Document:

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                                                                  Exhibit 10.17

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                                   $73,000,000

                                CREDIT AGREEMENT
                         DATED AS OF SEPTEMBER 26, 2002

                                      AMONG

                         CENTURY BUSINESS SERVICES, INC.

                              BANK OF AMERICA, N.A.

                             AS AGENT, ISSUING BANK
                                       AND
                                SWING LINE BANK,

                 THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO,

                         BANC OF AMERICA SECURITIES LLC,

                                AS LEAD ARRANGER

                                       AND

                                  BOOK MANAGER

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<PAGE>

                                TABLE OF CONTENTS

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ARTICLE I  DEFINITIONS.......................................................................1

         1.01  Certain Defined Terms.........................................................1
         1.02  Other Interpretive Provisions................................................28
         1.03  Accounting Principles........................................................29

ARTICLE II  THE CREDITS.....................................................................29

         2.01  Amounts and Terms of Commitments.............................................29
         2.02  Loan Accounts................................................................32
         2.03  Procedure for Borrowing......................................................33
         2.04  Conversion and Continuation Elections........................................35
         2.05  Voluntary Termination or Reduction of Commitments............................37
         2.06  Optional Prepayments.........................................................37
         2.07  Mandatory Prepayments of Loans...............................................37
         2.08  Repayment....................................................................38
         2.09  Interest.....................................................................38
         2.10  Fees.........................................................................39
         2.11  Computation of Fees and Interest.............................................39
         2.12  Payments by the Company......................................................40
         2.13  Payments by the Lenders to the Agent.........................................40
         2.14  Sharing of Payments, Etc.....................................................41

ARTICLE III  THE LETTERS OF CREDIT..........................................................41

         3.01  The Letter of Credit Subfacility.............................................41
         3.02  Issuance, Amendment and Renewal of Letters of Credit.........................42
         3.03  Risk Participations, Drawings and Reimbursements.............................44
         3.04  Repayment of Participations..................................................46
         3.05  Role of the Issuing Bank.....................................................46
         3.06  Obligations Absolute.........................................................47
         3.07  Cash Collateral Pledge.......................................................48
         3.08  Letter of Credit Fees........................................................48
         3.09  Uniform Customs and Practice.................................................49
         3.10  Outstanding Letters of Credit................................................49

ARTICLE IV  TAXES, YIELD PROTECTION AND ILLEGALITY..........................................49

         4.01  Taxes........................................................................49
         4.02  Illegality...................................................................50
         4.03  Increased Costs and Reduction of Return......................................51
         4.04  Funding Losses...............................................................51
         4.05  Inability to Determine Rates.................................................52
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                                TABLE OF CONTENTS
                                   (CONTINUED)
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         4.06  Certificates of Lenders......................................................52
         4.07  Survival.....................................................................53
         4.08  Replacement of Lenders.......................................................53

ARTICLE V  CONDITIONS PRECEDENT.............................................................53

         5.01  Conditions of Effectiveness and Initial Credit Extensions....................53
         5.02  Conditions to All Credit Extensions..........................................55

ARTICLE VI  REPRESENTATIONS AND WARRANTIES..................................................56

         6.01  Corporate Existence and Power................................................56
         6.02  Corporate Authorization; No Contravention....................................56
         6.03  Governmental Authorization...................................................57
         6.04  Binding Effect...............................................................57
         6.05  Litigation...................................................................57
         6.06  No Default...................................................................57
         6.07  ERISA Compliance.............................................................58
         6.08  Use of Proceeds; Margin Regulations..........................................58
         6.09  Title to Properties..........................................................58
         6.10  Taxes........................................................................58
         6.11  Financial Condition..........................................................59
         6.12  Environmental Matters........................................................59
         6.13  Collateral Documents.........................................................60
         6.14  Regulated Entities...........................................................61
         6.15  No Burdensome Restrictions...................................................61
         6.16  Solvency.....................................................................61
         6.17  Labor Relations..............................................................61
         6.18  Copyrights, Patents, Trademarks, etc.........................................61
         6.19  Subsidiaries.................................................................61
         6.20  Broker's; Transaction Fees...................................................61
         6.21  Insurance....................................................................61
         6.22  Swap Obligations.............................................................62
         6.23  Full Disclosure..............................................................62
         6.24  Intercompany Indebtedness....................................................62

ARTICLE VII  AFFIRMATIVE COVENANTS..........................................................62

         7.01  Financial Statements.........................................................62
         7.02  Certificates; Other Information..............................................63
         7.03  Notices......................................................................64
         7.04  Preservation of Corporate Existence, Etc.....................................65
         7.05  Maintenance of Property......................................................66
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                                TABLE OF CONTENTS
                                   (CONTINUED)
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         7.06  Insurance....................................................................66
         7.07  Payment of Obligations.......................................................66
         7.08  Compliance with Laws.........................................................66
         7.09  Compliance with ERISA........................................................67
         7.10  Inspection of Property and Books and Records.................................67
         7.11  Environmental Laws...........................................................67
         7.12  Use of Proceeds..............................................................67
         7.13  Solvency.....................................................................67
         7.14  Further Assurances...........................................................67
         7.15  New Subsidiaries.............................................................68

ARTICLE VIII  NEGATIVE COVENANTS............................................................69

         8.01  Limitation on Liens..........................................................69
         8.02  Disposition of Assets........................................................71
         8.03  Consolidations and Mergers...................................................72
         8.04  Loans and Investments........................................................73
         8.05  Limitation on Indebtedness...................................................74
         8.06  Transactions with Affiliates.................................................75
         8.07  Use of Proceeds..............................................................75
         8.08  Contingent Obligations.......................................................75
         8.09  Lease Obligations............................................................76
         8.10  Restricted Payments..........................................................76
         8.11  ERISA........................................................................76
         8.12  Change in Business...........................................................77
         8.13  Accounting Changes...........................................................77
         8.14  Minimum Tangible Net Worth...................................................77
         8.15  Leverage Ratio...............................................................77
         8.16  Fixed Charge Coverage Ratio..................................................77
         8.17  No Impairment of Intercompany Transfers......................................77
         8.18  Excluded Subsidiaries........................................................78

ARTICLE IX  EVENTS OF DEFAULT...............................................................78

         9.01  Event of Default.............................................................78
         9.02  Remedies.....................................................................80
         9.03  Rights Not Exclusive.........................................................81

ARTICLE X  THE AGENT........................................................................81

        10.01  Appointment and Authorization; "Agent".......................................81
        10.02  Delegation of Duties.........................................................82
        10.03  Liability of Agent...........................................................82
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                                TABLE OF CONTENTS
                                   (CONTINUED)
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        10.04  Reliance by Agent............................................................82
        10.05  Notice of Default............................................................83
        10.06  Credit Decision..............................................................83
        10.07  Indemnification of Agent.....................................................83
        10.08  Agent in Individual Capacity.................................................84
        10.09  Successor Agent..............................................................84
        10.10  Withholding Tax..............................................................84
        10.11  Collateral and Guaranty Matters..............................................86

ARTICLE XI  MISCELLANEOUS...................................................................86

        11.01  Amendments and Waivers.......................................................86
        11.02  Notices......................................................................87
        11.03  No Waiver; Cumulative Remedies...............................................88
        11.04  Costs and Expenses...........................................................88
        11.05  Company Indemnification......................................................89
        11.06  Payments Set Aside...........................................................89
        11.07  Successors and Assigns.......................................................89
        11.08  Assignments, Participations, etc.............................................90
        11.09  Confidentiality..............................................................93
        11.10  Set-off......................................................................93
        11.11  Notification of Addresses, Lending Offices, Etc..............................94
        11.12  Counterparts.................................................................94
        11.13  Severability.................................................................94
        11.14  No Third Parties Benefited...................................................94
        11.15  Governing Law and Jurisdiction...............................................94
        11.16  Waiver of Jury Trial.........................................................95
        11.17  Entire Agreement.............................................................95
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<TABLE>
<S>                              <C>
                            SCHEDULES

Schedule 1.01            Existing Letters of Credit
Schedule 2.01            Commitments
Schedule 6.11            Permitted Liabilities
Schedule 6.05(b)         Litigation
Schedule 6.19            Subsidiaries and Minority Interests
Schedule 8.02            Specified Asset Sales
Schedule 8.04            Existing Investments
Schedule 8.05            Existing Indebtedness
Schedule 8.08            Contingent Obligations
Schedule 11.02           Lending Offices; Addresses for Notices

                            EXHIBITS

Exhibit A                Form of Notice of Borrowing
Exhibit B                Form of Notice of Conversion/Continuation
Exhibit C                Form of Compliance Certificate
Exhibit D-1              Form of Legal Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P.
Exhibit D-2              Form of Legal Opinion of Company's general counsel
Exhibit E                Form of Assignment and Acceptance
Exhibit F-1              Form of  Promissory Note - Revolving Loan
Exhibit F-2              Form of Promissory Note - Swing Line Loan
Exhibit G                Form of Borrowing Base Certificate
Exhibit H                Form of Commitment and Acceptance
</TABLE>

<PAGE>

                                CREDIT AGREEMENT

         This CREDIT AGREEMENT is entered into as of September 26, 2002, (as
amended, restated, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT") among Century Business Services, Inc., a Delaware
corporation (the "COMPANY"), the several financial institutions from time to
time party to this Agreement (collectively, the "LENDERS"; individually, a
"LENDER"), and Bank of America, N.A., as administrative agent for the Lenders
(the "AGENT").

         WHEREAS, the Lenders have agreed to make available to the Company a
revolving credit facility with a letter of credit subfacility upon the terms and
conditions set forth in this Agreement;

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

                                   ARTICLE I

                                   DEFINITIONS

     1.01 CERTAIN DEFINED TERMS. The following terms have the following
meanings:

          "ACCOUNT DEBTOR" means each Person obligated in any way on or in
     connection with a Receivable.

          "ACQUISITION" means any transaction or series of related transactions
     for the purpose of or resulting, directly or indirectly, in (a) the
     acquisition of all or substantially all of the assets of a Person, or of
     any business or division of a Person, (b) the acquisition of in excess of
     50% of the capital stock, partnership interests, membership interests or
     equity of any Person, or otherwise causing any Person to become a
     Subsidiary, or (c) a merger or consolidation or any other combination with
     another Person (other than a Person that is a Subsidiary) provided that
     after giving effect to the merger the Person is a Subsidiary or the Company
     or a Subsidiary is the surviving entity.

          "AFFILIATE" means, as to any Person, any other Person which, directly
     or indirectly, is in control of, is controlled by, or is under common
     control with, such Person. A Person shall be deemed to control another
     Person if the controlling Person possesses, directly or indirectly, the
     power to direct or cause the direction of the management and policies of
     the other Person, whether through the ownership of voting securities,
     membership interests, by contract, or otherwise.

          "AGENT" means Bank of America in its capacity as agent for the Lenders
     hereunder, and any successor agent arising under SECTION 10.09.

          "AGENT-RELATED PERSONS" means Bank of America and any successor agent
     arising under SECTION 10.09 and any successor letter of credit issuing bank

<PAGE>

     hereunder, together with their respective Affiliates, and the officers,
     directors, employees, agents and attorneys-in-fact of such Persons and
     Affiliates.

          "AGENT'S PAYMENT OFFICE" means the address for payments set forth on
     SCHEDULE 11.02 or such other address as the Agent may from time to time
     specify.

          "AGREEMENT" has the meaning set forth in the preamble.

          "APPLICABLE MARGIN" shall mean on any date the applicable percentage
     set forth below based upon the Leverage Ratio as shown in the Compliance
     Certificate then most recently delivered to the Lenders:
<TABLE>
<CAPTION>
     -------------------------------------------- -----------------------------------------------------
         Revolving Loans/ Letters of Credit                               Fees
     -------------------------------------------- -----------------------------------------------------
                                                      Letter of Credit Fees
     --------------- ------------ --------------- ------------------------------ ----------------------
         Leverage        Base        Eurodollar         Non-        Financial        Commitment Fee
          Ratio          Rate          Rate          Financial
     --------------- ------------ --------------- -------------- --------------- ----------------------
     <S>             <C>          <C>             <C>            <C>             <C>
      greater than
         1.50:1.0       1.250%         2.500%         1.250%          2.500%              .50%
     --------------- ------------ --------------- -------------- --------------- ----------------------
      greater than
         1.0:1.0,       1.000%         2.250%         1.125%          2.250%              .45%
      but less than
         1.50:1.0
     -------------- ------------ --------------- -------------- --------------- ----------------------
        less than
         1.0:1.0        .750%         2.000%         1.000%          2.000%              .40%
     --------------- ------------ --------------- -------------- --------------- ----------------------

     --------------- ------------ --------------- -------------- --------------- ----------------------
</TABLE>

     ; PROVIDED HOWEVER that, (i) for the period from the Closing Date to and
     including the date of the delivery of the Compliance Certificate for the
     period ending September 30, 2002, the Applicable Margin shall be determined
     as if the Leverage Ratio for such period were greater than or equal to
     1.0:1.0 but than less 1.5:1.0 and (ii) if the Company shall have failed to
     deliver to the Lenders by the date required hereunder any Compliance
     Certificate pursuant to SECTION 7.02(b), then from the date such Compliance
     Certificate was required to be delivered until the date of such delivery
     the Applicable Margin shall be determined as if the Leverage Ratio for such
     period was greater than or equal to 1.5:1.0. Each change in the Applicable
     Margin shall take effect with respect to all outstanding Loans on the third
     Business Day immediately succeeding the day on which such Compliance
     Certificate is received by the Agent. Notwithstanding the foregoing, no
     reduction in the Applicable Margin shall be effected if a Default or an
     Event of Default shall have occurred and be continuing on the date when
     such change would otherwise occur, it being understood that on the third
     Business Day immediately succeeding the day on which such Default or Event
     of Default is either waived or cured (assuming no other Default or Event of
     Default shall be then pending), the Applicable Margin shall be reduced (on
     a prospective basis) in accordance with the then most recently delivered
     Compliance Certificate.

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<PAGE>

          "APPROVED FUND" means any Fund that is administered or managed by (a)
     a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
     an entity that administers or manages a Lender.

          "ATTORNEY COSTS" means and includes all reasonable and customary fees
     and disbursements of any law firm or other external counsel, the allocated
     cost of internal legal services and all disbursements of internal counsel
     related to this Agreement and the other Loan Documents.

          AVAILABILITY" means, at any time, (a) the Maximum Revolver Amount at
     such time MINUS (b) the sum of the Effective Amount of each of the
     Revolving Loans, the Swing Line Loans and L/C Obligations at such time.

          "BANK OF AMERICA" means Bank of America, N.A., a national banking
     association.

          "BANKRUPTCY CODE" means the Federal Bankruptcy Reform Act of 1978 (11
     U.S.C.sec.101, et seq.).

          "BASE RATE" means, for any day, the higher of (a) the rate of interest
     in effect for such days as publicly announced from time to time by Bank of
     America as its "prime rate" and (b) the latest Federal Funds Rate PLUS
     0.50% per annum. The "prime rate" is a rate set by Bank of America based
     upon various factors including Bank of America's costs and desired return,
     general economic conditions and other factors, and is used as a reference
     point for pricing some loans, which may be priced at, above or below such
     announced rate. Any change in the prime rate announced by Bank of America
     shall take effect at the opening of business on the day specified in the
     public announcement of such change.

          "BASE RATE LOAN" means a Revolving Loan, or an L/C Advance, that bears
     interest based on the Base Rate.

          "BORROWING" means a borrowing hereunder consisting of Loans of the
     same Type made to the Company on the same day by the Lenders under Article
     II, and, in the case of Eurodollar Rate Loans, having the same Interest
     Period.

          "BORROWING BASE" means, as of any date of determination by the Agent,
     from time to time, an amount equal to the sum at such time of (a) 85% of
     the book value of Company's Eligible Receivables at such time PLUS (b) the
     lesser of (i) 60% of the book value of Company's Eligible Unbilled
     Work-in-Process and (ii) 35% of the amount calculated pursuant to CLAUSE
     (a) for the months of January, February and March of each calendar year and
     25% of the amount calculated pursuant to CLAUSE (a) for the months of April
     through December of each calendar year; PROVIDED FURTHER, HOWEVER, that (x)
     the percentages set forth in either or both of CLAUSES (a) and (b)(i) above
     may be reduced from time to time by the Agent in its reasonable discretion
     based upon the periodic field examinations conducted by or on the behalf of
     the Agent and (y) the Agent may, in its reasonable discretion, increase any
     percentage set forth in CLAUSES (a) or (b)(i)

                                       3
<PAGE>
     above previously reduced by it pursuant to the terms hereof provided that
     such percentage is not increased to a percentage greater than the
     applicable percentage set forth above.

          "BORROWING BASE CERTIFICATE" means a certificate in the form of
     EXHIBIT G hereto.

          "BORROWING DATE" means any date on which a Borrowing occurs under
     SECTION 2.03.

          "BUDGETED EBITDA" has the meaning set forth in SECTION 7.02(d).

          "BUSINESS DAY" means any day other than a Saturday, Sunday or other
     day on which commercial banks in Chicago or San Francisco are authorized or
     required by law to close and, if the applicable Business Day relates to any
     Eurodollar Rate Loan, means such a day on which dealings are carried on in
     the applicable offshore interbank market.

          "BUYING LENDER(S)" has the meaning set forth in SECTION 2.01(c).

          "CAPITAL ADEQUACY REGULATION" means any guideline, request or
     directive of any central bank or other Governmental Authority, or any other
     law, rule or regulation, whether or not having the force of law, in each
     case, regarding capital adequacy of any Lender or of any corporation
     controlling a Lender.

          "CAPITAL EXPENDITURES" means, for any period and with respect to any
     Person, the aggregate of all expenditures by such Person and its
     Subsidiaries for the acquisition or leasing of fixed or capital assets or
     additions to equipment (including replacements, capitalized repairs and
     improvements during such period) which should be capitalized under GAAP on
     a consolidated balance sheet of such Person and its Subsidiaries.

          "CAPITAL LEASE" has the meaning specified in the definition of
     "Capital Lease Obligations."

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

          "CASH COLLATERALIZE" means to pledge and deposit with or deliver to
     the Agent, for the benefit of the Agent, the Issuing Bank and the Lenders,
     as additional collateral for the L/C Obligations, cash or deposit account
     balances pursuant to documentation in form and substance satisfactory to
     the Agent and the Issuing Bank (which documents are hereby consented to by
     the Lenders). The Company hereby grants the Agent, for the benefit of the
     Agent, the Issuing Bank and the Lenders, a security interest in all such
     cash and deposit account balances.

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<PAGE>

     Cash collateral shall be maintained in blocked deposit accounts at Bank of
     America.

          "CASH EQUIVALENTS" means:

               (a) securities issued or fully guaranteed or insured by the
          United States Government or any agency thereof and backed by the full
          faith and credit of the United States having maturities of not more
          than six months from the date of acquisition;

               (b) certificates of deposit, time deposits, Eurodollar time
          deposits, repurchase agreements, reverse repo agreements, or bankers'
          acceptances, having in each case a tenor of not more than six months,
          issued by any Lender, or by any U.S. commercial bank having combined
          capital and surplus of not less than $100,000,000 whose short term
          securities are rated at least A-1 by Standard & Poor's Corporation and
          P-1 by Moody's Investors Service, Inc.;

               (c) commercial paper of an issuer rated at least A-1 by Standard
          & Poor's Corporation or P-1 by Moody's Investors Service Inc. and in
          either case having a tenor of not more than three months;

               (d) money market funds that invest principally in Cash
          Equivalents described in CLAUSES (a) through (c) hereof.

          "CHANGE OF CONTROL" means (a) any Person or any two or more Persons
     (in each case other than a Person that is a stockholder of the Company as
     of the date of this Agreement) acting in concert acquiring beneficial
     ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
     Commission under the Exchange Act), directly or indirectly, of capital
     stock of the Company (or other securities convertible into such capital
     stock) representing 35% or more of the combined voting power of all capital
     stock of the Company entitled to vote in the election of directors, other
     than capital stock having such power only by reason of the happening of a
     contingency, or (b) during any period of twelve consecutive calendar months
     (other than pursuant to a disposition permitted pursuant to SECTION 8.02),
     the ceasing of more than 35% of the individuals who hold an office
     possessing the title Regional Directors or Executive Vice President or such
     title that ranks senior thereto of the Company and the Company's direct
     Subsidiaries (collectively, "KEY MANAGEMENT"), on the first day of each
     such period to be part of the Key Management of the Company and its
     Subsidiaries taken as a whole.

          "CLOSING DATE" means the date on which all conditions precedent set
     forth in SECTION 5.01 are satisfied or waived by all Lenders.

          "CODE" means the Internal Revenue Code of 1986, as amended, and
     regulations promulgated thereunder.

                                       5
<PAGE>

          "COLLATERAL" means all property and interests in property and proceeds
     thereof now owned or hereafter acquired by the Company or any Guarantor in
     or upon which a Lien now or hereafter exists in favor of the Lenders, or
     the Collateral Agent on behalf of the Lenders, whether under this
     Agreement, the Pledge and Security Agreement or under any other documents
     executed by any such Persons and delivered to the Collateral Agent.

          "COLLATERAL AGENT" means the Agent acting in its capacity as
     Collateral Agent pursuant to the Collateral Documents (other than the
     Guaranty).

          "COLLATERAL DOCUMENTS" means, collectively, the Pledge and Security
     Agreement, the Guaranty and the Mortgage Documents.

          "COMMITMENT" means, collectively, the Revolving Loan Commitment and
     the Swing Line Loan Commitment.

          "COMMITMENT AND ACCEPTANCE" means a certificate substantially in the
     form attached hereto as EXHIBIT H.

          "COMMITMENT FEE" has the meaning specified in SECTION 2.10(b).

          "COMMITMENT INCREASE NOTICE" has the meaning specified in SECTION
     2.01(c).

          "COMPANY" means Century Business Services, Inc., a Delaware
     corporation.

          "COMPLIANCE CERTIFICATE" means a certificate substantially in the form
     of EXHIBIT C.

          "CONSOLIDATED INTEREST EXPENSE" means, for any period, gross
     consolidated interest expense (after giving effect to any increase in
     interest expense resulting from net amount of payments made or received
     with respect to Permitted Swap Obligations; PROVIDED, HOWEVER, that no net
     reduction in interest expense shall be permitted if the Company should
     receive more payments than the Company makes with respect thereto) for the
     period (including all commissions, discounts, fees and other charges in
     connection with standby letters of credit and similar instruments) for the
     Company and its Subsidiaries (other than Excluded Subsidiaries), plus the
     portion of the upfront costs and expenses for Swap Contracts (to the extent
     not included in gross interest expense) fairly allocated to such Swap
     Contracts as expenses for such period, as determined in accordance with
     GAAP and after giving effect to any Swap Contract then in effect.

          "CONTINGENT OBLIGATION" means, as to any Person, any direct or
     indirect liability of that Person, whether or not contingent, with or
     without recourse, (a) with respect to any Indebtedness, lease, dividend,
     letter of credit or other obligation (the "primary obligations") of another
     Person (the "primary obligor"), including any obligation of that Person
     (i) to purchase, repurchase or otherwise

                                       6
<PAGE>

     acquire such primary obligations or any security therefor, (ii) to advance
     or provide funds for the payment or discharge of any such primary
     obligation, or to maintain working capital or equity capital of the primary
     obligor or otherwise to maintain the net worth or solvency or any balance
     sheet item, level of income or financial condition of the primary obligor,
     (iii) to purchase property, securities or services primarily for the
     purpose of assuring the owner of any such primary obligation of the ability
     of the primary obligor to make payment of such primary obligation, or (iv)
     otherwise to assure or hold harmless the holder of any such primary
     obligation against loss in respect thereof (each, a "GUARANTY OBLIGATION");
     (b) with respect to any Surety Instrument (other than any Letter of Credit)
     issued for the account of that Person or as to which that Person is
     otherwise liable for reimbursement of drawings or payments; (c) to purchase
     any materials, supplies or other property from, or to obtain the services
     of, another Person if the relevant contract or other related document or
     obligation requires that payment for such materials, supplies or other
     property, or for such services, shall be made regardless of whether
     delivery of such materials, supplies or other property is ever made or
     tendered, or such services are ever performed or tendered, or (d) in
     respect of any Swap Contract; PROVIDED, HOWEVER, that neither the term
     "CONTINGENT OBLIGATION" nor the term "GUARANTY OBLIGATION" shall include
     obligations in respect of insurance, reinsurance, surety or fidelity
     contracts, bonds or policies entered into or issued in the ordinary course
     of business. Except as otherwise expressly provided herein, the amount of
     any Contingent Obligation shall, in the case of Guaranty Obligations, be
     deemed equal to the stated or determinable amount of the primary obligation
     in respect of which such Guaranty Obligation is made or, if not stated or
     if indeterminable, the maximum reasonably anticipated liability in respect
     thereof, and in the case of other Contingent Obligations other than in
     respect of Swap Contracts, shall be equal to the maximum reasonably
     anticipated liability in respect thereof and, in the case of Contingent
     Obligations in respect of Swap Contracts, shall be equal to the Swap
     Termination Value.

          "CONTRACTUAL OBLIGATION" means, as to any Person, any provision of any
     security issued by such Person or of any agreement, undertaking, contract,
     indenture, mortgage, deed of trust or other instrument, document or
     agreement to which such Person is a party or by which it or any of its
     property is bound.

          "CONVERSION/CONTINUATION DATE" means any date on which, under SECTION
     2.04, the Company (a) converts Loans of one Type to another Type, or (b)
     continues as Loans of the same Type, but with a new Interest Period, Loans
     having Interest Periods expiring on such date.

          "CREDIT EXTENSION" means and includes (a) the making of any Loans
     hereunder, and (b) the Issuance of any Letters of Credit hereunder.

          "DEFAULT" means any event or circumstance which, with the giving of
     notice, the lapse of time, or both, would (if not cured or otherwise
     remedied during such time) constitute an Event of Default.

                                       7
<PAGE>

          "DEFAULT RATE" has the meaning set forth in SECTION 2.09(c).

          "DEFAULTING LENDER" means any Lender that (a) has failed to fund any
     portion of the Revolving Loans, participations in L/C Obligations or
     participations in Swing Line Loans required to be funded by it hereunder
     within one Business Day of the date required to be funded by it hereunder,
     (b) has otherwise failed to pay over to the Agent or any other Lender any
     other amount required to be paid by it hereunder within one Business Day of
     the date when due, unless the subject of a good faith dispute, or (c) has
     been deemed insolvent or become the subject of a bankruptcy or insolvency
     proceeding.

          "DISPOSITION" means (a) the sale, lease, conveyance, or other
     disposition of Property in excess of $100,000, other than sales or other
     dispositions expressly permitted under CLAUSES (a) through (b) of SECTION
     8.02, and (b) the sale or transfer by the Company or any Subsidiary of the
     Company of any debt or equity securities issued by any Subsidiary of the
     Company and held by such transferor Person.

          "DOLLARS", "DOLLARS" and "$" each mean lawful money of the United
     States.

          "EBITDA" means, for any period, for the Company and its Subsidiaries
     (other than Excluded Subsidiaries) on a consolidated basis, determined in
     accordance with GAAP, the sum of (a) the Net Income (or net loss) for such
     period PLUS (b) all amounts treated as expenses for depreciation and the
     amortization of intangibles of any kind, including, the impairment of
     goodwill charges, to the extent included in the determination of such Net
     Income (or loss), PLUS (c) Consolidated Interest Expense, PLUS (d) all
     accrued taxes on or measured by income to the extent included in the
     determination of such Net Income (or loss), PROVIDED, HOWEVER, that the
     portion of Consolidated Interest Expense, accrued taxes, expense for
     depreciation and amortization, referenced in CLAUSES (b) through (d) above,
     attributable to operations disposed of in accordance with SECTION 8.02
     shall be excluded from the calculation of EBITDA.

          "EBITDAR" means, for any period, for the Company and its Subsidiaries
     (other than Excluded Subsidiaries) on a consolidated basis, determined in
     accordance with GAAP, the sum of (a) EBITDA for such period, PLUS, (b) all
     Rental Expense for such period; PLUS (c) non-cash rental charges incurred
     during such period pursuant to FAS 146 with respect to discontinued leased
     real property locations, PLUS (d) cash dividends received during such
     period by the Company, or any Subsidiary that is not an Excluded
     Subsidiary, from an Excluded Subsidiary, provided that the aggregate amount
     of such cash dividends included in the calculation of this clause does not
     exceed ten percent (10%) of EBITDA for such period.

          "EFFECTIVE AMOUNT" means (a) with respect to any Revolving Loans on
     any date, the aggregate outstanding principal amount thereof after giving
     effect to any Borrowings and prepayments or repayments of Revolving Loans
     occurring on

                                       8
<PAGE>

     such date, (b) with respect to any Swing Line Loans on any date, the
     aggregate outstanding principal amount thereof after giving effect to any
     Borrowings and prepayments or repayments of Swing Line Loans occurring on
     such date and (c) with respect to any outstanding L/C Obligations on any
     date, the amount of such L/C Obligations on such date after giving effect
     to any Issuances of Letters of Credit occurring on such date and any other
     changes in the aggregate amount of the L/C Obligations as of such date,
     including as a result of any reimbursements of outstanding unpaid drawings
     under any Letters of Credit or any reductions in the maximum amount
     available for drawing under Letters of Credit taking effect on such date.
     For purposes of SECTION 2.07, the Effective Amount shall be determined
     without giving effect to any mandatory prepayments to be made under said
     Section.

          "EFFECTIVE COMMITMENT AMOUNT" has the meaning set forth in SECTION
     2.01(c).

          "ELIGIBLE ASSIGNEE" means (a) a Lender; (b) an Affiliate of a Lender;
     (c) an Approved Fund; and (d) any other Person (other than a natural
     person) approved by (i) the Agent, the Issuing Bank and the Swing Line
     Bank, and (ii) unless an Event of Default has occurred and is continuing,
     the Company (each such approval not to be unreasonably withheld or
     delayed); PROVIDED that notwithstanding the foregoing, "Eligible Assignee"
     shall not include the Company or any of the Company's Affiliates or
     Subsidiaries.

          "ELIGIBLE RECEIVABLES" means at any time, those Receivables owned by
     the Company or any Subsidiary (other than an Excluded Subsidiary) and
     reflected on the most recent Borrowing Base Certificate delivered to the
     Lenders and which the Agent deems eligible as the basis for Revolving
     Loans, based on criteria which the Agent establishes from time to time in
     its reasonable credit judgment. Without limiting the foregoing, no
     Receivable shall be an Eligible Receivable if:

          (1) It is more than ninety (90) days after the date of the original
     invoice issued by the Company or Subsidiary with respect to the sale giving
     rise thereto; or

          (2) 25% or more (based on aggregate Dollar amount) of the Receivables
     from the Account Debtor are due or unpaid more than ninety (90) days after
     the date of the original invoice issued by the Company or any Subsidiary
     with respect to the sale giving rise thereto; or

          (3) The Receivable is owed by an Account Debtor which is an employee,
     officer, director or shareholder of the Company or any Subsidiary or it
     arises out of a rendition of services not made in the ordinary course of
     the Company's or any Subsidiary's business or to a Person which is an
     Affiliate of the Company or any Subsidiary or controlled

                                       9
<PAGE>

     by an Affiliate of Company or any Subsidiary, unless such Affiliate of
     Company or Subsidiary or Person controlled by an Affiliate of Company or
     any Subsidiary has been approved in writing by the Agent as a party from
     whom Eligible Receivables can be generated; or

          (4) The Receivable is subject to any right of set-off by the Account
     Debtor, and that Account Debtor has not entered into an agreement with the
     Agent which is acceptable to the Agent with respect to the waiver of rights
     of set-off; or the Account Debtor has disputed liability, or made any claim
     with respect to any other Receivable due from such Account Debtor to the
     Company or the applicable Subsidiary, to the extent of such set off,
     dispute or claim; or

          (5) The Account Debtor (i) has filed a petition for bankruptcy or any
     other petition for relief under the Bankruptcy Code or any other bankruptcy
     or insolvency law or has made an assignment for the benefit of creditors,
     (ii) has had filed against it any petition or other application for relief
     under the Bankruptcy Code or any other bankruptcy or insolvency law, (iii)
     has so filed, suspended its business operations, become insolvent, or
     suffered a receiver or a trustee to be appointed for any of its assets or
     affairs, or (iv) in the case of any Account Debtor which is an individual,
     is deceased or has been declared judicially incompetent; or

          (6) It arises out of a rendition of services to an Account Debtor
     outside the continental United States or the Province of Ontario, Canada,
     unless the sale is on letter of credit or acceptance terms acceptable to
     the Agent; or

          (7) The services giving rise to such Receivable have not been
     performed by the Company or its Subsidiaries, as applicable, and, if
     applicable, accepted by the Account Debtor, or the Account Debtor revokes
     its acceptance of such goods or services; or

          (8) It is owed by an Account Debtor which is obligated to the Company
     or any Subsidiary respecting Receivables the aggregate unpaid (billed or
     unbilled) balance of which exceeds 10% of the aggregate billed and unpaid
     balance of all Receivables owed to the Company or any Subsidiary at such
     time by all of the Account Debtors, to the extent of such excess; or

          (9) It is an Receivable with respect to which the Account Debtor is
     located in any State requiring the filing of a Notice of Business
     Activities Report or similar report in order to permit the Company or any
     Subsidiary to seek judicial enforcement in such State of payment of such
     Receivable, unless Company or the Subsidiary has qualified to do business
     in such state or has filed a Notice of Business Activities Report or
     equivalent report for the then current year; or

          (10) The Receivable is evidenced by instruments, unless (a) the Agent
     shall have specifically agreed to include such Receivable as an Eligible
     Receivable and (b) the originals of such instruments shall have been
     endorsed and/or assigned and delivered to the Agent in a manner
     satisfactory to the Agent; PROVIDED, that only the next installment due
     under such instrument shall be included as an Eligible Receivable; or

                                       10
<PAGE>

          (11) With respect to such Receivable, a check or other instrument for
     the payment of money, tendered in full or partial satisfaction of such
     Receivable, has been received, presented for payment and returned
     uncollected for any reason; or

          (12) The Company or the applicable Subsidiary has extended the time
     for payment for such Receivable beyond the time period set forth in CLAUSE
     (1) above without the consent of the Agent; or

          (13) The perfection, enforceability or validity of the Agent's Liens
     in such Receivable, or, except as set forth in CLAUSE (9) above and CLAUSE
     (14) below, the Agent's or Lenders' ability to obtain direct payment of the
     proceeds of such Receivable, is governed by any federal, state or local
     statutory requirements other than those of the UCC, unless the Company or
     the applicable Subsidiary assigns its right to payment of such Receivables
     to the Agent in accordance with the terms of the Assignment of Claims Act
     of 1940, as amended (31 U.S.C. Sec. 3727 ET SEQ.) and the Agent is
     otherwise satisfied as to perfection, enforceability and validity of the
     Liens in favor of the Collateral Agent; or

          (14) The Account Debtor is United States of America or any department,
     agency or instrumentality thereof, any state, municipality, or other
     political subdivision of the United States of America, or any department,
     agency, public corporation or other instrumentality thereof, except as
     permitted by CLAUSE (13) above; or

          (15) The Receivable is not subject to a first priority perfected
     security interest in favor of the Agent; or

          (16) The Receivable constitutes an Insurance Company Receivable; or

          (17) The Receivable constitutes an Insurance Company Pre-Billed
     Receivable.

          (18) The Company or the applicable Subsidiary has not delivered an
     invoice, including, without limitation, electronic or facsimile
     transmission of bills or other records evidencing Receivables with respect
     to the Company's or such Subsidiary's group health and benefit insurance
     business, to the applicable Account Debtor with respect to such Receivable.

     Notwithstanding the foregoing, the amount of Receivables excluded from
     "Eligible Receivables" pursuant any of CLAUSES (2), (4), (6), (8), (10),
     (11), (13) or (14), may be calculated, at the Company's option with respect
     to any such clause, either (A) on the basis of the actual amount of
     Receivables of the type described in such clause as of the date of
     determination thereof or (B) on the basis of the percentage that the gross
     book value of Receivables of the type described in such clause bears to the
     aggregate gross book value of all Receivables (other than unbilled
     work-in-process) of the Company and the Subsidiary (other than Excluded
     Subsidiaries), in each case as determined based upon the information set

                                       11
<PAGE>

     forth in the Field Exam Report most recently available at the time of such
     determination, provided that such Field Exam Report was prepared less than
     180 days prior to the date of such determination (in each case,
     hereinafter, the "RELEVANT PERCENTAGE" for such type of Receivables), such
     that the amount excluded under this definition for such clause as of such
     date of determination pursuant to this CLAUSE (B) shall be equal to the
     product of the Relevant Percentage (stated as a decimal) for the
     Receivables of the type described in such clause multiplied by the gross
     book value of all Receivables (other than unbilled work-in-process) as of
     such date of determination. Receivables of the types described in each
     other clause of this definition shall be calculated only on the basis
     described in CLAUSE (A) of this paragraph.

     If any Receivable at any time ceases to be an Eligible Receivable by reason
     of any of the foregoing exclusions or any failure to meet any other
     eligibility criteria established by the Agent in its reasonable credit
     judgment upon notice to the Company, such Receivable shall thereupon be
     excluded from the calculation of Eligible Receivables without the necessity
     of any further action or notice of the Agent or any other Person.

          "ELIGIBLE UNBILLED WORK-IN-PROCESS" means, Receivables of the Company
     and any Subsidiary (other than an Excluded Subsidiary) which would
     constitute Eligible Receivables, but for the provisions of CLAUSE (18) of
     the definition thereof, and for which the services giving rise to such
     Receivable have been fully or partially performed, such Receivables have
     been entered into the applicable books and records of the Company or the
     applicable Subsidiary, and the Company or the applicable Subsidiary has not
     delivered an invoice to the applicable Account Debtor with respect to such
     Receivable, PROVIDED, (a) that such services have been invoiced to the
     applicable Account Debtor for a period less than or equal to thirty (30)
     days past the date such services were performed and entered into the books
     and records of the Company or the applicable Subsidiary and (b) the
     services that have been performed have been accepted by the Account Debtor
     and the Account Debtor has not revoked its acceptance of such services.

          "ENVIRONMENTAL CLAIMS" means all claims, however asserted, by any
     Governmental Authority or other Person alleging potential liability or
     responsibility for violation of any Environmental Law, or for release or
     injury to the environment.

          "ENVIRONMENTAL LAWS" means all federal, state or local laws, statutes,
     common law duties, rules, regulations, ordinances and codes, together with
     all administrative orders, directed duties, requests, licenses,
     authorizations and permits of, and agreements with, any Governmental
     Authorities, in each case relating to environmental, health, safety and
     land use matters.

          "ENVIRONMENTAL PERMITS" has the meaning specified in SECTION 6.12(b).

                                       12
<PAGE>

          "ERISA" means the Employee Retirement Income Security Act of 1974, and
     regulations promulgated thereunder.

          "ERISA AFFILIATE" means any trade or business (whether or not
     incorporated) under common control with the Company within the meaning of
     Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code
     for purposes of provisions relating to Section 412 of the Code).

          "ERISA EVENT" means (a) a Reportable Event with respect to a Pension
     Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a Pension
     Plan subject to Section 4063 of ERISA during a plan year in which it was a
     substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
     cessation of operations which is treated as such a withdrawal under Section
     4062(e) of ERISA; (c) a complete or partial withdrawal by the Company or
     any ERISA Affiliate from a Multiemployer Plan or notification that a
     Multiemployer Plan is in reorganization; (d) the filing of a notice of
     intent to terminate, the treatment of a Plan amendment as a termination
     under Section 4041 or 4041A of ERISA, or the commencement of proceedings by
     the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or
     condition which might reasonably be expected to constitute grounds under
     Section 4042 of ERISA for the termination of, or the appointment of a
     trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
     imposition of any liability under Title IV of ERISA, other than PBGC
     premiums due but not delinquent under Section 4007 of ERISA, upon the
     Company or any ERISA Affiliate.

          "EURODOLLAR BASE RATE" has the meaning set forth in the definition of
     Eurodollar Rate.

          "EURODOLLAR RATE" means for any Interest Period with respect to any
     Eurodollar Rate Loan, a rate per annum determined by the Agent pursuant to
     the following formula:

     Eurodollar Rate  =          EURODOLLAR BASE RATE
                         ------------------------------------
                         1.00 - Eurodollar Reserve Percentage

          Where,

          "EURODOLLAR BASE RATE" means, for such Interest Period:

          (a) the rate per annum equal to the rate determined by the Agent to be
     the offered rate that appears on the page of the Telerate screen (or any
     successor thereto) that displays an average British Bankers Association
     Interest Settlement Rate for deposits in Dollars (for delivery on the first
     day of such Interest Period) with a term equivalent to such Interest
     Period, determined as of approximately 11:00 a.m. (London time) two
     Business Days prior to the first day of such Interest Period, or

          (b) if the rate referenced in the preceding clause (a) does not appear
     on such page or service or such page or service shall not be available, the
     rate per

                                       13
<PAGE>

     annum equal to the rate determined by the Agent to be the offered rate on
     such other page or other service that displays an average British Bankers
     Association Interest Settlement Rate for deposits in Dollars (for delivery
     on the first day of such Interest Period) with a term equivalent to such
     Interest Period, determined as of approximately 11:00 a.m. (London time)
     two Business Days prior to the first day of such Interest Period, or

          (c) if the rates referenced in the preceding clauses (a) and (b) are
     not available, the rate per annum determined by the Agent as the rate of
     interest at which deposits in Dollars for delivery on the first day of such
     Interest Period in same day funds in the approximate amount of the
     Eurodollar Rate Loan being made, continued or converted by Bank of America
     and with a term equivalent to such Interest Period would be offered by Bank
     of America's London Branch to major banks in the London interbank
     eurodollar market at their request at approximately 4:00 p.m. (London time)
     two Business Days prior to the first day of such Interest Period.

          "EURODOLLAR RATE LOAN" means a Loan that bears interest at a rate
     based on the Eurodollar Rate

          "EURODOLLAR RESERVE PERCENTAGE" means, for any day during any Interest
     Period, the reserve percentage (expressed as a decimal, carried out to five
     decimal places) in effect on such day, whether or not applicable to any
     Lender, under regulations issued from time to time by the FRB for
     determining the maximum reserve requirement (including any emergency,
     supplemental or other marginal reserve requirement) with respect to
     Eurocurrency funding (currently referred to as "Eurocurrency liabilities").
     The Eurodollar Rate for each outstanding Eurodollar Rate Loan shall be
     adjusted automatically as of the effective date of any change in the
     Eurodollar Reserve Percentage.

          "EVENT OF DEFAULT" means any of the events or circumstances specified
     in SECTION 9.01.

          "EXCHANGE ACT" means the Securities Exchange Act of 1934, and
     regulations promulgated thereunder.

          "EXCLUDED SUBSIDIARY" means, at any time, any Subsidiary whose capital
     stock may not be pledged under the Pledge and Security Agreement, assets
     may not be encumbered under the Pledge and Security Agreement, or may not
     guaranty the Obligations under the Guaranty, in any case without violating
     federal, state and/or local laws or regulations applicable to such
     Subsidiary.

          "EXISTING CREDIT AGREEMENT" means that certain Amended and Restated
     Credit Agreement dated as of October 3, 1997 and as amended and restated as
     of August 10, 1998 and August 24, 1999 among the Company, the Agent, the
     Letter of Credit Issuing Bank, Swing Line Bank, the financial institutions
     party thereto, Banc of America Securities LLC, as Lead Arranger and Book
     Manger, and

                                       14
<PAGE>

     BankBoston, NA, Bank One, Michigan, LaSalle Bank National Association and
     PNC Bank, National Association as Co-Agents (as further amended prior to
     the date hereof).

          "EXISTING LETTER OF CREDIT" means each letter of credit listed on
     SCHEDULE 1.01.

          "FDIC" means the Federal Deposit Insurance Corporation, and any
     Governmental Authority succeeding to any of its principal functions.

          "FEDERAL FUNDS RATE" means, for any day, the rate set forth in the
     weekly statistical release designated as H.15(519), or any successor
     publication, published by the Federal Reserve Bank of New York (including
     any such successor, "H.15(519)") on the preceding Business Day opposite the
     caption "Federal Funds (Effective)"; or, if for any relevant day such rate
     is not so published on any such preceding Business Day, the rate for such
     day will be the arithmetic mean as determined by the Agent of the rates for
     the last transaction in overnight Federal funds arranged prior to 9:00 a.m.
     (New York City time) on that day by each of three leading brokers of
     Federal funds transactions in New York City selected by the Agent.

          "FEE LETTER" has the meaning specified in SECTION 2.10(a).

