below)  by  the   Company   and/or  the
Administrative  Agent, the Company or the Administrative  Agent may make written
demand on such Affected Lender (with a copy to the  Administrative  Agent in the
case of a  demand  by the  Company  and a copy to the  Company  in the case of a
demand by the Administrative  Agent) for the Affected Lender to assign, and such
Affected Lender shall use commercially  reasonable efforts to assign pursuant to
one or more duly executed Assignment Agreements five (5) Business Days after the
date of such demand, to one or more financial  institutions that comply with the
provisions of Section 14.3(a) which the Company or the Administrative  Agent, as
the case may be, shall have engaged for such purpose ("Replacement Lender"), all
of such Affected  Lender's rights and  obligations  under this Agreement and the
other  Loan  Documents  (including,   without  limitation,  its  Revolving  Loan
Commitment,  all  Loans  owing  to it,  all of its  participation  interests  in
existing  Letters of Credit,  and its  obligation to  participate  in additional
Letters of Credit and Alternate  Currency  Loans  hereunder) in accordance  with
Section 14.3. The  Administrative  Agent is authorized to execute one or more of
such assignment  agreements as attorney-in-fact  for any Affected Lender failing
to execute and deliver the same within five (5) Business  Days after the date of
such  demand.  With  respect to such  assignment  the  Affected  Lender shall be
entitled to receive,  in cash, all amounts due and owing to the Affected  Lender
hereunder or under any other Loan Document,  including,  without limitation, the
aggregate  outstanding  principal  amount  of the  Loans  owed to  such  Lender,
together  with accrued  interest  thereon  through the date of such  assignment,
amounts  payable  under  Sections  2.15(e),  4.1,  and 4.2 with  respect to such
Affected Lender and  compensation  payable under Section 2.15(c) in the event of
any

                                       92
<PAGE>

replacement  of any Affected  Lender under clause (b) or clause (c) of this
Section  2.20;  provided  that upon such  Affected  Lender's  replacement,  such
Affected  Lender  shall  cease to be a party  hereto  but shall  continue  to be
entitled to the benefits of Sections  2.15(e),  4.1, 4.2, 4.4, and 11.6, as well
as to any fees  accrued for its account  hereunder  and not yet paid,  and shall
continue to be obligated under Section 12.8.

         Alternate Currency Loans.

         Upon the satisfaction of the conditions  precedent set forth in Article
         V hereof and set forth in the applicable  Alternate  Currency Addendum,
         from and including the later of the date of this Agreement and the date
         of execution of the applicable Alternate Currency Addendum and prior to
         the termination of the Aggregate  Tranche B Revolving Credit Commitment
         (or such earlier  termination date as shall be specified in or pursuant
         to the applicable Alternate Currency Addendum), each Alternate Currency
         Bank agrees,  on the terms and  conditions  set forth in this Agreement
         and in the applicable  Alternate Currency  Addendum,  to make Alternate
         Currency Loans under such Alternate Currency Addendum to the applicable
         Borrower party to such Alternate Currency Addendum from time to time in
         the applicable Alternate Currency, in an amount not to exceed each such
         Alternate  Currency Bank's applicable  Alternate  Currency  Commitment;
         provided,  further, at no time shall the Dollar Amount of the Alternate
         Currency Loans for any specific  Alternate  Currency exceed the maximum
         amount  specified as the maximum amount for such Alternate  Currency in
         the applicable  Alternate  Currency  Addendum other than as a result of
         currency  fluctuations and then only to the extent permitted in Section
         2.5(b)(ii)  and  provided,  further  that at no time  shall the  Dollar
         Amount  of the  Tranche  B  Revolving  Credit  Obligations  exceed  the
         Aggregate Tranche B Revolving Loan Commitments. Subject to the terms of
         this  Agreement and the applicable  Alternate  Currency  Addendum,  the
         applicable  Borrowers may borrow, repay and reborrow Alternate Currency
         Loans in the  applicable  Alternate  Currency  at any time prior to the
         termination of the Aggregate  Tranche B Revolving Credit Commitment (or
         such earlier  termination  date as shall be specified in or pursuant to
         the applicable Alternate Currency Addendum).  On the termination of the
         Aggregate  Tranche  B  Revolving  Credit  Commitment  (or such  earlier
         termination date as shall be specified in or pursuant to the applicable
         Alternate Currency Addendum),  the outstanding principal balance of the
         Alternate  Currency  Loans  shall  be paid  in  full by the  applicable
         Borrower  and  prior to the  termination  of the  Aggregate  Tranche  B
         Revolving Credit Commitment (or such earlier  termination date as shall
         be  specified  in or  pursuant  to the  applicable  Alternate  Currency
         Addendum)  prepayments of the Alternate Currency Loans shall be made by
         the  applicable  Borrower  if and to the  extent  required  by  Section
         2.5(b)(ii). For the avoidance of doubt, it is understood that no Lender
         shall have any  obligation  hereunder to execute an Alternate  Currency
         Addendum and so to become an Alternate Currency Bank.

         Borrowing Notice.  When the applicable Borrower desires to borrow under
         this  Section  2.21,  the  applicable  Borrower  shall  deliver  to the
         applicable  Alternate  Currency  Bank  and the  Administrative  Agent a
         Borrowing/Conversion/Continuation  Notice, signed by it, as provided in
         Section 2.8  specifying  that such  Borrower is requesting an Alternate
         Currency  Loan pursuant to this Section  2.21,  and the  Administrative
         Agent  shall  give  prompt  notice  to the  Lenders  with a  Tranche  B
         Revolving Loan Commitment of any such request for an Alternate Currency
         Loan.  Any  Borrowing/Conversion/Continuation  Notice given pursuant to
         this Section 2.21 shall be irrevocable.

         Termination.  Except as  otherwise  required by  applicable  law, in no
         event shall any  Alternate  Currency  Bank have the right to accelerate
         the Alternate  Currency Loans outstanding under any Alternate  Currency
         Addendum or to terminate its  commitments  (if any)  thereunder to make
         Alternate  Currency  Loans  prior  to the  stated  termination  date in
         respect  thereof,  except that each Alternate  Currency Bank shall have
         such rights upon an  acceleration of the Loans and a termination of the
         Revolving Credit Commitments pursuant to Article IX.

         Statements.   Each  Alternate   Currency  Bank  shall  furnish  to  the
         Administrative  Agent not less frequently  than monthly,  at the end of
         each calendar quarter,  and at any other time at the reasonable request
         of the Administrative  Agent, a statement setting forth the outstanding
         Alternate  Currency  Loans made and repaid  during the period since the
         last such report under such Alternate Currency Addendum.

         Risk  Participation.  Immediately and automatically upon the occurrence
         of a Default  under  Sections  8.1(a),  (e) or (f),  each Lender with a
         Tranche  B  Revolving   Loan   Commitment   shall  be  deemed  to  have
         unconditionally and irrevocably purchased from the applicable Alternate
         Currency Bank,  without recourse or warranty,  an undivided interest in
         and participation in each Alternate  Currency Loan ratably in an amount
         equal to such Lender's Pro Rata Tranche B Revolving Share of the amount
         of principal and accrued  interest of such Loan,  and  immediately  and
         automatically  all Alternate  Currency  Loans shall be converted to and
         redenominated  in  Dollars  equal to the  Dollar  Amount  of each  such
         Alternate  Currency Loan determined as of the date of such  conversion;
         provided,  that to the extent such conversion shall occur other than at
         the end of an Interest Period, the applicable Borrower shall pay to the
         applicable  Alternate  Currency  Bank,  all losses and  breakage  costs
         related  thereto in  accordance  with Section 4.4.  Each of the Lenders
         shall pay to the applicable  Alternate Currency Bank not later than two
         (2) Business Days

                                       93
<PAGE>

         following a request for payment from such Alternate  Currency Bank, in
         Dollars,   an  amount   equal  to  the   undivided   interest  in  and
         participation in the Alternate  Currency Loan purchased by such Lender
         pursuant to this Section  2.21(e).  In the event that any Lender fails
         to make  payment  to the  applicable  Alternate  Currency  Bank of any
         amount due under this Section 2.21(e),  the Administrative Agent shall
         be entitled to receive,  retain and apply against such  obligation the
         principal  and  interest  otherwise  payable to such Lender  hereunder
         until the  Administrative  Agent  receives  from such Lender an amount
         sufficient to discharge such Lender's payment obligation as prescribed
         in this Section 2.21(e)  together with interest thereon at the Federal
         Funds Effective Rate for each day during the period  commencing on the
         date of demand by the applicable Alternate Currency Bank and ending on
         the date such obligation is fully satisfied.  The Administrative Agent
         will  promptly  remit all payments  received as provided  above to the
         applicable  Alternate  Currency  Bank.  In  consideration  of the risk
         participations  prescribed in this Section 2.21(e),  each Lender shall
         receive,  from the  accrued  interest  paid for  periods  prior to the
         conversion  of any Alternate  Currency Loan as described  above by the
         applicable  Borrower on each  Alternate  Currency Loan, a fee equal to
         such  Lender's  Pro Rata Tranche B Revolving  Share of the  Applicable
         Eurocurrency Margin component of the interest accrued on such Loan, as
         in effect from time to time during the period such  interest  accrued.
         Such  portion  of the  interest  paid by the  applicable  Borrower  on
         Alternate  Currency  Loans to the applicable  Alternate  Currency Bank
         shall be paid as promptly as possible by such Alternate  Currency Bank
         to the  Administrative  Agent, and the  Administrative  Agent shall as
         promptly as possible convert such amount into Dollars at the spot rate
         of exchange in accordance with its normal banking  practices and apply
         such  resulting  amount  ratably  among  the  Lenders  (including  the
         Alternate  Currency  Banks) in  proportion to their Pro Rata Tranche B
         Revolving Share.

         Other   Provisions   Applicable  to  Alternate   Currency  Loans.   The
         specification  of payment of  Alternate  Currency  Loans in the related
         Alternate Currency at a specific place pursuant to this Agreement is of
         the essence. Such Alternate Currency shall, subject to Section 2.21, be
         the currency of account and payment of such Loans under this  Agreement
         and  the  applicable   Alternate  Currency  Addendum.   Notwithstanding
         anything in this Agreement,  the obligation of the applicable  Borrower
         in respect of such Loans shall not be  discharged  by an amount paid in
         any other currency or at another place,  whether pursuant to a judgment
         or otherwise,  to the extent the amount so paid,  on prompt  conversion
         into the  applicable  Alternate  Currency  and  transfer to such Lender
         under  normal  banking  procedure,  does not yield  the  amount of such
         Alternate Currency due under this Agreement or the applicable Alternate
         Currency Addendum. In the event that any payment, whether pursuant to a
         judgment or otherwise, upon conversion and transfer, does not result in
         payment  of the  amount  of such  Alternate  Currency  due  under  this
         Agreement or the applicable  Alternate Currency  Addendum,  such Lender
         shall have an independent cause of action against each of the Borrowers
         for  the  currency  deficit.  In  the  event  that  any  payment,  upon
         conversion and transfer,  results in payment in excess of the amount of
         such  Alternate  Currency due under this  Agreement  or the  applicable
         Alternate  Currency  Addendum,  such Lender shall refund such excess to
         the applicable Borrower.

     Judgment Currency. If, for the purposes of obtaining judgment in any court,
it is necessary to convert a sum due from any Borrower hereunder in the currency
expressed to be payable herein (the "specified currency") into another currency,
the parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance  with normal
banking  procedures  the  Administrative  Agent  could  purchase  the  specified
currency with such other  currency at the  Administrative  Agent's office in New
York,  New  York  on the  Business  Day  preceding  that  on  which  the  final,
non-appealable judgment is given. The obligations of each Borrower in respect of
any  sum  due to  any  Lender  or  the  Administrative  Agent  hereunder  shall,
notwithstanding any judgment in a currency other than the specified currency, be
discharged only to the extent that on the Business Day following receipt by such
Lender or the  Administrative  Agent (as the case may be) of any sum adjudged to
be so due in such other currency such Lender or the Administrative Agent (as the
case  may be) may in  accordance  with  normal,  reasonable  banking  procedures
purchase the specified  currency with such other currency.  If the amount of the
specified  currency so  purchased  is less than the sum  originally  due to such
Lender  or the  Administrative  Agent,  as the  case  may be,  in the  specified
currency, each Borrower agrees, to the fullest extent that it may effectively do
so, as a separate obligation and notwithstanding any such judgment, to indemnify
such Lender or the Administrative  Agent, as the case may be, against such loss,
and if the amount of the  specified  currency so  purchased  exceeds (a) the sum
originally due to any Lender or the Administrative Agent, as the case may be, in
the specified currency and (b) any amounts shared with other Lenders as a result
of allocations of such excess as a disproportionate payment to such Lender under
Section  13.2,  such  Lender or the  Administrative  Agent,  as the case may be,
agrees to remit such excess to such Borrower.

          Market  Disruption;   Denomination  of  Amounts  in  Dollars;   Dollar
          Equivalent of Reimbursement Obligations.

          Notwithstanding the satisfaction of all conditions referred to in this
          Article II with  respect to any Advance in any Agreed  Currency  other
          than Dollars or an Alternate Currency,  as applicable,  if there shall
          occur on or prior to the date of such  Advance  any change in national
          or  international  financial,  political  or  economic  conditions  or
          currency  exchange  rates  or  exchange  controls  which  would in the
          reasonable  opinion  of the  Company,  any

                                       94
<PAGE>

         Subsidiary  Borrower,  any Alternate Currency Bank, the Administrative
         Agent  or  the  Required  Lenders  make  it   impracticable   for  the
         Eurocurrency  Rate Loans or Alternate  Currency Loans  comprising such
         Advance  to  be  denominated  in  the  Agreed  Currency  or  Alternate
         Currency,  as applicable,  specified by the applicable Borrower,  then
         the  Administrative  Agent shall  forthwith give notice thereof to the
         Company or such Borrower,  the applicable  Alternate Currency Bank and
         the  Lenders,  or the  applicable  Borrower  shall give  notice to the
         Administrative  Agent, the applicable  Alternate Currency Bank and the
         Lenders,  as the case  may be,  and such  Eurocurrency  Rate  Loans or
         Alternate Currency Loans shall not be denominated in such currency but
         shall  be made on such  Borrowing  Date in  Dollars,  in an  aggregate
         principal amount equal to the Dollar Amount of the aggregate principal
         amount  specified in the related  Borrowing  Notice,  as Floating Rate
         Loans,  unless the  applicable  Borrower  notifies the  Administrative
         Agent at least  one (1)  Business  Day  before  such  date that (i) it
         elects  not to  borrow  on such  date or (ii) it elects to borrow on a
         date at least three (3) Business Days thereafter in a different Agreed
         Currency  or  Alternate  Currency,  as the case may be,  in which  the
         denomination of such Loans would in the opinion of the  Administrative
         Agent,  any Alternate  Currency Bank, if applicable,  and the Required
         Lenders be practicable and in an aggregate  principal  amount equal to
         the Dollar Amount of the aggregate  principal  amount specified in the
         related Borrowing Notice.

         Except  as set  forth  in  Sections  2.1,  2.5 and  2.21,  all  amounts
         referenced  in this  Article  II shall be  calculated  using the Dollar
         Amount  determined based upon the Equivalent Amount in effect as of the
         date of any determination  thereof;  provided,  however,  to the extent
         that any Borrower  shall be  obligated  hereunder to pay in Dollars any
         Advance denominated in a currency other than Dollars, such amount shall
         be paid in Dollars using the Dollar  Amount of the Advance  (calculated
         based  upon the  Equivalent  Amount in  effect  on the date of  payment
         thereof)  and in the  event  that  the  applicable  Borrower  does  not
         reimburse the Administrative Agent and the Lenders are required to fund
         a purchase of a participation  in such Advance,  such purchase shall be
         made in Dollars in an amount equal to the Dollar Amount of such Advance
         (calculated  based upon the Equivalent  Amount in effect on the date of
         payment thereof).  Notwithstanding anything herein to the contrary, the
         full risk of currency  fluctuations shall be borne by the Borrowers and
         the  Borrowers  agree to indemnify and hold harmless each Issuing Bank,
         the Alternate Currency Banks, the Administrative  Agent and the Lenders
         from and against any loss resulting from any borrowing denominated in a
         currency  other  than in  Dollars  and for  which the  Lenders  are not
         reimbursed on the day of such borrowing.

     Subsidiary  Borrowers.  The  Company  may at any time or from time to time,
with the consent of the  Administrative  Agent, add as a party to this Agreement
any  Wholly-Owned  Subsidiary  to be a  "Subsidiary  Borrower"  hereunder by the
execution and delivery to the Administrative Agent and the Lenders of (a) a duly
completed Assumption Letter by such Subsidiary,  with the written consent of the
Company  at  the  foot  thereof  and  (b)  such  other  guaranty,  security  and
subordinated   intercompany   indebtedness   documents   (and  related   closing
documentation) as may be reasonably  required by the Administrative  Agent, such
documents  with  respect  to any  additional  Subsidiaries  to be  substantially
similar in form and  substance  to the Loan  Documents  executed on or about the
Closing  Date by or in  respect  of the  Subsidiaries  parties  hereto as of the
Closing Date.  Upon such execution,  delivery and consent such Subsidiary  shall
for all purposes be a party  hereto as a  Subsidiary  Borrower as fully as if it
had executed  and  delivered  this  Agreement.  So long as the  principal of and
interest on any Advances made to any  Subsidiary  Borrower  under this Agreement
shall have been paid in full,  all  Letters of Credit  issued for the account of
such  Subsidiary  Borrower have expired or been returned and  terminated and all
other  obligations of such  Subsidiary  Borrower under this Agreement shall have
been fully performed,  the Company may, by not less than five (5) Business Days'
prior  notice to the  Administrative  Agent  (which  shall  promptly  notify the
Lenders thereof),  terminate such Subsidiary  Borrower's status as a "Subsidiary
Borrower".

     Security.  At all times prior to the Trigger Event Date, all Obligations of
the Borrowers under this Agreement and all other Loan Documents shall be secured
in  accordance  with the  Collateral  Documents.  Provided  no Default  has then
occurred and is continuing, at any time, and from time to time, on and after the
Trigger Date, the Administrative Agent shall, at the Borrowers' expense, deliver
such documents as the Borrowers may  reasonably  request to evidence the release
of the Collateral from the assignments and security  interests granted under the
Collateral Documents.

                         : THE LETTER OF CREDIT FACILITY

     Obligation to Issue Letters of Credit.  Subject to the terms and conditions
of this  Agreement  and in reliance  upon the  representations,  warranties  and
covenants of the Company  herein set forth,  each Issuing Bank hereby  agrees to
issue for the account of the Company or any  Subsidiary  Borrower  through  such
Issuing  Bank's  branches as it and the Company may jointly  agree,  one or more
Letters of Credit  denominated  in Dollars in accordance  with this Article III,
from time to time during the period,  commencing  on the Closing Date and ending
on the  Business  Day  prior  to the  termination  of the  Aggregate  Tranche  A
Commitment.

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<PAGE>

     Transitional Provision. Schedule 3.2 contains a schedule of certain letters
of credit  issued for the account of the Company and its  Subsidiaries  prior to
the Closing Date.  From and after the Closing Date, such letters of credit shall
be deemed to be Letters of Credit issued pursuant to this Article III.

     Types and  Amounts.  No Issuing  Bank shall have any  obligation  to and no
Issuing Bank shall:

          (a) issue (or amend)  any Letter of Credit if on the date of  issuance
     (or  amendment),  before or after  giving  effect  to the  Letter of Credit
     requested  hereunder,  (i) the  amount of the  Tranche A  Revolving  Credit
     Obligations  at such time would exceed the  Aggregate  Revolving  Tranche A
     Loan Commitment at such time, or (ii) the aggregate  outstanding  amount of
     the L/C Obligations would exceed $25,000,000; or

          (b) issue (or amend) any Letter of Credit which has an expiration date
     later than the date which is the  earlier of one (1) year after the date of
     issuance thereof or the Revolving Loan Termination Date; provided, that any
     Letter of Credit with a one-year tenor may provide for the renewal  thereof
     for  additional  one-year  periods (not to extend beyond the Revolving Loan
     Termination Date) with the consent of the applicable Issuing Bank.

     Conditions.  In  addition  to  being  subject  to the  satisfaction  of the
conditions  contained in Sections 5.1, 5.2 and 5.3, the obligation of an Issuing
Bank to issue any Letter of Credit is subject to the satisfaction in full of the
following conditions:

          (a) the Company shall have  delivered to the  applicable  Issuing Bank
     (at such  times and in such  manner  as such  Issuing  Bank may  reasonably
     prescribe)  and the  Administrative  Agent,  a request for issuance of such
     Letter of Credit in  substantially  the form of Exhibit C hereto (each such
     request a "Request For Letter of Credit"),  duly executed  application  for
     such  Letter  of  Credit,  and  such  other  documents,   instructions  and
     agreements  as may be  required  pursuant  to the terms  thereof  (all such
     applications,  documents,  instructions,  and agreements  being referred to
     herein as the "L/C Documents"),  and the proposed Letter of Credit shall be
     reasonably satisfactory to such Issuing Bank as to form and content; and

          (b) as of the date of  issuance  no order,  judgment  or decree of any
     court,  arbitrator or Governmental  Authority shall purport by its terms to
     enjoin or restrain the applicable  Issuing Bank from issuing such Letter of
     Credit and no law, rule or  regulation  applicable to such Issuing Bank and
     no request  or  directive  (whether  or not having the force of law) from a
     Governmental  Authority  with  jurisdiction  over such  Issuing  Bank shall
     prohibit or request  that such  Issuing  Bank  refrain from the issuance of
     Letters of Credit generally or the issuance of that Letter of Credit.

     Procedure  for Issuance of Letters of Credit.  (a) Subject to the terms and
conditions of this Article III and provided that the  applicable  conditions set
forth in Sections 5.1, 5.2 and 5.3 hereof have been  satisfied,  the  applicable
Issuing Bank shall, on the requested date, issue a Letter of Credit on behalf of
the Company or a Subsidiary  Borrower,  as applicable  in  accordance  with such
Issuing Bank's usual and customary  business  practices and, in this connection,
such  Issuing  Bank may  assume  that the  applicable  conditions  set  forth in
Sections 3.3(b),  3.4(b) and 5.3 hereof have been satisfied unless it shall have
received notice to the contrary from the Administrative Agent or a Lender or has
knowledge that the applicable conditions have not been met.

          (b)  Promptly,  and in any event not more  than one (1)  Business  Day
     following  the date of  issuance  of any Letter of Credit,  the  applicable
     Issuing Bank shall give the  Administrative  Agent written or telex notice,
     or telephonic  notice  confirmed  promptly  thereafter  in writing,  of the
     issuance  of a Letter of Credit  (provided,  however,  that the  failure to
     provide such notice  shall not result in any  liability on the part of such
     Issuing Bank), and the  Administrative  Agent shall promptly give notice to
     the Lenders of each such issuance.

          (c) No Issuing Bank shall extend or amend any Letter of Credit  unless
     the  requirements  of this  Section  3.5 are met as though a new  Letter of
     Credit was being requested and issued.

     Letter of Credit  Participation.  On the date of the making of the  initial
Loans,  with respect to the Letters of Credit  identified  on Schedule  3.2, and
immediately  upon the issuance of each Letter of Credit  hereunder,  each Lender
shall be deemed to have automatically, irrevocably and unconditionally purchased
and  received  from  the  applicable  Issuing  Bank an  undivided  interest  and
participation in and to such Letter of Credit, the obligations of the Company in
respect   thereof,   and  the   liability  of  such   Issuing  Bank   thereunder
(collectively, an "L/C Interest") in the amount available for drawing under such
Letter of Credit multiplied by such Lender's Pro Rata Tranche A Revolving Share.

                                      96
<PAGE>

     Reimbursement   Obligation.   (a)  The  Company   agrees   unconditionally,
irrevocably and absolutely to pay immediately to the  Administrative  Agent, for
the account of the Lenders with Tranche A Revolving Loan Commitments, the amount
of each  advance  drawn  under or pursuant to a Letter of Credit or an L/C Draft
related thereto (such obligation of the Company to reimburse the  Administrative
Agent  for an  advance  made  under  a  Letter  of  Credit  or L/C  Draft  being
hereinafter  referred to as a  "Reimbursement  Obligation"  with respect to such
Letter of  Credit  or L/C  Draft),  each  such  reimbursement  to be made by the
Company no later than the  Business  Day on which the  applicable  Issuing  Bank
makes  payment of each such L/C Draft or, if the  Company  shall  have  received
notice of a  Reimbursement  Obligation  later than 12:00 noon (Chicago time), on
any  Business  Day or on a day which is not a Business  Day, no later than 12:00
noon (Chicago time), on the immediately  following  Business Day or, in the case
of any other draw on a Letter of  Credit,  the date  specified  in the demand of
such  Issuing  Bank.  If the Company at any time fails to repay a  Reimbursement
Obligation  pursuant to this Section 3.7, the Issuing Bank shall promptly notify
the Administrative Agent and the Administrative Agent shall promptly notify each
Lender and the Company  shall be deemed to have  requested  to borrow  Tranche A
Revolving Loans from the Lenders with Tranche A Revolving Loan  Commitments,  as
of the date of the advance giving rise to the Reimbursement Obligation, equal to
the amount of the unpaid  Reimbursement  Obligation.  Such  Tranche A  Revolving
Loans  shall  be  made  as of the  date  of the  payment  giving  rise  to  such
Reimbursement  Obligation,   automatically,   without  notice  and  without  any
requirement  to satisfy the  conditions  precedent  otherwise  applicable  to an
Advance of Tranche A Revolving Loans.

