Document:

<PAGE>

                            REVOLVING LOAN AGREEMENT

                            Dated as of May 10, 2000

                                      among

                                POWER-ONE, INC.,

                       INTERNATIONAL POWER DEVICES, INC.,

                               MELCHER HOLDING AG,

                                       AND

                                 HC POWER, INC.,

                                as the Borrowers

                            THE LENDERS HEREIN NAMED

                                       and

                         UNION BANK OF CALIFORNIA, N.A.,
                    as Administrative Agent and Lead Arranger

<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                PAGE
<S>   <C>          <C>                                                          <C>
Article 1.         DEFINITIONS AND ACCOUNTING TERMS................................1

      1.1  Defined Terms...........................................................1
      1.2  Use of Defined Terms...................................................33
      1.3  Joinder of Powec.......................................................33
      1.4  Accounting Terms.......................................................33
      1.5  Rounding...............................................................34
      1.6  Exhibits and Schedules.................................................34
      1.7  References to "Borrower and its Subsidiaries"..........................34
      1.8  Miscellaneous Terms....................................................34

Article 2.         LOANS AND LETTERS OF CREDIT....................................35

      2.1  Loans-General..........................................................35
      2.2  Alternate Base Rate Loans..............................................38
      2.3  Eurodollar Rate Loans..................................................38
      2.4  Letters of Credit......................................................39
      2.5  Voluntary Reduction of Revolving Commitment............................43
      2.6  Administrative Agent's Right to Assume Funds Available for Advances....44
      2.7  Collateral.............................................................44

Article 3.         PAYMENTS AND FEES..............................................45

      3.1  Principal and Interest.................................................45
      3.2  Arranger and Agency Fees...............................................47
      3.3  Commitment Fee.........................................................47
      3.4  Letter of Credit Fees..................................................47
      3.5  Increased Commitment Costs.............................................48
      3.6  Eurodollar Costs and Related Matters...................................49
      3.7  Late Payments..........................................................53
      3.8  Computation of Interest and Fees.......................................53
      3.9  Non-Banking Days.......................................................54
      3.10  Manner and Treatment of Payments......................................54
      3.11  Funding Sources.......................................................55
      3.12  Failure to Charge Not Subsequent Waiver...............................56
      3.13  Administrative Agent's Right to Assume Payments Will be Made..........56
      3.14  Fee Determination Detail..............................................56
      3.15  Survivability.........................................................56
</TABLE>

                                      - i -

<PAGE>

<TABLE>

<S>   <C>          <C>                                                            <C>
Article 4.         REPRESENTATIONS AND WARRANTIES.................................57

      4.1  Existence and Qualification; Power; Compliance With Laws...............57
      4.2  Authority; Compliance With Other Agreements and Instruments and
               Government Regulations.............................................57
      4.3  No Governmental Approvals Required.....................................58
      4.4  Subsidiaries...........................................................58
      4.5  Financial Statements...................................................59
      4.6  No Other Liabilities; No Material Adverse Changes......................59
      4.7  Title to and Location of Property......................................60
      4.8  Intangible Assets......................................................60
      4.9  Public Utility Holding Company Act.....................................60
      4.10  Litigation............................................................60
      4.11  Binding Obligations...................................................61
      4.12  No Default............................................................61
      4.13  ERISA.................................................................61
      4.14  Regulation U; Investment Company Act..................................61
      4.15  Disclosure............................................................62
      4.16  Tax Liability.........................................................62
      4.17  Projections...........................................................62
      4.18  Hazardous Materials...................................................62
      4.19  Security Interest.....................................................63

Article 5.         AFFIRMATIVE COVENANTS
                   (OTHER THAN INFORMATION AND
                   REPORTING REQUIREMENTS)........................................64

      5.1  Payment of Taxes and Other Potential Liens.............................64
      5.2  Preservation of Existence..............................................64
      5.3  Maintenance of Properties..............................................64
      5.4  Maintenance of Insurance...............................................65
      5.5  Compliance With Laws...................................................65
      5.6  Inspection Rights......................................................65
      5.7  Keeping of Records and Books of Account................................65
      5.8  Compliance With Agreements.............................................65
      5.9  Use of Proceeds........................................................65
      5.10 Hazardous Materials Laws...............................................65
      5.11 Future Subsidiaries....................................................66
      5.12 Intentionally Omitted..................................................66
      5.13 Intentionally Omitted..................................................66
      5.14 Syndication Process....................................................66
</TABLE>

                                     - ii -

<PAGE>

<TABLE>

<S>   <C>          <C>                                                            <C>
Article 6.         NEGATIVE COVENANTS.............................................67

      6.1  Payment of Subordinated Obligations....................................67
      6.2  Disposition of Property................................................67
      6.3  Mergers................................................................67
      6.4  Hostile Acquisitions...................................................68
      6.5  Acquisitions...........................................................68
      6.6  Distributions..........................................................68
      6.7  ERISA..................................................................68
      6.8  Change in Nature of Business...........................................68
      6.9  Liens and Negative Pledges.............................................68
      6.10  Indebtedness and Guaranty Obligations.................................69
      6.11  Transactions with Affiliates..........................................70
      6.12  Leverage Ratio........................................................70
      6.13  Fixed Charge Coverage Ratio...........................................70
      6.14  Net Worth.............................................................70
      6.15  Investments...........................................................71
      6.16  Capital Expenditures..................................................72
      6.17  Intentionally Omitted.................................................72
      6.18  Subsidiary Indebtedness...............................................72
      6.19  Amendments to Subordinated Obligations................................72
      6.20  Changes in Officers, Name, Location of Chief Executive Offices, Etc...72

Article 7.         INFORMATION AND REPORTING REQUIREMENTS.........................73

      7.1  Financial and Business Information.....................................73
      7.2  Compliance Certificates................................................76

Article 8.         CONDITIONS.....................................................77

      8.1  Initial Advances.......................................................77
      8.2  Any Advance............................................................79

Article 9.         EVENTS OF DEFAULT AND REMEDIES UPON EVENT
                   OF DEFAULT.....................................................81

      9.1  Events of Default......................................................81
      9.2  Remedies Upon Event of Default.........................................83

Article 10.        THE ADMINISTRATIVE AGENT.......................................87
</TABLE>

                                     - iii -

<PAGE>
<TABLE>
<S>   <C>          <C>                                                            <C>
      10.1  Appointment and Authorization.........................................87
      10.2  Administrative Agent and Affiliates...................................87
      10.3  Proportionate Interest in any Collateral..............................87
      10.4  Lenders' Credit Decisions.............................................88
      10.5  Action by Administrative Agent........................................88
      10.6  Liability of Administrative Agent.....................................89
      10.7  Indemnification.......................................................90
      10.8  Successor Administrative Agent........................................91
      10.9  No Obligations of the Borrowers.......................................92

Article 11.        MISCELLANEOUS..................................................93

      11.1  Cumulative Remedies; No Waiver........................................93
      11.2  Amendments; Consents..................................................93
      11.3  Costs, Expenses and Taxes.............................................94
      11.4  Nature of Lenders' Obligations........................................95
      11.5  Survival of Representations and Warranties............................95
      11.6  Notices...............................................................96
      11.7  Execution of Loan Documents...........................................96
      11.8  Binding Effect; Assignment............................................96
      11.9  Right of Setoff.......................................................99
      11.10  Sharing of Setoffs..................................................100
      11.11  Indemnity by the Borrowers..........................................100
      11.12  Nonliability of the Lenders.........................................102
      11.13  No Third Parties Benefitted.........................................103
      11.14  Confidentiality.....................................................103
      11.15  Further Assurances..................................................104
      11.16  Integration.........................................................104
      11.17  Governing Law; JURISDICTION AND VENUE...............................104
      11.18  Severability of Provisions..........................................105
      11.19  Headings............................................................105
      11.20  Time of the Essence.................................................105
      11.21  Foreign Lenders and Participants....................................105
      11.22  Hazardous Material Indemnity........................................106
      11.23  Waiver of Right to Trial by Jury....................................107
      11.24  Purported Oral Amendments...........................................107
      11.25  Joint and Several...................................................108
      11.26  Conversion of Currencies............................................108
</TABLE>

                                     - iv -

<PAGE>

EXHIBITS

A       -      Commitment Assignment and Acceptance
B       -      Compliance Certificate
C       -      Note
D       -      Opinion
E       -      Pledge Agreement
F       -      Pricing Certificate
G       -      Request for Letter of Credit
H       -      Request for Loan
I       -      Subsidiary Guaranty
J       -      Swing Line Note
K       -      Joinder Agreement
L       -      Joint Borrower Provisions

SCHEDULES

1.1            Lender Commitments
2.4            Existing Letters of Credit
4.4            Subsidiaries
4.6            Material Adverse Changes
4.7A           Existing Liens, Negative Pledges and Rights of Others
4.7B           Location of Property
4.8            Trade Names
4.10           Material Litigation
4.18           Hazardous Materials Matters
6.10           Existing Indebtedness and Guaranty Obligations
6.15           Existing Investments

                                      - v -

<PAGE>

                            REVOLVING LOAN AGREEMENT

                            Dated as of May 10, 2000

                  THIS REVOLVING LOAN AGREEMENT (this "Agreement") is entered
into by and among Power-One, Inc., a Delaware corporation ("Parent"),
International Power Devices, Inc., a Massachusetts corporation ("IPD"), Melcher
Holding AG, a corporation organized under the laws of Switzerland ("Melcher"),
and HC Power, Inc., a California corporation ("HC", and collectively with
Parent, IPD and Melcher, the "Borrowers"), each lender whose name is set forth
on the signature pages of this Agreement and each lender which may hereafter
become a party to this Agreement pursuant to Section 11.8 (collectively, the
"Lenders" and individually, a "Lender"), Union Bank of California, N.A., as
Administrative Agent, and Union Bank of California, N.A., as Lead Arranger, with
reference to the following facts:

                                    RECITALS

                  A. The Borrowers have requested that the Lenders provide the
Borrowers with certain credit facilities.

                  B. The Lenders are willing to provide the Borrowers with such
credit facilities on the terms and conditions set forth herein.

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

                                   Article 1.

                        DEFINITIONS AND ACCOUNTING TERMS

                  1.1 DEFINED TERMS. As used in this Agreement, the following
terms shall have the respective meanings set forth below:

                  "ACQUISITION" means any transaction, or any series of related
         transactions, consummated on or after the Closing Date, by which any of
         the Borrowers and/or any Subsidiary of any of the Borrowers directly or
         indirectly (a) acquires any ongoing business or all or substantially
         all of the assets of any Person engaged in any ongoing business,
         whether through a purchase of assets, a merger or otherwise, (b)
         acquires control of securities of a Person engaged in an ongoing
         business representing more than 50% of the ordinary voting power for
         the election of directors or other governing position if the business
         affairs of

                                       -1-

<PAGE>

         such Person are managed by a board of directors or other governing body
         or (c) acquires control of more than 50% of the ownership interest in
         any partnership, joint venture, limited liability company, business
         trust or other Person engaged in an ongoing business that is not
         managed by a board of directors or other governing body.

                  "ACQUISITION CONSIDERATION" means the consideration given by
         the Parent or any of its Subsidiaries for an Acquisition, including but
         not limited to the fair market value of any cash, Property, stock or
         services given, the maximum amount that could reasonably be expected to
         be paid pursuant to any earn-out contracts or agreements and the amount
         of any Indebtedness in respect of debt for borrowed money, synthetic
         leases and Capital Lease Obligations assumed or incurred by the Parent
         or any of its Subsidiaries in connection with such Acquisition.

                  "ADMINISTRATIVE AGENT" means Union Bank of California, N.A.
         when acting in its capacity as the Administrative Agent under any of
         the Loan Documents, or any successor Administrative Agent.

                  "ADMINISTRATIVE AGENT'S OFFICE" means the Administrative
         Agent's address as set forth on the signature pages of this Agreement,
         or such other address as the Administrative Agent hereafter may
         designate by written notice to the Borrowers and the Lenders.

                  "ADVANCE" means any advance made or to be made by any Lender
         to the Borrowers as provided in ARTICLE 2, and INCLUDES each Alternate
         Base Rate Advance and each Eurodollar Rate Advance.

                  "AFFILIATE" means, as to any Person, any other Person which
         directly or indirectly controls, or is under common control with, or is
         controlled by, such Person. As used in this definition, "control" (and
         the correlative terms, "controlled by" and "under common control with")
         shall mean possession, directly or indirectly, of power to direct or
         cause the direction of management or policies (whether through
         ownership of securities or partnership or other ownership interests, by
         contract or otherwise); PROVIDED that, in any event, any Person that
         owns, directly or indirectly, 10% or more of the securities having
         ordinary voting power for the election of directors or other governing
         body of a corporation that has more than 100 record holders of such
         securities, or 10% or more of the partnership or other ownership
         interests of any other Person that has more than 100 record holders of
         such interests, will be deemed to be an Affiliate of such corporation,
         partnership or other Person.

                                       -2-

<PAGE>

                  "AGREEMENT" means this Revolving Loan Agreement, either as
         originally executed or as it may from time to time be supplemented,
         modified, amended, restated or extended.

                  "AGREEMENT CURRENCY" has the meaning specified in Section
         11.26 hereof.

                  "AGGREGATE EFFECTIVE AMOUNT" means, as of any date of
         determination and with respect to all Letters of Credit then
         outstanding, the SUM of (a) the aggregate effective face amounts of all
         such Letters of Credit not then paid by the Issuing Lender PLUS (b) the
         aggregate amounts paid by the Issuing Lender under such Letters of
         Credit not then reimbursed to the Issuing Lender by the Borrowers
         pursuant to Section 2.4(d) and not the subject of Advances made
         pursuant to Section 2.4(e).

                  "ALTERNATE BASE RATE" means, as of any date of determination,
         the rate per annum (rounded upwards, if necessary, to the next 1/100 of
         1%) equal to the HIGHER OF (a) the Prime Rate in effect on such date
         and (b) the Federal Funds Rate in effect on such date plus 1/2 of 1%
         (50 basis points).

                  "ALTERNATE BASE RATE ADVANCE" means an Advance made hereunder
         and specified to be an Alternate Base Rate Advance in accordance with
         ARTICLE 2.

                  "ALTERNATE BASE RATE LOAN" means a Loan made hereunder and
         specified to be an Alternate Base Rate Loan in accordance with ARTICLE
         2.

                  "APPLICABLE BASE RATE MARGIN" means, for each Pricing Period,
         the interest rate margin set forth below (expressed in basis points per
         annum) opposite the Applicable Pricing Level for that Pricing Period:

<TABLE>
<CAPTION>

                      Applicable
                    Pricing Level                    Margin
                    -------------                    ------
                    <S>                              <C>
                           I                           100
                           II                           75
                           III                          50
                           IV                           25
                           V                             0
</TABLE>

                                       -3-

<PAGE>

                  "APPLICABLE COMMITMENT FEE RATE" means, for each Pricing
         Period, the rate set forth below (expressed in basis points per annum)
         opposite the Applicable Pricing Level for that Pricing Period:

<TABLE>
<CAPTION>

                              Applicable
                             Pricing Level             Commitment Fee
                             -------------             --------------
                               <S>                          <C>
                               I                            50
                               II                           50
                               III                          37.5
                               IV                           30
                               V                            25
</TABLE>

                  "APPLICABLE CURRENCY" means, as to any particular payment or
         Advance, Dollars or the Approved Offshore Currency in which it is
         denominated or is payable.

                  "APPLICABLE EURODOLLAR RATE MARGIN" means, for each Pricing
         Period, the interest rate margin set forth below (expressed in basis
         points per annum) opposite the Applicable Pricing Level for that
         Pricing Period:

<TABLE>
<CAPTION>

                             Applicable
                            Pricing Level                       Margin
                            -------------                       ------
                                <S>                             <C>
                                 I                              225
                                 II                             200
                                 III                            175
                                 IV                             150
                                 V                              125
</TABLE>

                        "APPLICABLE PRICING LEVEL" means, for each Pricing
         Period, the pricing level set forth below opposite the Leverage Ratio
         as of the last day of

                                       -4-

<PAGE>

         the Fiscal Quarter most recently ended prior to the commencement of
         that Pricing Period:

<TABLE>
<CAPTION>

               Pricing Level                      Leverage Ratio
               -------------                      --------------
               <S>                      <C>
                       I                Greater than or equal to 2.75 to 1.00

                       II               Greater than or equal to 2.25 to 1.00,
                                        but less than 2.75 to 1.00

                       III              Greater than or equal to 1.75 to 1.00,
                                        but less than 2.25 to 1.00

                       IV               Greater than or equal to 1.00 to 1.00,
                                        but less than 1.75 to 1.00

                       V                Less than 1.00 to 1.00
</TABLE>

         PROVIDED that (i) in the event that Parent does not deliver a Pricing
         Certificate with respect to any Pricing Period prior to the
         commencement of such Pricing Period, then until such Pricing
         Certificate is delivered, the Applicable Pricing Level for that Pricing
         Period shall be Pricing Level I, and (ii) if any Pricing Certificate is
         subsequently determined to be in error, then any resulting change in
         the Applicable Pricing Level shall be made retroactively to the
         beginning of the relevant Pricing Period.

                  "APPROVED OFFSHORE CURRENCY" means any Pound Sterling, Danish
         Kroner, Norwegian Kroner, Finnish Markka, Swiss Francs, Canadian
         Dollars, Euro or any other freely available currency (excluding Mexican
         Pesos) certified by the Lenders to the Administrative Agent upon not
         less than 10 Business Days' notice that in the opinion of all Lenders,
         in their sole discretion, is at such time freely traded in the offshore
         interbank foreign exchange markets and is freely transferable and
         freely convertible into Dollars.

                  "APPROVED OFFSHORE CURRENCY BORROWING LIMIT" means the Dollar
         Equivalent of $50,000,000.

                  "APPROVED OFFSHORE CURRENCY LENDING OFFICE" means as to each
         Lender, its office or branch so designated by written notice to the
         Borrowers and the Administrative Agent as its Approved Offshore
         Currency Lending Office. If no Approved Offshore Currency Lending
         Office is designated by a Lender its Approved Offshore Currency Lending
         Office shall be its office at its address for purposes of notices
         hereunder.

                                       -5-

<PAGE>

                  "APPROVED OFFSHORE CURRENCY PAYMENT OFFICE" means as to each
         Lender, its office or branch so designated by written notice to the
         Borrowers and the Administrative Agent as its Approved Offshore
         Currency Payment Office. If no Approved Offshore Currency Payment
         Office is designated by a Lender, its Approved Offshore Currency
         Payment Office shall be its office at its address for purposes of
         notices hereunder.

                  "APPROVED OFFSHORE CURRENCY RATE" means, for any Loan to be
         made in an Approved Offshore Currency for any Eurodollar Period
         therefor, the interest rate per annum (rounded upward to the nearest
         1/16th of one percent) determined by the Administrative Agent at
         approximately 9:00 a.m. (London time), on the date which is two Banking
         Days before the first day of such Eurodollar Period, to be the offered
         quotation that appears on the Reuter's LIBOR01 page for deposits in the
         applicable Approved Offshore Currency in the applicable Eurodollar
         Market for such Approved Offshore Currency for a length of time
         approximately equal to the Eurodollar Period for the Approved Offshore
         Currency Advance sought by the Borrowers. If at least two such offered
         quotations appear on the Reuter's LIBOR01 page, the Approved Offshore
         Currency Rate shall be the arithmetic mean (rounded upward to the
         nearest 1/16th of one percent) of such offered quotations, as
         determined by the Administrative Agent. If the Reuter's LIBOR01 page is
         not available or has been discontinued, the Approved Offshore Currency
         Rate shall be the rate per annum that the Administrative Agent
         determines to be the arithmetic mean (rounded as aforesaid) of the per
         annum rates of interest at which deposits in the applicable Approved
         Offshore Currency in an amount approximately equal to the principal
         amount of, and for a length of time approximately equal to the
         Eurodollar Period for, the Offshore Advance sought by the Borrowers are
         offered to the Administrative Agent in immediately available funds in
         the applicable Eurodollar Market for such Approved Offshore Currency at
         11:00 a.m. (local time of such Eurodollar Market), on the date which is
         two Business Days prior to the first day of a Eurodollar Period.

                  "ARRANGER" means Union Bank of California, N.A.

                  "AVAILABLE AMOUNT" means as of any date of determination, the
         SUM of (a) the Commitment LESS (b) the aggregate principal amount
         outstanding under the Notes.

                  "BANKING DAY" means any Monday, Tuesday, Wednesday, Thursday
         or Friday, OTHER THAN a day on which banks are authorized or required
         to be closed in California or New York.

                                       -6-

<PAGE>

                  "CAPITAL EXPENDITURE" means any expenditure by any of the
         Borrowers or any Subsidiary of a Borrower for or related to fixed
         assets or purchased intangibles that is treated as a capital
         expenditure under GAAP, INCLUDING any amount which is required to be
         treated as an asset subject to a Capital Lease Obligation, but
         EXCLUDING any such fixed assets or purchased intangibles acquired in
         connection with a Permitted Acquisition. The amount of Capital
         Expenditures in respect of fixed assets purchased or constructed by a
         Borrower or any Subsidiary of a Borrower in any fiscal period shall be
         NET OF (a) any net sales proceeds received during such fiscal period by
         such Borrower or such Subsidiary for fixed assets sold by such Borrower
         or such Subsidiary and (b) any casualty insurance proceeds received
         during such fiscal period by such Borrower or such Subsidiary for
         casualties to fixed assets and applied to the repair or replacement
         thereof.

                  "CAPITAL LEASE OBLIGATIONS" means all monetary obligations of
         a Person under any leasing or similar arrangement which, in accordance
         with GAAP, is classified as a capital lease.

                  "CASH" means, when used in connection with any Person, all
         monetary and non-monetary items owned by that Person that are treated
         as cash in accordance with GAAP, consistently applied.

                  "CASH EQUIVALENTS" means, when used in connection with any
         Person, that Person's Investments in:

                           (a)      Government Securities due within one year
         after the date of the making of the Investment;

                           (b)      readily marketable direct obligations of any
         State of the United States of America or any political subdivision of
         any such State or any public agency or instrumentality thereof given on
         the date of such Investment a credit rating of at least Aa by Moody's
         Investors Service, Inc. or AA by Standard & Poor's Rating Group (a
         division of McGraw-Hill, Inc.), in each case due within one year from
         the making of the Investment;

                           (c)      certificates of deposit issued by, bank
         deposits in, Eurodollar deposits through, bankers' acceptances of, and
         repurchase agreements covering Government Securities executed by any
         Lender or any bank incorporated under the Laws of the United States of
         America, any State thereof or the District of Columbia and having on
         the date of such Investment combined capital, surplus and undivided
         profits of at least $250,000,000, or

                                       -7-

<PAGE>

         total assets of at least $5,000,000,000, in each case due within one
         year after the date of the making of the Investment;

                           (d)      certificates of deposit issued by, bank
         deposits in, Eurodollar deposits through, bankers' acceptances of, and
         repurchase agreements covering Government Securities executed by, any
         Lender or any branch or office located in the United States of America
         of a bank incorporated under the Laws of any jurisdiction outside the
         United States of America having on the date of such Investment combined
         capital, surplus and undivided profits of at least $500,000,000, or
         total assets of at least $15,000,000,000, in each case due within one
         year after the date of the making of the Investment;

                           (e)      repurchase agreements covering Government
         Securities executed by a broker or dealer registered under Section
         15(b) of the Securities Exchange Act of 1934, as amended, having on the
         date of the Investment capital of at least $50,000,000, due within 90
         days after the date of the making of the Investment; PROVIDED that the
         maker of the Investment receives written confirmation of the transfer
         to it of record ownership of the Government Securities on the books of
         a "primary dealer" in such Government Securities or on the books of
         such registered broker or dealer, as soon as practicable after the
         making of the Investment;

                           (f)      readily marketable commercial paper or other
         debt securities issued by corporations doing business in and
         incorporated under the Laws of the United States of America or any
         State thereof or of any corporation that is the holding company for a
         Lender or a bank described in clause (c) or (d) above given on the date
         of such Investment a credit rating of at least P-1 by Moody's Investors
         Service, Inc. or A-1 by Standard & Poor's Rating Group (a division of
         McGraw-Hill, Inc.), in each case due within one year after the date of
         the making of the Investment;

                           (g)      "money market preferred stock" issued by a
         corporation incorporated under the Laws of the United States of America
         or any State thereof (i) given on the date of such Investment a credit
         rating of at least Aa by Moody's Investors Service, Inc. and AA by
         Standard & Poor's Rating Group (a division of McGraw-Hill, Inc.), in
         each case having an investment period not exceeding 50 days or (ii) to
         the extent that investors therein have the benefit of a standby letter
         of credit issued by a Lender or a bank described in clauses (c) or (d)
         above; PROVIDED that (y) the amount of all such Investments issued by
         the same issuer does not exceed $5,000,000 and (z) the aggregate amount
         of all such Investments does not exceed $15,000,000;

                                       -8-

<PAGE>

                           (h)      a readily redeemable "money market mutual
         fund" sponsored by a bank described in clause (c) or (d) hereof, or a
         registered broker or dealer described in clause (e) hereof, that has
         and maintains an investment policy limiting its investments primarily
         to instruments of the types described in clauses (a) through (g) hereof
         and given on the date of such Investment a credit rating of at least Aa
         by Moody's Investors Service, Inc. and AA by Standard & Poor's Rating
         Group (a division of McGraw-Hill, Inc.); and

                           (i)      corporate notes or bonds having an original
         term to maturity of not more than one year issued by a corporation
         incorporated under the Laws of the United States of America, or a
         participation interest therein; PROVIDED that (i) commercial paper
         issued by such corporation is given on the date of such Investment a
         credit rating of at least Aa by Moody's Investors Service, Inc. and AA
         by Standard & Poor's Rating Group (a division of McGraw-Hill, Inc.),
         (ii) the amount of all such Investments issued by the same issuer does
         not exceed $5,000,000 and (iii) the aggregate amount of all such
         Investments does not exceed $15,000,000.

                  "CASH INCOME TAXES" means, with respect to any fiscal period,
         taxes on or measured by the income of the Parent and its Subsidiaries
         that are paid or currently payable in Cash by the Parent during that
         fiscal period.

                  "CASH INTEREST EXPENSE" means Interest Expense that is paid or
         currently payable in Cash.

                  "CERTIFICATE" means a certificate signed by a Senior Officer
         or Responsible Official (as applicable) of the Person providing the
         certificate.

                  "CHANGE IN CONTROL" means (a) any merger or consolidation of
         the Parent with or into any Person (other than a merger or
         consolidation in which the Parent is a surviving corporation) or any
         sale, transfer or other conveyance, whether direct or indirect, of all
         or substantially all of the assets of the Parent, on a consolidated
         basis, in one transaction or a series of related transactions, (b) any
         "person" or "group" (as such terms are used for purposes of Sections
         13(d) and 14(d) of the Securities Exchange Act of 1934, as amended,
         whether or not applicable) is or becomes the "beneficial owner",
         directly or indirectly, of more than 50% of the total voting power in
         the aggregate of all classes of capital stock of the Parent then
         outstanding normally entitled to vote in elections of directors, or (c)
         during any period of 24 consecutive months after the Closing Date,
         individuals who at the beginning of such 24-month period constituted
         the board of directors of the Parent (together with any new directors

                                       -9-

<PAGE>

         whose election by such board of directors or whose nomination for
         election by the shareholders of the Parent was approved by a vote of a
         majority of the directors then still in office who were either
         directors at the beginning of such period or whose election or
         nomination for election was previously so approved) cease for any
         reason to constitute a majority of the board of directors of the Parent
         then in office.

                  "CLOSING DATE" means the time and Banking Day on which the
         conditions set forth in Section 8.1 are satisfied or waived. The
         Administrative Agent shall notify the Borrowers and the Lenders of the
         date that is the Closing Date.

                  "CODE" means the Internal Revenue Code of 1986, as amended or
         replaced and as in effect from time to time.

                  "COLLATERAL" means all of the collateral covered by the Pledge
         Agreement.

                  "COMMERCIAL LETTER OF CREDIT" means each Letter of Credit
         issued to support the purchase of goods by a Borrower which is
         determined to be a commercial letter of credit by the Issuing Lender.

                  "COMMITMENT" means, subject to Section 2.5, $200,000,000. The
         respective Pro Rata Shares of the Lenders with respect to the
         Commitment are set forth in SCHEDULE 1.1.

                  "COMMITMENT ASSIGNMENT AND ACCEPTANCE" means a commitment
         assignment and acceptance substantially in the form of EXHIBIT A.

                  "COMMON STOCK" means the common stock of a Borrower or its
         successor.

                  "COMPLIANCE CERTIFICATE" means a certificate in the form of
         EXHIBIT B, properly completed and signed by a Senior Officer of the
         Parent.

                  "CONTRACTUAL OBLIGATION" means, as to any Person, any
         provision of any outstanding security issued by that Person or of any
         material agreement, instrument or undertaking to which that Person is a
         party or by which it or any of its Property is bound.

                  "DEBTOR RELIEF LAWS" means the Bankruptcy Code of the United
         States of America, as amended from time to time, and all other
         applicable liquidation,

                                      -10-

<PAGE>

         conservatorship, bankruptcy, moratorium, rearrangement, receivership,
         insolvency, reorganization, or similar debtor relief Laws from time to
         time in effect affecting the rights of creditors generally.

                  "DEFAULT" means any event that, with the giving of any
         applicable notice or passage of time specified in Section 9.1, or both,
         would be an Event of Default.

                  "DEFAULT RATE" means the SUM OF (a) any incremental interest
         rate then in effect pursuant to Section 3.1(d) PLUS (b) the interest
         rate prescribed in Section 3.7.

                  "DESIGNATED DEPOSIT ACCOUNT" means a deposit account to be
         maintained by Parent (for the benefit of Borrowers) with Union Bank of
         California, N.A. or one of its Affiliates, as from time to time
         designated by Parent by written notification to the Administrative
         Agent.

                  "DESIGNATED EURODOLLAR MARKET" means, with respect to any
         Eurodollar Rate Loan, the London Eurodollar Market.

                  "DISQUALIFIED STOCK" means any capital stock, warrants,
         options or other rights to acquire capital stock (but excluding any
         debt security which is conver tible, or exchangeable, for capital
         stock), which, by its terms (or by the terms of any security into which
         it is convertible or for which it is exchangeable), or upon the
         happening of any event, matures or is mandatorily redeemable, pursuant
         to a sinking fund obligation or otherwise, or is redeemable at the
         option of the holder thereof, in whole or in part, on or prior to the
         Maturity Date.

                  "DISPOSITION" means the sale, transfer or other disposition in
         any single transaction or series of related transactions of any asset,
         or group of related assets, of any Borrower or any Subsidiary of a
         Borrower (a) which asset or assets constitute a line of business or
         substantially all the assets of such Borrower or Subsidiary or (b) the
         aggregate amount of the Net Cash Sales Proceeds of such assets is more
         than $1,000,000, OTHER THAN (i) inventory or other assets sold or
         otherwise disposed of in the ordinary course of business of such
         Borrower or Subsidiary, (ii) equipment sold or otherwise disposed of
         where substantially similar equipment in replacement thereof has
         theretofore been acquired, or thereafter within 90 days is acquired, by
         such Borrower or Subsidiary and (iii) obsolete or worn-out assets.

                                      -11-
<PAGE>

                  "DISTRIBUTION" means, with respect to any shares of capital
         stock or any warrant or option to purchase an equity security or other
         equity security issued by a Person, (a) the retirement, redemption,
         purchase or other acquisition for Cash or for Property (other than
         other equity securities) by such Person of any such security, (b) the
         declaration or (without duplication) payment by such Person of any
         dividend in Cash or in Property on or with respect to any such
         security, (c) any Investment by such Person in the holder of 5% or more
         of any such security if a purpose of such Investment is to avoid
         characterization of the transaction as a Distribution and (d) any other
         payment in Cash or Property by such Person constituting a distribution
         under applicable Laws with respect to such security.

                  "DOLLAR ADVANCE" means an Advance denominated in Dollars.

                  "DOLLAR EQUIVALENT" means (a) in relation to any amount
         denominated in Dollars, the amount thereof and (b) in relation to an
         amount denominated in an Approved Offshore Currency, the amount of such
         Dollars required to purchase the relevant stated amount of Approved
         Offshore Currency at the Exchange Rate on the date of determination.
         For the purposes of this Agreement, unless otherwise expressly stated
         herein, the Dollar Equivalent principal amount of any Advance or Letter
         of Credit shall be determined on the date on which the Request for Loan
         or Request for Letter of Credit is received with respect thereto.

                  "DOLLARS" or "$" means United States of America dollars.

                  "DOMESTIC SUBSIDIARY" means a Subsidiary of a Borrower that is
         not a Foreign Subsidiary.

                  "EBITDA" means, with respect to any fiscal period, the SUM OF
         (a) Net Income for that period, PLUS (b) any non-operating
         non-recurring loss reflected in such Net Income, MINUS (c) any
         non-operating non-recurring gain reflected in such Net Income, PLUS (d)
         Interest Expense of the Parent and its Subsidiaries for that period,
         PLUS (e) the aggregate amount of federal and state tax expense on or
         measured by income of the Parent and its Subsidiaries for that period
         (whether or not payable during that period), PLUS (f) to the extent
         included in such fiscal period, a one-time charge for the acceleration
         of stock grants associated with the Acquisition of HC, not to exceed
         $8,000,000 in aggregate amount, PLUS (g) to the extent included in such
         fiscal period, a one-time charge for acquisition costs associated with
         the Acquisition of HC, not to exceed $2,400,000 in aggregate amount,
         PLUS (h) to the extent included in such fiscal period, a one-

                                        -12-
<PAGE>

         time charge for acquired in-process research and development related
         to IPD not to exceed $3,300,000 in aggregate amount, PLUS (i) to the
         extent included in such fiscal period, a one-time charge for the
         inventory write-up with respect to purchase accounting adjustments
         related to the Acquisition of IPD and Melcher not to exceed
         $3,700,000 in aggregate amount, PLUS (j) a one-time write-off with
         respect to the Calex license not to exceed $1,000,000 in aggregate
         amount, MINUS (k) the aggregate amount of federal and state credits
         against taxes on or measured by income of the Parent and its
         Subsidiaries for that period (whether or not usable during that
         period), PLUS (l) depreciation, amortization and all other non-cash
         expenses of the Parent and its Subsidiaries for that period, in each
         case as determined in accordance with GAAP, consistently applied.