          "FIELD EXAM REPORT" means, that certain report dated as of April 30,
     2002 of an appraiser, and each subsequent appraisal or verification report
     issued after the Closing Date pursuant to the last sentence of SECTION
     7.10.

          "FINANCIAL LETTERS OF CREDIT" means any Letter of Credit which either
     the Agent or the Issuing Bank determines is required under applicable law
     (including regulations and guidelines established by banking regulators)
     relating to reserve requirements to be classified as a financial letter of
     credit.

          "FIXED CHARGE COVERAGE RATIO" means, with respect to the Company and
     its Subsidiaries (other than Excluded Subsidiaries) on a consolidated basis
     for any fiscal period, the ratio of EBITDAR minus Capital Expenditures to
     Fixed Charges.

          "FIXED CHARGES" means, with respect to the Company and its
     Subsidiaries (other than Excluded Subsidiaries) on a consolidated basis for
     any fiscal period of determination, (a) Consolidated Interest Expense paid
     in cash during such fiscal period, PLUS (b) scheduled payments of principal
     with respect to Indebtedness for such fiscal period, PLUS (c) Rental
     Expense paid for such fiscal period.

          "FRB" means the Board of Governors of the Federal Reserve System, and
     any Governmental Authority succeeding to any of its principal functions.

                                       15
<PAGE>

          "FUND" means any Person (other than a natural person) that is (or will
     be) engaged in making, purchasing, holding or otherwise investing in
     commercial loans and similar extensions of credit in the ordinary course of
     its business.

          "FURTHER TAXES" means any and all present or future taxes, levies,
     assessments, imposts, duties, deductions, fees, withholdings or similar
     charges (including, without limitation, net income taxes and franchise
     taxes), and all liabilities with respect thereto, imposed by any
     jurisdiction on account of amounts payable or paid pursuant to SECTION
     4.01.

          "GAAP" means generally accepted accounting principles set forth from
     time to time in the opinions and pronouncements of the Accounting
     Principles Board and the American Institute of Certified Public Accountants
     and statements and pronouncements of the Financial Accounting Standards
     Board (or agencies with similar functions of comparable stature and
     authority within the U.S. accounting profession), which are in effect and
     applicable to the circumstances as of the date of determination; PROVIDED,
     HOWEVER, that for purposes of all computations required to be made with
     respect to compliance by the Company with SECTIONS 8.14, 8.15, and 8.16,
     such term shall mean generally accepted accounting principles as in effect
     on the date of this Agreement, applied in a manner consistent with those
     used in preparing the financial statements referred to in SECTION 6.11 (X)
     and (Y).

          "GOVERNMENTAL AUTHORITY" means any nation or government, any state or
     other political subdivision thereof, any central bank (or similar monetary
     or regulatory authority) thereof, any entity exercising executive,
     legislative, judicial, regulatory or administrative functions of or
     pertaining to government (including, without limitation, any board of
     insurance, insurance department or insurance commissioner and any taxing
     authority or political subdivision), and any corporation or other entity
     owned or controlled, through stock or capital ownership or otherwise, by
     any of the foregoing.

          "GUARANTOR" means each direct and indirect domestic Subsidiary of the
     Company that is not an Excluded Subsidiary, whether now existing or
     hereafter created or acquired.

          "GUARANTY" means the Guaranty, dated as of the date hereof, duly
     executed and delivered by each Guarantor in favor of the Collateral Agent,
     on behalf of the Lenders, as the same may be amended, restated,
     supplemented or otherwise modified from time to time.

          "GUARANTY OBLIGATION" has the meaning specified in the definition of
     "Contingent Obligation."

          "HAZARDOUS MATERIALS" means any toxic or hazardous waste, substance
     or chemical or any pollutant, contaminant, chemical or other substance
     defined or

                                       16
<PAGE>

     regulated pursuant to any Environmental Law, including, without limitation,
     asbestos, petroleum, crude oil or any fraction thereof.

          "INDEBTEDNESS" of any Person means, without duplication:

               (a) all indebtedness for borrowed money;

               (b) all obligations issued, undertaken or assumed as the deferred
          purchase price of property or services (other than trade payables and
          other accrued liabilities entered into in the ordinary course of
          business);

               (c) all non-contingent reimbursement or payment obligations with
          respect to Surety Instruments and all L/C Obligations;

               (d) all obligations evidenced by notes, bonds, debentures or
          similar instruments;

               (e) all indebtedness created or arising under any conditional
          sale or other title retention agreement, or incurred as financing, in
          either case with respect to property acquired by the Person (even
          though the rights and remedies of the seller or bank under such
          agreement in the event of default are limited to repossession or sale
          of such property);

               (f) all Capital Lease Obligations;

               (g) all indebtedness referred to in CLAUSES (a) through (f) above
          secured by (or for which the holder of such Indebtedness has an
          existing right, contingent or otherwise, to be secured by) any Lien
          upon or in property (including accounts and contracts rights) owned by
          such Person, even though such Person has not assumed or become liable
          for the payment of such Indebtedness; and

               (h) all Guaranty Obligations in respect of indebtedness or
          obligations of others of the kinds referred to in CLAUSES (a)
          through (g) above.

          "INDEMNIFIED LIABILITIES" has the meaning specified in SECTION 11.05.

          "INDEMNIFIED PERSON" has the meaning specified in SECTION 11.05.

          "INDEPENDENT AUDITOR" has the meaning specified in SECTION 7.01(a).

          "INSOLVENCY PROCEEDING" means, with respect to any Person, (a) any
     case, action or proceeding with respect to such Person before any court or
     other Governmental Authority relating to bankruptcy, reorganization,
     insolvency, liquidation, receivership, dissolution, winding-up or relief of
     debtors, or (b) any general assignment for the benefit of creditors,
     composition, marshaling of assets

                                       17
<PAGE>

     for creditors, or other, similar arrangement in respect of its creditors
     generally or any substantial portion of its creditors; undertaken under
     U.S. Federal, state or foreign law, including the Bankruptcy Code.

          "INSURANCE COMPANY RECEIVABLES" means insurance policy premiums
     invoiced to client and, to be collected and subsequently passed through to
     the insurance carrier (excluding any portion thereof which is owned, and
     may be permanently retained, by the Company or its Subsidiaries).

          "INSURANCE COMPANY PRE-BILLED RECEIVABLES" means billings of insurance
     premiums and commissions in advance of the policy effective dates.

          "INTEREST PAYMENT DATE" means, as to any Eurodollar Rate Loan, the
     last day of each Interest Period applicable to such Eurodollar Rate Loan
     and, as to any Base Rate Loan or Swing Line Loan, the last Business Day of
     each March, June, September and December and each date such Loan is
     converted into another Type of Loan; provided, however, that if any
     Interest Period exceeds three months, the date that falls three months
     after the beginning of such Interest Period and after each Interest Payment
     Date thereafter is also an Interest Payment Date.

          "INTEREST PERIOD" means, as to any Eurodollar Rate Loan, the period
     commencing on the Borrowing Date of such Loan or on the
     Conversion/Continuation Date on which the Loan is converted into or
     continued as an Eurodollar Rate Loan, and ending on the date seven days (if
     such seven day period ends on or before October 28, 2002), one, two, three
     or six months thereafter as selected by the Company in its Notice of
     Borrowing or Notice of Conversion/Continuation;

PROVIDED that:

          (a) if any Interest Period would otherwise end on a day that is not a
     Business Day, that Interest Period shall be extended to the following
     Business Day unless the result of such extension would be to carry such
     Interest Period into another calendar month, in which event such Interest
     Period shall end on the preceding Business Day;

          (b) any Interest Period that begins on the last Business Day of a
     calendar month (or on a day for which there is no numerically corresponding
     day in the calendar month at the end of such Interest Period) shall end on
     the last Business Day of the calendar month at the end of such Interest
     Period; and

          (c) no Interest Period for any Revolving Loan shall extend beyond the
     Revolving Termination Date.

          "IRS" means the Internal Revenue Service, and any Governmental
     Authority succeeding to any of its principal functions under the Code.

          "ISSUANCE DATE" has the meaning specified in SECTION 3.01(a).

                                       18
<PAGE>

          "ISSUE" means, with respect to any Letter of Credit, to issue or to
     extend the expiry of, or to renew or increase the amount of, such Letter of
     Credit; and the terms "ISSUED," "ISSUING" and "ISSUANCE" have corresponding
     meanings.

          "ISSUING BANK" means Bank of America in its capacity as issuer of one
     or more Letters of Credit hereunder together with any replacement letter of
     credit issuer arising under SECTION 10.01(b) or SECTION 10.09.

          "LENDER" has the meaning specified in the introductory clause hereto.
     References to the "Lenders" shall include Bank of America, including in its
     capacity as Issuing Bank and Swing Loan Lender; for purposes of
     clarification only, to the extent that Bank of America may have any rights
     or obligations in addition to those of the Lenders due to its status as
     Issuing Bank, its status as such will be specifically referenced.

          "LENDER INCREASE NOTICE" has the meaning set forth in SECTION 2.01(c).

          "LENDING OFFICE" means, as to any Lender, the office or offices of
     such Lender specified as its "Lending Office" or "Domestic Lending Office"
     or "Offshore Lending Office", as the case may be, on SCHEDULE 11.02, or
     such other office or offices as such Lender may from time to time notify
     the Company and the Agent.

          "L/C ADVANCE" means each Lender's participation in any L/C Borrowing
     in accordance with its Pro Rata Share.

          "L/C AMENDMENT APPLICATION" means an application form for amendment of
     outstanding standby or commercial documentary letters of credit as shall at
     any time be in use at the Issuing Bank, as the Issuing Bank shall request.

          "L/C APPLICATION" means an application form for issuances of standby
     or commercial documentary letters of credit as shall at any time be in use
     at the Issuing Bank, as the Issuing Bank shall request.

          "L/C BORROWING" means an extension of credit resulting from a drawing
     under any Letter of Credit which shall not have been reimbursed on the date
     when made nor converted into a Borrowing of Revolving Loans under SECTION
     3.03(c).

          "L/C COMMITMENT" means the commitment of the Issuing Bank to Issue,
     and the commitment of the Lenders severally to participate in, Letters of
     Credit from time to time Issued or outstanding under Article III, in an
     aggregate amount not to exceed on any date the amount of $10,000,000, as
     the same shall be reduced as a result of a reduction in the L/C Commitment
     pursuant to SECTION 2.06; PROVIDED that the L/C Commitment is a part of the
     combined Commitments, rather than a separate, independent commitment.

          "L/C OBLIGATIONS" means at any time the sum of (a) the aggregate
     undrawn amount of all Letters of Credit then outstanding, plus (b) the
     amount of

                                       19
<PAGE>

     all unreimbursed drawings under all Letters of Credit, including all
     outstanding L/C Borrowings.

          "L/C-RELATED DOCUMENTS" means the Letters of Credit, the L/C
     Applications, the L/C Amendment Applications and any other document
     relating to any Letter of Credit, including any of the Issuing Bank's
     standard form documents for letter of credit issuances.

          "LETTER OF CREDIT" means any letter of credit (whether commercial
     letters of credit or standby letters of credit) that is Issued by the
     Issuing Bank pursuant to ARTICLE III.

          "LEVERAGE RATIO" means, with respect to the Company and its
     Subsidiaries (other than Excluded Subsidiaries), on a consolidated basis,
     as of any date of determination, the ratio of total consolidated
     Indebtedness as of such date to EBITDA for the twelve month period then
     most recently ended (taken as a single accounting period).

          "LIEN" means any security interest, mortgage, deed of trust, pledge,
     hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
     (statutory or other) or preferential arrangement of any kind or nature
     whatsoever in respect of any property (including those created by, arising
     under or evidenced by any conditional sale or other title retention
     agreement, the interest of a lessor under a capital lease, any financing
     lease having substantially the same economic effect as any of the
     foregoing, or the filing of any financing statement naming the owner of the
     asset to which such lien relates as debtor, under the Uniform Commercial
     Code or any comparable law) and any contingent or other agreement to
     provide any of the foregoing, but not including the interest of a lessor
     under an operating lease.

          "LOAN" means an extension of credit by a Lender to the Company under
     Article II or Article III in the form of a Revolving Loan, Swing Line Loan
     or L/C Borrowing.

          "LOAN DOCUMENTS" means this Agreement, any Notes, the Fee Letter, the
     L/C Related Documents, the Borrowing Base Certificates, the Collateral
     Documents and all other documents and certificates delivered to the Agent
     or any Lender in connection herewith.

          "MAJORITY LENDERS" means at any time, at least three Lenders holding
     more than 50% of the then aggregate Commitments or, if the Commitments have
     been terminated, Lenders holding more than 50% of the then unpaid principal
     amount of Loans and L/C Obligations; PROVIDED that the Commitment of any
     Defaulting Lender shall be excluded for the purposes of making a
     determination of Majority Lenders.

          "MARGIN STOCK" means "margin stock" as such term is defined in
     Regulation T, U or X of the FRB.

                                       20
<PAGE>

          "MATERIAL ADVERSE EFFECT" means (a) a material adverse change in, or a
     material adverse effect upon, the operations, business, properties,
     financial condition or prospects of the Company and its Subsidiaries (other
     than Excluded Subsidiaries) taken as a whole, or of the Company and its
     Subsidiaries (including Excluded Subsidiaries) taken as a whole; (b) a
     material impairment of the ability of the Company or any Guarantor to
     perform under any Loan Document and to avoid any Event of Default; or (c) a
     material adverse effect upon the legality, validity, binding effect or
     enforceability against the Company or any Guarantor of any Loan Document.

          "MAXIMUM REVOLVER AMOUNT" means, at any time, the lesser of (a) the
     combined Revolving Loan Commitments and (b) the Borrowing Base at such
     time.

          "MORTGAGE DOCUMENTS" means collectively, all real property mortgages,
     leasehold mortgages, assignments of leases, mortgage deeds, deeds of trust,
     deeds to secure debt, security agreements, and other similar instruments
     entered into at any time which provide the Collateral Agent a Lien securing
     the Obligations under any of the Loan Documents, for the benefit of the
     Collateral Agent and the Lenders, on, or other interest in any portion of
     the real property of the Company or the Guarantors or which relate to any
     such Lien or interest and supporting documentation thereto.

          "MULTIEMPLOYER PLAN" means a "multiemployer plan", within the meaning
     of Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate
     makes, is making, or is obligated to make contributions or, during the
     immediately preceding six (6) years, has made, or been obligated to make,
     contributions.

          "NET INCOME" shall mean for any period, the net income (or loss) of
     the Company and its Subsidiaries (other than Excluded Subsidiaries) on a
     consolidated basis for such period taken as a single accounting period
     determined in conformity with GAAP; PROVIDED, that there shall be excluded
     from such determination, to the extent otherwise included therein, (i) the
     income (or loss) of any entity accrued prior to the date it becomes a
     Subsidiary (or such other date as provided in the relevant acquisition
     agreement) of the Company or is merged into or consolidated with the
     Company or any Subsidiary or on which its assets are acquired by the
     Company or any Subsidiary of the Company, (ii) the income of any Subsidiary
     of the Company to the extent that the declaration or payment of dividends
     or similar distributions by that Subsidiary of that income is not at the
     time permitted by operation of the terms of, or without any third-party
     consent required by, its charter or any agreement, instrument, judgment,
     decree, order, statute, rule or governmental regulation applicable to that
     Subsidiary (iii) any non-cash charges relating to the FAS 142 transitional
     goodwill impairment, (iv) non-cash, deferred financing charges, (v) income
     and losses with respect to operations disposed of in accordance with
     SECTION 8.02, (vi) gains and losses from dispositions permitted under
     SECTION 8.02(c), (vii) non-cash charges related to the

                                       21
<PAGE>

     effect of changes in accounting principles (all of which are in accordance
     with GAAP) and (viii) extraordinary gains and losses.

          "NET WORTH" means shareholders' equity as determined in accordance
     with GAAP.

          "NOTE" means a promissory note executed by the Company in favor of a
     Lender pursuant to SECTION 2.02(b), in substantially the form of EXHIBIT
     F-1, with respect to Revolving Loans, and EXHIBIT F-2, with respect to the
     Swing Line Loan.

          "NOTICE OF BORROWING" means a notice in substantially the form of
     EXHIBIT A.

          "NOTICE OF CONVERSION/CONTINUATION" means a notice in substantially
     the form of EXHIBIT B.

          "OBLIGATIONS" means all advances, debts, liabilities, obligations,
     covenants and duties arising under any Loan Document owing by the Company
     to any Lender, the Agent, the Collateral Agent, or any Indemnified Person,
     whether direct or indirect (including those acquired by assignment),
     absolute or contingent, due or to become due, now existing or hereafter
     arising.

          "ORGANIZATION DOCUMENTS" means, for any corporation, the certificate
     or articles of incorporation, the bylaws, any certificate of determination
     or instrument relating to the rights of preferred shareholders of such
     corporation, any shareholder rights agreement, and all applicable
     resolutions of the board of directors (or any committee thereof) of such
     corporation and for any limited liability company, the certificate of
     formation, the operating agreement and any instruments relating to the
     rights of members of such limited liability company and all applicable
     resolutions of the governing body of such limited liability company.

          "OTHER TAXES" means any present or future stamp, court or documentary
     taxes or any other excise or property taxes, charges or similar levies
     which arise from any payment made hereunder or from the execution,
     delivery, performance, or enforcement of, or otherwise with respect to,
     this Agreement or any other Loan Documents.

          "PARTICIPANT" has the meaning specified in SECTION 11.08(d).

          "PBGC" means the Pension Benefit Guaranty Corporation, or any
     Governmental Authority succeeding to any of its principal functions under
     ERISA.

          "PENSION PLAN" means a pension plan (as defined in Section 3(2) of
     ERISA) subject to Title IV of ERISA which the Company or any ERISA
     Affiliate sponsors, maintains, or to which it makes, is making, or is
     obligated to make

                                       22
<PAGE>

     contributions, or in the case of a multiple employer plan (as described in
     Section 4064(a) of ERISA) has made contributions at any time during the
     immediately preceding six (6) plan years.

          "PERMITTED ACQUISITION" means an Acquisition which meets the following
     criteria:

          (1)  No Default or Event of Default has occurred and is continuing at
               the time of the consummation of such Acquisition and no Default
               or Event of Default would occur after giving effect to such
               Acquisition;

          (2)  The target company or operations shall be in a same or similar
               line of business as the Company or its Subsidiaries are engaged
               in;

          (3)  The target company or operations subject to such Acquisition must
               have generated positive earnings before interest, taxes,
               depreciation and amortization for the twelve-month period then
               most recently ended (for which financial statements are available
               provided, that such financial statements are for a period ended
               not more than 90 days prior to the date of such Acquisitions);

          (4)  Total cash consideration paid by the Company or any of its
               Subsidiaries upon the consummation of such Acquisition PLUS
               Indebtedness of the target company or operations assumed by the
               Company or any of its Subsidiaries (other than payments by the
               target company prior to the Acquisition), PLUS any deferred
               payments booked as a liability upon the consummation of such
               Acquisition (collectively, "CASH CONSIDERATION") for such
               Acquisition is equal to or less than $10,000,000, and the sum of
               such Cash Consideration and the maximum amount of contingent
               payments to be made by the Company and its Subsidiaries after the
               consummation of such Acquisition as additional consideration
               therefor is equal to or less than $20,000,000;

          (5)  For all Acquisitions made in any fiscal year (after giving effect
               to the subject Acquisition), the aggregate sum of: (i) Cash
               Consideration paid by the Company or its Subsidiaries and (ii)
               the actual amount of contingent payments made by the Company and
               its Subsidiaries with respect to all Acquisitions (regardless of
               whether consummated during such fiscal year) is equal to or less
               than $20,000,000;

          (6)  Such Acquisition shall be consensual and shall have been approved
               by the applicable target company's or seller's board of
               directors;

          (7)  Comply with SECTIONS 7.14 and 7.15 with respect to acquired
               target or operations;

                                       23
<PAGE>

          (8)  Such Acquisitions after giving effect thereto would not result in
               the creation of any additional Excluded Subsidiaries or the
               Acquisition of assets by any then existing Excluded Subsidiary,
               except as permitted pursuant to SECTION 8.04(k); and

          (9)  prior to such Acquisition, the Company shall have delivered to
               the Agent and the Lenders a certificate executed by a Responsible
               Officer, demonstrating to the satisfaction of the Agent that
               after giving effect to such Acquisition and the incurrence of any
               Indebtedness permitted hereunder in connection therewith, on a
               pro forma basis using historical audited (if any) or reviewed
               unaudited (if any) financial statements or compiled financial
               statements obtained from the target company in respect of each
               such Acquisition, the Company is in compliance with CLAUSES (4)
               and (5) above and SECTION 8.04(k), if applicable, and certifying
               to CLAUSE (1) above.

          "PERMITTED LIENS" has the meaning specified in SECTION 8.01.

          "PERMITTED SWAP OBLIGATIONS" means all obligations (contingent or
     otherwise) of the Company or any Subsidiary existing or arising under Swap
     Contracts, provided that each of the following criteria is satisfied: (a)
     such obligations are (or were) entered into by such Person in the ordinary
     course of business for the purpose of directly mitigating risks associated
     with liabilities, commitments or assets held or reasonably anticipated by
     such Person, or changes in the value of securities issued by such Person in
     conjunction with a securities repurchase program not otherwise prohibited
     hereunder, and not for purposes of speculation or taking a "market view"
     and (b) such Swap Contracts do not contain any provision ("walk-away"
     provision) exonerating the non-defaulting party from its obligation to make
     payments on outstanding transactions to the defaulting party.

          "PERSON" means an individual, partnership, corporation, limited
     liability company, business trust, joint stock company, trust,
     unincorporated association, joint venture or Governmental Authority or
     other entity.

          "PLAN" means an employee benefit plan (as defined in Section 3(3) of
     ERISA) which the Company or any ERISA Affiliate sponsors or maintains or to
     which the Company makes, is making, or is obligated to make contributions
     and includes any Pension Plan.

          "PLEDGE AND SECURITY AGREEMENT" means, the Pledge and Security
     Agreement dated as of the date hereof, duly executed and delivered by each
     of the Company and the Guarantors pledging the stock of its Subsidiaries
     (other than Excluded Subsidiaries) to the Collateral Agent, for the benefit
     of itself and the Lenders, as the same may be amended, supplemented or
     otherwise modified from time to time.

                                       24
<PAGE>

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

          "PROPOSED NEW LENDER" has the meaning set forth in SECTION 2.01(c).

          "PRO RATA SHARE" means, as to any Lender at any time, the percentage
     equivalent (expressed as a decimal, rounded to the ninth decimal place) at
     such time of such Lender's Revolving Loan Commitment divided by the
     combined Revolving Loan Commitments of all Lenders.

          "RECEIVABLES" means all of the Company's now owned or hereafter
     acquired or arising accounts, contract rights, and any other rights to
     payment for the rendition of services, whether or not they have been earned
     by performance.

          "RECONCILIATION CERTIFICATE" means a certificate executed by a
     Responsible Officer of the Company providing a reconciliation report of the
     Company and its Subsidiaries on a consolidated basis, setting forth a
     calculation of the financial covenants set forth in SECTIONS 8.14 through
     8.16 hereof, but, including, for the purposes of such reconciliation, the
     financial information of all Excluded Subsidiaries of the Company to the
     extent previously excluded from the calculation thereof, in a form and
     accompanied by such detail and documentation as shall be requested by the
     Agent in its reasonable discretion.

          "RENTAL EXPENSE" means, for any period, the sum of (without
     duplication with respect to gross lease arrangements): (a) all rental
     payments, (b) all common area maintenance payments made pursuant to real
     property leases and (c) all real estate taxes paid by the Company and its
     Subsidiaries (other than Excluded Subsidiaries) pursuant to real property
     leases not constituting Capital Lease Obligations.

          "REPORTABLE EVENT" means, any of the events set forth in Section
     4043(c) of ERISA or the regulations thereunder, other than any such event
     for which the 30-day notice requirement under ERISA has been waived in
     regulations issued by the PBGC.

          "REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
     common), treaty, rule or regulation or determination of an arbitrator or of
     a Governmental Authority not subject to a stay order issued by a court of
     competent jurisdiction, in each case applicable to or binding upon the
     Person or any of its property or to which the Person or any of its property
     is subject.

          "RESPONSIBLE OFFICER" means the chief executive officer, chief
     operating officer, the president, or the chief financial officer of the
     Company, or any other officer having substantially the same authority and
     responsibility as the chief financial officer; or, with respect to
     compliance with financial covenants, the chief financial officer, vice
     president-finance or the treasurer of the Company, or any other officer
     having substantially the same authority and responsibility.

                                       25
<PAGE>

          "REVOLVING LOAN" has the meaning specified in SECTION 2.01.

          "REVOLVING LOAN COMMITMENT", as to each Lender, has the meaning
     specified in SECTION 2.01.

          "REVOLVING TERMINATION DATE" means the earlier to occur of:

          (a) September 26, 2005; and

          (b) the date on which the Revolving Loan Commitments terminate in
     accordance with the provisions of this Agreement.

          "SEC" means the Securities and Exchange Commission, or any
     Governmental Authority succeeding to any of its principal functions.

          "SELLING LENDER(S)" has the meaning set forth in SECTION 2.01(c).

          "SOLVENT" means, when used with respect to any Person, that as of any
     date of determination, (a) the amount of the "present fair saleable value"
     of the assets of such Person will as of such date, exceed the amount that
     will be required to pay all "liabilities of such Person, contingent or
     otherwise" (whether or not reflected on a balance sheet prepared in
     accordance with GAAP), as of such date (as such quoted terms are determined
     in accordance with the Bankruptcy Code or other applicable bankruptcy,
     insolvency or other debtor relief laws) as such debts become due and
     payable, (b) such Person will not have as of such date, an unreasonably
     small amount of capital with which to conduct their business taking into
     account the particular capital requirements of such Person and its
     projected capital requirements and availability and (c) such Person will be
     able to pay their debts as they mature, taking into account the timing of
     and amounts of cash to be received by such Person, and the timing and
     amounts of cash to be payable on or in respect of indebtedness of such
     Person. For the purposes of this definitions, (i) "DEBT" means liability on
     a "CLAIM", and (ii) "CLAIM" means any (x) right to payment, whether or not
     such a right is reduced to judgement, liquidated, or unliquidated, fixed,
     contingent, matured, unmatured, disputed, undisputed, real or equitable,
     secured or unsecured or (y) right to an equitable remedy for breach of
     performance if such breach gives rise to a right of payment whether or not
     such right to an equitable remedy is reduced to judgment, fixed,
     contingent, matured, unmatured, disputed, undisputed, secured or unsecured.

          "SPC" has the meaning specified in SECTION 11.08(g).

          "SPECIFIED ASSET SALE" means each Asset disposition described in
     SCHEDULE 8.02 to this Agreement.

          "SUBSIDIARY" of a Person means any corporation, association,
     partnership, limited liability company, joint venture or other business
     entity of which more than 50% of the voting stock, membership interests or
     other equity interests (in the case of Persons other than corporations), is
     owned or controlled directly or

                                       26
<PAGE>

     indirectly by the Person, or one or more of the Subsidiaries of the Person,
     or a combination thereof. Unless the context otherwise clearly requires,
     references herein to a "Subsidiary" refer to a Subsidiary of the Company.

          "SURETY INSTRUMENTS" means all letters of credit (including, without
     limitation, standby, commercial and documentary), banker's acceptances,
     bank guaranties, shipside bonds, surety bonds and similar instruments.

          "SWAP CONTRACT" means any agreement, whether or not in writing,
     relating to any transaction that is a rate swap, basis swap, forward rate
     transaction, commodity swap, commodity option, equity or equity index swap
     or option, bond, note or bill option, interest rate option, forward foreign
     exchange transaction, cap, collar or floor transaction, currency swap,
     cross-currency rate swap, swaption, currency option or any other, similar
     transaction (including any option to enter into any of the foregoing) or
     any combination of the foregoing, and, unless the context otherwise clearly
     requires, any master agreement relating to or governing any or all of the
     foregoing.

          "SWAP TERMINATION VALUE" means, in respect of any one or more Swap
     Contracts, after taking into account the effect of any legally enforceable
     netting agreement relating to such Swap Contracts, (a) for any date on or
     after the date such Swap Contracts have been closed out and termination
     value(s) determined in accordance therewith, such termination value(s), and
     (b) for any date prior to the date referenced in clause (a) the amount(s)
     determined as the mark-to-market value(s) for such Swap Contracts, as
     determined by the Company based upon one or more mid-market or other
     readily available quotations provided by any recognized dealer in such Swap
     Contracts (which may include any Lender).

          "SWING LINE BANK" means Bank of America, in its capacity as provider
     of the Swing Line Loans.

          "SWING LINE LOAN" has the meaning specified in SECTION 2.01(b).

          "SWING LINE LOAN COMMITMENT" has the meaning specified in SECTION
     2.01(b).

          "SWING LINE RATE" means the Base Rate.

          "SWING LINE TERMINATION DATE" means the earlier to occur of:

          (a) September 26, 2005; and

          (b) the Revolving Termination Date.

          "TANGIBLE NET WORTH" means shareholders' equity as determined in
     accordance with GAAP, excluding all intangible assets (as determined in
     conformity with GAAP), including, without limitation, goodwill, patents,
     trademarks, copyrights, franchises, licenses and customer lists.

                                       27
<PAGE>

          "TAXES" means any and all present or future taxes, levies,
     assessments, imposts, duties, deductions, fees, withholdings or similar
     charges, and all liabilities with respect thereto, excluding, in the case
     of each Lender and the Agent, respectively, taxes imposed on or measured by
     its net income, capital, revenue or gross receipts by the jurisdiction (or
     any political subdivision thereof) under the laws of which such Lender or
     the Agent, as the case may be, is organized or maintains a lending office.

          "TYPE" means, with respect to any Borrowing, its nature as a Base Rate
     Loan or an Eurodollar Rate Loan.

          "UCC" the Uniform Commercial Code as the same may, from time to time,
     be enacted and in effect in the State of Illinois; PROVIDED, that to the
     extent that the UCC is used to define any term herein or in any Loan
     Document and such term is defined differently in different Articles or
     Divisions of the UCC, the definition of such term contained in Article or
     Division 9 shall govern; PROVIDED FURTHER, that in the event that, by
     reason of mandatory provisions of law, any or all of the attachment,
     perfection or priority of, or remedies with respect to, the Administrative
     the Agent's or any Lender's Lien on any Collateral is governed by the
     Uniform Commercial Code as enacted and in effect in a jurisdiction other
     than the State of Illinois, the term "UCC" shall mean the Uniform
     Commercial Code as enacted and in effect in such other jurisdiction solely
     for purposes of the provisions thereof relating to such attachment,
     perfection, priority or remedies and for purposes of definitions related to
     such provisions.

          "UNFUNDED PENSION LIABILITY" means the excess of a Plan's benefit
     liabilities under Section 4001(a)(16) of ERISA, over the current value of
     that Plan's assets, determined in accordance with the assumptions used for
     funding the Pension Plan pursuant to Section 412 of the Code for the
     applicable plan year.

          "UNITED STATES" and "U.S." each means the United States of America.

          "WHOLLY-OWNED SUBSIDIARY" means any corporation, association,
     partnership, limited liability company, joint venture or other business
     entity in which (other than directors' or other qualifying shares required
     by law) 100% of the equity interests of each class having ordinary voting
     power, and 100% of the equity interests of every other class, in each case,
     at the time as of which any determination is being made, is owned,
     beneficially and of record, by the Company, or by one or more of the other
     Wholly-Owned Subsidiaries, or both.

     1.02 OTHER INTERPRETIVE PROVISIONS. (a) The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.

          (b) The words "hereof", "herein", "hereunder" and similar words refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and Section, Schedule and Exhibit references are to this Agreement
unless otherwise specified.

                                       28
<PAGE>

          (c) (i) The term "documents" includes any and all instruments,
          documents, agreements, certificates, indentures, notices and other
          writings, however evidenced.

                  (ii) The term "including" is not limiting and means "including
          without limitation."

                 (iii) In the computation of periods of time from a specified
          date to a later specified date, the word "from" means "from and
          including"; the words "to" and "until" each mean "to but excluding",
          and the word "through" means "to and including."

          (d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, and
(ii) references to any statute or regulation are to be construed as including
all statutory and regulatory provisions consolidating, amending, replacing,
supplementing or interpreting the statute or regulation.

          (e) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.

          (f) This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.

          (g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the Company
and the other parties, and are the products of all parties. Accordingly, they
shall not be construed against the Lenders or the Agent merely because of the
Agent's or Lenders' involvement in their preparation.

     1.03 ACCOUNTING PRINCIPLES. (a) Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP consistently applied.

          (b) References herein to "fiscal year" and "fiscal quarter" refer to
such fiscal periods of the Company.

                                   ARTICLE II

                                   THE CREDITS

     2.01 AMOUNTS AND TERMS OF COMMITMENTS. (a) Each Lender severally agrees, on
the terms and conditions set forth herein, to make loans to the Company (each
such loan, a "REVOLVING LOAN") from time to time on any Business Day during the
period from the Closing Date to the Revolving Termination Date, in an aggregate
amount not to exceed at any time the total of the amounts set forth on SCHEDULE
2.01 (such total amount, as the same may be reduced

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<PAGE>

under SECTION 2.05 or as a result of one or more assignments under SECTION
10.08, the Lender's "REVOLVING LOAN COMMITMENT"); PROVIDED, however, that, after
giving effect to any Borrowing of Revolving Loans (exclusive of Revolving Loans,
Swing Line Loans and L/C Obligations which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans), the Effective Amount of all outstanding Revolving Loans, Swing Line
Loans and L/C Obligations, shall not at any time exceed the Maximum Revolver
Amount; and PROVIDED FURTHER, that the Effective Amount of the Revolving Loans
of any Lender plus the participation of such Lender in the Effective Amount of
all Swing Loan Loans and L/C Obligations shall not at any time exceed such
Lender's Revolving Loan Commitment. Within the limits of each Lender's Revolving
Loan Commitment, and subject to Availability at such time and the other terms
and conditions hereof, the Company may borrow under this SECTION 2.01(a), prepay
under SECTION 2.06 and reborrow under this SECTION 2.01(a).

          (b) Subject to the terms and conditions hereof, the Swing Line Bank
agrees to make loans to the Company (each such loan, a "SWING LINE LOAN") from
time to time on any Business Day during the period from the Closing Date to the
Swing Line Termination Date in an aggregate principal amount at any one time
outstanding not to exceed $10,000,000 (the "SWING LINE LOAN COMMITMENT");
PROVIDED, after giving effect to any Borrowing of Swing Line Loans, the
Effective Amount of all outstanding Swing Line Loans shall not at any time
exceed the Swing Line Loan Commitment; AND PROVIDED FURTHER, that the Effective
Amount of all outstanding Revolving Loans, Swing Line Loans and L/C Obligations
shall not at any time exceed the Maximum Revolver Amount. Prior to the Swing
Line Termination Date, the Company may use the Swing Line Loan Commitment by
borrowing, prepaying the Swing Line Loans in whole or in part, and reborrowing,
all in accordance with the terms and conditions hereof. All Swing Line Loans
shall bear interest at the Swing Line Rate and shall not be entitled to be
converted into Loans that bear interest at any other rate.

          (c) INCREASE OF REVOLVING LOAN COMMITMENT. (i) At any time, the
Company may request (in consultation with the Agent) that the combined Revolving
Loan Commitment be increased in a minimum amount equal to, and in minimum
increments of, $1,000,000, PROVIDED that, (A) the combined Revolving Loan
=Commitment shall at no time exceed $80,000,000 and (B) the Company shall not
previously have reduced the combined Revolving Loan Commitment. Such request
shall be made in a written notice given to the Agent and the Lenders by the
Company not less than twenty (20) Business Days prior to the proposed effective
date of such increase, which notice (a "COMMITMENT INCREASE NOTICE") shall
specify the amount of the proposed increase in the combined Revolving Loan
Commitment and the proposed effective date of such increase. In the event of
such a Commitment Increase Notice, each of the Lenders shall be given the
opportunity to participate in the requested increase. No Lender shall have any
obligation to increase its Commitment pursuant to a Commitment Increase Notice.
On or prior to the date that is fifteen (15) Business Days after receipt of the
Commitment Increase Notice, each Lender shall submit to the Agent a notice
indicating the maximum amount by which it is willing to increase its Commitment
in connection with such Commitment Increase Notice (any such notice to the Agent
being herein a "LENDER INCREASE NOTICE"). Any Lender which does not submit a
Lender Increase Notice to the Agent prior to the expiration of such fifteen (15)
Business Day period shall be deemed to have denied any increase in its
Commitment. In the event that the increases of Commitments set forth in the
Lender Increase Notices exceed the amount requested by the Company in the
Commitment Increase Notice, the Agent and the Arranger shall have the

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<PAGE>

right, in consultation with the Company, to allocate the amount of increases
necessary to meet the Company's Commitment Increase Notice. In the event that
the Lender Increase Notices are less than the amount requested by the Company,
not later than three (3) Business Days prior to the proposed effective date the
Company may notify the Agent of any financial institution that shall have agreed
to become a "Lender" party hereto (a "PROPOSED NEW LENDER") in connection with
the Commitment Increase Notice. Any Proposed New Lender shall be subject to the
consent of the Agent (which consent shall not be unreasonably withheld). If the
Company shall not have arranged any Proposed New Lender(s) to commit to the
shortfall from the Lender Increase Notices, then the Company shall be deemed to
have reduced the amount of its Commitment Increase Notice to the aggregate
amount set forth in the Lender Increase Notices. Based upon the Lender Increase
Notices, any allocations made in connection therewith and any notice regarding
any Proposed New Lender, if applicable, the Agent shall notify the Company and
the Lenders on or before the Business Day immediately prior to the proposed
effective date of the amount of each Lender's and Proposed New Lenders'
Commitment (the "EFFECTIVE COMMITMENT AMOUNT") and the amount of the combined
Revolving Loan Commitment, which amount shall be effective on the following
Business Day. Any increase in the combined Revolving Loan Commitment shall be
subject to the following conditions precedent: (1) the Company shall have
obtained from each Subsidiary party to a Loan Document its reaffirmation of such
Loan Documents, if any, executed by it, which consent and reaffirmation shall be
in writing and in form and substance reasonably satisfactory to the Agent, (2)
as of the date of the Commitment Increase Notice and as of the proposed
effective date of the increase in the combined Revolving Loan Commitment, all
representations and warranties shall be true and correct in all material
respects as though made on such date (except to the extent such representation
or warranties expressly refer to an earlier date, in which case they shall be
true and correct as of such earlier date) and no event shall have occurred and
then be continuing which constitutes a Default or Event of Default, (3) the
Company, the Agent and each Proposed New Lender or Lender that shall have agreed
to provide a "Commitment" in support of such increase in the combined Revolving
Loan Commitment shall have executed and delivered a "COMMITMENT AND ACCEPTANCE"
substantially in the form of EXHIBIT H hereto, (4) counsel for the Company and
for any such guarantors shall have provided to the Agent supplemental opinions
in form and substance reasonably satisfactory to the Agent and (5) the Company
and the Proposed New Lender shall otherwise have executed and delivered such
other instruments and documents as are consistent with those required under
ARTICLE V or that the Agent shall have reasonably requested in connection with
such increase. If any fee shall be charged by the Buying Lenders (as defined
below) in connection with any such increase, such fee shall be in accordance
with then prevailing market conditions, which market conditions shall have been
reasonably documented by the Agent to the Company. Upon satisfaction of the
conditions precedent to any increase in the combined Revolving Loan Commitment,
the Agent shall promptly advise the Company and each Lender of the effective
date of such increase. Upon the effective date of any increase in the combined
Revolving Loan Commitment that is provided by a Proposed New Lender, such
Proposed New Lender shall be a party to this Agreement as a Lender and shall
have the rights and obligations of a Lender hereunder. Nothing contained herein
shall constitute, or otherwise be deemed to be, a commitment on the part of any
Lender to increase its Commitment hereunder at any time.

          (ii) For purposes of this CLAUSE (ii), (A) the term "BUYING LENDER(S)"
shall mean (1) each Lender the Effective Commitment Amount of which is greater
than its

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<PAGE>

Commitment prior to the effective date of any increase in the combined
Revolving Loan Commitment and (2) each Proposed New Lender that is allocated an
Effective Commitment Amount in connection with any Commitment Increase Notice,
and (B) the term "SELLING LENDER(S)" shall mean each Lender whose Commitment is
not being increased from that in effect prior to such increase in the combined
Revolving Loan Commitment. Effective on the effective date of any increase in
the combined Revolving Loan Commitment pursuant to CLAUSE (i) above, each
Selling Lender hereby sells, grants, assigns and conveys to each Buying Lender,
without recourse, warranty, or representation of any kind, except as
specifically provided herein, an undivided percentage in such Selling Lender's
right, title and interest in and to its outstanding Loans in the respective
dollar amounts and percentages necessary so that, from and after such sale, each
such Selling Lender's outstanding Loans shall equal such Selling Lender's Pro
Rata Share (calculated based upon the Effective Commitment Amounts) of the
outstanding Loans. Effective on the effective date of the increase in the
combined Revolving Loan Commitment pursuant to CLAUSE (i) above, each Buying
Lender hereby purchases and accepts such grant, assignment and conveyance from
the Selling Lenders. Each Buying Lender hereby agrees that its respective
purchase price for the portion of the outstanding Loans purchased hereby shall
equal the respective dollar amount necessary so that, from and after such
payments, each Buying Lender's outstanding Loans shall equal such Buying
Lender's Pro Rata Share (calculated based upon the Effective Commitment Amounts)
of the outstanding Loans. Such amount shall be payable on the effective date of
the increase in the combined Revolving Loan Commitment by wire transfer of
immediately available funds to the Agent. The Agent, in turn, shall wire
transfer any such funds received to the Selling Lenders, in same day funds, for
the sole account of the Selling Lenders. Each Selling Lender hereby represents
and warrants to each Buying Lender that such Selling Lender owns the Loans being
sold and assigned hereby for its own account and has not sold, transferred or
encumbered any or all of its interest in such Loans, except for participations
which will be extinguished upon payment to Selling Lender of an amount equal to
the portion of the outstanding Loans being sold by such Selling Lender. Each
Buying Lender hereby acknowledges and agrees that, except for each Selling
Lender's representations and warranties contained in the foregoing sentence,
each such Buying Lender has entered into its Commitment and Acceptance with
respect to such increase on the basis of its own independent investigation and
has not relied upon, and will not rely upon, any explicit or implicit written or
oral representation, warranty or other statement of the Lenders or the Agent
concerning the authorization, execution, legality, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or the other Loan
Documents. The Company hereby agrees to compensate each Lender for all losses,
expenses and liabilities incurred by each Lender in connection with the sale and
assignment of any Eurodollar Rate Loan hereunder on the terms and in the manner
as set forth in SECTION 4.04.

     2.02 LOAN ACCOUNTS.

          (a) The Loans made by each Lender and the Letters of Credit Issued by
the Issuing Bank shall be evidenced by one or more accounts or records
maintained by such Lender or Issuing Bank, as the case may be, in the ordinary
course of business. The accounts or records maintained by the Agent, the Issuing
Bank and each Lender shall be prima facie evidence of the amount of the Loans
made by the Lenders to the Company, and the Letters of Credit issued for the
account of the Company, and the interest and payments thereon. Any failure so to
record or

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<PAGE>

any error in doing so shall not, however, limit or otherwise affect the
obligation of the Company hereunder to pay any amount owing with respect to the
Loans or any Letter of Credit.

          (b) Upon the request of any Lender made through the Agent, the Loans
made by such Lender may be evidenced by one or more Notes, instead of or in
addition to loan accounts. Each such Lender shall record on the schedules
annexed to its Note(s) the date, amount and maturity of each Loan made by it and
the amount of each payment of principal made by the Company with respect
thereto. Each such Lender is irrevocably authorized by the Company to make such
recordations on its Note(s) and each Lender's record shall be deemed prima facie
correct; PROVIDED, HOWEVER, that the failure of a Lender to make, or an error in
making, a notation thereon with respect to any Loan shall not limit or otherwise
affect the obligations of the Company hereunder or under any such Note to such
Lender.