          (b) Each Lender with a Tranche A Revolving Loan Commitment  shall upon
     any notice pursuant to Section 3.7(a) make available to the  Administrative
     Agent for the account of the relevant Issuing Bank an amount in Dollars and
     in  immediately  available  funds equal to its Pro Rata Tranche A Revolving
     Share of the amount of the drawing,  whereupon  such Lenders shall (subject
     to  Section   3.7(d))  each  be  deemed  to  have  made  a  Revolving  Loan
     constituting  a Floating Rate Advance,  the proceeds of which Advance shall
     be used to repay such Reimbursement  Obligation.  If any Lender so notified
     fails to make available to the Administrative  Agent for the account of the
     Issuing Bank the amount of such Lender's Pro Rata Tranche A Revolving Share
     of the amount of the drawing by no later than 2:00 p.m.  (Chicago  time) on
     the date of the advance giving rise to the Reimbursement  Obligation,  then
     interest  shall accrue on such  Lender's  obligation  to make such payment,
     from such date to the date such Lender  makes such  payment,  at a rate per
     annum equal to the Federal Funds Effective Rate in effect from time to time
     during such period. The  Administrative  Agent will promptly give notice of
     the occurrence of the draw, but failure of the Administrative Agent to give
     any such  notice in  sufficient  time to enable any  Lender to effect  such
     payment on such date shall not relieve  such  Lender  from its  obligations
     under this Section 3.7.

          (c) Each Lender's obligation in accordance with this Agreement to make
     the Tranche A Revolving  Loans,  as  contemplated by this Section 3.7, as a
     result  of a  drawing  under a Letter  of  Credit,  shall be  absolute  and
     unconditional  and without  recourse to the Issuing  Banks and shall not be
     affected by any  circumstance,  including  (i) any  set-off,  counterclaim,
     recoupment,  defense or other  right which such  Revolving  Lender may have
     against an Issuing  Bank,  the  Company or any other  Person for any reason
     whatsoever;  (ii) the occurrence or continuance of a Default,  an Unmatured
     Default  or a Material  Adverse  Effect;  or (iii) any other  circumstance,
     happening  or  event  whatsoever,  whether  or  not  similar  to any of the
     foregoing.

          (d) If, for any  reason,  the Company  fails to repay a  Reimbursement
     Obligation  on the day such  Reimbursement  Obligation  arises and, for any
     reason,  the  Lenders  are  unable  to make or have no  obligation  to make
     Revolving  Loans,  then such  Reimbursement  Obligation shall bear interest
     from  and  after  such  day,  until  paid in  full,  at the  interest  rate
     applicable to a Floating Rate Advance.

     Letter of Credit Fees. The Company agrees to pay:

          (a) quarterly, in arrears, to the Administrative Agent for the ratable
     benefit of the Lenders with a Tranche A Revolving Loan  Commitment a letter
     of  credit  fee  at a rate  per  annum  equal  to the  Applicable  L/C  Fee
     Percentage on the average daily  outstanding  amount  available for drawing
     under all Letters of Credit;

          (b) quarterly, in arrears, to the applicable Issuing Bank, a letter of
     credit  fronting  fee in an amount  agreed to between  the  Company and the
     applicable  Issuing  Bank on the  average  daily  outstanding  face  amount
     available  for drawing  under all Letters of Credit  issued by such Issuing
     Bank; and

          (c) to the applicable  Issuing Bank, all reasonable and customary fees
     and  other  issuance,  amendment,  document  examination,  negotiation  and
     presentment  expenses and related  charges in connection with the issuance,
     amendment,  presentation of L/C Drafts, and the like customarily charged by
     such Issuing Banks with respect to standby letters of credit.

                                      97
<PAGE>

     Issuing Bank Reporting Requirements. In addition to the notices required by
Section 3.5(b), each Issuing Bank shall, no later than the tenth (10th) Business
Day following the last day of each month,  provide to the Administrative  Agent,
upon the  Administrative  Agent's  request,  schedules,  in form  and  substance
reasonably  satisfactory to the Administrative Agent, showing the date of issue,
account party,  amount,  expiration date and the reference number of each Letter
of  Credit  issued  by it  outstanding  at any time  during  such  month and the
aggregate  amount paid by the Company during such month.  In addition,  upon the
request of the  Administrative  Agent,  each Issuing  Bank shall  furnish to the
Administrative  Agent copies of any Letter of Credit and any  application for or
reimbursement  agreement with respect to a Letter of Credit to which the Issuing
Bank is party and such other documentation as may reasonably be requested by the
Administrative  Agent. Upon the request of any Lender, the Administrative  Agent
will provide to such Lender information concerning such Letters of Credit.

     Indemnification;  Exoneration.  (a)  In  addition  to  amounts  payable  as
elsewhere  provided in this Article III, the Company  hereby  agrees to protect,
indemnify, pay and save harmless the Administrative Agent, each Issuing Bank and
each  Lender  from and  against  any and all  liabilities  and  costs  which the
Administrative  Agent,  such Issuing Bank or such Lender may incur or be subject
to as a  consequence,  direct or indirect,  of (i) the issuance of any Letter of
Credit other than,  in the case of the  applicable  Issuing Bank, as a result of
its gross negligence or willful misconduct,  as determined by the final judgment
of a court of  competent  jurisdiction,  or (ii) the  failure of the  applicable
Issuing Bank to honor a drawing  under a Letter of Credit as a result of any act
or omission,  whether rightful or wrongful,  of any present or future de jure or
de facto  Governmental  Authority  (all such  acts or  omissions  herein  called
"Governmental Acts").

          (b) As among the Company,  the Lenders,  the Administrative  Agent and
     the Issuing Banks,  the Company assumes all risks of the acts and omissions
     of, or misuse of such Letter of Credit by, the  beneficiary  of any Letters
     of Credit.  In furtherance and not in limitation of the foregoing,  subject
     to the provisions of the Letter of Credit applications and Letter of Credit
     reimbursement agreements executed by the Company at the time of request for
     any Letter of Credit,  neither the  Administrative  Agent, any Issuing Bank
     nor any Lender shall be responsible (in the absence of gross  negligence or
     willful misconduct of such party in connection therewith,  as determined by
     the final judgment of a court of competent jurisdiction): (i) for the form,
     validity,  sufficiency,  accuracy,  genuineness  or  legal  effect  of  any
     document  submitted by any party in connection with the application for and
     issuance of the Letters of Credit, even if it should in fact prove to be in
     any  or all  respects  invalid,  insufficient,  inaccurate,  fraudulent  or
     forged; (ii) for the validity or sufficiency of any instrument transferring
     or assigning or  purporting to transfer or assign a Letter of Credit or the
     rights or benefits  thereunder  or proceeds  thereof,  in whole or in part,
     which may prove to be  invalid or  ineffective  for any  reason;  (iii) for
     failure  of the  beneficiary  of a Letter of  Credit  to  comply  duly with
     conditions not expressly  provided on the face of such Letter of Credit and
     required  in order to draw upon such  Letter of  Credit;  (iv) for  errors,
     omissions,  interruptions  or delays in  transmission  or  delivery  of any
     messages,  by mail,  cable,  telegraph,  telex,  or other  similar  form of
     teletransmission  or  otherwise;   (v)  for  errors  in  interpretation  of
     technical  trade terms;  (vi) for any loss or delay in the  transmission or
     otherwise  of any  document  required in order to make a drawing  under any
     Letter of Credit or of the proceeds thereof;  (vii) for the  misapplication
     by the  beneficiary  of a Letter of Credit of the  proceeds  of any drawing
     under such Letter of Credit;  and (viii) for any consequences  arising from
     causes beyond the control of the  Administrative  Agent,  the Issuing Banks
     and the Lenders, including, without limitation, any Governmental Acts. None
     of the above shall  affect,  impair,  or prevent the vesting of any Issuing
     Bank's rights or powers under this Section 3.10.

          (c) In furtherance and extension and not in limitation of the specific
     provisions  hereinabove  set  forth,  any  action  taken or  omitted by any
     Issuing  Bank  under or in  connection  with the  Letters  of Credit or any
     related  certificates  shall not,  in the  absence of gross  negligence  or
     willful  misconduct,  as  determined  by the final  judgment  of a court of
     competent jurisdiction, put the applicable Issuing Bank, the Administrative
     Agent or any Lender under any resulting liability to the Company or relieve
     the Company of any of its obligations hereunder to any such Person.

          (d) Without  prejudice to the  survival of any other  agreement of the
     Company hereunder,  the agreements and obligations of the Company contained
     in this  Section 3.10 shall  survive the payment in full of  principal  and
     interest  hereunder,  the  termination  of the  Letters  of Credit  and the
     termination of this Agreement.

     Cash Collateral.  Notwithstanding anything to the contrary herein or in any
application  for a Letter  of  Credit,  after  the  occurrence  and  during  the
continuance  of a  Default,  the  Company  shall,  on the  Business  Day that it
receives the Administrative  Agent's demand, deliver to the Administrative Agent
for the benefit of the Lenders and the Issuing Banks,  cash, or other collateral
of a type satisfactory to the Required Lenders, having a value, as determined by
such Lenders, equal to one hundred percent (100%) of the aggregate Dollar Amount
of the  outstanding  L/C  Obligations.  In addition,  if the Tranche A Revolving
Credit Availability is at any time less than the Dollar Amount of all contingent
L/C  Obligations  outstanding  at any  time,  the  Company  shall  deposit  cash
collateral  with the  Administrative  Agent in  Dollars  in an  amount  equal to
one-hundred  five  percent  (105%)  of the  Dollar  Amount  by  which  such  L/C
Obligations  exceed  such  Tranche A  Revolving  Credit  Availability.  Any such
collateral  shall  be held by the  Administrative  Agent in a  separate  account
appropriately  designated  as a cash  collateral  account  in  relation  to this
Agreement and the Letters of Credit and retained by

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the  Administrative  Agent for the  benefit of the  Lenders and the Issuing
Banks as collateral  security for the Company's  obligations  in respect of this
Agreement  and each of the Letters of Credit and L/C Drafts.  Such amounts shall
be applied to  reimburse  the Issuing  Banks for  drawings or payments  under or
pursuant  to Letters of Credit or L/C  Drafts,  or if no such  reimbursement  is
required,  to payment  of such of the other  Obligations  as the  Administrative
Agent shall determine.  If no Default shall be continuing,  amounts remaining in
any cash collateral account established  pursuant to this Section 3.11 which are
not to be applied to reimburse an Issuing Bank for amounts  actually  paid or to
be paid by such  Issuing  Bank in  respect  of a Letter of Credit or L/C  Draft,
shall be returned to the Company within one (1) Business Day (after deduction of
the  Administrative  Agent's  expenses  incurred  in  connection  with such cash
collateral account).

                            : CHANGE IN CIRCUMSTANCES

     Yield  Protection.  If any law or any  governmental  or  quasi-governmental
rule,  regulation,  policy,  guideline or  directive  (whether or not having the
force of law) adopted after the date of this Agreement or any  interpretation or
application   thereof   by  any   Governmental   Authority   charged   with  the
interpretation  or  application   thereof,  or  the  compliance  of  any  Lender
therewith,  subjects any Lender or any applicable  Lending  Installation  to any
tax,  duty,  charge or  withholding  on or from  payments  due from any Borrower
(excluding  taxation  of the  overall  net income of any Lender or taxation of a
similar basis,  which are governed by Section 2.14(e)),  or changes the basis of
taxation of payments to any Lender in respect of its Revolving Loan  Commitment,
Loans,  its L/C  Interests,  the  Letters  of  Credit  or other  amounts  due it
hereunder, or imposes or increases or deems applicable any reserve,  assessment,
insurance  charge,  special  deposit or similar  requirement  against assets of,
deposits  with or for the account of, or credit  extended  by, any Lender or any
applicable Lending  Installation (other than reserves and assessments taken into
account in determining the interest rate applicable to Eurocurrency  Rate Loans)
with respect to its  Revolving  Loan  Commitment,  Loans,  L/C  Interests or the
Letters of Credit, or

imposes any other  condition  the result of which is to increase the cost to any
Lender or any applicable Lending Installation of making,  funding or maintaining
its Revolving Loan Commitment, Loans, the L/C Interests or the Letters of Credit
or  reduces  any  amount  received  by  any  Lender  or any  applicable  Lending
Installation in connection with its Revolving Loan Commitment,  Loans or Letters
of Credit, or requires any Lender or any applicable Lending Installation to make
any payment  calculated by reference to the amount of Revolving Loan Commitment,
Loans or L/C  Interests  held or interest  received by it or by reference to the
Letters of Credit, by an amount deemed material by such Lender;

and the result of any of the foregoing is to increase the cost to that Lender of
making,  renewing or  maintaining  its Revolving  Loan  Commitment,  Loans,  L/C
Interests,  or Letters of Credit or to reduce  any  amount  received  under this
Agreement,  then,  within  fifteen (15) days after receipt by the Company or any
other  Borrower of written  demand by such Lender  pursuant to Section  4.5, the
applicable  Borrowers  shall pay such  Lender  that  portion  of such  increased
expense incurred or reduction in an amount received which such Lender reasonably
determines is  attributable to making,  funding and  maintaining its Loans,  L/C
Interests, Letters of Credit and its Revolving Loan Commitment.

     Changes in Capital  Adequacy  Regulations.  If a Lender  determines (a) the
amount of capital  required or expected to be  maintained  by such  Lender,  any
Lending  Installation of such Lender or any corporation  controlling such Lender
is increased as a result of a "Change" (as defined below), and (b) such increase
in capital will result in an increase in the cost to such Lender of  maintaining
its Revolving Loan Commitment,  Loans,  L/C Interests,  the Letters of Credit or
its  obligation to make Loans  hereunder,  then,  within fifteen (15) days after
receipt by the Company or any other  Borrower  of written  demand by such Lender
pursuant to Section  4.5,  the  applicable  Borrowers  shall pay such Lender the
amount  necessary to  compensate  for any shortfall in the rate of return on the
portion of such  increased  capital which such Lender  reasonably  determines is
attributable to this Agreement,  its Revolving Loan  Commitment,  its Loans, its
L/C Interests,  the Letters of Credit or its obligation to make Loans  hereunder
(after  taking into  account  such  Lender's  policies as to capital  adequacy).
"Change"  means  (i)  any  change  after  the  date  of  this  Agreement  in the
"Risk-Based Capital Guidelines" (as defined below) excluding,  for the avoidance
of doubt, the effect of any phasing in of such Risk-Based  Capital Guidelines or
any other  capital  requirements  passed prior to the date  hereof,  or (ii) any
adoption of or change in any other law, governmental or quasi-governmental rule,
regulation,  policy,  guideline,  interpretation,  or directive  (whether or not
having  the force of law) after the date of this  Agreement  which  affects  the
amount of capital  required or expected  to be  maintained  by any Lender or any
Lending  Installation  or any corporation  controlling  any Lender.  "Risk-Based
Capital Guidelines" means (i) the risk-based capital guidelines in effect in the
United States on the date of this Agreement,  including  transition  rules,  and
(ii) the corresponding capital regulations promulgated by regulatory authorities
outside  the  United  States  implementing  the July  1988  report  of the Basle
Committee   on   Banking   Regulation   and   Supervisory   Practices   Entitled
"International  Convergence  of Capital  Measurements  and  Capital  Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.

     Availability  of Types  of  Advances.  If (a) any  Lender  determines  that
maintenance of its Eurocurrency  Rate Loans at a suitable  Lending  Installation
would violate any applicable law, rule, regulation or directive,  whether or not
having the force of law, or (b) the Required Lenders determine that (i) deposits
of a type,  currency or maturity  appropriate to match

                                      99
<PAGE>

fund  Fixed-Rate  Advances  are not  available  or (ii) the  interest  rate
applicable  to a  Fixed-Rate  Advance  does not  accurately  reflect the cost of
making or  maintaining  such an  Advance,  then the  Administrative  Agent shall
suspend the availability of the affected Type of Advance and, in the case of any
occurrence set forth in clause (a), require any Advances of the affected Type to
be repaid or converted into another Type.

     Funding Indemnification. If any payment of a Fixed-Rate Advance occurs on a
date  which is not the  last  day of the  applicable  Interest  Period,  whether
because of acceleration,  prepayment,  or otherwise,  or a Fixed-Rate Advance is
not made on the date specified by the  applicable  Borrower for any reason other
than default by the Lenders,  the Borrowers  shall indemnify each Lender for any
loss or cost incurred by it resulting therefrom,  including, without limitation,
any  loss or cost in  liquidating  or  employing  deposits  acquired  to fund or
maintain the Fixed-Rate Advance or Swing Line Loan, as applicable.

     Lender  Statements;  Survival of Indemnity.  If reasonably  possible,  each
Lender shall  designate an alternate  Lending  Installation  with respect to its
Fixed-Rate  Loans to reduce any  liability  of any Borrower to such Lender under
Sections 4.1 and 4.2 or to avoid the  unavailability  of a Type of Advance under
Section  4.3, so long as such  designation  is not, in such  Lender's  judgment,
disadvantageous  to such Lender.  Any demand for  compensation  pursuant to this
Article IV shall be in writing and shall  state the amount  due,  if any,  under
Section  4.1,  4.2  or  4.4  and  shall  set  forth  in  reasonable  detail  the
calculations upon which such Lender determined such amount.  Such written demand
shall be rebuttably presumed correct for all purposes.  Determination of amounts
payable  under such  Sections  in  connection  with a  Fixed-Rate  Loan shall be
calculated as though each Lender funded its Fixed-Rate Loan through the purchase
of a deposit of the type,  currency  and maturity  corresponding  to the deposit
used as a reference  in  determining  the  Fixed-Rate  applicable  to such Loan,
whether in fact that is the case or not. The  obligations of the Company and the
other  Borrowers  under  Sections 4.1, 4.2 and 4.4 shall survive  payment of the
Obligations and termination of this Agreement.

                             : CONDITIONS PRECEDENT

     Initial  Advances and Letters of Credit.  The Lenders shall not be required
to make the initial Loans or issue any Letters of Credit unless (i) such initial
Loans are made not later than July 21, 2000;  and (ii) the Company has furnished
to the  Administrative  Agent each of the following,  with sufficient copies for
the Lenders, and the other conditions set forth below have been satisfied:

         Copies  of  the  material  Acquisition   Documents  (including  without
         limitation the documents  evidencing the Subordinated  Seller Debt) and
         such  other   information   with  respect  to  the  Spectra   Precision
         Acquisition as the Administrative  Agent may reasonably request,  which
         shall  be in form  and  substance  satisfactory  to the  Administrative
         Agent, and evidence  satisfactory to the Administrative  Agent that all
         conditions precedent thereunder or otherwise to the consummation of the
         Spectra  Precision  Acquisition  shall  have  been  satisfied  (and not
         waived) and that the Spectra Precision  Acquisition (other than certain
         modifications  to the  corporate  structure  of the  Seller's  European
         holdings in a manner acceptable to the  Administrative  Agent) has been
         or is substantially contemporaneously being consummated.

         Copy of the Subordinated Seller Note duly executed by the Company.

         Copies of the Certificate of  Incorporation  or equivalent  document of
         each of the Loan Parties,  together with all amendments thereto and, to
         the extent applicable, a certificate of good standing, all certified by
         the   appropriate   governmental   officer  in  its   jurisdiction   of
         incorporation.

         Copies,  certified by the  Secretary or Assistant  Secretary of each of
         the Loan Parties of their  respective  By-Laws and of their  respective
         Board of Directors'  resolutions  authorizing the execution of the Loan
         Documents.

         An  incumbency  certificate,  executed by the  Secretary  or  Assistant
         Secretary of each of the Loan Parties, which shall identify by name and
         title and bear the  signature  of the officers of the  applicable  Loan
         Party  authorized  to sign the Loan  Documents  and to make  borrowings
         hereunder, upon which certificate the Lenders shall be entitled to rely
         until informed of any change in writing by the applicable Loan Party.

         A certificate, in form and substance satisfactory to the Administrative
         Agent,  signed by the chief financial  officer of the Company,  stating
         that on the Closing Date all the  representations and warranties of the
         Loan Parties in the Loan  Documents  are true and correct  (unless such
         representation  and  warranty is made as of a specific  date,  in which
         case, such  representation  and warranty shall be true as of such date)
         and no Default or Unmatured Default has occurred and is continuing.

         The written  opinions of the Loan Parties' United States counsel,  and,
         if applicable,  foreign counsel,  addressed to the Administrative Agent
         and  the  Lenders,   in  form  and   substance   satisfactory   to  the
         Administrative Agent.

         The capital  structure and  corporate  structure of the Company and its
         Subsidiaries  is  satisfactory  to  the  Administrative  Agent  and  is
         consistent in all material respects with the Acquisition Documents, and
         there exists no

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<PAGE>

         injunction or temporary  restraining  order which,  in the  reasonable
         judgment  of  the  Administrative  Agent,  could  prohibit  or  impose
         material restrictions on the Spectra Precision Acquisition or prohibit
         the making of the Loans or the other transactions  contemplated by the
         Loan  Documents  or any  litigation  seeking  such  an  injunction  or
         restraining order.

         A written solvency  certificate from the chief financial officer of the
         Company in form and substance satisfactory to the Administrative Agent,
         dated the initial  Borrowing Date, with respect to the value,  Solvency
         and other  factual  information  of or relating to, as the case may be,
         the Borrower and its Subsidiaries on a consolidated basis, after giving
         effect to the  Spectra  Precision  Acquisition  and the  incurrence  of
         Indebtedness  related  thereto  (including  the initial  extensions  of
         credit hereunder).

         The  Administrative  Agent shall have  received  (i) pro forma  opening
         financial statements giving effect to the Spectra Precision Acquisition
         which must not be  materially  less  favorable,  in the  Administrative
         Agent's reasonable judgment,  than the projections  previously provided
         to the Arrangers and which must demonstrate, in the reasonable judgment
         of the Administrative  Agent,  together with all other information then
         available  to the  Administrative  Agent,  that  the  Company  and  its
         Subsidiaries  can repay their debts and satisfy their  respective other
         obligations  as and  when  due,  and  can  comply  with  the  financial
         covenants  set forth  herein,  (ii) a  certificate  from an  Authorized
         Officer  demonstrating to the satisfaction of the Administrative  Agent
         that as of the Closing Date, but giving pro forma effect to the Spectra
         Precision  Acquisition,  the Company would have been in compliance with
         the financial  covenants in Section 7.4 at the level prescribed for the
         fiscal quarter ending September 30, 2000, (iii) such information as the
         Administrative  Agent may reasonably  request to confirm the tax, legal
         and business  assumptions  made in such pro forma financial  statements
         and (iv) the most recent audited financial statements for the Seller.

         Evidence  reasonably  satisfactory  to the  Administrative  Agent that,
         after giving effect to the initial extensions of credit hereunder,  the
         sum of (i) the cash and Cash Equivalent of the Borrowers,  and (ii) the
         Tranche  A  Revolving  Credit  Availability  and  (iii)  the  Tranche B
         Revolving Credit Availability shall be at least $35,000,000.

         The  Administrative  Agent shall have received a satisfactory  business
         plan for the Company for the five fiscal  years  following  the Closing
         Date, including a projected  consolidated  balance sheet,  consolidated
         statements of income,  retained earnings and cash flow with assumptions
         used in preparing the statements.

         All  governmental,  shareholder  and third party consents and approvals
         necessary in  connection  with this  Agreement,  the Spectra  Precision
         Acquisition and the other transactions  contemplated  hereby shall have
         been obtained;  all such consents and approvals  shall be in full force
         and effect;  and all  applicable  waiting  periods  shall have  expired
         without any action being taken by any Governmental Authority that could
         restrain,  prevent or impose any  material  adverse  conditions  on the
         Spectra Precision  Acquisition or such other transactions or that could
         seek or threaten any of the foregoing,  and no law or regulation  shall
         be applicable which in the judgment of the  Administrative  Agent could
         have such effect.