                  "ELIGIBLE ASSIGNEE" means (a) another Lender, (b) with respect
         to any Lender, any Affiliate of that Lender, (c) any commercial bank
         having total assets of $1,000,000,000 or more, (d) any (i) savings
         bank, savings and loan association or similar financial institution or
         (ii) insurance company engaged in the business of writing insurance
         which, in either case (A) has total assets of $1,000,000,000 or more,
         (B) is engaged in the business of lending money and extending credit
         under credit facilities substantially similar to those extended under
         this Agreement and (C) is operationally and procedurally able to meet
         the obligations of a Lender hereunder to the same degree as a
         commercial bank and (e) any other financial institution (INCLUDING a
         mutual fund or other fund) having total assets of $1,000,000,000 or
         more which meets the requirements set forth in subclauses (B) and (C)
         of clause (d) above; PROVIDED that each Eligible Assignee must either
         (aa) be organized under the Laws of the United States of America, any
         State thereof or the District of Columbia or (bb) be organized under
         the Laws of the Cayman Islands or any country which is a member of the
         Organization for Economic Cooperation and Development, or a political
         subdivision of such a country, and (i) act hereunder through a branch,
         agency or funding office located in the United States of America and
         (ii) be exempt from withholding of tax on interest and deliver the
         documents related thereto pursuant to Section 11.21.

                  "EMU" means Economic and Monetary Union as contemplated in the
         Treaty.

                  "EMU LEGISLATION" means (a) the Treaty and (b) legislative
         measures of the European Council for the introduction of, changeover
         to, or operation of, the Euro, in each case as amended or supplemented
         from time to time.

                                      -13-

<PAGE>

                  "ERISA" means the Employee Retirement Income Security Act of
         1974, and any regulations issued pursuant thereto, as amended or
         replaced and as in effect from time to time.

                  "ERISA AFFILIATE" means each Person (whether or not
         incorporated) which is required to be aggregated with any Borrower
         pursuant to Section 414 of the Code.

                  "EURODOLLAR BANKING DAY" means any Banking Day on which
         dealings in Dollar deposits are conducted by and among banks in the
         Designated Eurodollar Market.

                  "EURODOLLAR LENDING OFFICE" means, as to each Lender, its
         office or branch so designated by written notice to the Borrowers and
         the Administrative Agent as its Eurodollar Lending Office. If no
         Eurodollar Lending Office is designated by a Lender, its Eurodollar
         Lending Office shall be its office at its address for purposes of
         notices hereunder.

                  "EURODOLLAR MARKET" means a regular established market located
         outside the United States of America by and among banks for the
         solicitation, offer and acceptance of Dollar deposits in such banks.

                  "EURODOLLAR OBLIGATIONS" means eurocurrency liabilities, as
         defined in Regulation D or any comparable regulation of any
         Governmental Agency having jurisdiction over any Lender.

                  "EURODOLLAR PERIOD" means, as to each Eurodollar Rate Loan,
         the period commencing on the date specified by the Borrowers pursuant
         to Section 2.1(c) and ending 1, 2, 3 or 6 months (or, with the written
         consent of all of the Lenders, any other period) thereafter, as
         specified by the Borrowers in the applicable Request for Loan; PROVIDED
         that:

                           (a)      The first day of any Eurodollar Period shall
                  be a Eurodollar Banking Day;

                           (b)      Any Eurodollar Period that would otherwise
                  end on a day that is not a Eurodollar Banking Day shall be
                  extended to the immediately succeeding Eurodollar Banking Day
                  unless such Eurodollar Banking Day falls in another calendar
                  month, in which case such Eurodollar Period shall end on the
                  immediately preceding Eurodollar Banking Day; and

                                      -14-

<PAGE>

                           (c)      No Eurodollar Period shall extend beyond the
                  Maturity Date.

                  "EURODOLLAR RATE" means, with respect to any Eurodollar Rate
         Loan, the average of the interest rates per annum (rounded upward, if
         necessary, to the next 1/16 of 1%) at which deposits in Dollars are
         offered to the Administrative Agent in the Designated Eurodollar Market
         at or about 11:00 a.m. local time in the Designated Eurodollar Market,
         two (2) Eurodollar Banking Days before the first day of the applicable
         Eurodollar Period in an aggregate amount approximately equal to the
         amount of the Advance to be made by the Administrative Agent with
         respect to such Eurodollar Rate Loan and for a period of time
         comparable to the number of days in the applicable Eurodollar Period.

                  "EURODOLLAR RATE ADVANCE" means an Advance made hereunder and
         denominated in an Approved Offshore Currency and any other Advance made
         hereunder and specified to be a Eurodollar Rate Advance in accordance
         with ARTICLE 2.

                  "EURODOLLAR RATE LOAN" means a Loan made hereunder and
         denominated in an Approved Offshore Currency and any other Loan made
         hereunder and specified to be a Eurodollar Rate Loan in accordance with
         ARTICLE 2.

                  "EVENT OF DEFAULT" shall have the meaning provided in Section
         9.1.

                  "EXCHANGE RATE" means with respect to any Approved Offshore
         Currency on a particular date, the rate at which such Approved Offshore
         Currency may be exchanged into Dollars, as set forth on such date on
         the Reuters currency page for exchanges of such Approved Offshore
         Currency into Dollars. In the event that such rate does not appear on
         any Reuters currency page, the Exchange Rate with respect to such
         Approved Offshore Currency shall be determined by reference to such
         other publicly available service for displaying exchange rates as may
         be agreed upon by the Administrative Agent and the Borrowers or, in the
         absence of such agreement, such Exchange Rate shall instead be the
         arithmetic mean of the spot rates of exchange for the Administrative
         Agent and two other money center banks in the interbank market where
         the foreign currency exchange operations of the Administrative Agent
         and such two other money center banks in respect of such Approved
         Offshore Currency are then being conducted, at or about 10:00 a.m.
         local time, for the purchase of Dollars with such Approved Offshore
         Currency, for delivery two Business Days later; PROVIDED, HOWEVER, that
         if at the time of any such

                                      -15-

<PAGE>

         determination, for any reason, no such spot rate is being quoted by the
         Administrative Agent, the Administrative Agent may use any reasonable
         method it deems applicable to determine its respective spot rate, and
         such determination shall be prima facie evidence of such rate.

                  "EXISTING CREDIT AGREEMENT" means the $65,000,000 Second
         Amended and Restated Credit Agreement dated as of August 12, 1999 among
         the Parent, certain Subsidiaries of the Parent, the lenders identified
         therein, Bank of America, N.A., as Administrative Agent and Union Bank
         of California, N.A., as Co-Agent, as amended.

                  "EXISTING LETTERS OF CREDIT" means the letters of credit, if
         any, outstanding on the Closing Date and listed on SCHEDULE 2.4.

                  "FEDERAL FUNDS RATE" means, as of any date of determination,
         the rate set forth in the weekly statistical release designated as
         H.15(519), or any successor publication, published by the Federal
         Reserve Board (including any such successor, "H.15(519)") for such date
         opposite the caption "Federal Funds (Effective)". If for any relevant
         date such rate is not yet published in H.15(519), the rate for such
         date will be the rate set forth in the daily statistical release
         designated as the Composite 3:30 p.m. Quotations for U.S. Government
         Securities, or any successor publication, published by the Federal
         Reserve Bank of New York (including any such successor, the "Composite
         3:30 p.m. Quotation") for such date under the caption "Federal Funds
         Effective Rate". If on any relevant date the appropriate rate for such
         date is not yet published in either H.15(519) or the Composite 3:30
         p.m. Quotations, the rate for such date will be the arithmetic mean of
         the rates for the last transaction in overnight Federal funds arranged
         prior to 9:00 a.m. (New York City time) on that date by each of three
         leading brokers of Federal funds transactions in New York City selected
         by the Administrative Agent. For purposes of this Agreement, any change
         in the Alternate Base Rate due to a change in the Federal Funds Rate
         shall be effective as of the opening of business on the effective date
         of such change.

                  "FISCAL YEAR" means each period of 52 or 53 weeks ending on
         the Sunday closest to December 31 of each year.

                  "FIXED CHARGE COVERAGE RATIO" means, as of the last day of any
         fiscal quarter, calculated for the Parent and its Subsidiaries on a
         consolidated basis, the RATIO OF (a) EBITDA for the fiscal period
         consisting of the four (4) consecutive fiscal quarters ended on that
         date LESS federal and state income tax

                                      -16-

<PAGE>

         expense TO (b) the SUM OF, without duplication, (i) Interest Expense of
         the Parent and its Subsidiaries for such fiscal period, PLUS (ii)
         scheduled principal payments in respect of Indebtedness during such
         period.

                  "FOREIGN SUBSIDIARY" means a Subsidiary of a Borrower that (a)
         is organized under the Laws of a country (or political subdivision
         thereof) OTHER THAN the United States of America and (b) holds all or
         substantially all of its assets outside the United States of America.

                  "GAAP" means, as of any date of determination, accounting
         principles (a) set forth as generally accepted in then currently
         effective Opinions of the Accounting Principles Board of the American
         Institute of Certified Public Accountants, (b) set forth as generally
         accepted in then currently effective Statements of the Financial
         Accounting Standards Board or (c) that are then approved by such other
         entity as may be approved by a significant segment of the accounting
         profession in the United States of America. The term "CONSISTENTLY
         APPLIED," as used in connection therewith, means that the accounting
         principles applied are consistent in all material respects with those
         applied at prior dates or for prior periods.

                  "GOVERNMENT SECURITIES" means readily marketable (a) direct
         full faith and credit obligations of the United States of America or
         obligations guaranteed by the full faith and credit of the United
         States of America and (b) obligations of an agency or instrumentality
         of, or corporation owned, controlled or sponsored by, the United States
         of America that are generally considered in the securities industry to
         be implicit obligations of the United States of America.

                  "GOVERNMENTAL AGENCY" means (a) any international, foreign,
         federal, state, county or municipal government, or political
         subdivision thereof, (b) any governmental or quasi-governmental agency,
         authority, board, bureau, commission, department, instrumentality or
         public body or (c) any court or administrative tribunal of competent
         jurisdiction.

                  "GUARANTY OBLIGATION" means, as to any Person, any (a)
         guarantee by that Person of Indebtedness of, or other obligation
         performable by, any other Person or (b) assurance given by that Person
         to an obligee of any other Person with respect to the performance of an
         obligation by, or the financial condition of, such other Person,
         whether direct, indirect or contingent, INCLUDING any purchase or
         repurchase agreement covering such obligation or any collateral
         security therefor, any agreement to provide funds (by means of loans,
         capital contributions or otherwise) to such other Person, any agreement
         to support the

                                      -17-

<PAGE>

         solvency or level of any balance sheet item of such other Person or any
         "keep-well" or other arrangement of whatever nature given for the
         purpose of assuring or holding harmless such obligee against loss with
         respect to any obligation of such other Person; PROVIDED, HOWEVER, that
         the term Guaranty Obligation shall not include endorsements of
         instruments for deposit or collection in the ordinary course of
         business and customary indemnities given in connection with asset sales
         in the ordinary course of business. The amount of any Guaranty
         Obligation in respect of Indebtedness shall be deemed to be an amount
         equal to the stated or determinable amount of the related Indebtedness
         (unless the Guaranty Obligation is limited by its terms to a lesser
         amount, in which case to the extent of such amount) or, if not stated
         or determinable, the maximum reasonably anticipated liability in
         respect thereof as determined by the Person in good faith. The amount
         of any other Guaranty Obligation shall be deemed to be zero unless and
         until the amount thereof has been (or in accordance with Financial
         Accounting Standards Board Statement No. 5 should be) quantified and
         reflected or disclosed in the consolidated financial statements (or
         notes thereto) of the Parent.

                  "HAZARDOUS MATERIALS" means substances defined as
         "hazardous substances" pursuant to the Comprehensive Environmental
         Response, Compensation and Liability Act of 1980, 42 U.S.C. Section
         9601 et seq., or as "hazardous", "toxic" or "pollutant" substances
         or as "solid waste" pursuant to the Hazardous Materials
         Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
         Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or
         as "friable asbestos" pursuant to the Toxic Substances Control Act,
         15 U.S.C. Section 2601 et seq. or any other applicable Hazardous
         Materials Law, in each case as such Laws are amended from time to
         time.

                  "HAZARDOUS MATERIALS LAWS" means all Laws governing the
         treatment, transportation or disposal of Hazardous Materials applicable
         to any of the Real Property.

                  "HC" has the meaning specified in the introduction to this
         Agreement.

                  "INDEBTEDNESS" means, as to any Person (without duplication),
         (a) indebtedness of such Person for borrowed money or for the deferred
         purchase price of Property (EXCLUDING trade and other accounts payable
         in the ordinary course of business in accordance with ordinary trade
         terms and accrued liabilities incurred in the ordinary course of
         business), INCLUDING any Guaranty Obligation for any such indebtedness,
         (b) indebtedness of such Person of the nature described in clause (a)
         that is non-recourse to the credit of such

                                      -18-

<PAGE>

         Person but is secured by assets of such Person, to the extent of the
         fair market value of such assets as determined in good faith by such
         Person, (c) Capital Lease Obligations of such Person, (d) indebtedness
         of such Person arising under bankers' acceptance facilities or under
         facilities for the discount of accounts receivable of such Person, (e)
         any direct or contingent obligations of such Person under letters of
         credit issued for the account of such Person and (f) any net
         obligations of such Person under Interest Rate Protection Agreements.

                  "INTANGIBLE ASSETS" means assets that are considered
         intangible assets under GAAP, INCLUDING customer lists, goodwill,
         covenants not to compete, copyrights, trade names, trademarks, patents
         and license rights with respect to intellectual property.

                  "INTEREST EXPENSE" means, with respect to any Person and as of
         the last day of any fiscal period, the SUM OF (a) all interest, fees,
         charges and related expenses (in each case as such expenses are
         calculated according to GAAP) paid or payable (without duplication) for
         that fiscal period by that Person to a lender in connection with
         borrowed money (INCLUDING any obligations for fees, charges and related
         expenses payable to the issuer of any letter of credit) or the deferred
         purchase price of assets that are considered "interest expense" under
         GAAP PLUS (b) the portion of rent paid or payable (without duplication)
         for that fiscal period by that Person under Capital Lease Obligations
         that should be treated as interest in accordance with Financial
         Accounting Standards Board Statement No. 13.

                  "INTEREST RATE PROTECTION AGREEMENT" means a written agreement
         between a Borrower and one or more financial institutions providing for
         "swap", "cap", "collar" or other interest rate protection with respect
         to any Indebtedness.

                  "INVESTMENT" means, when used in connection with any Person,
         any investment by or of that Person, whether by means of purchase or
         other acquisition of stock or other securities of any other Person or
         by means of a loan, advance creating a debt, capital contribution,
         guaranty or other debt or equity participation or interest in any other
         Person, INCLUDING any partnership and joint venture interests of such
         Person. The amount of any Investment shall be the amount actually
         invested (MINUS any return of capital with respect to such Investment
         which has actually been received in Cash or has been converted into
         Cash), without adjustment for subsequent increases or decreases in the
         value of such Investment.

                                      -19-

<PAGE>

                  "IPD" has the meaning specified in the introduction to this
         Agreement.

                  "ISSUING LENDER" means Union Bank of California, N.A.

                  "JOINT VENTURE" means any Investment by a Borrower in any
         Person that is not a Wholly-Owned Subsidiary of such Borrower, which
         Person is engaged in the same or a similar line of business as such
         Borrower.

                  "LAWS" means, collectively, all international, foreign,
         federal, state and local statutes, treaties, rules, regulations,
         ordinances, codes and administrative or judicial precedents.

                  "LENDER" means (a) initially, each lender whose name is set
         forth in the signature pages of this Agreement and (b) thereafter, each
         lender from time to time a party to this Agreement, including each
         lender which may hereafter become a party to this Agreement pursuant to
         Section 11.8.

                  "LETTERS OF CREDIT" means (a) the Existing Letters of Credit
         and (b) any of the Commercial Letters of Credit or Standby Letters of
         Credit issued by the Issuing Lender under the Commitment pursuant to
         Section 2.4, either as originally issued or as the same may be
         supplemented, modified, amended, renewed, extended or supplanted.

                  "LEVERAGE RATIO" means, as of the last day of any fiscal
         quarter, determined for the Parent and its Subsidiaries on a
         consolidated basis, the RATIO OF (a) all Indebtedness of the Parent and
         its Subsidiaries on that date TO (b) EBITDA for the fiscal period
         consisting of the four (4) consecutive fiscal quarters ended on that
         date. For purpose of calculation of the Leverage Ratio only, EBITDA
         shall be measured on a pro forma basis and each Person or line of
         business that was acquired or disposed of during the four Fiscal
         Quarter period ending on or before such date of calculation shall be
         deemed to have been acquired or disposed of on the first day of such
         period.

                  "LIEN" means any mortgage, deed of trust, pledge,
         hypothecation, assignment for security, security interest, encumbrance,
         lien or similar charge of any kind, whether voluntarily incurred or
         arising by operation of Law or otherwise, affecting any Property,
         INCLUDING any conditional sale or other title retention agreement, any
         lease in the nature of a security interest, and/or the filing of any
         financing statement (OTHER THAN a precautionary financing statement
         with respect to a lease that is not in the nature of a security
         interest) under the

                                      -20-

<PAGE>

         Uniform Commercial Code or comparable Law of any jurisdiction with
         respect to any Property.

                  "LOAN" means the aggregate of the Advances made at any one
         time by the Lenders pursuant to Section 2.1.

                  "LOAN DOCUMENTS" means, collectively, this Agreement, the
         Notes, the Swing Line Note, the Subsidiary Guaranty, the Pledge
         Agreement, and any other agreements of any type or nature hereafter
         executed and delivered by any of the Borrowers or any of the Subsidiary
         Guarantors to the Administrative Agent or to any Lender in any way
         relating to or in furtherance of this Agreement, in each case either
         as originally executed or as the same may from time to time be
         supplemented, modified, amended, restated, extended or supplanted.

                  "MARGIN STOCK" means "margin stock", as such term is defined
         in Regulation U.

                  "MATERIAL ADVERSE EFFECT" means any set of circumstances or
         events which (a) has had or could reasonably be expected to have any
         material adverse effect whatsoever upon the validity or enforceability
         of any Loan Document, (b) has been or could reasonably be expected to
         be material and adverse to the business or condition (financial or
         otherwise) of the Parent and its Subsidiaries, taken as a whole or (c)
         has materially impaired or could reasonably be expected to materially
         impair the ability of the Borrowers to perform the Obligations.

                  "MATERIAL SUBSIDIARY" means each Subsidiary of the Parent or
         of a Subsidiary of the Parent (a) the gross revenues of which for the
         then most recently completed four Fiscal Quarters constituted or, with
         respect to any such Subsidiary acquired during such Fiscal Quarters,
         would have constituted (had the gross revenues of such Subsidiary been
         included for such period) 5% or more of the consolidated gross revenues
         of the Parent and its Subsidiaries for such period or (b) the assets of
         which as of the end of any fiscal quarter constituted 5% or more of the
         consolidated assets of the Parent and its Subsidiaries as of the end of
         such Fiscal Quarter. For purposes of this Agreement, each of Melcher,
         Melcher AG, Melcher Production AG, IPD, HC, Power-Electronics, Inc.,
         Poder Uno de Mexico, S.A. de C.V. and, following the Powec Acquisition,
         Powec shall at all times be deemed to be a Material Subsidiary.

                  "MATURITY DATE" means the third anniversary of the Closing
         Date.

                                      -21-

<PAGE>

                  "MELCHER" has the meaning specified in the introduction to
         this Agreement.

                  "MULTIEMPLOYER PLAN" means any employee benefit plan of the
         type described in Section 4001(a)(3) of ERISA to which a Borrower or
         any of its ERISA Affiliates contributes or is obligated to contribute.

                  "NEGATIVE PLEDGE" means a Contractual Obligation which
         contains a covenant binding on a Borrower or any of its Subsidiaries
         that prohibits Liens on any of its Property, OTHER THAN (a) any such
         covenant contained in a Contractual Obligation granting or relating to
         a particular Lien which affects only the Property that is the subject
         of such Lien and (b) any such covenant that does not apply to Liens
         securing the Obligations.

                  "NET CASH ISSUANCE PROCEEDS" means, with respect to the
         issuance of any debt security or equity security by a Borrower or any
         of its Subsidiaries, the Cash proceeds received by or for the account
         of such Borrower or Subsidiary in consideration of such issuance NET OF
         (a) underwriting discounts and commissions actually paid to any Person
         not an Affiliate of such Borrower and (b) professional fees and
         disbursements actually paid in connection therewith.

                  "NET CASH SALES PROCEEDS" means, with respect to any
         Disposition, the SUM OF (a) the Cash proceeds received by or for the
         account of the Parent and its Subsidiaries from such Disposition PLUS
         (b) the amount of Cash received by or for the account of the Parent and
         its Subsidiaries upon the sale, collection or other liquidation of any
         proceeds that are not Cash from such Disposition, in each case NET OF
         (i) any amount required to be paid to any Person owning an interest in
         the assets disposed of, (ii) any amount applied to the repayment of
         Indebtedness secured by a Lien permitted under Section 6.9 on the asset
         disposed of, (iii) any transfer, income or other taxes payable as a
         result of such Disposition, (iv) professional fees and expenses, fees
         due to any Governmental Agency, broker's commissions and other
         out-of-pocket costs of sale actually paid to any Person that is not an
         Affiliate of the Parent attributable to such Disposition, and (v) any
         reserves established in accordance with GAAP in connection with such
         Disposition.

                  "NET INCOME" means, with respect to any fiscal period, the
         consolidated net income of the Parent and its Subsidiaries for that
         period, determined in accordance with GAAP, consistently applied.

                                      -22-

<PAGE>

                  "NET WORTH" means, for the Parent and its Subsidiaries, on a
         consolidated basis, determined in accordance with GAAP, total assets
         MINUS total liabilities.

                  "NOTE" means a promissory note, other than a Swing Line Note,
         made by the Borrowers to a Lender evidencing Advances under that
         Lender's Pro Rata Share of the Commitment, substantially in the form of
         EXHIBIT C, either as originally executed or as the same may from time
         to time be supplemented, modified, amended, renewed, extended or
         supplanted.

                  "OBLIGATIONS" means all present and future obligations of
         every kind or nature of the Borrowers and/or any of the Subsidiary
         Guarantors at any time and from time to time owed to the Administrative
         Agent or the Lenders or any one or more of them, under any one or more
         of the Loan Documents, whether due or to become due, matured or
         unmatured, liquidated or unliquidated, or contingent or noncontingent,
         INCLUDING obligations of performance as well as obligations of payment,
         and INCLUDING interest that accrues after the commencement of any
         proceeding under any Debtor Relief Law by or against any of the
         Borrowers or any of the Subsidiary Guarantors.

                  "OPINION OF COUNSEL" means the favorable written legal opinion
         of counsel to the Borrowers, substantially in the form of EXHIBIT D,
         together with copies of factual certificates and legal opinions, if
         any, delivered to such counsel in connection with such opinion upon
         which such counsel has relied.

                  "PARENT" has the meaning specified in the introduction to this
         Agreement.

                  "PARTY" means any Person other than the Administrative Agent
         and the Lenders, which now or hereafter is a party to any of the Loan
         Documents.

                  "PBGC" means the Pension Benefit Guaranty Corporation or any
         successor thereof established under ERISA.

                  "PENSION PLAN" means any "employee pension benefit plan" (as
         such term is defined in Section 3(2) of ERISA), OTHER THAN a
         Multiemployer Plan, which is subject to Title IV of ERISA and is
         maintained by Borrower or to which Borrower contributes or has an
         obligation to contribute.

                  "PERMITTED ACQUISITION" means, collectively, the Powec
         Acquisition and any other Acquisition by a Borrower or any Subsidiary
         of a Borrower (as applicable, the "acquiror") of another Person engaged
         in the same or a similar line of business as that of the acquiror (the
         "target"), PROVIDED that: (i) if such

                                      -23-

<PAGE>

         Acquisition involves the acquiror's payment of total Acquisition
         Consideration of more than $30,000,000, the Requisite Lenders shall
         have approved the terms and conditions of such Acquisition unless all
         of the Acquisition Consideration for such Acquisition consists of
         Common Stock or preferred stock of the acquiror or one of its
         Affiliates and not more than forty percent (40%) of the total
         Acquisition Consideration for such Acquisition consists of such
         preferred stock; (ii) if such Acquisition involves the acquiror's
         payment of total Acquisition Consideration of less than $30,000,000, a
         Senior Officer of the Parent shall have provided the Administrative
         Agent with notice of such intended Acquisition at least twenty (20)
         Banking Days prior to the applicable Borrower's consummation of such
         Acquisition and with a Compliance Certificate demonstrating the
         Borrowers' compliance with the financial covenants set forth in
         Sections 6.12, 6.13, 6.14, 6.16 and 6.17 of this Agreement both
         immediately prior to and after giving effect to the proposed
         Acquisition and certifying that no Event of Default then exists or
         would occur after giving effect to the proposed Acquisition; (iii) the
         Borrowers shall not be in default of any of the financial covenants set
         forth in Sections 6.12, 6.13, 6.14, 6.16 and 6.17 of this Agreement;
         (iv) such Acquisition shall have been approved by the board of
         directors of the target; (v) the pro-forma balance sheets and combining
         projections (including pro-forma financial covenant ratios) provided by
         the Borrowers to the Administrative Agent shall demonstrate that the
         Borrowers would remain in compliance with the financial covenants
         referred to in clause (ii) above after giving effect to the
         Acquisition; (vi) the target shall have achieved positive net profits
         after taxes and positive earnings before interest, taxes, depreciation
         and amortization for the twelve consecutive month period of the target
         ended prior to such Acquisition; and (vii) the Administrative Agent
         shall have received the financial statements for the most recent fiscal
         year of the target ended prior to the Acquisition, and such financial
         statements shall have been audited or reviewed by a firm of independent
         certified public accountants acceptable to the Administrative Agent.

                  "PERMITTED ENCUMBRANCES" means:

                           (a)      Inchoate Liens incident to construction on
         or maintenance of Property; or Liens incident to construction on or
         maintenance of Property now or hereafter filed of record for which
         adequate reserves have been set aside (or deposits made pursuant to
         applicable Law) and which are being contested in good faith by
         appropriate proceedings and have not proceeded to judgment, PROVIDED
         that, by reason of nonpayment of the obligations secured by such

                                      -24-

<PAGE>

         Liens, no such Property is subject to a material impending risk of loss
         or forfeiture;

                           (b)      Liens for taxes and assessments on Property
         which are not yet past due; or Liens for taxes and assessments on
         Property for which adequate reserves have been set aside and are being
         contested in good faith by appropriate proceedings and have not
         proceeded to judgment, PROVIDED that, by reason of nonpayment of the
         obligations secured by such Liens, no such Property is subject to a
         material impending risk of loss or forfeiture;

                           (c)      defects and irregularities in title to any
         Property which in the aggregate do not materially impair the fair
         market value or use of the Property for the purposes for which it is or
         may reasonably be expected to be held;

                           (d)      easements, exceptions, reservations, or
         other agreements for the purpose of pipelines, conduits, cables, wire
         communication lines, power lines and substations, streets, trails,
         walkways, drainage, irrigation, water, and sewerage purposes, dikes,
         canals, ditches, the removal of oil, gas, coal, or other minerals, and
         other like purposes affecting Property which in the aggregate do not
         materially burden or impair the fair market value or use of such
         Property for the purposes for which it is or may reasonably be expected
         to be held;

                           (e)      easements, exceptions, reservations, or
         other agreements for the purpose of facilitating the joint or common
         use of Property in or adjacent to a shopping center or similar project
         affecting Property which in the aggregate do not materially burden or
         impair the fair market value or use of such Property for the purposes
         for which it is or may reasonably be expected to be held;

                           (f)      rights reserved to or vested in any
         Governmental Agency to control or regulate, or obligations or duties to
         any Governmental Agency with respect to, the use of any Property;

                           (g)      rights reserved to or vested in any
         Governmental Agency to control or regulate, or obligations or duties to
         any Governmental Agency with respect to, any right, power, franchise,
         grant, license, or permit;

                           (h)      present or future zoning laws and ordinances
         or other laws and ordinances restricting the occupancy, use, or
         enjoyment of Property;

                                      -25-

<PAGE>

                           (i)      statutory Liens, other than those described
         in clauses (a) or (b) above, arising in the ordinary course of business
         with respect to obligations which are not delinquent or are being
         contested in good faith, PROVIDED that, if delinquent, adequate
         reserves have been set aside with respect thereto and, by reason of
         nonpayment, no Property is subject to a material impending risk of loss
         or forfeiture;

                           (j)      covenants, conditions, and restrictions
         affecting the use of Property which in the aggregate do not materially
         impair the fair market value or use of the Property for the purposes
         for which it is or may reasonably be expected to be held;

                           (k)      rights of tenants under leases and rental
         agreements covering Property entered into in the ordinary course of
         business of the Person owning such Property;

                           (l)      Liens consisting of pledges or deposits to
         secure obligations under workers' compensation laws or similar
         legislation, including Liens of judgments thereunder which are not
         currently dischargeable;

                           (m)      Liens consisting of pledges or deposits of
         Property to secure performance in connection with operating leases made
         in the ordinary course of business, PROVIDED the aggregate value of all
         such pledges and deposits in connection with any such lease does not at
         any time exceed 20% of the annual fixed rentals payable under such
         lease;

                           (n)      Liens consisting of deposits of Property to
         secure bids made with respect to, or performance of, contracts (OTHER
         THAN contracts creating or evidencing an extension of credit to the
         depositor);

                           (o)      Liens consisting of any right of offset, or
         statutory bankers' lien, on bank deposit accounts maintained in the
         ordinary course of business so long as such bank deposit accounts are
         not established or maintained for the purpose of providing such right
         of offset or bankers' lien;

                           (p)      Liens consisting of deposits of Property to
         secure statutory obligations of a Borrower;

                           (q)      Liens consisting of deposits of Property to
         secure (or in lieu of) surety, appeal or customs bonds;

                                      -26-

<PAGE>

                           (r)      Liens created by or resulting from any
         litigation or legal proceeding in the ordinary course of business which
         is currently being contested in good faith by appropriate proceedings,
         PROVIDED that, adequate reserves have been set aside and no material
         Property is subject to a material impending risk of loss or forfeiture;

                           (s)      Liens created to secure the purchase price
         of assets acquired by such Person created to secure Indebtedness
         permitted by Section 6.10(d) hereof, which is incurred solely for the
         purpose of financing the acquisition of such assets and incurred at the
         time of acquisition, so long as each such Lien shall at all times be
         confined solely to the assets or assets so acquired (and proceeds
         thereof), and refinancings thereof so long as any such Lien remains
         solely on the asset or assets acquired and the amount of Indebtedness
         related thereto is not increased;

                           (t)      Liens in favor of any Lender or any
         Affiliate of any Lender to secure any obligations owed to such Lender
         in respect of any Interest Rate Protection Agreement; and

                           (u)      other non-consensual Liens incurred in the
         ordinary course of business but not in connection with the incurrence
         of any Indebtedness, which do not in the aggregate, when taken together
         with all other Liens, materially impair the fair market value or use of
         the Property for the purposes for which it is or may reasonably be
         expected to be held;

                  "PERMITTED RIGHT OF OTHERS" means a Right of Others consisting
         of (a) an interest (OTHER THAN a legal or equitable co-ownership
         interest, an option or right to acquire a legal or equitable
         co-ownership interest and any interest of a ground lessor under a
         ground lease), that does not materially impair the fair market value or
         use of Property for the purposes for which it is or may reasonably be
         expected to be held, (b) an option or right to acquire a Lien that
         would be a Permitted Encumbrance, (c) the subordination of a lease or
         sublease in favor of a financing entity and (d) a license, or similar
         right, of or to Intangible Assets granted in the ordinary course of
         business.

                  "PERSON" means any individual or entity, INCLUDING a trustee,
         corporation, limited liability company, general partnership, limited
         partnership, joint stock company, trust, estate, unincorporated
         organization, business association, firm, joint venture, Governmental
         Agency, or other entity.

                                      -27-

<PAGE>

                  "PLEDGE AGREEMENT" means the pledge agreement to be executed
         and delivered pursuant to ARTICLE 8 by the Borrowers, in the form of
         EXHIBIT E, either as originally executed or as it may from time to time
         be supplemented, modified, amended, extended or supplanted.

                  "PLEDGED COLLATERAL" means (a) the certificates evidencing
         100% of the shares of capital stock held by the Borrowers in all
         Domestic Subsidiaries and (b) the certificates evidencing 65% of the
         shares of capital stock held by the Borrowers in all Foreign
         Subsidiaries.

                  "POWEC ACQUISITION" means, collectively: (i) the Acquisition
         by the Parent of all of the issued and outstanding capital stock of
         Powec AS; and (ii) the Acquisition by the Parent of a
         telecommunications product line from Eldec Corp.

                  "PRICING CERTIFICATE" means a certificate in the form of
         EXHIBIT F, properly completed and signed by a Senior Officer of the
         Parent.