     2.03 PROCEDURE FOR BORROWING.

          (a) REVOLVING LOANS. (i) Each Borrowing (other than a L/C Borrowing or
a Borrowing of Swing Line Loans) shall be made upon the Company's irrevocable
written notice delivered to the Agent in the form of a Notice of Borrowing
(which notice must be received by the Agent prior to 10:00 a.m. (Chicago time)
(x) three Business Days prior to the requested Borrowing Date, in the case of
Eurodollar Rate Loans and (y) on the date of the requested Borrowing Date, in
the case of Base Rate Loans, specifying:

               (1) the amount of the Borrowing, which shall be in an aggregate
          minimum amount of $500,000, or any multiple of $100,000 in excess
          thereof, in the case of Base Rate Loans, and $1,000,000, or any
          multiple of $500,000 in excess thereof, in the case of Eurodollar Rate
          Loans;

               (2) the requested Borrowing Date, which shall be a Business Day;

               (3) the Type of Loans comprising the Borrowing; and

               (4) the duration of the Interest Period applicable to such
          Eurodollar Rate Loans included in such notice. If the Notice of
          Borrowing fails to specify the duration of the Interest Period for any
          Borrowing comprised of Eurodollar Rate Loans, such Interest Period
          shall be one month;

PROVIDED, HOWEVER, that with respect to the Borrowing to be made on the Closing
Date, the Notice of Borrowing shall be delivered to the Agent not later than
10:00 a.m. (Chicago time) on the Closing Date and such Borrowing will consist of
Base Rate Loans only.

          (ii) The Agent will promptly notify each Lender of its receipt of any
Notice of Borrowing and of the amount of such Lender's Pro Rata Share of that
Borrowing.

          (iii) Each Lender will make the amount of its Pro Rata Share of each
Borrowing available to the Agent for the account of the Company at the Agent's
Payment Office by 2:00 p.m. (Chicago time) on the Borrowing Date requested by
the Company in funds immediately available to the Agent. The proceeds of all
such Loans will then be made available to the Company by the Agent at such
office by crediting the account of the Company on the

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<PAGE>

books of Bank of America with the aggregate of the amounts made available to the
Agent by the Lenders and in like funds as received by the Agent.

          (iv) After giving effect to any Borrowing, unless the Agent shall
otherwise consent, there may not be more than seven different Interest Periods
in effect.

          (b) SWING LINE LOANS. (i) The Company may borrow under the Swing Line
Loan Commitment on any Business Day until the Swing Line Termination Date;
PROVIDED that the Company shall give the Agent irrevocable notice (which notice
must be received by the Agent prior to 12:00 noon (Chicago time)) and the Agent
shall promptly deliver to the Company and the Swing Line Bank a confirmation of
such notice specifying the amount of the requested Swing Line Loan, which shall
be in a minimum amount of $100,000 or a whole multiple of $100,000 in excess
thereof. The proceeds of the Swing Line Loan will be made available by the Swing
Line Bank to the Company in immediately available funds at the office of the
Swing Line Bank by 2:00 p.m. (Chicago time) on the date of such notice. The
Company may at any time and from time to time, prepay the Swing Line Loans, in
whole or in part, without premium or penalty, by notifying the Agent prior to
12:00 noon (Chicago time) on any Business Day of the date and amount of
prepayment. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein. Partial prepayments
shall be in an aggregate principal amount of $100,000 or a whole multiple of
$100,000 in excess thereof.

          (ii) The Agent, acting upon the demand of the Swing Line Bank, at any
time in the Swing Line Bank's sole and absolute discretion, shall on behalf of
the Company (which hereby irrevocably directs the Agent to so act on its behalf)
notify each Lender (including the Swing Line Bank) to make a Revolving Loan to
the Company in a principal amount equal to such Lender's Pro Rata Share of the
amount of such Swing Line Loan, unless any Lender or Lenders shall be obligated,
pursuant to SECTION 2.01(a), to make funds available to the Agent on the date
such notice is given in an aggregate amount equal to or in excess of such Swing
Line Loan, in which case such funds shall be applied by the Agent first to repay
such Swing Line Loan and any remaining funds shall be made available to the
Company in accordance with SECTION 2.01(a); PROVIDED, HOWEVER, that such notice
shall be deemed to have automatically been given upon the occurrence of an Event
of Default under SECTION 9.01(f) or (g). Upon notice from the Agent, following
any demand by the Swing Line Bank each Lender (other than the Swing Line Bank)
will immediately transfer to the Agent, for transfer to the Swing Line Bank, in
immediately available funds, an amount equal to such Lender's Pro Rata Share of
the amount of such Swing Line Loan so repaid. Each Lender's obligation to
transfer the amount of such Revolving Loan to the Agent shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which such Lender or any other Person may have against the Swing Line Bank, (ii)
the occurrence or continuance of a Default or an Event of Default or the
termination of the Revolving Loan Commitment, (iii) any adverse change in the
condition (financial or otherwise) of the Company or any other Person, (iv) any
breach of this Agreement by the Company or any other Person or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.

          (iii) Notwithstanding anything herein to the contrary, the Swing Line
Bank (i) shall not be obligated to make any Swing Line Loan if the conditions
set forth in ARTICLE V have

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<PAGE>

not been satisfied and (ii) shall not make any requested Swing Line Loan if,
prior to 1:00 p.m. (Chicago time) on the date of such requested Swing Line Loan,
it has received a written notice from the Agent or any Lender directing it not
to make further Swing Line Loans because one or more of the conditions specified
in ARTICLE V are not then satisfied.

          (iv) If prior to the making of a Loan required to be made by SECTION
2.03(b)(ii) an Event of Default described in SECTION 9.01(f) or 9.01(g) shall
have occurred and be continuing with respect to the Company, each Lender will,
on the date such Loan was to have been made pursuant to the notice described in
SECTION 2.03(b)(ii), purchase an undivided participating interest in the
outstanding Swing Line Loans in an amount equal to its Pro Rata Share of the
aggregate principal amount of Swing Line Loans then outstanding. Each Lender
will immediately transfer to the Agent for the benefit of the Swing Line Bank,
in immediately available funds, the amount of its participation.

                  (v) Whenever, at any time after a Lender has purchased a
participating interest in a Swing Line Loan, the Swing Line Bank receives any
payment on account thereof, the Swing Line Bank will distribute to the Agent for
delivery to each Lender its participating interest in such amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Lender's participating interest was outstanding and funded);
PROVIDED, HOWEVER, that in the event that such payment received by the Swing
Line Bank is required to be returned, such Lender will return to the Agent for
delivery to the Swing Line Bank any portion thereof previously distributed by
the Swing Line Bank to it.

          (vi) Each Lender's obligation to make the Loans referred to in SECTION
2.03(b)(ii) and to purchase participating interests pursuant to SECTION
2.03(b)(iv) shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any set-off, counterclaim,
recoupment, defense or other right which such Lender or the Company may have
against the Swing Line Bank, the Company or any other Person for any reason
whatsoever, (ii) the occurrence or continuance of a Default or an Event of
Default, (iii) any adverse change in the condition (financial or otherwise) of
the Company, (iv) any breach of this Agreement or any other Loan Document by the
Company, any Subsidiary or any other Lender, or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.

     2.04 CONVERSION AND CONTINUATION ELECTIONS.

          (a) The Company may, upon irrevocable written notice to the Agent in
accordance with the provisions of this SECTION 2.04:

               (i) elect, as of any Business Day, in the case of Base Rate Loans
          (other than Swing Line Loans), or as of the last day of the applicable
          Interest Period, in the case of Eurodollar Rate Loans, to convert any
          such Loans (or any part thereof in an aggregate minimum amount of
          $500,000, or any multiple of $100,000 in excess thereof, in the case
          of Base Rate Loans, and $1,000,000, or any multiple of $500,000 in
          excess thereof, in the case of Eurodollar Rate Loans) into Loans of
          any other Type; or

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<PAGE>

               (ii) elect as of the last day of the applicable Interest Period,
          to continue any Loans having Interest Periods expiring on such day (or
          any part thereof in an amount not less than $1,000,000, or that is in
          an integral multiple of $500,000 in excess thereof);

PROVIDED, that if at any time the aggregate amount of Eurodollar Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $1,000,000, such Eurodollar Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Company to continue such Loans as, and convert such Loans into,
Eurodollar Rate Loans shall terminate.

          (b) The Company shall deliver a Notice of Conversion/Continuation to
be received by the Agent not later than 10:00 a.m. (Chicago time) at least
(i) three Business Days in advance of the Conversion/ Continuation Date, if the
Loans are to be converted into or continued as Eurodollar Rate Loans and (ii) on
the date of the Conversion/Continuation Date, if the Loans are to be converted
into Base Rate Loans, specifying:

               (i) the proposed Conversion/Continuation Date;

               (ii) the aggregate amount of Loans to be converted or continued;

               (iii) the Type of Loans resulting from the proposed conversion or
          continuation; and

               (iv) other than in the case of conversions into Base Rate Loans,
          the duration of the requested Interest Period.

          (c) If upon the expiration of any Interest Period applicable to
Eurodollar Rate Loans, the Company has failed to submit or complete a notice in
accordance with SECTION 2.04(b), the Company shall be deemed to have elected to
convert such Eurodollar Rate Loans into a one month Eurodollar Rate Loan,
PROVIDED, HOWEVER, if any Default or Event of Default then exits, the Company
shall be deemed to have elected to convert such Eurodollar Rate Loans into a
Base Rate Loan.

          (d) The Agent will promptly notify each Lender of its receipt of a
Notice of Conversion/Continuation, or, if no timely notice is provided by the
Company, the Agent will promptly notify each Lender of the details of any
automatic continuation or conversion. All conversions and continuations shall be
made ratably according to the respective outstanding principal amounts of the
Loans, with respect to which the notice was given, held by each Lender.

          (e) Unless the Majority Lenders otherwise consent, during the
existence of a Default or Event of Default, the Company may not elect to have a
Loan converted into or continued as an Eurodollar Rate Loan.

          (f) After giving effect to any conversion or continuation of
Eurodollar Rate Loans, unless the Agent shall otherwise consent, there may not
be more than seven different Interest Periods in effect.

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<PAGE>

     2.05 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS. The Company may,
upon not less than three Business Days' prior written notice to the Agent,
terminate the Commitments, or permanently reduce the Commitments by an aggregate
minimum amount of $1,000,000 or any multiple of $1,000,000 in excess thereof;
UNLESS, after giving effect thereto and to any prepayments of Revolving Loans
made on the effective date thereof, (i) the Effective Amount of all Revolving
Loans, Swing Line Loans and L/C Obligations would exceed the amount of the
Commitments then in effect, (ii) the Effective Amount of all Swing Line Loans
then outstanding would exceed the Swing Line Loan Commitment or (iii) the
Effective Amount of all L/C Obligations would exceed the L/C Commitment. If and
to the extent specified by the Company in the notice to the Agent, some or all
of the reduction in the Commitments shall be applied to reduce the L/C
Commitment. Once reduced in accordance with this Section, the Commitments may
not be increased. Any reduction of the Commitments shall be applied to each
Lender according to its Pro Rata Share. All accrued Commitment Fees and letter
of credit fees to, but not including, the effective date of any reduction or
termination of the Commitments shall be paid on the effective date of such
reduction or termination.

     2.06 OPTIONAL PREPAYMENTS. Subject to SECTION 4.04, the Company may, at any
time or from time to time, upon irrevocable notice to the Agent by 10:00 a.m.
Chicago time, prepay Loans ratably among the Lenders in whole or in part without
penalty, in minimum amounts of $500,000, or any multiple of $100,000 in excess
thereof, in the case of Base Rate Loans, and $500,000, or any multiple of
$500,000 in excess thereof, in the case of Eurodollar Rate Loans. Such notice of
prepayment shall specify the date and amount of such prepayment and the Type(s)
of Loans to be prepaid. The Agent will promptly notify each Lender of its
receipt of any such notice, and of such Lender's Pro Rata Share of such
prepayment. If such notice is given by the Company, the Company shall make such
prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein, together with accrued interest to each
such date on the amount prepaid and any amounts required pursuant to SECTION
4.04.

     2.07 MANDATORY PREPAYMENTS OF LOANS.

          (a) The Company shall promptly, but in any event within two (2)
Business Days, prepay the outstanding principal amount of the Revolving Loans or
Swing Line Loans on any date on which the aggregate outstanding principal amount
of such Loans together with the Effective Amount of the L/C Obligations (after
giving effect to any other repayments or prepayments on such day) exceeds the
Maximum Revolver Amount in the amount of such excess, or if any such excess
remains after a prepayment in full hereunder of all outstanding Loans, the
Company shall Cash Collaterialize the outstanding Letters of Credit to the
extent of such remaining excess.

          (b) If on any date the Effective Amount of L/C Obligations exceeds the
L/C Commitment, the Company shall Cash Collateralize on such date the
outstanding Letters of Credit in an amount equal to the excess of the maximum
amount then available to be drawn under the Letters of Credit over the Aggregate
L/C Commitment.

          (c) GENERAL. Any prepayments pursuant to this SECTION 2.07 shall be
applied first to any Base Rate Loans then outstanding and then to Eurodollar
Rate Loans with the shortest Interest Periods remaining. The Company shall pay,
together with each prepayment

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<PAGE>

under this SECTION 2.07, accrued interest on the amount prepaid and any amounts
required pursuant to SECTION 4.04.

     2.08 REPAYMENT.

          (a) The Company shall repay to the Lenders on the Revolving
Termination Date the aggregate principal amount of Revolving Loans outstanding
on such date.

          (b) SWING LINE LOANS. The Company shall repay to the Swing Line Bank
on the Swing Line Termination Date the aggregate principal amount of Swing Line
Loans outstanding on such date.

     2.09 INTEREST.

          (a) Each Loan (other than Swing Line Loans) shall bear interest on the
outstanding principal amount thereof from the applicable Borrowing Date at a
rate per annum equal to either the Eurodollar Rate or the Base Rate, as the case
may be, PLUS the Applicable Margin (and subject to the Company's right to
convert to other Types of Loans under SECTION 2.04). Swing Line Loans shall bear
interest on the outstanding principal amount thereof from the applicable
Borrowing Date at a rate per annum equal to the Swing Line Rate.

          (b) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of Loans
under SECTION 2.06 or 2.07 for the portion of the Loans so prepaid and upon
payment (including prepayment) in full thereof and, during the existence of any
Event of Default, interest shall be paid on demand of the Agent at the request
or with the consent of the Majority Lenders.

          (c) Notwithstanding SECTION 2.09(a), while any Event of Default exists
or after acceleration, the Company shall pay interest (after as well as before
entry of judgment thereon to the extent permitted by law) on the principal
amount of all outstanding Obligations, at a rate per annum which is determined
by adding 2% per annum to the Applicable Margin then in effect for such Loans;
and in the case of Obligations not subject to an Applicable Margin, at a rate
per annum equal to the Base Rate plus 2%; PROVIDED, HOWEVER, that, on and after
the expiration of any Interest Period applicable to any Eurodollar Rate Loan
outstanding on the date of occurrence of such Event of Default or acceleration,
the principal amount of such Loan shall, during the continuation of such Event
of Default or after acceleration, bear interest at a rate per annum equal to the
Base Rate plus 2% (the "DEFAULT RATE").

          (d) Anything herein to the contrary notwithstanding, the obligations
of the Company to any Lender hereunder shall be subject to the limitation that
payments of interest shall not be required for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for
or receiving such payment by such Lender would be contrary to the provisions of
any law applicable to such Lender limiting the highest rate of interest that may
be lawfully contracted for, charged or received by such Lender, and in such
event the Company shall pay such Lender interest at the highest rate permitted
by applicable law.

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<PAGE>

     2.10 FEES.

          (a) AGENCY FEES. The Company shall pay the fees to the Agent for the
Agent's own account, as required by the letter agreement ("FEE LETTER") between
the Company and the Agent, dated as of August 5, 2002.

          (b) COMMITMENT FEES. The Company shall pay to the Agent for the
account of each Lender a commitment fee ("COMMITMENT FEE") on the average daily
unused portion of such Lender's Revolving Loan Commitment, computed on a
quarterly basis in arrears on the last Business Day of each calendar quarter
based upon the daily utilization for that quarter as calculated by the Agent, at
the Applicable Margin per annum. For purposes of calculating utilization under
this Section, the Revolving Loan Commitment shall be deemed used to the extent
of the Effective Amount of Revolving Loans then outstanding, PLUS the Effective
Amount of L/C Obligations then outstanding but excluding for the purposes of
calculating utilization under this Section the Effective Amount of Swing Line
Loans. Such commitment fee shall accrue from the Closing Date to the Revolving
Termination Date and shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December through the Revolving
Termination Date, with the final payment to be made on the Revolving Termination
Date; provided that, in connection with any reduction or termination of
Revolving Loan Commitment under SECTION 2.05, the accrued commitment fee
calculated for the period ending on such date shall also be paid on the date of
such reduction or termination, with the following quarterly payment being
calculated on the basis of the period from such reduction or termination date to
such quarterly payment date. The commitment fees provided in this Section shall
accrue at all times after the above-mentioned commencement date, including at
any time during which one or more conditions in Article V are not met.

     2.11 COMPUTATION OF FEES AND INTEREST.

          (a) All computations of interest for Base Rate Loans when the Base
Rate is determined by Bank of America's "reference rate" shall be made on the
basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.
All other computations of fees and interest shall be made on the basis of a
360-day year and actual days elapsed (which results in more interest being paid
than if computed on the basis of a 365-day year). Interest and fees shall accrue
during each period during which interest or such fees are computed from the
first day thereof to the last day thereof.

          (b) Each determination of an interest rate by the Agent shall be
conclusive and binding on the Company and the Lenders and shall be prima facie
evidence of such interest rate. The Agent will, at the request of the Company or
any Lender, deliver to the Company or the Lender, as the case may be, a
statement showing the quotations used by the Agent in determining any interest
rate and the resulting interest rate.

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<PAGE>

     2.12 PAYMENTS BY THE COMPANY.

          (a) All payments to be made by the Company shall be made without
set-off, recoupment or counterclaim. Except as otherwise expressly provided
herein, all payments by the Company shall be made to the Agent for the account
of the Lenders at the Agent's Payment Office, and shall be made in dollars and
in immediately available funds, (i) solely for the purpose of calculating the
accrual of interest on the outstanding Obligations, no later than 12:00 Noon
(Chicago time) on the date specified herein and (ii) for all other purposes, no
later than 5:00 PM (Chicago time) on the date specified herein. The Agent will
promptly distribute to each Lender its Pro Rata Share (or other applicable share
as expressly provided herein) of such payment in like funds as received. Any
payment received by the Agent later than the time specified herein shall be
deemed to have been received on the following Business Day and any applicable
interest or fees shall continue to accrue for the day actually received.

          (b) Subject to the provisions set forth in the definition of "Interest
Period" herein, whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be.

          (c) Unless the Agent receives notice from the Company prior to the
date on which any payment is due to the Lenders that the Company will not make
such payment in full as and when required, the Agent may assume that the Company
has made such payment in full to the Agent on such date in immediately available
funds and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Company has not made such
payment in full to the Agent, each Lender shall repay to the Agent on demand
such amount distributed to such Lender, together with interest thereon at the
Federal Funds Rate for each day from the date such amount is distributed to such
Lender until the date repaid.

     2.13 PAYMENTS BY THE LENDERS TO THE AGENT.

          (a) Unless the Agent receives notice from a Lender on or prior to the
Closing Date or, with respect to any Borrowing after the Closing Date, at least
one Business Day prior to the date of such Borrowing, that such Lender will not
make available as and when required hereunder to the Agent for the account of
the Company the amount of that Lender's Pro Rata Share of the Borrowing, the
Agent may assume that each Lender has made such amount available to the Agent in
immediately available funds on the Borrowing Date and the Agent may (but shall
not be so required), in reliance upon such assumption, make available to the
Company on such date a corresponding amount. If and to the extent any Lender
shall not have made its full amount available to the Agent in immediately
available funds and the Agent in such circumstances has made available to the
Company such amount, that Lender shall on the Business Day following such
Borrowing Date make such amount available to the Agent, together with interest
at the Federal Funds Rate for each day during such period. A notice of the Agent
submitted to any Lender with respect to amounts owing under this clause (a)
shall be conclusive, absent manifest error. If such amount is so made available,
such payment to the Agent shall constitute such Lender's Loan on the date of
Borrowing for all purposes of this Agreement. If such amount is not made
available to the Agent on the Business Day following the Borrowing

                                       40
<PAGE>

Date, the Agent will notify the Company of such failure to fund and, upon demand
by the Agent, the Company shall pay such amount to the Agent for the Agent's
account, together with interest thereon for each day elapsed since the date of
such Borrowing, at a rate per annum equal to the interest rate applicable at the
time to the Loans comprising such Borrowing.

          (b) The failure of any Lender to make any Loan on any Borrowing Date
shall not relieve any other Lender of any obligation hereunder to make a Loan on
such Borrowing Date, but no Lender shall be responsible for the failure of any
other Lender to make the Loan to be made by such other Lender on any Borrowing
Date.

     2.14 SHARING OF PAYMENTS, ETC. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder), such Lender shall immediately (a) notify the Agent of
such fact, and (b) purchase from the other Lenders such participations in the
Loans made by them as shall be necessary to cause such purchasing Lender to
share the excess payment pro rata with each of them; PROVIDED, HOWEVER, that if
all or any portion of such excess payment is thereafter recovered from the
purchasing Lender, such purchase shall to that extent be rescinded and each
other Lender shall repay to the purchasing Lender the purchase price paid
therefor, together with an amount equal to such paying Lender's ratable share
(according to the proportion of (i) the amount of such paying Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Company agrees that any Lender so
purchasing a participation from another Lender may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off, but subject to SECTION 11.10) with respect to such participation as
fully as if such Lender were the direct creditor of the Company in the amount of
such participation. The Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this
Section and will in each case notify the Lenders following any such purchases or
repayments.

                                  ARTICLE III

                              THE LETTERS OF CREDIT

     3.01 THE LETTER OF CREDIT SUBFACILITY.

          (a) On the terms and conditions set forth herein (i) the Issuing Bank
agrees, (A) from time to time on any Business Day during the period from the
Closing Date to the Revolving Termination Date to issue Letters of Credit for
the account of the Company, and to amend or renew Letters of Credit previously
issued by it, in accordance with SECTIONS 3.02(C) and (d), and (B) to honor
drafts under the Letters of Credit; and (ii) the Lenders severally agree to
participate in Letters of Credit Issued for the account of the Company;
PROVIDED, that the Issuing Bank shall not be obligated to Issue, and no Lender
shall be obligated to participate in, any Letter of Credit if as of the date of
Issuance of such Letter of Credit (the "ISSUANCE DATE") (1) the Effective Amount
of all L/C Obligations and Swing Line Loans plus the Effective Amount of all
Revolving Loans exceeds the Maximum Revolver Amount, (2) the participation of
any Lender in the Effective Amount of all L/C Obligations and Swing Line Loans
plus the

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<PAGE>

Effective Amount of the Revolving Loans of such Lender exceeds such Lender's
Revolving Loan Commitment or (3) the Effective Amount of L/C Obligations exceeds
the L/C Commitment. Within the foregoing limits, and subject to the other terms
and conditions hereof, the Company's ability to obtain Letters of Credit shall
be fully revolving, and, accordingly, the Company may, during the foregoing
period, obtain Letters of Credit to replace Letters of Credit which have expired
or which have been drawn upon and reimbursed.

          (b) The Issuing Bank is under no obligation to Issue any Letter of
Credit if:

               (i) any order, judgment or decree of any Governmental Authority
     or arbitrator shall by its terms purport to enjoin or restrain the Issuing
     Bank from Issuing such Letter of Credit, or any Requirement of Law
     applicable to the Issuing Bank or any request or directive (whether or not
     having the force of law) from any Governmental Authority with jurisdiction
     over the Issuing Bank shall prohibit, or request that the Issuing Bank
     refrain from, the Issuance of letters of credit generally or such Letter of
     Credit in particular or shall impose upon the Issuing Bank with respect to
     such Letter of Credit any restriction, reserve or capital requirement (for
     which the Issuing Bank is not otherwise compensated hereunder) not in
     effect on the Closing Date, or shall impose upon the Issuing Bank any
     unreimbursed loss, cost or expense which was not applicable on the Closing
     Date and which the Issuing Bank in good faith deems material to it;

               (ii) the Issuing Bank has received written notice from any
     Lender, the Agent or the Company, on or prior to the Business Day prior to
     the requested date of Issuance of such Letter of Credit, that one or more
     of the applicable conditions contained in ARTICLE V is not then satisfied;

               (iii) the expiry date of any requested Letter of Credit is after
     the Revolving Termination Date, unless the Company has Cash Collateralized,
     in form and substance satisfactory to the Issuing Bank, its L/C Obligations
     under such Letter of Credit on or prior to the date of the Issuance of such
     Letter of Credit;

               (iv) any requested Letter of Credit does not provide for drafts,
     or is not otherwise in form and substance reasonably acceptable to the
     Issuing Bank, or the Issuance of a Letter of Credit shall violate any
     applicable policies of the Issuing Bank; or

               (v) such Letter of Credit is in a face amount less than $25,000,
     unless such lesser amount is approved by the Agent and the Issuing Bank, or
     is to be denominated in a currency other than Dollars.

     3.02 ISSUANCE, AMENDMENT AND RENEWAL OF LETTERS OF CREDIT.

          (a) Each Letter of Credit shall be issued upon the irrevocable written
request of the Company received by the Issuing Bank (with a copy sent by the
Company to the Agent) at least three days (or such shorter time as the Issuing
Bank may agree in a particular instance in its sole discretion) prior to the
proposed date of issuance. Each such request for issuance of a Letter of Credit
shall be by facsimile, confirmed immediately in an original writing, in the form
of an L/C Application, and shall specify in form and detail satisfactory to the
Issuing Bank: (i) the proposed date of issuance of the Letter of Credit (which
shall be a Business Day); (ii) the face

                                       42
<PAGE>

amount of the Letter of Credit; (iii) the expiry date of the Letter of Credit;
(iv) the name and address of the beneficiary thereof; (v) the documents to be
presented by the beneficiary of the Letter of Credit in case of any drawing
thereunder; (vi) the full text of any certificate to be presented by the
beneficiary in case of any drawing thereunder; and (vii) such other matters as
the Issuing Bank may require.

          (b) Prior to the Issuance of any Letter of Credit, the Issuing Bank
will confirm with the Agent (by telephone or in writing) that the Agent has
received a copy of the L/C Application or L/C Amendment Application from the
Company and, if not, the Issuing Bank will provide the Agent with a copy
thereof. Unless the Issuing Bank has received notice on or before the Business
Day the Issuing Bank is to issue a requested Letter of Credit from the Agent (A)
directing the Issuing Bank not to issue such Letter of Credit because such
issuance is not then permitted under SECTION 3.01(a) as a result of the
limitations set forth in clauses (1) through (3) thereof or SECTION 3.01(b)(ii);
or (B) that one or more conditions specified in Article V are not then
satisfied; then, subject to the terms and conditions hereof, the Issuing Bank
shall, with the written approval of the Agent, on the requested date, issue a
Letter of Credit for the account of the Company in accordance with the Issuing
Bank's usual and customary business practices.

          (c) From time to time while a Letter of Credit is outstanding and
prior to the Revolving Termination Date, the Issuing Bank will, upon the written
request of the Company received by the Issuing Bank (with a copy sent by the
Company to the Agent) at least three days (or such shorter time as the Issuing
Bank may agree in a particular instance in its sole discretion) prior to the
proposed date of amendment, amend any Letter of Credit issued by it. Each such
request for amendment of a Letter of Credit shall be made by facsimile,
confirmed immediately in an original writing, made in the form of an L/C
Amendment Application and shall specify in form and detail satisfactory to the
Issuing Bank: (i) the Letter of Credit to be amended; (ii) the proposed date of
amendment of the Letter of Credit (which shall be a Business Day); (iii) the
nature of the proposed amendment; and (iv) such other matters as the Issuing
Bank may require. The Issuing Bank shall be under no obligation to amend any
Letter of Credit if: (A) the Issuing Bank would have no obligation at such time
to issue such Letter of Credit in its amended form under the terms of this
Agreement; or (B) the beneficiary of any such letter of Credit does not accept
the proposed amendment to the Letter of Credit. The Agent will promptly notify
the Lenders of the receipt by it of any L/C Application or L/C Amendment
Application.

          (d) The Issuing Bank and the Lenders agree that, while a Letter of
Credit is outstanding and prior to the Revolving Termination Date, at the option
of the Company and upon the written request of the Company received by the
Issuing Bank (with a copy sent by the Company to the Agent) at least five days
(or such shorter time as the Issuing Bank may agree in a particular instance in
its sole discretion) prior to the proposed date of notification of renewal, the
Issuing Bank shall be entitled to authorize the automatic renewal of any Letter
of Credit issued by it. Each such request for renewal of a Letter of Credit
shall be made by facsimile, confirmed immediately in an original writing, in the
form of an L/C Amendment Application, and shall specify in form and detail
satisfactory to the Issuing Bank: (i) the Letter of Credit to be renewed; (ii)
the proposed date of notification of renewal of the Letter of Credit (which
shall be a Business Day); (iii) the revised expiry date of the Letter of Credit;
and (iv) such other matters as the Issuing Bank may require. The Issuing Bank
shall be under no obligation so to renew any Letter of Credit if: (A) the
Issuing Bank would have no obligation at such time to issue or amend

                                       43
<PAGE>

such Letter of Credit in its renewed form under the terms of this Agreement; or
(B) the beneficiary of any such Letter of Credit does not accept the proposed
renewal of the Letter of Credit. If any outstanding Letter of Credit shall
provide that it shall be automatically renewed unless the beneficiary thereof
receives notice from the Issuing Bank that such Letter of Credit shall not be
renewed, and if at the time of renewal the Issuing Bank would be entitled to
authorize the automatic renewal of such Letter of Credit in accordance with this
clause (d) upon the request of the Company but the Issuing Bank shall not have
received any L/C Amendment Application from the Company with respect to such
renewal or other written direction by the Company with respect thereto, the
Issuing Bank shall nonetheless be permitted to allow such Letter of Credit to
renew, and the Company and the Lenders hereby authorize such renewal, and,
accordingly, the Issuing Bank shall be deemed to have received an L/C Amendment
Application from the Company requesting such renewal.

          (e) The Issuing Bank may, at its election (or as required by the Agent
at the direction of the Majority Lenders), deliver any notices of termination or
other communications to any Letter of Credit beneficiary or transferee, and take
any other action as necessary or appropriate, at any time and from time to time,
in order to cause the expiry date of such Letter of Credit to be a date not
later than the Revolving Termination Date.

          (f) This Agreement shall control in the event of any conflict with any
L/C-Related Document (other than any Letter of Credit).

          (g) The Issuing Bank will also deliver to the Agent (and the Agent
shall deliver a copy to each Lender), concurrently or promptly following its
delivery of a Letter of Credit, or amendment to or renewal of a Letter of
Credit, to an advising lender or a beneficiary, a true and complete copy of each
such Letter of Credit or amendment to or renewal of a Letter of Credit.

     3.03 RISK PARTICIPATIONS, DRAWINGS AND REIMBURSEMENTS.

          (a) Immediately upon the Issuance of each Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Issuing Bank a participation in such Letter of Credit and each
drawing thereunder in an amount equal to the product of (i) the Pro Rata Share
of such Lender, times (ii) the maximum amount available to be drawn under such
Letter of Credit and the amount of such drawing, respectively. For purposes of
SECTION 2.10(b), each Issuance of a Letter of Credit shall be deemed to utilize
the Commitment of each Lender by an amount equal to the amount of such
participation.

          (b) In the event of any request for a drawing under a Letter of Credit
by the beneficiary or transferee thereof, the Issuing Bank will promptly notify
the Company and the Agent. The Company shall reimburse the Issuing Bank (by an
L/C Borrowing or otherwise) prior to 12:00 Noon (Chicago time), on each date
that any amount is paid by the Issuing Bank under any Letter of Credit (each
such date, an "HONOR DATE"), in an amount equal to the amount so paid by the
Issuing Bank. In the event the Company fails to reimburse the Issuing Bank for
the full amount of any drawing under any Letter of Credit by 12:00 Noon (Chicago
time) on the Honor Date, the Issuing Bank will promptly notify the Agent and the
Agent will promptly notify each Lender thereof, and the Company shall be deemed
to have requested that Base Rate Loans

                                       44
<PAGE>
in an aggregate amount equal to the unreimbursed drawing be made by the Lenders
to be disbursed on the Honor Date under such Letter of Credit, subject to
Availability and subject to the conditions set forth in SECTION 5.02. Any notice
given by the Issuing Bank or the Agent pursuant to this clause (b) may be given
by telephone if immediately confirmed in writing (including by facsimile);
PROVIDED that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.

          (c) Each Lender (including the Lender acting as Issuing Bank) shall
upon any notice pursuant to SECTION 3.03(b) make available to the Agent for the
account of the relevant Issuing Bank an amount in Dollars and in immediately
available funds equal to its Pro Rata Share of the amount of the drawing,
whereupon the participating Lenders that so make funds available shall (subject
to SECTION 3.03(d)) each be deemed to have made a Revolving Loan consisting of a
Base Rate Loan to the Company in that amount. With respect to any unreimbursed
drawing that is not fully refinanced by a Revolving Loan consisting of Base Rate
Loans because the conditions set forth in SECTION 5.02 cannot be satisfied, the
lack of sufficient Availability or for any other reason, the Company shall be
deemed to have incurred from the Issuing Bank an L/C Borrowing in the amount of
the unreimbursed drawing that is not so refinanced, which L/C Borrowing shall be
due and payable on demand by the Agent or the Issuing Bank (together with
interest) and shall bear interest at the Default Rate. In such event, each
Lender's payment to the Agent for the account of the Issuing Bank pursuant to
this SECTION 3.03(c) shall be deemed payment in respect of its participation in
such L/C Borrowing and shall constitute an L/C Advance from such Lender in
satisfaction of its participation obligation under this SECTION 3.03. Until each
Lender funds its Revolving Loan or L/C Advance pursuant to this SECTION 3.03(c)
to reimburse the Issuing Bank for any amount drawn under any Letter of Credit,
interest in respect of such Lender's Pro Rata Share of such amount shall be
solely for the account of the Issuing Bank. The Agent shall remit the funds so
received to the Issuing Bank. If any Lender so notified fails to make available
to the Agent for the account of the Issuing Bank the amount of such Lender's Pro
Rata Share of the amount of the drawing by no later than 2:00 p.m. (Chicago
time) on the Honor Date, then interest shall accrue on such Lender's obligation
to make such payment, from the Honor Date to the date such Lender makes such
payment, at a rate per annum equal to the Federal Funds Rate in effect from time
to time during such period. A certificate of the Issuing Bank submitted to any
Lender (through the Agent) with respects to any amounts owing under this Section
shall be conclusive absent manifest error. The Agent will promptly give notice
of the occurrence of the Honor Date, but failure of the Agent to give any such
notice on the Honor Date or in sufficient time to enable any Lender to effect
such payment on such date shall not relieve such Lender from its obligations
under this SECTION 3.03.

          (d) Each Lender's obligation in accordance with this Agreement to make
the Revolving Loans or to fund its L/C Advances, as contemplated by this SECTION
3.03, as a result of a drawing under a Letter of Credit, shall be absolute and
unconditional and without recourse to the Issuing Bank and shall not be affected
by any circumstance, including (i) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against the Issuing Bank, the
Company or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default, an Event of Default or a Material Adverse Effect; or
(iii) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing; PROVIDED, HOWEVER, that each Lender's
obligation to make Revolving Loans under this SECTION 3.03 (but not its
obligation to fund L/C Advances) is subject to Availability and the conditions

                                       45
<PAGE>

set forth in SECTION 5.02 (other than delivery by the Company of a Borrowing
Notice). No such making of an L/C Advance shall relieve or otherwise impair the
obligation of the Company to reimburse the Issuing Bank for the amount of any
payment made by the Issuing Bank under any Letter of Credit, together with
interest as provided herein.

     3.04 REPAYMENT OF PARTICIPATIONS.

          (a) Upon (and only upon) receipt by the Agent for the account of the
Issuing Bank of immediately available funds from the Company (i) in
reimbursement of any payment made by the Issuing Bank under the Letter of Credit
with respect to which any Lender has paid the Agent for the account of the
Issuing Bank for such Lender's participation in the Letter of Credit pursuant to
SECTION 3.03 or (ii) in payment of interest thereon, the Agent will pay to each
Lender, in the same funds as those received by the Agent for the account of the
Issuing Bank, the amount of such Lender's Pro Rata Share of such funds, and the
Issuing Bank shall receive the amount of the Pro Rata Share of such funds of any
Lender that did not so pay the Agent for the account of the Issuing Bank.

          (b) If the Agent or the Issuing Bank is required at any time to return
to the Company, or to a trustee, receiver, liquidator, custodian, or any
official in any Insolvency Proceeding, any portion of the payments made by the
Company to the Agent for the account of the Issuing Bank pursuant to SECTION
3.04(a) in reimbursement of a payment made under the Letter of Credit or
interest or fee thereon, each Lender shall, on demand of the Agent, forthwith
return to the Agent or the Issuing Bank the amount of its Pro Rata Share of any
amounts so returned by the Agent or the Issuing Bank plus interest thereon from
the date such demand is made to the date such amounts are returned by such
Lender to the Agent or the Issuing Bank, at a rate per annum equal to the
Federal Funds Rate in effect from time to time.

     3.05 ROLE OF THE ISSUING BANK.

          (a) Each Lender and the Company agree that, in paying any drawing
under a Letter of Credit, the Issuing Bank shall not have any responsibility to
obtain any document (other than any sight draft and certificates expressly
required by the Letter of Credit) or to ascertain or inquire as to the validity
or accuracy of any such document which on its face appears valid or the
authority of the Person executing or delivering any such document.

          (b) No Agent-Related Person nor any of the respective correspondents,
participants or assignees of the Issuing Bank shall be liable to any Lender for:
(i) any action taken or omitted in connection herewith at the request or with
the approval of the Majority Lenders (or all of the Lenders, as applicable under
SECTION 11.01); (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due execution, effectiveness,
validity or enforceability of any L/C-Related Document.

          (c) The Company hereby assumes all risks of the acts or omissions of
any beneficiary or transferee with respect to its use of any Letter of Credit;
PROVIDED, however, that this assumption is not intended to, and shall not,
preclude the Company's pursuing such rights and remedies as it may have against
the beneficiary or transferee at law or under any other agreement. No
Agent-Related Person, nor any of the respective correspondents, participants or

                                       46
<PAGE>

assignees of the Issuing Bank, shall be liable or responsible for any of the
matters described in clauses (i) through (vii) of SECTION 3.06; PROVIDED,
however, anything in such clauses to the contrary notwithstanding, that the
Company may have a claim against the Issuing Bank, and the Issuing Bank may be
liable to the Company, to the extent, but only to the extent, of any direct, as
opposed to consequential or exemplary, damages suffered by the Company which the
Company proves were caused by the Issuing Bank's willful misconduct or gross
negligence or the Issuing Bank's willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing: (i) the Issuing
Bank may accept documents that appear on their face to be in order, without
responsibility for further investigation, unless it received a notice or
information to the contrary; and (ii) the Issuing Bank shall not be responsible
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which appear to be in order
when presented.

     3.06 OBLIGATIONS ABSOLUTE. The obligations of the Company under this
Agreement and any L/C-Related Document to reimburse the Issuing Bank for a
drawing under a Letter of Credit, and to repay any L/C Borrowing and any drawing
under a Letter of Credit converted into Revolving Loans, shall be unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement and each such other L/C-Related Document under all circumstances,
including the following:

               (i) any lack of validity or enforceability of this Agreement or
     any L/C-Related Document;

               (ii) any permitted change in the time, manner or place of payment
     of, or in any other term of, all or any of the obligations of the Company
     in respect of any Letter of Credit or any other amendment or waiver of or
     any consent to departure from all or any of the L/C-Related Documents;

               (iii) the existence of any claim, set-off, defense or other right
     that the Company may have at any time against any beneficiary or any
     transferee of any Letter of Credit (or any Person for whom any such
     beneficiary or any such transferee may be acting), the Issuing Bank or any
     other Person, whether in connection with this Agreement, the transactions
     contemplated hereby or by the L/C-Related Documents or any unrelated
     transaction;

               (iv) any draft, demand, certificate or other document presented
     under any 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; or any loss or delay in the transmission or
     otherwise of any document required in order to make a drawing under any
     Letter of Credit;

               (v) any payment by the Issuing Bank under any Letter of Credit
     against presentation of a draft or certificate that does not strictly
     comply with the terms of any Letter of Credit; or any permitted payment
     made by the Issuing Bank under any Letter of Credit to any Person
     purporting to be a trustee in bankruptcy, debtor-in-possession,

                                       47
<PAGE>

     assignee for the benefit of creditors, liquidator, receiver or other
     representative of or successor to any beneficiary or any transferee of any
     Letter of Credit, including any arising in connection with any Insolvency
     Proceeding;

               (vi) any exchange, release or non-perfection of any collateral,
     or any release or amendment or waiver of or consent to departure from any
     other guarantee, for all or any of the obligations of the Company in
     respect of any Letter of Credit; or

               (vii) any other circumstance or happening whatsoever, whether or
     not similar to any of the foregoing, including any other circumstance that
     might otherwise constitute a defense available to, or a discharge of, the
     Company or a guarantor.

     3.07 CASH COLLATERAL PLEDGE. Upon (i) the request of the Agent or the
Majority Lenders, (A) if the Issuing Bank has honored any full or partial
drawing request on any Letter of Credit and such drawing has resulted in an L/C
Borrowing hereunder, or (B) if, as of the Revolving Termination Date, any
Letters of Credit may for any reason remain outstanding and partially or wholly
undrawn, or (ii) the occurrence of the circumstances described in SECTION
2.07(b) requiring the Company to Cash Collateralize Letters of Credit, then, the
Company shall immediately Cash Collateralize the L/C Obligations in an amount
equal to such L/C Obligations.

     3.08 LETTER OF CREDIT FEES.

          (a) The Company shall pay to the Agent for the account of each of the
Lenders a letter of credit fee with respect to the Letters of Credit equal to
the Applicable Margin per annum of the average daily maximum amount available to
be drawn of the outstanding Letters of Credit, computed on a quarterly basis in
arrears on the last Business Day of each March, June, September and December
based upon Letters of Credit outstanding for that quarter as calculated by the
Agent. Such letter of credit fees shall be due and payable quarterly in arrears
on the last Business Day of each calendar quarter during which Letters of Credit
are outstanding, commencing on the first such quarterly date to occur after the
Closing Date, through the Revolving Termination Date (or such later date upon
which the outstanding Letters of Credit shall expire), with the final payment to
be made on the Revolving Termination Date (or such later expiration date).

          (b) The Company shall pay to the Issuing Bank a letter of credit
fronting fee for each Letter of Credit Issued by the Issuing Bank equal to .125%
per annum of the face amount (or increased face amount, as the case may be) of
such Letter of Credit. Such Letter of Credit fronting fee shall be due and
payable quarterly in arrears on the last Business Day of each calendar quarter
during which such Letter of Credit is outstanding, commencing on the first such
quarterly date to occur after such Letter of Credit is issued, through the
Revolving Termination Date (or such later date upon which such Letter of Credit
shall expire), with the final payment to be made on the Revolving Termination
Date (or such later expiration date).

          (c) The Company shall pay to the Issuing Bank from time to time on
demand the normal issuance, presentation, amendment and other processing fees,
and other standard costs and charges, of the Issuing Bank relating to letters of
credit as from time to time in effect.

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<PAGE>

     3.09 UNIFORM CUSTOMS AND PRACTICE. Unless otherwise expressly agreed by the
Issuing Bank and the Company when a Letter of Credit is issued (including any
such agreement applicable to an Existing Letter of Credit), (i) the rules of the
"International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each standby Letter of Credit,
and (ii) the rules of the Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce (the "ICC")
at the time of issuance (including the ICC decision published by the Commission
on Banking Technique and Practice on April 6, 1998 regarding the European single
currency (euro)) shall apply to each commercial Letter of Credit.

     3.10 OUTSTANDING LETTERS OF CREDIt. The Existing Letters of Credit set
forth on SCHEDULE 1.01 were issued prior to the Effective Date pursuant to the
Existing Credit Agreement and will remain outstanding as of the Closing Date.
The Company, the Issuing Bank and each of the Lenders hereby agree with respect
to the Existing Letters of Credit that each such Existing Letter of Credit, for
all purposes under this Agreement, shall be deemed to be Letters of Credit
governed by the terms and conditions of this Agreement. Each Lender further
agrees to participate in each such Existing Letter of Credit in an amount equal
to its Pro Rata Share of the stated amount of such Existing Letter of Credit.

                                   ARTICLE IV

                     TAXES, YIELD PROTECTION AND ILLEGALITY

     4.01 TAXES.

          (a) Any and all payments by the Company to each Lender or the Agent
under this Agreement and any other Loan Document shall be made free and clear
of, and without deduction or withholding for, any Taxes. In addition, the
Company shall pay all Other Taxes.