         There shall not have occurred a material  adverse change since December
         31, 1999 in the business,  assets,  liabilities (actual or contingent),
         operations,  condition  (financial  or  otherwise)  or prospects of the
         Company and its Subsidiaries taken as a whole.

         The  Administrative  Agent,  Lenders and/or their Affiliates shall have
         received  all fees and  expenses,  including  the  reasonable  fees and
         expenses  of  Winston & Strawn,  required  to be paid on or before  the
         Closing Date.

         The Administrative  Agent shall have received evidence  satisfactory to
         it  that  all   outstanding   Indebtedness   of  the  Company  and  its
         Subsidiaries   except   for   Permitted   Existing   Indebtedness   and
         Indebtedness  permitted  pursuant to Section 7.3(c)(x) has been paid in
         full  and  all  Liens  securing  such  Indebtedness   shall  have  been
         terminated.

         Written  money  transfer  instructions  with  respect  to  the  initial
         Advances and to future Advances in form and substance acceptable to the
         Administrative  Agent and its counsel  addressed to the  Administrative
         Agent and signed by an  Authorized  Officer,  together  with such other
         related money transfer  authorizations as the Administrative  Agent may
         have reasonably requested.

         The  Administrative   Agent  shall  have  received  the  duly  executed
         Collateral   Documents  (other  than  the  Mortgages),   together  with
         insurance  certificates  naming the Administrative  Agent, on behalf of
         the  Lenders,  as loss payee for any casualty  policies and  additional
         insured for any liability policies in form and substance  acceptable to
         the Administrative Agent.

         (i) Such duly completed and executed UCC-1 financing  statements as the
         Administrative  Agent  shall have  requested  to perfect  its  security
         interest  in the  Collateral;  (ii)  copies of  searches  of  financing
         statements filed under the Uniform  Commercial Code,  together with tax
         lien and  judgment  searches  with respect to the assets of the Company
         and its  Subsidiaries,  in both  cases  in  such  jurisdictions  as the
         Administrative  Agent may request;  and (iii) such duly executed  UCC-3
         termination statements,  mortgage releases and similar documents as the

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<PAGE>

         Administrative  Agent may  request  with  respect to any  mortgages  or
         security  interests  securing  indebtedness being repaid in full on the
         initial Borrowing Date.

         Proof  that  the   appropriate   financing   statements   covering  the
         Collateral,  including, without limitation, such fixture filings as the
         Administrative  Agent may request,  have been executed and delivered by
         the Company or a Subsidiary,  as the case may be, and filed or recorded
         in such jurisdictions as the Administrative  Agent shall have specified
         or other arrangements with respect to filing or recording  satisfactory
         to the Administrative Agent have been made.

         A copy of the notice of prepayment  sent by the Company to John Hancock
         Life  Insurance  Company  pursuant to that  certain note dated June 13,
         1994.

         Such other documents as the Administrative  Agent or its counsel or the
         Required Lenders may have reasonably requested.

     Initial  Advance  to Each  New  Subsidiary  Borrower.  No  Lender  shall be
required to make an Advance  hereunder or purchase  participations in Letters of
Credit,  or  Alternate  Currency  Loans  hereunder,  no Swing Line Bank shall be
required to make any Swing Line Loans hereunder,  and no Alternate Currency Bank
shall be required to make any Alternate  Currency Loans, in each case, to or for
the account of a new Subsidiary Borrower added after the Closing Date unless the
Company has furnished or caused to be furnished to the Administrative Agent with
sufficient copies for the Lenders:

         The  Assumption  Letter  executed  and  delivered  by  such  Subsidiary
         Borrower and containing the written consent of the Company thereon,  as
         contemplated by Section 2.24.

         Copies,  certified by the Secretary,  Assistant Secretary,  Director or
         Officer  of  the  Subsidiary  Borrower,  of  its  Board  of  Directors'
         resolutions approving the Assumption Letter.

         An  incumbency  certificate,   executed  by  the  Secretary,  Assistant
         Secretary,  Director or Officer of the Subsidiary Borrower, which shall
         identify by name and title and bear the  signature  of the  officers of
         such Subsidiary  Borrower  authorized to sign the Assumption Letter and
         the other  documents  to be executed and  delivered by such  Subsidiary
         Borrower hereunder, upon which certificate the Administrative Agent and
         the Lenders  shall be entitled to rely until  informed of any change in
         writing by the Company.

         An  opinion  of  counsel  to such  Subsidiary  Borrower,  in  form  and
         substance satisfactory to the Administrative Agent.

         Guaranty  documentation and contribution  agreement  documentation from
         such  Subsidiary  Borrower in form and  substance  satisfactory  to the
         Administrative Agent.

         With  respect to the initial  Advance made to any  Subsidiary  Borrower
         organized under the laws of England and Wales, the Administrative Agent
         shall have received  originals  and/or copies,  as  applicable,  of all
         filings   required   to  be  made  and  such  other   evidence  as  the
         Administrative  Agent may require  establishing  to the  Administrative
         Agent's  satisfaction  that each Lender and Issuing Bank is entitled to
         receive  payments  under  the  Loan  Documents   without  deduction  or
         withholding   of  any  English  taxes  or  with  such   deductions  and
         withholding of English taxes as may be acceptable to the Administrative
         Agent.

     Each Advance and Each Letter of Credit.  The Lenders  shall not be required
to make any  Loan,  or issue  any  Letter of  Credit,  unless on the  applicable
Borrowing  Date,  or in the case of a Letter  of  Credit,  the date on which the
Letter of Credit is to be issued:

                  (a)      There exists no Default or Unmatured Default;

                  (b) All of the  representations  and  warranties  contained in
         Article VI are true and correct as of such  Borrowing Date (unless such
         representation  and  warranty is made as of a specific  date,  in which
         case, such representation and warranty shall be true as of such date);

     (c) (i) The Tranche A Revolving Credit Obligations do not, and after making
     such  proposed  Advance or issuing such Letter of Credit would not,  exceed
     the Aggregate  Tranche A Revolving Loan Commitment,  and (ii) the Tranche B
     Revolving Credit Obligations do not, and after making such proposed Advance
     or issuing such Letter of Credit would not, exceed the Aggregate  Tranche B
     Revolving Loan Commitment; and

     (d) the  Administrative  Agent has received a timely  Borrowing Notice with
respect to the applicable Loan.

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     Each Borrowing/Conversion/Continuation Notice with respect to a new Advance
and the letter of credit  application  with  respect to each Letter of Credit or
Letter of Credit amendment shall constitute a representation and warranty by the
Company that the conditions  contained in Sections 5.3(a), (b) and (c) have been
satisfied.

                        : REPRESENTATIONS AND WARRANTIES

     In order to induce the  Administrative  Agent and the Lenders to enter into
this  Agreement  and to make and  continue  the Loans  and the  other  financial
accommodations  to the  Borrowers  and to issue the Letters of Credit  described
herein, each of the Borrowers  represents and warrants as follows to each Lender
and the Administrative Agent as of the date of this Agreement,  giving effect to
the consummation of the transactions  contemplated by the Loan Documents and the
Acquisition  Documents,  and thereafter on each date as required by Sections 5.2
and 5.3:

     Organization; Corporate Powers. Each of the Company and its Subsidiaries is
duly  organized,  validly  existing and in good  standing  under the laws of its
jurisdiction  of  formation  and has all  requisite  authority  to  conduct  its
business in each  jurisdiction in which its business is conducted,  except where
the failure to do so would not have a Material Adverse Effect.

     Authorization  and  Validity.  Each of the Loan  Parties has the  requisite
power and authority and legal right to execute and deliver the Loan Documents to
which it is a party and to perform its obligations thereunder. The execution and
delivery  by each of the Loan  Parties  of the Loan  Documents  to which it is a
party  and  the  performance  of  its  obligations  thereunder  have  been  duly
authorized by proper proceedings,  and the Loan Documents to which it is a party
constitute  legal,  valid and binding  obligations  of each of the Loan  Parties
enforceable  against  each of the Loan Parties in  accordance  with their terms,
except as  enforceability  may be limited by  bankruptcy,  insolvency or similar
laws affecting the enforcement of creditors' rights generally.

     No Conflict;  Government Consent. Neither the execution and delivery by the
Loan Parties of the Loan Documents,  nor the  consummation  of the  transactions
therein  contemplated,  nor compliance with the provisions  thereof will violate
any law, rule, regulation,  order, writ, judgment,  injunction,  decree or award
binding on the Company or any  Subsidiary or the  Company's or any  Subsidiary's
articles  of  incorporation  or  by-laws  or other  constitutive  documents  and
agreements or the provisions of any material indenture,  instrument or agreement
to which the Company or any Subsidiary is a party or is subject, or by which it,
or its property,  is bound, or conflict with or constitute a default thereunder,
or result in the creation or imposition of any Lien in, of or on the property of
the  Company  or any of its  Subsidiaries  pursuant  to the  terms  of any  such
indenture,  instrument  or  agreement.  No order,  consent,  approval,  license,
authorization,  or validation of, or filing,  recording or registration with, or
exemption by, any  governmental or public body or authority,  or any subdivision
thereof,  is required to authorize any Loan Party, or is required to be obtained
by any Loan Party in connection with the execution, delivery and performance of,
or the legality,  validity, binding effect or enforceability of, any of the Loan
Documents.

     Financial Statements.  Each of the consolidated financial statements of the
Company and its Subsidiaries for the fiscal years ended January 2, 1998, January
1, 1999 and  December  31,  1999 were  prepared  in  accordance  with  Agreement
Accounting  Principles and fairly present the consolidated  financial  condition
and  operations  of the  Company  and its  Subsidiaries  at such  dates  and the
consolidated results of their operations for the periods then ended.

     Material  Adverse  Change.  Since December 31, 1999,  there has occurred no
change in the business, assets, liabilities (actual or contingent),  operations,
condition (financial or otherwise) or prospects,  of the Company, or the Company
and its Subsidiaries taken as a whole, or any other event which has had or could
reasonably be expected to have a Material Adverse Effect.

     Taxes.  The  Company  and the  Subsidiaries  have filed all  United  States
federal tax returns and all other  material tax returns which are required to be
filed and have paid all taxes due  pursuant  to said  returns or pursuant to any
assessment received by the Company or any Subsidiary, except such taxes, if any,
as are being contested in good faith and as to which adequate reserves have been
provided.  No tax liens have been filed and no claims  are being  asserted  with
respect to any such taxes.  The  charges,  accruals and reserves on the books of
the Company and the  Subsidiaries in respect of any taxes or other  governmental
charges are adequate.

     Litigation and Contingent Obligations. There is no litigation,
arbitration,  governmental  investigation,  proceeding or inquiry pending or, to
the  knowledge of any of the  Borrowers,  threatened  against or  affecting  the
Company  or  any of its  Subsidiaries  (a)  challenging  the  Spectra  Precision
Acquisition or the validity or enforceability  of any material  provision of the
Loan  Documents  or (b) which  could  reasonably  be expected to have a Material
Adverse  Effect.  There is no material  loss  contingency  within the meaning of
Agreement Accounting Principles which has not been reflected in the consolidated
financial  statements  of the  Company or  prepared  and  delivered  pursuant to
Section 7.1(a) for the fiscal period during which such material loss contingency
was incurred.  Neither the Company nor any of its  Subsidiaries is subject to or
in default

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with respect to any final judgment, writ, injunction,  restraining order or
order of any nature,  decree,  rule or regulation  of any court or  Governmental
Authority which could reasonably be expected to have a Material Adverse Effect.

     Subsidiaries.  Schedule 6.8 hereto  contains an accurate list of all of the
Subsidiaries  of the Company in existence  on the Closing  Date,  setting  forth
their  respective  jurisdictions  of  formation  and  the  percentage  of  their
respective  capital  stock owned  directly or indirectly by the Company or other
Subsidiaries.   All  of  the  issued  and  outstanding  Capital  Stock  of  such
Subsidiaries  have been  duly  authorized  and  issued  and are  fully  paid and
non-assessable.  Except as set forth on Schedule 6.8, no authorized but unissued
or treasury shares of capital stock of any Subsidiary are subject to any option,
warrant,  right to call or commitment  of any kind or  character.  Except as set
forth  on  Schedule  6.8,  neither  the  Company  nor  any  Subsidiary  has  any
outstanding stock or securities  convertible into or exchangeable for any shares
of its capital stock,  or any right issued to any Person  (either  preemptive or
other) to subscribe  for or to purchase,  or any options for the purchase of, or
any agreements  providing for the issuance  (contingent or otherwise) of, or any
calls,  commitments  or claims of any  character  relating to any of its capital
stock or any stock or securities convertible into or exchangeable for any of its
capital stock other than as expressly set forth in the  certificate  or articles
of incorporation of the Company or such Subsidiary.  Neither the Company nor any
Subsidiary is subject to any obligation  (contingent or otherwise) to repurchase
or  otherwise  acquire  or  retire  any  shares  of  its  capital  stock  or any
convertible securities, rights or options of the type described in the preceding
sentence  except as otherwise set forth on Schedule 6.8.  Except as set forth on
Schedule  6.8, as of the date hereof the Company does not own or hold,  directly
or  indirectly,  any  capital  stock or equity  security  of,  or any  equity or
partnership interest in any Person other than such Subsidiaries.

     ERISA.  As at December  31,  1999 the  Unfunded  Liabilities  of all Single
Employer Plans did not in the aggregate  exceed  $5,000,000.  Each Plan complies
and  has  been   maintained  in  all  material   respects  with  all  applicable
requirements  of law and  regulations.  No  Reportable  Event has occurred  with
respect to any Single  Employer Plan having any Unfunded  Liability which has or
may  reasonably be expected to result in a liability to the Company in excess of
$10,000,000.  Neither the Company nor any other members of the Controlled  Group
has  terminated  any Single  Employer Plan without in each instance  funding all
vested benefit obligations  thereunder.  Each member of the Controlled Group has
fulfilled its minimum  funding  obligations  with respect to each  Multiemployer
Plan.  No  Termination  Event has occurred or is  reasonably  expected to occur.
There are no material  actions,  suits or claims (other than routine  claims for
benefits)  pending  or, to the  knowledge  of the  Company or its  Subsidiaries,
threatened with respect to any Plan or Multiemployer Plan.

     Accuracy of Information.  None of the (a) information,  exhibits or reports
furnished  or  to  be  furnished  by  the  Company  or  any  Subsidiary  to  the
Administrative  Agent or to any Lender in connection with the negotiation of the
Loan  Documents,  or (b)  representations  or  warranties  of the Company or any
Subsidiary  contained  in  this  Agreement,   the  other  Loan  Documents,   the
Transaction  Documents or any other document,  certificate or written  statement
furnished  to the  Administrative  Agent or the  Lenders  by or on behalf of the
Company  or  any  Subsidiary  for  use  in  connection  with  the   transactions
contemplated by this Agreement or the Transaction Documents, as the case may be,
contained,  contains or will contain any untrue  statement of a material fact or
omitted,  omits or will omit to state a material fact necessary in order to make
the  statements  contained  herein or  therein  not  misleading  in light of the
circumstances  in which the same were made. The pro forma financial  information
contained in such materials is based upon good faith  estimates and  assumptions
believed  by the  Company to be  reasonable  at the time made.  There is no fact
known to the Company (other than matters of a general  economic nature) that has
had or could  reasonably be expected to have a Material  Adverse Effect and that
has not been  disclosed  herein or in such  other  documents,  certificates  and
statements  furnished to the Lenders for use in connection with the transactions
contemplated by this Agreement.  No information,  exhibit or report furnished by
the Company or any  Subsidiary to any  Administrative  Agent or to any Lender in
connection  with the  negotiation  of, or compliance  with, the Loan  Documents,
contained any material  misstatement of fact or omitted to state a material fact
or any fact  necessary to make the statements  contained  therein not materially
misleading.

     Regulation U. Margin Stock constitutes less than 25% of those assets of the
Company  and its  Subsidiaries  which are  subject  to any  limitation  on sale,
pledge, or other restriction hereunder.

     Material  Agreements.  Neither the Company nor any of its Subsidiaries is a
party to any Contractual Obligation the performance of which could reasonably be
expected to have a Material  Adverse Effect.  Neither the Company nor any of its
Subsidiaries is subject to any charter or other  restriction in any constitutive
agreement or document affecting its business,  properties,  financial condition,
prospects or results of operations  which could reasonably be expected to have a
Material Adverse Effect. Neither the Company nor any Subsidiary is in default in
the performance,  observance or fulfillment of any of the obligations, covenants
or conditions  contained in any  Contractual  Obligation to which it is a party,
which default could reasonably be expected to have a Material Adverse Effect.

     Compliance With Laws. The Company and its Subsidiaries have complied
with all Requirements of Law except to the extent that such non-compliance could
not  reasonably  be  expected  to have a Material  Adverse  Effect.  Neither the
Company  nor any  Subsidiary  has  received  any notice to the  effect  that its
operations are not in material  compliance  with

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<PAGE>

any   Requirements   of  Law  or  the  subject  of  any  federal  or  state
investigation  evaluating  whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, which
non-compliance  or  remedial  action  could  reasonably  be  expected  to have a
Material Adverse Effect.

     Ownership  of  Properties.  On  the  Closing  Date,  the  Company  and  its
Subsidiaries  have good title,  free of all Liens,  to all of the properties and
assets reflected in its December 31, 1999 audited financial  statements as owned
by it (other than  properties and assets  disposed of in the ordinary  course of
business since such date), except Liens permitted under Section 7.3(c).

     Statutory  Indebtedness  Restrictions.  Neither  the Company nor any of its
Subsidiaries  is subject to regulation  under the Public Utility Holding Company
Act of 1935,  the  Federal  Power  Act,  the  Interstate  Commerce  Act,  or the
Investment  Company  Act of 1940,  or any  other  federal  or state  statute  or
regulation  which  limits its  ability to incur  indebtedness  or its ability to
consummate the transactions contemplated hereby.

     Environmental  Matters.  Each of the  Company  and its  Subsidiaries  is in
compliance  with all  Environmental,  Health or Safety  Requirements  of Laws in
effect in each jurisdiction where it is presently doing business and as to which
the  failure  to so  comply,  in the  aggregate  for all  such  failures,  would
reasonably  be likely to  subject  the  Company to  liability  that would have a
Material  Adverse  Effect.  Neither the Company nor any Subsidiary is subject to
any liability under the Environmental,  Health or Safety Requirements of Laws in
effect in any  jurisdiction  where it is  presently  doing  business  that could
reasonably be expected to have a Material Adverse Effect. As of the date hereof,
neither the Company nor any Subsidiary has received any:

         notice from any Governmental Authority by which any of the Company's or
         such Subsidiary's  present or  previously-owned  or leased property has
         been identified in any manner by any such  Governmental  Authority as a
         hazardous  substance  disposal or removal site,  "Super Fund"  clean-up
         site or candidate for removal or closure pursuant to any Environmental,
         Health or Safety Requirements of Law; or

         notice  of  any  Lien  arising   under  or  in   connection   with  any
         Environmental,  Health or Safety  Requirements of Law that has attached
         to any of the Company's or such  Subsidiary's  owned or leased property
         or any revenues of the Company's or such  Subsidiary's  owned or leased
         property; or

         communication,   written  or  oral,  from  any  Governmental  Authority
         concerning  action or  omission by the  Company or such  Subsidiary  in
         connection  with its ownership or leasing of any property  resulting in
         the release of any  hazardous  substance  resulting in any violation of
         any Environmental, Health or Safety Requirements of Law;

where  the  effect  of  which,  in  the  aggregate  for  all  such  notices  and
communications, could reasonably be expected to have a Material Adverse Effect.

     Insurance.  The  properties  and assets and business of the Company and its
Subsidiaries  are  insured  with  financially  sound  and  reputable   insurance
companies  not  Subsidiaries  of  the  Company,  in  such  amounts,   with  such
deductibles  and  covering  such risks as are  customarily  carried by companies
engaged in similar businesses and are similarly situated.

     Labor  Matters.  As of the  Closing  Date,  no labor  disputes,  strikes or
walkouts affecting the operations of the Company or any of its Subsidiaries, are
pending,  or, to the Company's  knowledge,  threatened,  planned or contemplated
which could reasonably be expected to have a Material Adverse Effect.

     Solvency.  After  giving  effect  to (i)  the  extensions  of  credit  made
hereunder  on the Closing Date or such other date as Loans  requested  hereunder
were made,  (ii) the other  transactions  contemplated by this Agreement and the
other Loan Documents,  including the Spectra Precision Acquisition and (iii) the
payment and accrual of all transaction costs with respect to the foregoing,  the
Company and its Subsidiaries are Solvent.

     Default.  No Default or Unmatured  Default has occurred and is  continuing.

     Foreign Employee Benefit Matters. (a) Each Foreign Employee Benefit Plan is
in compliance  in all material  respects  with all laws,  regulations  and rules
applicable  thereto and the respective  requirements of the governing  documents
for such Plan; (b) the aggregate of the accumulated  benefit  obligations  under
all Foreign  Pension  Plans does not exceed to any  material  extent the current
fair market value of the assets held in the trusts or similar  funding  vehicles
for such Plans;  (c) with  respect to any Foreign  Employee  Benefit Plan (other
than a Foreign  Pension  Plan),  reasonable  reserves have been  established  in
accordance  with  prudent  business  practice  or  where  required  by  ordinary
accounting  practices in the jurisdiction in which such Plan is maintained;  and
(d) there are no material  actions,  suits or claims (other than routine

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claims for  benefits)  pending or, to the  knowledge of the Company and its
Subsidiaries,  threatened  against  the Company or any  Subsidiary  of it or any
member of its  Controlled  Group with  respect to any Foreign  Employee  Benefit
Plan.

     Acquisition  Documents.  The Company has  delivered  to the  Administrative
Agent true, complete and correct copies of the Acquisition  Documents (including
all schedules, exhibits, annexes, amendments, supplements, modifications and all
other documents  delivered  pursuant  thereto or in connection  therewith).  The
Acquisition  Documents  as  originally  executed  and  delivered  by the parties
thereto have not been  amended,  waived,  supplemented  or modified  without the
consent of the Administrative  Agent. The  representations and warranties of the
Company  set  forth  therein  and,  to  the   knowledge  of  the  Company,   the
representations  and  warranties of the other parties set forth therein are true
and correct in all material respects as of the date thereof. On the date of this
Agreement,  neither the  Company  nor any other party to any of the  Acquisition
Documents is in default in the  performance of or compliance with any provisions
under the Acquisition  Documents.  The Spectra Precision Acquisition (other than
certain  modifications  to the  corporate  structure  of the  Seller's  European
holdings  in  a  manner  acceptable  to  the  Administrative   Agent)  has  been
consummated in accordance with applicable laws and regulations.

     Collateral  Documents.  All representations and warranties of the Borrowers
contained in the Collateral Documents are true and correct.

     Security.  The  provisions  of the  Collateral  Documents  are effective to
create and give the  Administrative  Agent,  for the benefit of the Lenders,  as
security for the repayment of the obligations  secured thereby, a legal,  valid,
perfected and  enforceable  Lien (which  priority is subject only to prior Liens
permitted by such agreements) upon all right, title and interest of the Borrower
and its  Subsidiaries in any and all of the Collateral  described  therein.  The
Mortgages,  upon their  execution and delivery,  will be effective to create and
give the Administrative  Agent, for the benefit of the Lenders,  as security for
repayment of the obligations to be secured thereby,  a legal,  valid,  perfected
and  enforceable  Lien  (which  priority  will be  subject  only to prior  Liens
permitted by such mortgages) upon all right, title and interest of the Borrowers
in the Collateral described therein. The Pledge Agreement is effective to create
and give the Administrative  Agent, for the benefit of the Lenders,  as security
for the repayment of the obligations secured thereby, a legal, valid,  perfected
and  enforceable  first priority Lien upon and security  interest in the capital
stock pledged thereby.

     Subordinated  Seller  Debt.  Each  Borrower  incurring  the  same  has  the
corporate  power  and  authority  to incur  the  Indebtedness  evidenced  by the
Subordinated  Seller Debt.  The  subordination  provisions  of the  Subordinated
Seller Debt will be enforceable  against the holders of the Subordinated  Seller
Debt by any Holder of Obligations which has not effectively  waived the benefits
thereof.  All  Obligations,  including the  Obligations  to pay principal of and
interest on the Loans,  constitute senior Indebtedness  entitled to the benefits
of  subordination  created  by  the  Subordinated  Seller  Debt.  The  Borrowers
acknowledge that the Administrative Agent and each Lender are entering into this
Agreement and are extending the Aggregate Total  Commitment in reliance upon the
subordination provisions of the Subordinated Seller Note and this Section 6.25.