                  "PRICING PERIOD" means (a) initially, the period commencing on
         the Closing Date and ending on the fourth Banking Day following receipt
         by Administrative Agent of the financial statements required to be
         delivered pursuant to Section 7.1(a) and the Pricing Certificate
         required to be delivered pursuant to Section 7.1(b), and (b)
         thereafter, each subsequent period commencing on the fifth Banking Day
         following receipt by the Administrative Agent of the financial
         statements required to be delivered pursuant to Section 7.1(a) and the
         Pricing Certificate required to be delivered pursuant to Section 7.1(b)
         and ending on the fourth Banking Day following receipt by the
         Administrative Agent of such financial statements for the next
         subsequent Fiscal Quarter.

                  "PRIME RATE" means the rate of interest publicly announced
         from time to time by the Administrative Agent in San Francisco,
         California (or other headquarters city of the Administrative Agent), as
         its "reference rate." The "reference rate" is one of several base rates
         used by the Administrative Agent and serves as the basis upon which
         effective rates of interest are calculated for loans and other credits
         making reference thereto. The "reference rate" is not necessarily the
         lowest base interest rate used by the Administrative Agent. The
         "reference rate" is evidenced by the recording thereof after its
         announcement in such internal publication or publications as the
         Administrative Agent may designate. Any change in the Prime Rate
         announced by the Administrative

                                      -28-

<PAGE>

         Agent shall take effect at the opening of business on the day specified
         in the public announcement of such change.

                  "PROJECTIONS" means the projected financial information to be
         prepared by the Parent and to be contained in the Confidential Offering
         Memorandum furnished to the Lenders as part of the syndication process
         referred to in Section 5.14.

                  "PROPERTY" means any interest in any kind of property or
         asset, whether real, personal or mixed, or tangible or intangible.

                  "PRO RATA SHARE" means, with respect to each Lender, the
         percentage of the Commitment set forth opposite the name of that Lender
         on SCHEDULE 1.1, as such percentage may be increased or decreased
         pursuant to a Commitment Assignment and Acceptance executed in
         accordance with Section 11.8.

                  "QUARTERLY PAYMENT DATE" means each June 30, September 30,
         December 31 and March 31, commencing with June 30, 2000.

                  "REAL PROPERTY" means, as of any date of determination, all
         real property then or theretofore owned, leased or occupied by any of
         the Borrowers.

                  "REGULATION D" means Regulation D, as at any time amended, of
         the Board of Governors of the Federal Reserve System, or any other
         regulation in substance substituted therefor.

                  "REGULATION U" means Regulation U, as at any time amended, of
         the Board of Governors of the Federal Reserve System, or any other
         regulation in substance substituted therefor.

                  "REQUEST FOR LETTER OF CREDIT" means a written request for a
         Letter of Credit substantially in the form of EXHIBIT G, signed by a
         Responsible Official of the Parent, on behalf of the Borrowers, and
         properly completed to provide all information required to be included
         therein.

                  "REQUEST FOR LOAN" means a written request for a Loan
         substantially in the form of EXHIBIT H, signed by a Responsible
         Official of the Parent, on behalf of the Borrowers, and properly
         completed to provide all information required to be included therein.

                                      -29-

<PAGE>

                  "REQUIREMENT OF LAW" means, as to any Person, the articles or
         certificate of incorporation and by-laws or other organizational or
         governing documents of such Person, and any Law, or judgment, award,
         decree, writ or determination of a Governmental Agency, 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.

                  "REQUISITE LENDERS" means (a) as of any date of determination
         if the Commitments are then in effect, Lenders having in the aggregate
         51% or more of the Commitments then in effect and (b) as of any date of
         determination if the Commitments have then been suspended or terminated
         and there is then any Indebtedness evidenced by the Notes, Lenders
         holding Notes evidencing in the aggregate 51% or more of the aggregate
         Indebtedness then evidenced by the Notes, and, in any event, not less
         than two (2) Lenders (unless there shall then be but one Lender).

                  "RESET DATE" means the date on which any Loan denominated in
         an Approved Offshore Currency is continued for an additional Eurodollar
         Period.

                  "RESPONSIBLE OFFICIAL" means (a) any Senior Officer of the
         Parent, who shall be authorized by all of the Borrowers to act on their
         behalf, and (b) any other responsible official of the Parent so
         designated in a written notice thereof from a Senior Officer of the
         Parent to the Administrative Agent. The Lenders shall be entitled to
         conclusively rely upon any document or certificate that is signed or
         executed by a Responsible Official as having been authorized by all
         necessary corporate action on the part of the Borrowers.

                  "RIGHT OF OTHERS" means, as to any Property in which a Person
         has an interest, any legal or equitable right, title or other interest
         (other than a Lien) held by any other Person in that Property, and any
         option or right held by any other Person to acquire any such right,
         title or other interest in that Property, INCLUDING any option or right
         to acquire a Lien; PROVIDED, however, that (a) no covenant restricting
         the use or disposition of Property of such Person contained in any
         Contractual Obligation of such Person and (b) no provision contained in
         a contract creating a right of payment or performance in favor of a
         Person that conditions, limits, restricts, diminishes, transfers or
         terminates such right shall be deemed to constitute a Right of Others.

                  "SENIOR OFFICER" means (a) the chief executive officer, (b)
         the president, (c) any executive vice president, (d) the chief
         financial officer or (e) the treasurer, in each case of the Parent.

                                      -30-

<PAGE>

                  "SPECIAL EURODOLLAR CIRCUMSTANCE" means the application or
         adoption after the Closing Date of any Law or interpretation, or any
         change therein or thereof, or any change in the interpretation or
         administration thereof by any Governmental Agency, central bank or
         comparable authority charged with the interpretation or administration
         thereof, or compliance by any Lender or its Eurodollar Lending Office
         with any request or directive (whether or not having the force of Law)
         of any such Governmental Agency, central bank or comparable authority.

                  "STANDBY LETTER OF CREDIT" means each Letter of Credit issued
         by the Issuing Lender under the Commitment pursuant to Section 2.4 to
         support the payment or performance of an obligation by a Borrower.

                  "STOCKHOLDERS' EQUITY" means, as of any date of determination
         and with respect to any Person, the consolidated stockholders' equity
         of the Person as of that date determined in accordance with GAAP;
         PROVIDED that there shall be excluded from Stockholders' Equity any
         amount attributable to Disqualified Stock.

                  "SUBORDINATED OBLIGATIONS" means any Indebtedness of a
         Borrower that (a) does not have any scheduled principal payment,
         mandatory principal prepayment or sinking fund payment due prior to the
         date that is one year after the Maturity Date, (b) is not secured by
         any Lien on any Property of such Borrower or any of its Subsidiaries,
         (c) is not guarantied by any Subsidiary of such Borrower, (d) is
         subordinated by its terms in right of payment to the Obligations
         pursuant to provisions acceptable to the Requisite Lenders, (e) is
         subject to such financial and other covenants and events of defaults as
         may be acceptable to the Requisite Lenders and (f) is subject to
         customary interest blockage and delayed acceleration provisions as may
         be acceptable to the Requisite Lenders.

                  "SUBSIDIARY" means, as of any date of determination and with
         respect to any Person, any corporation, limited liability company or
         partnership (whether or not, in any case, characterized as such or as a
         "joint venture"), whether now existing or hereafter organized or
         acquired: (a) in the case of a corporation or limited liability
         company, of which a majority of the securities having ordinary voting
         power for the election of directors or other governing body (other than
         securities having such power only by reason of the happening of a
         contingency) are at the time beneficially owned by such Person and/or
         one or more Subsidiaries of such Person, or (b) in the case of a
         partnership, of which a

                                      -31-

<PAGE>

         majority of the partnership or other ownership interests are at the
         time beneficially owned by such Person and/or one or more of its
         Subsidiaries.

                  "SUBSIDIARY GUARANTORS" means all current and future Domestic
         Subsidiaries.

                  "SUBSIDIARY GUARANTY" means the continuing guaranty of the
         Obligations to be executed and delivered pursuant to ARTICLE 8 by the
         Subsidiary Guarantors, in the form of EXHIBIT I, either as originally
         executed or as it may from time to time be supplemented, modified,
         amended, extended or supplanted.

                  "SWING LINE" means the revolving line of credit established by
         the Swing Line Bank in favor of the Borrowers pursuant to Section 2.1A.

                  "SWING LINE COMMITMENT" means an amount equal to the lesser of
         (i) $5,000,000 or (ii) the then applicable Commitment MINUS the
         Aggregate Effective Amount of outstanding Letters of Credit MINUS the
         aggregate principal amount outstanding under the Notes.

                  "SWING LINE BANK" means Union Bank of California, N.A. or any
         successor swing line bank hereunder.

                  "SWING LINE LOAN" means an Advance which bears interest at a
         rate per annum equal to interest payable on an Alternate Base Rate Loan
         and made by the Swing Line Bank to the Borrowers under the Swing Line.

                  "SWING LINE NOTE" means the promissory note made by the
         Borrowers to the Swing Line Bank, substantially in the form of EXHIBIT
         J, either as originally executed or as the same may from time to time
         be supplemented, modified, amended, renewed, extended or supplanted.

                  "SWING LINE OUTSTANDINGS" means, as of any date of
         determination, the aggregate principal amount of Swing Line Loans then
         outstanding.

                  "TANGIBLE NET WORTH" means, as of the last day of any fiscal
         quarter, (a) Stockholders' Equity of the Parent and its Subsidiaries on
         such date MINUS (b) all Intangible Assets of the Borrowers and their
         Subsidiaries on such date.

                  "TO THE BEST KNOWLEDGE OF" means, when modifying a
         representation, warranty or other statement of any Person, that the
         fact or situation described therein is known by the Person (or, in the
         case of a Person other than a natural

                                      -32-

<PAGE>

         Person, known by a Responsible Official of that Person) making the
         representation, warranty or other statement, or with the exercise of
         reasonable due diligence under the circumstances (in accordance with
         the standard of what a reasonable Person in similar circumstances would
         have done) would have been known by the Person (or, in the case of a
         Person other than a natural Person, would have been known by a
         Responsible Official of that Person).

                  "TREATY" means the Treaty establishing the European Economic
         Community, being the Treaty of Rome of March 25, 1957 as amended by the
         single European Act of 1986 and the Maastricht Treaty, which was signed
         on February 7, 1992 and came into force on November 1, 1993, as
         amended, modified or supplemented from time to time.

                  "TYPE", when used with respect to any Loan or Advance, means
         the designation of whether such Loan or Advance is an Alternate Base
         Rate Loan or Advance, or a Eurodollar Rate Loan or Advance.

                  "WHOLLY-OWNED SUBSIDIARY" means a Subsidiary of a Borrower,
         100% of the capital stock or other equity interest of which is owned,
         directly or indirectly, by such Borrower, EXCEPT for director's
         qualifying shares required by applicable Laws.

                  1.2 USE OF DEFINED TERMS. Any defined term used in the plural
shall refer to all members of the relevant class, and any defined term used in
the singular shall refer to any one or more of the members of the relevant
class.

                  1.3 JOINDER OF POWEC. The Borrowers may add Powec as a
"Borrower" hereunder at any time with the consent of the Administrative Agent.
To become a "Borrower" hereunder, Powec shall be required to become a party to
this Agreement by entering into a joinder agreement substantially in the form of
EXHIBIT K.

                  1.4 ACCOUNTING TERMS. All accounting terms not specifically
defined in this Agreement shall be construed in conformity with, and all
financial data required to be submitted by this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, EXCEPT as otherwise
specifically prescribed herein. In the event that GAAP changes during the term
of this Agreement such that the covenants contained in Sections 6.12, 6.13,
6.14, 6.16, and 6.17 would then be calculated in a different manner or with
different components, (a) the Borrowers and the Lenders agree to amend this
Agreement in such respects as are necessary to conform those covenants as
criteria for evaluating the Borrowers' financial condition to substantially the
same criteria as were effective prior to such change in GAAP, and (b) the

                                      -33-

<PAGE>

Borrowers shall be deemed to be in compliance with the covenants contained in
the aforesaid Sections if and to the extent that the Borrowers would have been
in compliance therewith under GAAP as in effect immediately prior to such
change, but shall have the obligation to deliver each of the materials described
in ARTICLE 7 to the Administrative Agent and the Lenders, on the dates therein
specified, with financial data presented in a manner which conforms with GAAP as
in effect immediately prior to such change.

                  1.5 ROUNDING. Any financial ratios required to be maintained
by the Borrowers pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed in this
Agreement and rounding the result up or down to the nearest number (with a
round-up if there is no nearest number) to the number of places by which such
ratio is expressed in this Agreement.

                  1.6 EXHIBITS AND SCHEDULES. All Exhibits and Schedules to this
Agreement, either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by this reference. A
matter disclosed on any Schedule shall be deemed disclosed on all Schedules.

                  1.7 REFERENCES TO "BORROWER AND ITS SUBSIDIARIES". Any
reference herein to "a Borrower and its Subsidiaries" or the like shall refer
solely to such Borrower during such times, if any, as such Borrower shall have
no Subsidiaries.

                  1.8 MISCELLANEOUS TERMS. The term "or" is disjunctive; the
term "and" is conjunctive. The term "shall" is mandatory; the term "may" is
permissive. Masculine terms also apply to females; feminine terms also apply to
males. The term "including" is by way of example and not limitation.

                                       -34-
<PAGE>

                                   Article 2.

                           LOANS AND LETTERS OF CREDIT

                  2.1 LOANS-GENERAL.

                           (a)      Subject to the terms and conditions set
         forth in this Agreement, at any time and from time to time from the
         Closing Date through the Maturity Date, each Lender shall, pro rata
         according to that Lender's Pro Rata Share of the then applicable
         Commitment, make Advances to the Borrowers under the Commitment in
         Dollars or in Approved Offshore Currencies in such amounts as the
         Borrowers may request that do not cause either: (A) the SUM OF (i) the
         aggregate principal amount outstanding under the Notes, (ii) the
         aggregate Swing Line Outstandings (after giving effect to any
         concurrent payment thereof with the proceeds of such Advances) and
         (iii) the Aggregate Effective Amount of all outstanding Letters of
         Credit to exceed the Commitment; or (B) the Dollar Equivalent of the
         principal amount of all Loans and of the Aggregate Effective Amount of
         all Letters of Credit outstanding in Approved Offshore Currencies to
         exceed the Approved Offshore Currency Borrowing Limit. Subject to the
         limitations set forth herein, the Borrowers may borrow, repay and
         reborrow under the Commitment without premium or penalty.

                           (b)      Subject to the next sentence, each Loan
         shall be made pursuant to a Request for Loan which shall specify the
         requested: (i) date of such Loan; (ii) type of Loan; (iii) amount of
         such Loan, (iv) currency in which such Loan is to be made (i.e.,
         whether in Dollars or in an Approved Offshore Currency), and if such
         Loan is to be made in an Approved Offshore Currency, such Request for
         Loan shall specify which particular Approved Offshore Currency is
         requested; and (v) in the case of a Eurodollar Rate Loan, the
         Eurodollar Period for such Loan. Unless the Administrative Agent has
         notified, in its sole and absolute discretion, the Borrowers to the
         contrary, a Loan may be requested by telephone by a Responsible
         Official of the Parent, in which case the Parent shall confirm such
         request by promptly delivering a Request for Loan (conforming to the
         preceding sentence) in person or by telecopier to the Administrative
         Agent. The Administrative Agent shall incur no liability whatsoever
         hereunder in acting upon any telephonic request for Loan purportedly
         made by a Responsible Official of the Parent, and the Borrowers hereby
         agree to indemnify the Administrative Agent from any loss, cost,
         expense or liability as a result of so acting.

                                      -35-

<PAGE>

                           (c)      Promptly following receipt of a Request for
         Loan, the Administrative Agent shall notify each Lender by telephone or
         telecopier (and if by telephone, promptly confirmed by telecopier) of
         the date and type of the Loan, the Dollar Equivalent of such Loan (if
         such Request for Loan designated an Approved Offshore Currency) the
         applicable Eurodollar Period, and that Lender's Pro Rata Share of the
         Loan. Not later than 12:00 p.m., California time, on the date specified
         for any Loan (which must be a Banking Day), each Lender shall make its
         Pro Rata Share of the Loan in immediately available funds available to
         the Administrative Agent at the Administrative Agent's Office, EXCEPT
         that if such Loan is denominated in an Approved Offshore Currency, each
         Lender shall make available its funds at such office as the
         Administrative Agent has previously specified in a notice to each
         Lender, in such funds as are then customary for the settlement of
         international transactions in the applicable Approved Offshore Currency
         and no later than such local time as is necessary for such funds to be
         received and transferred to the appropriate Borrower for same day value
         on the date of such Loan. Upon satisfaction or waiver of the applicable
         conditions set forth in ARTICLE 8, all Advances shall be credited on
         that date in immediately available funds to the Designated Deposit
         Account.

                           (d)      Unless the Requisite Lenders otherwise
         consent, each Alternate Base Rate Loan shall be not less than $500,000
         and in an integral multiple of $100,000 or the unused amount of the
         Commitment and Eurodollar Rate Loan shall be not less than $1,000,000
         and in an integral multiple of $500,000 or the unused amount of the
         Commitment (or the Dollar Equivalent of each such amount on the date of
         such Eurodollar Rate Loan).

                           (e)      The Advances made by each Lender under the
         Commitment shall be evidenced by that Lender's Note.

                           (f)      A Request for Loan shall be irrevocable upon
         the Administrative Agent's first notification thereof.

                           (g)      If no Request for Loan (or telephonic
         request for Loan referred to in the second sentence of Section 2.1(c),
         if applicable) has been made within the requisite notice periods set
         forth in Section 2.2 or 2.3 prior to the end of the Eurodollar Period
         for any outstanding Eurodollar Rate Loan, then on the last day of such
         Eurodollar Period, such Eurodollar Rate Loan shall be automatically
         converted into an Alternate Base Rate Loan in the same amount, unless
         such Eurodollar Rate Loan is a Loan denominated in an Approved Offshore
         Currency, in which case such Eurodollar Rate Loan shall be repaid in
         full.

                                      -36-
<PAGE>

                  2.1A     SWING LINE

                           (a)      The Swing Line Bank shall from time to time
         prior to the Maturity Date make Swing Line Loans to the Borrowers in
         such amounts as the Borrowers may request; PROVIDED, HOWEVER, THAT (i)
         after giving effect to such Swing Line Loan, the Swing Line
         Outstandings shall not exceed the Swing Line Commitment, and (ii)
         without the consent of the Requisite Lenders and the Swing Line Bank,
         no Swing Line Loan shall be made during the continuation of an Event of
         Default. Unless notified to the contrary by the Swing Line Bank,
         Advances under the Swing Line may be made in amounts of at least
         $100,000 and integral multiples of $25,000 in excess thereof. Each
         request by the Borrowers for a Swing Line Loan shall be made pursuant
         to a Request for Loan (or telephonic request for Loan promptly
         confirmed by telecopier) received by the Administrative Agent, at the
         Administrative Agent's office, not later than 9:00 a.m., California
         time, on the date (which must be a Banking Day) such Swing Line Loan is
         to be made. Each repayment of a Swing Line Loan shall be in an amount
         which is an integral multiple of $25,000 or the remaining outstanding
         principal amount of Swing Line Loans.

                           (b)      The Swing Line Loans shall bear interest at
         a fluctuating rate per annum equal to the rate of interest payable on
         Alternate Base Rate Loans payable on such dates, not more frequently
         than monthly, as may be specified by the Swing Line Bank and in any
         event on the Maturity Date. Interest on Swing Line Loans shall be
         payable upon demand of the Swing Line Bank, and the Swing Line Bank
         shall be responsible for invoicing the Borrowers for such interest. The
         interest payable on Swing Line Loans is solely for the account of the
         Swing Line Bank.

                           (c)      The principal amount of the Swing Line Loans
         shall be payable not later than seven (7) days following demand made by
         the Swing Line Bank and in any event on the Maturity Date.

                           (d)      Upon the making of each Swing Line Loan by
         the Swing Line Bank, each Lender shall be deemed to have purchased from
         the Swing Line Bank a participation therein in an amount equal to that
         Lender's Pro Rata Share of the then applicable Commitment TIMES the
         amount of the Swing Line Loan. Upon demand by the Administrative Agent,
         including any such demand made following the occurrence of an Event of
         Default, each Lender promptly shall provide to the Swing Line Bank such
         Lender's participation amount of any such Swing Line Loan as computed
         in accordance with the preceding sentence.

                                      -37-
<PAGE>

         The obligation of each Lender so to provide its purchase price to the
         Swing Line Bank shall be absolute and unconditional and shall not be
         affected by the occurrence of an Event of Default or any other
         occurrence or event.

                           (e)      In the event that the Swing Line
         Outstandings are in excess of $2,000,000 on three consecutive Banking
         Days, then on the next Banking Day (unless the Borrowers have made
         other arrangements acceptable to the Swing Line Bank to reduce the
         Swing Line Outstandings below such amount), the Borrowers shall request
         a Loan in a minimum amount necessary to reduce the Swing Line
         Outstandings below such amount. The Administrative Agent shall request
         that the Lenders provide such amount to the Swing Line Bank (which the
         Swing Line Bank shall then apply to the Swing Line Outstandings) and
         credit any balance of such Loan in immediately available funds to the
         Designated Deposit Account. If the Borrowers fail to request a Loan
         within the requisite time therefor pursuant to Section 2.2, the
         Administrative Agent may, but is not required to, without notice to or
         the consent of the Borrowers, cause a Loan to be made by the Lenders in
         the minimum amount necessary to reduce the Swing Line Outstandings
         below such amount and, for this purpose, the conditions precedent set
         forth in Section 8.2 shall not apply. The proceeds of such Loan shall
         be paid to the Swing Line Bank for application to the Swing Line
         Outstandings.

                  2.2 ALTERNATE BASE RATE LOANS. Each request by the Borrowers
for an Alternate Base Rate Loan shall be made pursuant to a Request for Loan (or
telephonic or other request for loan referred to in the second sentence of
Section 2.1(c), if appli cable) received by the Administrative Agent, at the
Administrative Agent's Office, not later than 10:00 a.m. California time, on the
date (which must be a Banking Day) immediately prior to the date of the
requested Alternate Base Rate Loan. All Alternate Base Rate Loans shall be
denominated in Dollars. All Loans other than Loans denominated in an Approved
Offshore Currency shall constitute Alternate Base Rate Loans unless properly
designated as a Eurodollar Rate Loan pursuant to Section 2.3.

                  2.3  EURODOLLAR RATE LOANS.

                           (a)      Each request by the Borrowers for a
         Eurodollar Rate Loan shall be made pursuant to a Request for Loan (or
         telephonic or other request for Loan referred to in the second sentence
         of Section 2.1(c), if applicable) received by the Administrative Agent,
         at the Administrative Agent's Office, not later than 9:00 a.m.,
         California time, at least four (4) Eurodollar Banking Days (or at least
         five (5) Eurodollar Banking Days, if such Eurodollar Rate Loan is to be
         made in

                                      -38-
<PAGE>

         an Approved Offshore Currency) before the first day of the applicable
         Euro dollar Period.

                           (b)      On the date which is two (2) Eurodollar
         Banking Days before the first day of the applicable Eurodollar Period,
         the Administrative Agent shall confirm its determination of the
         applicable Eurodollar Rate (which determination shall be conclusive in
         the absence of manifest error) and promptly shall give notice of the
         same to the Borrowers and the Lenders by telephone or telecopier (and
         if by telephone, promptly confirmed by telecopier).

                           (c)      Unless the Administrative Agent and the
         Requisite Lenders otherwise consent, no more than ten (10) Eurodollar
         Rate Loans shall be out standing at any one time.

                           (d)      No Eurodollar Rate Loan may be requested
         during the continuation of a Default or Event of Default.

                           (e)      Nothing contained herein shall require any
         Lender to fund any Eurodollar Rate Advance in the Designated Eurodollar
         Market.

                  2.4  LETTERS OF CREDIT.

                           (a)      The Existing Letters of Credit described in
         SCHEDULE 2.4 shall be Letters of Credit for all purposes under this
         Agreement. Subject to the terms and conditions hereof, at any time and
         from time to time from the Closing Date through the Maturity Date, the
         Issuing Lender shall issue such Letters of Credit under the Commitment
         as Borrowers may request by a Request for Letter of Credit; PROVIDED
         that (i) giving effect to all such Letters of Credit, the SUM of (A)
         the aggregate principal amount outstanding under the Notes PLUS (B) the
         Swing Line Outstandings PLUS (C) the Aggregate Effective Amount of all
         outstanding Letters of Credit, does not exceed the then applicable
         Commitment, and (ii) the Aggregate Effective Amount under all
         outstanding Letters of Credit does not exceed $6,000,000. Each Letter
         of Credit shall be in a form acceptable to the Issuing Lender. Unless
         all the Lenders otherwise consent in a writing delivered to the
         Administrative Agent, the term of any Letter of Credit shall not exceed
         one (1) year or extend beyond the Maturity Date.

                           (b)      Each Request for Letter of Credit shall be
         submitted to the Issuing Lender, with a copy to the Administrative
         Agent, at least five (5) Banking Days prior to the date upon which the
         related Letter of Credit is proposed to be issued. The Administrative
         Agent shall promptly notify the

                                      -39-
<PAGE>

         Issuing Lender whether such Request for Letter of Credit, and the
         issuance of a Letter of Credit pursuant thereto, conforms to the
         requirements of this Agreement. Upon issuance of a Letter of Credit,
         the Issuing Lender shall promptly notify the Administrative Agent, and
         the Administrative Agent shall promptly notify the Lenders, of the
         amount and terms thereof.

                           (c)      Upon the issuance of a Letter of Credit,
         each Lender shall be deemed to have purchased a pro rata participation
         in such Letter of Credit from the Issuing Lender in an amount equal to
         that Lender's Pro Rata Share. Without limiting the scope and nature of
         each Lender's participation in any Letter of Credit, to the extent that
         the Issuing Lender has not been reimbursed by the Borrowers for any
         payment required to be made by the Issuing Lender under any Letter of
         Credit, each Lender shall, pro rata according to its Pro Rata Share,
         reimburse the Issuing Lender through the Administrative Agent promptly
         upon demand for the amount of such payment. The obligation of each
         Lender to so reimburse the Issuing Lender shall be absolute and
         unconditional and shall not be affected by the occurrence of an Event
         of Default or any other occurrence or event. Any such reimbursement
         shall not relieve or otherwise impair the obligation of the Borrowers
         to reimburse the Issuing Lender for the amount of any payment made by
         the Issuing Lender under any Letter of Credit together with interest as
         hereinafter provided.

                           (d)      The Borrowers agree to pay to the Issuing
         Lender through the Administrative Agent an amount equal to any payment
         made by the Issuing Lender with respect to each Letter of Credit within
         one (1) Banking Day after demand made by the Issuing Lender therefor,
         together with interest on such amount from the date of any payment made
         by the Issuing Lender (with the understanding that the Issuing Lender
         promptly shall notify the Borrowers of such payment date) at the rate
         applicable to Alternate Base Rate Loans for two (2) Banking Days and
         thereafter at the Default Rate. The principal amount of any such
         payment shall be used to reimburse the Issuing Lender for the payment
         made by it under the Letter of Credit and, to the extent that the
         Lenders have not reimbursed the Issuing Lender pursuant to Section
         2.4(c), the interest amount of any such payment shall be for the
         account of the Issuing Lender. Each Lender that has reimbursed the
         Issuing Lender pursuant to Section 2.4(c) for its Pro Rata Share of any
         payment made by the Issuing Lender under a Letter of Credit shall
         thereupon acquire a pro rata participation, to the extent of such
         reimbursement, in the claim of the Issuing Lender against the Borrowers
         for reimbursement of principal and interest under this Section 2.4(d)
         and shall share, in accordance with that pro rata participation, in any
         principal payment made by the Borrowers with respect to such claim and
         in any interest payment

                                      -40-
<PAGE>

         made by the Borrowers (but only with respect to periods subsequent to
         the date such Lender reimbursed the Issuing Lender) with respect to
         such claim.

                           (e)      The Borrowers may, pursuant to a Request for
         Loan, request that Advances be made pursuant to Section 2.1(a) to
         provide funds for the payment required by Section 2.4(d) and, for this
         purpose, the conditions precedent set forth in ARTICLE 8 shall not
         apply. The proceeds of such Advances shall be paid directly to the
         Issuing Lender to reimburse it for the payment made by it under the
         Letter of Credit.

                           (f)      If the Borrowers fail to make the payment
         required by Section 2.4(d) within the time period therein set forth, in
         lieu of the reimbursement to the Issuing Lender under Section 2.4(c)
         the Issuing Lender may (but is not required to), without notice to or
         the consent of the Borrowers, instruct the Administrative Agent to
         cause Advances to be made by the Lenders under the Commitment in an
         aggregate amount equal to the amount paid by the Issuing Lender with
         respect to that Letter of Credit and, for this purpose, the conditions
         precedent set forth in ARTICLE 8 shall not apply. The proceeds of such
         Advances shall be paid directly to the Issuing Lender to reimburse it
         for the payment made by it under the Letter of Credit.

                           (g)      The issuance of any supplement,
         modification, amendment, renewal, or extension to or of any Letter of
         Credit shall be treated in all respects the same as the issuance of a
         new Letter of Credit.

                           (h)      The obligation of the Borrowers to pay to
         the Issuing Lender the amount of any payment made by the Issuing Lender
         under any Letter of Credit shall be absolute, unconditional, and
         irrevocable, subject only to performance by the Issuing Lender of its
         obligations to the Borrowers under Uniform Commercial Code Section
         5109. Without limiting the foregoing, the Borrowers' obligations shall
         not be affected by any of the following circumstances:

                                    (i)      any lack of validity or
                  enforceability prior to its stated expiration date of the
                  Letter of Credit, this Agreement, or any other agreement or
                  instrument relating thereto;

                                    (ii)     any amendment or waiver of or any
                  consent to departure from the Letter of Credit, this
                  Agreement, or any other agreement or instrument relating
                  thereto, with the consent of the Borrowers;

                                      -41-
<PAGE>

                                    (iii)    the existence of any claim, setoff,
                  defense, or other rights which the Borrowers, or any of them,
                  may have at any time against the Issuing Lender, the
                  Administrative Agent or any Lender, any beneficiary of the
                  Letter of Credit (or any persons or entities for whom any such
                  beneficiary may be acting) or any other Person, whether in
                  connection with the Letter of Credit, this Agreement, or any
                  other agreement or instrument relating thereto, or any
                  unrelated transactions;

                                    (iv)     any demand, statement, or any other
                  document presented under the Letter of Credit proving to be
                  forged, fraudulent, invalid, or insufficient in any respect or
                  any statement therein being untrue or inaccurate in any
                  respect whatsoever so long as any such document appeared
                  substantially to comply with the terms of the Letter of
                  Credit;

                                    (v)      payment by the Issuing Lender in
                  good faith under the Letter of Credit against presentation of
                  a draft or any accompanying document which does not strictly
                  comply with the terms of the Letter of Credit;

                                    (vi)     the existence, character, quality,
                  quantity, condition, packing, value or delivery of any
                  Property purported to be represented by documents presented in
                  connection with any Letter of Credit or any difference between
                  any such Property and the character, quality, quantity,
                  condition, or value of such Property as described in such
                  documents;

                                    (vii)    the time, place, manner, order or
                  contents of shipments or deliveries of Property as described
                  in documents presented in connection with any Letter of Credit
                  or the existence, nature and extent of any insurance relative
                  thereto;

                                    (viii)   the solvency or financial
                  responsibility of any party issuing any documents in
                  connection with a Letter of Credit;

                                    (ix)     any failure or delay in notice of
                  shipments or arrival of any Property;

                                      -42-
<PAGE>

                                    (x)      any error in the transmission of
                  any message relating to a Letter of Credit not caused by the
                  Issuing Lender, or any delay or interruption in any such
                  message;

                                    (xi)     any error, neglect or default of
                  any correspondent of the Issuing Lender in connection with a
                  Letter of Credit;

                                    (xii)    any consequence arising from acts
                  of God, war, insurrection, civil unrest, disturbances, labor
                  disputes, emergency conditions or other causes beyond the
                  control of the Issuing Lender;

                                    (xiii)   so long as the Issuing Lender in
                  good faith determines that the contract or document appears
                  substantially to comply with the terms of the Letter of
                  Credit, the form, accuracy, genuineness or legal effect of any
                  contract or document referred to in any document submitted to
                  the Issuing Lender in connection with a Letter of Credit; and

                                    (xiv)    where the Issuing Lender has acted
                  in good faith and observed general banking usage, any other
                  circumstances whatsoever;

         provided in each case in this Section 2.4(h) that payment by the
         Issuing Lender under the applicable Letter of Credit shall not have
         constituted gross negligence or wilful misconduct.

                           (i)      The Issuing Lender shall be entitled to the
         protection accorded to the Administrative Agent pursuant to Section
         10.6, with all necessary changes.

                           (j)      The Uniform Customs and Practice for
         Documentary Credits, as published in its most current version by the
         International Chamber of Commerce, shall be deemed a part of this
         Section and shall apply to all Letters of Credit to the extent not
         inconsistent with applicable Law.

                  2.5 VOLUNTARY REDUCTION OF REVOLVING COMMITMENT. The Borrowers
shall have the right, at any time and from time to time, without penalty or
charge, upon at least five (5) Banking Days' prior written notice by a
Responsible Official of the Parent to the Administrative Agent, voluntarily to
reduce, permanently and irrevocably, in aggregate principal amounts in an
integral multiple of $500,000 but not

                                      -43-
<PAGE>

less than $5,000,000, or to terminate, all or a portion of the then undisbursed
portion of the Commitment. The Administrative Agent shall promptly notify the
Lenders of any reduction or termination of the Commitment under this Section.