          (b) If the Company shall be required by law to deduct or withhold any
Taxes, Other Taxes or Further Taxes from or in respect of any sum payable
hereunder to any Lender or the Agent, then:

               (i) the sum payable shall be increased as necessary so that,
          after making all required deductions and withholdings (including
          deductions and withholdings applicable to additional sums payable
          under this Section), such Lender or the Agent, as the case may be,
          receives and retains an amount equal to the sum it would have received
          and retained had no such deductions or withholdings been made;

               (ii) the Company shall make such deductions and withholdings;

               (iii) the Company shall pay the full amount deducted or withheld
          to the relevant taxing authority or other authority in accordance with
          applicable law; and

               (iv) the Company shall also pay to each Lender or the Agent for
          the account of such Lender, at the time interest is paid, Further
          Taxes in the amount that the

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<PAGE>

          respective Lender specifies as necessary to preserve the after-tax
          yield the Lender would have received if such Taxes, Other Taxes or
          Further Taxes had not been imposed.

          (c) The Company agrees to indemnify and hold harmless each Lender and
the Agent for the full amount of (i) Taxes, (ii) Other Taxes, and (iii) Further
Taxes in the amount that the respective Lender specifies as necessary to
preserve the after-tax yield the Lender would have received if such Taxes, Other
Taxes or Further Taxes had not been imposed, and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes, Other Taxes or Further Taxes were
correctly or legally asserted. Payment under this indemnification shall be made
within 30 days after the date the Lender or the Agent makes written demand
therefor.

          (d) Within 30 days after the date of any payment pursuant to this
Section by the Company of Taxes, Other Taxes or Further Taxes, the Company shall
furnish to each Lender or the Agent the original or a certified copy of a
receipt evidencing payment thereof, or other evidence of payment satisfactory to
such Lender or the Agent.

          (e) If the Company is required to pay any amount to any Lender or the
Agent pursuant to clauses (b) or (c) of this Section, then such Lender shall use
reasonable efforts (consistent with legal and regulatory restrictions) to change
the jurisdiction of its Lending Office so as to eliminate any such additional
payment by the Company which may thereafter accrue, if such change in the sole
judgment of such Lender is not otherwise disadvantageous to such Lender.

     4.02 ILLEGALITY.

          (a) If any Lender determines that the introduction of any Requirement
of Law, or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make Eurodollar Rate Loans,
then, on notice thereof by the Lender to the Company through the Agent, any
obligation of that Lender to make Eurodollar Rate Loans shall be suspended until
the Lender notifies the Agent and the Company that the circumstances giving rise
to such determination no longer exist.

          (b) If a Lender determines that it is unlawful to maintain any
Eurodollar Rate Loan, the Company shall, upon its receipt of notice of such fact
and demand from such Lender (with a copy to the Agent), prepay in full such
Eurodollar Rate Loans of that Lender then outstanding, together with interest
accrued thereon and amounts required under SECTION 4.04, either on the last day
of the Interest Period thereof, if the Lender may lawfully continue to maintain
such Eurodollar Rate Loans to such day, or immediately, if the Lender may not
lawfully continue to maintain such Eurodollar Rate Loan. If the Company is
required to so prepay any Eurodollar Rate Loan, then concurrently with such
prepayment, the Company may borrow from the affected Lender, in the amount of
such repayment, a Base Rate Loan.

          (c) If the obligation of any Lender to make or maintain Eurodollar
Rate Loans has been so terminated or suspended, the Company may elect, by giving
notice to the Lender

                                       50
<PAGE>

          through the Agent that all Loans which would otherwise be made by the
          Lender as Eurodollar Rate Loans shall be instead Base Rate Loans.

          (d) Before giving any notice to the Agent under this Section, the
affected Lender shall designate a different Lending Office with respect to its
Eurodollar Rate Loans if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of the Lender, be
illegal or otherwise disadvantageous to the Lender.

     4.03 INCREASED COSTS AND REDUCTION OF RETURN.

          (a) If any Lender determines that, due to either (i) the introduction
of or any change in or in the interpretation of any law or regulation after the
date of this Agreement or (ii) the compliance by that Lender with any guideline
or request after the date of this Agreement from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to such Lender of agreeing to make or making, funding
or maintaining any Eurodollar Rate Loans (except for any such reserve
requirement reflected in the Eurodollar Reserve Percentage), or participating in
Letters of Credit, or, in the case of the Issuing Bank, any increase in the cost
to the Issuing Bank of agreeing to issue, issuing or maintaining any Letter of
Credit or of agreeing to make or making, funding or maintaining any unpaid
drawing under any Letter of Credit, then the Company shall be liable for, and
shall from time to time, upon demand (with a copy of such demand to be sent to
the Agent), pay to the Agent for the account of such Lender, additional amounts
as are sufficient to compensate such Lender for such increased costs.

          (b) If any Lender shall have determined that (i) the introduction of
any Capital Adequacy Regulation after the date of this Agreement, (ii) any
change in any Capital Adequacy Regulation after the date of this Agreement,
(iii) any change after the date of this Agreement in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or (iv) compliance by the Lender (or its Lending Office) or any
corporation controlling the Lender with any Capital Adequacy Regulation, affects
or would affect the amount of capital required or expected to be maintained by
the Lender or any corporation controlling the Lender and (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 that
the amount of such capital is increased as a consequence of its Commitment,
loans, credits or obligations under this Agreement, then, upon demand of such
Lender to the Company through the Agent, the Company shall pay to the Lender,
from time to time as specified by the Lender, additional amounts sufficient to
compensate the Lender for such increase.

     4.04 FUNDING LOSSES. The Company shall reimburse each Lender and hold each
Lender harmless from any loss or expense which the Lender may sustain or incur
as a consequence of:

          (i) the failure of the Company to make on a timely basis any payment
of principal of any Eurodollar Rate Loan;

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<PAGE>

          (ii) the failure of the Company to borrow a Loan, continue a
Eurodollar Rate Loan or convert a Loan into a Eurodollar Rate Loan after the
Company has given (or is deemed to have given) a Notice of Borrowing or a Notice
of Conversion/ Continuation;

          (iii) the failure of the Company to make any prepayment in accordance
with any notice delivered under SECTION 2.06;

          (iv) the prepayment (including pursuant to SECTION 2.07) or other
payment (including after acceleration thereof) of an Eurodollar Rate Loan on a
day that is not the last day of the relevant Interest Period; or

          (v) the automatic conversion under SECTION 2.04 of any Eurodollar Rate
Loan to a Base Rate Loan on a day that is not the last day of the relevant
Interest Period; or

          (vi) any Buying Lender is deemed to have purchased a Eurodollar Rate
Loan bearing interest at a rate which is less than the prevailing rate of
interest on Eurodollar Rate Loans at the time of purchase in accordance with
SECTION 2.01(c); or

          (vii) any Selling Lender pursuant to SECTION 2.01(c) is deemed to have
sold a Eurodollar Rate Loan bearing interest at a rate which is higher than the
prevailing rate of interest on Eurodollar Rate Loans at the time of sale in
accordance with SECTION 2.01(c);

including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Eurodollar Rate Loans or from fees
payable to terminate the deposits from which such funds were obtained. For
purposes of calculating amounts payable by the Company to the Lenders under this
Section and under SECTION 4.03(a), each Eurodollar Rate Loan made by a Lender
(and each related reserve, special deposit or similar requirement) shall be
conclusively deemed to have been funded at the Eurodollar Base Rate used in
determining the Eurodollar Rate for such Eurodollar Rate Loan by a matching
deposit or other borrowing in the interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan is
in fact so funded.

     4.05 INABILITY TO DETERMINE RATES. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the Eurodollar
Rate for any requested Interest Period with respect to a proposed Eurodollar
Rate Loan, or that the Eurodollar Rate applicable pursuant to SECTION 2.09(a)
for any requested Interest Period with respect to a proposed Eurodollar Rate
Loan does not adequately and fairly reflect the cost to the Lenders of funding
such Loan, the Agent will promptly so notify the Company and each Lender.
Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate
Loans hereunder shall be suspended until the Agent revokes such notice in
writing. Upon receipt of such notice, the Company may revoke any Notice of
Borrowing or Notice of Conversion/Continuation then submitted by it. If the
Company does not revoke such Notice, the Lenders shall make, convert or continue
the Loans, as proposed by the Company, in the amount specified in the applicable
notice submitted by the Company, but such Loans shall be made, converted or
continued as Base Rate Loans instead of Eurodollar Rate Loans.

     4.06 CERTIFICATES OF LENDERS. Any Lender claiming reimbursement or
compensation under this Article IV shall deliver to the Company (with a copy to
the Agent) a certificate setting

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<PAGE>

forth in reasonable detail the amount payable to the Lender hereunder and such
certificate shall be conclusive and binding on the Company in the absence of
manifest error. Notwithstanding anything to the contrary contained in this
Agreement, no amounts shall be payable by the Company pursuant to SECTIONS 4.03
or 4.04 with respect to any period commencing more than 180 days before the
delivery of the certificate contemplated by this SECTION 4.06 unless such
amounts are claimed as a result of the retroactive effect of any newly enacted
or adopted law, rule or regulation and such certificate is delivered within 180
days after such enactment or adoption.

     4.07 SURVIVAL. The agreements and obligations of the Company in this
Article IV shall survive the payment of all other Obligations.

     4.08 REPLACEMENT OF LENDERS. Upon any Lender's making a claim for
compensation under SECTION 4.01 or 4.03, the Company may replace such Lender in
accordance with this Section. The Company may, upon notice to such Lender and
the Agent, replace such Lender by causing such Lender to assign its Revolving
Loan Commitment (with the assignment fee to be paid by the Company in such
instance) pursuant to SECTION 11.08(a) to one or more other Lenders or Eligible
Assignees procured by the Company; PROVIDED, HOWEVER, that if the Company elects
to exercise such right with respect to any Lender, it shall be obligated to
replace all Lenders that have made similar requests for compensation pursuant to
SECTION 4.01 or 4.03. The Lender shall have received payment in full all
principal, interest, fees and other amounts owing to such Lender through the
date of replacement (including any amounts payable pursuant to SECTIONS 4.01,
4.03 and 4.04), and the Company shall release such Lender from its obligations
under the Loan Documents. Any Lender being replaced shall execute and deliver an
Assignment and Acceptance with respect to such Lender's Revolving Loan
Commitment and outstanding Loans and participations in L/C Obligations and Swing
Line Loans.

                                   ARTICLE V

                              CONDITIONS PRECEDENT

     5.01 CONDITIONS OF EFFECTIVENESS AND INITIAL CREDIT EXTENSIONS. The
obligation of each Lender to make its initial Credit Extension hereunder is
subject to the condition that the Agent shall have received on or before the
Closing Date all of the following, in form and substance satisfactory to the
Agent and each Lender (the satisfaction of each Lender being conclusively
evidenced by such Lender's execution and delivery of its counterpart of this
Agreement), and in sufficient copies for each Lender:

          (a) CREDIT AGREEMENT AND NOTES. This Agreement and the Notes (if any)
executed by each party thereto;

          (b) RESOLUTIONS; INCUMBENCY.

               (i) Copies of the resolutions of the board of directors of the
          Company and each Subsidiary that may become party to a Loan Document
          authorizing the transactions contemplated hereby, certified as of the
          Closing Date by the Secretary or an Assistant Secretary of such
          Person; and

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<PAGE>

               (ii) A certificate of the Secretary or Assistant Secretary of the
          Company, and each Subsidiary that may become party to a Loan Document
          certifying the names and true signatures of the officers of the
          Company or such Subsidiary authorized to execute, deliver and perform,
          as applicable, this Agreement, and all other Loan Documents to be
          delivered by it hereunder;

          (c) ORGANIZATION DOCUMENTS; GOOD STANDING. Each of the following
documents:

               (i) the Organization Documents of the Company and each Guarantor
          as in effect on the Closing Date, certified by the Secretary or
          Assistant Secretary or Manager of such Person as of the Closing Date;
          and

               (ii) a good standing certificate for the Company and each
          Guarantor from the Secretary of State (or similar, applicable
          Governmental Authority) of its state of incorporation and each state
          where such Person is qualified to do business as a foreign corporation
          as of a recent date;

          (d) LEGAL OPINION. An opinion addressed to the Agent, the Collateral
Agent and the Lenders of Akin, Gump, Strauss, Hauer & Feld, L.L.P., counsel to
the Company, substantially in the form of EXHIBIT D-1. An opinion addressed to
the Agent, the Collateral Agent and the Lenders of Michael W. Gleespen, general
counsel to the Company and its Subsidiaries substantially in the form of EXHIBIT
D-2.

          (e) PAYMENT OF FEES. Evidence of payment by the Company of all accrued
and unpaid fees, costs and expenses to the extent then due and payable on the
Closing Date, together with Attorney Costs of Bank of America to the extent
invoiced prior to or on the Closing Date, plus such additional amounts of
Attorney Costs as shall constitute Bank of America's reasonable estimate of
Attorney Costs incurred or to be incurred by it through the closing proceedings
(provided that such estimate shall not thereafter preclude final settling of
accounts between the Company and Bank of America); including any such costs,
fees and expenses arising under or referenced in SECTIONS 2.10 and 10.07;

          (f) CERTIFICATE. A certificate signed by a Responsible Officer of the
Company, dated as of the Closing Date:

               (i) stating that the representations and warranties contained in
          ARTICLE VI are true and correct on and as of such date, as though made
          on and as of such date;

               (ii) stating that no Default or Event of Default exists or would
          result from the Credit Extension;

               (iii) stating that there has occurred since December 31, 2001, no
          event or circumstance that has resulted or could reasonably be
          expected to result in a Material Adverse Effect; and

               (iv) delineating the Applicable Margin after giving pro forma
          effect to the Loans to be incurred on the Closing Date.

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<PAGE>

          (g) COLLATERAL DOCUMENTS. The Collateral Documents, executed by the
Company and each Subsidiary party to such Collateral Document, in appropriate
form for recording, where necessary, together with:

               (i) all certificates and instruments representing the Collateral,
          including, without limitation, stock transfer powers executed in blank
          as the Collateral Agent or the Lenders may specify;

               (ii) evidence that all other actions necessary or, in the opinion
          of the Collateral Agent or the Lenders, desirable to perfect and
          protect the first priority security interest subject to Permitted
          Liens created by the Collateral Documents have been taken; and

               (iii) to the extent required by the Agent, delivery of title
          insurance, surveys and certificates and instruments with respect to
          the Mortgage Documents and each in form and substance satisfactory to
          the Agent.

          (h) SOLVENCY CERTIFICATE. A written solvency certificate from the
chief financial officer of the Company in form and content satisfactory to the
Lenders, dated the initial Borrowing Date, with respect to the value, Solvency
and other factual information of, or relating to, as the case may be, Company,
after giving effect to the initial Credit Extension.

          (i) OTHER DOCUMENTS. Such other approvals, opinions, documents or
materials as the Agent or any Lender may reasonably request.

          (j) FINANCIAL STATEMENTS. The financial statements and other
information referenced in SECTION 6.11.

          (k) INITIAL BORROWING BASE CERTIFICATE. An initial Borrowing Base
Certificate dated as of the Closing Date.

          (l) PAYMENT OF EXISTING INDEBTEDNESS. Evidence satisfactory to the
Agent that the outstanding Indebtedness under the Existing Credit Agreement has
been paid in full, except with respect to contingent obligations pertaining to
undrawn Existing Letters of Credit.

     5.02 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of each Lender to
make any Loan (but not its obligations to fund its participation interests
pursuant to SECTION 2.03(b)(ii) or SECTION 3.03(c)) to be made by it (including
its initial Loan hereunder after the date hereof) or to continue or convert any
Loan under SECTION 2.04 and the obligation of the Issuing Bank to Issue any
Letter of Credit (including the initial Letter of Credit) is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date or Issuance Date:

          (a) NOTICE, APPLICATION. The Agent shall have received (with a copy
for each Lender) a Notice of Borrowing (or equivalent notice pursuant to SECTION
2.03(b) with respect to Swing Line Loans) or, in the case of any Issuance of any
Letter of Credit, the Issuing Bank and the Agent shall have received an L/C
Application or L/C Amendment Application, as required under SECTION 3.02;

                                       55
<PAGE>

          (b) CONTINUATION OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties in Article VI shall be true and correct in all
material respects on and as of such Borrowing Date or Issuance Date with the
same effect as if made on and as of such Borrowing Date or Issuance Date (except
to the extent such representations and warranties expressly refer to an earlier
date, in which case they shall be true and correct in all material respects as
of such earlier date); and

          (c) NO EXISTING DEFAULT. No Default or Event of Default shall exist or
shall result from such Borrowing or continuation or conversion or Issuance.

Each Notice of Borrowing, L/C Application or L/C Amendment Application submitted
by the Company hereunder shall constitute a representation and warranty by the
Company hereunder, as of the date of each such notice and as of each Borrowing
Date or Issuance Date, as applicable, that the conditions in this SECTION 5.02
are satisfied.

                                   ARTICLE VI

                         REPRESENTATIONS AND WARRANTIES

     The Company represents and warrants to the Agent and each Lender that:

     6.01 CORPORATE EXISTENCE AND POWER. The Company and each of its
Subsidiaries:

          (a) is a corporation (or a limited liability company) duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation;

          (b) has the power and authority and all material governmental
licenses, authorizations, consents and material approvals to own its assets,
carry on its business and to execute, deliver, and perform its obligations under
the Loan Documents;

          (c) is duly qualified as a foreign corporation and is licensed and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
or license, except in each case to the extent that the failure to do so could
not reasonably be expected to have a Material Adverse Effect.

          (d) is in compliance with all Requirements of Law, except to the
extent that the failure to do so could not reasonably be expected to have a
Material Adverse Effect.

     6.02 CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by the Company and its Subsidiaries of this Agreement and each other
Loan Document to which such Person is party, have been duly authorized by all
necessary corporate action, and do not and will not:

          (a) contravene the terms of any of such Person's Organization
Documents;

          (b) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any material Contractual
Obligation to which such

                                       56
<PAGE>

Person is a party or any order, injunction, writ or decree of any Governmental
Authority to which such Person or its property is subject; or

          (c) violate any material Requirement of Law.

     6.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Company or
any of its Subsidiaries of the Agreement or any other Loan Document, except (i)
such as have been obtained or made and are in full force, (ii) those third party
approvals or consents which, if not made or obtained, would not cause a Default
or an Event of Default hereunder or could not reasonably be expected to have an
Material Adverse Effect and (iii) solely with respect to the performance by the
Company or any of its Subsidiaries of this Agreement or any other Loan Document,
(1) the recording and filing of the Collateral Documents as required by this
Agreement, (2) filings, consents or approvals required for the exercise by the
Collateral Agent of its rights under the Collateral Documents, (3) filings under
the Exchange Act, and filings of releases with respect to the collateral (as
defined in the Existing Credit Agreement) securing the Existing Credit Agreement
and (4) routine filings to be made after the date hereof to maintain "good
standing" in such jurisdictions and to maintain licenses and permits.

     6.04 BINDING EFFECT. This Agreement and each other Loan Document to which
the Company or any of its Subsidiaries is a party constitute the legal, valid
and binding obligations of the Company and any of its Subsidiaries to the extent
it is a party thereto, enforceable against such Person in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability,
regardless of whether considered in a proceeding in equity or at law.

     6.05 LITIGATION. There are no actions, suits, investigations, proceedings,
claims or disputes pending, or to the best knowledge of the Company, threatened
or contemplated, at law, in equity, in arbitration or before any Governmental
Authority, against the Company, or its Subsidiaries or any of their respective
properties (a) which purport to affect or pertain to this Agreement or any other
Loan Document, or any of the transactions contemplated hereby or thereby; (b)
which are existing on the Closing Date, other than as disclosed on SCHEDULE
6.05(b), provided, however, that none of the matters set forth on such SCHEDULE
6.05(b), whether taken individually or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect or (c) which arise after the
Closing Date, other than those which would not reasonably be expected to have a
Material Adverse Effect. No injunction, writ, temporary restraining order or any
order of any nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution, delivery or performance of this
Agreement or any other Loan Document, or directing that the transactions
provided for herein or therein not be consummated as herein or therein provided.

     6.06 NO DEFAULT. No Default or Event of Default exists or would result from
the incurring of any Obligations by the Company. As of the Closing Date, neither
the Company nor any Subsidiary is in default under or with respect to any
Contractual Obligation in any respect

                                       57
<PAGE>

which, individually or together with all such defaults, could reasonably be
expected to have a Material Adverse Effect, or that would, if such default had
occurred after the Closing Date, create an Event of Default under SECTION
9.01(e).

     6.07 ERISA COMPLIANCE.

          (a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law. Each
Plan which is intended to qualify under Section 401(a) of the Code has received
a favorable determination letter from the IRS and to the best knowledge of the
Company, nothing has occurred which would cause the loss of such qualification.
The Company and each ERISA Affiliate has made all required contributions to any
Plan subject to Section 412 of the Code, and no application for a funding waiver
or an extension of any amortization period pursuant to Section 412 of the Code
has been made with respect to any Plan.

          (b) There are no pending or, to the best knowledge of Company,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.

          (c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
the Company nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
neither the Company nor any ERISA Affiliate has incurred, or reasonably expects
to incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v)
neither the Company nor any ERISA Affiliate has engaged in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.

     6.08 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the Loans are to
be used solely for the purposes set forth in and permitted by SECTION 7.12 and
SECTION 8.07. Neither the Company nor any Subsidiary is generally engaged in the
business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock.

     6.09 TITLE TO PROPERTIES. The Company and each Subsidiary have good record
and marketable title in fee simple to, or valid leasehold interests in, all real
property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, have a Material Adverse Effect. The property of the Company and
its Subsidiaries is subject to no Liens other than Permitted Liens.

     6.10 TAXES. The Company and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested

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in good faith by appropriate proceedings and for which adequate reserves have
been provided in accordance with GAAP. To the Company's knowledge as of the
Closing Date, there is no proposed tax assessment against the Company or any
Subsidiary.

     6.11 FINANCIAL CONDITION. (a) The (x) audited consolidated financial
statements of the Company and its Subsidiaries dated December 31, 2001 and (y)
the unaudited consolidated financial statements (including, without limitation,
balances sheets, income and cash flow statements) of the Company and its
Subsidiaries dated June 30, 2002:

               (i) were prepared in accordance with GAAP consistently applied
     throughout the period covered thereby, except as otherwise expressly noted
     therein (subject to ordinary, good faith year end audit adjustments);

               (ii) fairly present the financial condition of the Company and
     its Subsidiaries as of the date thereof and results of operations for the
     period covered thereby; and

               (iii) except as specifically disclosed in SCHEDULE 6.11, show all
     material indebtedness and other liabilities, direct or contingent, of the
     Company and its consolidated Subsidiaries as of the date thereof, including
     liabilities for taxes, material commitments and Contingent Obligations.

          (b) Since December 31, 2001, there has been no Material Adverse
Effect.

     6.12 ENVIRONMENTAL MATTERS.

          (a) The on-going operations of the Company and each of its
Subsidiaries comply in all material respects with all Environmental Laws, except
such non-compliance which would not (if enforced in accordance with applicable
law) result in liability in excess of $250,000 in the aggregate.

          (b) The Company and each of its Subsidiaries have obtained all
material licenses, permits, authorizations and registrations required under any
Environmental Law ("ENVIRONMENTAL PERMITS") and necessary for their respective
ordinary course operations, all such Environmental Permits are in good standing,
and the Company and each of its Subsidiaries are in compliance with all material
terms and conditions of such Environmental Permits.

          (c) None of the Company, any of its Subsidiaries or any of their
respective present Property or operations, is subject to any outstanding written
order from or agreement with any Governmental Authority, nor subject to any
judicial or docketed administrative proceeding, respecting any Environmental
Law, Environmental Claim or Hazardous Material.

          (d) There are no Hazardous Materials or other conditions or
circumstances existing with respect to any Property, or arising from operations
prior to the Closing Date, of the Company or any of its Subsidiaries that would
reasonably be expected to give rise to Environmental Claims with a potential
liability of the Company and its Subsidiaries in excess of $250,000 in the
aggregate for any such condition, circumstance or Property. In addition, (i)
neither the Company nor any of its Subsidiaries has any underground storage
tanks (x) that are

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not properly registered or permitted under applicable Environmental Laws, or (y)
that are leaking or disposing of Hazardous Materials off-site, and (ii) the
Company and its Subsidiaries have met all notification requirements under Title
III of CERCLA and all other Environmental Laws.

     6.13 COLLATERAL DOCUMENTS.

          (a) The provisions of the Pledge and Security Agreement are effective
to create, in favor of the Collateral Agent for the benefit of the Lenders, a
legal, valid and enforceable security interest in all of the collateral
described therein; and the Collateral was delivered to the Collateral Agent or
its nominee in accordance with the terms thereof. The Lien of the Pledge and
Security Agreement constitutes a perfected, first priority security interest
other than Permitted Liens in all right, title and interest of the Company or
such Subsidiary, as the case may be, in the Collateral described therein, prior
and superior to all other Liens and interests; PROVIDED, HOWEVER, the Collateral
consisting of capital stock is not subject to any other Lien other than
Permitted Liens.

          (b) The provisions of each of the Collateral Documents are effective
to create in favor of the Collateral Agent for the benefit of the Lenders, a
legal, valid and enforceable first priority security interest in all right,
title and interest of the Company and its Subsidiaries in the collateral
described therein, subject only to any Permitted Liens. With respect to the
pledge of Collateral consisting of equity interests in the Company's
Subsidiaries which are first tier Foreign Subsidiaries (as defined in the Pledge
and Security Agreement), such pledge shall be limited to a pledge of 65% of the
issued and outstanding shares or other units of equity interests PROVIDED,
HOWEVER, if the pledge of more sixty-five percent (65%) of such Foreign
Subsidiary would not result in materially adverse tax consequences to the
pledgor under Section 956 of the Internal Revenue Code, or if such materially
adverse tax consequences are no longer effective, then such pledged equity
interests shall constitute 100% or such other percentage of issued and
outstanding shares or other units of equity interests of such Foreign Subsidiary
and such Foreign Subsidiary shall execute and deliver the applicable Collateral
Documents. If any Excluded Subsidiary shall cease to be an Excluded Subsidiary
for any reason and to the extent any Excluded Subsidiary may do so without
violating federal, state or local laws or regulations applicable to it, the
Company shall promptly notify the Agent thereof and such Subsidiary shall
promptly execute and deliver the Collateral Documents and all other instruments
and documents necessary in the opinion of the Agent to become a Guarantor and
the Company shall cause such Subsidiary's outstanding capital stock to be
pledged to the Agent pursuant to the Collateral Documents. The chief executive
office and the principal books and records of the Company and each Guarantor
will be located at its address set forth on Exhibit A to the Pledge and Security
Agreement, and when financing statements have been filed in the appropriate
offices in the jurisdictions of organization for the Company and the Guarantors
and when such other actions as are each described in each of the Collateral
Documents have been taken, each of the Collateral Documents shall constitute a
perfected security interest in all right, title and interest of such Person, as
the case may be, in the Collateral described therein, and except for Permitted
Liens existing on the Closing Date and those Liens whose priority cannot be
superseded by the provisions hereof or of any Collateral Document and filings
hereunder or thereunder, a perfected first lien on, and security interest in,
all right, title and interest of such Person, as the case may be, in the
Collateral described in each Collateral Document.

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          (c) All representations and warranties of the Company and any of its
Subsidiaries party thereto contained in the Collateral Documents are true and
correct.

     6.14 REGULATED ENTITIES. None of the Company nor any Subsidiary that is not
an Excluded Subsidiary, is an "Investment Company" within the meaning of the
Investment Company Act of 1940. None of the Company nor any Subsidiary that is
not an Excluded Subsidiary is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act,
any state public utilities code, or any other Federal or state statute or
regulation limiting its ability to incur Indebtedness.

     6.15 NO BURDENSOME RESTRICTIONS. Neither the Company nor any Subsidiary is
a party to or bound by any Contractual Obligation, or subject to any restriction
in any Organization Document, or any Requirement of Law, which could reasonably
be expected to have a Material Adverse Effect.

     6.16 SOLVENCY. The Company and its Subsidiaries, taken as a whole, are
Solvent.

     6.17 LABOR RELATIONS. There are no strikes, lockouts or other labor
disputes against the Company or any of its Subsidiaries, or, to the best of the
Company's knowledge, threatened against or affecting the Company or any of its
Subsidiaries, and no significant unfair labor practice complaint is pending
against the Company or any of its Subsidiaries or, to the best knowledge of the
Company, threatened against any of them before any Governmental Authority which
in any such case could reasonably be expected to have a Material Adverse Effect.

     6.18 COPYRIGHTS, PATENTS, TRADEMARKS, ETC. The Company or its Subsidiaries
own or are licensed or otherwise have the right to use all of the material
patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other material rights that are reasonably
necessary for the operation of their respective businesses, without conflict
with the rights of any other Person. To the best knowledge of the Company, no
slogan or other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by the Company
or any Subsidiary infringes upon any rights held by any other Person, and no
claim or litigation regarding any of the foregoing is pending or threatened,
which, in any case, could reasonably be expected to have a Material Adverse
Effect.

     6.19 SUBSIDIARIES. As of the Closing Date, the Company has no Subsidiaries
other than those specifically disclosed in Part (A) of SCHEDULE 6.19 hereto and
has no equity investments in any other corporation or entity other than those
specifically disclosed in Part (B) of SCHEDULE 6.19. Such Schedule additionally
identifies all Excluded Subsidiaries existing as of the Closing Date and as
otherwise permitted pursuant to SECTION 8.04(f). No Excluded Subsidiary owns any
capital stock of any Subsidiary which is not also an Excluded Subsidiary.

     6.20 BROKER'S; TRANSACTION FEES. Neither the Company nor any of its
Subsidiaries has any obligation to any Person in respect of any finder's,
broker's or investment banker's fee in connection with this Agreement or any
other Loan Document.

     6.21 INSURANCE. The properties of the Company and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Company, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies

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engaged in similar businesses and owning similar properties in localities where
the Company or such Subsidiary operates.

     6.22 SWAP OBLIGATIONS. Neither the Company nor any of its Subsidiaries has
incurred any outstanding obligations under any Swap Contracts, other than
Permitted Swap Obligations. The Company has undertaken its own independent
assessment of its consolidated assets, liabilities and commitments and has
considered appropriate means of mitigating and managing risks associated with
such matters and has not relied on any swap counterparty or any Affiliate of any
swap counterparty in determining whether to enter into any Swap Contract.

     6.23 FULL DISCLOSURE. None of the representations or warranties made by
the Company or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, written statement or certificate
furnished by or on behalf of the Company or any Subsidiary in connection with
the Loan Documents (including the offering and disclosure materials delivered by
or on behalf of the Company to the Lenders prior to the Closing Date), contains
any untrue statement of a material fact or omits any material fact required to
be stated therein or necessary to make the statements made therein, in light of
the circumstances under which they are made, not misleading as of the time when
made or delivered (other than omissions that pertain to matters of a general
economic nature or matters of public knowledge that generally effect any of the
industry segments of the Company or its Subsidiaries); provided that, with
respect to projected financial information, the Company represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.

     6.24 INTERCOMPANY INDEBTEDNESS. Neither the Company nor any Subsidiary has
any intercompany Indebtedness which is evidenced by a promissory note, except
promissory notes which have been pledged and delivered to the Collateral Agent
pursuant to the Pledge and Security Agreement.

                                  ARTICLE VII

                              AFFIRMATIVE COVENANTS

     So long as any Lender shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Majority Lenders waive compliance in
writing:

     7.01 FINANCIAL STATEMENTS. The Company shall deliver to the Agent, in form
and detail satisfactory to the Agent and the Majority Lenders, with sufficient
copies for the Agent and each Lender:

          (a) as soon as available, but not later than 90 days after the end of
each fiscal year, to the extent prepared to comply with SEC requirements, a copy
of SEC Form 10-K's filed by the Company with the SEC for such fiscal year, or if
no such Form 10-K was filed by the Company for such fiscal year, a copy of the
audited consolidated balance sheet of the Company and its Subsidiaries as at the
end of such year and the related consolidated statements of income or operations
and shareholders' equity and cash flows for such year, setting forth in each
case in

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comparative form the figures for the previous fiscal year, and in any case
accompanied by the opinion of KPMG LLP or another nationally-recognized
independent public accounting firm ("INDEPENDENT AUDITOR") which report shall
state that such consolidated financial statements present fairly the financial
position for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years. Such opinion shall not be qualified or limited
because of a restricted or limited examination by the Independent Auditor of any
material portion of the Company's or any Subsidiary's records. Concurrently with
the delivery of the foregoing financial statements, a copy of the unaudited
combined consolidated balance sheet of the Excluded Subsidiaries as at the end
of such year and the related combined consolidated statements of income or
operations of the Excluded Subsidiaries for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, which
unaudited combined consolidated financial statements shall have been prepared in
accordance with GAAP;

          (b) as soon as available, but not later than 45 days after the end of
each of the first three fiscal quarters of each fiscal year, to the extent
prepared to comply with SEC requirements, a copy of the SEC Form 10-Qs filed by
the Company with the SEC for such fiscal quarter, or if no such Form 10-Q was
filed by the Company for such fiscal quarter, a copy of the unaudited
consolidated balance sheet of the Company and its Subsidiaries as of the end of
such quarter and the related consolidated statements of income and shareholders'
equity and cash flows for the period commencing on the first day and ending on
the last day of such quarter, and in any case certified by the chief executive
officer and chief financial officer as fairly presenting, in accordance with
GAAP (subject to ordinary, good faith year-end audit adjustments), the financial
position and the results of operations of the Company and the Subsidiaries; and
concurrently with the delivery of the foregoing unaudited financial statements,
a copy of the unaudited combined consolidated balance sheet of the Excluded
Subsidiaries as of the end of such quarter and the related combined consolidated
statements of income of the Excluded Subsidiaries for the period commencing on
the first day and ending on the last day of such quarter, and in any case
certified by the chief executive officer and chief financial officer as fairly
presenting, in accordance with GAAP (subject to ordinary, good faith year-end
audit adjustments), the financial position and the results of operations of the
Excluded Subsidiaries; and

          (c) as soon as available, but not later than 30 days after the end of
each calendar month of each fiscal year, a copy of the unaudited consolidated
statements of income for the period commencing on the first day and ending on
the last day of such calendar month, and certified by a Responsible Officer as
fairly presenting (subject to ordinary, good faith year-end audit adjustments)
the results described therein of the Company and the Subsidiaries and
concurrently with the delivery of the foregoing unaudited financial statements,
a copy of the unaudited combined consolidated statements of income for the
period commencing on the first day and ending on the last day of such calendar
month, and certified by a Responsible Officer as fairly presenting (subject to
ordinary, good faith year-end audit adjustments) the results described therein
of the Excluded Subsidiaries.

     7.02 CERTIFICATES; OTHER INFORMATION. The Company shall furnish to the
Agent, with sufficient copies for each Lender:

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          (a) concurrently with the delivery of the financial statements
referred to in SECTION 7.01(a), a certificate of the Independent Auditor stating
that in making the examination necessary therefor no knowledge was obtained of
any Default or Event of Default, except as specified in such certificate;

          (b) concurrently with the delivery of the financial statements
referred to in SECTIONS 7.01(a) and (b) a Compliance Certificate executed by a
Responsible Officer;

          (c) promptly, copies of all financial statements and reports that the
Company sends to its shareholders, and copies of all financial statements and
regular, periodical or special reports (including Forms 10K, 10Q and 8K) that
the Company or any Subsidiary may make to, or file with, the SEC;

          (d) as soon as available, but in any event not later than February 15
of each calendar year, a copy of the plan and forecast (including a projected
consolidated balance sheet, income statement and cash flow statement by business
services and insurance segments) of the Company and its Subsidiaries for the
next fiscal year and on each February 15 of each calendar year, a copy of
projected quarterly EBITDA of the Company and its Subsidiaries, in each case for
its then current fiscal year ("BUDGETED EBITDA"); and

          (e) concurrently with the delivery of the financial statements
referred to in SECTIONS 7.01(a) and (b) a Reconciliation Certificate executed by
a Responsible Officer.

          (f) ACCOUNT RECEIVABLE AND ACCOUNT PAYABLE AGING REPORT. Within thirty
(30) days after the end of each calendar month, an account receivable aging
report (the "ACCOUNT RECEIVABLE AGING REPORT") of the Company and its
Subsidiaries by business region, and an account payable aging report (the
"ACCOUNT PAYABLE AGING REPORT") of the Company and its Subsidiaries by business
region. Each Account Receivable Aging Report and Account Payable Aging Report
shall include such detail as the Agent may reasonably require and shall be
signed by the president or the chief financial officer or treasurer of the
Company; and

          (g) promptly, such additional information regarding the business,
financial or corporate affairs of the Company or any Subsidiary as the Agent, at
the request of any Lender, may from time to time request.

          (h) thirty (30) days following the end of each month, a Borrowing Base
Certificate (together with supporting information with respect to the
information set forth therein, including, without limitation, Receivables owed
by Affiliates of the Company or its Subsidiaries, Insurance Company Payables,
Insurance Company Pre-Billed Receivables and Account Debtors subject to
Insolvency Proceedings, in such detail as reasonably requested by the Agent)
calculating the Borrowing Base as of the end of such previous month ended.

     7.03 NOTICES. The Company shall promptly notify the Agent and each Lender:

          (a) of the occurrence of any Default or Event of Default;

          (b) of any matter that has resulted or may reasonably be expected in
the opinion of a Responsible Officer to result in a Material Adverse Effect,
including (i) breach or

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non-performance of, or any default under, a Contractual Obligation of the
Company or any Subsidiary; (ii) any dispute, litigation, investigation,
proceeding or suspension between the Company or any Subsidiary and any
Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Company or any
Subsidiary; including pursuant to any applicable Environmental Laws;

          (c) of the occurrence of any of the following events affecting the
Company or any ERISA Affiliate (but in no event more than 10 days after such
event), and deliver to the Agent and each Lender a copy of any notice with
respect to such event that is filed with a Governmental Authority and any notice
delivered by a Governmental Authority to the Company or any ERISA Affiliate with
respect to such event:

               (i) an ERISA Event;

               (ii) a material increase in the Unfunded Pension Liability of any
Pension Plan;

               (iii) the adoption of, or the commencement of contributions to,
any Plan subject to Section 412 of the Code by the Company or any ERISA
Affiliate; or

               (iv) the adoption of any amendment to a Plan subject to
Section 412 of the Code, if such amendment results in a material increase in
contributions or Unfunded Pension Liability.

          (d) of any material change in accounting policies or financial
reporting practices by the Company or any of its consolidated Subsidiaries;

          (e) upon the request from time to time of the Agent, the Swap
Termination Values, together with a description of the method by which such
values were determined, relating to any then-outstanding Swap Contracts to which
the Company or any of its Subsidiaries is party; and

          (f) the issuance of any order, the taking of any action or any request
for an extraordinary audit for cause by any Governmental Authority.

     Each notice under this Section shall be accompanied by a written statement
by a Responsible Officer setting forth details of the occurrence referred to
therein, and stating what action the Company or any affected Subsidiary proposes
to take with respect thereto and at what time. Each notice under SECTION 7.03(a)
shall describe with particularity any and all clauses or provisions of this
Agreement or other Loan Document that have been (or foreseeably will be)
breached or violated.

     7.04 PRESERVATION OF CORPORATE EXISTENCE, ETC. The Company shall, and shall
cause each Subsidiary to:

          (a) preserve and maintain in full force and effect its corporate
existence and good standing under the laws of its state or jurisdiction of
incorporation (except as permitted by SECTION 8.03);

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<PAGE>

          (b) preserve and maintain in full force and effect all material
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except
in connection with transactions permitted by SECTION 8.03 and sales of assets
permitted by SECTION 8.02;

          (c) use reasonable efforts, in the ordinary course of business, to
preserve its business organization and goodwill; and

          (d) preserve or renew all of its registered patents, trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.

     7.05 MAINTENANCE OF PROPERTY. The Company shall maintain, and shall cause
each Subsidiary to maintain, and preserve all its property which is used or
useful in its business in good working order and condition, ordinary wear and
tear excepted and make all necessary repairs thereto and renewals and
replacements thereof.

     7.06 INSURANCE. The Company shall (i) maintain, and shall cause each
Subsidiary to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons and (ii) maintain such
other insurance with respect to the Collateral for the benefit of the Collateral
Agent as required pursuant to the Pledge and Security Agreement.

     7.07 PAYMENT OF OBLIGATIONS. The Company shall, and shall cause each
Subsidiary to, pay and discharge as the same shall become due and payable, all
their respective obligations and liabilities, including:

          (a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by the Company or such Subsidiary;

          (b) all lawful claims which, if unpaid, would by law become a Lien
(other than a Permitted Lien) upon its property; and

          (c) all indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness, unless the payment of such indebtedness is being contested in
good faith by appropriate proceedings and adequate reserves in accordance with
GAAP are being maintained by the Company or such Subsidiary.

     7.08 COMPLIANCE WITH LAWS. The Company shall comply, and shall cause each
Subsidiary to comply, in all material respects with all Requirements of Law of
any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.

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     7.09 COMPLIANCE WITH ERISA. The Company shall, and shall cause each of its
ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification unless such Plan is terminated; and (c) make
all required contributions to any Plan subject to Section 412 of the Code.

     7.10 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Company shall
maintain and shall cause each Subsidiary to maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Company and such Subsidiary. The
Company shall permit, and shall cause each Subsidiary to permit, representatives
and independent contractors of the Agent or any Lender to visit and inspect any
of their respective properties, to examine their respective corporate, financial
and operating records, and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
directors, officers, and independent public accountants, all at the expense of
the Company and at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance notice to the
Company; PROVIDED, HOWEVER, when an Event of Default exists the Agent or any
Lender may do any of the foregoing at the expense of the Company at any time
without advance notice. Without limiting the foregoing, the Company shall
permit, and shall cause each Subsidiary to permit, the Agent (or its independent
contractors and other third party examiners) access to the Company and its
Subsidiaries' books of records and account to verify, examine and appraise the
Company and its Subsidiaries' Receivables at the Company's expense, provided
such inspections shall not occur more than twice per calendar year, PROVIDED,
HOWEVER, when an Event of Default or Default shall have occurred and is
continuing, the Agent may do any of the foregoing at the expense of the Company
as often as it deems reasonably necessary at any time without advance notice.

     7.11 ENVIRONMENTAL LAWS. The Company shall, and shall cause each Subsidiary
to, conduct its operations and keep and maintain its property in compliance with
all Environmental Laws.

     7.12 USE OF PROCEEDS. The Company shall use the proceeds of the Loans for
working capital and other general corporate purposes, including Permitted
Acquisitions and the payment of fees and expenses relating thereto, in each case
not in contravention of any Requirement of Law or of any Loan Document.

     7.13 SOLVENCY. The Company and its Subsidiaries, taken as a whole, shall at
all times be Solvent.

     7.14 FURTHER ASSURANCES.

          (a) The Company shall ensure that all written information, exhibits
and reports furnished to the Agent or the Lenders pursuant to the Loan Documents
do not and will not contain any untrue statement of a material fact and do not
and will not omit to state any material fact or any fact necessary to make the
statements contained therein not materially misleading in light of the
circumstances in which made; provided that with respect to projected

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financial information, the Company represents only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time. The Company will promptly disclose to the Agent and the Lenders and
correct any defect or error that may be discovered therein or in any Loan
Document or in the execution, acknowledgment or recordation thereof.

          (b) Promptly upon request the Agent or the Majority Lenders, the
Company shall (and shall cause any of its Subsidiaries to) do, execute,
acknowledge, deliver, record, re-record, file, re-file, register and
re-register, any and all such further acts, deeds, conveyances, security
agreements, mortgages, assignments, estoppel certificates, financing statements
and continuations thereof, termination statements, notices of assignment,
transfers, certificates, assurances and other instruments the Agent or such
Lenders, as the case may be, may reasonably require from time to time in order
(i) to carry out more effectively the purposes of this Agreement or any other
Loan Document, (ii) to subject any of the properties, rights or interests
covered by any of the Collateral Documents to the Liens created by any of the
Collateral Documents, (iii) to perfect and maintain the validity, effectiveness
and priority of any of the Collateral Documents and the Liens intended to be
created thereby, and (iv) to better assure, convey, grant, assign, transfer,
preserve, protect and confirm to the Collateral Agent and Lenders the rights
granted or now or hereafter intended to be granted to the Collateral Agent and
the Lenders under any Loan Document or under any other document executed in
connection therewith.