     Subsidiaries.  Except as set forth on Schedule 6.8, each  Subsidiary of the
Borrower is a Wholly-Owned Subsidiary.

     Representations and Warranties of each Subsidiary Borrower. Each Subsidiary
Borrower  further  represents and warrants to the  Administrative  Agent and the
Lenders that:

         Organization and Corporate  Powers.  Such Subsidiary  Borrower (i) is a
         company duly formed and validly existing and in good standing under the
         laws of the state or country  of its  organization  (such  jurisdiction
         being  hereinafter  referred  to as the "Home  Country");  (ii) has the
         requisite  power and  authority  to own its  property and assets and to
         carry on its business  substantially  as now conducted except where the
         failure  to have such  requisite  authority  would not have a  material
         adverse effect on such Subsidiary Borrower; and (iii) has the requisite
         power  and  authority  and  legal  right to  execute  and  deliver  any
         Alternate  Currency Addendum to which it is a party and each other Loan
         Document  to  which  it is a  party  and the  performance  by it of its
         obligations  thereunder have been duly  authorized by proper  corporate
         proceedings.

         Binding Effect. Each Loan Document,  including, without limitation, any
         Alternate  Currency Addendum,  executed by such Subsidiary  Borrower is
         the legal,  valid and binding  obligations of such Subsidiary  Borrower
         enforceable  in  accordance  with  their  respective  terms,  except as
         enforceability may be limited by bankruptcy, insolvency or similar laws
         affecting the  enforcement of creditors'  rights  generally and general
         equitable principles.

         No Conflict;  Government Consent. Neither the execution and delivery by
         such Subsidiary  Borrower of the Loan Documents to which it is a party,
         nor the consummation by it of the transactions  therein contemplated to
         be consummated by it, nor compliance by such  Subsidiary  Borrower with
         the provisions thereof will violate any law, rule,  regulation,  order,
         writ, judgment,  injunction, decree or award binding on such Subsidiary
         Borrower or any of

                                      106
<PAGE>

         its  Subsidiaries  or  such  Subsidiary   Borrower's  or  any  of  its
         Subsidiaries'  memoranda or articles of  association or the provisions
         of any  indenture,  instrument  or agreement to which such  Subsidiary
         Borrower or any of its  Subsidiaries  is a party or is subject,  or by
         which it, or its property,  is bound, or conflict with or constitute a
         default  thereunder,  or result in the creation or  imposition  of any
         lien in, of or on the property of such  Subsidiary  Borrower or any of
         its  Subsidiaries  pursuant  to  the  terms  of  any  such  indenture,
         instrument  or agreement in any such case which  violation,  conflict,
         default, creation or imposition could reasonably be expected to have a
         material  adverse  effect  on  such  Subsidiary  Borrower.  No  order,
         consent,  approval,  license,  authorization,  or  validation  of,  or
         filing,   recording  or  registration   with,  or  exemption  by,  any
         governmental  agency is  required  to  authorize,  or is  required  in
         connection  with the execution,  delivery and  performance  of, or the
         legality,  validity,  binding effect or enforceability  of, any of the
         Loan Documents.

         Filing.  To ensure the  enforceability  or admissibility in evidence of
         this Agreement and each Loan Document to which such Subsidiary Borrower
         is a party  (including,  without  limitation,  any  Alternate  Currency
         Addendum) in its Home Country,  it is not necessary that this Agreement
         or any other Loan Document to which such Subsidiary Borrower is a party
         or any  other  document  be filed or  recorded  with any court or other
         authority  in its Home Country or that any stamp or similar tax be paid
         to or in respect of this  Agreement or any other Loan  Document of such
         Subsidiary   Borrower.   The   qualification   by  any  Lender  or  the
         Administrative  Agent for  admission  to do business  under the laws of
         such Subsidiary Borrower's Home Country does not constitute a condition
         to, and the failure to so qualify does not affect,  the exercise by any
         Lender or the Administrative Agent of any right,  privilege,  or remedy
         afforded to any Lender or the  Administrative  Agent in connection with
         the Loan Documents to which such Subsidiary  Borrower is a party or the
         enforcement  of any such  right,  privilege,  or  remedy  against  such
         Subsidiary   Borrower.   The   performance   by  any   Lender   or  the
         Administrative Agent of any action required or permitted under the Loan
         Documents will not (i) violate any law or regulation of such Subsidiary
         Borrower's  Home Country or any  political  subdivision  thereof,  (ii)
         result in any tax or other monetary liability to such party pursuant to
         the  laws of such  Subsidiary  Borrower's  Home  Country  or  political
         subdivision or taxing authority thereof (provided that, should any such
         action result in any such tax or other monetary liability to the Lender
         or the  Administrative  Agent,  the Borrowers hereby agree to indemnify
         such Lender or the  Administrative  Agent,  as the case may be, against
         (x) any such tax or other  monetary  liability  and (y) any increase in
         any tax or other monetary  liability  which results from such action by
         such  Lender  or  the  Administrative  Agent  and,  to the  extent  the
         Borrowers make such  indemnification,  the incurrence of such liability
         by the  Administrative  Agent  or any  Lender  will  not  constitute  a
         Default) or (iii) violate any rule or  regulation of any  federation or
         organization or similar entity of which the such Subsidiary  Borrower's
         Home Country is a member.

         No Immunity.  Neither such Subsidiary Borrower nor any of its assets is
         entitled to immunity  from suit,  execution,  attachment or other legal
         process.  Such Subsidiary Borrower's execution and delivery of the Loan
         Documents  to which it is a party  constitute,  and the exercise of its
         rights and  performance of and compliance  with its  obligations  under
         such Loan Documents will  constitute,  private and commercial acts done
         and performed for private and commercial purposes.

         Application of  Representations  and  Warranties.  It is understood and
         agreed by the parties hereto that the representations and warranties of
         each Subsidiary Borrower (other than any Subsidiary Borrower that shall
         be a Subsidiary  Borrower as of the Closing  Date) in this Section 6.26
         shall only be applicable to such  Subsidiary  Borrower on and after the
         date of its execution of an Assumption  Letter and, if  applicable,  an
         Alternate Currency Addendum.

                                   : COVENANTS

     The  Company  covenants  and  agrees  that so long  as any  Revolving  Loan
Commitments are  outstanding and thereafter  until payment in full of all of the
Obligations (other than contingent indemnity obligations) and termination of all
Letters of Credit,  unless  the  Required  Lenders  shall  otherwise  give prior
written consent:

     Reporting. The Company shall:

     Financial Reporting. Furnish to the Administrative Agent and the Lenders:

          (i) Quarterly Reports.  As soon as practicable and in any event within
     forty-five (45) days after the end of the first three quarterly  periods of
     each of its fiscal years, for itself and the Subsidiaries, consolidated and
     consolidating  unaudited  balance  sheets as at the end of each such period
     and consolidated and consolidating statement of income and consolidated and
     consolidating  statement of changes in owners'  equity,  and a statement of
     cash flows for the period from the beginning of such fiscal year to the end
     of such  quarter,  presented  on the same  basis as  described  in  Section
     7.1(a)(ii)  and on a comparative  basis with the statements for such period
     in the prior fiscal year of the Company.

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<PAGE>

          (ii) Annual Reports.  As soon as practicable,  and in any event within
     ninety  (90) days after the end of each of its fiscal  years,  (a) an audit
     report, certified (as to consolidated, but not consolidating statements) by
     internationally   recognized   independent  certified  public  accountants,
     prepared in accordance with generally accepted accounting principles,  on a
     consolidated  and  consolidating  basis for  itself  and the  Subsidiaries,
     including balance sheets as of the end of such period, related statement of
     income and consolidated and  consolidating  statement of changes in owners'
     equity,  and a  statement  of cash  flows,  which  audit  report  shall  be
     unqualified and shall state that such financial  statements  fairly present
     the consolidated  financial position of the Company and its Subsidiaries as
     at the dates indicated and the results of operations and cash flows for the
     periods  indicated  in  conformity  with  generally   accepted   accounting
     principles and that the examination by such  accountants in connection with
     such consolidated and consolidating  financial  statements has been made in
     accordance  with generally  accepted  auditing  standards and (b) projected
     balance  sheets,  statements  of income and cash flows for each fiscal year
     through  the  Termination  Date,  prepared  in  accordance  with  generally
     accepted accounting principles,  on a consolidated basis, together with the
     appropriate  supporting details and a statement of underlying  assumptions,
     all in form  similar  to  those  delivered  to the  Arrangers  prior to the
     Closing Date.

          (iii)  Officer's  Certificate.  Together  with  each  delivery  of any
     financial  statement  (a)  pursuant to clauses (i) and (ii) of this Section
     7.1(a), an Officer's Certificate of the Company,  substantially in the form
     of Exhibit E attached hereto and made a part hereof, stating that as of the
     date of such Officer's  Certificate no Default or Unmatured Default exists,
     or if any  Default or  Unmatured  Default  exists,  stating  the nature and
     status  thereof and (b)  pursuant  to clauses (i) and (ii) of this  Section
     7.1(a),  a compliance  certificate,  substantially in the form of Exhibit F
     attached  hereto  and made a part  hereof,  signed by the  Company's  chief
     financial  officer,  chief accounting  officer or treasurer,  setting forth
     calculations  for the period then ended for Section 2.5(b),  if applicable,
     which  demonstrate  compliance,  when  applicable,  with the  provisions of
     Sections  7.3(a)  through  (h),  Section  7.3(p) and Section 7.4, and which
     calculate  the  Leverage  Ratio  for  purposes  of  determining   the  then
     Applicable  Floating  Rate  Margin,   Applicable  Eurocurrency  Margin  and
     Applicable Commitment Fee Percentage.

     Notice of Default.  Promptly upon any of the chief  executive  officer,
     chief operating officer, chief financial officer, treasurer, controller
     or other executive  officer of the Company  obtaining  actual knowledge
     (i) of any condition or event which  constitutes a Default or Unmatured
     Default,  (ii) that any  Lender or  Administrative  Agent has given any
     written  notice to any  Authorized  Officer  with  respect to a claimed
     Default or Unmatured  Default under this  Agreement,  or (iii) that any
     Person has given any written  notice to any  Authorized  Officer or any
     Subsidiary  of the Company or taken any other  action with respect to a
     claimed  default  or event or  condition  of the  type  referred  to in
     Section 8.1(d), the Company shall deliver to the  Administrative  Agent
     and the Lenders an Officer's Certificate  specifying (A) the nature and
     period of  existence of any such claimed  default,  Default,  Unmatured
     Default,  condition  or event,  (B) the notice given or action taken by
     such Person in  connection  therewith,  and (C) what action the Company
     has taken, is taking or proposes to take with respect thereto.

     Lawsuits.  (i) Promptly upon the Company  obtaining actual knowledge of
     the institution of, or written threat of, any action, suit, proceeding,
     governmental   investigation   or   arbitration,   by  or  before   any
     Governmental Authority,  against or affecting the Company or any of its
     Subsidiaries or any property of the Company or any of its  Subsidiaries
     not previously  disclosed pursuant to Section 6.7, which action,  suit,
     proceeding,  governmental  investigation or arbitration  exposes, or in
     the  case  of  multiple  actions,  suits,   proceedings,   governmental
     investigations  or  arbitrations   arising  out  of  the  same  general
     allegations or circumstances which expose, in the Company's  reasonable
     judgment,  the Company or any of its  Subsidiaries  to  liability in an
     amount  aggregating  $5,000,000 or more (exclusive of claims covered by
     insurance policies of the Company or any of its Subsidiaries unless the
     insurers of such claims have disclaimed  coverage or reserved the right
     to disclaim  coverage on such claims),  give written  notice thereof to
     the  Administrative  Agent  and the  Lenders  and  provide  such  other
     information  as may be  reasonably  available to enable each Lender and
     the Administrative  Agent and its counsel to evaluate such matters; and
     (ii) in  addition to the  requirements  set forth in clause (i) of this
     Section  7.1(c),  upon  request  of  the  Administrative  Agent  or the
     Required  Lenders,  promptly  give written  notice of the status of any
     action,  suit,  proceeding,  governmental  investigation or arbitration
     covered by a report delivered  pursuant to clause (i) above and provide
     such other  information as may be reasonably  available to it to enable
     the Required  Lenders and the  Administrative  Agent and its counsel to
     evaluate such matters.

     ERISA Notices.  Deliver or cause to be delivered to the  Administrative
     Agent  and  the  Lenders,  at  the  Company's  expense,  the  following
     information  and  notices as soon as  reasonably  possible,  and in any
     event:

     (i) within ten (10)  Business  Days after the  Company or any member of the
     Controlled Group obtains knowledge that a Termination Event has occurred or
     a lawsuit  involving a Plan or  Multiemployer  Plan has been filed, in each
     case which could reasonably be expected to subject the Company to liability
     in  excess  of  $5,000,000,  a written  statement  of the  chief  financial
     officer,  treasurer or designee of the Company  describing such Termination
     Event and the action,  if

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     any,  which the  member of the  Controlled  Group has  taken,  is taking or
     proposes to take with respect thereto,  and when known, any action taken or
     threatened by the IRS, DOL or PBGC with respect thereto;

     (ii)within  ten  (10)  Business  Days  after  the  Company  or  any  of its
     Subsidiaries  obtains  knowledge  that a  material  prohibited  transaction
     (defined  in  Sections  406 of ERISA  and  Section  4975 of the  Code)  has
     occurred, a statement of the chief financial officer, treasurer or designee
     of the Company describing such transaction and the action which the Company
     or such  Subsidiary  has taken,  is taking or proposes to take with respect
     thereto;

     (iii)  within  ten (10)  Business  Days  after  the  Company  or any of its
     Subsidiaries  receives notice of any unfavorable  determination letter from
     the IRS regarding the  qualification  of a Plan under Section 401(a) of the
     Code, copies of each such letter;

     (iv)within  ten (10) Business Days after the filing thereof with the IRS, a
     copy of each funding  waiver request filed with respect to any Benefit Plan
     and  all  communications  received  by  the  Company  or a  member  of  the
     Controlled Group with respect to such request;

     (v)  within ten (10)  Business  Days  after  receipt by the  Company or any
     member of the  Controlled  Group of the PBGC's  intention  to  terminate  a
     Benefit Plan or to have a trustee  appointed to  administer a Benefit Plan,
     copies of each such notice;

     (vi)within  ten (10)  Business  Days after the Company or any member of the
     Controlled Group fails to make a required installment or any other required
     payment  under  Section  412 of the Code on or before the due date for such
     installment or payment, a notification of such failure;

     (vii) within ten (10) Business Days after the  establishment of any Foreign
     Employee  Benefit Plan or the  commencement  of, or obligation to commence,
     contributions  to any Foreign Employee Benefit Plan to which the Company or
     any Subsidiary was not previously contributing,  where the aggregate annual
     contributions to such Plan(s)  resulting  therefrom are or could reasonably
     be  expected  to  be  in  excess  of  $5,000,000,   notification   of  such
     establishment,  commencement  or  obligation  to commence and the amount of
     such contributions; and

         For  purposes  of  this  Section  7.1(d),  the  Company,   any  of  its
         Subsidiaries  and any member of the Controlled Group shall be deemed to
         know all facts known by the administrator of any Plan which is a Single
         Employer Plan.

         Labor  Matters.  Notify  the  Administrative  Agent and the  Lenders in
         writing,  promptly  upon  an  Authorized  Officer  learning  of (i) any
         material labor dispute to which the Company or any of its  Subsidiaries
         may  become  a  party,  including,  without  limitation,  any  strikes,
         lockouts or other disputes  relating to such Persons'  plants and other
         facilities  and (ii) any  material  Worker  Adjustment  and  Retraining
         Notification Act liability  incurred with respect to the closing of any
         plant or other facility of the Company or any of its Subsidiaries.

         Other Indebtedness.  Deliver to the Administrative  Agent (i) a copy of
         each regular report,  notice or  communication  regarding  potential or
         actual  defaults  (including any  accompanying  officer's  certificate)
         delivered by or on behalf of the Company to the holders of Indebtedness
         for money borrowed with an aggregate  outstanding  principal  amount in
         excess of $10,000,000 pursuant to the terms of the agreements governing
         such Indebtedness, such delivery to be made at the same time and by the
         same means as such notice of default is delivered to such holders,  and
         (ii) a copy of each  notice  or  other  communication  received  by the
         Company from the holders of  Indebtedness  for money  borrowed  with an
         aggregate   outstanding  principal  amount  in  excess  of  $10,000,000
         regarding  potential or actual  defaults  pursuant to the terms of such
         Indebtedness,  such delivery to be made  promptly  after such notice or
         other communication is received by the Company.

         Other Reports.  Deliver or cause to be delivered to the  Administrative
         Agent and the Lenders copies of (i) all financial  statements,  reports
         on Form S-1, 8-K, 10-K or 10-Q and non-routine notices, if any, sent or
         made available  generally by the Company to its  securities  holders or
         filed with the  Commission by the Company,  and (ii) all  notifications
         received  from  the  Commission  by the  Company  or  its  Subsidiaries
         pursuant  to  the  Securities  Exchange  Act  of  1934  and  the  rules
         promulgated  thereunder other than routine reminders or notices that do
         not  relate  to  specific   violations  of  rules  promulgated  by  the
         Commission.  The Company shall include the Administrative Agent and the
         Lenders on its standard  distribution lists for all press releases made
         available generally by the Company or any of the Company's Subsidiaries
         to the public concerning  material  developments in the business of the
         Company or any such Subsidiary.

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         Environmental  Notices.  As soon as  possible  and in any event  within
         fifteen  (15)  days  after  receipt  by  the  Company,  deliver  to the
         Administrative  Agent and the Lenders a copy of (i) any notice or claim
         to the effect that the Company or any of its  Subsidiaries is or may be
         liable to any Person as a result of the Release by the Company,  any of
         its  Subsidiaries,  or any  other  Person of any  Contaminant  into the
         environment,  and  (ii)  any  notice  alleging  any  violation  of  any
         Environmental,  Health or Safety  Requirements of Law by the Company or
         any of its  Subsidiaries  if,  in  either  case,  such  notice or claim
         relates to an event which could  reasonably  be expected to subject the
         Company and each of its  Subsidiaries  to liability  individually or in
         the aggregate in excess of $10,000,000.

         Other Information.  Promptly upon receiving a request therefor from the
         Administrative  Agent,  prepare and deliver to the Administrative Agent
         and the Lenders such other  information  with respect to the Company or
         any of its  Subsidiaries,  as  from  time  to  time  may be  reasonably
         requested by the Administrative Agent.

         Affirmative Covenants.

         Corporate Existence, Etc. Subject to Section 7.3(i), the Company shall,
         and shall cause each of its  Subsidiaries to, at all times maintain its
         corporate existence and preserve and keep, or cause to be preserved and
         kept,  in full force and effect its rights and  franchises  material to
         its businesses except where, in the case of Subsidiaries  which are not
         Subsidiary Borrowers, failure to do so could not reasonably be expected
         to have a Material Adverse Effect.

         Corporate  Powers;  Conduct of Business.  The Company shall,  and shall
         cause each of its  Subsidiaries  to, qualify and remain qualified to do
         business  in each  jurisdiction  in which the  nature  of its  business
         requires it to be so qualified and where the failure to be so qualified
         will have or could  reasonably  be expected to have a Material  Adverse
         Effect.

         Compliance  with Laws,  Etc.  The  Company  shall,  and shall cause its
         Subsidiaries  to,  (a)  comply  with  all  Requirements  of Law and all
         restrictive covenants affecting such Person or the business, prospects,
         properties,  assets or  operations  of such  Person,  and (b) obtain as
         needed all permits  necessary  for its  operations  and  maintain  such
         permits  in good  standing  unless  failure  to comply  or obtain  such
         permits  could not  reasonably  be expected to have a Material  Adverse
         Effect.

         Payment of Taxes and Claims; Tax Consolidation.  The Company shall pay,
         and cause each of its  Subsidiaries  to pay,  (i) all  material  taxes,
         assessments and other governmental charges imposed upon it or on any of
         its  properties  or  assets  or in  respect  of any of its  franchises,
         business,  income or property  before any  penalty or interest  accrues
         thereon, and (ii) all claims (including, without limitation, claims for
         labor,  services,  materials and supplies) for material sums which have
         become  due and  payable  and  which by law  have or may  become a Lien
         (other  than  a Lien  permitted  by  Section  7.3(C))  upon  any of the
         Company's or such  Subsidiary's  property or assets,  prior to the time
         when any  penalty  or fine  shall be  incurred  with  respect  thereto;
         provided,  however,  that no such taxes,  assessments and  governmental
         charges referred to in clause (i) above or claims referred to in clause
         (ii) above (and interest,  penalties or fines relating thereto) need be
         paid if  being  contested  in good  faith  by  appropriate  proceedings
         diligently  instituted  and  conducted  and if such  reserve  or  other
         appropriate provision,  if any, as shall be required in conformity with
         Agreement Accounting Principles shall have been made therefor.

         Insurance.  The Company will maintain,  and will cause to be maintained
         on  behalf  of  each  of  its  Subsidiaries,   insurance   coverage  by
         financially  sound and reputable  insurance  companies or associations,
         against such  casualties and  contingencies,  of such types and in such
         amounts as are customary for  companies  engaged in similar  businesses
         and owning and operating similar  properties,  it being understood that
         the Company and its  Subsidiaries  may self-insure  against hazards and
         risks with  respect to which,  and in such  amounts,  as the Company in
         good faith  determines  prudent  and  consistent  with sound  financial
         practice,  and  as are  customary  for  companies  engaged  in  similar
         businesses  and owning and operating  similar  properties.  The Company
         shall  furnish to any Lender upon  request full  information  as to the
         insurance carried.

         Inspection  of Property;  Books and Records;  Discussions.  The Company
         shall permit and cause each of the  Company's  Subsidiaries  to permit,
         any   authorized    representative(s)    designated   by   either   the
         Administrative  Agent or the Required Lenders to visit and inspect, for
         a reasonable  purpose,  any of the  properties of the Company or any of
         its  Subsidiaries,  to examine,  audit,  check and make copies of their
         respective financial and accounting records,  books, journals,  orders,
         receipts  and any  correspondence  and  other  data  relating  to their
         respective   businesses  or  the   transactions   contemplated   hereby
         (including,   without  limitation,  in  connection  with  environmental
         compliance,  hazard  or  liability),  and  to  discuss  their  affairs,
         finances  and  accounts  with  their  officers  and  their  independent
         certified public  accountants,  all upon reasonable  notice and at such
         reasonable  times  during  normal  business  hours,  as often as may be
         reasonably  requested.  The Company shall keep and maintain,  and cause
         each of the Company's Subsidiaries to keep and maintain proper books of
         record  and  account  in which  entries in  conformity  with

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         Agreement  Accounting  Principles  shall be made of all  dealings  and
         transactions   in  relation  to  their   respective   businesses   and
         activities.

         ERISA  Compliance.  The  Company  shall,  and shall  cause  each of the
         Company's  Subsidiaries to,  establish,  maintain and operate all Plans
         (and,  to the  extent  it is  within  the  power  of the  Company  or a
         Subsidiary, all Multiemployer Plans) to comply in all material respects
         with the provisions of ERISA,  the Code, all other applicable laws, and
         the  regulations  and  interpretations  thereunder  and the  respective
         requirements of the governing documents for such Plans.

         Maintenance  of Property.  The Company shall cause all property used or
         useful in the conduct of its business or the business of any Subsidiary
         to be maintained and kept in good  condition,  repair and working order
         and supplied  with all  necessary  equipment and shall cause to be made
         all  necessary  repairs,   renewals,   replacements,   betterments  and
         improvements  thereof,  all as in the  judgment  of the  Company may be
         necessary so that the business  carried on in connection  therewith may
         be properly and advantageously conducted at all times and except to the
         extent  that the  failure to so  maintain  such  property  could not be
         reasonably expected to have a Material Adverse Effect.

         Environmental  Compliance.  The Company shall,  and shall cause each of
         the Company's Subsidiaries to comply with, all Environmental, Health or
         Safety  Requirements  of Law,  except  where  noncompliance  could  not
         reasonably be expected to have a Material Adverse Effect.

         Use of Proceeds.  The Borrowers  shall use the proceeds of the Advances
         to fund the Spectra Precision  Acquisition in whole or in part, to make
         payments on the Seller  Subordinated Note (subject to the provisions of
         this  Agreement  and  the   subordination   provisions  of  the  Seller
         Subordinated  Note) and to  provide  funds for the  additional  working
         capital needs and other general  corporate  purposes of the Company and
         its  Subsidiaries,  including,  without  limitation,  the  financing of
         Permitted  Acquisitions.  The Company  will not, nor will it permit any
         Subsidiary  to, use any of the  proceeds  of the  Advances  to make any
         Acquisition other than a Permitted Acquisition made pursuant to Section
         7.3(g).