                  2.6 ADMINISTRATIVE AGENT'S RIGHT TO ASSUME FUNDS AVAILABLE FOR
ADVANCES. Unless the Administrative Agent shall have been notified by any Lender
no later than 10:00 a.m. on the Banking Day of the proposed funding by the
Administrative Agent of any Loan that such Lender does not intend to make
available to the Administrative Agent such Lender's portion of the total amount
of such Loan, the Administrative Agent may assume that such Lender has made such
amount avail able to the Administrative Agent on the date of the Loan and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrowers a corresponding amount. If the Administrative Agent has made funds
available to the Borrowers based on such assumption and such corresponding
amount is not in fact made available to the Administrative Agent by such Lender,
the Administrative Agent shall be entitled to recover such corresponding amount
on demand from such Lender. If such Lender does not pay such corresponding
amount forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent promptly shall notify the Borrowers and the Borrowers shall
pay such corresponding amount to the Administrative Agent. The Administrative
Agent also shall be entitled to recover from such Lender interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrowers to the
date such corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to either (i) the daily Federal Funds Rate, if such
corresponding amount was made available by the Administrative Agent in Dollars,
or (ii) the Administrative Agent's cost of funds for the Applicable Currency
computed on the same basis as regular interest on Loans made hereunder in such
Applicable Currency, if such corresponding amount was made available by the
Administrative Agent in an Approved Offshore Currency, as applicable. Nothing
herein shall be deemed to relieve any Lender from its obligation to fulfill its
share of the Commitments or to prejudice any rights which the Administrative
Agent or the Borrowers may have against any Lender as a result of any default by
such Lender hereunder.

                  2.7 COLLATERAL. The Obligations shall be secured by a first
priority (SUBJECT TO Liens permitted by Section 6.9) perfected Lien on the
Collateral pursuant to the Pledge Agreement.

                                   -44-
<PAGE>

                                   Article 3.

                                PAYMENTS AND FEES

                  3.1 PRINCIPAL AND INTEREST.

                           (a)      Interest shall be payable on the outstanding
         daily unpaid principal amount of each Advance from the date thereof
         until payment in full is made and shall accrue and be payable at the
         rates set forth or provided for herein before and after Default, before
         and after maturity, before and after judgment, and before and after the
         commencement of any proceeding under any Debtor Relief Law, with
         interest on overdue interest at the Default Rate to the fullest extent
         permitted by applicable Laws.

                           (b)      Interest accrued on each Alternate Base Rate
         Loan shall be due and payable on each Quarterly Payment Date. EXCEPT as
         otherwise provided in Sections 3.1(d) and 3.8, the unpaid principal
         amount of any Alternate Base Rate Loan shall bear interest at a
         fluctuating rate per annum equal to the Alternate Base Rate PLUS the
         Applicable Base Rate Margin. Each change in the interest rate under
         this Section 3.1(b) due to a change in the Alternate Base Rate shall
         take effect simultaneously with the corresponding change in the
         Alternate Base Rate.

                           (c)      Interest accrued on each Eurodollar Rate
         Loan which is for a term of three months or less shall be due and
         payable on the last day of the related Eurodollar Period. Interest
         accrued on each other Eurodollar Rate Loan shall be due and payable on
         the date which is three months after the date such Eurodollar Rate Loan
         was made (and, in the event that all of the Lenders have approved a
         Eurodollar Period of longer than six months, every three months
         thereafter through the last day of the Eurodollar Period) and on the
         last day of the related Eurodollar Period. EXCEPT as otherwise provided
         in Sections 3.1(d) and 3.8, the unpaid principal amount of any
         Eurodollar Rate Loan shall bear interest at a rate per annum equal to
         the Eurodollar Rate or the Approved Offshore Currency Rate for that
         Eurodollar Rate Loan, as applicable, PLUS the Applicable Eurodollar
         Rate Margin.

                           (d)      During the existence of an Event of Default,
         the Loans shall bear interest at a rate per annum equal to the SUM OF
         (i) the interest rate specified in Sections 3.1(b) or 3.1(c), whichever
         is applicable, PLUS (ii) two (2) percentage points.

                                      -45-
<PAGE>

                           (e)      If not sooner paid, the principal
         Indebtedness evidenced by the Notes shall be payable as follows:

                                    (i)      the amount, if any, by which the
                  SUM OF (A) the principal Indebtedness evidenced by the Notes
                  PLUS (B) the Swing Line Outstandings PLUS (C) the Aggregate
                  Effective Amount of all outstanding Letters of Credit at any
                  time exceeds the then applicable Commitment shall be payable
                  immediately;

                                    (ii)     the amount, if any, by which the
                  Dollar Equivalent of the principal amount of all Loans and of
                  the Aggregate Effective Amount of all Letters of Credit
                  outstanding in Approved Offshore Currencies exceed the
                  Approved Offshore Currency Borrowing Limit shall be payable
                  immediately;

                                    (iii)    the amount, if any, by which the
                  Dollar Equivalent of the principal amount of all Loans and of
                  the Aggregate Effective Amount of all Letters of Credit
                  outstanding on any Reset Date exceeds the then applicable
                  Commitment as a result of a change in Dollar Equivalents shall
                  be payable with two Banking Days after the Administrative
                  Agent notifies the Borrower of such excess; and

                                    (iv)     the principal Indebtedness
                  evidenced by the Notes shall in any event be payable on the
                  Maturity Date.

                           (f)      The principal Indebtedness evidenced by the
         Notes shall be prepaid on or before the third Banking Day following the
         receipt by Borrower or any of its Subsidiaries of (i) Net Cash Sales
         Proceeds from Dispositions, by an amount equal to 100% of such Net Cash
         Sales Proceeds, (ii) Net Cash Issuance Proceeds from the issuance of
         debt securities of any Borrower or of any Subsidiary of a Borrower
         (other than debt permitted by clauses (a) through (e) or (g) and (h) of
         Section 6.10) , by an amount equal to 100% of such Net Cash Issuance
         Proceeds, and (iii) Net Cash Issuance Proceeds from the issuance of
         equity securities of any Borrower or of any Subsidiary of a Borrower
         (EXCEPT (i) an issuance of equity securities to a Borrower or to a
         Wholly-Owned Subsidiary or to employees or former employees, directors
         and officers of a Borrower pursuant to an exercise of stock options
         with respect to equity in such Borrower and (ii) an issuance of equity
         securities in connection with Permitted Acquisition), by an amount
         equal to 100% of such Net Cash Issuance Proceeds.

                                      -46-
<PAGE>

                           (g)      The principal Indebtedness evidenced by the
         Notes may, at any time and from time to time, voluntarily be paid or
         prepaid in whole or in part without premium or penalty, EXCEPT that
         with respect to any voluntary prepayment under this Subsection, (i) any
         partial prepayment of a Revolving Loan shall be not less than $100,000
         and shall be in an integral multiple of $50,000, (ii) the
         Administrative Agent shall have received written notice of any
         prepayment by 9:00 a.m. California time on the date that is two (2)
         Banking Days before the date of prepayment (which must be a Banking
         Day) in the case of an Alternate Base Rate Loan, and, in the case of a
         Eurodollar Rate Loan, three (3) Banking Days before the date of
         prepayment, which notice shall identify the date and amount of the
         prepayment and the Loan(s) being prepaid, (iii) each prepayment of
         principal on any Eurodollar Rate Loan shall be accompanied by payment
         of interest accrued to the date of payment on the amount of principal
         paid, and (iv) any payment or prepayment of all or any part of any
         Eurodollar Rate Loan on a day other than the last day of the applicable
         Eurodollar Period shall be subject to Section 3.6(e).

                  3.2 ARRANGER AND AGENCY FEES. On the Closing Date and on each
other date upon which a fee is payable, the Borrowers shall pay to the Arranger
and the Administrative Agent such fees as heretofore agreed upon by letter
agreement between the Borrowers and the Arranger. The fees paid to the Arranger
and the Administrative Agent are solely for their own account and are
nonrefundable.

                  3.3 COMMITMENT FEE. From the Closing Date through the Maturity
Date, the Borrowers shall pay to the Administrative Agent, for the ratable
accounts of the Lenders pro rata according to their Pro Rata Share of the
Commitment, a commit ment fee equal to the Applicable Commitment Fee Rate per
annum TIMES the SUM of (a) the average daily Available Amount PLUS (b) the
average daily Aggregate Effective Amount of all Letters of Credit. The
commitment fee shall be payable quarterly in arrears as of each Quarterly
Payment Date within ten (10) days after receipt by the Borrowers of an invoice
therefor from the Administrative Agent.

                  3.4 LETTER OF CREDIT FEES. With respect to each Letter of
Credit, the Borrowers shall pay the following fees:

                           (a)      concurrently with the issuance of each
         Standby Letter of Credit, a letter of credit issuance fee to the
         Issuing Lender for the sole account of the Issuing Lender, in an amount
         set forth in the letter agreement between the Borrowers and the Issuing
         Lender;

                                      -47-
<PAGE>

                           (b)      quarterly, in arrears as of each Quarterly
         Payment Date, to the Administrative Agent for the ratable accounts of
         the Lenders pro rata according to their Pro Rata Share of the
         Commitment, a standby letter of credit fee in an amount equal to the
         then Applicable Eurodollar Margin per annum TIMES the average daily
         amount available for drawing under all outstanding Standby Letters of
         Credit; and

                           (c)      concurrently with each issuance,
         negotiation, drawing or amendment of each Commercial Letter of Credit,
         to the Issuing Lender for the sole account of the Issuing Lender,
         issuance, negotiation, drawing and amendment fees in the amounts set
         forth from time to time as the Issuing Lender's published scheduled
         fees for such services.

         Each of the fees payable with respect to Letters of Credit under this
         Section is earned when due and is nonrefundable.

                  3.5 INCREASED COMMITMENT COSTS. If any Lender shall determine
in good faith that the introduction after the Closing Date of any applicable
law, rule, regulation or guideline regarding capital adequacy, or any change
therein or any change in the interpretation or administration thereof by any
central bank or other Governmental Agency charged with the interpretation or
administration thereof, or compliance by such Lender (or its Eurodollar Lending
Office) or any corporation controlling such Lender, with any request, guideline
or directive regarding capital adequacy (whether or not having the force of Law)
of any such central bank or other authority not imposed as a result of such
Lender's or such corporation's failure to comply with any other Laws, affects or
would affect the amount of capital required or expected to be main tained by
such Lender or any corporation controlling such Lender and such Lender (taking
into consideration such Lender's or such corporation's policies with respect to
capital adequacy and such Lender's desired return on capital) determines in good
faith that the amount of such capital is increased, or the rate of return on
capital is reduced, as a consequence of its obligations under this Agreement,
then, within ten (10) Banking Days after demand of such Lender, the Borrowers
shall pay to such Lender, from time to time as specified in good faith by such
Lender, additional amounts sufficient to compensate such Lender in light of such
circumstances, to the extent reasonably allocable to such obligations under this
Agreement, PROVIDED that the Borrowers shall not be obligated to pay any such
amount which arose prior to the date which is ninety (90) days preceding the
date of such demand or is attributable to periods prior to the date which is
ninety (90) days preceding the date of such demand. Each Lender's determination
of such amounts shall be conclusive in the absence of manifest error. If
Borrowers become obligated to pay additional amounts described in this SECTION
3.5 or under SECTION 3.6 to any Lender, the Borrowers may designate a

                                      -48-
<PAGE>

financial institution reasonably acceptable to the Administrative Agent to
replace such Lender by purchasing for cash and receiving an assignment of such
Lender's Pro Rata Share of the Commitment and the rights of such Lender under
the Loan Documents without recourse to or warranty by, or expenses to, such
Lender, for a purchase price equal to the outstanding amounts owing to such
Lender (including such additional amounts owing to such Lender pursuant to this
SECTION 3.5 or SECTION 3.6). Upon execution of an Assignment Agreement, such
other financial institution shall be deemed to be a "Lender" for all purposes of
this Agreement as set forth in SECTION 11.8 hereof.

                  3.6  EURODOLLAR COSTS AND RELATED MATTERS.

                           (a)      In the event that any Governmental Agency
         imposes on any Lender any reserve or comparable requirement (INCLUDING
         any emergency, supplemental or other reserve) with respect to the
         Eurodollar Obligations of that Lender, the Borrowers shall pay that
         Lender within ten (10) Banking Days after demand all amounts necessary
         to compensate such Lender (determined as though such Lender's
         Eurodollar Lending Office had funded 100% of its Eurodollar Rate
         Advance in the Designated Eurodollar Market) in respect of the
         imposition of such reserve requirements (PROVIDED, that the Borrowers
         shall not be obligated to pay any such amount which arose prior to the
         date which is ninety (90) days preceding the date of such demand or is
         attributable to periods prior to the date which is ninety (90) days
         preceding the date of such demand). The Lender's determination of such
         amount shall be conclusive in the absence of manifest error.

                           (b)      If, after the date hereof, the existence or
         occurrence of any Special Eurodollar Circumstance:

                                    (1)      shall subject any Lender or its
                  Eurodollar Lending Office to any tax, duty or other charge or
                  cost with respect to any Eurodollar Rate Advance, any of its
                  Notes evidencing Eurodollar Rate Loans or its obligation to
                  make Eurodollar Rate Advances, or shall change the basis of
                  taxation of payments to any Lender attributable to the
                  principal of or interest on any Eurodollar Rate Advance or any
                  other amounts due under this Agreement in respect of any
                  Eurodollar Rate Advance, any of its Notes evidencing
                  Eurodollar Rate Loans or its obligation to make Eurodollar
                  Rate Advances, EXCLUDING (i) taxes imposed on or measured in
                  whole or in part by its overall net income by (A) any
                  jurisdiction (or political subdivision thereof) in which it is
                  orga nized or maintains its principal office or Eurodollar
                  Lending Office or

                                      -49-
<PAGE>

                  (B) any jurisdiction (or political subdivision thereof) in
                  which it is "doing business" and (ii) any withholding taxes or
                  other taxes based on gross income imposed by the United States
                  of America for any period with respect to which it has failed
                  to provide Borrower with the appropriate form or forms
                  required by Section 11.21, to the extent such forms are then
                  required by applicable Laws;

                                    (2)      shall impose, modify or deem
                  applicable any reserve not applicable or deemed applicable on
                  the date hereof (INCLUDING any reserve imposed by the Board of
                  Governors of the Federal Reserve System, special deposit,
                  capital or similar requirements against assets of, deposits
                  with or for the account of, or credit extended by, any Lender
                  or its Eurodollar Lending Office); or

                                    (3)      shall impose on any Lender or its
                  Eurodollar Lending Office or the Designated Eurodollar Market
                  any other condition affecting any Eurodollar Rate Advance, any
                  of its Notes evidencing Eurodollar Rate Loans, its obligation
                  to make Eurodollar Rate Advances or this Agreement, or shall
                  otherwise affect any of the same;

         and the result of any of the foregoing, as determined in good faith by
         such Lender, increases the cost to such Lender or its Eurodollar
         Lending Office of making or maintaining any Eurodollar Rate Advance or
         in respect of any Eurodollar Rate Advance, any of its Notes evidencing
         Eurodollar Rate Loans or its obligation to make Eurodollar Rate
         Advances or reduces the amount of any sum received or receivable by
         such Lender or its Eurodollar Lending Office with respect to any
         Eurodollar Rate Advance, any of its Notes evidencing Eurodollar Rate
         Loans or its obligation to make Eurodollar Rate Advances (assuming such
         Lender's Eurodollar Lending Office had funded 100% of its Eurodollar
         Rate Advance in the Designated Eurodollar Market), then, within five
         (5) Banking Days after demand by such Lender (with a copy to the
         Administrative Agent), the Borrowers shall pay to such Lender such
         additional amount or amounts as will compensate such Lender for such
         increased cost or reduction (determined as though such Lender's
         Eurodollar Lending Office had funded 100% of its Eurodollar Rate
         Advance in the Designated Eurodollar Market); PROVIDED, that the
         Borrowers shall not be obligated to pay any such amount which arose
         prior to the date which is ninety (90) days preceding the date of such
         demand or is attributable to periods prior to the date which is ninety
         (90) days preceding the date of such demand. A statement of any Lender
         claiming compensation under this subsection shall be conclusive in the
         absence of manifest error.

                                      -50-
<PAGE>

                           (c)      If, after the date hereof, the existence or
         occurrence of any Special Eurodollar Circumstance shall, in the good
         faith opinion of any Lender, make it unlawful or impossible for such
         Lender or its Eurodollar Lending Office to make, maintain or fund its
         portion of any Eurodollar Rate Loan, or materially restrict the
         authority of such Lender to purchase or sell, or to take deposits of,
         Dollars in the Designated Eurodollar Market, or to determine or charge
         interest rates based upon the Eurodollar Rate, and such Lender shall so
         notify the Administrative Agent, then such Lender's obligation to make
         Eurodollar Rate Advances shall be suspended for the duration of such
         illegality or impossibility and the Administrative Agent forthwith
         shall give notice thereof to the other Lenders and the Borrowers. Upon
         receipt of such notice, the outstanding principal amount of such
         Lender's Eurodollar Rate Advances, together with accrued interest
         thereon, automatically shall be converted to Alternate Base Rate
         Advances (or shall be repaid in full, if such Eurodollar Rate Advances
         are denominated in an Approved Offshore Currency) on either (1) the
         last day of the Eurodollar Period(s) applicable to such Eurodollar Rate
         Advances if such Lender may lawfully continue to maintain and fund such
         Eurodollar Rate Advances to such day(s) or (2) immediately if such
         Lender may not lawfully continue to fund and maintain such Eurodollar
         Rate Advances to such day(s), PROVIDED that in such event the
         conversion or payment shall not be subject to payment of a prepayment
         fee under Section 3.6(e). Each Lender agrees to endeavor promptly to
         notify the Borrowers of any event of which it has actual knowledge,
         occurring after the Closing Date, which will cause that Lender to
         notify the Administrative Agent under this Section, and agrees to
         designate a different Eurodollar Lending Office if such designation
         will avoid the need for such notice and will not, in the good faith
         judgment of such Lender, otherwise be materially disadvantageous to
         such Lender. In the event that any Lender is unable, for the reasons
         set forth above, to make, maintain or fund its portion of any
         Eurodollar Rate Loan, such Lender shall fund such amount as an
         Alternate Base Rate Advance for the same period of time, and such
         amount shall be treated in all respects as an Alternate Base Rate
         Advance. Any Lender whose obligation to make Eurodollar Rate Advances
         has been suspended under this Section shall promptly notify the
         Administrative Agent and the Borrowers of the cessation of the Special
         Eurodollar Circumstance which gave rise to such suspension.

                           (d)      If, with respect to any proposed Eurodollar
                  Rate Loan:

                                    (1)      the Administrative Agent reasonably
                  determines that, by reason of circumstances affecting the
                  Designated Eurodollar Market generally that are beyond the
                  reasonable control of the Lenders,

                                      -51-
<PAGE>

                  deposits in Dollars (in the applicable amounts) are not being
                  offered to any Lender in the Designated Eurodollar Market for
                  the applicable Eurodollar Period; or

                                    (2)      the Requisite Lenders advise the
                  Administrative Agent that the Eurodollar Rate as determined by
                  the Administrative Agent (i) does not represent the effective
                  pricing to such Lenders for deposits in Dollars in the
                  Designated Eurodollar Market in the relevant amount for the
                  applicable Eurodollar Period, or (ii) will not adequately and
                  fairly reflect the cost to such Lenders of making the
                  applicable Euro dollar Rate Advances;

         then the Administrative Agent forthwith shall give notice thereof to
         the Borrowers and the Lenders, whereupon until the Administrative Agent
         notifies the Borrowers that the circumstances giving rise to such
         suspension no longer exist, the obligation of the Lenders to make any
         future Eurodollar Rate Advances shall be suspended.

                           (e)      Upon payment or prepayment of any Eurodollar
         Rate Advance (OTHER THAN as the result of a conversion required under
         Section 3.6(c)) on a day other than the last day in the applicable
         Eurodollar Period (whether voluntarily, involuntarily, by reason of
         acceleration, or otherwise), or upon the failure of the Borrowers (for
         a reason other than the breach by a Lender of its obligation pursuant
         to Section 2.1(a) to make an Advance) to borrow on the date or in the
         amount specified for a Eurodollar Rate Loan in any Request for Loan,
         the Borrowers shall pay to the appropriate Lender within five (5)
         Banking Days after demand a prepayment fee or failure to borrow fee, as
         the case may be (determined as though 100% of the Eurodollar Rate
         Advance had been funded in the Designated Eurodollar Market) equal to
         the SUM of:

                                    (1)      $250; PLUS

                                    (2)      the amount, if any, by which (i)
                  the additional interest would have accrued on the amount
                  prepaid or not borrowed at the Eurodollar Rate if that amount
                  had remained or been outstanding through the last day of the
                  applicable Eurodollar Period EXCEEDS (ii) the interest that
                  the Lender could recover by placing such amount on deposit in
                  the Designated Eurodollar Market for a period beginning on the
                  date of the prepayment or failure to borrow and ending on the
                  last day of the applicable Eurodollar Period (or, if no
                  deposit rate quotation is available

                                      -52-
<PAGE>

                  for such period, for the most comparable period for which a
                  deposit rate quotation may be obtained); PLUS

                                    (3)      all reasonable out-of-pocket
                  expenses incurred by the Lender reasonably attributable to
                  such payment, prepayment or failure to borrow.

         Each Lender's determination of the amount of any prepayment fee payable
         under this Section shall be conclusive in the absence of manifest
         error.

                           (f)      Each Lender agrees to endeavor promptly to
         notify the Borrowers of any event of which it has actual knowledge,
         occurring after the Closing Date, which will entitle such Lender to
         compensation pursuant to clause (a) or clause (b) of this Section, and
         agrees to designate a different Eurodollar Lending Office if such
         designation will avoid the need for or reduce the amount of such
         compensation and will not, in the good faith judgment of such Lender,
         otherwise be materially disadvantageous to such Lender. Any request for
         compensation by a Lender under this Section shall set forth the basis
         upon which it has been determined that such an amount is due from the
         Borrowers, a calculation of the amount due, and a certification that
         the corresponding costs have been incurred by the Lender.

                  3.7 LATE PAYMENTS. If any installment of principal or interest
or any fee or cost or other amount payable under any Loan Document to the
Administrative Agent or any Lender is not paid when due, it shall thereafter
bear interest at a fluctuating interest rate per annum at all times equal to the
SUM OF the Alternate Base Rate PLUS 2%, to the fullest extent permitted by
applicable Laws. Accrued and unpaid interest on past due amounts (INCLUDING,
without limitation, interest on past due interest) shall be compounded monthly,
on the last day of each calendar month, to the fullest extent permitted by
applicable Laws.

                  3.8 COMPUTATION OF INTEREST AND FEES. Computation of interest
and fees under this Agreement shall be calculated on the basis of a year of 360
days and the actual number of days elapsed. Interest shall accrue on each Loan
for the day on which the Loan is made; interest shall not accrue on a Loan, or
any portion thereof, for the day on which the Loan or such portion is paid. Any
Loan that is repaid on the same day on which it is made shall bear interest for
one day. Notwithstanding anything in this Agreement to the contrary, interest in
excess of the maximum amount permitted by applicable Laws shall not accrue or be
payable hereunder or under the Notes, and any amount paid as interest hereunder
or under the Notes which would

                                      -53-
<PAGE>

otherwise be in excess of such maximum permitted amount shall instead be treated
as a payment of principal.

                  3.9 NON-BANKING DAYS. If any payment to be made by the
Borrowers or any other Party under any Loan Document shall come due on a day
other than a Banking Day, payment shall instead be considered due on the next
succeeding Banking Day and the extension of time shall be reflected in computing
interest and fees, unless, with respect to a payment due in respect of a
Eurodollar Loan, such Banking Day falls in another calendar month, in which case
payment shall be made on the preceding Banking Day.

                  3.10  MANNER AND TREATMENT OF PAYMENTS.

                           (a)      Each payment hereunder (EXCEPT payments
         pursuant to Sections 3.5, .3.6, 11.3, 11.11 and 11.22) or on the Notes
         or under any other Loan Document shall be made to the Administrative
         Agent at the Administrative Agent's Office (or at the Administrative
         Agent's Approved Offshore Currency Payment Office, if payment is made
         in respect of a Loan or Letter of Credit denominated in an Approved
         Offshore Currency) for the account of each of the Lenders or the
         Administrative Agent, as the case may be, in immediately available
         funds not later than 11:00 a.m. California time, on the day of payment
         (which must be a Banking Day). All payments received after such time,
         on any Banking Day, shall be deemed received on the next succeeding
         Banking Day. The amount of all payments received by the Administrative
         Agent for the account of each Lender shall be immediately paid by the
         Administrative Agent to the applicable Lender in immediately available
         funds and, if such payment was received by the Administrative Agent by
         11:00 a.m., California time, on a Banking Day and not so made available
         to the account of a Lender on that Banking Day, the Administrative
         Agent shall reimburse that Lender for the cost to such Lender of
         funding the amount of such payment at the Federal Funds Rate. All
         payments shall be made in the Applicable Currency borrowed.

                           (b)      The Borrowers hereby authorize the
         Administrative Agent to debit the general operating bank account of the
         Parent to effect any payment due to the Lenders or the Administrative
         Agent pursuant to this Agreement. Any resulting overdraft in such
         account shall be payable by the Borrowers to the Administrative Agent
         on the next following Banking Day.

                                      -54-
<PAGE>

                           (c)      Each payment or prepayment on account of any
         Loan shall be applied pro rata according to the outstanding Advances
         made by each Lender comprising such Loan.

                           (d)      Each Lender shall use its best efforts to
         keep a record (in writing or by an electronic data entry system) of
         Advances made by it and payments received by it with respect to each of
         its Notes and, subject to Section 10.6(G), such record shall, as
         against the Borrowers, be presumptive evidence of the amounts owing.
         Notwithstanding the foregoing sentence, the failure by any Lender to
         keep such a record shall not affect the Borrowers' obligation to pay
         the Obligations.

                           (e)      Each payment of any amount payable by the
         Borrowers or any other Party under this Agreement or any other Loan
         Document shall be made free and clear of, and without reduction by
         reason of, any taxes, assessments or other charges imposed by any
         Governmental Agency, central bank or comparable authority, EXCLUDING
         (i) taxes imposed on or measured in whole or in part by its overall net
         income by (A) any jurisdiction (or political subdivision thereof) in
         which it is organized or maintains its principal office or Eurodollar
         Lending Office or (B) any jurisdiction (or political subdivision
         thereof) in which it is "doing business" and (ii) any withholding taxes
         or other taxes based on gross income imposed by the United States of
         America for any period with respect to which it has failed to provide
         the Borrowers with the appropriate form or forms required by Section
         11.21, to the extent such forms are then required by applicable Laws
         (all such non-excluded taxes, assessments or other charges being
         hereinafter referred to as "Taxes"). To the extent that the Borrowers
         are obligated by applicable Laws to make any deduction or withholding
         on account of Taxes from any amount payable to any Lender under this
         Agreement, the Borrowers shall (i) make such deduction or withholding
         and pay the same to the relevant Governmental Agency and (ii) pay such
         additional amount to that Lender as is necessary to result in that
         Lender's receiving a net after-Tax amount equal to the amount to which
         that Lender would have been entitled under this Agreement absent such
         deduction or withholding. If and when receipt of such payment results
         in an excess payment or credit to that Lender on account of such Taxes,
         that Lender shall promptly refund such excess to the Borrowers.

                  3.11 FUNDING SOURCES. Nothing in this Agreement shall be
deemed to obligate any Lender to obtain the funds for any Loan or Advance in any
particular place or manner or to constitute a representation by any Lender that
it has obtained or will obtain the funds for any Loan or Advance in any
particular place or manner.

                                      -55-
<PAGE>

                  3.12 FAILURE TO CHARGE NOT SUBSEQUENT WAIVER. Any decision by
the Administrative Agent or any Lender not to require payment of any interest
(INCLUDING interest arising under Section 3.7), fee, cost or other amount
payable under any Loan Document, or to calculate any amount payable by a
particular method, on any occasion shall in no way limit or be deemed a waiver
of the Administrative Agent's or such Lender's right to require full payment of
any interest (INCLUDING interest arising under Section 3.7), fee, cost or other
amount payable under any Loan Document, or to calculate an amount payable by
another method that is not inconsistent with this Agreement, on any other or
subsequent occasion.

                  3.13 ADMINISTRATIVE AGENT'S RIGHT TO ASSUME PAYMENTS WILL BE
MADE. Unless the Administrative Agent shall have been notified by the Borrowers
prior to the date on which any payment to be made by the Borrowers hereunder is
due that the Borrowers do not intend to remit such payment, the Administrative
Agent may, in its discretion, assume that the Borrowers have remitted such
payment when so due and the Administrative Agent may, in its discretion and in
reliance upon such assumption, make available to each Lender on such payment
date an amount equal to such Lender's share of such assumed payment. If the
Borrowers have not in fact remitted such payment to the Administrative Agent,
each Lender shall forthwith on demand repay to the Administrative Agent the
amount of such assumed payment made available to such Lender, together with
interest thereon in respect of each day from and including the date such amount
was made available by the Administrative Agent to such Lender to the date such
amount is repaid to the Administrative Agent at the Federal Funds Rate.

                  3.14 FEE DETERMINATION DETAIL. The Administrative Agent, and
any Lender, shall provide reasonable detail to the Borrowers regarding the
manner in which the amount of any payment to the Administrative Agent and the
Lenders, or that Lender, under ARTICLE 3 has been determined, concurrently with
demand for such payment.

                  3.15 SURVIVABILITY. All of the Borrowers' obligations under
Sections 3.5 and 3.6 shall survive for the ninety (90) day period following the
date on which the Commitment is terminated and all Loans hereunder are fully
paid, and the Borrowers shall remain obligated thereunder for all claims under
such Sections made by any Lender to the Borrowers prior to the expiration of
such period.

                                       -56-

<PAGE>

                                   Article 4.

                         REPRESENTATIONS AND WARRANTIES

                  The Borrowers represent and warrant to the Lenders that:

                  4.1 EXISTENCE AND QUALIFICATION; POWER; COMPLIANCE WITH LAWS.
Each Borrower is a corporation duly formed, validly existing and in good
standing under the Laws of its state or other jurisdiction of organization. Each
Borrower is duly qualified or registered to transact business and is in good
standing in its state or other jurisdiction of organization and in each other
jurisdiction in which the conduct of its business or the ownership or leasing of
its Properties makes such qualification or registration necessary, EXCEPT where
the failure so to qualify or register and to be in good standing would not
constitute a Material Adverse Effect. Each Borrower has all requisite power and
authority to conduct its business, to own and lease its Properties and to
execute and deliver each Loan Document to which it is a Party and to perform its
Obligations. As of the Closing Date, the chief executive offices of the Parent
are located in California. All outstanding shares of capital stock of each
Borrower are duly authorized, validly issued, fully paid and non-assessable, and
no holder thereof has any enforceable right of rescission under any applicable
state or federal securities Laws. Each Borrower is in compliance with all Laws
and other legal requirements applicable to its business, has obtained all
authorizations, consents, approvals, orders, licenses and permits from, and has
accomplished all filings, registrations and qualifications with, or obtained
exemptions from any of the foregoing from, any Governmental Agency that are
necessary for the transaction of its business, EXCEPT where the failure so to
comply, obtain authorizations, etc., file, register, qualify or obtain
exemptions does not constitute a Material Adverse Effect.

                  4.2 AUTHORITY; COMPLIANCE WITH OTHER AGREEMENTS AND
INSTRUMENTS AND GOVERNMENT REGULATIONS. The execution, delivery and performance
by each Borrower and each Subsidiary Guarantor of the Loan Documents to which it
is a Party have been duly authorized by all necessary corporate action, and do
not and will not:

                           (a)      Require any consent or approval not
         heretofore obtained of any partner, director, stockholder, security
         holder or creditor of such Party;

                           (b)      Violate or conflict with any provision of
         such Party's charter, articles of incorporation or bylaws, as
         applicable;

                           (c)      Result in or require the creation or
         imposition of any Lien (OTHER THAN pursuant to the Loan Documents) or
         Right of Others upon or with

                                      -57-
<PAGE>

         respect to any Property now owned or leased or hereafter acquired by
         such Party;

                           (d)      Violate any Requirement of Law applicable to
         such Party;

                           (e)      Result in a breach of or constitute a
         default under, or cause or permit the acceleration of any obligation
         owed under, any indenture or loan or credit agreement or any other
         Contractual Obligation to which such Party is a party or by which such
         Party or any of its Property is bound or affected;

and such Party is not in violation of, or default under, any Requirement of Law
or Contractual Obligation, or any indenture, loan or credit agreement described
in Section 4.2(e), in any respect that constitutes a Material Adverse Effect.

                  4.3 NO GOVERNMENTAL APPROVALS REQUIRED. EXCEPT as previously
obtained or made, no authorization, consent, approval, order, license or permit
from, or filing, registration or qualification with, any Governmental Agency is
or will be required to authorize or permit under applicable Laws the execution,
delivery and performance by any Borrower or any Subsidiary Guarantor of the Loan
Documents to which it is a Party.

                  4.4  SUBSIDIARIES.

                           (a)      SCHEDULE 4.4 hereto correctly sets forth the
         names, form of legal entity, number of shares of capital stock issued
         and outstanding, number of shares owned by each Borrower and each
         Material Subsidiary of each Borrower (specifying such owner) and
         jurisdictions of organization of all Material Subsidiaries of the
         Borrowers. Except as described in SCHEDULE 4.4, the Borrowers do not
         own any capital stock, equity interest or debt security which is
         convertible, or exchangeable, for capital stock or equity interest in
         any Person. Unless otherwise indicated in SCHEDULE 4.4, all of the
         outstanding shares of capital stock, or all of the units of equity
         interest, as the case may be, of each Material Subsidiary are owned of
         record and beneficially by the applicable Borrower, there are no
         outstanding options, warrants or other rights to purchase capital stock
         of any such Material Subsidiary, and all such shares or equity
         interests so owned are duly authorized, validly issued, fully paid and
         non-assessable, and were issued in compliance with all applicable state
         and federal securities and other Laws, and are free and clear of all
         Liens, EXCEPT for Permitted Encumbrances.