     7.15 NEW SUBSIDIARIES. If the Company or any domestic Subsidiary (other
than an Excluded Subsidiary) proposes to create, acquire or capitalize any
domestic Subsidiary (other than an Excluded Subsidiary) in accordance with the
terms and provisions hereof (whether pursuant to a Permitted Acquisition or
otherwise), it shall first (or substantially concurrently with such creation,
acquisition or capitalization) (a) (1) execute and deliver, and cause such
Subsidiary (other than Excluded Subsidiaries) to execute and deliver, to Agent a
Pledge and Security Agreement, a Guaranty and all other appropriate Collateral
Documents reasonably requested by the Agent or (2) execute and deliver a joinder
agreement acceptable in form and substance to the Agent with respect to each of
the applicable Collateral Documents as the Agent shall require in its sole
discretion and (b) execute and deliver, and cause such Subsidiary (other than
Excluded Subsidiaries) to execute and deliver, to the Agent appropriate
corporate resolutions, opinions and other documentation reasonably requested by
the Agent in form and substance reasonably satisfactory to the Agent, in each
case, to provide the Agent with a first priority perfected security interest on
the Collateral granted thereby and Lien thereon, PROVIDED, HOWEVER, to the
extent, such Collateral consists of equity interests in a first tier Foreign
Subsidiary (as defined in the Pledge and Security Agreement) the pledge of such
equity interests shall be limited to a pledge of 65% of the issued and
outstanding shares or other units of such equity interests (PROVIDED FURTHER,
HOWEVER, if the pledge of more sixty-five percent (65%) of such Foreign
Subsidiary would not result in materially adverse tax consequences to the
pledgor under Section 956 of the Internal Revenue Code, and only to the extent
such materially adverse tax consequences remain effective, then such pledged
equity interest shall constitute 100% or such other percentage of issued and
outstanding shares or other units of equity interests of such Foreign
Subsidiary). If the foregoing materially adverse tax consequences should no
longer be effective, such Foreign Subsidiary shall execute the Collateral
Documents. If the Company or any Subsidiary, should acquire, create or
capitalize any new Subsidiary, the Company shall promptly notify the Agent
thereof and provided an updated SCHEDULE 6.19 listing such new

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Subsidiary. If any Excluded Subsidiary shall cease to be an Excluded Subsidiary
for any reason and to the extent any Excluded Subsidiary may do so without
violating federal, state or local laws or regulations applicable to it, the
Company shall promptly notify the Agent thereof and such Subsidiary shall
promptly execute and deliver the Collateral Documents and all other instruments
and documents necessary in the opinion of the Agent to become a Guarantor and
the Company shall cause such Subsidiary's outstanding capital stock to be
pledged to the Agent pursuant to the Collateral Documents.

                                  ARTICLE VIII

                               NEGATIVE COVENANTS

     So long as any Lender shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Majority Lenders waive compliance in
writing:

     8.01 LIMITATION ON LIENS. The Company shall not, and shall not suffer or
permit any Subsidiary to, directly or indirectly, make, create, incur, assume or
suffer to exist any Lien upon or with respect to any part of its property,
whether now owned or hereafter acquired, other than the following ("PERMITTED
LIENS"):

          (a) any Lien existing on property of the Company or any Subsidiary on
the Closing Date; PROVIDED that the aggregate outstanding principal amount of
Indebtedness secured by all such Liens (together with Indebtedness secured by
Liens permitted by SECTIONS 8.01(i), (j) and (m) and Indebtedness and Contingent
Obligations permitted by SECTION 8.05(d), and SECTION 8.08(g)) shall not at any
time exceed an amount equal to 4% of the total assets of the Company and its
Subsidiaries on a consolidated basis;

          (b) any Lien created under any Loan Document;

          (c) Liens for taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty, or to the extent
that non-payment thereof is permitted by SECTION 7.07, provided that no notice
of lien has been filed or recorded under the Code;

          (d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of business
which are not delinquent or remain payable without penalty or which are being
contested in good faith and by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the property subject thereto;
(e) Liens (other than any Lien imposed by ERISA) consisting of pledges or
deposits required in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other social security, old age, pension
or similar legislation;

          (f) Liens on the property of the Company or its Subsidiaries securing
(i) the non-delinquent performance of bids, trade contracts (other than for
borrowed money), leases,

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statutory obligations, (ii) contingent obligations on surety and appeal bonds,
and (iii) other non-delinquent obligations of a like nature; in each case,
incurred in the ordinary course of business;

          (g) Liens consisting of judgment or judicial attachment liens,
provided that the enforcement of such Liens is effectively stayed and all such
liens in the aggregate at any time outstanding for the Company and its
Subsidiaries do not exceed $1,000,000;

          (h) easements, rights-of-way, zoning restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not interfere with the
ordinary conduct of the businesses of the Company and its Subsidiaries;

          (i) purchase money security interests on any property acquired or held
by the Company or its Subsidiaries in the ordinary course of business, securing
Indebtedness incurred or assumed for the purpose of financing all or any part of
the cost of acquiring such property; PROVIDED THAT (i) any such Lien attaches to
such property concurrently with or within 180 days after the acquisition
thereof, (ii) such Lien attaches solely to the property so acquired in such
transaction and (iii) the aggregate outstanding principal amount of Indebtedness
secured by all such purchase money security interests (together with
Indebtedness secured by Liens permitted by SECTIONS 8.01(a), (j) and (m) and
Indebtedness and Contingent Obligations permitted by SECTION 8.05(D) and SECTION
8.08(g)) shall not at any time exceed an amount equal to 4% of the total assets
of the Company and its Subsidiaries on a consolidated basis;

          (j) Liens securing Capital Lease Obligations on assets subject to such
Capital Leases, provided that the attributable principal portion of such Capital
Lease Obligations secured by all such Capital Leases (together with Indebtedness
with respect to Liens permitted by SECTIONS 8.01(a), (i), and (m) and
Indebtedness and Contingent Obligations permitted by SECTION 8.05(d) and SECTION
8.08(g)) shall not at any time exceed an amount equal to 4% of the total assets
of the Company and its Subsidiaries on a consolidated basis;

          (k) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; PROVIDED THAT (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by regulations promulgated by
the FRB, and (ii) such deposit account is not intended by the Company or any
Subsidiary to provide collateral to the depository institution;

          (l) Liens comprised of cash or Cash Equivalents with respect to the
Company's reimbursement obligations under Existing Letters of Credit; and

          (m) Liens on assets of Persons which become Subsidiaries after the
date of this Agreement, PROVIDED, HOWEVER, that (x) such Liens existed at the
time the respective Persons became Subsidiaries and were not created in
anticipation thereof, (y) such Liens attach only to equipment and real property
of such Subsidiary and proceeds thereof and (z) the aggregate outstanding
principal amount of Indebtedness secured by all such Liens (together with
Indebtedness secured by Liens permitted by SECTIONS 8.01(a), (i) and (j) and
Indebtedness and

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Contingent Obligations permitted by SECTION 8.05(d) and SECTION 8.08(g)) shall
not at any time exceed an amount equal to 4% of the total assets of the Company
and its Subsidiaries on a consolidated basis; and

          (n) Liens consisting of pledges of cash collateral or government
securities to secure on a mark-to-market basis Permitted Swap Obligations only,
provided that the aggregate value of such collateral so pledged by the Company
and the Subsidiaries together in favor of any counterparty does not at any time
exceed $1,000,000.

In addition, neither the Company nor any of its Subsidiaries shall become a
party to any agreement, note, indenture or other instrument, or take any other
action, which would prohibit the creation of a first priority Lien on any of its
properties or other assets in favor of the Collateral Agent for the benefit of
itself and the Lenders, as collateral for the Obligations, except with respect
to specific equipment secured by Indebtedness or Capital Leases permitted under
SECTIONS 8.01(i) or (j) or with respect to software licenses or similar
contracts which constitute property or assets of the Company or any of its
Subsidiaries which by the express terms thereof prohibit the creation of a first
priority Lien in favor of the Collateral Agent on such software licenses or
similar contracts.

     8.02 DISPOSITION OF ASSETS. The Company shall not, and shall not suffer or
permit any Subsidiary to, directly or indirectly, sell, assign, lease, convey,
transfer or otherwise dispose of (whether in one or a series of transactions)
any property (including accounts and notes receivable, with or without recourse)
or enter into any agreement to do any of the foregoing, except:

          (a) dispositions of inventory, or used, worn-out or surplus equipment
(including, without limitation, demonstration or pilot plants), all in the
ordinary course of business;

          (b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to the
purchase price of such replacement equipment within ninety (90) days of each
such sale;

          (c) each Specified Asset Sale;

          (d) dispositions not otherwise permitted hereunder which are made for
fair market value; provided that (i) at the time of any disposition, no Event of
Default shall exist or shall result from such disposition, (ii) not less than
80% of the aggregate sales price from such disposition shall be paid in cash or
Cash Equivalents, and (iii) the aggregate value of all assets so sold by the
Company and its Subsidiaries, together, shall not exceed (x) 5% of the net
tangible assets of the Company and its Subsidiaries on a consolidated basis
during any twelve month period with net tangible assets to be measured as of the
beginning of such period, and (y) 15% of the net tangible assets of the Company
and its Subsidiaries on a consolidated basis during the term of this Agreement,
with net tangible assets to be measured as of the Closing Date;

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          (e) transfer of cash or Cash Equivalents not otherwise prohibited by
the Loan Documents;

          (f) Investments permitted under SECTION 8.04 and dispositions pursuant
to a merger or other consolidation permitted under SECTION 8.03; and

          (g) transfer of inventory, equipment or other assets from the Company
to any Subsidiary which is not an Excluded Subsidiary or to the Company or any
other such Subsidiary from any Subsidiary.

     8.03 CONSOLIDATIONS AND MERGERS. The Company shall not, and shall not
suffer or permit any Subsidiary to, merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions all or substantially all of its assets whether now owned
or hereafter acquired) to or in favor of any Person, except:

          (a) any Subsidiary (other than an Excluded Subsidiary) may merge with
the Company (PROVIDED that the Company shall be the continuing or surviving
corporation), or with any one or more Subsidiaries (other than an Excluded
Subsidiary), PROVIDED that if any transaction shall be between a Subsidiary and
a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall be the continuing
or surviving corporation it being understood and agreed that, notwithstanding
the prohibition contained in this clause, an Excluded Subsidiary shall be
permitted to constitute part of a transaction permitted by this clause in the
event that such transaction would remove or eliminate the condition that caused
such Excluded Subsidiary to be an Excluded Subsidiary;

          (b) any Subsidiary (other than an Excluded Subsidiary) may sell all or
substantially all of its assets (upon voluntary liquidation or otherwise), to
the Company or another Wholly-Owned Subsidiary (other than an Excluded
Subsidiary) it being understood and agreed that, notwithstanding the prohibition
contained in this clause, an Excluded Subsidiary shall be permitted to
constitute part of a transaction permitted by this clause in the event that such
transaction would remove or eliminate the condition that caused such Excluded
Subsidiary to be an Excluded Subsidiary;

          (c) any Subsidiary may merge with or consolidate into any Person
(other than an Excluded Subsidiary), PROVIDED that (i) at the time of such
merger or consolidation, no Default or Event of Default shall exist or result
after giving effect to the consummation of such merger or consolidation and (ii)
either (x) such Subsidiary shall be the continuing or surviving corporation as a
Wholly-Owned Subsidiary of the Company or (y) such Person shall become a
Subsidiary of the Company as a result thereto; it being understood and agreed
that, notwithstanding the prohibition contained in this clause, an Excluded
Subsidiary shall be permitted to constitute part of a transaction permitted by
this clause in the event that such transaction would remove or eliminate the
condition that caused such Excluded Subsidiary to be an Excluded Subsidiary; and

          (d) any Excluded Subsidiary may merge with or consolidate into any one
or more Excluded Subsidiaries.

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     8.04 LOANS AND INVESTMENTS. The Company shall not purchase or acquire, or
suffer or permit any Subsidiary to purchase or acquire, or make any commitment
therefor, any capital stock, equity interest, or any obligations or other
securities of, or any interest in, any Person, or make or commit to make any
Acquisitions, or make or commit to make any advance, loan, extension of credit
or capital contribution to or any other investment in, any Person including any
Affiliate of the Company (collectively, "INVESTMENTS"), except for:

          (a) Investments held by the Company or Subsidiary in the form of cash
and/or Cash Equivalents;

          (b) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the ordinary
course of business;

          (c) unsecured extensions of credit by the Company to any Subsidiary
(other than an Excluded Subsidiary) or by any such Subsidiary to another such
Subsidiary or the Company, provided, that to the extent that any such extension
of credit pursuant to this CLAUSE (c) shall be evidenced by a promissory note,
such promissory note shall be pledged and immediately delivered to the
Collateral Agent pursuant to the Pledge and Security Agreement and shall be
subordinated in a manner acceptable to the Agent;

          (d) Investments incurred in order to consummate Permitted
Acquisitions;

          (e) Investments constituting Permitted Swap Obligations or payments or
advances under Swap Contracts relating to Permitted Swap Obligations;

          (f) Investments made by the Company or any Subsidiary which is not an
Excluded Subsidiary after the date of this Agreement in any Subsidiary (other
than an Excluded Subsidiary) in the form of a capital contribution;

          (g) advances, loans, or other extensions of credit to employees with
respect to payroll, relocation and travel expenses on behalf of the Company and
its Subsidiaries (other than Excluded Subsidiaries) in the ordinary course of
business and consistent with past practice and which shall not exceed $1,100,000
in the aggregate at any time outstanding;

          (h) other Investments existing as of the Closing Date and listed on
SCHEDULE 8.04;

          (i) Investments of a Person that becomes a Subsidiary after the date
of this Agreement as a result of an Acquisition so long as (x) such Investment
existed at the time such Person became a Subsidiary and was not created in
anticipation thereof and (y) such Investment would otherwise be permitted
pursuant to this SECTION 8.04;

          (j) equity interests, notes, chattel paper and securities received in
settlement of debts created in the ordinary course of business and owed to the
Company or its Subsidiaries or received in satisfaction of judgements or
pursuant to a plan of reorganization or similar arrangement upon the bankruptcy
or insolvency of a debtor, and promptly (but in any event, within thirty (30)
days of receipt of such equity interests, notes, chattel paper or securities)
pledged (and if certificated or evidenced by an instrument or chattel paper,
delivered) to the

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Collateral Agent pursuant to a pledge agreement in form and substance reasonably
satisfactory to the Collateral Agent;

          (k) other Investments (other than repurchases of capital stock of the
Company or any of its Subsidiaries); PROVIDED, that, the aggregate amount of
consideration paid, loaned, advanced, or commitments incurred, with respect to
all such Investments during any fiscal year of the Company does not exceed the
amount of $3,000,000, PROVIDED, HOWEVER, that the amount of permitted
Investments under this CLAUSE (k) may be increased for any fiscal year ending on
or after December 31, 2004 by an amount, equal to the lesser of (i) $2,000,000
and (ii) the amount, if any, by which $3,000,000 exceeds the amount of any such
Investments made during the then immediately preceding fiscal year;

          (l) Investments which constitute redemptions and repurchases permitted
under SECTION 8.10;

          (m) Investments consisting of prepaid expenses, lease, utilities,
workers' compensation performance and similar deposits made in the ordinary
course of business and consistent with past practice;

          (n) Investments consisting of non-cash consideration received by the
Company or its Subsidiaries from dispositions permitted under SECTION 8.02(d)
and promptly (but in any event, within thirty (30) days of receipt thereof)
pledged (and, if certificated securities or evidenced by an instrument,
delivered) to the Collateral Agent pursuant to a pledge agreement in form and
substance reasonably satisfactory to the Collateral Agent; and

          (o) Investments consisting of Contingent Obligations permitted
pursuant to SECTION 8.08.

     8.05 LIMITATION ON INDEBTEDNESS. The Company shall not, and shall not
suffer or permit any Subsidiary to, create, incur, assume, suffer to exist, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:

          (a) Indebtedness incurred pursuant to this Agreement and the other
Loan Documents;

          (b) Indebtedness consisting of Contingent Obligations permitted
pursuant to SECTION 8.08;

          (c) Indebtedness existing on the Closing Date and set forth in
SCHEDULE 8.05;

          (d) other Indebtedness (together with Indebtedness secured by Liens
permitted by SECTION 8.01(a), (i), (j), (m) and Contingent Obligations permitted
by 8.08(g)) in an aggregate outstanding principal amount not to exceed at any
time an amount equal to 4% of the total assets of the Company and its
Subsidiaries on a consolidated basis;

          (e) Indebtedness incurred in connection with leases permitted pursuant
to SECTION 8.09;

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          (f) Indebtedness permitted to be incurred pursuant to SECTION 8.04(C);

          (g) Existing Letters of Credit, excluding any replacements, renewals
or extensions thereof; and

          (h) unsecured Indebtedness under notes to sellers containing terms
satisfactory to the Agent and fully subordinated to the Loans and the other
Obligations on terms satisfactory to the Agent.

     8.06 TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall not
suffer or permit any Subsidiary to, enter into any transaction with any
Affiliate of the Company (other than a Subsidiary which is not an Excluded
Subsidiary), except upon fair and reasonable terms no less favorable to the
Company or such Subsidiary than would obtain in a comparable arm's-length
transaction with a Person not an Affiliate of the Company or such Subsidiary.

     8.07 USE OF PROCEEDS. The Company shall not, and shall not suffer or permit
any Subsidiary to, use any portion of the Loan proceeds or any Letter of Credit,
directly or indirectly, (i) to purchase or carry Margin Stock in violation of
any applicable legal and regulatory requirements including, without limitation,
Regulations T, U and X, the Securities Act of 1933, and the Securities Exchange
Act of 1934 and the regulations promulgated thereunder, (ii) to repay or
otherwise refinance indebtedness of the Company or others incurred to purchase
or carry Margin Stock, or (iii) to acquire any security in any transaction that
is subject to Section 13 or 14 of the Exchange Act.

     8.08 CONTINGENT OBLIGATIONS. The Company shall not, and shall not suffer or
permit any Subsidiary to, create, incur, assume or suffer to exist any
Contingent Obligations except:

          (a) endorsements for collection or deposit in the ordinary course of
business;

          (b) Permitted Swap Obligations;

          (c) Contingent Obligations (x) of the Company and its Subsidiaries
existing as of the Closing Date and listed in SCHEDULE 8.08, (y) of the Company
with respect to payments to be made by a Subsidiary of the Company pursuant to
operating leases entered into by such Subsidiary in the ordinary course of
business and (z) of the Company's Subsidiaries pursuant to the Guaranty;

          (d) Contingent Obligations with respect to Surety Instruments incurred
in the ordinary course of business;

          (e) Contingent Obligations of a Person that becomes a Subsidiary after
the date of this Agreement as a result of a Permitted Acquisition so long as
such Contingent Obligation existed at the time such Person became a Subsidiary
and was not created in anticipation thereof;

          (f) guarantees with respect to permitted Indebtedness and Capital
Leases permitted under SECTION 8.05;

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<PAGE>

          (g) Contingent Obligations incurred by the Company in connection with
a Permitted Acquisition; PROVIDED that the aggregate maximum amount of such
Contingent Obligations (together with Indebtedness secured by Liens permitted by
SECTIONS 8.01(a), (i), (j), (m) and Indebtedness and Contingent Obligations
permitted by SECTION 8.05(d)) does not to exceed at any time an amount equal to
4% of the total assets of the Company and its Subsidiaries on a consolidated
basis.

     8.09 LEASE OBLIGATIONS. The Company shall not, and shall not suffer or
permit any Subsidiary to, create or suffer to exist any obligations for the
payment of rent for any property under lease or agreement to lease, except for:

          (a) leases of the Company and of Subsidiaries in existence on the
Closing Date and any renewal, extension or refinancing thereof;

          (b) operating leases entered into by the Company or any Subsidiary
after the Closing Date in the ordinary course of business; and

          (c) Capital Leases permitted under SECTION 8.01(j).

     8.10 RESTRICTED PAYMENTS. The Company shall not, and shall not suffer or
permit any Subsidiary to, declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account of any shares of any class of its capital stock, or purchase, redeem or
otherwise acquire for value any shares of its capital stock or any warrants,
rights or options to acquire such shares, now or hereafter outstanding, except
that (a) any Subsidiary may declare and make dividend payments or other
distributions to the Company or to its immediate parent Subsidiary of the
Company and (b) redemptions and repurchases made by the Company or of its
Subsidiaries of the capital stock of the Company, PROVIDED (i) that the amount
of such redemptions and repurchases does not exceed an amount equal to fifty
percent (50%) of Net Income for the twelve (12) month period then most recently
ended and with respect to the last month of such period the Agent and the
Lenders shall have received the monthly financial information required pursuant
to SECTION 7.01(c), (ii) the Company is and shall be in compliance after giving
effect to such redemptions and repurchases with SECTIONS 8.14 through 8.16, and
(iii) no Default or Event of Default has occurred and is continuing or would
occur after giving effect to such redemptions or repurchases.

          8.11 ERISA. The Company shall not, and shall not suffer or permit any
of its Subsidiaries to, (a) terminate any Plan subject to Title IV of ERISA so
as to result in any material (in the opinion of the Majority Lenders) liability
to the Company or any ERISA Affiliate, (b) permit to exist any ERISA Event or
any other event or condition, which presents the risk of a material (in the
opinion of the Majority Lenders) liability to the Company or any ERISA
Affiliate, (c) make a complete or partial withdrawal (within the meaning of
ERISA Section 4201) from any Multiemployer Plan so as to result in any material
(in the opinion of the Majority Lenders) liability to the Company or any ERISA
Affiliate, (d) enter into any new Plan or modify any existing Plan so as to
increase its obligations thereunder which could result in any material (in the
opinion of the Majority Lenders) liability to the Company or any ERISA
Affiliate, or (e) permit the present value of all nonforfeitable accrued
benefits under any Plan (using the actuarial assumptions utilized by the PBGC
upon termination of a Plan) materially (in

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the opinion of the Majority Lenders) to exceed the fair market value of Plan
assets allocable to such benefits, all determined as of the most recent
valuation date for each such Plan.

     8.12 CHANGE IN BUSINESS. The Company shall not, and shall not suffer or
permit any Subsidiary to, engage in any material line of business substantially
different from those lines of business, and reasonable extensions thereof,
carried on by the Company and its Subsidiaries taken as a whole on the Closing
Date.

     8.13 ACCOUNTING CHANGES. The Company shall not, and shall not suffer or
permit any Subsidiary to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP or change the fiscal year of the
Company or of any Subsidiary.

     8.14 MINIMUM TANGIBLE NET WORTH. The Company shall not permit its
consolidated Tangible Net Worth at any time after the Closing Date to be less
than an amount equal to the sum of (a) $120,000,000 plus (b) 50% of the
Company's positive net income as determined in accordance with GAAP (with no
deduction for net losses), if any, for each fiscal quarter ending after the
Closing Date and prior to any date of determination hereunder plus (c) an amount
equal to 100% of the net cash and non-cash proceeds of any equity securities
issued by the Company or its Subsidiaries after the Closing Date and prior to
any date of determination hereunder.

     8.15 LEVERAGE RATIO. The Company shall not, at any time, permit its
Leverage Ratio to be greater than 2.00:1.0.

     8.16 FIXED CHARGE COVERAGE RATIO. The Company shall not, as of the last day
of each fiscal quarter ending during any period set forth below, permit its
Fixed Charge Coverage Ratio for the four fiscal quarters then ended as of such
day (taken as one accounting period) to be less than the ratio set forth below
opposite such period:

               Fiscal Quarters Ending During Period        Ratio
               ------------------------------------        ------
               Closing Date through March 31, 2003        1.35:1.0

               April 1, 2003 through December 31, 2003    1.40:1.0

               January 1, 2004 and thereafter             1.45:1.0.

     8.17 NO IMPAIRMENT OF INTERCOMPANY TRANSFERS. The Company shall not, and
shall not permit any Subsidiary to, directly or indirectly enter into or become
bound by any agreement, instrument, indenture or other obligation (other than
this Agreement and the other Loan Documents) that could directly or indirectly
restrict, prohibit or require the consent of any Person with respect to the
payment of dividends or distributions or the making or repayment of intercompany
loans or the transfer of assets by a Subsidiary of the Company to the Company or
such Subsidiaries' shareholders, except for restrictions with respect to a
Subsidiary imposed pursuant to an agreement entered into for the disposition of
all or substantially all of the equity or

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Property of such Subsidiary (or the Property subject to such disposition)
permitted under SECTION 8.02 pending the closing of such disposition.

     8.18 EXCLUDED SUBSIDIARIES. The Company shall not permit any Excluded
Subsidiary to own the capital stock of any Subsidiary that is not an Excluded
Subsidiary.

                                   ARTICLE IX

                                EVENTS OF DEFAULT

     9.01 EVENT OF DEFAULT. Any of the following shall constitute an "EVENT OF
DEFAULT":

          (a) NON-PAYMENT. The Company fails to pay, (i) when and as required to
be paid herein, any amount of principal of any Loan or of any L/C Obligation, or
(ii) within five days after the same becomes due, any interest, fee or any other
amount payable hereunder or under any other Loan Document; or

          (b) REPRESENTATION OR WARRANTY. Any information contained in any
Borrowing Base Certificate is untrue or incorrect in any respect (other than
inadvertent, immaterial errors not exceeding $100,000 in the aggregate in any
Borrowing Base Certificate), or any representation or warranty by the Company or
any Subsidiary made or deemed made herein, in any other Loan Document, or which
is contained in any certificate, document or financial or other statement by the
Company, any Subsidiary, or any Responsible Officer, furnished at any time under
this Agreement, or in or under any other Loan Document, is incorrect in any
material respect on or as of the date made or deemed made; or

          (c) SPECIFIC DEFAULTS. The Company fails to perform or observe any
term, covenant or agreement contained in any of SECTION 7.01, 7.02, 7.03 (a),
(b), or (c), 7.04 or 7.08 or in Article VIII; or

          (d) OTHER DEFAULTS. The Company or any Subsidiary party thereto fails
to perform or observe any other term or covenant contained in this Agreement or
any other Loan Document, and such default shall continue unremedied for a period
of 30 days after the earlier of (i) the date upon which a Responsible Officer
knew or reasonably should have known of such failure or (ii) the date upon which
written notice thereof is given to the Company by the Agent or any Lender; or

          (e) CROSS-DEFAULT. (i) The Company or any Subsidiary (A) fails to make
any payment in respect of any Indebtedness or Contingent Obligation (other than
in respect of Swap Contracts), having an aggregate principal amount (including
undrawn committed or available amounts and including amounts owing to all
creditors under any combined or syndicated credit arrangement) of more than
$5,000,000 when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) and such failure continues after the
applicable grace or notice period, if any, specified in the relevant document on
the date of such failure; or (B) fails to perform or observe any other condition
or covenant, or any other event shall occur or condition exist with respect to
the obligations of the Company or such Subsidiary, under any agreement or
instrument relating to any Indebtedness or Contingent Obligation of more than
$5,000,000, and such failure continues after the applicable grace or notice
period, if any,

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specified in the relevant document on the date of such failure if the effect of
such failure, event or condition is to cause, or to permit the holder or holders
of such Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause such Indebtedness to be declared to be due and payable
prior to its stated maturity, or such Contingent Obligation to become payable or
cash collateral in respect thereof to be demanded; or (ii) there occurs under
any Swap Contract an Early Termination Date (as defined in such Swap Contract)
resulting from (1) any event of default under such Swap Contract as to which the
Company or any Subsidiary is the Defaulting Party (as defined in such Swap
Contract) or (2) any Termination Event (as so defined) as to which the Company
or any Subsidiary is an Affected Party (as so defined), and, in either event,
the Swap Termination Value owed by the Company or such Subsidiary as a result
thereof is greater than $5,000,000; or

          (f) INSOLVENCY; VOLUNTARY PROCEEDINGS. The Company or any Subsidiary
(i) ceases or fails to be solvent, or generally fails to pay, or admits in
writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise; (ii)
commences any Insolvency Proceeding with respect to itself; or (iii) takes any
action to effectuate or authorize any of the foregoing; or

          (g) INVOLUNTARY PROCEEDINGS. (i) Any involuntary Insolvency Proceeding
is commenced or filed against the Company or any Subsidiary, or any writ,
judgment, warrant of attachment, execution or similar process, is issued or
levied against a substantial part of the Company's or any Subsidiary's
properties, and any such proceeding or petition shall not be dismissed, or such
writ, judgment, warrant of attachment, execution or similar process shall not be
released, vacated or fully bonded within 60 days after commencement, filing or
levy; (ii) the Company or any Subsidiary admits the material allegations of a
petition against it in any Insolvency Proceeding, or an order for relief (or
similar order under non-U.S. law) is ordered in any Insolvency Proceeding; or
(iii) the Company or any Subsidiary acquiesces in the appointment of a receiver,
trustee, custodian, conservator, liquidator, mortgagee in possession (or agent
therefor), or other similar Person for itself or a substantial portion of its
property or business; or

          (h) ERISA. (i) An ERISA Event shall occur with respect to a Pension
Plan or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of the Company under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $1,000,000,
(ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans
at any time exceeds $1,000,000; or (iii) the Company or any ERISA Affiliate
shall fail to pay when due, after the expiration of any applicable grace period,
any installment payment with respect to its withdrawal liability under Section
4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$1,000,000, or (iv) the Company or any ERISA Affiliate shall fail to pay when
due any required installment or any other payment required under Section 412 of
the Code in an aggregate amount in excess of $1,000,000; or

          (i) MONETARY JUDGMENTS. One or more non-interlocutory judgments,
non-interlocutory orders, decrees or arbitration awards is entered against the
Company or any Subsidiary involving in the aggregate a liability (to the extent
not covered by independent third-

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party insurance or reinsurance as to which the insurer does not dispute
coverage) as to any single or related series of transactions, incidents or
conditions, of $1,000,000 or more, and the same shall remain unsatisfied,
unvacated and unstayed pending appeal for a period of 30 days after the entry
thereof; or

          (j) NON-MONETARY JUDGMENTS. Any non-monetary judgment, order or decree
is entered against the Company or any Subsidiary which does or would reasonably
be expected to have a Material Adverse Effect, and there shall be any period of
30 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; or

          (k) COLLATERAL. (i) Any Collateral Document shall for any reason cease
to be valid and generally binding on or enforceable against the Company or any
Subsidiary of the Company party thereto or the Company or any Subsidiary of the
Company shall so state in writing or bring an action to limit its obligations or
liabilities thereunder; or (ii) any Collateral Document shall for any reason
(other than pursuant to the terms thereof or as a result of the failure of the
Collateral Agent to file appropriate continuation statements or to take other
required actions except to the extent permitted by the terms thereof) cease to
create a valid security interest in the Collateral purported to be covered
thereby or such security interest shall for any reason cease to be a perfected
and first priority security interest subject only to Permitted Liens; or

          (l) CHANGE OF CONTROL. There occurs any Change of Control; or

          (m) GUARANTOR DEFAULTS. Any Guarantor fails in any material respect to
perform or observe any term, covenant or agreement in the Guaranty or the
Guaranty is for any reason partially (including with respect to future advances)
or wholly revoked or invalidated, or otherwise ceases to be in full force and
effect (other than pursuant to the terms thereof), or any Guarantor or any other
Person contests in any manner the validity or enforceability thereof or denies
that it has any further liability or obligation thereunder; or any event
described at clauses (f) or (g) of this Section occurs with respect to such
Guarantor.

     9.02 REMEDIES. If any Event of Default occurs, the Agent shall, at the
request of, or may, with the consent of, the Majority Lenders:

          (a) declare the commitment of each Lender to make Loans and any
obligation of the Issuing Bank to Issue Letters of Credit to be terminated,
whereupon such commitments and obligation shall be terminated;

          (b) declare an amount equal to the maximum aggregate amount that is or
at any time thereafter may become available for drawing under any outstanding
Letters of Credit (whether or not any beneficiary shall have presented, or shall
be entitled at such time to present, the drafts or other documents required to
draw under such Letters of Credit) to be immediately due and payable, and
declare the unpaid principal amount of all outstanding Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Company; and

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          (c) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or applicable
law;

PROVIDED, HOWEVER, that upon the occurrence of any event specified in SECTIONS
9.01(f) or (g) (in the case of CLAUSE (i) of SECTION 9.01(g) upon the expiration
of the 60-day period mentioned therein), the obligation of each Lender to make
Loans and any obligation of the Issuing Bank to Issue Letters of Credit shall
automatically terminate and the unpaid principal amount of all outstanding Loans
and all interest and other amounts as aforesaid shall automatically become due
and payable without further act of the Agent, the Issuing Bank or any Lender.

     9.03 RIGHTS NOT EXCLUSIVE. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.

                                   ARTICLE X

                                    THE AGENT

     10.01 APPOINTMENT AND AUTHORIZATION; "AGENT".

          (a) Each Lender hereby irrevocably (subject to SECTION 10.09)
appoints, designates and authorizes the Agent (including, without limitation, in
its capacity as Collateral Agent) to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent. Without limiting the generality
of the foregoing sentence, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.

          (b) The Issuing Bank shall act on behalf of the Lenders with respect
to any Letters of Credit issued by it and the documents associated therewith
until such time and except for so long as the Agent may agree at the request of
the Majority Lenders to act for such Issuing Bank with respect thereto;
provided, however, that the Issuing Bank shall have all of the benefits and
immunities (i) provided to the Agent in this ARTICLE X with respect to any acts
taken or omissions suffered by the Issuing Bank in connection with Letters of
Credit issued by it or proposed to be issued by it and the application and
agreements for letters of credit pertaining to the Letters of Credit as fully as
if the term "Agent", as used in this ARTICLE X, included the

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Issuing Bank with respect to such acts or omissions, and (ii) as additionally
provided in this Agreement with respect to the Issuing Bank.

     10.02 DELEGATION OF DUTIES. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.

     10.03 LIABILITY OF AGENT. None of the Agent-Related Persons shall (i) be
liable to the Lenders for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by the Company or any
Subsidiary or Affiliate of the Company, or any officer thereof, contained in
this Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Agent under or in connection with, this Agreement or any other Loan Document, or
the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of the Company or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Company or any
of the Company's Subsidiaries or Affiliates.

     10.04 RELIANCE BY AGENT.

          (a) The Agent shall be entitled to rely, and shall be fully protected
in relying, upon any writing, resolution, notice, consent, certificate,
affidavit, letter, telegram, facsimile, telex or telephone message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to the Company), independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Majority Lenders as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Majority
Lenders and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Lenders.

          (b) For purposes of determining compliance with the conditions
specified in SECTION 5.01, each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Agent to such Lender for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to the Lender.

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     10.05 NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Agent for the account of the Lenders, unless the Agent shall have
received written notice from a Lender or the Company referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". The Agent will notify the Lenders of its
receipt of any such notice. The Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Majority Lenders in
accordance with ARTICLE IX; PROVIDED, HOWEVER, that unless and until the Agent
has received any such request, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable or in the best interest
of the Lenders.

     10.06 CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Company and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries, and all applicable lender regulatory laws relating
to the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Company and its Subsidiaries
hereunder. Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Company.
Except for notices, reports and other documents expressly herein required to be
furnished to the Lenders by the Agent, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of the Company which may come into the possession
of any of the Agent-Related Persons.

     10.07 INDEMNIFICATION OF AGENT. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), pro rata,
from and against any and all Indemnified Liabilities; provided, HOWEVER, that no
Lender shall be liable for the payment to the Agent-Related Persons of any
portion of such Indemnified Liabilities resulting solely from such Person's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender shall reimburse the Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs) incurred by the Agent
in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Company.

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The undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Agent.

     10.08 AGENT IN INDIVIDUAL CAPACITY. Bank of America and its Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though Bank of America were not the Agent or the
Issuing Lender hereunder and without notice to or consent of the Lenders. The
Lenders acknowledge that, pursuant to such activities, Bank of America or its
Affiliates may receive information regarding the Company or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Company or such Subsidiary) and acknowledge that the Agent shall be
under no obligation to provide such information to them. With respect to its
Loans, Bank of America shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Agent.

     10.09 SUCCESSOR AGENT. The Agent may, and at the request of the Majority
Lenders shall, resign as Agent upon 30 days' notice to the Lenders. If the Agent
resigns under this Agreement, the Majority Lenders shall appoint from among the
Lenders a successor agent for the Lenders which successor agent shall be
approved by the Company. If no successor agent is appointed prior to the
effective date of the resignation of the Agent, the Agent may appoint, after
consulting with the Lenders and the Company, a successor agent from among the
Lenders. Upon the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and duties of the
retiring Agent and the term "Agent" shall mean such successor agent and the
retiring Agent's appointment, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this ARTICLE X and SECTIONS 11.04 and 11.05 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor agent has accepted appointment as Agent by the date
which is 30 days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective and
the Lenders shall perform all of the duties of the Agent hereunder until such
time, if any, as the Majority Lenders appoint a successor agent as provided for
above. Notwithstanding the foregoing, however, Bank of America may not be
removed as the Agent at the request of the Majority Lenders unless Bank of
America shall also simultaneously be replaced as "Issuing Bank" hereunder
pursuant to documentation in form and substance reasonably satisfactory to Bank
of America.

     10.10 WITHHOLDING TAX.

          (a) If any Lender is a "foreign corporation, partnership or trust"
within the meaning of the Code and such Lender claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such
Lender agrees with and in favor of the Agent, to deliver to the Agent:

               (i) if such Lender claims an exemption from, or a reduction of,
          withholding tax under a United States tax treaty, two properly
          completed and executed copies of IRS Form W-8BEN before the payment of
          any interest in the first calendar year

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          and before the payment of any interest in each third succeeding
          calendar year during which interest may be paid under this Agreement;

               (ii) if such Lender claims that interest paid under this
          Agreement is exempt from United States withholding tax because it is
          effectively connected with a United States trade or business of such
          Lender, two properly completed and executed copies of IRS Form W-8ECI
          before the payment of any interest is due in the first taxable year of
          such Lender and in each succeeding taxable year of such Lender during
          which interest may be paid under this Agreement; and

               (iii) such other form or forms as may be required under the Code
          or other laws of the United States as a condition to exemption from,
          or reduction of, United States withholding tax.

Such Lender agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.

          (b) If any Lender claims exemption from, or reduction of, withholding
tax under a United States tax treaty by providing IRS Form W-8BEN and such
Lender sells, assigns, grants a participation in, or otherwise transfers all or
part of the Obligations of the Company to such Lender, such Lender agrees to
notify the Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Company to such Lender. To the extent of
such percentage amount, the Agent will treat such Lender's IRS Form W-8BEN as no
longer valid.

          (c) If any Lender claiming exemption from United States withholding
tax by filing IRS Form W-8ECI with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of the
Company to such Lender, such Lender agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.

          (d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Lender
an amount equivalent to the applicable withholding tax after taking into account
such reduction. However, if the forms or other documentation required by clause
(a) of this Section are not delivered to the Agent, then the Agent may withhold
from any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax imposed by
Sections 1441 and 1442 of the Code, without reduction.

          (e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered or was not properly executed, or because such
Lender failed to notify the Agent of a change in circumstances which rendered
the exemption from, or reduction of, withholding tax ineffective, or for any
other reason) such Lender shall indemnify the Agent fully for all amounts paid,
directly or indirectly, by the Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to the Agent under this

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Section, together with all costs and expenses (including Attorney Costs). The
obligation of the Lenders under this Section shall survive the payment of all
Obligations and the resignation or replacement of the Agent.

     10.11 COLLATERAL AND GUARANTY MATTERS. The Lenders irrevocably authorize
the Collateral Agent, at its option and in its discretion:

          (a) to release any Lien on any property granted to or held by the
Collateral Agent under any Loan Document (i) upon termination of the Revolving
Loan Commitments and payment in full of all Obligations (other than contingent
indemnification obligations) and the expiration or termination of all Letters of
Credit, (ii) that is sold or to be sold as part of or in connection with any
sale permitted hereunder or under any other Loan Document, or (iii) subject to
SECTION 11.01, if approved, authorized or ratified in writing by the Majority
Lenders;

          (b) to subordinate any Lien on any property granted to or held by the
Collateral Agent under any Loan Document to the holder of any Lien on such
property that is permitted by SECTIONS 8.01(i), (j) or (m); and

          (c) to release any Guarantor from its obligations under the Guaranty
if such Person ceases to be a Subsidiary as a result of a transaction permitted
hereunder.

Upon request by the Collateral Agent at any time, the Majority Lenders will
confirm in writing the Collateral Agent's authority to release or subordinate
its interest in particular types or items of property, or to release any
Guarantor from its obligations under the Guaranty pursuant to this SECTION
10.11.

                                   ARTICLE XI

                                  MISCELLANEOUS

     11.01 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
the Company or any other Guarantor therefrom, shall be effective unless in
writing signed by the Majority Lenders and the Company or the applicable
Guarantor, as the case may be, and acknowledged by the Agent, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; PROVIDED, HOWEVER, that no such amendment,
waiver or consent shall:

          (a) waive any condition set forth in SECTION 5.01 (except for 5.01(e))
without the written consent of each Lender;

          (b) extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to SECTION 9.02) without the written consent of
such Lender;

          (c) postpone any date fixed by this Agreement or any other Loan
Document for any payment (other than pursuant to SECTION 2.07) of principal,
interest, fees or other amounts

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due to the Lenders (or any of them) hereunder or under any other Loan Document
without the written consent of each Lender directly affected thereby;

          (d) reduce the principal of, or the rate of interest specified herein
on, any Loan or L/C Borrowing, or (subject to clause (v) of the second proviso
to this SECTION 11.01) any fees or other amounts payable hereunder or under any
other Loan Document without the written consent of each Lender directly affected
thereby; PROVIDED, HOWEVER, that only the consent of the Majority Lenders shall
be necessary (i) to amend the definition of "Default Rate" or to waive any
obligation of the Company to pay interest at the Default Rate or (ii) to amend
any financial covenant hereunder (or any defined term used therein) even if the
effect of such amendment would be to reduce the rate of interest on any Loan or
L/C Borrowing or to reduce any fee payable hereunder; or

          (e) change SECTION 2.14 in a manner that would alter the pro rata
sharing of payments required thereby without the written consent of each Lender;

          (f) change any provision of this Section or the definition of
"Majority Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to amend, waive or otherwise modify any rights
hereunder or make any determination or grant any consent hereunder, without the
written consent of each Lender

          (g) release any Guarantor (other than pursuant to this Agreement or
the Collateral Documents) from the Guaranty without the written consent of each
Lender or release the Agent's Liens and security interests in all or
substantially all of the Collateral except as otherwise may be provided in this
Agreement or in the Collateral Documents or except where the consent of the
Majority Lenders only is provided for;

and, PROVIDED FURTHER, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Issuing Bank in addition to the Lenders required
above, affect the rights or duties of the Issuing Bank under this Agreement or
any Letter of Credit Application relating to any Letter of Credit issued or to
be issued by it; (ii) no amendment, waiver or consent shall, unless in writing
and signed by the Swing Line Bank in addition to the Lenders required above,
affect the rights or duties of the Swing Line Bank under this Agreement; (iii)
no amendment, waiver or consent shall, unless in writing and signed by the Agent
in addition to the Lenders required above, affect the rights or duties of the
Agent under this Agreement or any other Loan Document; and (iv) SECTION 11.08(g)
may not be amended, waived or otherwise modified without the consent of each
Granting Lender all or any part of whose Loans are being funded by an SPC at the
time of such amendment, waiver or other modification; and (v) the Fee Letter may
be amended, or rights or privileges thereunder waived, in a writing executed
only by the parties thereto. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender.

     11.02 NOTICES.

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          (a) All notices, requests, consents, approvals, waivers and other
communications shall be in writing (including, unless the context expressly
otherwise provides, by facsimile transmission, provided that any matter
transmitted by facsimile (i) shall be immediately confirmed by a telephone call
to the recipient at the number specified on SCHEDULE 11.02, and (ii) shall be
followed promptly by delivery of a hard copy original thereof) and mailed, faxed
or delivered, to the address or facsimile number specified for notices on
SCHEDULE 11.02; or, as directed to the Company or the Agent, to such other
address as shall be designated by such party in a written notice to the other
parties, and as directed to any other party, at such other address as shall be
designated by such party in a written notice to the Company and the Agent.

          (b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery; except that
notices pursuant to ARTICLE II, III or X to the Agent shall not be effective
until actually received by the Agent, and notices pursuant to ARTICLE III to the
Issuing Bank shall not be effective until actually received by the Issuing Bank
at the address specified for the "Issuing Bank" on the applicable signature page
hereof.

          (c) Any agreement of the Agent and the Lenders herein to receive
certain notices by telephone or facsimile is solely for the convenience and at
the request of the Company. The Agent and the Lenders shall be entitled to rely
on the authority of any Person purporting to be a Person authorized by the
Company to give such notice and the Agent and the Lenders shall not have any
liability to the Company or other Person on account of any action taken or not
taken by the Agent or the Lenders in reliance upon such telephonic or facsimile
notice. The obligation of the Company to repay the Loans and L/C Obligations
shall not be affected in any way or to any extent by any failure by the Agent
and the Lenders to receive written confirmation of any telephonic or facsimile
notice or the receipt by the Agent and the Lenders of a confirmation which is at
variance with the terms understood by the Agent and the Lenders to be contained
in the telephonic or facsimile notice.