         Subsidiary Guarantees; Subsidiary Subordination Agreement.
         The Company will:

                    (i)  cause  each  Subsidiary  Borrower  that  is a  Domestic
               Subsidiary  and each Domestic  Subsidiary  that has assets with a
               book value in excess of  $10,000,000 to execute the Guaranty (and
               from and after the  Closing  Date  cause  each  other  Subsidiary
               Borrower that is a Domestic  Subsidiary  and each other  Domestic
               Subsidiary  which has such  assets to execute  and deliver to the
               Administrative  Agent,  within  ten (10) days  after  becoming  a
               Subsidiary Borrower or another Domestic Subsidiary which has such
               assets,  as  applicable,   an  assumption  or  joinder  agreement
               pursuant  to  which  it  agrees  to be  bound  by the  terms  and
               provisions  of the  Guaranty  (whereupon  such  Subsidiary  shall
               become a  "Guarantor"  under  this  Agreement))  and  cause  such
               Guarantors  to execute  and deliver to the  Administrative  Agent
               such  Collateral   Documents  as  the  Administrative  Agent  may
               require;

                    (ii) in the  event  that at any time  the book  value of the
               assets of all  Domestic  Subsidiaries  which  are not  Guarantors
               exceeds   the  lesser  of  (a)  twelve   percent   (12%)  of  the
               Consolidated  Net Assets of the Company and its  Subsidiaries  at
               such time and (b)  $25,000,000,  within ten (10) days  thereafter
               cause one or more of such  Subsidiaries to execute and deliver to
               the  Administrative  Agent an  assumption  or  joinder  agreement
               pursuant  to which it or they  agree to be bound by the terms and
               provisions of the Guaranty  (whereupon each such Subsidiary shall
               become a  "Guarantor"  under this  Agreement)  such  that,  after
               giving  effect  thereto,  the  book  value of the  assets  of all
               Domestic  Subsidiaries  which are not Guarantors  does not exceed
               the lesser of (a) twelve  percent (12%) of the  Consolidated  Net
               Assets of the Company and its  Subsidiaries  at such time and (b)
               $25,000,000,  and cause such Guarantors to execute and deliver to
               the  Administrative   Agent  such  Collateral  Documents  as  the
               Administrative Agent may require;

                    (iii) cause each  Subsidiary,  before it makes a loan to any
               of the  Borrowers,  to execute the  Subordination  Agreement (and
               from and after the Closing  Date cause each other  Subsidiary  to
               execute and deliver to the Administrative  Agent, within ten (10)
               days after becoming a Subsidiary, as applicable, an assumption or
               joinder agreement  pursuant to which it agrees to be bound by the
               terms and provisions of the Subordination Agreement);

                    (iv)  deliver  and  cause  such   Subsidiaries   to  deliver
               corporate  resolutions,  opinions  of  counsel,  and  such  other
               corporate   documentation   as  the   Administrative   Agent  may
               reasonably  request,   all  in  form  and  substance   reasonably
               satisfactory to the Administrative Agent; and

                    (v) cause each  Subsidiary to be a Wholly-Owned  Subsidiary,
               except as set forth on Schedule 6.8.

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         Foreign Employee Benefit Compliance. The Company shall, and shall cause
         each of its  Subsidiaries  and each member of its Controlled  Group to,
         establish,  maintain and operate all Foreign  Employee Benefit Plans to
         comply in all material  respects with all laws,  regulations  and rules
         applicable  thereto and the  respective  requirements  of the governing
         documents for such Plans,  except for failures to comply which,  in the
         aggregate,  would not be reasonably  expected to subject the Company or
         any of its Subsidiaries to liability, individually or in the aggregate,
         in excess of $5,000,000.

         Subordinated  Seller Debt. (i) The Company shall (A) extend the payment
         date  of  the   $40,000,000   first   installment   payable  under  the
         Subordinated  Seller Note on the first  anniversary of the Closing Date
         unless on such date the conditions set forth in the third  paragraph of
         Section  5.2(a) of the Seller  Subordinated  Note are satisfied and (B)
         elect not to make interest  payments due under the Seller  Subordinated
         Note pursuant to Section 2.3 of the Seller  Subordinated Note if at the
         time of the proposed payment, the Company or any of its Subsidiaries is
         not in compliance  with any of the covenants  contained in this Article
         VII  and  (ii)  the  Company  shall,   and  shall  cause  each  of  its
         Subsidiaries  to, comply at all times with each  covenant  contained in
         the documents  evidencing  the  Subordinated  Seller Debt and shall not
         permit any  potential  or actual  defaults to occur with respect to the
         Seller Subordinated Debt.

         Post-Closing  Deliveries.  The Company  and/or its  Subsidiaries  shall
         deliver,  or cause to be  delivered,  to the  Administrative  Agent (or
         Collateral Agent, as applicable):

                  within  fifteen (15) days after the Closing Date, a commitment
         for an ALTA Loan  Policy-1992  (the "Title  Policy")  dated the Closing
         Date in favor of the  Administrative  Agent (or  Collateral  Agent,  as
         applicable),  for the benefit of the  Lenders,  for the parcels of real
         estate covered by the Mortgages,  from a title  insurance  company,  in
         amounts and subject to such exceptions and  exclusions,  and containing
         such  information and endorsements as may be required by and acceptable
         to the  Administrative  Agent (or  Collateral  Agent,  as  applicable),
         including, without limitation, usury, zoning, comprehensive,  revolving
         credit and creditor's  rights  endorsements and within  forty-five days
         after the Closing  Date,  a final Title  Policy for each such parcel of
         real estate;

                  within  thirty (30) days after the Closing  Date,  a survey of
         each parcel of real estate  referred to in clause (ii) by a  registered
         surveyor,  prepared  in  compliance  with the Minimum  Standard  Detail
         Requirements  for  ALTA/ACSM  Land  Title  Surveys  adopted in 1986 and
         meeting the  accuracy  requirements  of a Class A survey and  otherwise
         acceptable  to  the  Administrative  Agent  (or  Collateral  Agent,  as
         applicable).  Each such survey shall set forth the legal description of
         the  applicable  real  estate  and  show all  improvements,  easements,
         building and set-back  lines and other  restrictions,  means of ingress
         and  egress,  electric,  water,  sewer,  gas and  other  utility  lines
         servicing  such real  estate,  and other  items as are  required by the
         Administrative Agent (or Collateral Agent, as applicable);

                  within thirty (30) days after the Closing Date, proof that the
         Mortgages  have  been  executed  and  delivered  by  the  Company  or a
         Subsidiary,  as the  case  may  be,  and  filed  or  recorded  in  such
         jurisdictions as the Administrative Agent shall have specified or other
         arrangements  with respect to filing or recording  satisfactory  to the
         Administrative  Agent (or Collateral  Agent,  as applicable)  have been
         made; and

                  within  sixty  (60) days  after  the  Closing  Date,  landlord
         waiver(s)  and a  mortgagee  estoppel  letter(s)  with  respect to each
         parcel of property  leased by the  Company or any of its  Subsidiaries,
         each in form and substance acceptable to the Administrative Agent.

         The Administrative Agent may, but shall not be obligated to, extend any
         of the  foregoing  time  periods  (other than that set forth in Section
         7.2(n)(iii)) as it may deem appropriate.

         Negative Covenants.

         Sales of  Assets.  The  Company  shall  not,  nor shall it  permit  any
         Subsidiary to, sell or otherwise  dispose of any  Receivables,  with or
         without recourse or consummate any Asset Sale, except:

                  (i)  transfers of assets to the  Company,  between the Company
         and any  Guarantor  which is a Domestic  Subsidiary,  between  any such
         Guarantors or between  Subsidiaries  pursuant to the Spectra  Precision
         Acquisition; and

                  (ii) sales, assignments, transfers, lease conveyances or other
         dispositions  of other assets if such  transaction  (a) is for not less
         than fair market value (as  determined  in good faith by the  Company's
         chief  financial

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         officer), and (b) when combined with all such other transactions (each
         such  transaction  being  valued  at  book  value)  and all  Sale  and
         Leaseback Transactions (each such Sale and Leaseback Transaction being
         valued at book value)  during the period from the Closing  Date to the
         date of such proposed  transaction,  represents the disposition of not
         greater  than ten  percent  (10%) of the  Company's  Consolidated  Net
         Assets at the end of the fiscal  year  immediately  preceding  that in
         which such transaction is proposed to be entered into.

         Liens.  The Company shall not, nor shall it permit any  Subsidiary  to,
         directly or indirectly create,  incur, assume or permit to exist a Lien
         on or with  respect  to the  Capital  Stock  of any  Subsidiary  of the
         Company.  In addition,  the Company  shall not, nor shall it permit any
         Subsidiary to, directly or indirectly create,  incur,  assume or permit
         to exist any Lien on or with respect to any of their  respective  other
         property or assets except:

               (i) Permitted Existing Liens;

               (ii) Customary Permitted Liens;

               (iii) Liens with respect to Equipment  acquired by the Company or
          any of its Subsidiaries  after the date hereof pursuant to a Permitted
          Acquisition (and not created in  contemplation  of such  acquisition);
          provided,  that  such  Liens  shall  extend  only to the  property  so
          acquired;

               (iv) Liens securing  Indebtedness  of a Subsidiary to the Company
          or to another Wholly-Owned Subsidiary;

               (v)  Liens   securing   Indebtedness   permitted   under  Section
          7.3(c)(vii); and

               (vi) Additional Liens,  provided the Indebtedness secured thereby
          does not exceed in the aggregate  $10,000,000  (less the amount of any
          Indebtedness secured by Liens permitted under clause (v)).

         Indebtedness. The Company shall not, nor shall it permit any Subsidiary
         to, cause or permit,  directly or indirectly create,  incur,  assume or
         otherwise  become or remain directly or indirectly  liable with respect
         to any Indebtedness, except:

               (i) the Obligations;

               (ii) the Subordinated Seller Debt;

               (iii) Permitted Existing Indebtedness;

               (iv) Indebtedness  arising from  intercompany  loans and advances
          from  the  Company  or any  Domestic  Subsidiary  to  any  Subsidiary,
          provided  that  (A)  such  intercompany   Indebtedness  shall  not  be
          evidenced by any note or similar instrument;  (B) the Company and each
          applicable  Subsidiary shall record all  intercompany  transactions on
          their  respective  books and records in a manner  satisfactory  to the
          Administrative  Agent;  (C) the  obligations of each  Subsidiary  with
          respect to any such  intercompany  loans shall be  subordinated to any
          Obligations of such Subsidiary  hereunder in a manner  satisfactory to
          the  Administrative  Agent; (D) no Default or Unmatured  Default would
          occur and be  continuing  after  giving  effect  to any such  proposed
          intercompany loan; (E) the aggregate Dollar Amount outstanding of such
          intercompany  loans  owing by  Foreign  Subsidiaries  other than loans
          pursuant  to  the  Spectra  Precision  Acquisition  shall  not  exceed
          $30,000,000  at any time and (F)  other  than  loans  pursuant  to the
          Spectra Precision  Acquisition,  such intercompany loans shall be made
          in the ordinary course of business, consistent with past practices and
          the proceeds of such loans shall be used to fund operating expenses of
          the applicable Subsidiary;

               (v) Contingent  Obligations to the extent permitted under Section
          7.3(d);

               (vi) Hedging  Obligations to the extent  permitted  under Section
          7.3(n);

               (vii)  Indebtedness with respect to Capital Lease Obligations and
          purchase money  Indebtedness with respect to real or personal property
          in an aggregate amount not to exceed $10,000,000;

               (viii)  Indebtedness  incurred for the purpose of refinancing any
          of the Indebtedness permitted under clause (iii);

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               (ix) additional unsecured  Indebtedness in an aggregate amount at
          any time outstanding not exceeding  $50,000,000 (less any Indebtedness
          described in clause  (vii)  above) of which not more than  $25,000,000
          may be incurred by Subsidiaries which are not Subsidiary  Borrowers or
          Guarantors; and

               (x) at any time on or  before  fifteen  Business  Days  after the
          Closing  Date,  Indebtedness  to John Hancock Life  Insurance  Company
          pursuant to that certain note dated June 13, 1994.

         Contingent Obligations.  The Company shall not, nor shall it permit any
         Subsidiary  to,  directly or  indirectly  create or become or be liable
         with  respect  to  any  Contingent  Obligation,  except:  (i)  recourse
         obligations  resulting from  endorsement of negotiable  instruments for
         collection in the ordinary course of business;  (ii) Permitted Existing
         Contingent Obligations; (iii) obligations,  warranties,  guaranties and
         indemnities,  not relating to  Indebtedness  of any Person,  which have
         been or are  undertaken or made in the ordinary  course of business and
         not for the  benefit of or in favor of an  Affiliate  of the Company or
         such Subsidiary; (iv) Contingent Obligations of the Subsidiaries of the
         Company under the Guaranty to which they are a party,  (v)  obligations
         arising  under  or  related  to the  Loan  Documents;  (vi)  Contingent
         Obligations  in  respect  of the  Subordinated  Seller  Debt  or  other
         Indebtedness  permitted by Section 7.3(c) above,  and (vii)  additional
         Contingent  Obligations  in an  aggregate  amount  not to exceed in the
         aggregate five percent (5%) of  Consolidated  Net Worth at any one time
         outstanding.

         Restricted  Payments.  The Company  shall not,  nor shall it permit any
         Subsidiary  to, make or declare  any  Restricted  Payments  (other than
         Restricted Payments by a Subsidiary to the Company) except that (i) the
         Company may make prepayments of the Seller  Subordinated  Note from the
         proceeds of equity  offerings  as required by Section 4.2 of the Seller
         Subordinated  Note (but only to the extent  otherwise  permitted by the
         subordination provisions of the Seller Subordinated Note); (ii) so long
         as no Default  or  Unmatured  Default  then  exists,  the  Company  may
         repurchase shares from its employees, officers or directors pursuant to
         any vesting  provisions with respect  thereto;  and (iii) so long as no
         Default  or  Unmatured  Default  then  exists,  the  Company  may  make
         Restricted  Payments  not to exceed  (A)  during  the  period  from the
         Closing Date through  December 29, 2000,  an aggregate  amount equal to
         twelve and  one-half  percent  (12.5%)  of Net Income for the  previous
         fiscal year and (B) for any subsequent fiscal year, an aggregate amount
         equal to  twenty-five  percent  (25%) of Net  Income  for the  previous
         fiscal year.

         Conduct of Business; Subsidiaries; Acquisitions. The Company shall not,
         nor shall it permit any  Subsidiary  to,  engage in any business  other
         than the  businesses  engaged in by the  Company on the date hereof and
         any business or  activities  which are similar,  related or  incidental
         thereto or logical extensions thereof. Except for the Spectra Precision
         Acquisition,  the Company shall not create,  acquire or capitalize  any
         Subsidiary  after the date  hereof  unless (i) no Default or  Unmatured
         Default   shall  have  occurred  and  be  continuing  or  would  result
         therefrom; (ii) after such creation, acquisition or capitalization, all
         of the  representations  and warranties  contained herein shall be true
         and correct in all material  respects (unless such  representation  and
         warranty  is  made  as  of  a  specific  date,  in  which  case,   such
         representation  or warranty  shall be true as of such date);  and (iii)
         after such creation, acquisition or capitalization the Company shall be
         in compliance with the terms of Section  7.2(k).  The Company shall not
         make any Acquisitions,  other than the Spectra Precision Acquisition or
         Acquisitions meeting the following  requirements (each such Acquisition
         constituting a "Permitted Acquisition"):

               (i) no Default or Unmatured  Default  shall have  occurred and be
          continuing or would result from such  Acquisition or the incurrence of
          any Indebtedness in connection therewith;

               (ii)the   purchase  is  consummated   pursuant  to  a  negotiated
          acquisition  agreement  on a  non-hostile  basis and  approved  by the
          target company's board of directors (and  shareholders,  if necessary)
          prior to the consummation of the Acquisition;

               (iii)  if the  purchase  price  payable  in  respect  to any such
          Acquisition (including,  without limitation, cash or stock (other than
          Equity  Interests  (other  than  Disqualified  Stock) of the  Company)
          consideration  paid and  Indebtedness  or other  liabilities  assumed)
          exceeds $25,000,000, prior to each such Acquisition, the Company shall
          have  delivered  to  the  Administrative   Agent  and  the  Lenders  a
          certificate from one of the Authorized  Officers,  demonstrating  that
          after  giving  effect to such  Acquisition,  on a pro  forma  basis in
          respect  of each  such  Acquisition  as if the  Acquisition  and  such
          incurrence  of  Indebtedness  had  occurred  on the  first  day of the
          twelve-month  period  ending  on the  last day of the  Company's  most
          recently  completed  fiscal  quarter,  the Company  would have been in
          compliance  with  the  financial  covenants  in  Section  7.4  and not
          otherwise in Default;

               (iv)  if  the  purchase  price  for  the  Acquisition  (excluding
          consideration  in the form of the Company's  Equity  Interests  (other
          than Disqualified  Stock)) exceeds,  together with all other Permitted
          Acquisitions  permitted  under  this  Section  7.3(f)  during the same
          fiscal  year,   $25,000,000  (the  "Permitted   Acquisition   Basket")
          (including

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          the  incurrence or assumption of any  Indebtedness  in connection
          therewith),   the  Required  Lenders  shall  have  consented  to  such
          Acquisition;

               (v) the businesses being acquired shall be similar to that of the
          Company  and its  Subsidiaries  as of the  Closing  Date,  related  or
          incidental thereto or logical extensions thereof; and

               (vi)such Acquisition shall be structured as an asset acquisition,
          as an  acquisition of one hundred  percent  (100%) of the  outstanding
          voting  equity  securities  of  the  target  company  or  as a  merger
          permitted hereby.

         Investments.  Neither  the Company  nor any of its  Subsidiaries  shall
         purchase  or  acquire,  or make any  commitment  therefor,  any  Equity
         Interest,  or any  obligations or other  securities of, or any interest
         in, any Person, or make or commit to make any advance,  loan, extension
         of credit or capital  contribution  to or any other  investment in, any
         Person including any Affiliate of the Company, except for:

               (i)   Investments  by  the  Company  or  any  Subsidiary  in  any
          Wholly-Owned Subsidiary which is a Guarantor;

               (ii)  Investments  incurred  in  order  to  consummate  Permitted
          Acquisitions otherwise permitted herein;

               (iii) Loans  giving  rise to  Indebtedness  permitted  by Section
          7.3(c)(iv);

               (iv)  Advances to employees  for business  expenses not to exceed
          $1,000,000 in the aggregate outstanding at any one time;

               (v) other loans to employees  in the ordinary  course of business
          and consistent  with past practices,  not to exceed  $5,000,000 in the
          aggregate outstanding at any one time;

               (vi) Investments in Cash Equivalents;

               (vii) Permitted Existing Investments; and

               (viii) other Investments in an aggregate amount not to exceed the
          sum of (A) $20,000,000 (based on the initial amount invested) plus (B)
          proceeds  (net  of  the  initial  amount  invested)  from  Investments
          permitted hereunder.

         Transactions with Shareholders and Affiliates.  Neither the Company nor
         any of its  Subsidiaries  shall  directly or  indirectly  enter into or
         permit to exist any transaction  (including,  without  limitation,  the
         purchase,  sale,  lease or exchange of any property or the rendering of
         any service)  with,  or make loans or advances to, any Affiliate of the
         Company  which is not its  Wholly-Owned  Subsidiary,  on terms that are
         less  favorable  to  the  Company  or  any  of  its  Subsidiaries,   as
         applicable,  than  those  that  might be  obtained  in an arm's  length
         transaction  at the time  from  Persons  who are not  such a holder  or
         Affiliate, except for Restricted Payments permitted by Section 7.3(f).

         Restriction on Fundamental Changes.  Neither the Company nor any of its
         Subsidiaries   shall  enter  into  any  merger  or  consolidation,   or
         liquidate,   wind-up  or  dissolve  (or  suffer  any   liquidation   or
         dissolution), or convey, lease, sell, transfer or otherwise dispose of,
         in one transaction or series of transactions,  all or substantially all
         of  the  Company's   consolidated   business  or  property  (each  such
         transaction a "Fundamental Change"), whether now or hereafter acquired,
         except (i) Fundamental Changes permitted under Sections 7.3(a),  7.3(b)
         or 7.3(f),  (ii) a  Subsidiary  of the  Company  may be merged  into or
         consolidated  with the Company or any  Wholly-Owned  Subsidiary  of the
         Company  (in which  case the  Company or such  Wholly-Owned  Subsidiary
         shall be the surviving  corporation);  provided that if the predecessor
         Subsidiary was a Guarantor,  the surviving  Subsidiary,  if applicable,
         shall be a Guarantor hereunder, (iii) any liquidation of any Subsidiary
         of the Company into the Company or another  Subsidiary  of the Company,
         as applicable, and (iv) the Company may merge with any other Person, or
         any  Subsidiary of the Company may  consolidate or merge with any other
         Person,  provided, that (A) no Default or Unmatured Default shall exist
         immediately  before or after giving effect to such Fundamental  Change,
         (B) in the

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         case of any  merger  of the  Company,  the  Company  is the  surviving
         corporation  in such merger and such merger is with a Person in a line
         of  business  substantially  similar  to that of the  Company  and its
         Subsidiaries  as of the Closing  Date or any  business  or  activities
         which are similar, related or incidental thereto or logical extensions
         thereof,  and (C) in the case of any  merger or  consolidation  of any
         Subsidiary  of  the  Company,   the  surviving   corporation  in  such
         Fundamental  Change is or becomes as a result  thereof a  Wholly-Owned
         Subsidiary  of the Company  and if the  predecessor  Subsidiary  was a
         Guarantor,  the surviving  Subsidiary shall be a Guarantor  hereunder,
         and (D)  such  transaction  is  with a  Person  in a line of  business
         substantially  similar to or related  to that of the  Company  and its
         Subsidiaries as of the Closing Date or is a logical extension thereof.

         Margin  Regulations.  Neither the Company nor any of its Subsidiaries,
         shall use all or any portion of the  proceeds  of any credit  extended
         under this Agreement to purchase or carry Margin Stock.

         ERISA.  (i) The Company shall not:

     (A) engage,  or permit any of its  Subsidiaries to engage,  in any material
     prohibited  transaction  described  in Sections 406 of ERISA or 4975 of the
     Code for which a statutory or class exemption is not available or a private
     exemption has not been previously obtained from the DOL;

     (B)  permit to exist any  accumulated  funding  deficiency  (as  defined in
     Sections  302 of ERISA and 412 of the Code),  with  respect to any  Benefit
     Plan, whether or not waived;

     (C) fail,  or permit any  Controlled  Group  member to fail,  to pay timely
     required material  contributions or annual installments due with respect to
     any waived funding deficiency to any Benefit Plan;

     (D)  terminate,  or permit any  Controlled  Group member to terminate,  any
     Benefit Plan which would result in any material liability of the Company or
     any Controlled Group member under Title IV of ERISA;

     (E) fail to make any material  contribution or payment to any Multiemployer
     Plan which the Company or any  Controlled  Group  member may be required to
     make under any agreement  relating to such  Multiemployer  Plan, or any law
     pertaining thereto;

     (F) permit any unfunded  liabilities  with  respect to any Foreign  Pension
     Plan  except to the extent  that any such  unfunded  liabilities  are being
     funded by annual  contributions  made by the  Borrower or any member of its
     Controlled  Group  and such  annual  contributions  are not  less  than the
     minimum amounts, if any, required under applicable local law;

     (G) fail, or permit any of its  Subsidiaries or Controlled Group members to
     fail, to pay any required  contributions  or payments to a Foreign  Pension
     Plan on or before the due date for such required installment or payment;

     (H) fail,  or permit any  Controlled  Group member to fail, to pay any
     required  material  installment or any other payment required under Section
     412 of the Code on or  before  the due date for such  installment  or other
     payment; or

     (I) amend, or permit any Controlled Group member to amend, a Plan resulting
     in a material increase in current liability for the plan year such that the
     Company or any Controlled  Group member is required to provide  security to
     such Plan under Section 401(a)(29) of the Code.

         (ii)  For  purposes  of  this  Section  7.3(k),  "material"  means  any
  noncompliance  or basis for  liability  which could  reasonably be expected to
  subject the Company or any of its  Subsidiaries to liability,  individually or
  in the aggregate, in excess of $5,000,000.

         Certain  Documents.  Neither the  Company  nor any of its  Subsidiaries
         shall amend,  modify or otherwise change any of the terms or provisions
         of  (i)  the  Acquisition  Documents,  or of any  of  their  respective
         constituent  documents  as in effect on the date  hereof in any  manner
         materially  adverse  to  the  interests  of the  Lenders  or  (ii)  the
         documents evidencing the Subordinated Seller Debt.