                                      -58-
<PAGE>

                           (b)      Each Material Subsidiary is a legal entity
         of the type described in SCHEDULE 4.4 duly formed, validly existing and
         in good standing under the Laws of its jurisdiction of organization, is
         duly qualified to do business as a foreign organization and is in good
         standing as such in each jurisdiction in which the conduct of its
         business or the ownership or leasing of its Properties makes such
         qualification necessary (EXCEPT where the failure to be so duly
         qualified and in good standing does not constitute a Material Adverse
         Effect), and has all requisite power and authority to conduct its
         business and to own and lease its Properties.

                           (c)      Each Material Subsidiary is in compliance
         with all Laws and other requirements applicable to its business and has
         obtained all authorizations, consents, approvals, orders, licenses, and
         permits from, and each such Material Subsidiary has accomplished all
         filings, registrations, and qualifications with, or obtained exemptions
         from any of the foregoing from, any Governmental Agency that are
         necessary for the transaction of its business, EXCEPT where the failure
         to be in such compliance, obtain such authorizations, consents,
         approvals, orders, licenses, and permits, accomplish such filings,
         registrations, and qualifications, or obtain such exemptions, does not
         constitute a Material Adverse Effect.

                  4.5 FINANCIAL STATEMENTS. The Parent has furnished to the
Administrative Agent (a) the audited financial statements of the Parent for the
Fiscal Year ended December 31, 1999 and (b) the unaudited balance sheet and
statement of operations of the Parent for the three-month period ended April 2,
2000. The financial statements described in clause (a) fairly present the
financial condition, results of operations and cash flows, and the balance sheet
and statement of operations described in clause (b) fairly present the financial
condition and results of operations of the Parent and its Subsidiaries as of
such dates and for such periods in conformity with GAAP (other than footnote
disclosures) consistently applied, subject only to normal year-end accruals and
audit adjustments.

                  4.6 NO OTHER LIABILITIES; NO MATERIAL ADVERSE CHANGES. The
Parent and its Subsidiaries do not have any material liability or material
contingent liability required under GAAP to be reflected or disclosed, and not
reflected or disclosed, in the balance sheet described in Section 4.5(b), OTHER
THAN liabilities and contingent liabilities arising in the ordinary course of
business since the date of such financial statements. Except as set forth on
SCHEDULE 4.6, as of the Closing Date, no circumstance or event has occurred that
constitutes a Material Adverse Effect since December 31, 1999.

                                      -59-
<PAGE>

                  4.7 TITLE TO AND LOCATION OF PROPERTY. The Parent and its
Subsidiaries have valid title to the Property (OTHER THAN assets which are the
subject of a Capital Lease Obligation) reflected in the balance sheet described
in Section 4.5(b), OTHER THAN items of Property or exceptions to title which are
in each case immaterial, and Property subsequently sold or disposed of in
accordance with SECTION 6.2 or otherwise in the ordinary course of business.
Such Property is free and clear of all Liens and Rights of Others, OTHER THAN
Liens or Rights of Others described in SCHEDULE 4.7A and Permitted Encumbrances
and Permitted Rights of Others. As of the Closing Date, Property of Borrower and
its Subsidiaries is located at one of the locations described in SCHEDULE 4.7B.

                  4.8 INTANGIBLE ASSETS. The Borrowers and their Subsidiaries
own, or possess the right to use to the extent necessary in their respective
businesses, all material trademarks, trade names, copyrights, patents, patent
rights, computer software, licenses and other Intangible Assets that are used in
the conduct of their businesses as now operated, and no such Intangible Asset,
to the best knowledge of the Borrowers, conflicts with the valid trademark,
trade name, copyright, patent, patent right or Intangible Asset of any other
Person to the extent that such conflict constitutes a Material Adverse Effect.
EXCEPT as set forth in SCHEDULE 4.8, the Borrowers have not used any trade name,
trade style or "dba" during the five year period ending on the Closing Date.

                  4.9 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Parent nor
any of its Subsidiaries is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.

                  4.10 LITIGATION. EXCEPT for (a) any matter fully covered as to
subject matter and amount (subject to applicable deductibles and retentions) by
insurance for which the insurance carrier has not asserted lack of subject
matter coverage or reserved its right to do so, (b) any matter, or series of
related matters, involving a claim against any Borrower or any Subsidiary of a
Borrower of less than $1,000,000, (c) matters of an administrative nature not
involving a claim or charge against a Borrower or any of its Subsidiary of a
Borrower and (d) matters set forth in SCHEDULE 4.10, there are no actions,
suits, proceedings or investigations pending as to which any Borrower or any
Subsidiary of a Borrower has been served or have received notice or, to the best
knowledge of the Borrowers, threatened against or affecting any Borrower or any
Subsidiary of a Borrower or any Property of any of them before any Governmental
Agency.

                                      -60-
<PAGE>

                  4.11 BINDING OBLIGATIONS. Each of the Loan Documents to which
any Borrower or any Subsidiary Guarantor is a Party will, when executed and
delivered by such Party, constitute the legal, valid and binding obligation of
such Party, enforceable against such Party in accordance with its terms, EXCEPT
as enforcement may be limited by Debtor Relief Laws or equitable principles
relating to the granting of specific performance and other equitable remedies as
a matter of judicial discretion.

                  4.12 NO DEFAULT. No event has occurred and is continuing that
is a Default or Event of Default.

                  4.13  ERISA.

                           (a)      With respect to each Pension Plan:

                                    (i)      such Pension Plan complies in all
                  material respects with ERISA and any other applicable Laws to
                  the extent that noncompliance could reasonably be expected to
                  have a Material Adverse Effect;

                                    (ii)     such Pension Plan has not incurred
                  any "accumulated funding deficiency" (as defined in Section
                  302 of ERISA) that could reasonably be expected to have a
                  Material Adverse Effect;

                                    (iii)    no "reportable event" (as defined
                  in Section 4043 of ERISA, but EXCLUDING such events as to
                  which the PBGC has by regulation waived the requirement
                  therein contained that it be notified within thirty days of
                  the occurrence of such event) has occurred that could
                  reasonably be expected to have a Material Adverse Effect; and

                                    (iv)     neither the Parent nor any of its
                  Subsidiaries has engaged in any non-exempt "prohibited
                  transaction" (as defined in Section 4975 of the Code) that
                  could reasonably be expected to have a Material Adverse
                  Effect.

                           (b)      Neither the Parent nor any of its
         Subsidiaries has incurred or expects to incur any withdrawal liability
         to any Multiemployer Plan that could reasonably be expected to have a
         Material Adverse Effect.

                  4.14 REGULATION U; INVESTMENT COMPANY ACT. No part of the
proceeds of any Loan hereunder will be used to purchase or carry, or to extend
credit to others for the purpose of purchasing or carrying, any Margin Stock in
violation of Regulation U.

                                   -61-
<PAGE>

Neither the Parent nor any of its Subsidiaries is or is required to be
registered as an "investment company" under the Investment Company Act of
1940.

                  4.15 DISCLOSURE. No written statement made by a Senior Officer
to the Administrative Agent or any Lender in connection with this Agreement, or
in connection with any Loan, as of the date thereof contained any untrue
statement of a material fact or omitted a material fact necessary to make the
statement made not misleading in light of all the circumstances existing at the
date the statement was made unless such statements were corrected in writing and
delivered to the Lenders prior to the date of this Agreement.

                  4.16 TAX LIABILITY. The Parent and its Subsidiaries have filed
all tax returns which are required to be filed, and have paid, or made provision
for the payment of, all taxes with respect to the periods, Property or
transactions covered by said returns, or pursuant to any assessment received by
the Parent or any of its Subsidiaries, EXCEPT (a) such taxes, if any, as are
being contested in good faith by appropriate proceedings and as to which
adequate reserves have been established and maintained and (b) immaterial taxes
so long as no material Property of the Parent or any of its Subsidiaries is at
impending risk of being seized, levied upon or forfeited.

                  4.17 PROJECTIONS. As of the Closing Date, to the best
knowledge of Borrowers, the assumptions set forth in the Projections are
reasonable and consistent with each other and with all facts known to the
Borrowers, and the Projections are reasonably based on such assumptions. Nothing
in this Section 4.17 shall be construed as a representation or covenant that the
Projections in fact will be achieved.

                  4.18 HAZARDOUS MATERIALS. Except as described in SCHEDULE
4.18, as of the Closing Date (a) neither the Parent nor any of its Subsidiaries
at any time has disposed of, discharged, released or threatened the release of
any Hazardous Materials on, from or under the Real Property in violation of any
Hazardous Materials Law that would individually or in the aggregate constitute a
Material Adverse Effect, (b) to the best knowledge of the Borrowers, no
condition exists that violates any Hazardous Material Law affecting any Real
Property except for such violations that would not individually or in the
aggregate constitute a Material Adverse Effect, (c) no Real Property or any
portion thereof is or has been utilized by Borrower or any of its Subsidiaries
as a site for the manufacture of any Hazardous Materials and (d) to the extent
that any Hazardous Materials are used, generated or stored by the Parent or any
of its Subsidiaries on any Real Property, or transported to or from such Real
Property by the Parent or any of its Subsidiaries, such use, generation, storage
and transportation are in compliance with all Hazardous Materials Laws except
for such

                                      -62-
<PAGE>

non-compliance that would not constitute a Material Adverse Effect or be
materially adverse to the interests of the Lenders.

                  4.19 SECURITY INTEREST. Upon the execution and delivery of the
Pledge Agreement, the Pledge Agreement will create a valid security interest in
the Pledged Collateral and upon delivery of the Pledged Collateral to the
Administrative Agent all action necessary to perfect the security interest so
created will have been taken and completed and such security interest will be of
first priority and free of adverse claims.

                                      -63-
<PAGE>

                                   Article 5.

                              AFFIRMATIVE COVENANTS

                           (OTHER THAN INFORMATION AND

                             REPORTING REQUIREMENTS)

                  So long as any Advance remains unpaid, or any other Obligation
remains unpaid, or any portion of the Commitment remains in force, the Borrowers
shall, and shall cause their respective Subsidiaries to, unless the
Administrative Agent (with the written approval of the Requisite Lenders)
otherwise consents:

                  5.1 PAYMENT OF TAXES AND OTHER POTENTIAL LIENS. Pay and
discharge promptly all taxes, assessments and governmental charges or levies
imposed upon any of them, upon their respective Property or any part thereof and
upon their respective income or profits or any part thereof, EXCEPT that the
Borrowers and their respective Subsidiaries shall not be required to pay or
cause to be paid (a) any tax, assessment, charge or levy that is not yet past
due, or is being contested in good faith by appropri ate proceedings so long as
the relevant entity has established and maintains adequate reserves for the
payment of the same or (b) any immaterial tax so long as no material Property of
a Borrower or of any of its Subsidiaries is at impending risk of being seized,
levied upon or forfeited.

                  5.2 PRESERVATION OF EXISTENCE. Preserve and maintain their
respective existences in the jurisdiction of their formation and all material
authorizations, rights, franchises, privileges, consents, approvals, orders,
licenses, permits, or registrations from any Governmental Agency that are
necessary for the transaction of their respective business and qualify and
remain qualified to transact business in each jurisdiction in which such
qualification is necessary in view of their respective business or the ownership
or leasing of their respective Properties EXCEPT (a) a merger permitted by
Section 6.3 or as otherwise permitted by this Agreement and (b) where the
failure to so qualify or remain qualified would not constitute a Material
Adverse Effect.

                  5.3 MAINTENANCE OF PROPERTIES. Maintain, preserve and protect
all of their respective Properties in good order and condition, subject to wear
and tear in the ordinary course of business, and not permit any waste of their
respective Properties, EXCEPT that the failure to maintain, preserve and protect
a particular item of Property that is at the end of its useful life or that is
not of significant value, either intrinsically or to the operations of the
Borrowers, shall not constitute a violation of this covenant.

                                      -64-
<PAGE>

                  5.4 MAINTENANCE OF INSURANCE. Maintain liability, casualty,
workers' compensation and other insurance (subject to customary deductibles and
retentions) with responsible insurance companies in such amounts and against
such risks as is customary and usual in the industry for companies of similar
size and composition.

                  5.5 COMPLIANCE WITH LAWS. Comply with all Requirements of Law
noncompliance with which constitutes a Material Adverse Effect, EXCEPT that the
Borrowers and their respective Subsidiaries need not comply with a Requirement
of Law then being contested by any of them in good faith by appropriate
proceedings.

                  5.6 INSPECTION RIGHTS. Upon reasonable notice, at any time
during regular business hours and as often as reasonably requested (but not so
as to materially interfere with the business of any Borrower or of any of its
Subsidiaries) permit the Administrative Agent or any Lender, or any authorized
employee, agent or representative thereof, to examine, audit and make copies and
abstracts from the records and books of account of, and to visit and inspect the
Properties of, the respective Borrowers and their respective Subsidiaries and to
discuss the affairs, finances and accounts of the respective Borrowers and their
respective Subsidiaries with any of their officers, key employees or
accountants.

                  5.7 KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Keep adequate
records and books of account reflecting all financial transactions in conformity
with GAAP, consistently applied, and in material conformity with all applicable
requirements of any Governmental Agency having regulatory jurisdiction over any
Borrower or any Subsidiary of a Borrower.

                  5.8 COMPLIANCE WITH AGREEMENTS. Promptly and fully comply with
all Contractual Obligations to which any one or more of them is a party, EXCEPT
for any such Contractual Obligations (a) the performance of which would cause a
Default or Event of Default or (b) then being contested by any of them in good
faith by appropriate proceedings or (c) if the failure to comply does not
constitute a Material Adverse Effect.

                  5.9 USE OF PROCEEDS. Use the proceeds of all Loans for working
capital, Capital Expenditures, Permitted Acquisitions and general corporate
purposes of the Borrowers.

                  5.10 HAZARDOUS MATERIALS LAWS. Keep and maintain all Real
Property and each portion thereof in compliance in all material respects with
all applicable Hazardous Materials Laws and promptly notify the Administrative
Agent in writing (attaching a copy of any pertinent written material) of (a) any
and all material

                                      -65-
<PAGE>

enforcement, cleanup, removal or other governmental or regulatory actions
instituted, completed or threatened in writing by a Governmental Agency pursuant
to any applicable Hazardous Materials Laws, (b) any and all material claims made
or threat ened in writing by any Person against any Borrower relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from any
Hazardous Materials and (c) discovery by any Senior Officer of any Borrower of
any material occurrence or condition on any Real Property adjoining or in the
vicinity of such Real Property that could reasonably be expected to cause such
Real Property or any part thereof to be subject to any material restrictions on
the ownership, occupancy, transferability or use of such Real Property under any
applicable Hazardous Materials Laws.

                  5.11 FUTURE SUBSIDIARIES. Pledge, pursuant to the Pledge
Agreement, all of the capital stock of any Domestic Subsidiary and 65% of the
capital stock of any Foreign Subsidiary formed or acquired after the Closing
Date, and cause each such Domestic Subsidiary to execute and deliver an
appropriate joinder to the Subsidiary Guaranty.

                  5.12  INTENTIONALLY OMITTED.

                  5.13 INTENTIONALLY OMITTED.

                  5.14 SYNDICATION PROCESS. Cooperate in such respects as may be
reasonably requested by the Arranger in connection with the syndication of the
credit facilities under this Agreement, INCLUDING the provision of information
(in form and substance acceptable to the Arranger) for inclusion in written
materials furnished to prospective syndicate members and the participation by
Senior Officers in meetings with prospective syndicate members. Nothing in this
Section 5.14 shall obligate the Borrowers to amend any Loan Document

                                      -66-
<PAGE>

                                   Article 6.

                               NEGATIVE COVENANTS

                  So long as any Advance remains unpaid, or any other Obligation
remains unpaid, or any portion of the Commitment remains in force, the Borrowers
shall not, and shall not permit any of their respective Subsidiaries to, unless
the Administrative Agent (with the written approval of the Requisite Lenders or,
if required by Section 11.2, of all of the Lenders) otherwise consents:

                  6.1 PAYMENT OF SUBORDINATED OBLIGATIONS. Pay any (a) principal
(INCLUDING sinking fund payments) or any other amount (OTHER THAN scheduled
interest payments) with respect to any Subordinated Obligation, or purchase or
redeem (or offer to purchase or redeem) any Subordinated Obligation, or deposit
any monies, securities or other Property with any trustee or other Person to
provide assurance that the principal or any portion thereof of any Subordinated
Obligation will be paid when due or otherwise to provide for the defeasance of
any Subordinated Obligation or (b) scheduled interest on any Subordinated
Obligation UNLESS the payment thereof is then permitted pursuant to the terms of
the indenture or other agreement governing such Subordinated Obligation.

                  6.2 DISPOSITION OF PROPERTY. Make any Disposition of its
Property, whether now owned or hereafter acquired, EXCEPT (a) a Disposition by a
Borrower to another Borrower or to a Wholly-Owned Subsidiary of a Borrower, or
by a Subsidiary of a Borrower to a Borrower or a Wholly-Owned Subsidiary of a
Borrower, (b) a Disposition for which the Net Cash Sales Proceeds, when added to
the aggregate Net Cash Sales Proceeds of all Dispositions made during the term
of this Agreement, do not exceed $5,000,000 and (c) Dispositions of Property in
connection with sale/leaseback transactions, PROVIDED that the aggregate Net
Cash Sales Proceeds of all such Property disposed of pursuant to this clause (C)
during the term of this Agreement shall not exceed $5,000,000.

                  6.3 MERGERS. Merge or consolidate with or into any Person,
EXCEPT (a) mergers and consolidations of a Subsidiary of a Borrower into such
Borrower or a Wholly-Owned Subsidiary or of Subsidiaries with each other and (b)
a merger or consolidation of a Person into a Borrower or with or into a
Wholly-Owned Subsidiary of a Borrower which constitutes a Permitted Acquisition;
PROVIDED that (i) such Borrower or Wholly-Owned Subsidiary is the surviving
entity, (ii) no Change in Control results therefrom, (iii) no Default or Event
of Default then exists or would result therefrom, and (iv) the Borrowers and
each of the Subsidiary Guarantors execute

                                      -67-
<PAGE>

such amendments to the Loan Documents as the Administrative Agent may reasonably
determine are appropriate as a result of such merger.

                  6.4 HOSTILE ACQUISITIONS. Directly or indirectly use the
proceeds of any Loan in connection with the acquisition of part or all of a
voting interest of five percent (5%) or more in any corporation or other
business entity if such acquisition is opposed by the board of directors of such
corporation or business entity.

                  6.5 ACQUISITIONS. Make any Acquisition other than a Permitted
Acquisition.

                  6.6 DISTRIBUTIONS. Make any Distribution, whether from
capital, income or otherwise, and whether in Cash or other Property, EXCEPT:

                           (a)      Distributions by any Subsidiary of a
         Borrower to such Borrower or any Wholly-Owned Subsidiary;

                           (b)      stock dividends payable on Common Stock; and

                           (c)      any Foreign Subsidiary may declare and pay
         stock dividends in respect of its capital stock issued to its
         directors, to the extent such issuance is required by Law.

                  6.7 ERISA. At any time, permit any Pension Plan to: (i) engage
in any non-exempt "prohibited transaction" (as defined in Section 4975 of the
Code); (ii) fail to comply with ERISA or any other applicable Laws; (iii) incur
any material "accumulated funding deficiency" (as defined in Section 302 of
ERISA); or (iv) terminate in any manner, which, with respect to each event
listed above, could reasonably be expected to result in a Material Adverse
Effect or (b) withdraw, completely or partially, from any Multiemployer Plan if
to do so could reasonably be expected to result in a Material Adverse Effect.

                  6.8 CHANGE IN NATURE OF BUSINESS. Make any material change in
the nature of the business of the Parent and its Subsidiaries, taken as a whole.

                  6.9 LIENS AND NEGATIVE PLEDGES. Create, incur, assume or
suffer to exist any Lien or Negative Pledge of any nature upon or with respect
to any of their respective Properties, or, except as permitted by Section 6.2,
engage in any sale and leaseback transaction with respect to any of their
respective Properties, whether now owned or hereafter acquired, EXCEPT:

                                      -68-
<PAGE>

                           (a)      Liens and Negative Pledges existing on the
         Closing Date and disclosed in SCHEDULE 4.7 and any renewals/extensions
         or amendments thereof, PROVIDED that the obligations secured or
         benefitted thereby are not increased;

                           (b)      Liens and Negative Pledges in favor of the
         Administrative Agent pursuant to the Collateral Documents;

                           (c)      Permitted Encumbrances;

                           (d)      Liens on Property acquired by Borrower or
         any of its Subsidiaries that were in existence at the time of the
         acquisition of such Property and were not created in contemplation of
         such acquisition;

                           (e)      Liens securing Indebtedness, in an aggregate
         outstanding principal amount at any time of not more than $8,000,000,
         permitted by Section 6.10(d) on and limited to the capital assets
         acquired, constructed or financed with the proceeds of such
         Indebtedness or with the proceeds of any Indebtedness directly or
         indirectly refinanced by such Indebtedness; and

                           (f)      Non-consensual Liens securing Indebtedness
         of not more than $500,000, PROVIDED that such Liens are discharged
         within thirty (30) days after their incurrence by a Borrower.

                  6.10  INDEBTEDNESS AND GUARANTY OBLIGATIONS.  Create, incur
or assume any Indebtedness or Guaranty Obligation EXCEPT:

                           (a)      Indebtedness and Guaranty Obligations
         existing on the Closing Date and disclosed in SCHEDULE 6.10, and
         refinancings, renewals, extensions or amendments that do not increase
         the amount thereof;

                           (b)      Indebtedness and Guaranty Obligations under
         the Loan Documents;

                           (c)      Indebtedness and Guaranty Obligations owed
         to a Borrower or any of its Subsidiaries;

                           (d)      Indebtedness consisting of Capital Lease
         Obligations, or otherwise incurred to finance the purchase or
         construction of capital assets (which shall be deemed to exist if the
         Indebtedness is incurred at or within 90 days before or after the
         purchase or construction of the capital asset), or to

                                      -69-
<PAGE>

         refinance any such Indebtedness, PROVIDED that the aggregate principal
         amount of such Indebtedness incurred in any Fiscal Year does not exceed
         $8,000,000.

                           (e)      Subordinated Obligations in such amount as
         may be approved in writing by the Requisite Lenders;

                           (f)      Indebtedness consisting of debt securities
         for which the Net Cash Issuance Proceeds will be applied as a mandatory
         prepayment pursuant to Section 3.1(f);

                           (g)      Indebtedness consisting of Interest Rate
         Protection Agreements; and

                           (h)      Guaranty Obligations in support of the
         obligations of a Wholly-Owned Subsidiary, PROVIDED that such
         obligations are not prohibited by this Agreement.

                  6.11 TRANSACTIONS WITH AFFILIATES. Enter into any transaction
of any kind with any Affiliate of a Borrower OTHER THAN (a) salary, bonus,
employee stock option and other advances, compensation arrangements with
employees, directors or officers in the ordinary course of business in an
aggregate amount not exceeding $2,000,000 outstanding at any time, (b)
transactions that are fully disclosed to the board of directors (or executive
committee thereof) of such Borrower and expressly authorized by a resolution of
the board of directors (or executive committee) of such Borrower which is
approved by a majority of the directors (or executive committee) not having an
interest in the transaction, (c) transactions between or among such Borrower and
its Subsidiaries and (d) transactions on overall terms at least as favorable to
such Borrower or its Subsidiaries as would be the case in an arm's-length
transaction between unrelated parties of equal bargaining power. Without
limiting the generality of the preceding sentence, in no event shall any
Borrower pay, or permit any of its Subsidiaries to pay, management fees or fees
for services to any Affiliate of such Borrower without the prior written
approval of the Administrative Agent.

                  6.12 LEVERAGE RATIO. Permit the Leverage Ratio as of the last
day of any fiscal quarter to be greater than 3.00 to 1.00.

                  6.13 FIXED CHARGE COVERAGE RATIO. Permit the Fixed Charge
Coverage Ratio as of the last day of any fiscal quarter to be less than 2.00 to
1.00.

                  6.14 NET WORTH. Permit Net Worth as of the last day of any
fiscal quarter occurring during the term of this Agreement to be less than the
SUM OF:

                                      -70-
<PAGE>

(a) $210,000,000; (b) 85% of the cumulative Net Income for each fiscal quarter
ending after December 31, 1999 (with no deduction for a net loss in any such
fiscal quarter); and (c) 100% of the proceeds of any issuance by a Borrower of
equity securities (EXCEPT to employees or former employees of a Borrower
pursuant to an employee stock option plan maintained by a Borrower) subsequent
to the Closing Date.

                  6.15 INVESTMENTS. Make or suffer to exist any Investment,
OTHER THAN:

                           (a)      Investments in existence on the Closing Date
         and disclosed on SCHEDULE 6.15;

                           (b)      Investments consisting of Cash Equivalents;

                           (c)      Investments in a Person that is the subject
         of a Permitted Acquisition;

                           (d)      Investments consisting of advances to
         officers, directors and employees of a Borrower or of any Subsidiary
         for travel, entertainment, relocation, anticipated bonus and analogous
         ordinary business purposes, not to exceed an aggregate outstanding
         amount at any time of $2,000,000;

                           (e)      Investments in a Domestic Subsidiary that is
         a Wholly-Owned Subsidiary;

                           (f)      Investments in a Foreign Subsidiary that is
         a Wholly-Owned Subsidiary and Investments in Joint Ventures; PROVIDED
         that the aggregate of all such Investments in all Foreign Subsidiaries
         and Joint Ventures does not exceed (i) for Fiscal Year 2000, 65% of Net
         Worth, (ii) for Fiscal Year 2001, 60% of Net Worth and (iii) for Fiscal
         Year 2002 and thereafter, 55% of Net Worth;

                           (g)      Investments consisting of the extension of
         credit to customers or suppliers of a Borrower or of any Subsidiary in
         the ordinary course of business and any Investments received in
         satisfaction or partial satisfaction thereof;

                           (h)      Investments received in connection with the
         settlement of a bona fide dispute with another Person;

                           (i)      Investments representing all or a portion of
         the sales price of Property sold or services provided to another
         Person;

                                      -71-
<PAGE>

                           (j)      Investments by Foreign Subsidiaries other
         than any Borrower in any other Subsidiary of a Borrower (whether a
         Domestic Subsidiary or a Foreign Subsidiary);

                           (k)      Investments consisting of accounts
         receivable that arise in the ordinary course of business and are
         payable on standard terms;

                           (l)      Investments in di/dt, Inc. of up to
         $4,000,000 in the aggregate during the term of this Agreement; and

                           (m)      Investments not described above not in
         excess of $10,000,000 in any Fiscal Year.

                  6.16 CAPITAL EXPENDITURES. Make any Capital Expenditure in any
Fiscal Year, if to do so would cause the aggregate of all Capital Expenditures
made in such Fiscal Year to exceed (i) $40,000,000 for the Fiscal Year 2000,
(ii) $45,000,000 for the Fiscal Year 2001, or (iii) $50,000,000 for the Fiscal
Year 2002.

                  6.17  INTENTIONALLY OMITTED.

                  6.18 SUBSIDIARY INDEBTEDNESS. Permit (whether or not otherwise
permitted under Section 6.10) any Subsidiary of a Borrower to create, incur,
assume or suffer to exist any Indebtedness or Guaranty Obligation, EXCEPT (a)
Indebtedness and Guaranty Obligations in existence on the Closing Date, (b) a
Guaranty Obligation required by Section 5.11, (c) Indebtedness owed to a
Borrower or another Subsidiary of a Borrower, and (d) Capital Lease Obligations
and purchase money obligations of a Subsidiary in respect of Property used by
that Subsidiary.

                  6.19 AMENDMENTS TO SUBORDINATED OBLIGATIONS. Amend or modify
any term or provision of any indenture, agreement or instrument evidencing or
governing any Subordinated Obligation in any respect that will or may adversely
affect the interests of the Lenders.

                  6.20 CHANGES IN OFFICERS, NAME, LOCATION OF CHIEF EXECUTIVE
OFFICES, ETC. Make any change in the senior management of any of the Borrowers,
the corporate name of any of the Borrowers, or the location of any of the
Borrowers' assets, principal place of business or chief executive office without
providing written notice to the Administrative Agent within thirty (30) days
following such change.

                                      -72-
<PAGE>

                                   Article 7.
                     INFORMATION AND REPORTING REQUIREMENTS

                  7.1 FINANCIAL AND BUSINESS INFORMATION. So long as any
Advance remains unpaid, or any other Obligation remains unpaid, or any
portion of the Commitment remains in force, the Borrowers shall, unless the
Administrative Agent (with the written approval of the Requisite Lenders)
otherwise consents, at the Borrowers' sole expense, deliver to the
Administrative Agent for distribution by it to the Lenders, a sufficient
number of copies for all of the Lenders of the following:

                           (a)      As soon as practicable, and in any event
         within 45 days after the end of each fiscal quarter (OTHER THAN the
         fourth fiscal quarter in any Fiscal Year), the consolidated and
         consolidating balance sheet of the Parent and its Subsidiaries as at
         the end of such fiscal quarter and the consolidated and consolidating
         statements of income and cash flows for such fiscal quarter, and the
         portion of the Fiscal Year ended with such fiscal quarter, all in
         reasonable detail. Such financial statements shall be certified by the
         chief financial officer of the Parent as fairly presenting the
         financial condition, results of operations and cash flows of the Parent
         and its Subsidiaries in accordance with GAAP (other than footnote
         disclosures), consistently applied, as at such date and for such
         periods, subject only to normal year-end accruals and audit
         adjustments;

                           (b)      As soon as practicable, and in any event
         within 45 days after the end of each fiscal quarter, a Pricing
         Certificate setting forth a calculation of the Leverage Ratio as of the
         last day of such fiscal quarter, and providing reasonable detail as to
         the calculation thereof, which calculations in the case of the fourth
         fiscal quarter in any Fiscal Year shall be based on the preliminary
         unaudited financial statements of the Parent and its Subsidiaries for
         such fiscal quarter, and as soon as practicable thereafter, in the
         event of any material variance in the actual calculation of the
         Leverage Ratio from such preliminary calculation, a revised Pricing
         Certificate setting forth the actual calculation thereof;

                           (c)      As soon as practicable, and in any event
         within 90 days after the end of each Fiscal Year, the consolidated and
         consolidating balance sheet of the Parent and its Subsidiaries as at
         the end of such Fiscal Year and the consolidated and consolidating
         statements of earnings, changes in stockholders' equity and cash flows,
         in each case of the Parent and its Subsidiaries for such Fiscal Year,
         all in reasonable detail. Such financial statements shall be prepared
         in accordance with GAAP, consistently applied, and such consolidated
         financial

                                      -73-

<PAGE>

         statements shall be accompanied by a report of KPMG or such other
         independent public accountants of recognized standing selected by the
         Parent and reasonably satisfactory to the Administrative Agent, which
         report shall be prepared in accordance with generally accepted auditing
         standards as at such date, and shall not be subject to any
         qualifications or exceptions as to the scope of the audit nor to any
         other qualification or exception determined by the Requisite Lenders in
         their good faith business judgment to be adverse to the interests of
         the Lenders. Such accountants' report shall be accompanied by a
         certificate stating that, in making the examination pursuant to
         generally accepted auditing standards necessary for the certification
         of such financial statements and such report, such accountants have
         obtained no knowledge of any Default then existing or, if, in the
         opinion of such accountants, any such Default shall exist, stating the
         nature and status of such Default, and stating that such accountants
         have reviewed the Borrowers' financial calculations as at the end of
         such Fiscal Year (which shall accompany such certificate) under
         Sections 6.12, 6.13, 6.14, 6.16, and 6.19, have read such Sections
         (including the definitions of all defined terms used therein) and that
         nothing has come to the attention of such accountants in the course of
         such examination that would cause them to believe that the same were
         not calculated by the Borrowers in the manner prescribed by this
         Agreement;

                           (d)      As soon as practicable, and in any event not
         later than sixty (60) days after the commencement of each Fiscal Year,
         a copy of the annual consolidated operating budget with respect to
         Parent and its Subsidiaries for such Fiscal Year and each subsequent
         Fiscal Year during the term of this Agreement;

                           (e)      Promptly after reasonable request by the
         Administrative Agent or any Lender, copies of any detailed audit
         reports by independent accountants in connection with the accounts or
         books of the Parent or any of its Subsidiaries, or any audit of any of
         them;

                           (f)      Promptly after the same are available, and
         in any event within five (5) Banking Days after filing with the
         Securities and Exchange Commission, copies of each annual report, proxy
         or financial statement or other report or communication sent to the
         stockholders of the Parent and copies of all annual, regular, periodic
         and special reports and registration statements which the Parent may
         file or be required to file with the Securities and Exchange Commission
         under Section 13 or 15(d) of the Securities Exchange Act of 1934, as
         amended, and not otherwise required to be delivered to the Lenders
         pursuant to other provisions of this Section 7.1;

                                      -74-

<PAGE>

                           (g)      Promptly after reasonable request by the
         Administrative Agent or any Lender, copies of any other report or other
         document that was filed by the Parent or any other Borrower with any
         Governmental Agency;

                           (h)      Promptly upon a Senior Officer becoming
         aware, and in any event within five (5) Banking Days after becoming
         aware, of the occurrence of any (i) "reportable event" (as such term is
         defined in Section 4043 of ERISA, but EXCLUDING such events as to which
         the PBGC has by regulation waived the requirement therein contained
         that it be notified within thirty days of the occurrence of such event)
         or (ii) non-exempt "prohibited transaction" (as such term is defined in
         Section 406 of ERISA or Section 4975 of the Code) involving any Pension
         Plan or any trust created thereunder, telephonic notice specifying the
         nature thereof, and, no more than two (2) Banking Days after such
         telephonic notice, written notice again specifying the nature thereof
         and specifying what action the applicable Borrower is taking or
         proposes to take with respect thereto, and, when known, any action
         taken by the Internal Revenue Service with respect thereto;

                           (i)      As soon as practicable, and in any event
         within two (2) Banking Days after a Senior Officer becomes aware of the
         existence of any condition or event which constitutes a Default or
         Event of Default, telephonic notice specifying the nature and period of
         existence thereof, and, no more than two (2) Banking Days after such
         telephonic notice, written notice again specifying the nature and
         period of existence thereof and specifying what action the Borrowers
         are taking or propose to take with respect thereto;

                           (j)      Promptly upon a Senior Officer becoming
         aware that (i) any Person has commenced a legal proceeding with respect
         to a claim against any Borrower that is $1,000,000 or more in excess of
         the amount thereof that is fully covered by insurance, (ii) any
         creditor under a credit agreement involving Indebtedness of $1,000,000
         or more or any lessor under a lease involving aggregate rent of
         $1,000,000 or more has asserted a default thereunder on the part of any
         Borrower or (iii) any Person has commenced a legal proceeding with
         respect to a claim against any Borrower under a contract that is not a
         credit agreement or material lease with respect to a claim of in excess
         of $1,000,000 or which otherwise may reasonably be expected to result
         in a Material Adverse Effect, a written notice describing the pertinent
         facts relating thereto and what action the applicable Borrower is
         taking or proposes to take with respect thereto; and

                                      -75-

<PAGE>

                           (k)      Such other data and information as from time
         to time may be reasonably requested by the Administrative Agent, any
         Lender (through the Administrative Agent) or the Requisite Lenders.