     11.03 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no delay
in exercising, on the part of the Agent or any Lender, any right, remedy, power
or privilege hereunder, shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.

     11.04 COSTS AND EXPENSES. The Company shall:

          (a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse Bank of America (including in its capacity as
Agent and Issuing Bank) within five Business Days after demand (subject to
SECTION 5.01(e)) for all costs and expenses incurred by Bank of America
(including in its capacity as Agent and Issuing Bank) in connection with the
development, preparation, delivery, administration (including, without
limitation, field examinations) and execution of, and any amendment, supplement,
waiver or modification to (in each case, whether or not consummated), this
Agreement, any Loan Document and any other

                                       88
<PAGE>

documents prepared in connection herewith or therewith, and the consummation of
the transactions contemplated hereby and thereby, including reasonable Attorney
Costs incurred by Bank of America (including in its capacity as Agent and
Issuing Bank) with respect thereto; and

          (b) pay or reimburse the Agent and each Lender within five Business
Days after demand (subject to SECTION 5.01(e)) for all costs and expenses
(including Attorney Costs) incurred by them in connection with the enforcement,
attempted enforcement, or preservation of any rights or remedies under this
Agreement or any other Loan Document during the existence of an Event of Default
or after acceleration of the Loans (including in connection with any "workout"
or restructuring regarding the Loans, and including in any Insolvency Proceeding
or appellate proceeding).

     11.05 COMPANY INDEMNIFICATION. Whether or not the transactions contemplated
hereby are consummated, the Company shall indemnify, defend and hold the
Agent-Related Persons, and each Lender and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"INDEMNIFIED PERSON") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Loans, the termination of the Letters of Credit and the
termination, resignation or replacement of the Agent or replacement of any
Lender) be imposed on, incurred by or asserted against any such Person in any
way relating to or arising out of the Company entering into this Agreement or
any document contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person under or
in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to or arising out of any act or failure to act of
the Company or any of its Subsidiaries in connection with this Agreement or the
Loans or Letters of Credit the use of the proceeds thereof, whether or not any
Indemnified Person is a party thereto (all the foregoing, collectively, the
"INDEMNIFIED LIABILITIES"); PROVIDED, that the Company shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities
resulting from the gross negligence or willful misconduct of such Indemnified
Person. The agreements in this Section shall survive payment of all other
Obligations.

     11.06 PAYMENTS SET ASIDE. To the extent that the Company makes a payment to
the Agent or the Lenders, or the Agent or the Lenders exercise their right of
set-off, and such payment or the proceeds of such set-off or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by the
Agent or such Lender in its discretion) to be repaid to a trustee, receiver or
any other party, in connection with any Insolvency Proceeding or otherwise, then
(a) to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Lender severally agrees to pay to the Agent upon demand its pro rata share
of any amount so recovered from or repaid by the Agent.

     11.07 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that the Company may not assign
or otherwise transfer any of its rights or

                                       89
<PAGE>

obligations hereunder without the prior written consent of each Lender and no
Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the provisions
of SECTION 11.08, (ii) by way of participation in accordance with the provisions
of SECTION 11.08, or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of SECTION 11.08, or (iv) to an SPC in accordance
with the provisions of SECTION 11.08 (and any other attempted assignment or
transfer by any party hereto shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in SECTION 11.08 and, to the extent
expressly contemplated hereby, the Indemnitees) any legal or equitable right,
remedy or claim under or by reason of this Agreement.

     11.08 ASSIGNMENTS, PARTICIPATIONS, ETC.

          (a) Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans (including for
purposes of this subsection (b), participations in L/C Obligations and in Swing
Line Loans) at the time owing to it); PROVIDED that (i) except in the case of an
assignment of the entire remaining amount of the assigning Lender's Commitment
and the Loans at the time owing to it or in the case of an assignment to a
Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender,
the aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) subject to each such assignment, determined as of the
date of the Assignment and Acceptance with respect to such assignment is
delivered to the Agent or, if the "Trade Date" is specified in the Assignment
and Acceptance, as of the Trade Date, shall not be less than $5,000,000 unless
the Agent, and so long as no Default or Event of Default has occurred and is
continuing, the Company otherwise consents (each such consent not to be
unreasonably withheld or delayed); (ii) each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned, except that this clause (ii) shall not apply to rights in respect of
Swing Line Loans; (iii) any assignment of a Commitment must be approved by the
Agent, the Issuing Bank and the Swing Line Bank unless the Person that is the
proposed assignee is itself a Lender (whether or not the proposed assignee would
otherwise qualify as an Eligible Assignee); and (iv) the parties to each
assignment shall execute and deliver to the Agent an Assignment and Acceptance,
together with a processing and recordation fee of $3,500. Subject to acceptance
and recording thereof by the Agent pursuant to SECTION 11.08, from and after the
effective date specified in each Assignment and Acceptance, the Eligible
Assignee thereunder shall be a party to this Agreement and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of SECTIONS 4.01,
4.03, 4.04, 11.04 and 11.05 with respect to facts and circumstances occurring
prior to the effective date of such assignment). Upon request, the Company (at
its expense) shall execute and deliver a Note to the assignee Lender. Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this subsection shall be treated for purposes of this

                                       90
<PAGE>

Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with SECTION 11.08(d).

          (b) From and after the date that the Agent notifies the assignor
Lender that it has received (and provided its consent with respect to) an
executed Assignment and Acceptance and payment of the above-referenced
processing fee, (i) the Eligible Assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, shall have the rights and
obligations of a Lender under the Loan Documents, and (ii) the assignor Lender
shall, to the extent that rights and obligations hereunder and under the other
Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Loan Documents.

          (c) Within five Business Days after its receipt of notice by the Agent
that it has received an executed Assignment and Acceptance and payment of the
processing fee, (and provided that it consents to such assignment in accordance
with SECTION 11.08(a)), the Company shall execute and deliver to the Agent, new
Notes (if requested by the Eligible Assignee) evidencing such Eligible
Assignee's assigned Loans and Commitment and, if the assignor Lender has
retained a portion of its Loans and its Commitment, replacement Notes in the
principal amount of the Loans retained by the assignor Lender (such Notes to be
in exchange for, but not in payment of, the Notes held by such Lender).
Immediately upon each Eligible Assignee's making its processing fee payment
under the Assignment and Acceptance, this Agreement shall be deemed to be
amended to the extent, but only to the extent, necessary to reflect the addition
of the Eligible Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Eligible Assignee shall reduce such
Commitments of the assigning Lender PRO TANTO.

          (d) Any Lender may at any time, without the consent of, or notice to,
the Company or the Agent, sell participations to any Person (other than a
natural person or the Company or any of the Company's Affiliates or
Subsidiaries) (each, a "PARTICIPANT") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans (including such Lender's participations in L/C
Obligations and/or Swing Line Loans) owing to it); PROVIDED 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 and (iii) the Company, the Issuing Bank, the
Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; PROVIDED that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
SECTION 11.01 that directly affects such Participant. Subject to SECTION
11.08(f), the Company agrees that each Participant shall be entitled to the
benefits of SECTIONS 4.01, 4.03 and 4.04 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to SECTION 11.08(a),
PROVIDED that if because of circumstances in effect on the effective date of any
sale of a participating interest, the Company would, under SECTION 4.01, be
obligated to make any

                                       91
<PAGE>

payment to or for the account of the applicable Lender, the Company shall only
be obligated to make such payment to the extent that it would then have been
obligated to make such payment to such Lender if it had not sold such
participating interest. To the extent permitted by law, each Participant also
shall be entitled to the benefits of SECTION 11.10 as though it were a Lender,
PROVIDED such Participant agrees to be subject to SECTION 2.14 as though it were
a Lender.

          (e) Notwithstanding any other provision in this Agreement, any Lender
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement and the Note held by it in favor
of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR ss.203.14, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.

          (f) No assignee, participant or other transferee of any Lender's
rights shall be entitled to receive any greater payment under ARTICLE IV than
such Lender would have been entitled to receive with respect to the rights
transferred or by reason of the provisions of ARTICLE IV requiring such Lender
to designate a different Applicable Lending Office under certain circumstances
or at a time when the circumstances giving rise to such greater payment did not
exist.

          (g) Notwithstanding anything to the contrary contained herein, any
Lender (a "GRANTING LENDER") may grant to a special purpose funding vehicle
identified as such in writing from time to time by the Granting Lender to the
Agent and the Company (an "SPC") the option to provide all or any part of any
Revolving Loan that such Granting Lender would otherwise be obligated to make
pursuant to this Agreement; PROVIDED that (i) nothing herein shall constitute a
commitment by any SPC to fund any Revolving Loan, and (ii) if an SPC elects not
to exercise such option or otherwise fails to make all or any part of such
Revolving Loan, the Granting Lender shall be obligated to make such Revolving
Loan pursuant to the terms hereof. Each party hereto hereby agrees that (i)
neither the grant to any SPC nor the exercise by any SPC of such option shall
increase the costs or expenses or otherwise increase or change the obligations
of the Company under this Agreement (including its obligations under SECTIONS
4.01, 4.03 and 4.04), (ii) no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement for which a Lender would be liable, and
(iii) the Granting Lender shall for all purposes, including the approval of any
amendment, waiver or other modification of any provision of any Loan Document,
remain the lender of record hereunder. The making of a Revolving Loan by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Revolving Loan were made by such Granting Lender. In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior debt of any SPC, it will not institute against, or join
any other Person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency, or liquidation proceeding under the
laws of the United States or any State thereof. Notwithstanding anything to the
contrary contained herein, any SPC may (i) with notice to, but without prior
consent of the Company and the Agent and with the payment of a processing fee of
$3,500, assign all or any portion of its right to receive payment with respect
to any Revolving Loan to the Granting Lender and (ii) disclose on a confidential
basis any non-public information

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<PAGE>

relating to its funding of Revolving Loans to any rating agency, commercial
paper dealer or provider of any surety or Guarantee or credit or liquidity
enhancement to such SPC.

          (h) Notwithstanding anything to the contrary contained herein, any
Lender that is a Fund may create a security interest in all or any portion of
the Loans owing to it and the Note, if any, held by it to the trustee for
holders of obligations owed, or securities issued, by such Fund as security for
such obligations or securities, PROVIDED that unless and until such trustee
actually becomes a Lender in compliance with the other provisions of this
SECTION 11.08, (i) no such pledge shall release the pledging Lender from any of
its obligations under the Loan Documents and (ii) such trustee shall not be
entitled to exercise any of the rights of a Lender under the Loan Documents even
though such trustee may have acquired ownership rights with respect to the
pledged interest through foreclosure or otherwise.

     11.09 CONFIDENTIALITY. Each Lender agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as "confidential" or
"secret" by the Company and provided to it or to which it otherwise is granted
access by the Company or any Subsidiary, or by the Agent on the Company's or
such Subsidiary's behalf, under this Agreement or any other Loan Document, and
neither it nor any of its Affiliates shall use any such information other than
in connection with or in enforcement of this Agreement and the other Loan
Documents or in connection with other business now or hereafter existing or
contemplated with the Company or any Subsidiary or to disclose it to any third
person; except to the extent such information (i) was or becomes generally
available to the public other than as a result of disclosure by the Lender, or
(ii) was or becomes available on a non-confidential basis from a source other
than the Company, provided that such source is not bound by a confidentiality
agreement with the Company known to the Lender; PROVIDED, HOWEVER, that any
Lender may disclose such information (A) at the request or pursuant to any
requirement of any Governmental Authority to which the Lender is subject or in
connection with an examination of such Lender by any such authority; (B)
pursuant to subpoena or other court process; (C) when required to do so in
accordance with the provisions of any applicable Requirement of Law; (D) to the
extent reasonably required in connection with any litigation or proceeding to
which the Agent, any Lender or their respective Affiliates may be party; (E) to
the extent reasonably required in connection with the exercise of any remedy
hereunder or under any other Loan Document; (F) to such Lender's independent
auditors and other professional advisors; (G) to any Participant or Eligible
Assignee, actual or potential, provided that such Person agrees in writing to
keep such information confidential to the same extent required of the Lenders
hereunder; (H) as to any Lender or its Affiliate, as expressly permitted under
the terms of any other document or agreement regarding confidentiality to which
the Company or any Subsidiary is party or is deemed party with such Lender or
such Affiliate; and (I) to its Affiliates; PROVIDED that such Lender shall
provide notice to the Company of any requirement to disclose to a person who
does not have an obligation to such Lender (or pursuant to applicable law or
applicable court order) to keep such information confidential (it being
understood and agreed that the failure to provide such notice shall not
constitute a violation by such Lender of this SECTION 11.09).

     11.10 SET-OFF. In addition to any rights and remedies of the Lenders
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Company, any such notice being waived

                                       93
<PAGE>

by the Company to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held by, and other indebtedness at any time owing by, such Lender to or
for the credit or the account of the Company against any and all Obligations
owing to such Lender, now or hereafter existing, irrespective of whether or not
the Agent or such Lender shall have made demand under this Agreement or any Loan
Document and although such Obligations may be contingent or unmatured. Each
Lender agrees promptly to notify the Company and the Agent after any such
set-off and application made by such Lender; PROVIDED, HOWEVER, that the failure
to give such notice shall not affect the validity of such set-off and
application.

     11.11 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Lender shall
notify the Agent in writing of any changes in the address to which notices to
the Lender should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.

     11.12 COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.

     11.13 SEVERABILITY. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.

     11.14 NO THIRD PARTIES BENEFITED. This Agreement is made and entered into
for the sole protection and legal benefit of the Company, the Lenders, the Agent
and the Agent-Related Persons, and their permitted successors and assigns, and
no other Person shall be a direct or indirect legal beneficiary of, or have any
direct or indirect cause of action or claim in connection with, this Agreement
or any of the other Loan Documents.

     11.15 GOVERNING LAW AND JURISDICTION.

          (a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS; PROVIDED THAT THE PARTIES
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

          (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS OR
OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE AGENT AND THE LENDERS
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY, THE AGENT AND THE LENDERS
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF

                                       94
<PAGE>

FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY
DOCUMENT RELATED HERETO. THE COMPANY, THE AGENT AND THE LENDERS EACH WAIVE
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE
BY ANY OTHER MEANS PERMITTED BY ILLINOIS LAW.

     11.16 WAIVER OF JURY TRIAL. THE COMPANY, THE LENDERS AND THE AGENT EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE
LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

     11.17 ENTIRE AGREEMENT. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Company,
the Lenders and the Agent, and supersedes all prior or contemporaneous
agreements and understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof.

                            [Signature Pages Follow]

                                       95
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Chicago, Illinois by their proper and duly
authorized officers as of the day and year first above written.

                                 CENTURY BUSINESS SERVICES, INC.

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

                                 BANK OF AMERICA, N.A., AS AGENT

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

                                 BANK OF AMERICA, N.A., INDIVIDUALLY AS A
                                 LENDER AND AS THE ISSUING BANK

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

                       Signature Page to Credit Agreement
<PAGE>
                                 FIFTH THIRD BANK

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

                       Signature Page to Credit Agreement
<PAGE>

                                 HUNTINGTON NATIONAL BANK

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

                       Signature Page to Credit Agreement
<PAGE>

                                 U.S. BANK, N.A.

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

                       Signature Page to Credit Agreement
<PAGE>

                                  SCHEDULE 2.01

                           REVOLVING LOAN COMMITMENTS
                               AND PRO RATA SHARES

                                         Revolving Loan           Pro Rata
           Lender                          Commitment               Share
           ------                          ---------                -----
                                        $                                  %
Bank of America, N.A.                     $21,000,000          28.767123288%
Fifth Third Bank                          $20,000,000          27.397260274%
U.S. Bank, N.A.                           $20,000,000          27.397260274%
Huntington National Bank                  $12,000,000          16.438356164%
                                          -----------          -------------

TOTAL:                                    $73,000,000              100%
                                          ===========              ====<PAGE>

                                                                  Exhibit 10.1

                                CREDIT AGREEMENT

                                  BY AND AMONG

                                HAWK CORPORATION,

                                       AND

             CERTAIN OF ITS DOMESTIC SUBSIDIARIES FROM TIME TO TIME

                                  PARTY HERETO,

                          AS BORROWERS AND GUARANTORS,

                     THE LENDING INSTITUTIONS PARTY HERETO,

                                   AS LENDERS,

                       J.P. MORGAN BUSINESS CREDIT CORP.,

                                   AS ADVISOR,

                              JPMORGAN CHASE BANK,

    AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT, ISSUING BANK AND ARRANGER,

                         PNC BANK, NATIONAL ASSOCIATION

                            AS A DOCUMENTATION AGENT

                                       AND

                               FLEET CAPITAL CORP.

                            AS A DOCUMENTATION AGENT

                          DATED AS OF OCTOBER 18, 2002

<PAGE>

                                CREDIT AGREEMENT

         CREDIT AGREEMENT dated as of October 18, 2002 among Hawk Corporation, a
Delaware corporation ("HAWK"), each of the other Borrowers (defined herein) from
time to time party hereto, as joint and several co-borrowers, the Lenders from
time to time party hereto, J.P. Morgan Business Credit Corp., as Advisor,
JPMorgan Chase Bank, as arranger, administrative agent and collateral agent for
the Lenders (in such capacities, together with its successors in such
capacities, the "AGENT") and as Issuing Bank (defined herein), PNC Bank,
National Association, as documentation agent (in such capacity, together with
its successors in such capacity, a "DOCUMENTATION AGENT"), and Fleet Capital
Corp., as documentation agent (in such capacity, together with its successors in
such capacity, a "DOCUMENTATION AGENT".

                             PRELIMINARY STATEMENTS

         (1) Unless otherwise defined herein, all capitalized terms used herein
and defined in Article 1 are used herein as so defined.

         (2) The Borrowers have applied to the Lenders for credit facilities in
the aggregate principal amount of $53,000,000 in order (i) to refinance existing
indebtedness and pay related expenses in connection therewith and expenses
related to the issuance of the Exchange Notes (defined below), (ii) to provide
for working capital, (iii) to, under certain circumstances, redeem Hawk's
Pre-Exchange Notes (defined below), and (iv) for general corporate purposes.

         (3) Subject to and upon the terms and conditions set forth herein, the
Lenders are willing to make available to the Borrowers the credit facilities
provided for herein.

         (4) Each of the Borrowers will be jointly and severally liable for all
Obligations made hereunder.

         NOW THEREFORE, it is agreed:

                                   ARTICLE 1

                          DEFINITIONS; ACCOUNTING TERMS

         SECTION 1.01 DEFINITIONS. As used in this Agreement the following terms
have the following meanings (terms defined in the singular to have a correlative
meaning when used in the plural and vice versa):

         "ACCEPTING LENDERS" has the meaning set forth in SECTION 2.18(d).

         "ACCOUNT" means any account receivable or right of Hawk or any of its
Domestic Subsidiaries to payment for goods sold or leased or for services
rendered, regardless of how such right is evidenced and whether or not it has
been earned by performance, whether secured or unsecured, now existing or
hereafter arising, and the proceeds thereof.

         "ACCOUNT DEBTOR" means each Person obligated in any way on or in
connection with an Account.

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         "ACQUISITION" means any transaction pursuant to which Hawk or any of
its Domestic Subsidiaries: (a) acquires equity securities (or warrants, options
or other rights to acquire such securities) of any Person (other than the
Borrowers or any Person that is then a Wholly-Owned Subsidiary of any Borrower),
pursuant to a solicitation of tenders therefor, or in one or more negotiated
block, market or other transactions not involving a tender offer, or a
combination of any of the foregoing; (b) makes any Person a Subsidiary of Hawk
or any of its Subsidiaries, or causes any such Person to be merged into Hawk or
any of its Subsidiaries, in any case pursuant to a merger, purchase of assets or
any reorganization providing for the delivery or issuance to the holders of such
Person's then outstanding securities, in exchange for such securities, of cash
or securities of Hawk or any of its Subsidiaries, or a combination thereof; or
(c) purchases all or substantially all of the business or assets of any Person.

         "ADDITIONAL COSTS" has the meaning set forth in SECTION 3.01(a).

         "ADJUSTED BASE RATE" means, for any day, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of
(a) the Prime Rate in effect on such day, and (b) the Federal Funds Rate in
effect on such day plus one-half of 1%. Any change in the Adjusted Base Rate due
to a change in the Prime Rate or the Federal Funds Rate shall be effective from
and including the effective date of such change in the Prime Rate or the Federal
Funds Rate, respectively.

         "ADJUSTED EURODOLLAR RATE" means, with respect to any borrowing for any
Eurodollar Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the Eurodollar Rate for such
Eurodollar Interest Period multiplied by (b) the Statutory Reserve Rate.

         "AFFECTED LOANS" has the meaning set forth in SECTION 3.04.

         "AFFECTED PARTY" has the meaning set forth in SECTION 3.01(a).

         "AFFECTED TYPE" has the meaning set forth in SECTION 3.04.

         "AFFILIATE" means any Person which directly or indirectly through one
or more intermediaries Controls, or is Controlled by, or is under common Control
with, any other Person.

         "AGENT" has the meaning set forth in the preamble to this Agreement.

         "AGREEMENT" means this Credit Agreement, as amended, restated,
supplemented or otherwise modified from time to time. References to Articles,
Sections, Exhibits, Schedules and the like refer to the Articles, Sections,
Exhibits, Schedules and the like of this Agreement unless otherwise indicated.

         "APPLICABLE COMMITMENT FEE RATE" means a rate of interest per year
(expressed in basis points), determined by the Agent in accordance with the
Pricing Grid, which shall initially be equal to thirty-seven and one-half (37.5)
basis points until changed for any Base Rate Margin Period after the earlier of
(i) the first Banking Day on which the Agent receives the audited financial
statements of Hawk and its Subsidiaries for the fiscal year ending December 31,
2002, or (ii) March 31, 2003. Anything in the Agreement to the contrary
notwithstanding, after the

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occurrence and during the continuance of any Event of Default, the Applicable
Commitment Fee Rate shall equal fifty (50) basis points.

         "APPLICABLE MARGIN" means the Base Rate Margin in respect of each Base
Rate Loan and the Eurodollar Margin in respect of each Eurodollar Loan.

         "ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee and accepted by the Agent in
accordance with SECTION 12.05 and in substantially the form of EXHIBIT G.

         "AUTHORIZATION LETTER" means the letter agreement executed by the
Borrowers in the form of EXHIBIT H.

         "AVAILABLE FUNDS" means all deposits in the Collateral Account which
have been made by 2:00 p.m. on a Banking Day, or such later time in any Banking
Day as the Agent shall have expressly consented to.

         "BANKING DAY" means any day on which commercial banks are not
authorized or are not required to be closed in New York, New York and whenever
such day relates to a Eurodollar Loan or notice with respect to any Eurodollar
Loan, a day on which dealings in Dollar deposits are also carried out in the
London interbank market.

         "BASE RATE LOAN" means any Loan hereunder bearing interest at a rate
based upon the Adjusted Base Rate.

         "BASE RATE MARGIN" means a rate of interest per year (expressed in
basis points) equal to:

         (a) For the period from the date hereof until the earlier of (i) the
first Banking Day on which the Agent receives the audited financial statements
of Hawk and its Subsidiaries for the fiscal year ending December 31, 2002 or
(ii) March 31, 2003, zero (0) basis points for Revolving Credit Loans other than
the Fixed Asset Advance, fifty (50) basis points for Revolving Credit Loans that
are part of the Fixed Asset Advance and fifty (50) basis points for any CapEx
Loans; and

         (b) For each Base Rate Margin Period thereafter, the Base Rate Margin
as set forth in the Pricing Grid for Revolving Credit Loans other than the Fixed
Asset Advance, Revolving Credit Loans that are part of the Fixed Asset Advance
and CapEx Loans, as applicable.

         Anything in the Agreement to the contrary notwithstanding, after the
occurrence and during the continuance of any Event of Default, interest shall
accrue on all Loans at the Default Rate.

         "BASE RATE MARGIN PERIOD" means each period beginning on the first
Banking Day of the month following the date on which the Agent receives the
financial statements pursuant to SECTION 6.08(c), accompanied by the Compliance
Certificate required to be delivered by Hawk pursuant to SECTION 6.08(d) for the
prior month and ending on the day immediately preceding the commencement of the
next Base Rate Margin Period.

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         "BORROWERS" means each of Hawk and its Domestic Subsidiaries party
hereto as Borrowers, jointly and severally, together with (i) any Domestic
Subsidiary of Hawk which becomes a Borrower hereunder pursuant to SECTION 6.17
and pursuant to such documentation as the Agent shall reasonably request and
(ii) all of their respective successors and assigns; and "BORROWER" means any
one of the Borrowers.

         "BORROWERS' AGENT" has the meaning set forth in SECTION 1.05.

         "BORROWING BASE" means the sum in Dollars of the following determined
as of the latest Borrowing Base Certificate delivered to the Agent:

         (a) up to 85% of the aggregate amount of Eligible Accounts; plus

         (b) up to the lesser of (i) the sum of (a) 65% of Eligible Inventory
which is not work-in process and (b) 25% of Eligible Inventory which is
work-in-process, up to a maximum of $4,000,000, (ii) 85% of the appraised net
recovery value of Eligible Inventory based on an inventory appraisal acceptable
to the Agent in its sole discretion and (iii) $15,000,000; plus

         (c) the Fixed Asset Availability;

in each case, as calculated by the Agent from time to time; PROVIDED, HOWEVER,
that the Agent, in its reasonable discretion, may on five (5) Banking Days'
prior written notice to the Borrowers' Agent from time to time adjust the
Borrowing Base by reducing the percentages of Eligible Accounts or Eligible
Inventory, establishing reserves, imposing maximum dollar amounts of collateral
availability or providing for other reductions in the amount of the Borrowing
Base as the Agent deems appropriate in its reasonable judgment from time to
time.

         "BORROWING BASE CERTIFICATE" means and includes the periodic Borrowing
Base Certificate delivered by the Borrowers' Agent to the Agent in substantially
the form of EXHIBIT F.

         "CAPEX ASSET" means equipment, fixed assets, real property or
improvements (including plant expansion) acquired on or after the Closing Date
which should, in accordance with GAAP, be reflected as additions to property,
plant or equipment on a Person's balance sheet.

         "CAPEX AVAILABILITY DATE" means the date on which the Agent has
received audited financial statements for Hawk and its Subsidiaries for the
Fiscal Year ending December 31, 2002 accompanied by the Compliance Certificate
required to be delivered for such Fiscal Year.

         "CAPEX COMMITMENTS" means the commitments of the Lenders to make CapEx
Loans to the Borrowers as in effect from time to time hereunder. The aggregate
amount of the CapEx Commitments shall initially equal $3,000,000, as may be
reduced pursuant to SECTION 2.10.

         "CAPEX COMMITMENT AMOUNT" means, with respect to each Lender, the
commitment of such Lender to make CapEx Loans hereunder, as such commitment may
be (a) reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to SECTION 12.05 and (b) reduced from time to time pursuant
to SECTION 2.10. The initial CapEx Commitment Amount of each Lender is the
amount set forth opposite such Lender's name as such Lender's "CapEx Commitment
Amount" on SCHEDULE 2.01 hereto or in the Assignment and

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Acceptance pursuant to which such Lender shall have assumed its Capital
Expenditure Commitment, as applicable.

         "CAPEX LOAN" means a Base Rate Loan or a Eurodollar Loan made pursuant
to SECTION 2.01(b).

         "CAPEX NOTE" means a promissory note of the Borrowers payable to the
order of any Lender, substantially in the form of EXHIBIT B (as such form may be
amended with the consent of the Agent), evidencing the Indebtedness of the
Borrowers to such Lender resulting from the CapEx Loans made by such Lender.

         "CAPITAL EXPENDITURES" means, for any period, the sum for Hawk and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP) of the aggregate amount of expenditures made or
liabilities incurred during such period (including the aggregate amount of
Capital Lease Obligations incurred during such period) to acquire or construct
fixed assets, plant and equipment (including renewals, improvements and
replacements, but excluding repairs) computed in accordance with GAAP; PROVIDED
that such term shall not include any such expenditures in connection with any
replacement or repair of property that has suffered a Casualty Event.

         "CAPITAL LEASE OBLIGATIONS" means, with respect to any Person,
obligations of such Person and its Subsidiaries under Capitalized Leases, and
for purposes hereof, the amount of any such obligation shall be the Capitalized
Rentals thereunder.

         "CAPITALIZED LEASE" means any lease of property, the obligation for
Rentals with respect to which is required to be capitalized on a consolidated or
combined balance sheet of the lessee and its subsidiaries or related entities in
accordance with GAAP.

         "CAPITALIZED RENTALS" of any Person means as of any date of
determination thereof, the amount at which the aggregate present value of future
Rentals due and to become due under all Capitalized Leases under which such
Person is a lessee would be reflected as a liability on a consolidated or
combined balance sheet of such Person in accordance with GAAP.

         "CAPITAL STOCK" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.

         "CASUALTY EVENT" means with respect to any property of any Person, any
loss of or damage to, or any condemnation or other taking of, such property for
which such Person receives insurance proceeds, proceeds of a condemnation award
or other compensation.

         "CHANGE OF CONTROL" means the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act) other than the Current Holder Group, Hawk or any
trustee or fiduciary holding securities under any employee benefit plan of Hawk
becomes, or obtains rights (whether by means of warrants, options or otherwise)
to become, the "beneficial owner," directly or indirectly, of more than 25% of
the outstanding Voting Stock or economic interests of Hawk; (b) the board of
directors of Hawk

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ceases to consist of a majority of Continuing Directors; (c) Hawk ceases to own,
directly or indirectly, 100% of the outstanding Capital Stock or other equity
interests of any other Borrower (other than in connection with a merger
expressly permitted under SECTION 7.03 hereof or a sale of assets expressly
permitted under SECTION 7.01 hereof); (d) the shareholders of Hawk approve a
merger or consolidation of Hawk with any other person, OTHER than a merger or
consolidation which would result in the voting securities of Hawk outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted or exchanged for voting securities of the
surviving or resulting entity) more than 75% of the combined voting power of the
voting securities of Hawk or such surviving or resulting entity outstanding
after such merger or consolidation; (e) the shareholders of Hawk approve a plan
of complete liquidation of Hawk or an agreement or agreements for the sale or
disposition by Hawk or all or substantially all of Hawk's assets; and/or (f) any
"Change of Control" or similar term as defined in any agreement or instrument
evidencing or governing Indebtedness of Hawk in an original aggregate principal
amount of at least $10,000,000. As used in this definition, "beneficial owner"
has the meaning provided in Rules 13(d)-3 and 13(d)-5 of the Exchange Act.

         "CLOSING DATE" means a date on or before November 30, 2002, unless
otherwise extended by the Lenders.

         "CODE" means the Internal Revenue Code of 1986, as amended from time to
time.

         "COLLATERAL" means, collectively, all of the property (including
Capital Stock and other beneficial interests) in which Liens are purported to be
granted pursuant to the Security Documents as security for all Obligations of
the Borrowers and the Guarantors hereunder.

         "COLLATERAL ACCOUNT" means, collectively, any account of Hawk or any of
its Domestic Subsidiaries maintained at the Agent or at another financial
institution reasonably acceptable to the Agent as an account into which all
proceeds of Collateral shall be deposited pursuant to any of the Security
Documents and pursuant to any Lock Box Agreement or Controlled Account Agreement
which Hawk or any of its Domestic Subsidiaries may enter into with the Agent or
at another financial institution reasonably acceptable to the Agent.

         "COLLATERAL AVAILABILITY" means, as of any date of determination
thereof, the amount by which (a) the Borrowing Base at such time exceeds (b) the
Total Exposure at such time.

         "COMMITMENTS" means each Revolving Credit Commitment and CapEx
Commitment, collectively.

         "COMPLIANCE CERTIFICATE" has the meaning set forth in SECTION 6.08(d).

         "CONTINUING DIRECTORS" means individuals who constituted the board of
directors of Hawk on the Closing Date together with any new directors whose
election or whose nomination for election by the equity holders of Hawk was
approved by a vote of at least two-thirds of the directors then still in office
who were directors on the Closing Date or whose election or nomination for
election was previously so approved.

         "CONTROL" and "CONTROLS" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the

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ownership of Voting Stock, by contract or holding or owning the power to vote,
or possessing the power to direct any right to vote, or as an officer, director,
employee or management consultant or other arrangement where there is the power
to direct or cause the direction of the management and policies of a Person; and
"CONTROLLED" means to be under the Control of another Person.

         "CONTROLLED ACCOUNT" means any deposit or other bank account maintained
by Hawk or any of its Domestic Subsidiaries with (a) the Agent or (b) any
financial institution other than the Agent that is the subject of a Controlled
Account Agreement in favor of the Agent.

         "CONTROLLED ACCOUNT AGREEMENT" means with respect to any deposit or
other bank account maintained by Hawk or any of its Domestic Subsidiaries, an
agreement among such Borrower or such Subsidiary, the depository institution at
which such account is maintained and the Agent, in form and substance
satisfactory to the Agent, that provides for the financial institution at which
such account is maintained to comply with instructions originated by the Agent
with respect to the funds from time to time on deposit in such account without
further consent of Hawk or such Subsidiary or any other Person.

         "CONTROLLED DISBURSEMENTS ACCOUNT" means, collectively, each account
identified on SCHEDULE III to the Security and Pledge Agreement and any
subsequent account of Hawk or any of its Domestic Subsidiaries with (a) the
Agent or (b) a financial institution other than the Agent and acceptable to the
Agent as a zero balance, cash management account pursuant to and under
controlled disbursement service agreements between Hawk or any of its Domestic
Subsidiaries and the Agent or such other financial institution and through which
all disbursements by Hawk or any of its Domestic Subsidiaries are made and
settled on a daily basis with no uninvested balance remaining overnight.

         "COPYRIGHTS" has the meaning set forth in the Security and Pledge
Agreement.

         "CURRENT HOLDER GROUP" means (i) those Persons who are officers and
directors of Hawk on the Closing Date, (ii) the spouses, heirs, legatees,
descendants and blood relatives to the third degree of consanguinity of any such
Person, (iii) the executors and administrators of the estate of any such Person
and any court-appointed guardian of any such Person and (iv) any trust, family
partnership, or similar investment entity for the benefit of any such Person
referred to in the foregoing clauses (i) and (ii).

         "DECLINING LENDERS" has the meaning set forth in SECTION 2.18(d).

         "DEFAULT" means any event, condition or act which, with the giving of
notice or lapse of time, or both, would become an Event of Default.

         "DEFAULT RATE" means (a) for any principal of any Loan, a rate per
annum equal to the Adjusted Base Rate plus two percent (2%) and (b) for any
other amount due or payable hereunder, a rate per annum equal to the Adjusted
Base Rate plus two percent (2%).

         "DESIGNATED FINANCIAL OFFICERS" has the meaning set forth in SECTION
1.05.

         "DISQUALIFIED STOCK" means with respect to any Person, any Capital
Stock of such Person that (i) is by its terms subject to mandatory redemption,
in whole or in part, pursuant to a sinking

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fund, scheduled redemption or similar provisions, at any time prior to the
Maturity Date; or (ii) otherwise is required to be repurchased or retired on a
scheduled date or dates, upon the occurrence of any event or circumstance, at
the option of the holder or holders thereof, or otherwise, at any time prior to
the Maturity Date, other than any such repurchase or retirement occasioned by a
"change of control" or similar event.

         "DOCUMENTATION AGENT" has the meaning set forth in the preamble to this
Agreement.

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

         "DOMESTIC SUBSIDIARY" means any Subsidiary other than a Foreign
Subsidiary.

         "EBITDA" means for any fiscal period and in respect of any Person, the
sum of (a) the net income of such Person for such period computed in accordance
with GAAP, plus, without duplication, (b) the sum of, in each case as such item
was included in the computation of such Person's net income for such period (i)
the total interest expense (including capitalized interest, interest in respect
of Capital Lease Obligations, net costs under Interest Rate Protection
Agreements and amortization of deferred financing costs), of such Person for
such period as reported on such Person's financial statements for such period,
plus (ii) the income tax expense of such Person for such period as reported on
such Person's financial statements for such period, plus (iii) the amount
reported on the financial statements of such Person as the depreciation of the
assets of such Person for such period computed in accordance with GAAP, plus
(iv) the amount reported on the financial statements of such Person as the
amortization of intangible assets of such Person for such period computed in
accordance with GAAP and amortization of the additional asset realized as a
result of the payment of the consent payment in connection with the Exchange
Notes, plus (v) the amount reported on the financial statements of such Person
as the write-down of intangible assets of such Person that consist of goodwill
for such period computed in accordance with GAAP, plus (vi) all (1) cash and
non-cash extraordinary or non-operating expenses, (2) non-cash non-recurring
losses (3) non-cash gains and losses in respect of unrealized foreign exchange
obligations of such Person for such period computed in accordance with GAAP (but
excluding, in each case, any non-cash charge to the extent it represents an
accrual of a reserve, cash charges in any future period or amortization of any
pre-paid cash expense), minus (vii) all cash and non-cash extraordinary or
non-operating income and gains of such Person for such period.

         "EFFECTIVE DATE" means the date on which all conditions under ARTICLE 4
are fully satisfied or waived.

         "ELIGIBLE ACCOUNTS" means those domestic Accounts owing to any
Borrower, now existing or hereafter arising, each of which Accounts met
customary criteria for eligibility as determined by the Agent in its reasonable
discretion, and continues to meet the same until it is collected in full.
Without limiting the Agent's discretion to determine that Accounts are not
Eligible Accounts, Accounts not meeting the following specifications shall not
be Eligible Accounts:

         (a) An invoice (in form and substance reasonably satisfactory to the
Agent) with respect to such Account has been sent to the applicable Account
Debtor and bears an invoice date contemporaneous with or later than the date of
the sale of goods or rendering of services giving rise to such invoice;

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         (b) The Account is due and payable in full, is not subject to any bill
and hold arrangement, and not more than ninety (90) days have elapsed since the
invoice date of such Account (PROVIDED that (i) with respect to Accounts of any
Account Debtor approved by the Agent and the Lenders in writing arising during
the period from October 1st through June 30th of each year that by their terms
are due and payable in full within ninety (90) days after the sale of goods or
the rendering of services giving rise to such Account, such Accounts shall be
considered Eligible Accounts and PROVIDED FURTHER that (A) not more than the
thirty (30) days have elapsed since the due date with respect to such Account,
and (B) no more than $3,000,000 of such Accounts shall be considered Eligible
Accounts by operation of this clause (i) in the aggregate; and (ii) the Lenders
may from time to time, in their reasonable discretion, elect to treat certain
other Accounts that are the subject of normal seasonal dating terms programs as
Eligible Accounts; PROVIDED that in the case of clauses (i) and (ii) such
Accounts are otherwise Eligible Accounts);

         (c) The Account arose from the sale of goods or the provision of
services to the Account Debtor by a Borrower and not by any other Person (in
whole or in part); such services or goods have been performed or provided in
full; the Account is evidenced by such invoices, shipping documents or other
instruments ordinarily used in the trade as shall be reasonably satisfactory to
the Agent and no rejection or dispute has occurred with respect to such Account;

         (d) The Account Debtor is organized under the laws of the United States
or any political subdivision thereof and has its chief executive office in the
United States, unless either (1) a payment guaranty for such Account has been
submitted from a reputable U.S. domiciled corporation, and such guaranty is
acceptable in form and substance to the Lenders and their counsel, or (2) a
letter of credit has been submitted which secures such Account and is otherwise
acceptable to the Lenders and their counsel;

         (e) The Account is not subject to any assignment, claim, lien or
security interest, except in favor of the Agent and the Lenders;

         (f) The Account is a valid and legally enforceable obligation of the
Account Debtor and is not subject to any claim for credit, defense, offset,
deduction, chargeback, counterclaim or adjustment by the Account Debtor, other
than any discount allowed for prompt payment;

         (g) The Account arose in the ordinary course of business of the
Borrowers and no notice of the bankruptcy, insolvency, failure, or suspension or
termination of business of the Account Debtor has been received by the
Borrowers;

         (h) The Account Debtor is not an Affiliate of the Borrowers or any of
their Subsidiaries or a supplier (or an Affiliate of a supplier) of goods or
services to the Borrowers or any of their Subsidiaries;

         (i) The Account otherwise conforms to all representations, warranties
and other provisions of this Agreement relating to Accounts;

         (j) The Account Debtor is not an individual or Governmental Authority;

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         (k) The Account is denominated and payable only in United States
dollars in the United States;

         (l) The Account is not evidenced by a promissory note, warrant or other
instrument or chattel paper;

         (m) The Account is subject to an enforceable, perfected, first priority
Lien in favor of the Agent;

         (n) The Account does not by its terms or the terms of any related
documentation require the consent of the Account Debtor to the transfer, sale or
assignment of such Account;

         (o) The Account does not include fees charged for services or goods
that exceed limitations imposed by applicable law or regulation;

         (p) The Account Debtor is not the holder of any indebtedness or other
obligations due from or payable by any of the Borrowers;

         (q) The Account is not due from an Account Debtor for which more than
50% (subject to periodic adjustment by the Agent) of the total Accounts due from
such Account Debtor fail to meet the other eligibility criteria set forth in
this definition;

         (r) The Agent in its reasonable discretion has not deemed the credit
worthiness of the Account or Account Debtor unsatisfactory; and

         (s) The Account has not been determined by the Agent in its reasonable
discretion to be unusual or not customary for the Borrowers' type of business or
otherwise ineligible for inclusion in the Borrowing Base.

         For purposes of determining the Borrowing Base at any time there shall
be excluded from Eligible Accounts, the portion, if any, of the aggregate amount
of Accounts owing from any single Account Debtor that exceeds 20% of the
aggregate balance of all Accounts of the Borrowers at such time.

         "ELIGIBLE ASSIGNEE" means: (a) a Lender; (b) an Affiliate of a Lender;
(c) a commercial bank organized under the laws of the United States, or any
State thereof, and having total assets in excess of $1,000,000,000; (d) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof, and having total assets in excess of
$1,000,000,000; (e) a commercial bank organized under the laws of any other
country that is a member of the OECD or has concluded special lending
arrangements with the International Monetary Fund associated with its General
Arrangements to Borrow or of the Cayman Islands, or a political subdivision of
any such country, and having total assets in excess of $1,000,000,000, so long
as such bank is acting through a branch or agency located in the United States;
(f) the central bank of any country that is a member of the OECD; (g) a finance
company, insurance company or other financial institution or fund (whether a
corporation, partnership, trust or other entity) that is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary course of
its business and having total assets in excess of $1,000,000,000; and (h) any
other Person

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approved by the Agent; PROVIDED that none of the Borrowers or any of their
Affiliates shall qualify as an Eligible Assignee under this definition.

         "ELIGIBLE INVENTORY" means such raw material, work in process and
finished goods inventory of the Borrowers, valued at the lesser of cost or fair
market value and in accordance with GAAP, as the Agent in its reasonable
discretion determines to be Eligible Inventory. Without limiting the Agent's
discretion to determine that inventory is not Eligible Inventory, inventory that
meets any of the following criteria shall not be Eligible Inventory:

         (a) slow moving, obsolete or unmerchantable inventory, as reasonably
determined by the Agent;

         (b) inventory located outside of the United States;

         (c) inventory that is not located at premises owned or leased by a
Borrower; PROVIDED that, if the aggregate amount of inventory located at any
location leased by a Borrower exceeds $50,000 at such location, unless the Agent
has received a Landlord's Waiver and Consent, in form and substance satisfactory
to the Agent, the Agent shall have the right, in its discretion, to (x) exclude
all or any portion of the inventory located at such location from Eligible
Inventory and/or (y) establish reserves under the Borrowing Base in respect of
such inventory;

         (d) spare parts, packaging and shipping materials, supplies, returned,
damaged or defective inventory;

         (e) inventory that is subject to any Lien, except Liens in favor of the
Agent;

         (f) inventory that is not subject to an enforceable, perfected, first
priority Lien in favor of the Agent;

         (g) inventory held for return to vendors;

         (h) goods held by any Borrower on consignment from another Person;

         (i) inventory that is in transit;

         (j) inventory that is not adequately insured; or

         (k) inventory that the Agent, in its good faith discretion, has deemed
to be otherwise ineligible.