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         Fiscal  Year.   Neither  the  Company  nor  any  of  its   consolidated
         Subsidiaries  shall  change  its  fiscal  year  for  accounting  or tax
         purposes from a period consisting of the twelve-month  period ending on
         Friday  nearest to  December  31 of each year,  except as  required  by
         Agreement Accounting  Principles or by law and disclosed to the Lenders
         and the Administrative Agent.

         Hedging Obligations.  The Company shall not and shall not permit any of
         its Subsidiaries to enter into any interest rate,  commodity or foreign
         currency exchange,  swap, collar, cap or similar agreements  evidencing
         Hedging  Obligations,  other than interest  rate,  foreign  currency or
         commodity  exchange,  swap,  collar,  cap or similar agreements entered
         into by the Company or its  Subsidiaries  pursuant to which the Company
         or its Subsidiaries has hedged its actual or anticipated interest rate,
         foreign  currency  or  commodity   exposure.   Such  permitted  hedging
         agreements  entered  into by the  Company or its  Subsidiaries  and any
         Lender or any Affiliate of any Lender are sometimes  referred to herein
         as "Hedging Agreements."

         Capital  Expenditures.  The Company shall not, and shall not permit any
         of its Subsidiaries to, make Capital Expenditures in any fiscal year to
         the extent that during any fiscal year the aggregate  amount of Capital
         Expenditures  for  the  Company  and  its  Subsidiaries   would  exceed
         $15,000,000,   excluding  any  amount   attributable   to  a  Permitted
         Acquisition (the "Capital  Expenditures  Limit").  Notwithstanding  the
         foregoing,  in the event that the Company and its  Subsidiaries  do not
         expend the entire Capital  Expenditures  Limit for any fiscal year, the
         Company  and its  Subsidiaries  may carry  forward  to the  immediately
         succeeding   fiscal  year  the  unutilized   portion  of  such  Capital
         Expenditures Limit

         Restrictive  Agreements.  Other than (x) the Subordinated  Seller Note,
         (y)  customary  provisions  in  licenses  or  similar  agreements  that
         restrict  the  ability of the  Company or its  Subsidiaries  to assign,
         transfer,  license or sublicense any  intellectual  property subject to
         such  license  or  agreement  and (z)  negative  pledge  provisions  in
         Equipment  financing  agreements  which  restrict  only  Liens  on  the
         Equipment  subject  to such  agreement  together  with any  accessions,
         additions,  replacements  or  proceeds of such  Equipment,  the Company
         shall not, nor shall it permit any of its  Subsidiaries  to, enter into
         any  indenture,   agreement,  instrument  or  other  arrangement  which
         directly or  indirectly  prohibits or  restrains,  or has the effect of
         prohibiting or restraining,  or imposes  materially  adverse conditions
         upon, the ability of the Company or any Subsidiary to create Liens upon
         their assets  securing the  Obligations or of any Subsidiary to (i) pay
         dividends or make other distributions or Restricted Payments (A) on its
         Capital   Stock  or  (B)  with   respect  to  any  other   interest  or
         participation  in, or  measured  by,  its  profits,  (ii) make loans or
         advances  to or other  investments  in the  Company or any  Subsidiary,
         (iii)  repay loans or advances  from the Company or any  Subsidiary  or
         (iv) transfer any of its properties to the Company or any Subsidiary.

         Financial Covenants.

         Minimum Fixed Charge Coverage  Ratio.  The Company shall maintain as of
         the end of each fiscal quarter set forth below a Fixed Charge  Coverage
         Ratio for the four fiscal  quarter  period then ending of not less than
         the ratio set forth below opposite such period:

               Fiscal Quarter Ending                              Ratio
               ---------------------                            ---------
         September 30, 2000 through March 31, 2002              1.50:1.00
         June 30, 2002 and September 30, 2002                   1.75:1.00
         December 31, 2002 and March 31, 2003                   2.00:1.00
         June 30, 2003 and September 30, 2003                   2.25:1.00
         December 31, 2003 and March 31, 2004                   2.50:1.00
         June 30, 2004 and September 30, 2004                   2.75:1.00
         December 31, 2004 and thereafter                       3.00:1.00

         Maximum  Leverage  Ratio.  The  Company  shall at all times  during the
         periods  specified  below maintain a Leverage Ratio for the four fiscal
         quarter  period  then  ending of not  greater  than the ratio set forth
         below opposite such period:

               Fiscal Quarter Ending                              Ratio
               ---------------------                            ---------
         September 30, 2000                                     3.50:1.00
         December 31, 2000 and March 31, 2001                   3.00:1.00
         June 30, 2001 and September 30, 2001                   2.50:1.00
         December 31, 2001 and March 31, 2002                   2.00:1.00
         June 30, 2002 and thereafter                           1.50:1.00

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         Minimum  Consolidated  Net  Worth.  The  Company  shall not  permit its
         Consolidated  Net  Worth at any time to be less than the sum of (i) 85%
         of  Consolidated  Net Worth on the Closing Date plus (ii) fifty percent
         (50%)  of Net  Income  (if  positive)  calculated  separately  for each
         subsequent quarterly accounting period, in each case, excluding changes
         in cumulative foreign exchange translation  adjustment,  plus (iii) the
         aggregate amount of all Equity Interests issued after the Closing Date.

                                   : DEFAULTS

         Defaults. Each of the following occurrences shall constitute a Default
         under this Agreement:

         Failure  to Make  Payments  When Due.  The  Company  or any  Subsidiary
         Borrower  shall  (i)  fail  to pay  when  due  any  of the  Obligations
         consisting of principal  with respect to any Loan or (ii) shall fail to
         pay within five (5) Business Days of the date when due any of the other
         Obligations under this Agreement or the other Loan Documents.

         Breach of Certain  Covenants.  The Company or any  Subsidiary  Borrower
         shall fail duly and  punctually  to perform or observe  any  agreement,
         covenant or obligation binding on it under:

               (i) Sections 7.1(b),  7.1(c), 7.1(f), 7.2(j), 7.2(k), 7.2(m), 7.3
          or 7.4 or

               (ii) any section of this Agreement or any other Loan Document not
          covered by Section 8.1(a),  8.1(b)(i) or 8.1(m) and such failure shall
          continue unremedied for thirty (30) days after the occurrence thereof.

         Breach of  Representation or Warranty.  Any  representation or warranty
         made or deemed  made by the Company or any  Subsidiary  Borrower to the
         Administrative  Agent or any  Lender  herein or by the  Company  or any
         Subsidiary  Borrower or any of their  Subsidiaries  in any of the other
         Loan Documents or in any statement or certificate or information at any
         time given by any such  Person  pursuant  to any of the Loan  Documents
         shall be false in any material  respect on the date as of which made or
         deemed made.

         Default  as  to  Other   Indebtedness.   The  Company  or  any  of  its
         Subsidiaries  shall  fail to pay when due (i) any  Subordinated  Seller
         Debt or (ii)  any  Indebtedness  in  excess  of  $5,000,000  (any  such
         Indebtedness being "Material  Indebtedness");  or the Company or any of
         its  Subsidiaries  shall fail to perform  (beyond the applicable  grace
         period with respect thereto,  if any) any term,  provision or condition
         contained in any agreement  under which any such Material  Indebtedness
         was created or is governed, or any other event shall occur or condition
         exist,  the effect of which default or event is to cause,  or to permit
         the holder or  holders of such  Material  Indebtedness  to cause,  such
         Material  Indebtedness to become due prior to its stated  maturity;  or
         any Material  Indebtedness  of the Borrower or any of its  Subsidiaries
         shall be  declared  to be due and  payable or required to be prepaid or
         repurchased (other than by a regularly  scheduled payment) prior to the
         stated maturity thereof.

         Involuntary Bankruptcy; Appointment of Receiver, Etc.

               (i) An involuntary case shall be commenced against the Company or
          any of the  Company's  Subsidiaries  and  the  petition  shall  not be
          dismissed,  stayed,  bonded or discharged  within forty-five (45) days
          after commencement of the case; or a court having  jurisdiction in the
          premises  shall  enter a decree or order for  relief in respect of the
          Company or any of the Company's  Subsidiaries in an involuntary  case,
          under any applicable  bankruptcy,  insolvency or other similar law now
          or hereinafter in effect; or any other similar relief shall be granted
          under any applicable federal, state, local or foreign law.

               (ii)A  decree  or order  of a court  having  jurisdiction  in the
          premises for the appointment of a receiver, liquidator,  sequestrator,
          trustee,  custodian or other officer  having  similar  powers over the
          Company  or  any  of  the  Company's  Subsidiaries  or  over  all or a
          substantial  part  of  the  property  of  the  Company  or  any of the
          Company's  Subsidiaries  shall be  entered;  or an  interim  receiver,
          trustee or other  custodian  of the  Company  or any of the  Company's
          Subsidiaries  or of all or a  substantial  part of the property of the
          Company or any of the Company's  Subsidiaries  shall be appointed or a
          warrant of  attachment,  execution  or  similar  process  against  any
          substantial  part  of  the  property  of  the  Company  or  any of the
          Company's Subsidiaries shall be issued and any such event shall not be
          stayed,  dismissed,  bonded or discharged  within forty-five (45) days
          after entry, appointment or issuance.

         Voluntary Bankruptcy;  Appointment of Receiver, Etc. The Company or any
         of the Company's Subsidiaries shall (i) commence a voluntary case under
         any  applicable  bankruptcy,  insolvency  or other  similar  law now or
         hereafter  in effect,  (ii) consent to the entry of an order for relief
         in an involuntary  case, or to the conversion of an

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         involuntary  case to a  voluntary  case,  under  any such  law,  (iii)
         consent to the  appointment  of or taking  possession  by a  receiver,
         trustee  or  other  custodian  for  all or a  substantial  part of its
         property, (iv) make any assignment for the benefit of creditors or (v)
         take any corporate action to authorize any of the foregoing.

         Judgments and  Attachments.  Any money  judgment(s)  writ or warrant of
         attachment,  or similar  process  against the  Company or any  Domestic
         Subsidiary or any of their  respective  assets  involving in any single
         case or in the  aggregate an amount in excess of  $5,000,000  is or are
         entered and shall remain undischarged,  unvacated, unbonded or unstayed
         for a period of thirty  (30) days or in any event  later  than  fifteen
         (15) days prior to the date of any proposed sale thereunder.

         Dissolution. Any order, judgment or decree shall be entered against the
         Company  or  any  Domestic   Subsidiary   decreeing   its   involuntary
         dissolution  or split up and such order shall remain  undischarged  and
         unstayed for a period in excess of forty-five (45) days; or the Company
         or any Domestic  Subsidiary shall otherwise  dissolve or cease to exist
         except as specifically permitted by this Agreement.

         Termination  Event.  Any  Termination  Event  occurs which the Required
         Lenders  believe  is  reasonably  likely  to  subject  the  Company  to
         liability  in excess of  $5,000,000.  The Unfunded  Liabilities  of all
         Single Employer Plans shall exceed in the aggregate $10,000,000.

         Waiver of Minimum Funding  Standard.  If the plan  administrator of any
         Plan  applies  under  Section  412(d)  of the Code for a waiver  of the
         minimum  funding  standards  of  Section  412(a)  of the  Code  and the
         Administrative  Agent or the Required  Lenders  believe the substantial
         business  hardship upon which the  application  for the waiver is based
         could  reasonably  be  expected  to subject  either the  Company or any
         Controlled Group member to liability in excess of $5,000,000.

         Change of Control.  A Change of Control shall occur.

         Guarantor  Revocation.  Any Guaranty shall fail to remain in full force
         or effect or any action shall be taken to  discontinue or to assert the
         invalidity or unenforceability of any Guaranty,  or any Guarantor shall
         fail to comply with any of the terms or  provisions  of any Guaranty to
         which  it is a  party,  or any  Guarantor  shall  deny  that it has any
         further  liability  under any Guaranty to which it is a party, or shall
         give  notice to such  effect;  in each case  other  than a  Guarantor's
         ceasing to be a Subsidiary  Borrower pursuant to Section 2.23 hereof or
         the  disposition  of such  Guarantor  in any  transaction  permitted by
         Section 7.3(b) hereof.

         Collateral Documents.  Any Collateral Documents shall fail to remain in
         full force or effect or any action shall be taken to  discontinue or to
         assert the invalidity or unenforceability  of any Collateral  Document,
         or any  "Default"  or  "Unmatured  Default"  shall  occur  under and as
         defined in any  Collateral  Document or shall  deny,  or give notice to
         such effect,  that it has any further  liability  under such Collateral
         Document or any Collateral Document shall for any reason fail to create
         a  valid  and  perfected,  first  priority  security  interest  in  any
         collateral purported to be covered thereby,  except as permitted by the
         terms of such Collateral Document.

         A Default shall be deemed  "continuing"  until cured or until waived in
         writing in accordance with Section 9.2.

      : ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND REMEDIES

     Termination of Revolving  Loan  Commitments;  Acceleration.  If any Default
described in Section  8.1(e) or 8.1(f) occurs with respect to the Company or any
Subsidiary  Borrower,  the obligations of the Lenders to make Loans  (including,
without  limitation,  Alternate  Currency Loans) hereunder and the obligation of
any  Issuing  Banks to issue  Letters of Credit  hereunder  shall  automatically
terminate and the Obligations shall  immediately  become due and payable without
any election or action on the part of the Administrative Agent or any Lender. If
any other Default occurs,  the Required  Lenders,  or the  Administrative  Agent
acting at the  direction  of the Required  Lenders may  terminate or suspend the
obligations  of the  Lenders  to  make  Loans  (including,  without  limitation,
Alternate  Currency Loans)  hereunder and the obligation of the Issuing Banks to
issue  Letters of Credit  hereunder,  or declare the  Obligations  to be due and
payable,  or both,  whereupon the Obligations  shall become  immediately due and
payable,  without  presentment,  demand,  protest or notice of any kind,  all of
which the Borrowers expressly waive.

     Amendments.  Subject to the  provisions  of this  Article IX, the  Required
Lenders (or the Administrative Agent with the consent in writing of the Required
Lenders) and the Borrowers may enter into agreements supplemental hereto for the
purpose of adding or modifying any  provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the  Borrowers  hereunder  or waiving
any Default or Unmatured  Default  hereunder;  provided,  however,  that no such
supplemental  agreement  shall,  without  the  consent of each  Lender  directly
affected thereby:

               (a) Postpone or extend the Revolving Loan  Termination  Date, the
          Term Loan Maturity Date or any other date scheduled for any payment of
          principal of, or interest on, the Loans, the Reimbursement Obligations
          or

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          any fees or other amounts  payable to such Lender (except with respect
          to a  waiver  of the  application  of the  default  rate  of  interest
          pursuant to Section 2.12 hereof).

               (b) Reduce the principal  amount of any Loans or L/C Obligations,
          or reduce the rate or extend the time of payment of  interest  or fees
          thereon.

               (c) Reduce the percentage specified in the definition of Required
          Lenders or any other percentage of Lenders  hereunder  specified to be
          the  applicable  percentage  in  this  Agreement  to act on  specified
          matters or amend the  definitions  of  "Required  Lenders",  "Pro Rata
          Revolving Share",  "Pro Rata Share",  "Pro Rata Term Share", "Pro Rata
          Tranche A Revolving Share" or "Pro Rata Tranche B Revolving Share".

               (d) Increase the amount of the Revolving Loan  Commitment or Term
          Loan Commitment of any Lender hereunder.

               (e) Permit the Company or any  Subsidiary  Borrower to assign its
          rights under this Agreement or any Guaranty.

                  (f)  Release  the  Company  or any  Guarantor  from any of its
         obligations  under the  Guaranty  set forth in  Article X hereof or any
         other Guaranty.

               (g) Amend this Section 9.2.

               (h)  Release  all or a  substantial  portion  of  the  collateral
          pledged  pursuant to the  Collateral  Documents  (except as  expressly
          provided therein).

               (i) Amend the definition of "Trigger Event Date".

     No  amendment  of any  provision  of  this  Agreement  relating  to (a) the
Administrative  Agent shall be  effective  without  the  written  consent of the
Administrative  Agent,  (b) any  Issuing  Bank shall be  effective  without  the
written  consent  of such  Issuing  Bank and (c) any Swing  Line  Loan  shall be
effective without the written consent of the Swing Line Bank. The Administrative
Agent may waive  payment  of the fee  required  under  Section  14.3(b)  without
obtaining the consent of any of the Lenders.

     Preservation  of  Rights.  No  delay  or  omission  of the  Lenders  or the
Administrative Agent to exercise any right under the Loan Documents shall impair
such right or be  construed  to be a waiver of any  Default  or an  acquiescence
therein,  and the  making  of a Loan  or the  issuance  of a  Letter  of  Credit
notwithstanding  the  existence of a Default or the  inability of the Company or
any other Borrower to satisfy the conditions  precedent to such Loan or issuance
of such Letter of Credit shall not  constitute any waiver or  acquiescence.  Any
single or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment or
other  variation of the terms,  conditions or  provisions of the Loan  Documents
whatsoever  shall be valid unless in writing  signed by the requisite  number of
Lenders  required  pursuant to Section  9.2, and then only to the extent in such
writing  specifically set forth. All remedies contained in the Loan Documents or
by  law  afforded  shall  be  cumulative  and  all  shall  be  available  to the
Administrative  Agent and the Lenders  until the  Obligations  have been paid in
full.

                                   : GUARANTY

     Guaranty.  For  valuable  consideration,  the  receipt  of which is  hereby
acknowledged,  and to induce the  Lenders to make  advances  to each  Subsidiary
Borrower and to make,  issue and  participate  in Letters of Credit,  Swing Line
Loans  and  Alternate   Currency  Loans,  the  Company  hereby   absolutely  and
unconditionally  guarantees prompt payment when due, whether at stated maturity,
upon  acceleration  or otherwise,  and at all times  thereafter,  of any and all
existing and future obligations including without limitation the Obligations, of
each Subsidiary  Borrower to the  Administrative  Agent, the Lenders,  the Swing
Line Bank, the Issuing  Lenders,  the Alternate  Currency Banks, or any of them,
under or with  respect  to the Loan  Documents  or under or with  respect to any
Hedging  Agreement  entered into in connection with this Agreement,  whether for
principal,  interest, (including interest accruing after the commencement of any
bankruptcy insolvency or similar proceeding whether or not allowed as a claim in
such  proceeding)  fees,  expenses or otherwise  (collectively,  the "Guaranteed
Obligations",   and  each  such  Subsidiary  Borrower  being  an  "Obligor"  and
collectively, the "Obligors").

     Waivers.  The Company  waives notice of the acceptance of this guaranty and
of the  extension or  continuation  of the  Guaranteed  Obligations  or any part
thereof.  The Company  further waives  presentment,  protest,  notice of notices
delivered or demand made on any Obligor or action or  delinquency  in respect of
the Guaranteed  Obligations or any part thereof,  including any right to require
the Administrative Agent and the Lenders to sue any Obligor, any other guarantor
or

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any other Person obligated with respect to the Guaranteed  Obligations or any
part thereof,  or otherwise to enforce  payment  thereof  against any collateral
securing the  Guaranteed  Obligations  or any part thereof.  The  Administrative
Agent and the Lenders  shall have no  obligation to disclose or discuss with the
Company their assessments of the financial condition of the Obligors.

     Guaranty Absolute. This guaranty is a guaranty of payment and not of
collection,  is a primary  obligation of the Company and not one of surety,  and
the  validity  and  enforceability  of  this  guaranty  shall  be  absolute  and
unconditional  irrespective  of, and shall not be impaired or affected by any of
the following: (a) any extension, modification or renewal of, or indulgence with
respect to, or substitutions for, the Guaranteed Obligations or any part thereof
or any agreement  relating  thereto at any time;  (b) any failure or omission to
enforce any right, power or remedy with respect to the Guaranteed Obligations or
any part thereof or any agreement relating thereto,  or any collateral;  (c) any
waiver of any right, power or remedy with respect to the Guaranteed  Obligations
or any part  thereof or any  agreement  relating  thereto or with respect to any
collateral;  (d)  any  release,  surrender,   compromise,   settlement,  waiver,
subordination or modification, with or without consideration, of any collateral,
any other  guaranties  with respect to the  Guaranteed  Obligations  or any part
thereof,  or any other  obligation of any Person with respect to the  Guaranteed
Obligations  or any part  thereof;  (e) the  enforceability  or  validity of the
Guaranteed Obligations or any part thereof or the genuineness, enforceability or
validity of any agreement  relating  thereto or with respect to any  collateral;
(f) the  application  of  payments  received  from any source to the  payment of
obligations other than the Guaranteed  Obligations,  any part thereof or amounts
which are not covered by this guaranty even though the Administrative  Agent and
the Lenders  might  lawfully  have elected to apply such payments to any part or
all of the  Guaranteed  Obligations  or to amounts which are not covered by this
guaranty;  (g) any change in the  ownership  of any  Obligor or the  insolvency,
bankruptcy  or any  other  change in the legal  status of any  Obligor;  (h) the
change in or the imposition of any law, decree, regulation or other governmental
act  which  does or might  impair,  delay  or in any way  affect  the  validity,
enforceability  or the payment when due of the Guaranteed  Obligations;  (i) the
failure of the Company or any  Obligor to  maintain  in full force,  validity or
effect or to obtain or renew when required all governmental and other approvals,
licenses or consents  required in connection with the Guaranteed  Obligations or
this  guaranty,  or to take any other  action  required in  connection  with the
performance of all  obligations  pursuant to the Guaranteed  Obligations or this
guaranty;  (j) the  existence  of any claim,  setoff or other  rights  which the
Company  may have at any time  against  any  Obligor,  or any  other  Person  in
connection herewith or an unrelated transaction;  (k) the Administrative Agent's
or any Lender's election,  in any case or proceeding instituted under chapter 11
of the  Bankruptcy  Code,  of  the  application  of  section  1111(b)(2)  of the
Bankruptcy  Code;  (l) any  borrowing,  use of cash  collateral,  or  grant of a
security interest by the Company, as debtor in possession,  under section 363 or
364 of the United States  Bankruptcy  Code; (m) the  disallowance  of all or any
portion any Lender's  claims for repayment of the Guaranteed  Debt under section
502 or 506 of the United States Bankruptcy Code; or (n) any other circumstances,
whether or not similar to any of the foregoing, which could constitute a defense
to a  guarantor;  all  whether  or not the  Company  shall  have had  notice  or
knowledge  of any act or  omission  referred  to in the  foregoing  clauses  (a)
through  (n) of this  paragraph.  It is  agreed  that  the  Company's  liability
hereunder  is  several  and  independent  of  any  other   guaranties  or  other
obligations at any time in effect with respect to the Guaranteed  Obligations or
any part  thereof and that the  Company's  liability  hereunder  may be enforced
regardless of the existence,  validity,  enforcement or  non-enforcement  of any
such other  guaranties or other  obligations  or any provision of any applicable
law  or  regulation  purporting  to  prohibit  payment  by  any  Obligor  of the
Guaranteed  Obligations  in the manner  agreed upon  between the Obligor and the
Administrative Agent and the Lenders.

     Acceleration.  The Company  agrees that,  as between the Company on the one
hand,  and the  Lenders and the  Administrative  Agent,  on the other hand,  the
obligations of each Obligor  guaranteed  under this Article X may be declared to
be  forthwith  due and  payable,  or may be  deemed  automatically  to have been
accelerated,  as provided in Section 9.1 hereof for  purposes of this Article X,
notwithstanding  any  stay,  injunction  or  other  prohibition  (whether  in  a
bankruptcy  proceeding  affecting  such Obligor or  otherwise)  preventing  such
declaration  as against such Obligor and that, in the event of such  declaration
or automatic  acceleration,  such obligations (whether or not due and payable by
such Obligor) shall forthwith become due and payable by the Company for purposes
of this Article X.

     Marshaling; Reinstatement. None of the Lenders nor the Administrative Agent
nor any  Person  acting for or on behalf of the  Lenders  or the  Administrative
Agent shall have any  obligation  to marshall any assets in favor of the Company
or against or in payment  of any or all of the  Guaranteed  Obligations.  If the
Company,  any  Borrower  or any  other  guarantor  of all  or  any  part  of the
Guaranteed  Obligations  makes  a  payment  or  payments  to any  Lender  or the
Administrative  Agent,  which  payment  or  payments  or any  part  thereof  are
subsequently invalidated,  declared to be fraudulent or preferential,  set aside
and/or required to be repaid to such Borrower, the Company, such other guarantor
or any other Person,  or their respective  estates,  trustees,  receivers or any
other party,  including,  without limitation,  the Company, under any bankruptcy
law, state or federal law, common law or equitable cause, then, to the extent of
such payment or repayment, the part of the Guaranteed Obligations which has been
paid,  reduced or satisfied by such amount shall be reinstated  and continued in
full force and effect as of the time immediately preceding such initial payment,
reduction or satisfaction.