                  7.2 COMPLIANCE CERTIFICATES. So long as any Advance remains
unpaid, or any other Obligation remains unpaid or unperformed, or any portion
of the Commitment remains outstanding, the Borrowers shall, at the Borrowers'
sole expense, deliver to the Administrative Agent for distribution by it to
the Lenders concurrently with the financial statements required pursuant to
Sections 7.1(a) and 7.1(c), a Compliance Certificate signed by a Senior
Officer.

                                      -76-

<PAGE>

                                   Article 8.
                                   CONDITIONS

                  8.1 INITIAL ADVANCES. The obligation of each Lender to make
the initial Advance to be made by it, and the obligation of the Issuing
Lender to issue the initial Letter of Credit, is subject to the following
conditions precedent, each of which shall be satisfied prior to the making of
the initial Advances (unless all of the Lenders, in their sole and absolute
discretion, shall agree otherwise):

                           (a)      The Administrative Agent shall have received
         all of the fol lowing, each of which shall be originals unless
         otherwise specified, each properly executed by a Responsible Official
         of each party thereto, each dated as of the Closing Date and each in
         form and substance satisfactory to the Administrative Agent and its
         legal counsel (unless otherwise specified or, in the case of the date
         of any of the following, unless the Administrative Agent otherwise
         agrees or directs):

                                    (1)      at least one (1) executed
                  counterpart of this Agreement, together with arrangements
                  satisfactory to the Administrative Agent for additional
                  executed counterparts, sufficient in number for distribution
                  to the Lenders and the Borrowers;

                                    (2)      a Note executed by each of the
                  Borrowers in favor of each Lender, in a principal amount equal
                  to that Lender's Pro Rata Share of the Commitment;

                                    (3)      the Subsidiary Guaranty executed by
                  the Subsidiary Guarantors;

                                    (4)      the Pledge Agreement executed by
                  the Borrowers;

                                    (5)      the Collateral, together with
                  executed undated stock powers relating thereto;

                                    (6)      such financing statements on Form
                  UCC-1 executed by the Borrowers with respect to the Pledge
                  Agreement as the Administrative Agent may reasonably request;

                                    (7)      with respect to the Borrowers and
                  the Subsidiary Guarantors, such documentation as the
                  Administrative Agent may

                                      -77-

<PAGE>

                  reasonably require to establish the due organization, valid
                  existence and good standing of each of the Borrowers and each
                  of the Subsidiary Guarantors, each such Party's qualification
                  to engage in business in each material jurisdiction in which
                  it is engaged in business or required to be so qualified, its
                  authority to execute, deliver and perform the Loan Documents
                  to which it is a Party, the identity, authority and capacity
                  of each Responsible Official thereof authorized to act on its
                  behalf, INCLUDING certified copies of articles or certificates
                  of incorporation and amendments thereto, bylaws and amendments
                  thereto, certificates of good standing and/or qualification to
                  engage in business, tax clearance certificates, certificates
                  of corporate resolutions, incumbency certificates,
                  Certificates of Responsible Officials, and the like;

                                    (8)      the Opinion of Counsel;

                                    (9)      a Certificate of the chief
                  financial officer of the Parent, on behalf of the Borrowers,
                  certifying that the representation contained in Section 4.17
                  is, to the best of his or her knowledge, true and correct;

                                    (10)     a Certificate of the chief
                  financial officer of the Parent, on behalf of the Borrowers,
                  certifying that the conditions specified in Sections 8.1(e)
                  and 8.1(f) have been satisfied;

                                    (11)     a preliminary opening balance sheet
                  for the Parent and its Subsidiaries, in form and substance
                  acceptable to the Administrative Agent, reviewed by a firm of
                  independent certified public accountants acceptable to the
                  Administrative Agent;

                                    (12)     a copy of the executed letter of
                  intent, purchase agreement and such other agreements,
                  documents or instruments relating to the Powec Acquisition as
                  the Administrative Agent or its counsel may reasonably
                  request;

                                    (13)     a copy of the due diligence
                  materials, audit report, letter to management, and such other
                  written information relating to the Powec Acquisition provided
                  to the Borrowers by their certified public accountants as the
                  Administrative Agent or its counsel may reasonably request;
                  and

                                      -78-

<PAGE>

                                    (14)     such other assurances,
                  certificates, documents, consents or opinions as the
                  Administrative Agent or the Requisite Lenders reasonably may
                  require.

                           (b)      The fees payable on the Closing Date
         pursuant to Section 3.2 shall have been paid.

                           (c)      All Indebtedness outstanding under the
         Existing Credit Agreement shall have been (or shall concurrently be)
         paid and the same shall, together with all Liens securing such
         Indebtedness, have been (or shall concurrently be) terminated.

                           (d)      The reasonable costs and expenses of the
         Administrative Agent in connection with the preparation of the Loan
         Documents payable pursuant to Section 11.3, and invoiced to the
         Borrowers prior to the Closing Date (if applicable), shall have been
         paid.

                           (e)      The representations and warranties of the
         Borrowers contained in ARTICLE 4 shall be true and correct in all
         material respects.

                           (f)      The Borrowers and any other Parties shall be
         in compliance with all the terms and provisions of the Loan Documents,
         and giving effect to the initial Advance, no Default or Event of
         Default shall have occurred and be continuing.

                           (g)      All legal matters relating to the Loan
         Documents shall be reasonably satisfactory to Sheppard, Mullin, Richter
         & Hampton LLP, special counsel to the Administrative Agent.

                           (h)      The Closing Date shall have occurred on or
         before May 10, 2000.

                  8.2 ANY ADVANCE. The obligation of each Lender to make any
Advance, and the obligation of the Issuing Lender to issue any Letter of
Credit, is subject to the following conditions precedent (unless the
Requisite Lenders or, in any case where the approval of all of the Lenders is
required pursuant to Section 11.2, all of the Lenders, in their sole and
absolute discretion, shall agree otherwise):

                           (a)      EXCEPT (i) for representations and
         warranties which expressly speak as of a particular date or are no
         longer true and correct as a result of a change which is permitted by
         this Agreement or (ii) as disclosed by

                                      -79-

<PAGE>

         the Borrowers and approved in writing by the Requisite Lenders, the
         representations and warranties contained in ARTICLE 4 (OTHER THAN
         Sections 4.4, 4.6 (first sentence), 4.10 and 4.17) shall be true and
         correct in all material respects on and as of the date of the Advance
         as though made on that date;

                           (b)      no circumstance or event shall have occurred
         that constitutes a Material Adverse Effect since the Closing Date;

                           (c)      other than matters described in SCHEDULE
         4.10 or not required as of the Closing Date to be therein described,
         there shall not be then pending or threatened any action, suit,
         proceeding or investigation against or affecting the Borrowers or any
         of their respective Subsidiaries or any Property of any of them before
         any Governmental Agency that constitutes a Material Adverse Effect; and

                           (d)      the Administrative Agent shall have timely
         received a Request for Loan (or telephonic or other request for Loan
         referred to in the second sentence of Section 2.1(c), if applicable),
         or a Request for Letter of Credit (as applicable), in compliance with
         ARTICLE 2.

                                      -80-

<PAGE>

                                   Article 9.
              EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT

                  9.1 EVENTS OF DEFAULT. The existence or occurrence of any
one or more of the following events, whatever the reason therefor and under
any circumstances whatsoever, shall constitute an Event of Default:

                           (a)      The Borrowers fail to pay any principal on
         any of the Notes, or any portion thereof, on the date when due; or

                           (b)      The Borrowers fail to pay any interest on
         any of the Notes, or any fees under Sections 3.3, 3.4 or 3.5, or any
         portion thereof, within two (2) Banking Days after the date when due;
         or fails to pay any other fee or amount payable to the Lenders under
         any Loan Document, or any portion thereof, within five (5) Banking Days
         after demand therefor; or

                           (c)      The Borrowers fail to comply with any of the
         covenants contained in ARTICLE 6 and, if such default is capable of
         being cured by the payment of cash, such default is not cured with
         three (3) Banking Days after discovery thereof by any Borrower; or

                           (d)      The Borrowers fail to comply with Section
         7.1(i) in any respect that is materially adverse to the interests of
         the Lenders; or

                           (e)      Any Borrower or any other Party fails to
         perform or observe any other covenant or agreement (not specified in
         clause (a), (b), (c) or (d) above) contained in any Loan Document on
         its part to be performed or observed within twenty (20) Banking Days
         after the giving of notice by the Administrative Agent on behalf of the
         Requisite Lenders of such Default or, if such Default is not reasonably
         susceptible of cure within such period, within such longer period as is
         reasonably necessary to effect a cure so long as such Borrower or such
         Party continues to diligently pursue cure of such Default but not in
         any event in excess of forty (40) Banking Days; or

                           (f)      Any representation or warranty of any
         Borrower or any other Party made in any Loan Document, or in any
         certificate or other writing delivered by any Borrower or such Party
         pursuant to any Loan Document, proves to have been incorrect when made
         or reaffirmed in any respect that is materially adverse to the
         interests of the Lenders; or

                                      -81-

<PAGE>

                           (g)      Any Borrower (i) fails to pay the principal,
         or any principal installment, of any present or future Indebtedness of
         $500,000 or more, or any guaranty of present or future Indebtedness of
         $500,000 or more, on its part to be paid, when due (or within any
         stated grace period), whether at the stated maturity, upon
         acceleration, by reason of required prepayment or otherwise or (ii)
         fails to perform or observe any other term, covenant or agreement on
         its part to be performed or observed, or suffers any event of default
         to occur, in connection with any present or future Indebtedness of
         $500,000 or more, or of any guaranty of present or future Indebtedness
         of $500,000 or more, if as a result of such failure or sufferance any
         holder or holders thereof (or an agent or trustee on its or their
         behalf) has the right to declare such Indebtedness due before the date
         on which it otherwise would become due or the right to require such
         Borrower to redeem or purchase, or offer to redeem or purchase, all or
         any portion of such Indebtedness; or

                           (h)      Any Loan Document, at any time after its
         execution and delivery and for any reason OTHER THAN the agreement or
         action (or omission to act) of the Administrative Agent or the Lenders
         or satisfaction in full of all the Obligations, ceases to be in full
         force and effect or is declared by a court of competent jurisdiction to
         be null and void, invalid or unenforceable in any respect which is
         materially adverse to the interests of the Lenders; or the Pledge
         Agreement ceases (other than by action or inaction of the
         Administrative Agent or any Lender) to create a valid and effective
         Lien in any material portion of the Collateral; or any Party thereto
         denies in writing that it has any or further liability or obligation
         under any Loan Document, or purports to revoke, terminate or rescind
         the same; or

                           (i)      A final judgment against any Borrower is
         entered for the payment of money in excess of $1,000,000 (not covered
         by insurance or for which an insurer has reserved its rights) and,
         absent procurement of a stay of execution, such judgment remains
         unsatisfied for thirty (30) calendar days after the date of entry of
         judgment, or in any event later than five (5) days prior to the date of
         any proposed sale thereunder; or any writ or warrant of attachment or
         execution or similar process is issued or levied against all or any
         material part of the Property of any Borrower and is not released,
         vacated or fully bonded within thirty (30) calendar days after its
         issue or levy; or

                           (j)      Any Borrower or Material Subsidiary
         institutes or consents to the institution of any proceeding under a
         Debtor Relief Law relating to it or to all or any material part of its
         Property, or is unable or admits in writing its inability to pay its
         debts as they mature, or makes an assignment for the benefit

                                      -82-

<PAGE>

         of creditors; or applies for or consents to the appointment of any
         receiver, trustee, custodian, conservator, liquidator, rehabilitator or
         similar officer for it or for all or any material part of its Property;
         or any receiver, trustee, custodian, conservator, liquidator,
         rehabilitator or similar officer is appointed without the application
         or consent of that Person and the appointment continues undischarged or
         unstayed for sixty (60) calendar days; or any proceeding under a Debtor
         Relief Law relating to any such Person or to all or any part of its
         Prop erty is instituted without the consent of that Person and
         continues undismissed or unstayed for sixty (60) calendar days; or

                           (k)      The occurrence of an Event of Default (as
         such term is or may hereafter be specifically defined in any other Loan
         Document) under any other Loan Document; or

                           (l)      Any holder of a Subordinated Obligation of
         more than $1,000,000 asserts in writing that such Subordinated
         Obligation is not subordinated to the Obligations in accordance with
         its terms and the applicable Borrower or Borrowers obligated with
         respect to such Subordinated Obligation does not promptly deny in
         writing such assertion and contest any attempt by such holder to take
         action based on such assertion; or

                           (m)      Any Pension Plan maintained by any Borrower
         is finally determined by the PBGC to have a material "accumulated
         funding deficiency" as that term is defined in Section 302 of ERISA in
         excess of an amount equal to 5% of the consolidated total assets of
         such Borrower as of the most-recently ended fiscal quarter; or

                           (n)      A Change in Control occurs.

                  9.2 REMEDIES UPON EVENT OF DEFAULT. Without limiting any
other rights or remedies of the Administrative Agent or the Lenders provided
for elsewhere in this Agreement, or the other Loan Documents, or by
applicable Law, or in equity, or otherwise:

                           (a)      Upon the occurrence, and during the
         continuance, of any Event of Default OTHER THAN an Event of Default
         described in Section 9.1(j):

                                    (1)      the Commitments to make Advances
                  and all other obligations of the Administrative Agent or the
                  Lenders and all rights of the Borrowers and any other Parties
                  under the Loan Documents shall be suspended without notice to
                  or demand upon the Borrowers, which are

                                      -83-

<PAGE>

                  expressly waived by the Borrowers, EXCEPT that all of the
                  Lenders or the Requisite Lenders (as the case may be, in
                  accordance with Section 11.2) may waive an Event of Default
                  or, without waiving, determine, upon terms and conditions
                  satisfactory to the Lenders or Requisite Lenders, as the case
                  may be, to reinstate the Commitments and such other
                  obligations and rights and make further Advances, which waiver
                  or determination shall apply equally to, and shall be binding
                  upon, all the Lenders;

                                    (2)      the Issuing Lender may, with the
                  approval of the Administrative Agent on behalf of the
                  Requisite Lenders, demand immediate payment by the Borrowers
                  of an amount equal to the aggregate amount of all outstanding
                  Letters of Credit to be held by the Issuing Lender in an
                  interest-bearing cash collateral account as collateral
                  hereunder; and

                                    (3)      the Requisite Lenders may request
                  the Administrative Agent to, and the Administrative Agent
                  thereupon shall, terminate the Commitments and/or declare all
                  or any part of the unpaid principal of all Notes, all interest
                  accrued and unpaid thereon and all other amounts payable under
                  the Loan Documents to be forthwith due and payable, whereupon
                  the same shall become and be forthwith due and payable,
                  without protest, presentment, notice of dishonor, demand or
                  further notice of any kind, all of which are expressly waived
                  by the Borrowers.

                           (b)      Upon the occurrence of any Event of Default
         described in Section 9.1(j):

                                    (1)      the Commitments to make Advances
                  and all other obligations of the Administrative Agent or the
                  Lenders and all rights of the Borrowers and any other Parties
                  under the Loan Documents shall terminate without notice to or
                  demand upon the Borrowers, which are expressly waived by the
                  Borrowers, EXCEPT that all of the Lenders may waive the Event
                  of Default or, without waiving, determine, upon terms and
                  conditions satisfactory to all the Lenders, to reinstate the
                  Commitment and such other obligations and rights and make
                  further Advances, which determination shall apply equally to,
                  and shall be bind ing upon, all the Lenders;

                                    (2)      an amount equal to the aggregate
                  amount of all outstanding Letters of Credit shall be
                  immediately due and payable to the

                                      -84-

<PAGE>

                  Issuing Lender without notice to or demand upon the Borrowers,
                  which are expressly waived by the Borrowers, to be held by the
                  Issuing Lender in an interest-bearing cash collateral account
                  as collateral hereunder; and

                                    (3)      the unpaid principal of all Notes,
                  all interest accrued and unpaid thereon and all other amounts
                  payable under the Loan Documents shall be forthwith due and
                  payable, without protest, present ment, notice of dishonor,
                  demand or further notice of any kind, all of which are
                  expressly waived by the Borrowers.

                           (c)      Upon the occurrence of any Event of Default,
         the Lenders and the Administrative Agent, or any of them, without
         notice to (EXCEPT as expressly provided for in any Loan Document) or
         demand upon the Borrowers, which are expressly waived by the Borrowers
         (EXCEPT as to notices expressly provided for in any Loan Document), may
         proceed (but only with the consent of the Requisite Lenders) to
         protect, exercise and enforce their rights and remedies under the Loan
         Documents against the Borrowers and any other Party and such other
         rights and remedies as are provided by Law or equity.

                           (d)      The order and manner in which the Lenders'
         rights and remedies are to be exercised shall be determined by the
         Requisite Lenders in their sole discretion, and all payments received
         by the Administrative Agent and the Lenders, or any of them, shall be
         applied first to the costs and expenses (including reasonable
         attorneys' fees and disbursements and the reasonably allocated costs of
         attorneys employed by the Administrative Agent or by any Lender) of the
         Administrative Agent and of the Lenders, and thereafter paid pro rata
         to the Lenders in the same proportions that the aggregate Obligations
         owed to each Lender under the Loan Documents bear to the aggregate
         Obligations owed under the Loan Documents to all the Lenders, without
         priority or preference among the Lenders. Regardless of how each Lender
         may treat payments for the purpose of its own accounting, for the
         purpose of computing the Borrowers' Obligations hereunder and under the
         Notes, payments shall be applied FIRST, to the costs and expenses of
         the Administrative Agent and the Lenders, as set forth above, SECOND,
         to the payment of accrued and unpaid interest due under any Loan
         Documents to and including the date of such application (ratably, and
         without duplication, according to the accrued and unpaid interest due
         under each of the Loan Documents), and THIRD, to the payment of all
         other amounts (including principal and fees) then owing to the
         Administrative Agent or the Lenders under the Loan Documents. No
         applica tion of payments will cure any Event of Default, or prevent
         acceleration, or continued acceleration, of amounts payable under the
         Loan Documents, or

                                      -85-

<PAGE>

         prevent the exercise, or continued exercise, of rights or remedies of
         the Lenders hereunder or thereunder or at Law or in equity.

                                      -86-

<PAGE>

                                   Article 10.
                            THE ADMINISTRATIVE AGENT

                  10.1 APPOINTMENT AND AUTHORIZATION. Subject to Section
10.8, each Lender hereby irrevocably appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to
exercise such powers under the Loan Documents as are delegated to the
Administrative Agent by the terms thereof or are reasonably incidental, as
determined by the Administrative Agent, thereto. This appointment and
authorization is intended solely for the purpose of facilitating the
servicing of the Loans and does not constitute appointment of the
Administrative Agent as trustee for any Lender or as representative of any
Lender for any other purpose and, EXCEPT as specifically set forth in the
Loan Documents to the contrary, the Administrative Agent shall take such
action and exercise such powers only in an administrative and ministerial
capacity.

                  10.2 ADMINISTRATIVE AGENT AND AFFILIATES. Union Bank of
California, N.A. (and each successor Administrative Agent) has the same
rights and powers under the Loan Documents as any other Lender and may
exercise the same as though it were not the Administrative Agent, and the
term "Lender" or "Lenders" includes Union Bank of California, N.A. in its
individual capacity. Union Bank of California, N.A. (and each successor
Administrative Agent) and its Affiliates may accept deposits from, lend money
to and generally engage in any kind of banking, trust or other business with
Borrower, any Subsidiary thereof, or any Affiliate of Borrower or any
Subsidiary thereof, as if it were not the Administrative Agent and without
any duty to account therefor to the Lenders. Union Bank of California, N.A.
(and each successor Administrative Agent) need not account to any other
Lender for any monies received by it for reimbursement of its costs and
expenses as Administrative Agent hereunder, or (subject to Section 11.10) for
any monies received by it in its capacity as a Lender hereunder. The
Administrative Agent shall not be deemed to hold a fiduciary relationship
with any Lender and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Agreement or
otherwise exist against the Administrative Agent.

                  10.3 PROPORTIONATE INTEREST IN ANY COLLATERAL. The
Administrative Agent, on behalf of all the Lenders, shall hold in accordance
with the Loan Documents all items of any collateral or interests therein
received or held by the Administrative Agent. Subject to the Administrative
Agent's and the Lenders' rights to reimbursement for their costs and expenses
hereunder (INCLUDING reasonable attorneys' fees and disbursements and other
professional services and the reasonably allocated costs of attorneys
employed by the Administrative Agent or a Lender) and subject to the

                                      -87-

<PAGE>

application of payments in accordance with Section 9.2(d), each Lender shall
have an interest in the Lenders' interest in such collateral or interests
therein in the same proportions that the aggregate Obligations owed such
Lender under the Loan Documents bear to the aggregate Obligations owed under
the Loan Documents to all the Lenders, without priority or preference among
the Lenders.

                  10.4 LENDERS' CREDIT DECISIONS. Each Lender agrees that it
has, independently and without reliance upon the Administrative Agent, any
other Lender or the directors, officers, agents, employees or attorneys of
the Administrative Agent or of any other Lender, and instead in reliance upon
information supplied to it by or on behalf of the Borrowers and upon such
other information as it has deemed appropriate, made its own independent
credit analysis and decision to enter into this Agreement. Each Lender also
agrees that it shall, independently and without reliance upon the
Administrative Agent, any other Lender or the directors, officers, agents,
employees or attorneys of the Administrative Agent or of any other Lender,
continue to make its own independent credit analyses and decisions in acting
or not acting under the Loan Documents.

                  10.5  ACTION BY ADMINISTRATIVE AGENT.

                           (a)      Absent actual knowledge of the
         Administrative Agent of the existence of a Default, the Administrative
         Agent may assume that no Default has occurred and is continuing, unless
         the Administrative Agent (or the Lender that is then the Administrative
         Agent) has received notice from the Borrowers stating the nature of the
         Default or has received notice from a Lender stating the nature of the
         Default and that such Lender considers the Default to have occurred and
         to be continuing.

                           (b)      The Administrative Agent has only those
         obligations under the Loan Documents as are expressly set forth
         therein.

                           (c)      EXCEPT for any obligation expressly set
         forth in the Loan Documents and as long as the Administrative Agent may
         assume that no Event of Default has occurred and is continuing, the
         Administrative Agent may, but shall not be required to, exercise its
         discretion to act or not act, EXCEPT that the Administrative Agent
         shall be required to act or not act upon the instructions of the
         Requisite Lenders (or of all the Lenders, to the extent required by
         Section 11.2) and those instructions shall be binding upon the
         Administrative Agent and all the Lenders, PROVIDED that the
         Administrative Agent shall not be required to act or not act if to do
         so would be contrary to any Loan Document or to applicable Law or would
         result, in the reasonable judgment of the

                                      -88-

<PAGE>

         Administrative Agent, in substantial risk of liability to the
         Administrative Agent.

                           (d)      If the Administrative Agent has received a
         notice specified in clause (a), the Administrative Agent shall
         immediately give notice thereof to the Lenders and shall act or not act
         upon the instructions of the Requisite Lenders (or of all the Lenders,
         to the extent required by Section 11.2), PROVIDED that the
         Administrative Agent shall not be required to act or not act if to do
         so would be contrary to any Loan Document or to applicable Law or would
         result, in the reasonable judgment of the Administrative Agent, in
         substantial risk of liability to the Administrative Agent, and EXCEPT
         that if the Requisite Lenders (or all the Lenders, if required under
         Section 11.2) fail, for five (5) Banking Days after the receipt of
         notice from the Administrative Agent, to instruct the Administrative
         Agent, then the Administrative Agent, in its sole discretion, may act
         or not act as it deems advisable for the protection of the interests of
         the Lenders.

                           (e)      The Administrative Agent shall have no
         liability to any Lender for acting, or not acting, as instructed by the
         Requisite Lenders (or all the Lenders, if required under Section 11.2),
         notwithstanding any other provision hereof.

                  10.6 LIABILITY OF ADMINISTRATIVE AGENT. Neither the
Administrative Agent nor any of its directors, officers, agents, employees or
attorneys shall be liable for any action taken or not taken by them under or
in connection with the Loan Documents, EXCEPT for their own gross negligence
or willful misconduct. Without limitation on the foregoing, the
Administrative Agent and its directors, officers, agents, employees and
attorneys:

                           (a)      May treat the payee of any Note as the
         holder thereof until the Administrative Agent receives notice of the
         assignment or transfer thereof, in form satisfactory to the
         Administrative Agent, signed by the payee, and may treat each Lender as
         the owner of that Lender's interest in the Obligations for all purposes
         of this Agreement until the Administrative Agent receives notice of the
         assignment or transfer thereof, in form satisfactory to the
         Administrative Agent, signed by that Lender;

                           (b)      May consult with legal counsel (INCLUDING
         in-house legal counsel), accountants (INCLUDING in-house accountants)
         and other professionals or experts selected by it, or with legal
         counsel, accountants or other profes sionals or experts for the
         Borrowers and/or their respective Subsidiaries or the

                                      -89-

<PAGE>

         Lenders, and shall not be liable for any action taken or not taken by
         it in good faith in accordance with any advice of such legal counsel,
         accountants or other professionals or experts selected by it with
         reasonable care;

                           (c)      Shall not be responsible to any Lender for
         any statement, warranty or representation made in any of the Loan
         Documents or in any notice, certificate, report, request or other
         statement (written or oral) given or made in connection with any of the
         Loan Documents except for those expressly made by it;

                           (d)      EXCEPT to the extent expressly set forth in
         the Loan Documents, shall have no duty to ask or inquire as to the
         performance or observance by the Borrowers or their respective
         Subsidiaries of any of the terms, conditions or covenants of any of the
         Loan Documents or to inspect any collateral or any Property, books or
         records of any Borrower or of any Subsidiary of any Borrower;

                           (e)      Will not be responsible to any Lender for
         the due execution, legality, validity, enforceability, genuineness,
         effectiveness, sufficiency or value of any Loan Document, any other
         instrument or writing furnished pursuant thereto or in connection
         therewith, or any collateral;

                           (f)      Will not incur any liability by acting or
         not acting in reliance upon any Loan Document, notice, consent,
         certificate, statement, request or other instrument or writing
         reasonably believed by it to be genuine and signed or sent by the
         proper party or parties; and

                           (g)      Will not incur any liability for any
         arithmetical error in computing any amount paid or payable by the
         Borrowers or any Subsidiary or Affiliate of any of the Borrowers or
         paid or payable to or received or receivable from any Lender under any
         Loan Document, INCLUDING, without limitation, principal, interest,
         commitment fees, Advances and other amounts; PROVIDED that, promptly
         upon discovery of such an error in computation, the Administrative
         Agent, the Lenders and (to the extent applicable) the Borrowers and/or
         their Subsidiaries or Affiliates shall make such adjustments as are
         neces sary to correct such error and to restore the parties to the
         position that they would have occupied had the error not occurred.

                  10.7 INDEMNIFICATION. Each Lender shall, ratably in
accordance with its Pro Rata Share of the Commitments (if the Commitments are
then in effect) or in accordance with its proportion of the aggregate
Indebtedness then evidenced by the

                                      -90-

<PAGE>

Notes (if the Commitments have then been terminated), indemnify and hold the
Administrative Agent and its directors, officers, agents, employees and
attorneys harmless against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (INCLUDING reasonable
attorneys' fees and disbursements and allocated costs of attorneys employed
by the Administrative Agent) that may be imposed on, incurred by or asserted
against it or them in any way relating to or arising out of the Loan
Documents (other than losses incurred by reason of the failure of the
Borrowers to pay the Indebtedness represented by the Notes) or any action
taken or not taken by it as Administrative Agent thereunder, EXCEPT such as
result from its own gross negligence or willful misconduct. Without
limitation on the foregoing, each Lender shall reimburse the Administrative
Agent upon demand for that Lender's Pro Rata Share of any out-of-pocket cost
or expense incurred by the Administrative Agent in connection with the
negotiation, preparation, execution, delivery, amendment, waiver, restruc
turing, reorganization (INCLUDING a bankruptcy reorganization), enforcement
or attempted enforcement of the Loan Documents, to the extent that the
Borrowers or any other Party is required by Section 11.3 to pay that cost or
expense but fails to do so upon demand. Nothing in this Section 10.7 shall
entitle the Administrative Agent or any indemnitee referred to above to
recover any amount from the Lenders if and to the extent that such amount has
theretofore been recovered from the Borrowers or any Subsidiary of any of the
Borrowers. To the extent that the Administrative Agent or any indemnitee
referred to above is later reimbursed such amount by the Borrowers or any
Subsidiary of any of the Borrowers, it shall return the amounts paid to it by
the Lenders in respect of such amount.

                  10.8 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative
Agent may, and at the request of the Requisite Lenders shall, resign as
Administrative Agent upon reasonable notice to the Lenders and the Borrowers
effective upon acceptance of appointment by a successor Administrative Agent.
If the Administrative Agent shall resign as Administrative Agent under this
Agreement, the Requisite Lenders shall appoint from among the Lenders a
successor Administrative Agent for the Lenders, which successor
Administrative Agent shall be approved by the Borrowers (and such approval
shall not be unreasonably withheld or delayed). If no successor
Administrative Agent is appointed prior to the effective date of the
resignation of the Administrative Agent, the Administrative Agent may
appoint, after consulting with the Lenders and the Borrowers, a successor
Administrative Agent from among the Lenders. Upon the acceptance of its
appointment as successor Administrative Agent hereunder, such successor
Administrative Agent shall succeed to all the rights, powers and duties of
the retiring Administrative Agent and the term "Administrative Agent" shall
mean such successor Administrative Agent and the retiring Administrative
Agent's appointment, powers and duties as Administrative Agent shall be
terminated.

                                      -91-

<PAGE>

After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this ARTICLE 10, and Sections 11.3,
11.11 and 11.22, shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement. Notwithstanding the foregoing, if (a) the Administrative Agent has
not been paid its agency fees under Section 3.4 or has not been reimbursed
for any expense reimbursable to it under Section 11.3, in either case for a
period of at least one (1) year and (b) no successor Administrative Agent has
accepted appointment as Administrative Agent by the date which is thirty (30)
days following a retiring Administrative Agent's notice of resignation, the
retiring Administrative Agent's resignation shall nevertheless thereupon
become effective and the Lenders shall perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Requisite
Lenders appoint a successor Administrative Agent as provided for above.

                  10.9 NO OBLIGATIONS OF THE BORROWERS. Nothing contained in
this Article 10 shall be deemed to impose upon the Borrowers any obligation
in respect of the due and punctual performance by the Administrative Agent of
its obligations to the Lenders under any provision of this Agreement, and the
Borrowers shall have no liability to the Administrative Agent or any of the
Lenders in respect of any failure by the Administrative Agent or any Lender
to perform any of its obligations to the Administrative Agent or the Lenders
under this Agreement. Without limiting the generality of the foregoing, where
any provision of this Agreement relating to the payment of any amounts due
and owing under the Loan Documents provides that such payments shall be made
by the Borrowers to the Administrative Agent for the account of the Lenders,
the Borrowers' obligations to the Lenders in respect of such payments shall
be deemed to be satisfied upon the making of such payments to the
Administrative Agent in the manner provided by this Agreement. In addition,
the Borrowers may rely on a written statement by the Administrative Agent to
the effect that it has obtained the written consent of the Requisite Lenders
or all of the Lenders, as applicable under Section 11.2, in connection with a
waiver, amendment, consent, approval or other action by the Lenders
hereunder, and shall have no obligation to verify or confirm the same.

                                      -92-
<PAGE>

                                   Article 11.