         "ENVIRONMENTAL LAW" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Sections 9601-9657, as
amended by the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No.
99-499, 100 Stat. 1613 (October 17, 1986), the Resource Conservation and
Recovery Act, 42 U.S.C. Sections 6991-6991i, as amended by the Superfund
Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499, 100 Stat. 1613
(October 17, 1986), as the same may be amended from time to time, and any other
presently existing or hereafter enacted or decided federal, state or local
statutory or common laws relating to pollution or protection of the environment,
including without limitation, any common law of nuisance or trespass, and any
law or regulation relating to emissions, discharges, releases or

<PAGE>

threatened release of pollutants, contaminants or chemicals or industrial, toxic
or hazardous substances or wastes into the environment (including without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants, contaminants
or chemicals, or industrial, toxic or hazardous substances or wastes.

         "EQUITY RIGHTS" means, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including any stockholders' or voting trust agreements) for the issuance or
sale of securities or securities convertible into any additional shares of
capital stock of any class, or partnership or other ownership interests of any
type in such Person.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.

         "ERISA AFFILIATE" means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as Hawk or any of its Subsidiaries or is under
common control (within the meaning of Section 414(e) of the Code) with Hawk or
any of its Subsidiaries.

         "EURODOLLAR INTEREST PAYMENT DATE" means with respect to any Eurodollar
Loan the last day of the Eurodollar Interest Period applicable to such
Eurodollar Loan.

         "EURODOLLAR INTEREST PERIOD" means the period of time commencing on the
day a Eurodollar Rate is made applicable to a Loan Tranche and ending on the
numerically corresponding day in the first, second or third calendar month
thereafter, as the Borrowers may select pursuant to SECTIONS 2.07 and SECTION
2.08; PROVIDED that each such Eurodollar Interest Period which commences on the
last Banking Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Banking Day of the appropriate calendar month.

         "EURODOLLAR LOAN" means any Loan Tranche the interest rate for which is
determined on the basis of the Eurodollar Rate.

         "EURODOLLAR MARGIN" means a rate of interest per year (expressed in
basis points) equal to:

         (a) For the period from the date hereof until the earlier of (i) the
first Banking Day on which the Agent receives the audited financial statements
for the fiscal year ended December 31, 2002 or (ii) March 31, 2003, two hundred
and fifty (250) basis points for Revolving Credit Loans other than the Fixed
Asset Advance, three hundred (300) basis points for Revolving Credit Loans that
are part of the Fixed Asset Advance and three hundred (300) basis points for
CapEx Loans; and

         (b) For each Eurodollar Margin Period thereafter, the Eurodollar Margin
as set forth in the Pricing Grid for Revolving Credit Loans other than the Fixed
Asset Advance, Revolving Credit Loans that are part of the Fixed Asset Advance
and CapEx Loans, as applicable.

<PAGE>

         To the extent that a Eurodollar Margin Period commences during the
pendency of a Eurodollar Interest Period for an existing Eurodollar Loan, the
Eurodollar Margin shall remain the same for the remainder of the Eurodollar
Interest Period for such existing Eurodollar Loan. Anything in this Agreement to
the contrary notwithstanding, after the occurrence and during the continuance of
any Event of Default, interest shall accrue on all Loans at the Default Rate.

         "EURODOLLAR MARGIN PERIOD" means each period beginning on the first
Banking Day of the month following the date on which the Agent receives the
financial statements pursuant to SECTION 6.08(c), accompanied by the Compliance
Certificate required to be delivered by Hawk pursuant to SECTION 6.08(d) for the
prior month and ending on the day immediately preceding the commencement of the
next Eurodollar Margin Period.

         "EURODOLLAR RATE" means, with respect to any Eurodollar Loan for any
Eurodollar Interest Period, the rate appearing on Page 3750 of the Telerate
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Agent from time to time for purposes of providing quotations
of interest rates applicable to dollar deposits in the London interbank market)
at approximately 11:00 a.m., London time, two Banking Days prior to the
commencement of such Eurodollar Interest Period, as the rate for dollar deposits
with a maturity comparable to such Eurodollar Interest Period. In the event that
such rate is not available at such time for any reason, then the Eurodollar Rate
with respect to such Eurodollar Loan for such Eurodollar Interest Period shall
be the rate at which Dollar deposits of $5,000,000 and for a maturity comparable
to such Eurodollar Interest Period are offered by the Agent's principal London
office in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Banking Days prior to the
commencement of such Eurodollar Interest Period.

         "EVENT OF DEFAULT" has the meaning given such term in SECTION 9.01.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

         "EXCHANGE NOTES" has the meaning given such term in SECTION 4.01(w).

         "EXCLUDED TAXES" means, with respect to any and all payments to the
Agent, any Lender or any recipient of any payment to be made by or on account of
any obligation of Hawk or any of its Subsidiaries under the Facility Documents,
net income taxes, branch profits taxes, franchise and excise taxes (to the
extent imposed in lieu of net income taxes) and all interest, penalties and
liabilities with respect thereto, imposed on the Agent or any Lender.

         "FACILITY DOCUMENTS" means this Credit Agreement, the Notes, the
Authorization Letter, all Letter of Credit documents, all Security Documents,
all foreign exchange contracts and Interest Rate Protection Agreements between
any of the Borrowers or Guarantors and the Agent or any of the Lenders, and any
other agreement, document or instrument between any of the Borrowers or
Guarantors and the Agent or the Lenders that is executed or delivered pursuant
to or in connection with this Agreement.

         "FEDERAL FUNDS RATE" means, for any day, the rate per annum (expressed
on a 360 day basis of calculation) equal to the weighted average of the rates on
overnight federal funds

<PAGE>

transactions as published by the Federal Reserve Bank of New York for such day
(or for any day that is not a Banking Day, for the immediately preceding Banking
Day).

         "FIRST PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Security Document, that such Lien,
subject to Permitted Liens (other than Permitted Liens described in SECTION
7.05(f)), is the most senior Lien to which such Collateral is subject.

         "FISCAL MONTH" means each fiscal month of Hawk.

         "FISCAL QUARTER" means each of the fiscal three month periods of Hawk
commencing on the first day of the Fiscal Year and on the first day of each
subsequent fiscal three month period.

         "FISCAL YEAR" means the fiscal year period of Hawk, each of which shall
end on the 31st day of December of each year.

         "FIXED ASSET ADVANCE" means the principal amount of Revolving Credit
Loans, which shall be drawn fully on the Closing Date, attributable to the Fixed
Asset Availability.

         "FIXED ASSET AVAILABILITY" means the lesser of (a) 81% of the sum of
(i) the net forced liquidation value of the machinery and equipment of Hawk and
its Domestic Subsidiaries, based on an appraisal acceptable to the Agent in its
discretion and (ii) the net liquidation value of the real property owned by Hawk
and its Domestic Subsidiaries located in the United States, based on an
appraisal acceptable to the Agent in its discretion and (b) $13,000,000;
PROVIDED, HOWEVER, that as of the last day of each Fiscal Month, beginning with
March 2003, the Fixed Asset Availability will be reduced by an amount (the
"FIXED ASSET AVAILABILITY REDUCTION AMOUNT") equal to the amount which would
fully amortize the principal amount of the Fixed Asset Advance as of the Closing
Date in eighty four (84) equal consecutive monthly installments.

         "FIXED CHARGE COVERAGE RATIO" means, as of any date, the ratio of (a)
consolidated EBITDA of Hawk and its Subsidiaries for the period of twelve (12)
Fiscal Months most recently ended prior to such date (determined on a
consolidated basis without duplication in accordance with GAAP), to (b) the sum
for Hawk and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of (i) the aggregate amount of Interest
Expense for such period, (ii) the aggregate amount of regularly scheduled
payments of principal in respect of long-term Indebtedness for borrowed money
paid or required to be paid during such period (PROVIDED, HOWEVER, that for each
of the periods of twelve Fiscal Months ending March 31, 2003, June 30, 2003 and
September 30, 2003, the amount included in clause (ii) shall be deemed to be
$1,238,000, and for the period of twelve Fiscal Months ending December 31, 2003,
the amount included in clause (ii) shall be deemed to be $1,548,000), (iii) the
aggregate amount of cash dividends and distributions paid by Hawk during such
period, (iv) the aggregate amount of income tax expense paid in cash during such
period, and (v) the aggregate amount of Non-Financed Capital Expenditures made
during such period.

         "FOREIGN EXCHANGE OBLIGATIONS" means all obligations of the Borrowers
or their Subsidiaries pursuant to and under any and all foreign exchange
contracts and agreements to which any Borrower or any Subsidiary is a party as
of any date of computation as if such foreign

<PAGE>

exchange agreement were to be terminated or declared to be in default on such
date (after giving effect to any netting provisions).

         "FOREIGN SUBSIDIARY" means any Subsidiary of Hawk (i) that is not
organized under the laws of the United States or any political subdivision
thereof or (ii) substantially all of whose assets or property are located
outside the United States (or substantially all of whose business is conducted
outside the United States) or (iii) substantially all of whose assets consist of
Foreign Subsidiaries.

         "FUNDED INDEBTEDNESS" means, in respect of any Person, (a) all
Indebtedness of such Person for borrowed money or which has been incurred by
such Person in connection with the acquisition of assets (excluding leases
defined as "operating leases" under GAAP), (b) all payments in respect of item
(a) above that were required to be made within one year prior to the date of any
determination of Funded Indebtedness, if the obligation to make such payments
constitutes a current liability of the obligor under GAAP, (c) all Capitalized
Rentals of such Person and (d) any and all other interest-bearing Indebtedness
for borrowed money (other than undrawn Letters of Credit).

         "GAAP" means, subject to SECTION 1.02, generally accepted accounting
principles in the United States of America as in effect from time to time,
applied on a basis consistent with those used in the preparation of the
financial statements referred to in SECTION 5.05.

         "GOVERNMENTAL AUTHORITY" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government and the National Association of Insurance Commissioners.

         "GUARANTEED OBLIGATIONS" has the meaning set forth in SECTION 10.01.

         "GUARANTIES" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect guaranteeing,
any Indebtedness, dividend or other obligation of any other Person (the "PRIMARY
OBLIGOR") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (a) to purchase such Indebtedness or obligation or
any property constituting security therefor, (b) to advance or supply funds (i)
for the purchase or payment of such Indebtedness or obligation or (ii) to
maintain working capital or other balance sheet conditions or otherwise to
advance or make available funds for the purchase or payment of such Indebtedness
or obligation, (c) to lease property or to purchase securities or other property
or services primarily for the purpose of assuring the owner of such Indebtedness
or obligation of the ability of the primary obligor to make payment of the
Indebtedness or obligation or (d) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this Agreement, a
Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness which has been
guaranteed, and a Guaranty in respect of any other obligation or liability or
any dividend shall be deemed to be Indebtedness equal to the maximum aggregate
amount of such obligation, liability or dividend.

<PAGE>

         "GUARANTORS" means any direct or indirect Subsidiary of Hawk that is
not a Borrower hereunder and who from time to time agrees to guaranty the
Obligations of the Borrowers hereunder pursuant to ARTICLE 10 hereof by
executing and delivering to the Agent a counterpart signature page to this
Agreement, or such other documentation acceptable to the Agent, together with
all of their successors and assigns; PROVIDED, HOWEVER, that no Foreign
Subsidiary of Hawk will be required to guaranty the Obligations of the Borrowers
hereunder except to the extent required by SECTION 6.17(b).

         "HARD COSTS" means, with respect to any CapEx Asset consisting of
equipment, the invoice price for the item less all taxes, shipping costs to
install and other incidental charges, and with respect to any CapEx Asset
consisting of improvements to real property, the construction costs of such
improvements, including materials and labor, each as determined by the Agent in
its sole discretion.

         "HAWK" has the meaning set forth in the preamble hereto.

         "HAZARDOUS MATERIALS" means any contaminants, hazardous substances,
regulated substances, or hazardous wastes which may be the subject of liability
pursuant to any Environmental Law.

         "INDEBTEDNESS" of any Person means and includes all obligations of such
Person which in accordance with GAAP shall be classified upon a balance sheet of
such Person as liabilities of such Person and in any event shall include all (a)
obligations of such Person for borrowed money or which have been incurred in
connection with the acquisition of property, (b) obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments, (c) all
obligations and liabilities, contingent or otherwise, of such Person in respect
of letters of credit, acceptances and similar facilities, (d) obligations
secured by any Lien upon property owned by such Person, even though such Person
has not assumed or become liable for the payment of such obligations, (e)
obligations created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person,
notwithstanding the fact that the rights and remedies of the seller, lender or
lessor under such agreement in the event of default are limited to repossession
or sale of property, (f) Capitalized Rentals, (g) Guaranties of obligations of
others of the character referred to in this definition, (h) Interest Rate
Protection Obligations, (i) Foreign Exchange Obligations and (j) obligations in
respect of, and valued at the higher of its stated or liquidation value, all
Disqualified Stock.

         "INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.

         "INTEREST EXPENSE" means, for any period, the sum, without duplication,
for Hawk and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all interest in
respect of Indebtedness paid in cash during such period, but excluding
capitalized debt acquisition costs (including capitalized fees and expenses
related to this Agreement) plus (b) the net amounts paid (or minus the net
amounts received) in cash in respect of Foreign Exchange Obligations or Interest
Rate Protection Agreements during such period excluding reimbursement of legal
fees and other similar transaction costs and excluding payments required by
reason of the early termination of Foreign Exchange Obligations or Interest Rate
Protection Agreements in effect on the date hereof plus (c) all fees, including
letter of credit fees and expenses (but excluding reimbursement of legal fees
and up-front fees and expenses paid on

<PAGE>

or prior to the Closing Date in connection with this Agreement and the Facility
Documents), paid in cash pursuant to this Agreement during such period.

         "INTEREST RATE PROTECTION AGREEMENT" means any interest rate cap, swap,
collar or other similar protection agreement, foreign currency exchange
agreement, commodity price protection agreement or other interest or currency
exchange rate or commodity price hedging arrangement to which Hawk or any of its
Subsidiaries is a party or for which any such Person is liable.

         "INTEREST RATE PROTECTION OBLIGATION" means obligations of Hawk or any
of its Subsidiaries pursuant to and under any and all Interest Rate Protection
Agreements to which any such Person is a party as of any date of computation as
if such Interest Rate Protection Agreement were to be terminated or declared to
be in default on such date (after giving effect to any netting provisions).

         "IP COLLATERAL" means, collectively, the Copyrights, Patents,
Trademarks and other Collateral relating to intellectual property rights of the
Borrowers or the Guarantors under the Security Documents.

         "ISSUING BANK" has the meaning set forth in SECTION 2.01(c).

         "JPMORGAN" means JPMorgan Chase Bank, a New York banking corporation.

         "JPMORGAN CHASE OFFICE" means the office of the Agent at One Chase
Square CS-5, Rochester, New York, 14643.

         "LANDLORD'S WAIVER AND CONSENT" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, in form and substance acceptable to the Agent in its
sole discretion.

         "LEASEHOLD PROPERTY" means any leasehold interest of Hawk or any of its
Subsidiaries as lessee under any lease of real property.

         "LENDERS" means, collectively, each entity identified as "Lender" on
the signature pages hereto and each Person, if any, that shall become a Lender
hereunder pursuant to SECTION 12.05 other than any Person that ceases to be a
party hereto pursuant to an Assignment and Acceptance.

         "LENDING OFFICE" means, for each Lender and for each type of Loan, the
lending office of such Lender (or of an Affiliate of such Lender) designated by
such Lender on SCHEDULE 2.01 (or, if applicable, its Assignment and Acceptance),
as the lending office of such Lender for such type of Loan, or such other office
of such Lender (or of an Affiliate of such Lender) as such Lender may from time
to time specify to the Agent and the Borrowers as the office by which such
Lender's Loans of such type are to be made and maintained.

         "LETTER OF CREDIT" means any letter of credit issued from time to time
by JPMorgan, in its capacity as Issuing Bank, for any Borrower as the account
party.

         "LETTER OF CREDIT EXPOSURE" means the maximum amount available to be
drawn under all outstanding Letters of Credit (converted to Dollars based on the
exchange rate in effect at the time the Letter of Credit Exposure is
determined).

<PAGE>

         "LETTER OF CREDIT OUTSTANDINGS" means at any time the sum of (a) the
Letter of Credit Exposure, assuming compliance with all requirements for drawing
referred to therein plus (b) the aggregate amount of drawings under Letters of
Credit that have not been reimbursed.

         "LETTER OF CREDIT SUBLIMIT" means $5,000,000.

         "LEVERAGE RATIO" means, as of any date, the ratio of (a) the aggregate
amount of Funded Indebtedness (including all Loans made hereunder) of Hawk and
its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP) as of such date to (b) EBITDA of Hawk and its Subsidiaries
on a consolidated basis for the period of twelve (12) consecutive Fiscal Months
most recently ended.

         "LIEN" means any interest in property securing an obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute, or contract, and including but not
limited to the security interest or lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting property. For the purposes of this
Agreement, Hawk and its Subsidiaries shall be deemed to be the owner of any
property which they have acquired or hold subject to a conditional sale
agreement, Capitalized Lease or other arrangement pursuant to which title to the
property has been retained by or vested in some other Person for security
purposes and such retention or vesting shall constitute a Lien.

         "LOAN TRANCHE" means any portion of the Loans outstanding as Base Rate
Loans or any portion of the Loans outstanding as a Eurodollar Loan having a
particular Eurodollar Interest Period. Each Eurodollar Loan outstanding having a
different Eurodollar Interest Period shall constitute a separate Loan Tranche,
and all Base Rate Loans shall constitute a single Loan Tranche.

         "LOANS" means and includes the Revolving Credit Loans, the CapEx Loans
and the Reimbursement Obligations and "LOAN" means any of the Loans.

         "LOCK BOX" means a post office box established by the Agent or such
other financial institutions as shall be acceptable to the Agent pursuant to a
Lock Box Agreement with Hawk or any of its Domestic Subsidiaries into which
Account Debtors of Hawk and its Domestic Subsidiaries are directed to remit
payments.

         "LOCK BOX AGREEMENT" means an agreement pursuant to which the Agent or
another financial institution acceptable to the Agent maintains a post office
box into which Account Debtors of Hawk and its Domestic Subsidiaries remit
payments of Accounts and which payments are deposited into a Controlled Account.

         "MATERIAL ADVERSE EFFECT" means: (a) a material adverse effect on the
business, operations or condition (financial or otherwise) of Hawk and its
Subsidiaries taken as a whole; (b) a material adverse effect on the ability of
any Borrower or any Guarantor to perform or comply with any of the terms and
conditions contained herein or in any other Facility Document; (c) a material

<PAGE>

adverse effect on the legality, validity, binding effect, enforceability or
admissibility into evidence of any Facility Document or the ability of the Agent
or the Lenders to enforce any rights or remedies under or in connection with any
Facility Document; or (d) a material adverse effect on the validity, perfection
or priority of any Lien in favor of the Agent and the Lenders on any of the
Collateral.

         "MATERIAL INDEBTEDNESS" means (i) Indebtedness (other than the Loans or
Letters of Credit) or (ii) obligations in respect of one or more Interest Rate
Protection Agreements, in the case of (i) and (ii) of any one or more of Hawk
and its Subsidiaries in an aggregate principal amount exceeding $1,000,000. For
purposes of determining Material Indebtedness, the "principal amount" of the
obligations of any Person in respect of any Foreign Exchange Obligation or
Interest Rate Protection Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that such Person would be
required to pay if such Foreign Exchange Obligation or Interest Rate Protection
Agreement were terminated at such time.

         "MATURITY DATE" means the earlier of (i) the Scheduled Maturity Date,
or (ii) the date which is one-hundred twenty (120) days prior to the maturity
date of the Exchange Notes.

         "MINIMUM BORROWING AMOUNT" means: (i) for Revolving Loans that are
Eurodollar Loans, $500,000 and (ii) for CapEx Loans that are (A) Base Rate
Loans, $250,000, or (B) Eurodollar Loans, $500,000.

         "MORTGAGE" means each of the leasehold mortgages and fee mortgages
executed in connection with this Agreement, as amended, modified or supplemented
from time to time.
         "MULTIEMPLOYER PLAN" means a Plan defined as such in Section 3(37) of
ERISA to which contributions have been made by Hawk or any of its Subsidiaries
or any ERISA Affiliate and which is covered by Title IV of ERISA.

         "NET CASH PAYMENTS" means:

         (a) with respect to any Casualty Event, the aggregate amount of
proceeds of insurance, condemnation awards and other compensation received by
Hawk or any of its Domestic Subsidiaries in respect of such Casualty Event net
of (A) reasonable expenses incurred by Hawk and its Domestic Subsidiaries in
connection therewith and (B) contractually required repayments of Indebtedness
to the extent secured by a Permitted Lien on such property and any income and
transfer taxes paid by Hawk or any of its Domestic Subsidiaries in respect of
such Casualty Event;

         (b) with respect to any sale or other disposition of assets, the
aggregate amount of all cash payments received by Hawk or any of its Domestic
Subsidiaries directly or indirectly in connection with such sale or other
disposition, whether at the time of such sale or disposition or thereafter under
deferred payment arrangements, including all cash payments received in respect
of investments entered into or received in connection with any such sale or
other disposition of assets; PROVIDED that

                  (i) Net Cash Payments shall be net of (A) the amount of any
         legal, title, transfer and recording tax expenses, commissions and
         other fees and expenses paid by Hawk or any of its Domestic
         Subsidiaries in connection with such sale or other disposition

<PAGE>

         and (B) any federal, state and local income or other taxes paid by Hawk
         or any of its Subsidiaries as a result of such sale or other
         disposition; and

                  (ii) Net Cash Payments shall be net of any repayments by Hawk
         or any of its Domestic Subsidiaries of Indebtedness to the extent that
         (A) such Indebtedness is secured by a Permitted Lien on the property
         that is the subject of such sale or other disposition and (B) the
         transferee of (or holder of such Permitted Lien on) such property
         requires that such Indebtedness be repaid as a condition to the
         purchase of such property; and

         (c) with respect to any sale of debt or equity securities or any
incurrence of Indebtedness, the aggregate amount of all cash proceeds received
by Hawk and its Domestic Subsidiaries directly or indirectly in connection with
such sale or incurrence, (and, in the case of a sale, whether at the time of
such sale or thereafter under deferred payment arrangements, including all cash
payments received in respect of investments entered into or received in
connection with any such sale), less all reasonable legal, underwriting, and
similar fees and expenses incurred in connection therewith.

         "NON-FINANCED CAPITAL EXPENDITURES" means Capital Expenditures paid in
cash and not financed with Indebtedness for borrowed money; PROVIDED that
Capital Expenditures financed with the proceeds of Revolving Credit Loans shall
be deemed to constitute "Non-Financed Capital Expenditures" for purposes of this
Agreement.

         "NON-MATERIAL SUBSIDIARY" means any Subsidiary of Hawk that

         (a) accounted for no more than two and one half percent (2.5%) of
consolidated revenues of Hawk and its Subsidiaries and two and one half percent
(2.5%) of consolidated earnings of Hawk and its Subsidiaries before interest and
taxes, in each case for the four consecutive Fiscal Quarters of Hawk ending on
the last day of the most recently completed Fiscal Quarter with respect to
which, pursuant to SECTION 6.08(b), financial statements have been, or are
required to have been, delivered by Hawk to the Agent, and

         (b) has assets which represent no more than two and one half percent
(2.5%) of the consolidated assets of Hawk and its Subsidiaries as of the last
day of the last Fiscal Quarter of the most recently completed Fiscal Quarter
with respect to which, pursuant to SECTION 6.08(b), financial statements have
been, or are required to have been, delivered by Hawk to the Agent,

to the extent that all Subsidiaries constituting Non-Material Subsidiaries do
not

                  (i) account in the aggregate for more than five percent (5%)
         of consolidated revenues of Hawk and its Subsidiaries or five percent
         (5%) of consolidated earnings of Hawk and its Subsidiaries before
         interest and taxes, in each case for the four consecutive Fiscal
         Quarters of Hawk ending on the last day of the most recently completed
         Fiscal Quarter with respect to which, pursuant to SECTION 6.08(b),
         financial statements have been, or are required to have been, delivered
         by Hawk to the Agent, or

                  (ii) have assets which represent more than five percent (5%)
         of the consolidated assets of Hawk and its Subsidiaries as of the last
         day of the last Fiscal Quarter of the most recently completed Fiscal
         Quarter with respect to which, pursuant to SECTION 6.08(b),

<PAGE>

         financial statements have been, or are required to have been, delivered
         by Hawk to the Agent.

         "NOTES" means and includes the Revolving Credit Notes and the CapEx
Notes; and "NOTE" means any one of the Notes.

         "OBLIGATIONS" means all obligations of the Borrowers and the Guarantors
to the Lenders and the Agent under this Agreement or any of the other Facility
Documents, including, without limitation, all indebtedness evidenced by the
Notes, all obligations under, or in respect of the Letters of Credit and all
Reimbursement Obligations, and all Foreign Exchange Obligations and Interest
Rate Protection Obligations of the Borrowers to the Lenders or the Agent,
together with all accrued and unpaid interest (including, without limitation,
all interest that, but for the filing of a petition in, or commencement of a
case, proceeding or other action relating to, bankruptcy, insolvency or
reorganization of any Borrower or any of its Subsidiaries, would have accrued,
whether or not a claim is allowed against such Borrower or Subsidiary for such
interest in the related bankruptcy proceeding), fees, expenses and charges
payable by Borrowers or the Guarantors hereunder or under any of the other
Facility Documents.

         "OECD" means the Organization for Economic Cooperation and Development.

         "OTHER TAXES" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Facility Document or from the execution,
delivery or enforcement of, or otherwise with respect to, any Facility Document.

         "OWNED PROPERTY" means any property owned in fee by Hawk or any of its
Domestic Subsidiaries.

         "PATENT SECURITY AGREEMENT" has the meaning set forth in the Security
and Pledge Agreement.

         "PATENTS" has the meaning set forth in the Security and Pledge
Agreement.

         "PAYOR" has the meaning set forth in SECTION 11.13.

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

         "PERMITTED FOREIGN ASSET TRANSFER" means any sale, lease, assignment or
transfer of assets by any Borrower to any Foreign Subsidiary, PROVIDED that the
Net Cash Payments, if any, received in connection with such disposition are
applied as required by SECTIONS 2.04(d) and (e), and to the extent Net Cash
Payments equal to the appraised value of the assets so disposed of are not
received by the transferring Borrower, the Fixed Asset Availability shall be
reduced (but without a permanent reduction in the Commitments) by an amount
equal to the difference between the Net Cash Payments received and the appraised
value of the asset.

         "PERMITTED LIENS" has the meaning set forth in SECTION 7.05.

<PAGE>

         "PERSON" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.

         "PIK NOTES" means Hawk's 12% Senior Notes due 2006 which are identical
in all respects to the Exchange Notes, except such PIK Notes will be dated as
of, and begin accruing interest as of, the date of issuance thereof, and issued
pursuant to the terms of the indenture governing the Exchange Notes as
additional interest in certain circumstances as provided in the indenture
governing the Exchange Notes as in effect on the Closing Date.

         "PLAN" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by Hawk or any of its
Subsidiaries or any ERISA Affiliate and which is covered by Title IV of ERISA or
to which Section 412 of the Code applies.

         "PRE-EXCHANGE NOTE REDEMPTION" has the meaning set forth in SECTION
2.17.

         "PRE-EXCHANGE NOTES" means Hawk's 10.25% Senior Notes due December 1,
2003.

         "PREVIOUS FACILITY" means the credit facility evidenced by that certain
Credit Agreement dated as of May 1, 1998 by and among Hawk, the lenders party
thereto, and KeyBank National Association, as administrative agent, as amended.

         "PRICING GRID" means the pricing grid attached hereto as EXHIBIT I.

         "PRIME RATE" means that rate of interest from time to time announced by
the Agent at its principal office as its prime commercial lending rate. The
Prime Rate is a reference rate and does not necessarily represent the lowest or
best rate being charged to any customer of the Agent.

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

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

         "REAL PROPERTY ASSET" means, at any time of determination, any fee
ownership or leasehold interest owned by Hawk or any of its Domestic
Subsidiaries in any real property.

         "REGISTER" has the meaning set forth in SECTION 12.05(d).

         "REGULATION A" means Regulation A of the Board of Governors of the
Federal Reserve System as in effect from time to time.

         "REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System as in effect from time to time.

         "REGULATION T" means Regulation T of the Board of Governors of the
Federal Reserve System as in effect from time to time.

<PAGE>

         "REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.

         "REGULATION X" means Regulation X of the Board of Governors of the
Federal Reserve System as in effect from time to time.

         "REGULATORY CHANGE" means, with respect to the Agent, any Lender or the
Issuing Bank, any adoption of, or change in, after the date of this Agreement,
United States federal, state, municipal or foreign laws or regulations
(including Regulation D) or the adoption or making of, or change in, after such
date, any interpretations, directives, guidelines or requests applying to a
class of banks including such Lender of or under any United States federal,
state, municipal or foreign laws or regulations (whether or not having the force
of law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.

         "REIMBURSEMENT OBLIGATION" means any obligation of the Borrowers to
reimburse the issuer of a Letter of Credit for any amount paid by such issuer
from time to time pursuant to and under any Letter of Credit.

         "RENTALS" means and includes as of the date of any determination
thereof all payments (including as such all payments which the lessee is
obligated to make to the lessor on termination of the lease or surrender of the
property, and all payments, if any, required to be paid by the lessee regardless
of sales volume or gross revenues) payable by Hawk and its Subsidiaries, as
lessee or sublessee under a lease of real or personal property, but shall be
exclusive of any amounts required to be paid by Hawk and its Subsidiaries
(whether or not designated as rents or additional rents) on account of
maintenance, repairs, insurance, taxes and similar charges.

         "REPLACEMENT LENDERS" has the meaning set forth in SECTION 2.18(d)(ii).

         "REPORTABLE EVENT" has the same meaning as defined in ERISA.

         "REQUIRED LENDERS" means, at any time, Lenders having Loans and unused
Commitments representing at least 51% of the aggregate amount of all Loans and
unused Commitments outstanding at such time; provided, however, in the event
that there are only two Lenders, Required Lenders means both such Lenders.

         "REQUIRED PAYMENT" has the meaning set forth in SECTION 11.13.

         "RESERVED COMMITMENT AMOUNT" has the meaning set forth in SECTION 2.17.

         "REVOLVING AVAILABILITY" means, as of any date of determination
thereof, the amount by which (a) the lesser of (i) the Borrowing Base at such
time and (ii) the aggregate of the Revolving Credit Commitments exceeds (b) the
Total Exposure at such time.

         "REVOLVING CREDIT COMMITMENT AMOUNT" means, with respect to each
Lender, the commitment of such Lender to make Revolving Credit Loans hereunder,
as such commitment may be (a) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to SECTION 12.05 and (b) reduced from
time to time pursuant to SECTION 2.10. The initial Revolving Credit Commitment
Amount of each Lender is the amount set forth opposite such Lender's name as
such

<PAGE>

Lender's "Revolving Credit Commitment Amount" on SCHEDULE 2.01 hereto or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Revolving Credit Commitment, as applicable.

         "REVOLVING CREDIT COMMITMENT PERCENTAGE" means for each Lender the
percentage determined by dividing such Lender's Revolving Credit Commitment
Amount by the aggregate amount of Revolving Credit Commitments, as such
Revolving Credit Commitments may be reduced from time to time pursuant to
SECTION 2.10. The initial Revolving Credit Commitment Percentage of each Lender
is as set forth opposite such Lender's name on SCHEDULE 2.01 hereto or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Revolving Credit Commitment, as applicable.

         "REVOLVING CREDIT COMMITMENTS" means the commitments of the Lenders to
make Revolving Credit Loans to the Borrowers as in effect from time to time
hereunder. The aggregate amount of the Revolving Credit Commitments shall
initially equal $50,000,000 and may be reduced pursuant to SECTION 2.10.

         "REVOLVING CREDIT LOAN" means a Base Rate Loan or a Eurodollar Loan
made pursuant to SECTION 2.01(a).

         "REVOLVING CREDIT OBLIGATIONS" means all Obligations of the Borrowers
hereunder in respect of the Revolving Credit Loans and the Revolving Credit
Commitments.

         "REVOLVING CREDIT NOTE" means a promissory note of the Borrowers
payable to the order of any Lender, substantially in the form of EXHIBIT A
hereto (as such form may be amended with the consent of the Agent), evidencing
the Indebtedness of the Borrowers to such Lender resulting from the Revolving
Credit Loans made by such Lender.

         "SCHEDULED MATURITY DATE" means October 18, 2006, as such date may be
extended in accordance with SECTION 2.18.

         "SECURITY AND PLEDGE AGREEMENT" means the Security and Pledge Agreement
substantially in the form of EXHIBIT K, executed and delivered by Hawk and each
of its Domestic Subsidiaries on the Effective Date, as such agreement may be
amended, restated, supplemented or otherwise modified from time to time.

         "SECURITY DOCUMENTS" means the Security and Pledge Agreement, the
Patent Security Agreements, the Trademark Security Agreements, the Mortgages,
the other agreements, instruments and documents identified on SCHEDULE 4.01(a)
hereto and all other instruments or documents delivered by Hawk or any of its
Subsidiaries or any shareholder or other equityholder of Hawk or any of its
Subsidiaries pursuant to this Agreement or any of the other Facility Documents
in order to grant to the Agent, on behalf of the Lenders, a Lien on any property
of Hawk or any of its Subsidiaries as security for any of the Obligations of
Hawk and its Subsidiaries hereunder and under the other Facility Documents, as
any of the same may be amended, restated, supplemented or otherwise modified
from time to time.

         "SETTLEMENT AMOUNT" has the meaning set forth in SECTION 2.14.

<PAGE>

         "SETTLEMENT DATE" has the meaning set forth in SECTION 2.14.

         "STATUTORY RESERVE RATE" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board of Governors of the Federal Reserve to which the Agent
is subject with respect to the Adjusted Eurodollar Rate for eurocurreney funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D). Such
reserve percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

         "SUBSIDIARY" means, with respect to any Person (the "PARENT") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held by the parent, or that is, as of such
date, otherwise Controlled by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent. As used
herein without reference to any "parent", the terms "Subsidiary" and
"Subsidiaries" shall mean a Subsidiary or Subsidiaries, respectively, of the
Borrowers.

         "TAXES" means any and all present or future taxes, levies, imposts,
duties, fees, deductions, charges or withholdings imposed by any Governmental
Authority.

         "TERMINATION DATE" means the earliest of (a) the Maturity Date,
PROVIDED that if such date is not a Banking Day, such date shall be the next
succeeding Banking Day (or, if such next succeeding Banking Day falls in the
next calendar month, the immediately preceding Banking Day), and (b) the date on
which the Revolving Credit Commitments are reduced to zero or terminated in full
pursuant to SECTION 2.10 or SECTION 9.02.

         "TOTAL EXPOSURE" means, at any time, the sum of the aggregate
outstanding principal amount of Revolving Credit Loans, accrued and unpaid
interest, fees and charges, Letter of Credit Exposure and Reimbursement
Obligations, Foreign Exchange Obligations and Interest Rate Protection
Obligations owing from the Borrowers to the Lenders and the Agent at such time.

         "TRADEMARKS" has the meaning set forth in the Security and Pledge
Agreement.

         "TRADEMARK SECURITY AGREEMENT" has the meaning set forth in the
Security and Pledge Agreement.

<PAGE>

         "UNCOLLECTED FUNDS" means all deposits of items which shall be on
deposit in the Collateral Account from time to time during the period from the
date on which such deposits became Available Funds to the beginning of the
following Banking Day.

         "UNCOLLECTED FUNDS COMPENSATION" means the compensation payable to the
Agent pursuant to SECTION 2.09.

         "UNUSED FACILITY AMOUNT" means, at any time of determination, the
difference between (a) the aggregate Commitments of the Lenders at such time and
(b) the sum of the outstanding principal amount of all Loans and Letter of
Credit Exposure at such time.

         "VOTING STOCK" means, with respect to any Person, Capital Stock issued
by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or Persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.

         "WEEKLY COLLATERAL CERTIFICATE" means a certificate substantially in
the form of EXHIBIT K, setting forth sales and collection data with respect to
the Accounts.

         "WHOLLY-OWNED SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, limited liability company or other entity of which all
of the Voting Stock or other equity interest is at the time of determination
owned directly or indirectly by such Person.

         SECTION 1.02 ACCOUNTING PRINCIPLES. Where the character or amount of
any asset or liability or item of income or expense is required to be
determined, or any consolidation, combination or other accounting computation is
required to be made, for the purposes of this Agreement, the same shall be done
in accordance with GAAP, to the extent applicable, except where such principles
are inconsistent with the requirements of this Agreement. If at any time any
change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Facility Document, and either the Borrowers' Agent
or the Required Lenders shall so request, the Agent, the Lenders and the
Borrowers shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP (subject to
the approval of the Required Lenders); PROVIDED THAT, until so amended, (i) such
ratio or requirement shall continue to be computed in accordance with GAAP prior
to such change therein and (ii) the Borrowers shall provide to the Agent and the
Lenders financial statements and other documents required under this Agreement
or as reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.

         SECTION 1.03 DIRECTLY OR INDIRECTLY. Where any provision in this
Agreement refers to action to be taken or not to be taken by any Person, such
provision shall be applicable whether the action in question is taken directly
or indirectly by such Person.

         SECTION 1.04 CONSTRUCTION. In the event of any inconsistency between
the covenants contained in the Security Documents and the covenants contained in
this Agreement, the provisions of this Agreement shall govern and be
controlling; provided, however, that to the extent the Security Documents
contain covenants which are in addition to the covenants contained herein

<PAGE>

or covenants that are more restrictive than the covenants contained herein, such
covenants shall not be deemed to be inconsistent for the purposes of this
SECTION 1.04.

         SECTION 1.05 JOINT AND SEVERAL OBLIGATIONS; BORROWERS' AGENT.

         (a) All obligations of the Borrowers hereunder shall be joint and
several. Any notice, request, waiver, consent or other action made, given or
taken by any Borrower shall bind all of the Borrowers. In any action or
proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Borrower would otherwise be held
or determined to be void, invalid or unenforceable, or subordinated to the
claims of any other creditors, on account of the amount of its joint and several
liability hereunder, then, notwithstanding any other provision hereof to the
contrary, the amount of such liability shall, without any further action by any
Borrower, any Lender, the Agent or any other Person, be automatically limited
and reduced to the highest amount that is valid and enforceable and not
subordinated to the claims of other creditors as determined in such action or
proceeding.

         (b) Each of the Borrowers hereby authorizes Hawk to act as agent (the
"BORROWERS' AGENT") for the Borrowers, and to execute and deliver on behalf of
any Borrower such notices, requests, waivers, consents, certificates, and other
documents, and to take any and all actions, required or permitted to be
delivered or taken by the Borrowers hereunder. The Borrowers' Agent hereby
designates the financial officers of the Borrowers' Agent identified in the
Authorization Letter (the "DESIGNATED FINANCIAL OFFICERS") to act for and on
behalf of the Borrowers' Agent and each of the Borrowers, and to execute and
deliver on behalf of the Borrowers' Agent and each of the Borrowers such
notices, requests, waivers, consents, certificates, and other documents, and to
take any and all actions, required or permitted to be delivered or taken by the
Borrowers' Agent and each of the Borrowers hereunder. The Borrowers' Agent and
each of the Borrowers hereby agrees that the Agent and the Lenders shall be
entitled to exclusively rely on any instrument, certificate, notice, agreement
or other document that is signed by any of the Designated Financial Officers.

         SECTION 1.06 TIMES OF DAY. Unless otherwise specified, all references
herein to times of day shall be references to Eastern time (daylight or
standard, as applicable).

                                   ARTICLE 2

                                   THE CREDIT

         SECTION 2.01 LOANS AND LETTERS OF CREDIT.

         (a) THE REVOLVING CREDIT LOANS.

                  (i) Subject to the terms and conditions of this Agreement,
         each of the Lenders severally agrees to make Revolving Credit Loans to
         the Borrowers from time to time from and including the date hereof to
         but excluding the Termination Date in an aggregate principal amount at
         any one time outstanding up to but not exceeding its Revolving Credit
         Commitment Amount, as set forth on SCHEDULE 2.01; PROVIDED that the
         obligation of each Lender to make Revolving Credit Loans hereunder is
         subject to the condition that the Total

<PAGE>

         Exposure (after giving effect to the funding of such Revolving Credit
         Loans) shall not exceed the lesser of the Borrowing Base and the
         aggregate Revolving Credit Commitments.

                  (ii) Any Lender may request that the Revolving Credit Loans
         made by it be evidenced by a Revolving Credit Note. In such event, the
         Borrowers shall issue to such Lender, a Revolving Credit Note,
         substantially in the Form of EXHIBIT A, dated as of the Effective Date
         payable to the order of such Lender in the aggregate principal amount
         equal to the Revolving Credit Commitment Amount of such Lender.

         (b) THE CAPEX LOANS.

                  (i) Subject to the terms and conditions of this Agreement,
         each of the Lenders severally agrees to make CapEx Loans to the
         Borrowers from time to time from and including the CapEx Availability
         Date to but excluding the Termination Date in an aggregate amount up to
         but not exceeding such Lender's CapEx Commitment Amount, as set forth
         on SCHEDULE 2.01, minus the principal amount of all CapEx Loans
         previously made by such Lender; PROVIDED, HOWEVER, that the Borrowers
         shall not be entitled to request, and the Lenders shall not be required
         to make, CapEx Loans in excess of (i) $2,000,000 in the aggregate
         during the Fiscal Year ending December 31, 2003, and (ii) $1,000,000
         during any Fiscal Year thereafter; PROVIDED, FURTHER, in no event will
         any CapEx Loan on any date exceed such amount which constitutes 80% of
         the Hard Costs of the CapEx Assets to be purchased with the proceeds of
         such CapEx Loan. The Borrowers may not request CapEx Loans to be made
         more than once in any Fiscal Quarter. CapEx Loans, once repaid, may not
         be reborrowed.

                  (ii) Any Lender may request that the CapEx Loans made by it be
         evidenced by a CapEx Note. In such event, the Borrowers shall issue to
         such Lender a CapEx Note, substantially in the form of EXHIBIT B, dated
         as of the Effective Date, payable to the order of such Lender in the
         aggregate principal amount equal to the CapEx Commitment Amount of such
         Lender.

         (c) LETTERS OF CREDIT. Subject to the provisions of SECTION 2.13 and
the other terms and conditions of this Agreement, at the request of the
Borrowers' Agent, the Agent, on behalf of the Lenders, shall issue Letters of
Credit (in its capacity as issuer of Letters of Credit, the "ISSUING BANK") from
time to time from and including the date hereof to but excluding the Termination
Date up to but not exceeding the lesser of (i) the difference between (A) the
lesser of (x) the aggregate amount of all Revolving Credit Commitments and (y)
the Borrowing Base and (B) the Total Exposure immediately prior to the issuance
of such Letter of Credit and (ii) the difference between (A) the Letter of
Credit Sublimit and (B) the aggregate amount of the Letter of Credit Exposure
which exists immediately prior to the issuance of such Letter of Credit.

         SECTION 2.02 FUNDING OF LOANS.

         (a) Until such time as the Borrowers shall have established a
Controlled Disbursements Account with the Agent, to request the funding of any
Loans hereunder, the Borrowers' Agent shall deliver to the Agent notice in
accordance with SECTION 2.11 setting forth (1) for each borrowing consisting of
Revolving Credit Loans, (A) the requested date of such borrowing,

<PAGE>

(B) the type of Loans comprising such borrowing, (C) the aggregate amount of
such borrowing and (D) in the case of a borrowing comprised of Eurodollar Loans,
the initial Eurodollar Interest Period for such Loans and (2) for each borrowing
consisting of CapEx Loans, in addition to the items described in items (A)
through (D) of clause (1), the use of proceeds of such CapEx Loan and shall be
accompanied by an invoice (or a copy) or other proper documentation setting
forth the invoice price for the equipment to be purchased. The aggregate
principal amount of any borrowing incurred by any Borrower on any day, other
than any borrowings made as Base Rate Loans pursuant to SECTION 2.02(b), shall
not be less than any Minimum Borrowing Amount. Following receipt of such notice,
the Agent shall, not later than 2:00 p.m. on (i) the same Banking Day that such
notice is given, if such Loans are to be Base Rate Loans or (ii) on the third
Banking Day after such notice is given, if such Loans are to be Eurodollar
Loans, subject to the conditions of this Agreement, make available to the
Borrowers by a credit to an account of the Borrowers maintained at the Agent the
amount of such requested Loans. The Loans shall be deemed to be made by each
Lender and to be outstanding to each Lender under the Note issued to such Lender
as of the date that such credit is made available to the Borrowers without
regard to the settlement procedures between the Agent and the Lenders pursuant
to SECTION 2.14.