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     Subrogation.  Until the irrevocable  payment in full of the Obligations and
termination  of  all  commitments  which  could  give  rise  to  any  Guaranteed
Obligation,  the Company shall have no right of subrogation  with respect to the
Guaranteed Obligations,  and hereby waives any right to enforce any remedy which
the  Administrative  Agent  and/or the  Lenders  now has or may  hereafter  have
against the Company,  any endorser or any other  guarantor of all or any part of
the  Guaranteed  Obligations,  and the Company hereby waives any benefit of, and
any  right  to  participate  in,  any  security  or  collateral   given  to  the
Administrative  Agent  and/or the  Lenders to secure  payment of the  Guaranteed
Obligations  or any part  thereof or any other  liability  of any Obligor to the
Administrative Agent and/or the Lenders.

     Termination  Date.  Subject to Section 10.5 this guaranty shall continue in
effect until the later of (a) the Facility Termination Date, and (b) the date on
which this Agreement has otherwise expired or been terminated in accordance with
its terms and all of the Guaranteed Obligations have been paid in full in cash.

                              : GENERAL PROVISIONS

     Survival of  Representations.  All  representations  and  warranties of the
Company contained in this Agreement shall survive delivery of this Agreement and
the making of the Loans herein  contemplated  so long as any principal,  accrued
interest,  fees,  or any other amount due and payable under any Loan Document is
outstanding and unpaid (other than contingent  reimbursement and indemnification
obligations)  and so  long as the  Revolving  Loan  Commitments  have  not  been
terminated.

     Governmental  Regulation.  Anything  contained  in  this  Agreement  to the
contrary  notwithstanding,  no Lender shall be obligated to extend credit to the
Company or any other  Borrower in violation  of any  limitation  or  prohibition
provided by any applicable statute or regulation.

     Headings.  Section  headings in the Loan  Documents are for  convenience of
reference only, and shall not govern the interpretation of any of the provisions
of the Loan Documents.

     Entire  Agreement.  The Loan  Documents  embody  the entire  agreement  and
understanding among the Borrowers,  the Administrative Agent and the Lenders and
supersede all prior  agreements  and  understandings  among the  Borrowers,  the
Administrative  Agent and the Lenders  relating to the  subject  matter  thereof
other than the Fee Letter.

     Several Obligations; Benefits of this Agreement. The respective obligations
of the Lenders  hereunder  are several and not joint and no Lender  shall be the
partner  or agent  of any  other  Lender  (except  to the  extent  to which  the
Administrative Agent is authorized to act as such). The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender from
any of its obligations  hereunder.  Any obligation of "the Borrowers"  hereunder
shall be joint and several obligation of the Borrowers. This Agreement shall not
be construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and assigns.

         Expenses; Indemnification.

         Expenses.  The Borrowers shall reimburse the  Administrative  Agent for
         any reasonable costs and out-of-pocket  expenses (including  reasonable
         attorneys'  and  paralegals'  fees and time  charges of  attorneys  and
         paralegals for the Administrative Agent, Issuing Banks, Swing Line Bank
         and Alternative  Currency Banks) paid or incurred by the Administrative
         Agent in  connection  with  the  preparation,  negotiation,  execution,
         delivery, syndication,  review, proposed or completed amendment, waiver
         or  modification,   and  administration  of  the  Loan  Documents.  The
         Borrowers  also  agree to  reimburse  the  Administrative  Agent,  each
         Alternate  Currency Bank, and each Arranger and each of the Lenders for
         any costs and out-of-pocket  expenses (including  reasonable attorneys'
         and  paralegals'  fees and time charges of attorneys and paralegals for
         the  Administrative  Agent, each Alternate Currency Bank, each Arranger
         and each Lender, which attorneys and paralegals may be employees of the
         Administrative  Agent, such Alternate Currency Bank, such Arranger,  or
         the  Lenders)  paid  or  incurred  by  the  Administrative  Agent,  the
         Alternate  Currency  Banks or the Arrangers or any Lender in connection
         with the  collection of the  Obligations  and  enforcement  of the Loan
         Documents.  The Administrative Agent shall provide the Borrowers with a
         detailed statement of all  reimbursements  requested under this Section
         11.6(a).

         Indemnity.   The  Borrowers  hereby  further  agree  to  indemnify  the
         Administrative Agent, the Arrangers,  the Alternate Currency Banks, the
         Issuing  Banks  and  each  and all of the  Lenders  and  each of  their
         respective  Affiliates,   and  each  of  the  Administrative   Agent's,
         Arranger's,  Alternate  Currency Bank's,  Issuing Bank's,  Lender's and
         Affiliate's directors,  officers, employees,  attorneys and agents (all
         such  persons,  "Indemnitees")  against  all losses,  claims,  damages,
         penalties,  judgments,  liabilities  and expenses  (including,  without
         limitation,  all expenses of litigation or preparation therefor whether
         or not such Indemnitee is a party thereto) which any of them may pay

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         or incur arising out of or relating to this Agreement,  the other Loan
         Documents,   the  Spectra  Precision  Acquisition,   the  transactions
         contemplated hereby or the direct or indirect  application or proposed
         application of the proceeds of any Loan hereunder except to the extent
         that they are determined in a final non-appealable judgment by a court
         of competent  jurisdiction to have resulted from the gross  negligence
         or willful misconduct of the party seeking indemnification.

         Waiver of Certain  Claims.  The  Borrowers  further  agree to assert no
         claim against any of the Indemnitees on any theory of liability seeking
         consequential, special, indirect, exemplary or punitive damages.

         Survival of Agreements. The obligations and agreements of the Borrowers
         under  this  Section  11.6  shall  survive  the   termination  of  this
         Agreement.

     Numbers of Documents.  All  statements,  notices,  closing  documents,  and
requests  hereunder  shall  be  furnished  to  the  Administrative   Agent  with
sufficient counterparts so that the Administrative Agent may furnish one to each
of the Lenders.

     Accounting. Except with respect to the pricing grid calculations in Section
2.15 and the financial covenant calculations in Section 7.4, both of which shall
be made in accordance with Agreement  Accounting  Principles as in effect on the
date  hereof,  all  accounting  terms used herein shall be  interpreted  and all
accounting  determinations  hereunder shall be made in accordance with generally
accepted  accounting  principles  as in effect  from time to time,  consistently
applied.

     Severability of Provisions. Any provision in any Loan Document that is held
to be inoperative,  unenforceable,  or invalid in any jurisdiction  shall, as to
that jurisdiction, be inoperative,  unenforceable,  or invalid without affecting
the remaining provisions in that jurisdiction or the operation,  enforceability,
or validity of that  provision  in any other  jurisdiction,  and to this end the
provisions of all Loan Documents are declared to be severable.

     Nonliability  of Lenders.  The  relationship  between the Borrowers and the
Lenders  and the  Administrative  Agent  shall be solely  that of  borrower  and
lender. Neither the Administrative Agent nor any Lender shall have any fiduciary
responsibilities to the Borrowers or the Guarantors.  Neither the Administrative
Agent nor any Lender undertakes any  responsibility to any Borrower or Guarantor
to review or inform any Borrower or Guarantor of any matter in  connection  with
any phase of the Borrowers' business or operations.

     GOVERNING  LAW. ANY DISPUTE  BETWEEN ANY  BORROWER  AND THE  ADMINISTRATIVE
AGENT,  ANY LENDER OR ANY OTHER HOLDER OF OBLIGATIONS  ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP  ESTABLISHED BETWEEN THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS,  AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE
WITH THE INTERNAL LAWS (BUT WITHOUT REGARD TO THE CONFLICTS OF LAWS  PROVISIONS)
OF THE STATE OF ILLINOIS.

         CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.

         EXCLUSIVE  JURISDICTION.  EXCEPT AS PROVIDED IN SUBSECTION (b), EACH OF
         THE PARTIES  HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF,
         CONNECTED  WITH,   RELATED  TO,  OR  INCIDENTAL  TO  THE   RELATIONSHIP
         ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE
         OTHER LOAN DOCUMENTS  WHETHER  ARISING IN CONTRACT,  TORT,  EQUITY,  OR
         OTHERWISE,  SHALL BE RESOLVED  EXCLUSIVELY  BY STATE OR FEDERAL  COURTS
         LOCATED  IN  ILLINOIS,  BUT THE  PARTIES  HERETO  ACKNOWLEDGE  THAT ANY
         APPEALS  FROM  THOSE  COURTS  MAY HAVE TO BE  HEARD BY A COURT  LOCATED
         OUTSIDE OF ILLINOIS.  EACH OF THE PARTIES HERETO WAIVES IN ALL DISPUTES
         BROUGHT  PURSUANT TO THIS SUBSECTION (a) ANY OBJECTION THAT IT MAY HAVE
         TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.

         OTHER  JURISDICTIONS.  EACH  BORROWER  AGREES  THAT THE  ADMINISTRATIVE
         AGENT,  ANY LENDER OR ANY OTHER  HOLDER OF  OBLIGATIONS  SHALL HAVE THE
         RIGHT TO PROCEED AGAINST EACH BORROWER OR ITS RESPECTIVE  PROPERTY IN A
         COURT IN ANY  LOCATION  TO ENABLE  SUCH  PERSON TO (1) OBTAIN  PERSONAL
         JURISDICTION  OVER ANY  BORROWERS (2) IN ORDER TO ENFORCE A JUDGMENT OR
         OTHER COURT ORDER  ENTERED IN FAVOR OF SUCH PERSON OR (3)  FORECLOSE ON
         COLLATERAL LOCATED IN SUCH  JURISDICTION.  EACH BORROWER AGREES THAT IT
         WILL  NOT  ASSERT  ANY  PERMISSIVE   UNRELATED   COUNTERCLAIMS  IN  ANY
         PROCEEDING  BROUGHT BY SUCH PERSON TO REALIZE ON ANY  SECURITY  FOR THE
         OBLIGATIONS  OR TO ENFORCE A JUDGMENT  OR OTHER COURT ORDER IN

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         FAVOR OF SUCH PERSON.  EACH BORROWER  WAIVES ANY OBJECTION THAT IT MAY
         HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS COMMENCED A
         PROCEEDING DESCRIBED IN THIS SUBSECTION (b).

         VENUE.  EACH  BORROWER  IRREVOCABLY  WAIVES ANY  OBJECTION  (INCLUDING,
         WITHOUT  LIMITATION,  ANY  OBJECTION OF THE LAYING OF VENUE OR BASED ON
         THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE
         TO THE BRINGING OF ANY SUCH ACTION OR  PROCEEDING  WITH RESPECT TO THIS
         AGREEMENT OR ANY OTHER  INSTRUMENT,  DOCUMENT OR AGREEMENT  EXECUTED OR
         DELIVERED IN CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH ABOVE.

         WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY
         RIGHT TO HAVE A JURY  PARTICIPATE  IN RESOLVING  ANY  DISPUTE,  WHETHER
         SOUNDING IN CONTRACT,  TORT,  OR OTHERWISE,  ARISING OUT OF,  CONNECTED
         WITH,  RELATED TO OR INCIDENTAL TO THE RELATIONSHIP  ESTABLISHED  AMONG
         THEM  IN  CONNECTION  WITH  THIS  AGREEMENT  OR ANY  OTHER  INSTRUMENT,
         DOCUMENT OR AGREEMENT  EXECUTED OR DELIVERED  IN  CONNECTION  HEREWITH.
         EACH OF THE PARTIES  HERETO  AGREES AND  CONSENTS  THAT ANY SUCH CLAIM,
         DEMAND,  ACTION  OR CAUSE OF ACTION  SHALL BE  DECIDED  BY COURT  TRIAL
         WITHOUT  A JURY  AND  THAT  ANY  PARTY  HERETO  MAY  FILE  AN  ORIGINAL
         COUNTERPART  OR A COPY OF THIS  AGREEMENT  WITH ANY  COURT  AS  WRITTEN
         EVIDENCE OF THE  CONSENT OF THE  PARTIES  HERETO TO THE WAIVER OF THEIR
         RIGHT TO TRIAL BY JURY.

         ADVICE OF COUNSEL.  EACH OF THE PARTIES  REPRESENTS TO EACH OTHER PARTY
         HERETO THAT IT HAS DISCUSSED  THIS  AGREEMENT  AND,  SPECIFICALLY,  THE
         PROVISIONS OF SECTION 11.6 AND THIS SECTION 11.12, WITH ITS COUNSEL.

     Other Transactions.  Each of the Administrative  Agent, the Arrangers,  the
Lenders,  the Issuing Banks,  the Swing Line Bank and the Borrowers  acknowledge
that  the   Administrative   Agent  and  the  Lenders  (or   Affiliates  of  the
Administrative   Agent  and  the  Lenders)  may,  from  time  to  time,   effect
transactions  for their own  accounts  or the  accounts of  customers,  and hold
positions  in  loans  or  options  on  loans  of  the  Company,   the  Company's
Subsidiaries  and  other  companies  that  may be the  subject  of  this  credit
arrangement  and nothing in this  Agreement  shall  impair the right of any such
Person to enter into any such  transaction  (to the  extent it is not  expressly
prohibited by the terms of this Agreement) or give any other Person any claim or
right  of  action  hereunder  as  a  result  of  the  existence  of  the  credit
arrangements  hereunder,  all of which are hereby waived.  In addition,  certain
Affiliates of one or more of the Lenders are or may be  securities  firms and as
such may effect,  from time to time,  transactions for their own accounts or for
the  accounts  of  customers  and hold  positions  in  securities  or options on
securities of the Company,  the Company's  Subsidiaries and other companies that
may be the subject of this  credit  arrangement  and  nothing in this  Agreement
shall impair the right of any such Person to enter into any such transaction (to
the extent it is not  expressly  prohibited  by the terms of this  Agreement) or
give any other Person any claim or right of action  hereunder as a result of the
existence of the credit arrangements hereunder,  all of which are hereby waived.
Other business units affiliated with the  Administrative  Agent may from time to
time  provide  other  financial  services  and  products  to the Company and its
Subsidiaries.

                           : THE ADMINISTRATIVE AGENT

     Appointment; Nature of Relationship. ABN is appointed by the Lenders as the
Administrative  Agent hereunder and under each other Loan Document,  and each of
the  Lenders  irrevocably  authorizes  the  Administrative  Agent  to act as the
contractual  representative  of such Lender with the rights and duties expressly
set forth  herein  and in the other Loan  Documents.  The  Administrative  Agent
agrees to act as such  contractual  representative  upon the express  conditions
contained  in this  Article  XII.  Notwithstanding  the use of the defined  term
"Administrative   Agent,"  it  is  expressly  understood  and  agreed  that  the
Administrative Agent shall not have any fiduciary responsibilities to any Holder
of Obligations by reason of this Agreement and that the Administrative  Agent is
merely acting as the representative of the Lenders with only those duties as are
expressly  set forth in this  Agreement  and the other  Loan  Documents.  In its
capacity as the Lenders'  contractual  representative,  the Administrative Agent
(i) does not assume any fiduciary  duties to any of the Holders of  Obligations,
(ii) is a  "representative"  of the Holders of Obligations within the meaning of
Section  9-105  of the  Uniform  Commercial  Code  and  (iii)  is  acting  as an
independent  contractor,  the rights  and  duties of which are  limited to those
expressly set forth in this Agreement and the other Loan Documents.  Each of the
Lenders,  for itself and on behalf of its Affiliates as Holders of  Obligations,
agrees to assert no claim against the Administrative  Agent on any agency theory
or any other theory of  liability  for breach of  fiduciary  duty,  all of which
claims each Holder of Obligations waives.

     Powers.  The  Administrative  Agent shall have and may exercise such powers
under the Loan  Documents as are  specifically  delegated to the  Administrative
Agent by the terms of each thereof,  together with such powers as are reasonably
incidental  thereto.  The  Administrative  Agent shall have no implied duties or
fiduciary  duties to the Lenders,  or

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any obligation to the Lenders to take any action  hereunder or under any of
the other Loan  Documents  except any action  specifically  provided by the Loan
Documents required to be taken by the Administrative Agent.

     General  Immunity.   Neither  the  Administrative  Agent  nor  any  of  its
directors,  officers,  agents or employees  shall be liable to the Company,  the
Lenders or any Lender for any action  taken or omitted to be taken by it or them
hereunder  or under  any  other  Loan  Document  or in  connection  herewith  or
therewith  except to the  extent  such  action or  inaction  is found in a final
judgment by a court of competent  jurisdiction to have arisen primarily from the
gross negligence or willful misconduct of such Person.

     No Responsibility for Loans, Creditworthiness, Recitals, Etc. Neither
the Administrative Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain,  inquire into, or verify
(a) any statement,  warranty or representation  made in connection with any Loan
Document or any borrowing hereunder; (b) the performance or observance of any of
the  covenants or agreements  of any obligor  under any Loan  Document;  (c) the
satisfaction  of any condition  specified in Article V, except  receipt of items
required to be delivered solely to the  Administrative  Agent; (d) the existence
or possible  existence  of any  Default or (e) the  validity,  effectiveness  or
genuineness of any Loan Document or any other instrument or writing furnished in
connection  therewith.  The Administrative Agent shall not be responsible to any
Lender for any recitals, statements,  representations or warranties herein or in
any  of  the  other  Loan  Documents,  or  for  the  execution,   effectiveness,
genuineness, validity, legality, enforceability,  collectibility, or sufficiency
of  this  Agreement  or any of the  other  Loan  Documents  or the  transactions
contemplated  thereby, or for the financial condition of any guarantor of any or
all of the Obligations, the Company or any of its Subsidiaries.

     Action on Instructions of Lenders.  The  Administrative  Agent shall in all
cases be fully protected in acting, or in refraining from acting,  hereunder and
under any other Loan Document in accordance with written  instructions signed by
the Required  Lenders (or all of the Lenders in the event that and to the extent
that this Agreement  expressly  requires such),  and such  instructions  and any
action taken or failure to act pursuant  thereto  shall be binding on all of the
Lenders  and on all  owners  of Loans and on all  Holders  of  Obligations.  The
Administrative Agent shall be fully justified in failing or refusing to take any
action  hereunder  and under any other Loan  Document  unless it shall  first be
indemnified  to its  satisfaction  by the Lenders  pro rata  against any and all
liability,  cost and expense that it may incur by reason of taking or continuing
to take any such action.

     Employment of Agents and Counsel.  The Administrative Agent may execute any
of its duties as the  Administrative  Agent  hereunder  and under any other Loan
Document by or through employees, agents, and attorneys-in-fact and shall not be
answerable to the Lenders,  except as to money or  securities  received by it or
its  authorized  agents,  for the  default or  misconduct  of any such agents or
attorneys-in-fact  selected by it with reasonable care. The Administrative Agent
shall be entitled to advice of counsel  concerning the  contractual  arrangement
between the  Administrative  Agent and the Lenders and all matters pertaining to
the Administrative Agent's duties hereunder and under any other Loan Document.

     Reliance on Documents;  Counsel. The Administrative Agent shall be entitled
to rely upon any notice,  consent,  certificate,  affidavit,  letter,  telegram,
statement,  paper or  document  believed  by it to be genuine and correct and to
have been  signed or sent by the proper  person or  persons,  and, in respect to
legal matters, upon the opinion of counsel selected by the Administrative Agent,
which counsel may be employees of the Administrative Agent.

     The Administrative Agent's, Issuing Banks', Swing Line Bank's and Alternate
Currency  Banks'  Reimbursement  and  Indemnification.  (a) The Lenders agree to
reimburse and indemnify the Administrative  Agent ratably in proportion to their
respective Pro Rata Shares (i) for any expenses  incurred by the  Administrative
Agent on behalf of the Lenders,  in connection with the preparation,  execution,
delivery,  administration and enforcement of the Loan Documents and (ii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Administrative  Agent in any way
relating to or arising out of the Loan Documents or any other document delivered
in  connection  therewith  or  the  transactions  contemplated  thereby,  or the
enforcement of any of the terms thereof or of any such other documents, provided
that no Lender shall be liable for any of the foregoing to the extent any of the
foregoing  is found in a final  non-appealable  judgment by a court of competent
jurisdiction  to have  arisen  primarily  from the gross  negligence  or willful
misconduct of the Administrative Agent.

                  (b) The Lenders  with a  Revolving  Loan  Commitment  agree to
reimburse and indemnify the  Administrative  Agent, the Issuing Banks, the Swing
Line Bank and the  Alternate  Currency  Banks  ratably  in  proportion  to their
respective  Pro Rata  Revolving  Shares (i) any  amounts not  reimbursed  by any
Borrower for which the  Administrative  Agent, the Issuing Banks, the Swing Line
Bank and the  Alternate  Currency  Banks are  entitled to  reimbursement  by any
Borrower under the Loan Documents,  (ii) for any other expenses  incurred by the
Administrative  Agent,  any Issuing  Bank,  the Swing Line Bank or any Alternate
Currency  Bank on behalf of the Lenders,  in  connection  with the  preparation,
execution,  delivery,  administration  and enforcement of the Loan Documents and
(iii) for any liabilities,  obligations,  losses, damages,

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<PAGE>

penalties,  actions,  judgments, suits, costs, expenses or disbursements of
any kind and nature  whatsoever which may be imposed on, incurred by or asserted
against the  Administrative  Agent, any Issuing Bank, the Swing Line Bank or any
Alternate  Currency  Bank in any way  relating  to or  arising  out of the  Loan
Documents  or any  other  document  delivered  in  connection  therewith  or the
transactions  contemplated  thereby,  or the  enforcement  of  any of the  terms
thereof or of any such other documents,  provided that no Lender shall be liable
for any of the  foregoing to the extent any of the foregoing is found in a final
non-appealable  judgment  by a court of  competent  jurisdiction  to have arisen
primarily from the gross negligence or willful  misconduct of the Administrative
Agent,  the  applicable  Issuing  Bank,  the Swing  Line Bank or the  applicable
Alternate Currency Bank.

     Rights as a Lender.  With respect to its Revolving Loan  Commitment,  Loans
made by it, Swing Line Loans made by it, and Letters of Credit issued by it, the
Administrative  Agent shall have the same rights and powers  hereunder and under
any other Loan  Document as any Lender or Issuing Bank and may exercise the same
as  though  it were  not the  Administrative  Agent,  and the term  "Lender"  or
"Lenders",  "Swing Line Bank",  "Issuing Bank" or "Issuing Banks" shall,  unless
the  context  otherwise  indicates,  include  the  Administrative  Agent  in its
individual  capacity.  The  Administrative  Agent may accept deposits from, lend
money to,  and  generally  engage in any kind of  trust,  debt,  equity or other
transaction,  in addition to those  contemplated  by this Agreement or any other
Loan Document,  with the Company or any of its Subsidiaries in which such Person
is not prohibited hereby from engaging with any other Person.

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

     Successor  Administrative Agent. The Administrative Agent may resign at any
time by giving written  notice thereof to the Lenders and the Company.  Upon any
such  resignation,  the  Required  Lenders  shall have the right to appoint,  on
behalf of the Borrowers and the Lenders, a successor Administrative Agent. If no
successor  Administrative  Agent shall have been so  appointed  by the  Required
Lenders and shall have  accepted such  appointment  within thirty days after the
retiring Administrative Agent's giving notice of resignation,  then the retiring
Administrative  Agent may appoint, on behalf of the Borrowers and the Lenders, a
successor  Administrative Agent. Such successor  Administrative Agent shall be a
commercial bank having capital and retained  earnings of at least  $500,000,000.
Upon the acceptance of any appointment as the Administrative  Agent hereunder by
a successor  Administrative  Agent,  such successor  Administrative  Agent shall
thereupon succeed to and become vested with all the rights,  powers,  privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged  from its duties and  obligations  hereunder and under
the other Loan Documents.  After any retiring Administrative Agent's resignation
hereunder as  Administrative  Agent,  the  provisions  of this Article XII shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the  Administrative  Agent  hereunder  and
under the other Loan Documents.

     No Duties Imposed Upon Syndication Agent, Documentation Agent or Arrangers.
None  of the  Persons  identified  on the  cover  page to  this  Agreement,  the
signature  pages  to  this  Agreement  or  otherwise  in  this  Agreement  as  a
"Syndication Agent",  "Documentation  Agent" or "Arranger" shall have any right,
power, obligation, liability,  responsibility or duty under this Agreement other
than, (a) expressly granted  indemnification  rights and (b) if such Person is a
Lender, those applicable to all Lenders as such. Without limiting the foregoing,
none  of the  Persons  identified  on the  cover  page to  this  Agreement,  the
signature  pages  to  this  Agreement  or  otherwise  in  this  Agreements  as a
"Syndication Agent", "Documentation Agent" or "Arranger" shall have or be deemed
to have any  fiduciary  duty to or fiduciary  relationship  with any Lender.  In
addition  to the  agreements  set forth in Section  12.10,  each of the  Lenders
acknowledges that it has not relied, and will not rely, on any of the Persons so
identified  in deciding to enter into this  Agreement or in taking or not taking
action hereunder.