                                  MISCELLANEOUS

                  11.1 CUMULATIVE REMEDIES; NO WAIVER. The rights, powers,
privileges and remedies of the Administrative Agent and the Lenders provided
herein or in any Note or other Loan Document are cumulative and not exclusive of
any right, power, privilege or remedy provided by Law or equity. No failure or
delay on the part of the Administrative Agent or any Lender in exercising any
right, power, privilege or remedy may be, or may be deemed to be, a waiver
thereof; nor may any single or partial exercise of any right, power, privilege
or remedy preclude any other or further exercise of the same or any other right,
power, privilege or remedy. The terms and conditions of ARTICLE 8 hereof are
inserted for the sole benefit of the Administrative Agent and the Lenders; the
same may be waived in whole or in part, with or without terms or conditions, in
respect of any Loan without prejudicing the Administrative Agent's or the
Lenders' rights to assert them in whole or in part in respect of any other Loan.

                  11.2 AMENDMENTS; CONSENTS. No amendment, modification,
supplement, extension, termination or waiver of any provision of this Agreement
or any other Loan Document, no approval or consent thereunder, and no consent to
any departure by the Borrowers or any other Party therefrom, may in any event be
effective unless in writing signed by the Administrative Agent with the written
approval of the Requisite Lenders (and, in the case of any amendment,
modification or supplement of or to any Loan Document to which the Borrowers are
a Party, signed by the Borrowers, and, in the case of any amendment,
modification or supplement to ARTICLE 10, signed by the Administrative Agent),
and then only in the specific instance and for the specific purpose given; and,
without the approval in writing of all the Lenders, no amendment, modification,
supplement, termination, waiver or consent may be effective:

                           (a)      To amend or modify the principal of, or the
         amount of principal, principal prepayments or the rate of interest
         payable on, any Note, or the amount of the Commitments or the Pro Rata
         Share of any Lender or the amount of any commitment fee payable to any
         Lender, or any other fee or amount payable to any Lender under the Loan
         Documents or to waive an Event of Default consisting of the failure of
         the Borrowers to pay when due principal, interest or any fee;

                                      -93-
<PAGE>

                           (b)      To postpone any date fixed for any payment
         of principal of, prepayment of principal of or any installment of
         interest on, any Note or any installment of any fee, or to extend the
         term of the Commitments;

                           (c)      To amend the provisions of the definition of
         "REQUISITE LENDERS", or "MATURITY DATE"; or

                           (d)      To release any Subsidiary Guarantor from the
         Subsidiary Guaranty or to release any Collateral from the Lien of the
         Pledge Agreement, EXCEPT if such release of Collateral occurs in
         connection with a Disposition permitted under Section 6.2, in which
         case such release shall not require the consent of any of the Lenders;
         or

                           (e)      To amend or waive ARTICLE 8 or this Section
         11.2; or

                           (f)      To amend any provision of this Agreement
         that expressly requires the consent or approval of all or a specified
         portion of the Lenders.

Any amendment, modification, supplement, termination, waiver or consent pursuant
to this Section 11.2 shall apply equally to, and shall be binding upon, all the
Lenders and the Administrative Agent.

                  11.3 COSTS, EXPENSES AND TAXES. The Borrowers shall pay within
five (5) Banking Days after demand, accompanied by an invoice therefor, the
reasonable costs and expenses of the Administrative Agent in connection with the
negotiation, preparation, syndication, execution and delivery of the Loan
Documents. The Borrowers shall also pay on demand, accompanied by an invoice
therefor, the reasonable costs and expenses of (a) the Administrative Agent in
connection with any amendment of or relating to the Loan Documents, and (b) the
Administrative Agent and the Lenders in connection with any waiver, refinancing,
restructuring, reorganization (INCLUDING a bankruptcy reorganization) and
enforcement or attempted enforcement of the Loan Documents, and any matter
related thereto. The foregoing costs and expenses shall include filing fees,
recording fees, title insurance fees, appraisal fees, search fees, and other
out-of-pocket expenses and the reasonable fees and out-of-pocket expenses of any
legal counsel (INCLUDING reasonably allocated costs of legal counsel employed by
the Administrative Agent or any Lender), independent public accountants and
other outside experts retained by the Administrative Agent or any Lender,
whether or not such costs and expenses are incurred or suffered by the
Administrative Agent or any Lender in connection with or during the course of
any bankruptcy or insolvency proceedings of any of the Borrowers or of any
Subsidiary of any thereof. The Borrowers shall pay any and all documentary and
other taxes,

                                      -94-
<PAGE>

EXCLUDING (i) taxes imposed on or measured in whole or in part by a Lender's
overall net income imposed on it by (A) any jurisdiction (or political
subdivision thereof) in which it is organized or maintains its principal office
or Eurodollar Lending Office or (B) any jurisdiction (or political subdivision
thereof) in which it is "doing business" or (ii) any withholding taxes or other
taxes based on gross income imposed by the United States of America for any
period with respect to which it has failed to provide the Borrowers with the
appropriate form or forms required by Section 11.21, to the extent such forms
are then required by applicable Laws, and all costs, expenses, fees and charges
payable or determined to be payable in connection with the filing or recording
of this Agreement, any other Loan Document or any other instrument or writing to
be delivered hereunder or thereunder, or in connection with any transaction
pursuant hereto or thereto, and shall reimburse, hold harmless and indemnify on
the terms set forth in 11.11 the Administrative Agent and the Lenders from and
against any and all loss, liability or legal or other expense with respect to or
resulting from any delay in paying or failure to pay any such tax, cost,
expense, fee or charge or that any of them may suffer or incur by reason of the
failure of any Party to perform any of its Obligations. Any amount payable to
the Administrative Agent or any Lender under this Section 11.3 shall bear
interest from the fifth Banking Day following the date of demand for payment at
the Default Rate.

                  11.4 NATURE OF LENDERS' OBLIGATIONS. The obligations of the
Lenders hereunder are several and not joint or joint and several. Nothing
contained in this Agreement or any other Loan Document and no action taken by
the Administrative Agent or the Lenders or any of them pursuant hereto or
thereto may, or may be deemed to, make the Lenders a partnership, an
association, a joint venture or other entity, either among themselves or with
any of the Borrowers or any Affiliate of any of the Borrowers. A default by any
Lender will not increase the Pro Rata Share of the Commitments attributable to
any other Lender. Any Lender not in default may, if it desires, assume in such
proportion as the nondefaulting Lenders agree the obligations of any Lender in
default, but is not obligated to do so. The Administrative Agent agrees that it
will use its best efforts either to induce promptly the other Lenders to assume
the obligations of a Lender in default or to obtain promptly another Lender,
reasonably satisfactory to the Borrowers, to replace such a Lender in default.

                  11.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained herein or in any other Loan Document,
or in any certificate or other writing delivered by or on behalf of any one or
more of the Parties to any Loan Document, will survive the making of the Loans
hereunder and the execution and delivery of the Notes, and have been or will be
relied upon by the Administrative Agent and each Lender, notwithstanding any
investigation made by the Administrative Agent or any Lender or on their behalf.

                                      -95-
<PAGE>

                  11.6 NOTICES. EXCEPT as otherwise expressly provided in the
Loan Documents, all notices, requests, demands, directions and other
communications provided for hereunder or under any other Loan Document must be
in writing and must be mailed, telegraphed, telecopied, dispatched by commercial
courier or delivered to the appropriate party at the address set forth on the
signature pages of this Agreement or other applicable Loan Document or, as to
any party to any Loan Document, at any other address as may be designated by it
in a written notice sent to all other parties to such Loan Document in
accordance with this Section. EXCEPT as otherwise expressly provided in any Loan
Document, if any notice, request, demand, direction or other communication
required or permitted by any Loan Document is given by mail it will be effective
on the earlier of receipt or the fourth Banking Day after deposit in the United
States mail with first class or airmail postage prepaid; if given by telegraph
or cable, when delivered to the telegraph company with charges prepaid; if given
by telecopier, when sent; if dispatched by commercial courier, on the scheduled
delivery date; or if given by personal delivery, when delivered.

                  11.7 EXECUTION OF LOAN DOCUMENTS. Unless the Administrative
Agent otherwise specifies with respect to any Loan Document, (a) this Agreement
and any other Loan Document may be executed in any number of counterparts and
any party hereto or thereto may execute any counterpart, each of which when
executed and delivered will be deemed to be an original and all of which
counterparts of this Agreement or any other Loan Document, as the case may be,
when taken together will be deemed to be but one and the same instrument and (b)
execution of any such counterpart may be evidenced by a telecopier transmission
of the signature of such party. The execution of this Agreement or any other
Loan Document by any party hereto or thereto will not become effective until
counterparts hereof or thereof, as the case may be, have been executed by all
the parties hereto or thereto.

                  11.8  BINDING EFFECT; ASSIGNMENT.

                           (a)      This Agreement and the other Loan Documents
         to which the Borrowers are a Party will be binding upon and inure to
         the benefit of the Borrowers, the Administrative Agent, each of the
         Lenders, and their respective successors and assigns, EXCEPT that the
         Borrowers may not assign their rights hereunder or thereunder or any
         interest herein or therein without the prior written consent of all the
         Lenders. Each Lender represents that it is not acquiring its Note with
         a view to the distribution thereof within the meaning of the Securities
         Act of 1933, as amended (subject to any requirement that disposition of
         such Note must be within the control of such Lender). Any Lender may at
         any time pledge its Note or any other instrument evidencing its

                                      -96-
<PAGE>

         rights as a Lender under this Agreement to a Federal Reserve Bank, but
         no such pledge shall release that Lender from its obligations hereunder
         or grant to such Federal Reserve Bank the rights of a Lender hereunder
         absent foreclosure of such pledge.

                           (b)      From time to time following the Closing
         Date, each Lender may assign to one or more Eligible Assignees all or
         any portion of its Pro Rata Share of the Commitments; PROVIDED that (i)
         such Eligible Assignee, if not then a Lender or an Affiliate of the
         assigning Lender, shall be approved by the Administrative Agent and (if
         no Event of Default then exists) the Borrowers (neither of which
         approvals shall be unreasonably withheld or delayed), (ii) such
         assignment shall be evidenced by a Commitment Assignment and
         Acceptance, a copy of which shall be furnished to the Administrative
         Agent as hereinbelow provided, (iii) EXCEPT in the case of an
         assignment to an Affiliate of the assigning Lender, to another Lender
         or of the entire remaining Commitments of the assigning Lender, the
         assignment shall not assign a Pro Rata Share of the Commitments that is
         equivalent to less than $10,000,000 and (iv) the effective date of any
         such assignment shall be as specified in the Commitment Assignment and
         Acceptance, but not earlier than the date which is five (5) Banking
         Days after the date the Administrative Agent has received the
         Commitment Assignment and Acceptance. Upon the effective date of such
         Commitment Assignment and Acceptance, the Eligible Assignee named
         therein shall be a Lender for all purposes of this Agreement, with the
         Pro Rata Share of the Commitments therein set forth and, to the extent
         of such Pro Rata Share, the assigning Lender shall be released from its
         further obligations under this Agreement. The Borrowers agree that they
         shall execute and deliver (against delivery by the assigning Lender to
         the Borrowers of its Note) to such assignee Lender, a Note evidencing
         that assignee Lender's Pro Rata Share of the Commitment, and to the
         assigning Lender, a Note evidencing the Pro Rata Share of the
         Commitments retained by the assigning Lender.

                           (c)      By executing and delivering a Commitment
         Assignment and Acceptance, the Eligible Assignee thereunder
         acknowledges and agrees that: (i) other than the representation and
         warranty that it is the legal and beneficial owner of the Pro Rata
         Share of the Commitment being assigned thereby free and clear of any
         adverse claim, the assigning Lender has made no representation or
         warranty and assumes no responsibility with respect to any statements,
         warranties or representations made in or in connection with this
         Agreement or the execution, legality, validity, enforceability,
         genuineness or sufficiency of this Agreement or any other Loan
         Document; (ii) the assigning Lender has made no representation or
         warranty and assumes no responsibility

                                      -97-
<PAGE>

         with respect to the financial condition of the Borrowers or the
         performance by the Borrowers of the Obligations; (iii) it has received
         a copy of this Agreement, together with copies of the most recent
         financial statements delivered pursuant to Section 7.1 and such other
         documents and information as it has deemed appropriate to make its own
         credit analysis and decision to enter into such Commitment Assignment
         and Acceptance; (iv) it will, independently and without reliance upon
         the Administrative Agent or any Lender and based on such documents and
         information as it shall deem appropriate at the time, conti nue to make
         its own credit decisions in taking or not taking action under this
         Agreement; (v) it appoints and authorizes the Administrative Agent to
         take such action and to exercise such powers under this Agreement as
         are delegated to the Administrative Agent by this Agreement; and (vi)
         it will perform in accordance with their terms all of the obligations
         which by the terms of this Agreement are required to be performed by it
         as a Lender.

                           (d)      The Administrative Agent shall maintain at
         the Administrative Agent's Office a copy of each Commitment Assignment
         and Acceptance delivered to it and a register (the "Register") of the
         names and address of each of the Lenders and the Pro Rata Share of the
         Commitment held by each Lender, giving effect to each Commitment
         Assignment and Acceptance. The Register shall be available during
         normal business hours for inspection by the Borrowers or any Lender
         upon reasonable prior notice to the Administrative Agent. After receipt
         of a completed Commitment Assignment and Acceptance executed by any
         Lender and an Eligible Assignee, receipt of an assignment fee of $3,500
         from such Lender or Eligible Assignee and consent from the
         Administrative Agent and, if applicable, the Borrower, the
         Administrative Agent shall, promptly following the effective date
         thereof, provide to the Borrowers and the Lenders a revised SCHEDULE
         1.1 giving effect thereto. The Borrowers, the Administrative Agent and
         the Lenders shall deem and treat the Persons listed as Lenders in the
         Register as the holders and owners of the Pro Rata Share of the
         Commitment listed therein for all purposes hereof, and no assignment or
         transfer of any such Pro Rata Share of the Commitment shall be
         effective, in each case unless and until a Commitment Assignment and
         Acceptance effecting the assignment or transfer thereof shall have been
         accepted by the Administrative Agent and recorded in the Register as
         provided above. Prior to such recordation, all amounts owed with
         respect to the applicable Pro Rata Share of the Commitment shall be
         owed to the Lender listed in the Register as the owner thereof, and any
         request, authority or consent of any Person who, at the time of making
         such request or giving such authority or consent, is listed in the
         Register as a Lender shall be conclusive and binding on any subsequent

                                      -98-
<PAGE>

         holder, assignee or transferee of the corresponding Pro Rata Share of
         the Commitment.

                           (e)      Each Lender may from time to time grant
         participations to one or more banks or other financial institutions in
         a portion of its Pro Rata Share of the Commitment; PROVIDED, HOWEVER,
         that (i) such Lender's obligations under this Agreement shall remain
         unchanged, (ii) such Lender shall remain solely responsible to the
         other parties hereto for the performance of such obligations, (iii) the
         participating banks or other financial institutions shall not be
         Lenders hereunder for any purpose EXCEPT, if the participation
         agreement so provides, for the purposes of Sections 3.6, 3.7, 11.11 and
         11.22 but only to the extent that the cost of such benefits to the
         Borrowers does not exceed the cost which the Borrowers would have
         incurred in respect of such Lender absent the participation, (iv) the
         Borrowers, the Administrative Agent and the other Lenders shall
         continue to deal solely and directly with such Lender in connec tion
         with such Lender's rights and obligations under this Agreement, (v) the
         participation interest shall be expressed as a percentage of the
         granting Lender's Pro Rata Share of the Commitment as it then exists
         and shall not restrict an increase in the Commitment, or in the
         granting Lender's Pro Rata Share of the Commitment, so long as the
         amount of the participation interest is not affected thereby and (vi)
         the consent of the holder of such participation interest shall not be
         required for amendments or waivers of provisions of the Loan Documents
         OTHER THAN those which (A) extend the Maturity Date or any other date
         upon which any payment of money is due to the Lenders, (B) reduce the
         rate of interest on the Notes, any fee or any other monetary amount
         payable to the Lenders, (C) reduce the amount of any installment of
         principal due under the Notes, (D) release any Subsidiary Guaranty, or
         (E) release any Collateral from the Lien of the Pledge Agreement,
         except if such release of Collateral occurs in connection with a
         Disposition permitted under Section 6.2, in which case such release
         shall not require the consent of any of the Lenders or of any holder of
         a participation interest in the Commitments.

                  11.9 RIGHT OF SETOFF. If an Event of Default has occurred and
is continuing, the Administrative Agent or any Lender (but in each case only
with the consent of the Requisite Lenders) may exercise its rights under Article
9 of the Uniform Commercial Code and other applicable Laws and, to the extent
permitted by applicable Laws, apply any funds in any deposit account maintained
with it by any of the Borrowers and/or any Property of the Borrowers in its
possession against the Obligations.

                                      -99-
<PAGE>

                  11.10 SHARING OF SETOFFS. Each Lender severally agrees that if
it, through the exercise of any right of setoff, banker's lien or counterclaim
against the Borrowers, or otherwise, receives payment of the Obligations held by
it that is ratably more than any other Lender, through any means, receives in
payment of the Obligations held by that Lender, then, subject to applicable
Laws: (a) the Lender exercising the right of setoff, banker's lien or
counterclaim or otherwise receiving such payment shall purchase, and shall be
deemed to have simultaneously purchased, from each of the other Lenders a
participation in the Obligations held by the other Lenders and shall pay to the
other Lenders a purchase price in an amount so that the share of the Obligations
held by each Lender after the exercise of the right of setoff, banker's lien or
counterclaim or receipt of payment shall be in the same proportion that existed
prior to the exercise of the right of setoff, banker's lien or counterclaim or
receipt of payment; and (b) such other adjustments and purchases of
participations shall be made from time to time as shall be equitable to ensure
that all of the Lenders share any payment obtained in respect of the Obligations
ratably in accordance with each Lender's share of the Obligations immediately
prior to, and without taking into account, the payment; PROVIDED that, if all or
any portion of a disproportionate payment obtained as a result of the exercise
of the right of setoff, banker's lien, counterclaim or otherwise is thereafter
recovered from the purchasing Lender by the Borrowers or any Person claiming
through or succeeding to the rights of the Borrowers, the purchase of a
participation shall be rescinded and the purchase price thereof shall be
restored to the extent of the recovery, but without interest. Each Lender that
purchases a participation in the Obligations pursuant to this Section 11.10
shall from and after the purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement with respect
to the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased. The
Borrowers expressly consent to the foregoing arrangements and agree that any
Lender holding a participation in an Obligation so purchased pursuant to this
Section 11.10 may exercise any and all rights of setoff, banker's lien or
counterclaim with respect to the participation as fully as if the Lender were
the original owner of the Obligation purchased.

                  11.11 INDEMNITY BY THE BORROWERS. The Borrowers agree to
indemnify, save and hold harmless the Administrative Agent and each Lender and
their respective directors, officers, agents, attorneys and employees
(collectively the "INDEMNITEES") from and against: (a) any and all claims,
demands, actions or causes of action (EXCEPT a claim, demand, action, or cause
of action for any amount excluded from the definition of "Taxes" in Section
3.12(d)) if the claim, demand, action or cause of action arises out of or
relates to any act or omission (or alleged act or omission) of any of the
Borrowers, any Affiliate of any of the Borrowers, or any officer, director or
stockholder of any such Party relating to the Commitment, the use or
contemplated use

                                      -100-
<PAGE>

of proceeds of any Loan, or the relationship of the Borrowers and the Lenders
under this Agreement; (b) any administrative or investigative proceeding by any
Governmental Agency arising out of or related to a claim, demand, action or
cause of action described in clause (A) above; and (c) any and all liabilities,
losses, reasonable costs or expenses (INCLUDING reasonable attorneys' fees and
the reasonably allocated costs of attorneys employed by any Indemnitee and
disbursements of such attorneys and other professional services) that any
Indemnitee suffers or incurs as a result of the assertion of any foregoing
claim, demand, action or cause of action; PROVIDED that no Indemnitee shall be
entitled to indemnification for any loss caused by its own gross negligence or
willful misconduct or for any loss asserted against it by another Indemnitee. If
any claim, demand, action or cause of action is asserted against any Indemnitee,
such Indemnitee shall promptly notify the Borrowers, but the failure to so
promptly notify the Borrowers shall not affect the Borrowers' obligations under
this Section unless such failure materially prejudices the Borrowers' right to
participate in the contest of such claim, demand, action or cause of action, as
hereinafter provided. Such Indemnitee may (and shall, if requested by the
Borrowers in writing) contest the validity, applicability and amount of such
claim, demand, action or cause of action and shall permit the Borrowers to
participate in such contest. Any Indemnitee that proposes to settle or
compromise any claim or proceeding for which the Borrowers may be liable for
payment of indemnity hereunder shall give the Borrowers written notice of the
terms of such proposed settlement or compromise reasonably in advance of
settling or compromising such claim or proceeding and shall obtain the
Borrowers' prior consent (which shall not be unreasonably withheld or delayed).
In connection with any claim, demand, action or cause of action covered by this
Section 11.11 against more than one Indemnitee, all such Indemnitees shall be
represented by the same legal counsel (which may be a law firm engaged by the
Indemnitees or attorneys employed by an Indemnitee or a combination of the
foregoing) selected by the Indemnitees and reasonably acceptable to the
Borrowers; PROVIDED, that if such legal counsel determines in good faith that
representing all such Indemnitees would or could result in a conflict of
interest under Laws or ethical principles applicable to such legal counsel or
that a defense or counterclaim is available to an Indemnitee that is not
available to all such Indemnitees, then to the extent reasonably necessary to
avoid such a conflict of interest or to permit unqualified assertion of such a
defense or counterclaim, each affected Indemnitee shall be entitled to separate
representation by legal counsel selected by that Indemnitee and reasonably
acceptable to the Borrowers, with all such legal counsel using reasonable
efforts to avoid unnecessary duplication of effort by counsel for all
Indemnitees; and FURTHER PROVIDED that the Administrative Agent (as an
Indemnitee) shall at all times be entitled to representation by separate legal
counsel (which may be a law firm or attorneys employed by the Administrative
Agent or a combination of the foregoing). Any obligation or liability of the
Borrowers to any Indemnitee under this Section 11.11 shall survive the
expiration or termination

                                      -101-
<PAGE>

of this Agreement and the repayment of all Loans and the payment and performance
of all other Obligations owed to the Lenders.

                  11.12 NONLIABILITY OF THE LENDERS. The Borrowers acknowledge
and agree that:

                           (a)      Any inspections of any Property of any of
         the Borrowers made by or through the Administrative Agent or the
         Lenders are for purposes of administration of the Loan only and the
         Borrowers are not entitled to rely upon the same (whether or not such
         inspections are at the expense of the Borrowers);

                           (b)      By accepting or approving anything required
         to be observed, performed, fulfilled or given to the Administrative
         Agent or the Lenders pursuant to the Loan Documents, neither the
         Administrative Agent nor the Lenders shall be deemed to have warranted
         or represented the sufficiency, legality, effectiveness or legal effect
         of the same, or of any term, provision or condition thereof, and such
         acceptance or approval thereof shall not constitute a warranty or
         representation to anyone with respect thereto by the Administrative
         Agent or the Lenders;

                           (c)      The relationship between the Borrowers and
         the Administrative Agent and the Lenders is, and shall at all times
         remain, solely that of borrowers and lenders; neither the
         Administrative Agent nor the Lenders shall under any circumstance be
         construed to be partners or joint venturers of the Borrowers or any of
         their respective Affiliates; neither the Administrative Agent nor the
         Lenders shall under any circumstance be deemed to be in a relationship
         of confidence or trust or a fiduciary relationship with the Borrowers
         or any of their respective Affiliates, or to owe any fiduciary duty to
         the Borrowers or any of their respective Affiliates; neither the
         Administrative Agent nor the Lenders undertake or assume any
         responsibility or duty to the Borrowers or any of their respective
         Affiliates to select, review, inspect, supervise, pass judgment upon or
         inform the Borrowers or any of their respective Affiliates of any
         matter in connection with their Property or the operations of the
         Borrowers or any of their respective Affiliates; the Borrowers and
         their Affiliates shall rely entirely upon their own judgment with
         respect to such matters; and any review, inspection, supervision,
         exercise of judgment or supply of information undertaken or assumed by
         the Administrative Agent or the Lenders in connection with such matters
         is solely for the protection of the Administrative Agent and the
         Lenders and neither the Borrowers nor any other Person is entitled to
         rely thereon; and

                                      -102-
<PAGE>

                           (d)      The Administrative Agent and the Lenders
         shall not be responsible or liable to any Person for any loss, damage,
         liability or claim of any kind relating to injury or death to Persons
         or damage to Property caused by the actions, inaction or negligence of
         any of the Borrowers and/or any Affiliate of any of the Borrowers and
         the Borrowers hereby indemnify and hold the Administrative Agent and
         the Lenders harmless on the terms set forth in Section 11.11 from any
         such loss, damage, liability or claim.

                  11.13 NO THIRD PARTIES BENEFITTED. This Agreement is made for
the purpose of defining and setting forth certain obligations, rights and duties
of the Borrowers, the Administrative Agent and the Lenders in connection with
the Loans, and is made for the sole benefit of the Borrowers, the Administrative
Agent and the Lenders, and the Administrative Agent's and the Lenders'
successors and permitted assigns. EXCEPT as provided in Sections 11.8 and 11.11,
no other Person shall have any rights of any nature hereunder or by reason
hereof.

                  11.14 CONFIDENTIALITY. Each Lender agrees to hold any
confidential information that it may receive from the Borrowers pursuant to this
Agreement in confidence, EXCEPT for disclosure: (a) to other Lenders or
Affiliates of a Lender; (b) to legal counsel and accountants for the Borrowers
or any Lender; (c) to other professional advisors to the Borrowers or any
Lender, provided that the recipient has accepted such information subject to a
confidentiality agreement substantially similar to this Section 11.14; (d) to
regulatory officials having jurisdiction over that Lender; (e) as required by
Law or legal process, provided that each Lender agrees to notify the Borrowers
of any such disclosures unless prohibited by applicable Laws, or in connection
with any legal proceeding to which that Lender and the Borrowers are adverse
parties; and (f) to another financial institution in connection with a
disposition or proposed disposition to that financial institution of all or part
of that Lender's interests hereunder or a participation interest in its Notes,
provided that the recipient has accepted such information subject to a
confidentiality agreement substantially similar to this Section 11.14. For
purposes of the foregoing, "confidential information" shall mean any information
respecting the Borrowers or its Subsidiaries reasonably considered by a Borrower
to be confidential, OTHER THAN (i) information previously filed with any
Governmental Agency and available to the public, (ii) information previously
published in any public medium from a source other than, directly or indirectly,
that Lender, and (iii) the information previously disclosed by the Borrowers to
any Person not associated with Borrowers which does not owe a professional duty
of confidentiality to the Borrowers or which has not executed an appropriate
confidentiality agreement with the Borrowers. Nothing in this Section shall be
construed to create or give rise to any fiduciary duty on the part of the
Administrative Agent or the Lenders to the Borrowers.

                                      -103-
<PAGE>

                  11.15 FURTHER ASSURANCES. The Borrowers shall, at their
expense and without expense to the Lenders or the Administrative Agent, do,
execute and deliver such further acts and documents as the Requisite Lenders or
the Administrative Agent from time to time reasonably require for the assuring
and confirming unto the Lenders or the Administrative Agent of the rights hereby
created or intended now or hereafter so to be, or for carrying out the intention
or facilitating the performance of the terms of any Loan Document.

                  11.16 INTEGRATION. This Agreement, together with the other
Loan Documents and the letter agreement referred to in Sections 3.2, 3.4, and
3.5, comprises the complete and integrated agreement of the parties on the
subject matter hereof and supersedes all prior agreements, written or oral, on
the subject matter hereof. In the event of any conflict between the provisions
of this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control and govern; PROVIDED that the inclusion of supplemental
rights or remedies in favor of the Administrative Agent or the Lenders in any
other Loan Document shall not be deemed a conflict with this Agreement. Each
Loan Document was drafted with the joint participation of the respective parties
thereto and shall be construed neither against nor in favor of any party, but
rather in accordance with the fair meaning thereof.

                  11.17 GOVERNING LAW; JURISDICTION AND VENUE. EXCEPT to the
extent otherwise provided therein, each Loan Document shall be governed by, and
construed and enforced in accordance with, the Laws of California applicable to
contracts made and performed in California. THE PARTIES AGREE THAT ALL ACTIONS
OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND
LITIGATED ONLY IN A STATE OR FEDERAL COURT LOCATED IN THE STATE OF CALIFORNIA,
OR, AT THE SOLE OPTION OF THE ADMINISTRATIVE AGENT OR ANY LENDER, IN ANY OTHER
COURT IN WHICH THE ADMINISTRATIVE AGENT AND/OR ANY LENDER SHALL INITIATE LEGAL
OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE
MATTER IN CONTROVERSY. THE PARTIES EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED IN ANY SUCH COURT, AND
THE PARTIES HEREBY WAIVE ANY OBJECTION THEY MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION AND HEREBY CONSENT TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY ANY SUCH COURT. FURTHERMORE, THE PARTIES
HEREBY WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT THEY MAY
HAVE TO ASSERT THAT ANY SUCH COURT IS AN INCONVENIENT FORUM

                                      -104-
<PAGE>

OR OTHERWISE TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 11.17.

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

                  11.19 HEADINGS. Article and Section headings in this Agreement
and the other Loan Documents are included for convenience of reference only and
are not part of this Agreement or the other Loan Documents for any other
purpose.

                  11.20 TIME OF THE ESSENCE. Time is of the essence of the Loan
Documents.

                  11.21 FOREIGN LENDERS AND PARTICIPANTS. Each Lender that is
incorporated or otherwise organized under the Laws of a jurisdiction other than
the United States of America or any State thereof or the District of Columbia
shall deliver to the Borrowers (with a copy to the Administrative Agent), on or
before the Closing Date (or on or before accepting an assignment or receiving a
participation interest herein pursuant to Section 11.8, if applicable) two duly
completed copies, signed by a Responsible Official, of either Form W-8BEN
(relating to such Lender and entitling it to a complete exemption from
withholding on all payments to be made to such Lender by the Borrowers pursuant
to this Agreement) or Form W-8ECI ( relating to all payments to be made to such
Lender by the Borrowers pursuant to this Agreement) of the United States
Internal Revenue Service or such other evidence (INCLUDING, if reasonably
necessary, Form W-8 or W-9) satisfactory to the Borrowers and the Administrative
Agent that no withholding under the federal income tax laws is required with
respect to such Lender. Thereafter and from time to time, each such Lender shall
(a) promptly submit to the Borrowers (with a copy to the Administrative Agent),
such additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United
States taxing authorities) as may then be available under then current United
States laws and regulations to avoid, or such evidence as is satisfactory to the
Borrowers and the Administrative Agent of any available exemption from, United
States withholding taxes in respect of all payments to be made to such Lender by
the Borrowers pursuant to this Agreement and (b) take such steps as shall not be
materially disadvantageous to it, in the reasonable judgment of such Lender, and
as may be reasonably necessary (including the re-designation of its Eurodollar
Lending Office, if any) to avoid any

                                      -105-
<PAGE>

requirement of applicable Laws that the Borrowers make any deduction or
withholding for taxes from amounts payable to such Lender. In the event that the
Borrowers or the Administrative Agent become aware that a participation has been
granted pursuant to Section 11.8(e) to a financial institution that is
incorporated or otherwise organized under the Laws of a jurisdiction other than
the United States of America, any State thereof or the District of Columbia,
then, upon request made by the Borrowers or the Administrative Agent to the
Lender which granted such participation, such Lender shall cause such
participant financial institution to deliver the same documents and information
to the Borrowers and the Administrative Agent as would be required under this
Section if such financial institution were a Lender.

                  11.22 HAZARDOUS MATERIAL INDEMNITY. The Borrowers hereby agree
to indemnify, hold harmless and defend (by counsel reasonably satisfactory to
the Administrative Agent) the Administrative Agent and each of the Lenders and
their respective directors, officers, employees, agents, successors and assigns
from and against any and all claims, losses, damages, liabilities, fines,
penalties, charges, administrative and judicial proceedings and orders,
judgments, remedial action require ments, enforcement actions of any kind, and
all reasonable costs and expenses incurred in connection therewith (including
but not limited to reasonable attorneys' fees and the reasonably allocated costs
of attorneys employed by the Administrative Agent or any Lender, and expenses to
the extent that the defense of any such action has not been assumed by the
Borrowers), arising directly or indirectly out of (i) the presence on, in, under
or about any Real Property of any Hazardous Materials, or any releases or
discharges of any Hazardous Materials on, under or from any Real Property and
(ii) any activity carried on or undertaken on or off any Real Property by the
Borrowers or any of its predecessors in title, whether prior to or during the
term of this Agree ment, and whether by the Borrowers or any predecessor in
title or any employees, agents, contractors or subcontractors of the Borrowers
or any predecessor in title, or any third persons at any time occupying or
present on any Real Property, in connection with the handling, treatment,
removal, storage, decontamination, clean-up, transport or disposal of any
Hazardous Materials at any time located or present on, in, under or about any
Real Property. The foregoing indemnity shall further apply to any residual
contamination on, in, under or about any Real Property, or affecting any natural
resources, and to any contamination of any Property or natural resources arising
in connection with the generation, use, handling, storage, transport or disposal
of any such Hazardous Materials, and irrespective of whether any of such
activities were or will be undertaken in accordance with applicable Laws, but
the foregoing indemnity shall not apply to Hazardous Materials on any Real
Property, the presence of which is caused by the Administrative Agent or the
Lenders. The Borrowers hereby acknowledge and agree that, notwithstanding any
other provision of this Agreement or any of the other Loan Documents to the
contrary, the obligations of the Borrowers

                                      -106-
<PAGE>

under this Section shall be unlimited corporate obligations of the Borrowers and
shall NOT be secured by any Lien on any Real Property. Any obligation or
liability of the Borrowers to any Indemnitee under this Section 11.22 shall
survive the expiration or termination of this Agreement and the repayment of all
Loans and the payment and performance of all other Obligations owed to the
Lenders.

                  11.23 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY 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 TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.

                  11.24  PURPORTED ORAL AMENDMENTS.  THE BORROWERS EXPRESSLY
ACKNOWLEDGE THAT THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE
AMENDED OR MODIFIED, OR THE PROVISIONS HEREOF OR THEREOF WAIVED OR
SUPPLEMENTED, BY AN INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION 11.2.
THE BORROWERS AGREE THAT THEY WILL NOT RELY ON ANY COURSE OF DEALING, COURSE
OF PERFORMANCE, OR ORAL OR WRITTEN STATEMENTS BY ANY REPRESENTATIVE OF THE
ADMINISTRATIVE AGENT OR ANY LENDER THAT DOES NOT COMPLY WITH SECTION 11.2 TO

                                      -107-
<PAGE>

EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR SUPPLEMENT TO THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS.

                  11.25 JOINT AND SEVERAL. Each of the Borrowers shall be
obligated for all of the Obligations on a joint and several basis,
notwithstanding which of the Borrowers may have directly received the proceeds
of any particular Loan or Advance or the benefit of a particular Letter of
Credit. Each of the Borrowers acknowledges and agrees that, for the purposes of
the Loan Documents, the Borrowers constitute a single integrated financial
enterprise and that each receives a benefit from the availability of credit
under this Agreement. Each of the Borrowers waives all defenses arising under
the Laws of suretyship, to the extent such Laws are applicable, in connection
with the Borrowers' joint and several obligations under this Agreement. Without
limiting the foregoing, each of the Borrowers agrees to the Joint Borrower
Provisions set forth in EXHIBIT L, attached to this Agreement and incorporated
herein by this reference.

                  11.26 CONVERSION OF CURRENCIES. If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum owing
hereunder in one currency into another currency, each party hereto agrees, to
the fullest extent that it may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures in the
relevant jurisdiction the first currency could be purchased with such other
currency on the Banking Day immediately preceding the day on which final
judgment is given. The obligations of the Borrowers in respect of any sum due to
any Lender (the "Applicable Lender") shall, notwithstanding any judgment in a
currency (the "Judgment Currency") other than the currency in which such sum is
stated to be due hereunder (the "Agreement Currency"), be discharged only to the
extent that on the Banking Day following receipt by the Applicable Lender of any
sum adjudged to be so due in the Judgment Currency, the Applicable Lender may in
accordance with normal banking procedures in the relevant jurisdiction purchase
the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Applicable Lender in the Agreement Currency, the Borrowers agree, as a separate
obligation and notwithstanding any such judgment, to indemnify the Applicable
Lender against such loss. The obligations of the Borrowers contained in this
Section 11.26 shall survive the termination of this Agreement and the payment of
all other amounts owing hereunder.

                                      -108-
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.

                   THE BORROWERS:

                   POWER-ONE, INC.

                   By:_____________________________________
                         Ed K. Schnopp
                         Senior Vice President-Finance
                         and Chief Financial Officer

                   INTERNATIONAL POWER DEVICES, INC.

                   By:_____________________________________
                   Name: __________________________________
                   Title: _________________________________

                   MELCHER HOLDING AG

                   By:_____________________________________
                   Name: __________________________________
                   Title: _________________________________

                   By:_____________________________________
                   Name: __________________________________
                   Title: _________________________________

                   HC POWER, INC.

                   By:_____________________________________
                   Name: __________________________________
                   Title: _________________________________

                                       S-1
<PAGE>

                    Address for the Borrowers:

                    c/o Power-One, Inc.
                    740 Calle Plano
                    Camarillo, California  93102-8583

                    Attn:     Ed K. Schnopp
                              Senior Vice President - Finance
                              and Chief Financial Officer

                    Telecopier: (805) 383-8976
                    Telephone:  (805) 987-9841

                                       S-2

<PAGE>

                        ADMINISTRATIVE AGENT:

                        UNION BANK OF CALIFORNIA, N.A.,
                        as Administrative Agent

                        By:_____________________________
                                 John Kase
                                 Vice President

                        Address:

                        Union Bank of California, N.A.
                        Commercial Banking Group
                        445 S. Figueroa Street, 10th Floor
                        Los Angeles, California 90071

                        Attn: John Kase

                        Telecopier: (213) 236-7637
                        Telephone:  (213) 236-7635

                                       S-3

<PAGE>

                        THE LENDERS:

                        UNION BANK OF CALIFORNIA, N.A.,
                        as a Lender

                        By:_____________________________
                                 John Kase
                                 Vice President

                        Address:

                        Union Bank of California, N.A.
                        Commercial Banking Group
                        445 S. Figueroa Street, 10th Floor
                        Los Angeles, California 90071

                        Attn: John Kase

                        Telecopier: (213) 236-7637
                        Telephone:  (213) 236-7635

                                       S-4<PAGE>

                                                                 EXHIBIT 10.22

                          REGISTRATION RIGHTS AGREEMENT

          This Registration Rights Agreement (the "Agreement") is entered into
as of March 31, 2000 by and among Tetra Tech, Inc., a Delaware corporation
("Tetra Tech"), and the parties listed on SCHEDULE A attached hereto (each, a
"Holder" and collectively, the "Holders").

                                 R E C I T A L S

          A. Tetra Tech and the Holders are parties to the Agreement and Plan of
Reorganization of even date (the "Reorganization Agreement"), pursuant to which
eXpert Wireless Solutions, Inc., a New Jersey corporation ("EWS"), will merge
with and into Tetra Tech EWS Acquisition Corporation, a Delaware corporation and
wholly-owned subsidiary of Tetra Tech.

          B. Pursuant to the Reorganization Agreement, the shareholders of EWS
will receive shares of the common stock, $.01 par value, of Tetra Tech ("Tetra
Tech Common Stock"); and

          C. This Agreement is the Registration Rights Agreement referred to in
SECTION 6.2 of the Reorganization Agreement and, pursuant thereto, must be
entered into by the parties in connection with the consummation of the
transactions contemplated by the Reorganization Agreement.

                                A G R E E M E N T

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

         1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:

            "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.

            "FORM S-3" shall mean such form under the Securities Act as in
effect on the date hereof or any successor registration form under the
Securities Act subsequently adopted by the SEC which permits inclusion or
incorporation of substantial information by reference to other documents
filed by Tetra Tech with the SEC.

<PAGE>

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

                  "REGISTER", "REGISTERED" and "REGISTRATION" shall mean and
refer to a registration effected by preparing and filing a Registration
Statement and taking all other actions that are necessary or appropriate in
connection therewith, and the declaration or ordering of effectiveness of such
Registration Statement by the SEC.

                  "REGISTRATION EXPENSES" shall have the meaning set forth in
SECTION 4.

                  "REGISTRABLE SECURITIES" shall mean the shares of Tetra Tech
Common Stock (i) issued pursuant to the Reorganization Agreement, and (ii)
issued as a dividend or other distribution with respect to or in exchange for or
in replacement of the shares referenced in (i) above; PROVIDED, HOWEVER, that
Registrable Securities shall not include any shares of Tetra Tech Common Stock
that have previously been registered or sold to the public or have been sold
pursuant to Rule 144 ( or similar successor Rule).

                  "REGISTRATION STATEMENT" shall mean any registration statement
of Tetra Tech in compliance with the Securities Act that covers Registrable
Securities pursuant to the provisions of this Agreement, including, without
limitation, the Prospectus, all amendments and supplements to such Registration
Statement, including all post-effective amendments, all exhibits and all
material incorporated by reference in such Registration Statement.

                  "RULE 144" shall mean Rule 144 promulgated under the
Securities Act or any similar successor rule, as the same shall be in effect
from time to time.

                  "RULE 144A" shall mean Rule 144A promulgated under the
Securities Act or any similar successor rule, as the same shall be in effect
from time to time.

                  "RULE 415" shall mean Rule 415 promulgated under the
Securities Act, or any similar successor rule, as the same shall be in effect
from time to time.

                  "SECURITIES ACT" shall mean the Securities Act of 1933, as
amended from time to time.

                  "SEC" shall mean the Securities and Exchange Commission.

                  "UNDERWRITTEN OFFERING" shall mean a registration in which
securities of Tetra Tech are sold to an underwriter or through an underwriter as
agent for reoffering to the public.

                                       2

<PAGE>

         2. TETRA TECH REGISTRATION. If Tetra Tech shall determine to register
any shares of Tetra Tech Common Stock, or any securities convertible into or
exchangeable or exercisable for shares of Tetra Tech Common Stock, for its own
account or for the account of any stockholder (other than a registration
relating to the sale of securities to employees of Tetra Tech pursuant to an
employee benefit plan or pursuant to a transaction of the type described in Rule
145 under the Securities Act), the Holders shall be entitled to include
Registrable Securities in such registration (and related underwritten offering,
if any) on the following terms and conditions:

                  (a) Tetra Tech shall promptly give written notice of such
determination to each Holder and each such Holder shall have the right to
request, by written notice given to Tetra Tech within 30 days of the receipt by
such Holder of such notice, that a specific number of Registrable Securities
held by such Holder be included in such Registration Statement;

                  (b) If the Registration Statement relates to an underwritten
offering, the notice called for by SECTION 2(a) shall specify the name of the
managing underwriter for such offering and the number of securities to be
registered for the account of Tetra Tech and for the account of any other
stockholder of Tetra Tech;

                  (c) If the Registration Statement relates to an underwritten
offering, each Holder to be included therein must (i) sell such person's
Registrable Securities on the same basis provided in the underwriting
arrangements approved by Tetra Tech and (ii) complete and execute all
questionnaires, powers of attorney, indemnities, hold-back agreements,
underwriting agreements and other documents required under the terms of such
underwriting arrangements or by the SEC;

                  (d) If the managing underwriter for the underwritten offering
under the Registration Statement to be filed by Tetra Tech determines that
inclusion of all or any portion of the Registrable Securities in such offering
would adversely affect the ability of the underwriter for such offering to sell
all of the securities requested to be included for sale or the price per share
in such offering, the number of shares that may be included in such registration
in such offering shall be allocated as follows: (i) first, Tetra Tech shall be
permitted to include all shares of capital stock to be registered thereby; and
(ii) second, the Holders, and any other selling stockholder exercising piggyback
registration rights granted by Tetra Tech shall be allowed to include securities
on a pro rata basis in such amounts as may be deemed appropriate by such
managing underwriter;

                  (e) Holders shall have the right to withdraw their Registrable
Securities from the Registration Statement at any time prior to the effective
date thereof, but if the same relates to an underwritten offering, they may only
do so during the time period and on terms deemed appropriate by the underwriters
for such underwritten offering; and

                                       3

<PAGE>

                  (f) Tetra Tech shall have the right to terminate or withdraw
any registration initiated by it under this SECTION 2 prior to the effective
date of such registration for any reason without liability to any Holder as a
result thereof, whether or not any Holder has elected to include such securities
in such registration.

          3.      REGISTRATION FOR HOLDERS.

                  (a) Tetra Tech shall file a Registration Statement on Form
S-3, providing for the sale by the Holders, pursuant to Rule 415, and/or any
similar rule that may be adopted by the SEC, of the Registrable Securities.
Tetra Tech shall use commercially reasonable efforts to (i) cause such
Registration Statement to become effective on or before July 31, 2000, and (ii)
keep such Registration Statement continuously effective for a period ending on
the date on which all such Holders are eligible to sell all Registrable
Securities under Rule 144 (or similar successor rule) without any volume or
other limitation. If, at the time Tetra Tech is required to file a Registration
Statement pursuant to this SECTION 3(a), Tetra Tech is not eligible to file a
Registration Statement on Form S-3 to register resales by stockholders, Tetra
Tech shall initially file a Registration Statement on Form S-1 and shall comply
with the provisions of the immediately preceding sentence. Upon becoming
eligible to use the Registration Statement on Form S-3 to register resales by
stockholders (whether pursuant to a ruling or waiver from the SEC or otherwise),
Tetra Tech shall promptly file a Registration Statement on Form S-3 or convert
the existing Registration Statement to Form S-3 relating to the offer and sale
of Registrable Securities by the Holders from time to time. Thereafter, Tetra
Tech shall use commercially reasonable efforts to cause such new or amended
Registration Statement to be declared effective by the SEC as promptly as
practicable.

                  (b) Each Holder shall reasonably cooperate in providing and/or
confirming in writing prior to or after the filing of the Registration Statement
such information (including, without limitation, information as to the number of
Registrable Securities that such Holder has sold pursuant to any such
Registration Statement from time to time) as is customarily provided in
connection with such Registration Statement.

                  (c) Notwithstanding the foregoing, for a period not to exceed
90 days, Tetra Tech shall not be obligated to prepare and file the Registration
Statement required hereunder if Tetra Tech, in its good faith judgment,
reasonably believes that the filing of such Registration Statement would require
the disclosure of material non-public information regarding Tetra Tech and,
accordingly, that the filing thereof, at the time requested, or the offering of
Tetra Tech Common Stock pursuant thereto, would materially and adversely affect
(i) a pending or scheduled public offering or private placement of securities of
Tetra Tech, (ii) an acquisition, merger, consolidation or similar transaction by
or of Tetra Tech, (iii) preexisting and continuing negotiations, discussions or
pending proposals with respect to any of the foregoing transactions, or (iv) the
financial condition of Tetra Tech in view of the disclosure of any pending or

                                       4

<PAGE>

threatened litigation, claim, assessment or governmental investigation which
might be required thereby.

          In the event that Tetra Tech, in good faith, reasonably believes that
such conditions are continuing after such 90-day period, it may, with the
consent of all the Holders, which consent shall not be unreasonably withheld,
extend such 90-day period for an additional 30 days. Any further delay shall
require the consent of the Holders of all such shares.

          4. RESTRICTIONS ON PUBLIC SALE BY HOLDERS OF REGISTRABLE SECURITIES.
Each Holder whose Registrable Securities are included (in whole or in part) in a
Registration Statement filed by Tetra Tech under SECTION 2 for sale in an
underwritten offering agrees, if requested by the managing underwriter of such
offering, not to sell, make any short sale of, loan, grant any option for the
purchase of, dispose of or effect any public sale or distribution of securities
of the same series and class as (or securities exchangeable or exercisable for
or convertible into securities of the same series and class as) the Registrable
Securities included in the Registration Statement, including a sale pursuant to
Rule 144 (except as part of such underwritten registration), during the ten day
period prior to, and during the 180 day period (or shorter period requested by
the underwriter) beginning on the closing date of such underwritten offering, to
the extent timely notified in writing by Tetra Tech or the managing underwriter.

          5. REGISTRATION PROCEDURES. In connection with Tetra Tech's
registration obligations pursuant to SECTIONS 2 OR 3 hereof, Tetra Tech will use
reasonable best efforts to effect such registration to permit the sale of the
Registrable Securities covered thereby in accordance with the intended method or
methods of disposition thereof, and pursuant thereto Tetra Tech will:

                  (a) prepare and file with the SEC a Registration Statement
with respect to such Registrable Securities and use its commercially reasonable
efforts to cause such Registration Statement to become effective; PROVIDED that,
before filing any Registration Statement or Prospectus or any amendments or
supplements thereto, Tetra Tech will furnish to the Holders of the Registrable
Securities covered by such Registration Statement and their counsel, copies of
all such documents proposed to be filed at least ten days prior thereto, and
Tetra Tech will not file any such Registration Statement or amendment thereto or
any Prospectus or any supplement thereto to which any such Holder shall
reasonably object within such ten day period; PROVIDED, FURTHER, that Tetra Tech
will not name or otherwise provide any information with respect to any Holder in
any Registration Statement or Prospectus without the express written consent of
such Holder, unless required to do so by the Securities Act and the rules and
regulations thereunder;

                  (b) prepare and file with the SEC such amendments,
post-effective amendments and supplements to the Registration Statement and the
Prospectus as may be necessary to comply with the provisions of the Securities
Act and the rules and regulations

                                       5

<PAGE>

thereunder with respect to the disposition of all securities covered by such
Registration Statement and as may be required to permit continuous sales
pursuant to the Prospectus;

                  (c) notify the selling Holders (i) when the Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and, with
respect to the Registration Statement or any post-effective amendment, when the
same has become effective, (ii) of any request by the SEC for amendments or
supplements to the Registration Statement or the Prospectus or for additional
information, (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose, (iv) of the receipt by Tetra Tech of any notification with
respect to the suspension of the qualification of the Registrable Securities for
sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose and (v) of the happening of any event which makes any statement
made in the Registration Statement, the Prospectus or any document incorporated
therein by reference untrue or which requires the making of any changes in the
Registration Statement, the Prospectus or any document incorporated therein by
reference in order to make the statements therein not misleading in light of the
circumstances then existing;

                  (d) use reasonable best efforts to obtain the withdrawal of
any order suspending the effectiveness of the Registration Statement at the
earliest possible moment;

                  (e) deliver to each selling Holder, without charge, such
reasonable number of conformed copies of the Registration Statement (and any
post-effective amendment thereto) and such number of copies of the current,
effective Prospectus (including each preliminary prospectus) and any amendment
or supplement thereto (and any documents incorporated by reference therein) as
such Holder may reasonably request. Tetra Tech consents to the use of the
Prospectus or any amendment or supplement thereto by each of the selling Holders
in connection with the offer and sale of the Registrable Securities covered by
the Prospectus or any amendment or supplement thereto;

                  (f) prior to any offering of Registrable Securities covered by
a Registration Statement, register or qualify such Registrable Securities for
offer and sale under the securities or blue sky laws of such jurisdictions as
any such selling Holder reasonably requests, and use commercially reasonable
efforts to keep each such registration or qualification effective, including
through new filings, or amendments or renewals, during the period such
Registration Statement is required to be kept effective pursuant to the terms of
this Agreement; and do any and all other acts or things necessary or advisable
to enable the disposition in all such jurisdictions reasonably requested by the
Holders of the Registrable Securities covered by such Registration Statement,
PROVIDED that under no circumstances shall Tetra Tech be required in connection
therewith or as a condition thereof to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions;

                                       6

<PAGE>

                  (g) facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold, free of any and all
restrictive legends, such certificates to be in such denominations and
registered in such names as the Holders may request;

                  (h) upon the occurrence of any event contemplated by SECTION
5(c)(v) above, promptly prepare a supplement or post-effective amendment to the
Registration Statement or the Prospectus or any document incorporated therein by
reference or file any other required

                                       7

<PAGE>

document so that, as thereafter delivered to the purchasers of the Registrable
Securities, the Prospectus will not contain an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;

                  (i) make generally available to the holders of Tetra Tech's
outstanding securities earnings statements satisfying the provisions of Section
11(a) of the Securities Act, no later than 60 days after the end of any 12 month
period (or 90 days, if such period is a fiscal year) beginning with the first
month of Tetra Tech's first fiscal quarter commencing after the effective date
of the Registration Statement, which statements shall cover said 12 month
period;

                  (j) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by each Registration Statement
from and after a date not later than the effective date of such Registration
Statement;

                  (k) use its best efforts to cause all Registrable Securities
covered by each Registration Statement to be listed, subject to notice of
issuance, prior to the date of the first sale of such Registrable Securities
pursuant to such Registration Statement, on each securities exchange on which
the Tetra Tech Common Stock is then listed, and admitted to trading on the
Nasdaq Stock Market, if the Tetra Tech Common Stock is then admitted to trading
on the Nasdaq Stock Market; and

                  (l) enter into such agreements (including underwriting
agreements in customary form containing, among other things, reasonable and
customary indemnities) and take such other actions as a majority of the Holders
shall reasonably request in order to expedite or facilitate the disposition of
such Registrable Securities; and

                  (m) cooperate with the selling Holders and the managing
underwriter or underwriters in their marketing efforts with respect to the sale
of the Registrable Securities, including participation by Tetra Tech management
in "road show" presentations.

          Each Holder agrees that, upon receipt of any notice from Tetra Tech of
the happening of any event of the kind described in SECTION 5(c)(v) hereof, such
Holder will forthwith discontinue disposition of Registrable Securities under
the Prospectus related to the applicable Registration Statement until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by SECTION 5(h) hereof, or until it is advised in writing by Tetra
Tech that the use of the Prospectus may be resumed. Tetra Tech agrees that the
period during which such Holder must discontinue disposition of Registrable
Securities under the Prospectus ("suspension period") will not exceed the
suspension period under other Registration Statements filed by Tetra Tech for
the benefit of selling stockholders.

          It shall be a condition precedent to the obligations of Tetra Tech to
take any action pursuant to this SECTION 5 with respect to the Registrable
Securities of any selling Holder that such Holder shall furnish to Tetra Tech
such information regarding itself and the Registrable Securities held by it as
shall be required by the Securities Act to effect the registration of such
Holder's Registrable Securities.

                                       8

<PAGE>

          6. REGISTRATION EXPENSES. All expenses incident to any registration to
be effected hereunder and incident to Tetra Tech's performance of or compliance
with this Agreement, including without limitation all registration and filing
fees, fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, National Association of Securities
Dealers, Inc., stock exchange and qualification fees, fees and disbursements of
Tetra Tech's counsel and of independent certified public accountants of Tetra
Tech (including the expenses of any special audit required by or incident to
such performance), the fees and disbursements of one counsel and one accountant
representing the Holders in such offering, expenses of the underwriters that are
customarily requested in similar circumstances by such underwriters (excluding
discounts, commissions or fees of underwriters, selling brokers, dealer managers
or similar securities industry professionals relating to the distribution of the
Registrable Securities, which will be borne by the Holders), all such expenses
being herein called "Registration Expenses," will be borne by Tetra Tech. Tetra
Tech will also pay its internal expenses, the expense of any annual audit and
the fees and expenses of any person retained by Tetra Tech.

          7.      INDEMNIFICATION.

                  (a) INDEMNIFICATION BY TETRA TECH. Tetra Tech agrees to
indemnify and hold harmless each Holder of Registrable Securities, its officers,
directors, partners, agents and employees and each person who controls such
Holder (within the meaning of Section 15 of the Securities Act) from and against
any and all losses, claims, damages and liabilities (including any
investigation, legal or other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted) (collectively, "Damages") to which such Holder may become
subject under the Securities Act, the Exchange Act or other federal or state
securities law or regulation, at common law or otherwise, insofar as such
Damages arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement,
Prospectus or preliminary prospectus or any amendment or supplement thereto,
(ii) the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading and (iii) any
violation or alleged violation by Tetra Tech of the Securities Act, the Exchange
Act or any state securities or blue sky laws in connection with the Registration
Statement, Prospectus or preliminary prospectus or any amendment or supplement
thereto, PROVIDED that Tetra Tech will not be liable to any Holder to the extent
that such Damages arise from or are based upon any untrue statement or omission
(x) based upon written information furnished to Tetra Tech by such Holder
expressly for the inclusion in such Registration Statement, (y) made in any
preliminary prospectus if such Holder failed to deliver a copy of the Prospectus
with or prior to the delivery of written confirmation of the sale by such Holder
to the party asserting the claim underlying such Damages and such Prospectus
would have corrected such untrue statement or omission and (z) made in any
Prospectus if such untrue statement or omission was corrected in an amendment or
supplement to such Prospectus delivered to Holder and identified as the current
Prospectus and such Holder failed to deliver such amendment or supplement prior
to or concurrently with the sale of Registrable Securities to the party
asserting the claim underlying such Damages.

                                       9

<PAGE>

                  (b) INDEMNIFICATION BY HOLDER OF REGISTRABLE SECURITIES. Each
Holder of Registrable Securities whose Registrable Securities are sold under a
Prospectus which is a part of a Registration Statement agrees to indemnify and
hold harmless Tetra Tech, its directors and each officer who signed such
Registration Statement and each person who controls Tetra Tech (within the
meaning of Section 15 of the Securities Act), and each other Holder of
Registrable Securities whose Registrable Securities are sold under the
Prospectus which is a part of such Registration Statement (and such Holder's
officers, directors and employees and each person who controls such Holder
within the meaning of Section 15 of the Securities Act), under the same
circumstances as the foregoing indemnity from Tetra Tech to each Holder of
Registrable Securities to the extent that such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue statement of a
material fact or omission of a material fact that was made in the Prospectus,
the Registration Statement, or any amendment or supplement thereto, in reliance
upon and in conformity with information relating to such Holder furnished in
writing to Tetra Tech by such Holder expressly for use therein, PROVIDED that in
no event shall the aggregate liability of any selling Holder of Registrable
Securities exceed the amount of the net proceeds received by such Holder upon
the sale of the Registrable Securities giving rise to such indemnification
obligation. Tetra Tech and the selling Holders shall be entitled to receive
indemnities from underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, to the same
extent as customarily furnished by such persons in similar circumstances.

                  (c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any person
entitled to indemnification hereunder will (i) give prompt notice to the
indemnifying party of any claim with respect to which it seeks indemnification
and (ii) permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party; PROVIDED, HOWEVER,
that any person entitled to indemnification hereunder shall have the right to
employ separate counsel and to participate in the defense of such claim, but the
fees and expenses of such counsel shall be at the expense of such person and not
of the indemnifying party unless (A) the indemnifying party has agreed to pay
such fees or expenses, (B) the indemnifying party shall have failed to assume
the defense of such claim and employ counsel reasonably satisfactory to such
person or (C) in the reasonable judgment of such person and the indemnifying
party, based upon advice of their respective counsel, a conflict of interest may
exist between such person and the indemnifying party with respect to such claims
(in which case, if the person notifies the indemnifying party in writing that
such person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such person). If such defense is not assumed by the
indemnifying party, the indemnifying party will not be subject to any liability
for any settlement made without its consent (but such consent will not be
unreasonably withheld). No indemnified party will be required to consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by all claimants or plaintiffs to such
indemnified party of a release from all liability in respect to such claim or
litigation. Any indemnifying party who is not entitled to, or elects not to,
assume the defense of

                                       10

<PAGE>

a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim. As used in this SECTION 7(c), the terms "indemnifying party",
"indemnified party" and other terms of similar import are intended to include
only Tetra Tech (and its officers, directors and control persons as set forth
above) on the one hand, and the Holders (and their officers, directors,
partners, employees, attorneys and control persons as set forth above) on the
other hand, as applicable.

                  (d) CONTRIBUTION. If for any reason the foregoing indemnity is
unavailable, then the indemnifying party shall contribute to the amount paid or
payable by the indemnified party as a result of such losses, claims, damages,
liabilities or expenses (i) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified party shall be
determined by reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by such indemnifying party
or by such indemnified party, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The parties acknowledge and agree that it would not be just and
equitable if contribution pursuant to this SECTION 7(d) were determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in this SECTION 7(d).
Notwithstanding the foregoing, no Holder shall be required to contribute any
amount in excess of the amount such Holder would have been required to pay to an
indemnified party if the indemnity under SECTION 7(b) hereof was available. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The obligation of any
person to contribute pursuant to this SECTION 7(d) shall be several and not
joint.

                  (e) TIMING OF PAYMENTS. An indemnifying party shall make
payments of all amounts required to be made pursuant to the foregoing provisions
of this SECTION 7 to or for the account of the indemnified party from time to
time promptly upon receipt of bills or invoices relating thereto or when
otherwise due or payable.

                  (f) SURVIVAL. The indemnity and contribution agreements
contained in this SECTION 7 shall remain in full force and effect, regardless of
any investigation made by or on behalf of Tetra Tech, a participating Holder,
its officers, directors, partners, attorneys, agents or any person, if any, who
controls Tetra Tech or such Holder as aforesaid, and shall survive the transfer
of such Registrable Securities by such Holder.

          8. PREPARATION; REASONABLE INVESTIGATION. In connection with the
preparation and filing of a Registration Statement pursuant to the terms of this
Agreement:

                                       11

<PAGE>

                  (a) Tetra Tech shall, with respect to a Registration Statement
filed pursuant to SECTION 3, give the Holders of such Registrable Securities so
registered, their underwriters, if any, and their respective counsel and
accountants the opportunity to participate in the preparation of such
Registration Statement (other than reports and proxy statements incorporated
therein by reference and properly filed with the SEC) and each Prospectus
included therein or filed with the SEC, and each amendment thereof or supplement
thereto; and

                  (b) Tetra Tech shall give the Holders of such Registrable
Securities so registered, their underwriters, if any, and their respective
counsel and accountants such reasonable access to its books and records and such
opportunities to discuss the business of Tetra Tech with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of such Holders or such underwriters, to
conduct a reasonable investigation within the meaning of Section 11(b)(3) of the
Securities Act.

          9. RULE 144. Tetra Tech covenants that it will use reasonable best
efforts to file, on a timely basis, the reports required to be filed by it under
the Securities Act and the Exchange Act and the rules and regulations adopted by
the SEC thereunder, and it will take such further action as any Holder may
reasonably request (including, without limitation, compliance with the current
public information requirements of Rule 144(c) and Rule 144A), all to the extent
required from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
conditions provided by Rule 144, Rule 144A or any similar rule or regulation
hereafter adopted by the SEC. Upon the request of any Holder, Tetra Tech will
promptly deliver to such Holder a written statement verifying that it has
complied with such information and requirements.

          10. SPECIFIC PERFORMANCE. Each Holder, in addition to being entitled
to exercise all rights provided herein or granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. Tetra Tech agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.

          11. NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by United States
first-class mail, postage prepaid, sent by facsimile or delivered personally by
hand or nationally recognized courier addressed (a) if to a Holder, as indicated
on the list of Holders attached hereto as SCHEDULE A, or at such other address
as such Holder or permitted assignee shall have furnished to Tetra Tech in
writing, or (b) if to Tetra Tech, at such address or facsimile number as Tetra
Tech shall have furnished to each Holder in writing. All such notices and other
written communications shall be effective on the date of mailing, facsimile
transfer or delivery.

                                       12

<PAGE>

          12. SUCCESSORS AND ASSIGNS: ASSIGNMENT OF RIGHTS. The rights and
benefits of a Holder hereunder may not be assigned to a transferee or assignee
without the consent of Tetra Tech; PROVIDED, HOWEVER, that, no later than the
10th day prior to the filing of the Registration Statement under SECTION 3
hereof, the rights and benefits of a Holder hereunder may be transferred in
connection with a transfer or assignment of any Registrable Securities held by
such Holder (i) by gift to immediate family members of such Holder, or trusts or
other entities for the sole benefit thereof, or (ii) by gift to any entity in
which such Holder, his or her immediate family members, or trusts or other
entities for the sole benefit thereof beneficially own all of the voting
securities; PROVIDED, HOWEVER, that in each case, the transferee executes an
instrument pursuant to which the transferee agrees to be bound by the terms and
conditions hereof as a Holder, and such other documents as Tetra Tech or its
counsel may reasonably require, after which, such transferee shall be deemed a
"Holder" hereunder. Any transfer of Registrable Securities, and rights
hereunder, shall be subject to compliance with applicable securities laws and
the restrictions contained in the Investment Letter executed by each Holder
pursuant to the Reorganization Agreement.

          13. SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

          14. ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement, the
Reorganization Agreement and the other agreements contemplated thereby
constitute the full and entire understanding and agreement among the parties
with regard to the subjects hereof and thereof. Without limiting the foregoing,
the rights of the Holders to registration pursuant to the terms of this
Agreement shall be subject to the limitations on resale contained in the
Investment Letter (as defined in the Reorganization Agreement). Neither this
Agreement nor any term hereof may be amended, waived, discharged or terminated,
except by a written instrument signed by Tetra Tech and the holders of at least
51% of the Registrable Securities and any such amendment, waiver, discharge or
termination shall be binding upon all the parties hereto, but in no event shall
the obligation of any party hereto be materially increased, except upon the
written consent of such party.

          15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be original, and all of which together shall
constitute one instrument.

          16. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware without giving effect to
principles of conflicts of laws thereof.

          17. NO THIRD PARTY BENEFICIARIES. The covenants and agreements set
forth herein are for the sole and exclusive benefit of the parties hereto and
their respective successors and assigns

                                       13

<PAGE>

and such covenants and agreements shall not be construed as conferring, and are
not intended to confer, any rights or benefits upon any other persons.

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                               TETRA TECH, INC.

                                        By:    /s/ Li-San Hwang
                                              ----------------------------------
                                               Li-San Hwang
                                               Chairman, Chief Executive Officer
                                               and President

                                          /s/ Kamran Mahbobi
                                        ----------------------------------------
                                        Kamran Mahbobi

                                         /s/ Phillippe Dorante
                                        ----------------------------------------
                                        Phillippe Dorante

                                         /s/ Abdolreza Ziglari
                                        ----------------------------------------
                                        Abdolreza Ziglari

                                         /s/ Behzad Ghahramani
                                        ----------------------------------------
                                        Behzad Ghahramani

                                         /s/ Behnam Adelzadeh
                                        ----------------------------------------
                                        Behnam Adelzadeh

                                       14

<PAGE>

<TABLE>
<CAPTION>
                                                                                                        SCHEDULE A

                                                 SCHEDULE OF HOLDERS

                                                                     Number of Shares of Tetra Tech Common
                                                                            Stock Issued Pursuant
         Holder's Name/Address/Facsimile No.                            to the Reorganization Agreement
-------------------------------------------------------       ----------------------------------------------------
<S>                                                           <C>
Kamran Mahbobi                                                                      89,733
1518 8th Street
Fort Lee, New Jersey  07024

Behzad Ghahramani                                                                   89,733
300 Gorge Road, Apt. #36
Cliffside, New Jersey  07010

Phillippe Dorante                                                                   89,733
317 West 95th Street, Apt. 3E
New York, New York 10025

Behnam Adelzadeh                                                                    48,945
200 Old Palisade Road, Apt. 29D
Fort Lee, New Jersey  07024

Abdolreza Ziglari                                                                   89,733
14315 Cervantes Avenue
Darnestown, Maryland  20874

</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00014-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00014-of-00352.parquet"}]]