     Collateral Agent. The Lenders agree that the  Administrative  Agent may, on
their behalf,  appoint a Collateral  Agent under the  Mortgages  with respect to
real estate  located in the State of Ohio and related title  insurance,  surveys
and other documentation. All references to the "Administrative Agent" in Article
XII shall also be deemed to be references to the Collateral Agent.

                           : SETOFF; RATABLE PAYMENTS

     Setoff.  In  addition  to,  and  without  limitation  of, any rights of the
Lenders  under  applicable  law, if any Default  occurs and is  continuing,  any
Indebtedness from any Lender to the Company or any other Borrower (including all
account

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balances,  whether  provisional or final and whether or not collected or
available) may be offset and applied toward the payment of the Obligations owing
to such Lender,  whether or not the Obligations,  or any part hereof, shall then
be due.

     Ratable  Payments.  If any  Lender,  whether  by setoff or  otherwise,  has
payment  made to it upon its Loans  (other than  payments  received  pursuant to
Sections  4.1,  4.2 or 4.4  and  payments  expressly  hereunder  provided  to be
distributed  on other than a pro rata basis or payments made and  distributed in
accordance with Section 2.12) in a greater  proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender,  whether in connection with
setoff or  amounts  which  might be  subject  to setoff or  otherwise,  receives
collateral or other  protection  for its Obligation or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in  proportion  to the  obligations  owing to them.  In case any such payment is
disturbed by legal process, or otherwise,  appropriate further adjustments shall
be made.

     Application of Payments.  The Administrative Agent shall apply all payments
and prepayments in respect of any Obligations in the following order:

first,  to pay interest on and then  principal of any portion of the Loans which
the Administrative Agent may have advanced on behalf of any Lender for which the
Administrative  Agent  has  not  then  been  reimbursed  by such  Lender  or the
applicable  Borrower and to pay any Swing Line Loan,  Alternate Currency Loan or
Reimbursement  Obligation that has not been paid; second, to the ratable payment
of the  Obligations  then due and payable;  and third, to the ratable payment of
all other Obligations.

     Relations Among Lenders. The Lenders are not partners or co-venturers,  and
no Lender shall be liable for the acts or omissions  of, or (except as otherwise
set forth herein in case of the Administrative Agent) authorized to act for, any
other Lender.

               : BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

     Successors  and Assigns.  The terms and  provisions  of the Loan  Documents
shall be binding upon and inure to the benefit of the  Borrowers and the Lenders
and their respective  successors and assigns,  except that (a) no Borrower shall
have any right to assign  its  rights or  obligations  under the Loan  Documents
without the consent of all of the Lenders,  and any such assignment in violation
of this Section  14.1(a) shall be null and void,  and (b) any  assignment by any
Lender must be made in  compliance  with Section  14.3  hereof.  Notwithstanding
clause (b) of this Section 14.1 or Section 14.3, (i) any Lender may at any time,
without  the  consent of any  Borrower  or the  Administrative  Agent  (unless a
Default or Unmatured  Default has occurred and is continuing,  in which case the
consent of the Administrative  Agent shall be required,  which consent shall not
unreasonably  be  withheld),  assign all or any portion of its rights under this
Agreement  to a  Federal  Reserve  Bank and (ii) any  Lender  which is a fund or
commingled  investment  vehicle that invests in commercial loans in the ordinary
course of its business  may at any time,  without the consent of any Borrower or
the Administrative Agent (unless a Default or Unmatured Default has occurred and
is continuing,  in which case the consent of the  Administrative  Agent shall be
required,  which consent shall not  unreasonably be withheld),  pledge or assign
all or any  part of its  rights  under  this  Agreement  to a  trustee  or other
representative  of  holders of  obligations  owed or  securities  issued by such
Lender as  collateral  to  secure  such  obligations  or  securities;  provided,
however,  that no such assignment or pledge shall release the transferor  Lender
from its obligations  hereunder.  The Administrative Agent may treat each Lender
as the owner of the Loans made by such Lender  hereunder for all purposes hereof
unless and until such Lender complies with Section 14.3 hereof in the case of an
assignment  thereof or, in the case of any other  transfer,  a written notice of
the transfer is filed with the Administrative  Agent. Any assignee or transferee
of a Loan,  Revolving Loan  Commitment,  L/C Interest or any other interest of a
lender under the Loan Documents agrees by acceptance  thereof to be bound by all
the terms and  provisions  of the Loan  Documents.  Any  request,  authority  or
consent of any  Person,  who at the time of making  such  request or giving such
authority or consent is the owner of any Loan,  shall be conclusive  and binding
on any subsequent owner, transferee or assignee of such Loan.

         Participations.

         Permitted Participants;  Effect. Subject to the terms set forth in this
         Section  14.2,  any Lender may, in the ordinary  course of its business
         and in accordance  with applicable law, at any time sell to one or more
         banks or other entities ("Participants") participating interests in any
         Loan  owing to such  Lender,  any  Revolving  Loan  Commitment  of such
         Lender,  any L/C Interest of such Lender or any other  interest of such
         Lender  under the Loan  Documents  on a pro rata or non-pro rata basis.
         Notice  of such  participation  to the  Administrative  Agent  shall be
         required prior to any participation  becoming effective with respect to
         a  Participant  which is not a Lender  or an  Affiliate  thereof.  Upon
         receiving  said  notice,  the  Administrative  Agent  shall  record the
         participation in the Register it maintains.

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<PAGE>

         Moreover,  notwithstanding such recordation,  such participation shall
         not be considered an assignment  under Section 14.3 of this  Agreement
         and such Participant shall not be considered a Lender. In the event of
         any such sale by a Lender of participating interests to a Participant,
         such  Lender's  obligations  under  the Loan  Documents  shall  remain
         unchanged,  such Lender shall remain solely  responsible  to the other
         parties hereto for the  performance of such  obligations,  such Lender
         shall remain the owner of all Loans made by it for all purposes  under
         the Loan  Documents,  all amounts  payable by the applicable  Borrower
         under this  Agreement  shall be  determined  as if such Lender had not
         sold such participating interests, and the applicable Borrower and the
         Administrative  Agent shall  continue to deal solely and directly with
         such Lender in connection  with such Lender's  rights and  obligations
         under the Loan  Documents  except that, for purposes of Article IV and
         Section 9.2  hereof,  the  Participants  shall be entitled to the same
         rights as if they were Lenders.

         Voting  Rights.  Each  Lender  shall  retain the sole right to approve,
         without the consent of any Participant, any amendment,  modification or
         waiver of any provision of the Loan Documents other than any amendment,
         modification  or waiver with  respect to any Loan,  Letter of Credit or
         Revolving  Loan  Commitment in which such  Participant  has an interest
         which forgives principal, interest or fees or reduces the interest rate
         or fees payable pursuant to the terms of this Agreement with respect to
         any such Loan or Revolving  Loan  Commitment,  postpones any date fixed
         for any  regularly-scheduled  payment of  principal  of, or interest or
         fees on, any such Loan or Revolving Loan Commitment.

         Assignments.

         Permitted Assignments. (i) Any Lender (each such assigning Lender under
         this Section 14.3 being a "Seller") may, in the ordinary  course of its
         business and in accordance  with  applicable law, at any time assign to
         one or more banks or other  entities  (other than the Company or any of
         its  Affiliates)  ("Purchasers")  all or a portion  of its  rights  and
         obligations under this Agreement  (including,  without limitation,  its
         Tranche A Revolving  Loan  Commitment,  its  Tranche B  Revolving  Loan
         Commitment,  any Loans owing to it, all of its participation  interests
         in existing Letters of Credit,  Swing Line Loans and Alternate Currency
         Loans,  and its  obligation to  participate  in  additional  Letters of
         Credit,  Swing Line Loans and Alternate  Currency  Loans  hereunder) in
         accordance  with the provisions of this Section 14.3.  Such  assignment
         shall be substantially in the form of Exhibit D hereto and shall not be
         permitted  hereunder  unless such  assignment is either for all of such
         Seller's  rights and  obligations  under the Loan Documents or, without
         the prior written consent of the Administrative  Agent and the Company,
         involves  loans and  commitments  as a consequence of which neither the
         Seller  nor  the  Purchaser   will  have  a  Commitment  of  less  than
         $5,000,000;  provided that the foregoing  restrictions  with respect to
         Commitments  having a minimum  aggregate  amount (A) shall not apply to
         any assignment between Lenders,  or to an Affiliate or Approved Fund of
         any  Lender,  and (B) in any event may be waived by the  Administrative
         Agent). The written consent of the Administrative  Agent, and, prior to
         the occurrence of a Default,  the Company (which consent,  in each such
         case, shall not be unreasonably  withheld),  shall be required prior to
         an assignment  becoming  effective with respect to a Purchaser which is
         not a Lender or an Affiliate or Approved Fund of such Lender.

         (ii)  Notwithstanding  anything to the contrary  contained herein,  any
         Lender  (each such  Lender,  a "Granting  Bank") may grant to a special
         purpose funding vehicle (each such special purpose funding  vehicle,  a
         "SPC"),  identified  as  such  in  writing  from  time  to  time by the
         applicable  Granting Bank to the Administrative  Agent and the Company,
         the option to provide to the Company and the other Borrowers all or any
         part  of any  Advance  that  such  Granting  Bank  would  otherwise  be
         obligated  to  make  to  the  applicable   Borrower  pursuant  to  this
         Agreement;  provided,  that  (i)  nothing  herein  shall  constitute  a
         commitment by any SPC to make any Advance, (ii) if an SPC elects not to
         exercise  such option or otherwise  fails to provide all or any part of
         such Advance,  the applicable  Granting Bank shall be obligated to make
         such Advance pursuant to the terms hereof.  The making of an Advance by
         any SPC hereunder  shall utilize the Revolving  Loan  Commitment of the
         applicable  Granting  Bank to the same extent,  and as if, such Advance
         were made by such Granting  Bank.  Each party hereto hereby agrees that
         no SPC shall be  liable  for any  indemnity  or other  similar  payment
         obligation  under this  Agreement (all liability for which shall remain
         with the  applicable  Granting  Bank).  All  notices  hereunder  to any
         Granting  Bank or the related  SPC,  and all payments in respect of the
         Obligations due to such Granting Bank or the related SPC, shall be made
         to such Granting Bank. In addition,  each Granting Bank shall vote as a
         Lender  hereunder  without giving effect to any  assignment  under this
         Section 14.3(a)(ii),  and not SPC shall have any vote as a Lender under
         this Agreement for any purpose.  In furtherance of the foregoing,  each
         party  hereto  hereby  agrees  (which   agreement   shall  survive  the
         termination of this Agreement) that, prior to the date that is one year
         and one day after the  payment  in full of all  outstanding  commercial
         paper or other senior  indebtedness  of any SPC, it will not  institute
         against, or join any other person in instituting against,  such SPC any
         bankruptcy,  reorganization,  arrangement,  insolvency  or  liquidation
         proceedings  under the laws of the United States or any State  thereto.
         In addition, notwithstanding anything to the contrary contained in this
         Section  14.3,  any SPC may (A) with  notice to, but  without the prior
         written  consent  of,  the  Company  and the  Administrative  Agent and
         without paying any processing or

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<PAGE>

         administrative  fee therefor,  assign all or a portion of its interest
         in any Advances to the Granting Bank or to any financial  institutions
         (consented  to  by  the  Company  and  the  Administrative   Agent  in
         accordance with the terms of Section  14.3(a)(i))  providing liquidity
         and/or credit support to or for the account of such SPC to support the
         funding or  maintenance of Advances and (B) disclose on a confidential
         basis any  non-public  information  relating  to its  Advances  to any
         rating  agency,  commercial  paper  dealer or  provider of any surety,
         guarantee or credit or liquidity enhancement to such SPC. This Section
         14.3(a)(ii) may not be amended without the written consent of each SPC
         affected thereby.

         Effect;  Effective Date. Upon (i) delivery to the Administrative  Agent
         and  the  Alternate   Currency   Banks  of  a  notice  of   assignment,
         substantially in the form attached as Appendix I to Exhibit D hereto (a
         "Notice of Assignment"),  together with any consent required by Section
         14.3(a)  hereof,  (ii)  payment of a $3,500 fee by the  assignee or the
         assignor (as agreed) to the  Administrative  Agent for processing  such
         assignment,  and (iii) the completion of the recording  requirements in
         Section 14.3(c), such assignment shall become effective on the later of
         such date when the requirements in clauses (i), (ii), and (iii) are met
         or the  effective  date  specified  in such Notice of  Assignment.  The
         Notice of Assignment shall contain a representation by the Purchaser to
         the effect that none of the consideration  used to make the purchase of
         the Revolving  Loan  Commitment,  Loans and L/C  Obligations  under the
         applicable  assignment  agreement  are "plan  assets" as defined  under
         ERISA and that the rights and  interests of the  Purchaser in and under
         the Loan Documents will not be "plan assets" under ERISA.  On and after
         the effective date of such assignment, such Purchaser, if not already a
         Lender,  shall for all purposes be a Lender party to this Agreement and
         any other Loan Documents executed by the Lenders and shall have all the
         rights and  obligations  of a Lender under the Loan  Documents,  to the
         same  extent as if it were an  original  party  hereto,  and no further
         consent or action by any Borrower,  the Lenders, the Alternate Currency
         Banks or the  Administrative  Agent  shall be  required  to release the
         Seller with respect to the  percentage of the Aggregate  Revolving Loan
         Commitment,  Loans and Letter of Credit, Swing Line Loans and Alternate
         Currency  Loan  participations  assigned  to such  Purchaser.  Upon the
         consummation of any assignment to a Purchaser  pursuant to this Section
         14.3(b),  the Seller, the Administrative  Agent, the Alternate Currency
         Banks and the Borrowers shall make appropriate arrangements so that, to
         the extent  notes have been issued to evidence  any of the  transferred
         Loans, replacement notes are issued to such Seller and new notes or, as
         appropriate,  replacement notes, are issued to such Purchaser,  in each
         case in principal  amounts  reflecting their Revolving Loan Commitment,
         as adjusted  pursuant to such assignment.  Notwithstanding  anything to
         the contrary  herein,  no Borrower  shall, at any time, be obligated to
         pay under Section  2.14(e) to any Lender that is a Purchaser,  assignee
         or transferee  any sum in excess of the sum which such  Borrower  would
         have been obligated to pay to the Lender that was the Seller,  assignor
         or transferor had such assignment or transfer not been effected.

         The  Register.   Notwithstanding  anything  to  the  contrary  in  this
         Agreement,  each Borrower hereby designates the  Administrative  Agent,
         and the Administrative Agent hereby accepts such designation,  to serve
         as such Borrower's  contractual  representative  solely for purposes of
         this Section 14.3(c).  In this  connection,  the  Administrative  Agent
         shall  maintain  at its address  referred to in Section  15.1 a copy of
         each  assignment  delivered  to and  accepted  by it  pursuant  to this
         Section 14.3 and a register (the "Register") for the recordation of the
         names and  addresses of the Lenders and the  Commitment  of,  principal
         amount of and  interest on the Loans owing to, each Lender from time to
         time and whether  such Lender is an original  Lender or the assignee of
         another Lender  pursuant to an assignment  under this Section 14.3. The
         entries  in the  Register  shall  be  conclusive  and  binding  for all
         purposes,  absent  manifest  error,  and the  Company  and  each of its
         Subsidiaries,  the Administrative  Agent and the Lenders may treat each
         Person whose name is recorded in the Register as a Lender hereunder for
         all purposes of this  Agreement.  The Register  shall be available  for
         inspection  by any  Borrower or any Lender at any  reasonable  time and
         from time to time upon reasonable prior notice.

     Confidentiality.  Subject to Section 14.5, the Administrative Agent and the
Lenders  and  their   respective   representatives   shall  hold  all  nonpublic
information  obtained  pursuant  to  the  requirements  of  this  Agreement  and
identified as such by the Company or any other Borrower in accordance  with such
Person's  customary  procedures  for handling  confidential  information of this
nature and in accordance  with safe and sound  commercial  lending or investment
practices  and in  any  event  may  make  disclosure  reasonably  required  by a
prospective  Transferee in connection  with the  contemplated  participation  or
assignment  or as required or  requested  by any  Governmental  Authority or any
securities  exchange or similar  self-regulatory  organization or representative
thereof or pursuant to a  regulatory  examination  or legal  process,  or to any
direct  or  indirect  contractual   counterparty  in  swap  agreements  or  such
contractual   counterparty's   professional  advisor.  In  no  event  shall  the
Administrative  Agent or any  Lender be  obligated  or  required  to return  any
materials  furnished  by  the  Company;  provided,   however,  each  prospective
Transferee  shall be required to agree that if it does not become a  participant
or assignee it shall return all materials furnished to it by or on behalf of the
Company in connection with this Agreement.

     Dissemination  of  Information.  Each  Borrower  authorizes  each Lender to
disclose to any  Participant  or  Purchaser  or any other  Person  acquiring  an
interest in the Loan Documents by operation of law (each a "Transferee") and any

                                      129
<PAGE>

prospective  Transferee  any and all  information  in such  Lender's  possession
concerning  the Company and its  Subsidiaries;  provided  that prior to any such
disclosure,  such  prospective  Transferee shall agree to preserve in accordance
with Section 14.4 the confidentiality of any confidential  information described
therein.

                                    : NOTICES

     Giving  Notice.  Except as  otherwise  permitted  by Section  2.10(d)  with
respect to  Borrowing/Conversion/Continuation  Notices,  all  notices  and other
communications  provided to any party hereto  under this  Agreement or any other
Loan Documents  shall be in writing or by telex or by facsimile and addressed or
delivered to such party at its address set forth below its  signature  hereto or
at such  other  address  as may be  designated  by such party in a notice to the
other  parties.  Any  notice,  if mailed and  properly  addressed  with  postage
prepaid,  shall be deemed given when  received;  any notice,  if  transmitted by
telex or facsimile, shall be deemed given when transmitted (answerback confirmed
in the case of telexes).

     Change of Address.  The Borrowers,  the Administrative Agent and any Lender
may each change the address for service of notice upon it by a notice in writing
to the other parties hereto.

     Authority of Company.  Each of the Subsidiary  Borrowers,  by its execution
hereof or of an Assumption  Letter (a)  irrevocably  authorizes the Company,  on
behalf of such  Subsidiary  Borrower,  to give and receive all notices under the
Loan  Documents and to make all elections  under the Loan  Documents and to give
all  Borrowing/Conversion/Continuation  Notices on its behalf,  (b) agrees to be
bound by any such  notices or elections  and (c) agrees that the  Administrative
Agent and Lenders may rely upon any such  policies or  elections  as if they had
been given or made by such Subsidiary Borrower.

                                 : COUNTERPARTS

     This Agreement may be executed in any number of counterparts,  all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart.  This Agreement shall be
effective when it has been executed by the Company, the Administrative Agent and
the Lenders and each party has  notified  the  Administrative  Agent by telex or
telephone, that it has taken such action.

                   Remainder of This Page Intentionally Blank

                                      130
<PAGE>

     IN WITNESS WHEREOF, the Company, the Subsidiary Borrowers,  the Lenders and
the Administrative Agent have executed this Agreement as of the date first above
written.

                           TRIMBLE NAVIGATION LIMITED, as the Company

                           By: /s/ Steven W. Berglund
                               ----------------------------------------
                            Name: Steven W. Berglund

                            Title: President and CEO

                            Address:

                            Attention:
                            Telephone No.:
                            Facsimile No.:

                                      131
<PAGE>

                            ABN AMRO BANK N.V., as Administrative Agent, Issuing
                            Bank, Swing Line Bank, Alternate Currency Bank, and
                            Lender

                            By: /s/ Paul Widuch
                                -----------------------------------------
                               Name: Paul Widuch
                               Title: Group Vice President

                            By: /s/ Judy Chiang
                                -----------------------------------------
                                Name: Judy Chiang
                                Title: Group Vice President

                                Address:           208 South LaSalle Street
                                                   Chicago, Illinois  60604

                            Attention: Suzanne Smith

                                Telephone No.:     (312) 992-5095
                                Facsimile No.:     (312) 992-5157

                                With a copy to:    101 California Street
                                                   Suite 4550
                                                   San Francisco, California
                                                   94111

                                Attention:
                                Telephone No.:     (415) 984-3700
                                Facsimile No:      (415) 362-3524

                                      132
<PAGE>

                            FLEET NATIONAL BANK, as Syndication Agent and Lender

                             By: /s/ William E. Rurode, Jr.
                                 -------------------------------------------
                                  Name: William E. Rurode, Jr.
                                  Title: Managing Director

                                  Address:           100 Federal Street
                                                     Boston, MA  02110

                             Attention: Bert Valbona

                                   Telephone No.:     (617) 434-3384
                                   Facsimile No.:     (617) 434-0382

                                      133
<PAGE>

                           THE BANK OF NOVA SCOTIA, as

                         Documentation Agent and Lender

                         By: /s/ Chris Osborn
                             -----------------------------------------------
                               Name: Chris Osborn
                               Title: Director

                               Address:          580 California Street
                                                 Suite 2100
                                                 San Francisco, CA 94104

                            Attention: Chris Osborne

                               Telephone No.:     (415) 616-4170
                               Facsimile No.:     (415) 397-0791

                                      134
<PAGE>

                           ERSTE BANK, NEW YORK BRANCH, as Lender

                            By: /s/ Robert J. Wagman
                                --------------------------------------------
                                Name: Robert J. Wagman
                                Title: AVP

                            By: /s/ John S, Runnion
                                --------------------------------------------
                                Name: John S. Runnion
                                Title: First Vice President

                                Address: 280 Park Avenue
                                     West Building
                                     New York, NY 10017

                                Attention:         Robert J. Wagman
                                Telephone No.:     (212) 984-5633
                                Facsimile No.:     (212) 986-5627

                                      135
<PAGE>

                           WELLS FARGO BANK, as Lender

                           By: /s/ Jill B. Ta
                              ---------------------------------------------
                                Name: Jill B. Ta
                                Title: Vice President

                                Address:           400 Hamilton Avenue
                                                   Palo Alto, CA 94301

                              Attention: Jill B. Ta

                              Telephone No.:     (650) 855-6629
                              Facsimile No.:     (650) 328-0814

                                      136
<PAGE>

                              MERITA BANK PLC, NEW YORK BRANCH, as Lender

                              By: /s/ Robert Louzan
                                 -------------------------------------------
                                 Name: Robert Louzan
                                 Title: Vice President

                             By: /s/ Harri Ranta
                                --------------------------------------------
                                Name: Harri Ranta
                                Title: Vice President

                                Address:           437 Madison Avenue
                                                   New York, NY 10022

                                Attention:         Robert A. Louzan
                                Telephone No.:     (212) 318-9306
                                Facsimile No.:     (212) 318-9318

                                      137
<PAGE>

                           BANK OF THE WEST, as Lender

                           By: /s/ David L. Chicca
                              ---------------------------------------------
                              Name: David L. Chicca
                              Title: Vice President

                               Address:           180 Montgomery Street
                                                  25th Floor
                                                  San Francisco, CA 94104

                               Attention:         David L. Chicca
                               Telephone No.:     (415) 765-4907
                               Facsimile No.:     (415) 362-4855

                                      138
<PAGE>

                          BARCLAYS BANK PLC, as Lender

                          By: /s/ Douglas Bernegger
                             ------------------------------------------------
                             Name: Douglas Bernegger
                             Title: Director

                             Address:           222 Broadway
                                                New York, NY 10038

                            Attention: John Giannone

                            Telephone No.:     (212) 412-3276
                            Facsimile No.:     (212) 412-7580

                                      139
<PAGE>

                           NATIONAL CITY BANK OF KENTUCKY, as Lender

                           By: /s/ Glenn E. Nord
                              ----------------------------------------------
                               Name: Glenn E. Nord
                               Title: Vice President

                               Address:           P. O. Box 36000
                                                  Louisville, KY 40233-6000

                               Attention:         Kevin L. Anderson
                               Telephone No.:     (502) 581-7894
                               Facsimile No.:     (502) 581-5122

                                      140
<PAGE>

                          IBM CREDIT CORPORATION, as Lender

                          By: /s/ Ronald J. Bachner
                             ------------------------------------------------
                             Name: Ronald J. Bachner
                             Title: Manager, Commercial & Specialty Financing

                             Address:           North Castle Drive
                                                Armonk, NY 10504

                             Attention:         Ronald J. Bachner
                             Telephone No.:     (914) 765-6068
                             Facsimile No.:     (914) 765-6271

                                      141
<PAGE>

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