         (b) After such time as the Borrowers shall have established a
Controlled Disbursements Account with the Agent, not later than 2:00 p.m. on
each Banking Day, the Agent shall, subject to the conditions of this Agreement
(but without any further written notice required), make available to the
Borrowers by a credit to an account of the Borrowers maintained at the Agent the
proceeds of Base Rate Loans to the extent necessary to pay items to be drawn on
the Controlled Disbursements Account that day after giving effect to all
Available Funds to be deposited to the Collateral Account on that day. All other
Loans and all requests for the making of Eurodollar Loans, or for the conversion
of Base Rate Loans into Eurodollar Loans, shall be made upon notice given in
accordance with SECTION 2.11. The Loans shall be deemed to be made by each
Lender and to be outstanding to each Lender under the Note issued to such Lender
as of the date that such credit is made available to the Borrowers without
regard to the settlement procedures between the Agent and the Lenders pursuant
to SECTION 2.14.

         SECTION 2.03 PRINCIPAL REPAYMENT OF LOANS.

         (a) REVOLVING CREDIT LOANS.

                  (i) Each Revolving Credit Loan shall mature and be payable in
         full on the Termination Date.

                  (ii) Except to the extent otherwise expressly provided in any
         Security Document, the Agent shall, not later than as of 2:00 p.m. on
         each Banking Day when any Revolving Credit Loans are outstanding,
         transfer out of the Collateral Account all funds remitted to the Agent
         by Account Debtors of the Borrowers or by financial institutions at
         which Controlled Accounts are maintained, first making payments of the
         outstanding principal amount of the Revolving Credit Loans (including
         all Revolving Credit Loans made or to be made that day) by a debit to
         the Collateral Account in an amount equal to the balance of the
         Collateral Account after giving effect to all Available Funds deposited
         to the Collateral Account on that day and prior to any other transfers
         from the Collateral Account. All such payments shall be applied first
         to the outstanding principal amount of all Base Rate Loans. To the
         extent that a payment hereunder creates a credit balance under

<PAGE>

         the Revolving Credit Obligations, JPMorgan Chase Bank, in its capacity
         as the depository bank, shall pay interest on such credit balance at a
         rate per annum equal to the greater of (x) zero percent (0%) and (y)
         the Prime Rate minus three percent (3%).

                  (iii) If at any time (x) the aggregate principal amount of the
         Revolving Credit Loans then outstanding plus the Letter of Credit
         Outstandings exceeds (y) the lesser of the Borrowing Base or the
         aggregate of the Revolving Credit Commitments, then immediately upon
         demand by the Agent, the Borrowers shall immediately prepay Revolving
         Credit Loans by an amount equal to such excess.

         (b) CAPEX LOANS. Beginning with the Fiscal Year ending December 31,
2003, and for each Fiscal Year thereafter, the Borrowers shall begin amortizing
and shall repay to the Agent for the ratable account of the Lenders the
aggregate amount of principal of the CapEx Loans made during such Fiscal Year in
such amounts that would fully amortize such outstanding amount in twenty-eight
(28) equal consecutive quarterly payments, and the first of such quarterly
payments shall be due on March 31, 2004. The final installment representing any
remaining principal balance of all CapEx Loans shall be due and payable on the
Termination Date.

         SECTION 2.04 MANDATORY PREPAYMENTS. In addition to the payments
required under SECTION 2.03(a)(iii), the Borrowers shall make the following
mandatory prepayments of the Loans:

         (a) CASUALTY EVENTS. Within ninety (90) days following the receipt by
Hawk or any of its Subsidiaries of the proceeds of insurance, condemnation award
or other compensation in respect of any Casualty Event affecting any property of
Hawk or any of its Subsidiaries (or upon such earlier date as Hawk or any of its
Subsidiaries, as the case may be, shall have determined not to repair or replace
the property affected by such Casualty Event), the Borrowers shall prepay the
Loans by an aggregate amount, if any, equal to 100% of the Net Cash Payments
from such Casualty Event not theretofore applied or committed to be applied to
the repair or replacement of such property (it being understood that (i) if the
Net Cash Payments committed to be applied are not in fact applied within ninety
(90) days of the respective Casualty Event, or Hawk or any of its Subsidiaries
have not entered into binding contractual agreements as of such 90th day
requiring payment of amounts at least equal to such funds in repair or
replacement of the property affected by the Casualty Event, then such Net Cash
Payments, or such lesser amount that is not required to be paid pursuant to such
binding contractual commitment, shall be applied to the prepayment of the Loans
as provided in this clause (a) at the expiration of such ninety (90) day period
and (ii) if an Event of Default shall have occurred and is continuing on the
date such Net Cash Payments are received by Hawk or any of its Subsidiaries or
at any time during such ninety (90) day period, then the Borrowers shall prepay
the outstanding Loans in an amount equal to 100% of such Net Cash Payments (or,
if any portion of such proceeds shall have been reinvested prior to the
occurrence of such Event of Default, 100% of such remaining amount of Net Cash
Payments not so reinvested) on the later of the date such Net Cash Payments are
received by Hawk or any of its Subsidiaries or the date of the occurrence of
such Event of Default), such prepayment to be effected in each case in the
manner and to the extent specified in paragraph (e) of this SECTION 2.04.

         (b) SALE OF EQUITY SECURITIES. Without limiting the obligation of Hawk
or its Subsidiaries to obtain the consent of the Lenders in accordance with
SECTION 12.01 with respect to any sale of equity securities not otherwise
permitted hereunder, the Borrowers agree, on or prior to the closing of any sale
of equity securities by Hawk or any of its Subsidiaries (other than the

<PAGE>

issuance of equity securities to employees in accordance with stock option and
related employee benefit programs), to deliver to the Agent a statement
certified by the principal financial officer of the Borrowers' Agent, in form
and detail reasonably satisfactory to the Agent, of the estimated amount of the
Net Cash Payments of such sale of equity securities that will (on the date of
such sale) be received by Hawk or its Subsidiaries, and, upon the date of such
sale of equity securities, the Borrowers shall prepay the Loans by an aggregate
amount equal to 100% of the Net Cash Payments of such sale of equity securities
received by Hawk or its Subsidiaries, such prepayment to be effected in each
case in the manner and to the extent specified in paragraph (e) of this SECTION
2.04.

         (c) INCURRENCE OF INDEBTEDNESS. Without limiting the obligation of Hawk
or any of its Subsidiaries to obtain the consent of the Lenders in accordance
with SECTION 12.01 with respect to the incurrence of any Indebtedness not
otherwise permitted hereunder, the Borrowers agree, on or prior to the closing
of any sale of debt securities or the incurrence of any Indebtedness by Hawk or
any of its Subsidiaries (other than Indebtedness permitted under SECTIONS
7.11(a), 7.11(b), 7.11(c), 7.11(d) and 7.11(f)), to deliver to the Agent a
statement certified by the principal financial officer of the Borrowers' Agent,
in form and detail reasonably satisfactory to the Agent, of the estimated amount
of the Net Cash Payments of such sale of debt securities or incurrence of
Indebtedness that will (on the date of such sale or incurrence) be received by
Hawk or its Subsidiaries and, upon the date of such sale or incurrence, the
Borrowers shall prepay the Revolving Credit Loans by an aggregate amount equal
to 100% of the Net Cash Payments of such sale or incurrence received by Hawk or
its Subsidiaries, such prepayment to be effected in each case in the manner and
to the extent specified in paragraph (e) of this SECTION 2.04.

         (d) SALE OF ASSETS. Without limiting the obligation of Hawk or any of
its Subsidiaries to obtain the consent of the Lenders in accordance with SECTION
12.01 with respect to any sale or other disposition of assets not otherwise
expressly permitted hereunder, the Borrowers agree that in connection with any
sale or other disposition of assets with a fair market value in excess of
$25,000 for any such sale or disposition, or in excess of $100,000 for all such
sales or dispositions in the aggregate in any Fiscal Year, by Hawk or any of its
Subsidiaries (other than dispositions permitted under CLAUSE (a) OR (b) OF
SECTION 7.01), to deliver to the Agent a monthly statement as soon as practical
after the end of each month, but in any event within five (5) Banking Days after
the end of each such month, certified by the principal financial officer of the
Borrower's Agent, in form and detail reasonably satisfactory to the Agent, of
the estimated amount of the Net Cash Payments of such sale or other disposition
that has been or will be received (on the date of such sale or other
disposition) by Hawk or its Subsidiaries. The Borrowers shall prepay the Loans
within ten (10) days of the date of any sale or other disposition of assets, by
an aggregate amount equal to 100% of the Net Cash Payments of any sale or other
disposition received by Hawk or its Subsidiaries. Prepayments of the Loans
resulting from any sale or other disposition of assets shall be effected in each
case in the manner and to the extent specified in paragraph (e) of this SECTION
2.04.

         (e) APPLICATION. (i) In the event of any mandatory prepayment pursuant
to SECTION 2.04(a) or (c), such prepayment shall be applied: first, to Revolving
Loans attributable to the Fixed Asset Advance, second to the CapEx Loans, and
third to Revolving Loans other than the Fixed Asset Advance, until paid in full,
(ii) in the event of any mandatory prepayment pursuant to SECTION 2.04(b), such
prepayment shall be applied: first, to the Revolving Loans other than the

<PAGE>

Fixed Asset Advance, second to Revolving Loans attributable to the Fixed Asset
Advance, and third to the CapEx Loans, and (iii) in the case of any mandatory
prepayment pursuant to SECTION 2.04(d), such prepayment shall be applied: (A) if
the asset disposed of consisted of a CapEx Asset purchased with the proceeds of
a CapEx Loan, first, to the CapEx Loans, second to Revolving Loans attributable
to the Fixed Asset Advance, and third to Revolving Loans other than the Fixed
Asset Advance, and (B) if the asset disposed of consisted of any other
machinery, equipment or tangible assets, first, an amount equal to the appraised
value of such asset to the Revolving Loans attributable to the Fixed Asset
Advance, second, to the Revolving Credit Loans other than the Fixed Asset
Advance and third to the CapEx Loans, PROVIDED, HOWEVER, that upon the
occurrence and during the continuance of an Event of Default, such prepayment
shall be applied to the Loans in such order as the Agent so elects. With respect
to any prepayment of any Loans, the Agent shall apply such prepayments: first,
to the payment of accrued interest in respect of outstanding Base Rate Loans;
second, to the principal amount of outstanding Base Rate Loans; third, to
accrued interest in respect of outstanding Eurodollar Loans; fourth, to the
principal amount of outstanding Eurodollar Loans; and fifth, to all other
outstanding Obligations. In the case of any prepayment of CapEx Loans, such
prepayments shall be applied to the installments thereof in reverse order of
maturity. The Commitments shall be automatically and permanently reduced as a
result of any mandatory prepayment made pursuant to SECTION 2.04(a), SECTION
2.04(c) or SECTION 2.04(d) by an amount corresponding to the amount of such
prepayment; PROVIDED, HOWEVER, that if the Borrowers' Agent advises the Agent in
writing at the time of any prepayment of Revolving Loans with the Net Cash
Proceeds from any asset disposition as required by SECTION 2.04(d) that, as
contemplated by SECTION 2.17, a portion of the Revolving Commitments gives rise
to a Reserved Commitment Amount, unless any portion of the Reserved Commitment
Amount is not utilized on or before the 179th day of receipt to reinvest in
assets permitted by SECTION 7.10(f), the Revolving Commitments shall not be
permanently reduced by the Reserved Commitment Amount. The Revolving Commitments
shall be automatically and permanently reduced by the amount of any Reserved
Commitment Amount remaining unutilized after 179 days. In addition, in the event
of any prepayment under SECTIONS 2.04(a) OR 2.04(d) above related to any asset
included in the Fixed Asset Availability, the Fixed Asset Availability shall be
reduced on a dollar for dollar basis in the amount of the portion of such
prepayment attributable to such asset. Other than as provided above, the
Commitments shall not be subject to permanent reduction as a result of any other
mandatory prepayment made pursuant to this SECTION 2.04.

         (f) PREPAYMENT PENALTIES. The Borrower shall not be required to pay any
prepayment premiums or penalties in connection with any mandatory prepayment
pursuant to this SECTION 2.04, other than (i) payments required to be paid
pursuant to SECTION 3.05 in connection with any prepayment of any Eurodollar
Loan and (ii) the early termination fee provided for in SECTION 2.15(d).

         SECTION 2.05 INTEREST.

         (a) Interest shall accrue on the outstanding and unpaid principal
amount of each Loan for the period from and including the date of such Loan to
but excluding the date such Loan is repaid, at the following rates per year: (i)
for a Loan Tranche which is outstanding as a Base Rate Loan, at a variable rate
per annum equal to the Adjusted Base Rate plus the Applicable Margin; and (ii)
for a Loan Tranche which is outstanding as a Eurodollar Loan, at a fixed rate
during the applicable Eurodollar Interest Period equal to the corresponding
Adjusted Eurodollar Rate plus the

<PAGE>

Applicable Margin; PROVIDED, HOWEVER, that after the occurrence and during the
continuance of any Event of Default, interest shall accrue on all Loans and all
other amounts payable hereunder (including, to the extent permitted by law,
interest on overdue interest) at the Default Rate.

         (b) Interest on each Eurodollar Loan and each Base Rate Loan shall be
calculated on the basis of a year of 360 days for the actual number of days
elapsed.

         (c) Subject to paragraph (f) below, accrued interest on each Base Rate
Loan shall be due and payable to the Agent for account of each Lender in arrears
on the first Banking Day of each calendar month, regardless of any payment of
the principal thereof.

         (d) Subject to paragraph (f) below, accrued interest on each Eurodollar
Loan shall be due and payable to the Agent for account of each Lender in arrears
upon any payment of principal and on each corresponding Eurodollar Interest
Payment Date.

         (e) The Agent shall determine the Adjusted Base Rate, the Adjusted
Eurodollar Rate and the Eurodollar Rate and such determination shall be
conclusive absent manifest error. Promptly after the determination of any
interest rate provided for herein or any change therein, the Agent shall notify
the Borrowers and the Lenders thereof.

         (f) Notwithstanding the foregoing, (i) interest accrued pursuant to the
proviso to paragraph (a) above shall be payable on demand, (ii) in the event of
any repayment or prepayment of any Loan, accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or
prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior
to the end of the current Eurodollar Interest Period therefor, accrued interest
on such Loan shall be payable on the effective date of such conversion.

         SECTION 2.06 EURODOLLAR INTEREST PERIODS. In the case of each Loan
other than a Base Rate Loan, the Borrowers shall select a Eurodollar Interest
Period, subject to the following limitations: (a) no Eurodollar Interest Period
shall have a duration of less than one (1) month and if any such proposed
Eurodollar Interest Period would otherwise be for a shorter period (as a result
of the Termination Date or otherwise), such Eurodollar Interest Period shall not
be available; and (b) if a Eurodollar Interest Period would end on a day which
is not a Banking Day, such Eurodollar Interest Period shall be extended to the
next Banking Day, unless such next Banking Day would fall in the next calendar
month in which event such Eurodollar Interest Period shall end on the
immediately preceding Banking Day. All elections of a Eurodollar Interest Period
shall be made by the Borrowers' Agent upon three (3) Banking Days' notice to the
Agent in accordance with SECTION 2.11 and the Agent shall quote to the Borrowers
the actual Eurodollar Rate to take effect for such Eurodollar Interest Period
(based upon the rate quotation described in the definition of Eurodollar Rate)
on the next Banking Day. Notwithstanding anything to the contrary set forth
herein, the Borrowers shall not be permitted to request any Eurodollar Loans
until the Agent has completed its initial syndication of the credit facilities
hereunder.

         SECTION 2.07 CONVERSIONS. Except to the extent specified to the Agent
prior to the Effective Date, each Loan shall be a Base Rate Loan unless and
until converted to a Eurodollar Loan in accordance with terms of this SECTION
2.07. The Borrowers shall have the right to make payments of principal, or to
convert a Loan Tranche from a Base Rate Loan to a Eurodollar Loan or from a
Eurodollar Loan to a Base Rate Loan at any time or from time to time, PROVIDED
that:

<PAGE>

(a) if the Loan Tranche is outstanding as a Eurodollar Loan, it may be converted
only on the last day of the applicable Eurodollar Interest Period; (b) if the
Loan Tranche is outstanding as a Eurodollar Loan, it shall automatically convert
to a Base Rate Loan on the last day of the applicable Eurodollar Interest
Period, unless the Borrowers' Agent gives notice to the Agent in accordance with
SECTION 2.11 three (3) Banking Days prior to the last day of the corresponding
Eurodollar Interest Period specifying a new Eurodollar Interest Period to apply
to such Loan Tranche; (c) no Loan Tranche comprising a Eurodollar Loan may be in
a principal amount less the amount specified in the definition of "MINIMUM
BORROWING AMOUNT"; (d) there may be no more than four (4) Loan Tranches
comprising Eurodollar Loans outstanding at any one time; and (e) no Loan Tranche
comprising a Eurodollar Loan may be created or continued while any Default or
Event of Default exists and continues.

         SECTION 2.08 VOLUNTARY PREPAYMENTS. In addition to repayments made
pursuant to SECTION 2.03(a)(iii), the Borrowers shall have the right to prepay
Loans at any time or from time to time; PROVIDED that: (i) the Borrowers' Agent
shall give the Agent notice of each such prepayment as provided in SECTION 2.11,
(ii) the Borrowers shall be responsible for the payment of such amounts as
provided in SECTION 3.05 with respect to the prepayment of any Eurodollar Loans
prepaid on any date other than the last day of the corresponding Eurodollar
Interest Period and (iii) after giving effect to any such prepayments, the
amounts of the Loans outstanding shall be in at least the Minimum Borrowing
Amounts. In addition, but subject to the foregoing, as a condition to giving
effect to any termination of the Commitments pursuant to SECTION 2.10, the
aggregate principal of all Loans shall be fully prepaid, together with interest
thereon accrued to the date of such payment and all amounts payable pursuant to
SECTION 2.13(c) and/or SECTION 3.05 in connection therewith.

         SECTION 2.09 UNCOLLECTED FUNDS COMPENSATION. Any credit extended by the
Agent to the Borrowers by allowing the Uncollected Funds in the Collateral
Account maintained by the Borrowers at the Agent to be immediately available
funds to the Borrowers shall not be deemed to be Loans hereunder. Uncollected
Funds Compensation to the Agent shall accrue on the amount of the Uncollected
Funds in existence from time to time at a variable rate per annum equal to the
Adjusted Base Rate plus the Applicable Margin for Base Rate Loans for one full
day. Upon making such computation, the Agent is authorized to make a Revolving
Credit Loan to the Borrowers for the amount thereof (or during the continuance
of an Event of Default, debit the Collateral Account) for the payment thereof to
the Agent. The Agent shall notify the Borrowers of the amount of the Uncollected
Funds Compensation for the preceding calendar month in the next monthly
statement rendered by the Agent to the Borrowers.

         SECTION 2.10 VOLUNTARY TERMINATION OF COMMITMENTS. The Borrowers shall
have the right to terminate the amount of Commitments in whole or in part at any
time; PROVIDED that (a) the Borrowers' Agent shall give notice of such
termination to the Agent as provided in SECTION 2.11, (b) each reduction of the
Revolving Credit Commitments shall be in an amount that is at least equal to
$5,000,000 or any greater multiple of $1,000,000 and (c) each reduction of the
CapEx Commitments shall be in an amount that is at least equal to $250,000 or
any greater multiple of $100,000. The Borrowers may not terminate the Revolving
Credit Commitments to an amount that is less than the Total Exposure then
outstanding, and unless the Commitments have been terminated in whole, the
Borrowers may not reduce the amount of the Revolving Credit

<PAGE>

Commitments to less than $25,000,000. Any portion of the Commitments that has
been terminated may not be reinstated.

         SECTION 2.11 CERTAIN NOTICES. Notices by the Borrowers' Agent to the
Agent of borrowings other than pursuant to SECTION 2.02(b), notice of conversion
of any Base Rate Loans to Eurodollar Loans pursuant to SECTION 2.07, and notice
of each prepayment of a Loan pursuant to SECTION 2.08 (which does not include
repayments pursuant to SECTION 2.03(a)(iii) or of termination of the Commitments
pursuant to SECTION 2.10) shall be irrevocable and shall be effective only if
received by the Agent in writing on a Banking Day and (a) in the case of Base
Rate Loans and prepayments of Base Rate Loans, given not later than 11:00 a.m.
on the date of such Base Rate Loan or such prepayment; (b) in the case of
Eurodollar Loans and prepayments of Eurodollar Loans, given not later than 11:00
a.m. three (3) Banking Days prior to the date of such Eurodollar Loan or such
prepayment; and (c) in the case of termination of the Commitments, given not
later than 12:00 noon time four (4) Banking Days prior thereto. Each such notice
of borrowing or prepayment shall specify the amount of the Loans to be borrowed
or prepaid and the date of borrowing or prepayment (which shall be a Banking
Day). The Agent shall promptly notify the Lenders of the contents of each such
notice.

         SECTION 2.12 CALCULATION OF BORROWING BASE. The Agent shall calculate
from time to time the amount of the Borrowing Base, based upon the most recent
Borrowing Base Certificate, and such amount shall be the "Borrowing Base"
hereunder.

         SECTION 2.13 LETTERS OF CREDIT.

         (a) Subject to the terms and conditions set forth herein, the
Borrowers' Agent may request the issuance of Letters of Credit for the account
of any of the Borrowers or their Subsidiaries, in a form reasonably acceptable
to the Agent, by delivering to the Agent by electronic or facsimile transmission
(reasonably in advance of the requested date of issuance, amendment, renewal or
extension) a letter of credit application in the form required by the Agent. A
Letter of Credit shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit, the
Borrowers shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension (i) the Total Exposure at such
time does not exceed the lesser of (x) the Borrowing Base at such time or (y)
the aggregate Revolving Credit Commitments at such time, and (ii) the Letter of
Credit Exposure at such time does not exceed the Letter of Credit Sublimit at
such time.

         (b) Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date three-hundred sixty-five (365) days, in
the case of standby Letters of Credit, or one-hundred eighty (180) days, in the
case of commercial or documentary Letters of Credit, after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
of any standby Letter of Credit, three-hundred sixty-five (365) days after such
renewal or extension); PROVIDED that any such standby Letter of Credit may
provide for automatic extensions thereof to a date not later than three-hundred
sixty-five (365) days beyond its current expiration date, and (ii) the date that
is five (5) Banking Days prior to the Termination Date. No Letter of Credit may
be extended beyond the date that is five (5) Banking Days prior to the
Termination Date.

         (c) By the issuance of a Letter of Credit (or an amendment to a Letter
of Credit increasing the amount thereof) and without any further action on the
part of the Agent or the

<PAGE>

Lenders, the Agent hereby grants to each Lender, and each Lender hereby acquires
from the Agent, a participation in such Letter of Credit equal to such Lender's
Revolving Credit Commitment Percentage of the aggregate amount available to be
drawn under such Letter of Credit. Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstances whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrences and continuance of a Default or Event of
Default or reduction or termination of the aggregate Revolving Credit
Commitments. If the Agent shall make any disbursement in respect of any Letter
of Credit, the resulting Reimbursement Obligation created thereby shall be
deemed to be a Revolving Credit Loan from each of the Lenders in accordance with
each Lender's Revolving Credit Commitment Percentage. The Agent shall notify the
Lenders of the creation of any Reimbursement Obligation within two (2) Banking
Days of any disbursement made by the Agent pursuant to or under any Letter of
Credit.

         (d) The Borrowers' Reimbursement Obligations with respect to Letters of
Credit shall be absolute, unconditional and irrevocable and shall be performed
strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Letter of Credit or any term or provision therein, (ii)
any draft or other document presented under a Letter of Credit proving to be
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the Agent to the
beneficiary under a Letter of Credit against presentation of a draft or other
document that does not strictly comply with the terms of such Letter of Credit
(other than due to the gross negligence or willful misconduct of the Agent),
(iv) the existence of any claim, setoff, defense or other right that any
Borrower or any other Person may at any time have against the beneficiary under
any Letter of Credit, the Agent, or any Lender or any other Person, whether in
connection with this Agreement, any other Facility Document or otherwise; and
(v) any other event or circumstance whatsoever (other than gross negligence or
willful misconduct of the Agent), whether or not similar to any of the
foregoing, that might, but for the provisions of this SECTION 2.13, constitute a
legal or equitable discharge of the Borrowers' obligations hereunder.

         (e) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Agent under
or in connection with Letters of Credit issued by it or any related certificates
shall not, in the absence of gross negligence or willful misconduct by the
Agent, result in any liability of the Agent to any Borrower or any of their
Subsidiaries or relieve any Borrower of any of its obligations hereunder to the
Agent or the Lenders.

         SECTION 2.14 SETTLEMENT BETWEEN AGENT AND LENDERS. The Agent and the
Lenders shall settle on an aggregated and netted basis (the "SETTLEMENT AMOUNT")
on a daily basis (each such date on which such a settlement occurs being a
"SETTLEMENT DATE") for all amounts which shall have become due to and due from
the Agent and the Lenders since the immediately preceding Settlement Date with
respect to any Obligations. The Agent shall notify the Lenders by 11:00 A.M. on
each Settlement Date of the Settlement Amount which is payable by the Agent or
the Lenders and the Agent or the Lenders, as the case may be, shall make payment
of the Settlement Amount by an electronic funds transfer not later than 5:00
P.M. on the Settlement Date. Nothing in this SECTION 2.14 or the settlement
procedures made pursuant to this SECTION 2.14 shall be deemed to change, as
between the Borrowers and the Lenders, the amount of the Loans

<PAGE>

which are outstanding to each of the Lenders or the accrual of interest due to
each of the Lenders on such Loans.

         SECTION 2.15 FEES.

         (a) The Borrowers agree to pay, on the Closing Date, to the Agent for
the account of each of the Lenders an upfront fee equal to 0.75% of the
aggregate Commitments for the Lenders' ratable Commitments.

         (b) The Borrowers agree to pay to the Agent quarterly after the date
hereof through the Termination Date and on the Termination Date for the account
of each of the Lenders a commitment fee which shall accrue on the daily average
Unused Facility Amount for the period from and including the date hereof through
the Termination Date. The commitment fee shall be calculated on the basis of a
360 day year for the actual number of days elapsed at a rate per year equal to
the Applicable Commitment Fee Rate. The commitment fee shall be due and payable
in arrears quarterly on the first Banking Day of each calendar quarter and shall
be computed by the Agent. On each such payment date, the Agent is authorized to
make a Revolving Credit Loan to the Borrowers for the amount thereof (or during
the continuance of an Event of Default, debit the Collateral Account) for the
payment thereof to the Lenders. The Agent shall notify the Borrowers of the
amount of the commitment fee for the preceding quarter in the next monthly
statement rendered by the Agent to the Borrowers.

         (c) The Borrowers agree to pay, with respect to Letters of Credit
issued hereunder, the following fees: (i) to the Agent for the benefit of the
Lenders (according to each Lender's Revolving Credit Commitment Percentage), a
letter of credit fee in respect of each standby Letter of Credit issued
hereunder which accrues at a rate equal to (x) the face amount of such Letter of
Credit multiplied by (y) the applicable Eurodollar Margin for Revolving Loans
other than the Fixed Asset Advance, such fees to be calculated on the basis of a
360 day year for actual number of days elapsed and paid by the Borrowers
quarterly in advance on the first Banking Day of each Fiscal Quarter, (ii) to
the Agent for the benefit of the Lenders (according to each Lender's Revolving
Credit Commitment Percentage), a letter of credit fee in respect of each trade
or documentary Letter of Credit issued hereunder which accrues at a rate equal
to (x) the applicable Eurodollar Margin for Revolving Loans other than the Fixed
Asset Advance multiplied by (y) the face amount of such Letter of Credit, such
fees to be calculated on the basis of a 360 day year for actual number of days
elapsed and paid by the Borrowers quarterly in advance on the first Banking Day
of each calendar quarter, (iii) to the Agent for its own account, a letter of
credit fronting fee payable in respect of each Letter of Credit issued hereunder
which accrues at a rate equal to (x) the face amount of such Letter of Credit
multiplied by (y) fifteen (15) basis points per annum, such fees to be
calculated on the basis of a 360 day year for the actual number of days elapsed
and paid by the Borrowers in advance at the time of the issuance of each Letter
of Credit and (iv) to the Agent for its customary processing fees and expenses
charged by the Agent for issuing, amending, modifying or extending any Letter of
Credit. Upon making a computation of the amount of such Letter of Credit fee,
the Agent is authorized to make a Revolving Credit Loan to the Borrowers for the
amount thereof The Agent shall notify the Borrowers of the amount of such Letter
of Credit fee in the next monthly statement rendered by the Agent to the
Borrowers.

         (d) In the event that the Commitments are terminated in their entirety
(or reduced to zero) by the Borrowers during the periods set forth below, the
Borrowers shall pay to the Agent

<PAGE>

for the account of each of the Lenders an early termination fee in an amount
equal to (i) 1.00% of the average Commitment of the Lenders as in effect since
the Closing Date, if the Commitments are terminated prior to the first
anniversary of the Closing Date, (ii) 0.75% of the average Commitments of the
Lenders as in effect since the Closing Date, if the Commitments are terminated
on or after the first anniversary of the Closing Date but prior to the second
anniversary of the Closing Date, and (iii) 0.50% of the average Commitment of
the Lenders as in effect since the Closing Date, if the Commitments are
terminated on or after the second anniversary of the Closing Date but prior to
the third anniversary of the Closing Date.

         SECTION 2.16 PAYMENTS GENERALLY. All payments under this Agreement or
the Notes shall be made in United States Dollars in funds which are immediately
available not later than 1:00 p.m. on the relevant dates specified herein at the
JPMorgan Chase Office for the account of each Lender and any payment made after
such time on such due date will be deemed to have been made on the next
succeeding Banking Day. In the event that any payment (other than with respect
to the principal of the Loans) under this Agreement becomes due, the Agent, at
its discretion without the requirement of obtaining the consent of or giving
prior notice to the Borrowers, may make a Revolving Credit Loan to the Borrowers
for the amount thereof (or during the continuance of an Event of Default,
debiting the Collateral Account for the payment thereof to the Lenders). The
Agent, or any Lender (subject to SECTION 11.17) for whose account any such
payment is to be made, may (but shall not be obligated to) debit the amount of
any such payment which is not made by such time to any ordinary deposit account
of the Borrowers with the Agent or such Lender, as the case may be, and any
Lender so doing shall promptly notify the Agent. Subject to SECTION 11.16, the
Borrowers shall, at the time of making each payment under this Agreement or the
Notes, specify to the Agent the principal or other amount payable by the
Borrowers under this Agreement or the Notes to which such payment is to be
applied and in the event that it fails to so specify, or if a Default or Event
of Default has occurred and is continuing, the Agent may, subject to SECTION
11.16, apply such payment as it may elect in its sole discretion. If the due
date of any payment under this Agreement or the Notes would otherwise fall on a
day which is not a Banking Day, such date shall be extended to the next
succeeding Banking Day and interest shall be payable for any principal so
extended for the period of such extension. Each payment received by the Agent
hereunder or under any Note for the account of a Lender shall be paid promptly
to such Lender, in immediately available funds, for the account of such Lender's
Lending Office.

         SECTION 2.17 PURPOSE. The Borrowers shall use the proceeds of the Loans
solely (a) to refinance the existing senior secured Indebtedness of the
Borrowers and their Subsidiaries listed on SCHEDULE 2.17 hereto, (b) for working
capital requirements of the Borrowers and their Subsidiaries, (c) to finance
transaction costs associated with the closing of the transactions contemplated
by the Facility Documents and the Exchange Notes, (d) to support Letters of
Credit up to the Letter of Credit Sublimit, (e) for other general corporate
purposes, and (f) commencing on the date on which Hawk shall have submitted
audited financial statements for the Fiscal Year ending December 31, 2002, so
long as no Default or Event of Default shall have occurred and is continuing on
such date or would result therefrom, Hawk may use the proceeds of Revolving
Loans to redeem its Pre-Exchange Notes then outstanding, if any, or any portion
thereof (the "PRE-EXCHANGE NOTE REDEMPTION"), PROVIDED that Hawk demonstrates
average excess Collateral Availability, during the thirty (30) calendar day
period immediately preceding such proposed Pre-Exchange Note Redemption (or, in
the case that the amount of Pre-Exchange Notes then outstanding is in excess of
$3,000,000, during the sixty (60) calendar day period immediately

<PAGE>

preceding such proposed Pre-Exchange Note Redemption), in excess of the sum of
(x) the face amount of Pre-Exchange Notes proposed for such Pre-Exchange Note
Redemption, PLUS (y) $6,000,000. Notwithstanding the foregoing, in the event the
Borrowers prepay Revolving Loans other than the Fixed Asset Advance as
contemplated by the proviso to the third sentence of SECTION 2.04(e) with the
proceeds from an Asset Sale, then an amount of the Revolving Commitments, as
specified by the Borrowers' Agent, equal to the amount of such prepayment (a
"RESERVED COMMITMENT AMOUNT") shall be reserved and shall not be available for
borrowing hereunder except and to the extent such proceeds are used to make
reinvestments permitted by SECTION 7.10(f). The Borrowers agree that upon any
borrowing of Revolving Loans which will utilize the Reserved Commitment Amount
to advise the Agent in writing of such fact at the time of borrowing,
identifying the amount of the borrowing that is to utilize the Reserved
Commitment Amount, the reinvestment in respect of which the proceeds are to be
applied and the reduced Reserved Commitment Amount remaining after such
utilization.

         SECTION 2.18 EXTENSION OF THE SCHEDULED MATURITY DATE.

         (a) Subject to the other provisions of this Agreement and PROVIDED that
no Event of Default has occurred and is continuing, the aggregate Commitments
shall be effective for an initial period from the Effective Date to the initial
Scheduled Maturity Date; PROVIDED that the Scheduled Maturity Date, and
concomitantly the aggregate Commitments, may be extended upon the Borrowers'
request for an additional one-year period expiring on the date that is one year
from the initialed Scheduled Maturity Date, PROVIDED FURTHER, that the Borrowers
may request only one (1) extension pursuant to this SECTION 2.18. The Borrowers'
Agent shall make any such request on behalf of the Borrowers at least thirty
(30) days, but no more than sixty (60) days, prior to the initial Scheduled
Maturity Date.

         (b) Upon receipt of the Borrowers' request to extend the Scheduled
Maturity Date, the Agent shall promptly notify each Lender of such request and
each Lender shall notify the Agent, no later than fifteen (15) days after such
Lender's receipt of notice, whether such Lender, in the exercise of its sole
discretion, will extend the Scheduled Maturity Date for an additional one-year
period. Any Lender which shall not timely notify the Agent whether it will
extend the Scheduled Maturity Date shall be deemed to have rejected the request
to extend the Scheduled Maturity Date and its Commitment. No Lender shall have
any obligation whatsoever to agree to extend the Scheduled Maturity Date. Any
agreement to extend the Scheduled Maturity Date by any Lender shall be
irrevocable, except as provided in clause (d) of this SECTION 2.18.

         (c) If all Lenders notify the Agent pursuant to clause (b) of this
SECTION 2.18 of their agreement to extend the Scheduled Maturity Date, then the
Agent shall so notify each Lender and the Borrowers' Agent and such extension
shall be effective without other or further action by any party hereto for such
additional one-year period.

         (d) If Lenders constituting at least the Required Lenders approve the
extension of the Scheduled Maturity Date (such Lenders agreeing to extend the
Scheduled Maturity Date herein called the "ACCEPTING LENDERS") and if one or
more Lenders shall notify, or be deemed to notify, the Agent pursuant to clause
(b) of this SECTION 2.18 that they will not extend the initial Scheduled
Maturity Date (such Lenders herein called the "DECLINING Lenders"), then (A) the
Agent shall promptly so notify the Borrowers' Agent and the Accepting Lenders,
(B) the Accepting Lenders shall, upon the Borrowers' election to extend the
initial Scheduled Maturity Date in accordance

<PAGE>

with clause (i) or (ii) below, extend the initial Scheduled Maturity Date, and
(C) the Borrowers' Agent shall, pursuant to a notice delivered to the Agent, the
Accepting Lenders and the Declining Lenders, no later than the tenth (10th) day
following the date by which each Lender is required, pursuant to clause (b) of
this SECTION 2.18 to approve or disapprove the requested extension of the
Scheduled Maturity Date, either:

                  (i) elect to extend the Scheduled Maturity Date and direct the
         Declining Lenders to terminate their Commitments, which termination
         shall become effective on the date that would have been the Scheduled
         Maturity Date except for the operation of this SECTION 2.18. On the
         date that would have been the Scheduled Maturity Date except for the
         operation of this SECTION 2.18, (x) the Borrowers' Agent shall deliver
         a notice of the effectiveness of such termination to the Declining
         Lenders with a copy to the Agent and (y) the Borrowers shall pay in
         full in immediately available funds all Obligations of the Borrowers
         owing to the Declining Lenders, including any amounts required pursuant
         to ARTICLE 3, and (z) upon the occurrence of the events set forth in
         clauses (x) and (y), the Declining Lenders shall each cease to be a
         Lender hereunder for all purposes, other than for purposes of ARTICLE 3
         and SECTION 12.03, and shall cease to have any obligations or any
         Commitment hereunder, other than to the Agent pursuant to ARTICLE 11,
         and the Agent shall promptly notify the Accepting Lenders and the
         Borrowers' Agent of the new Commitments; or

                  (ii) elect to extend the Scheduled Maturity Date and, prior to
         or no later than the then scheduled Maturity Date, (A) to replace one
         or more of the Declining Lenders with another lender or lenders that is
         an Eligible Assignee and otherwise reasonably acceptable to the Agent
         (such lenders herein called the "REPLACEMENT LENDERS") and (B) the
         Borrowers shall pay in full in immediately available funds all
         Obligations of the Borrowers owing to any Declining Lenders that are
         not being replaced, as provided in clause (i) above; PROVIDED that (x)
         any Replacement Lender shall purchase, and any Declining Lender shall
         sell, such Declining Lender's rights and obligations hereunder without
         recourse or expense to, or warranty by, such Declining Lender for a
         purchase price equal to the aggregate outstanding principal amount of
         the Obligations payable to such Declining Lender plus any accrued but
         unpaid interest on such Obligations and accrued but unpaid fees or
         other amounts owing in respect of such Declining Lender's Loans and
         Commitments hereunder, and (y) upon the payment of such amounts
         referred to in clause (x) and the execution of an Assignment and
         Acceptance by such Replacement Lender and such Declining Lender, such
         Replacement Lender shall constitute a Lender hereunder and such
         Declining Lender being so replaced shall no longer constitute a Lender
         other than for purposes of ARTICLE 3 and SECTION 12.03, and shall no
         longer have any obligations hereunder, other than to the Agent pursuant
         to ARTICLE 11; or

                  (iii) elect to revoke and cancel the extension request by
         giving notice of such revocation and cancellation to the Agent (which
         shall promptly notify the Lenders thereof) no later than the tenth
         (10th) day following the date by which each Lender is required,
         pursuant to clause (b) of this SECTION 2.18 to approve or disapprove
         the requested extension of the Scheduled Maturity Date and
         concomitantly the total Commitments.

<PAGE>

                  (iv) If the Borrowers' Agent fails to timely provide the
         election notice referred to in this clause (d), the Borrowers shall be
         deemed to have revoked and cancelled the extension request and to have
         elected not to extend the Scheduled Maturity Date.

         (e) The Borrowers request for any extension under this SECTION 2.18
shall be deemed to be a representation and warranty that no Default or Event of
Default then exists or will exist on the proposed effective date for any
extension of the Scheduled Maturity Date and that all representations and
warranties of the Borrowers and Guarantors contained herein and in each other
Facility Document are true and correct on the date of such request and the
proposed effective date for any extension of the Scheduled Maturity Date.

                                   ARTICLE 3

                       YIELD PROTECTION; ILLEGALITY; ETC.

         SECTION 3.01 ADDITIONAL COSTS.

         (a) The Borrowers shall pay directly to each Lender and the Issuing
Bank, as applicable (each an "AFFECTED PARTY") from time to time on demand
therefor such amounts as such Affected Party may reasonably determine to be
necessary to compensate it for any increased costs which such Affected Party
determines are attributable to its making or maintaining any Eurodollar Loans
under this Agreement or its Note or its obligation to make any such Loans
hereunder or issuing, participating in or maintaining any Letter of Credit, or
to compensate it for any reduction in any amount receivable by such Affected
Party hereunder in respect of any such Loans, obligation to make such Loans or
any Letters of Credit (such increases in costs and reductions in amounts
receivable being herein called "ADDITIONAL COSTS"), resulting from any
Regulatory Change which: (i) changes the basis of taxation of any amounts
payable to such Affected Party under this Agreement or its Notes in respect of
any of such Loans or Letters of Credit (other than taxes imposed on the overall
net income of such Affected Party or of its Lending Office for any of such Loans
or Letters of Credit by the jurisdiction in which such Affected Party has its
principal office or such Lending Office); (ii) imposes or modifies any reserve,
special deposit, deposit insurance or assessment, minimum capital, capital ratio
or similar requirements relating to any extensions of credit or other assets of;
or any deposits with or other liabilities of such Affected Party; or (iii)
imposes any other condition affecting this Agreement, the Eurodollar Loans made
by such Lender or its Notes or the Letters of Credit issued, participated in or
maintained by such Affected Party (or any of such extensions of credit or
liabilities). Each Affected Party will notify the Borrowers' Agent of any event
occurring after the date of this Agreement which will entitle such Affected
Party to compensation pursuant to this SECTION 3.01(a) as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation, PROVIDED that the failure to so notify the Borrowers' Agent shall
not affect the obligations of the Borrowers under this SECTION 3.01(a). If any
Affected Party requests compensation from the Borrowers under this SECTION
3.01(a), or under SECTION 3.01(c), the Borrowers' Agent may, by notice to such
Affected Party with a copy to the Agent, suspend the obligation of such Affected
Party to make Loans of the type with respect to which such compensation is
requested (in which case the provisions of SECTION 3.04 shall be applicable).

         (b) Without limiting the effect of the foregoing provisions of this
SECTION 3.01, in the event that, by reason of any Regulatory Change, any
Affected Party either (i) incurs Additional

<PAGE>

Costs based on or measured by the excess above a specified level of the amount
of a category of deposits or other liabilities of such Affected Party which
includes deposits by reference to which the interest rate on Eurodollar Loans is
determined as provided in this Agreement or a category of extensions of credit
or other assets of such Affected Party which includes Eurodollar Loans or (ii)
becomes subject to restrictions on the amount of such a category of liabilities
or assets which it may hold, then, if such Affected Party so elects by notice to
the Borrowers' Agent with a copy to the Agent, the obligation of such Affected
Party to make Loans of such type hereunder shall be suspended until the date
such Regulatory Change ceases to be in effect (in which case the provisions of
SECTION 3.04 shall be applicable).

         (c) Without limiting the effect of the foregoing provisions of this
SECTION 3.01 (but without duplication), the Borrowers shall pay directly to each
Affected Party from time to time on demand therefor such amounts as such
Affected Party may determine to be necessary to compensate such Affected Party
for any costs which it determines are attributable to the maintenance by such
Affected Party or its bank holding company or any of its Affiliates, pursuant to
any law or regulation of any jurisdiction or any interpretation, directive,
guideline or request (whether or not having the force of law) of any court or
governmental or monetary authority, whether in effect on the date of this
Agreement or thereafter, of capital in respect of its Loans hereunder or its
obligation to make Loans hereunder or in respect of its issuance, participation
in, or maintenance of Letters of Credit (such compensation to include, without
limitation, an amount equal to any reduction in return on assets or equity of
such Affected Party or its bank holding company or any of its Affiliates to a
level below that which it could have achieved but for such law, regulation,
interpretation, directive or request). Each Affected Party will notify the
Borrowers' Agent if such Affected Party is entitled to compensation pursuant to
this SECTION 3.01(c) as promptly as practicable after it determines to request
such compensation, PROVIDED that the failure to so notify the Borrowers' Agent
shall not affect the obligations of the Borrowers under this SECTION 3.01(c).

         (d) Determinations and allocations by a Lender or the Issuing Bank (as
applicable) for purposes of this SECTION 3.01 of the affect of any Regulatory
Change pursuant to subsections (a) or (b), or of the affect of capital
maintained pursuant to subsection (c), on its costs of making or maintaining
Loans or its obligation to make Loans or in respect of the Letters of Credit or
its issuance, participation in, or maintenance of Letters of Credit, or on
amounts receivable by, or the rate of return to, it in respect of Loans or such
obligation or in respect of the Letters of Credit or its issuance, participation
in, or maintenance of Letters of Credit, and of the additional amounts required
to compensate such Lender or the Issuing Bank (as applicable) under this SECTION
3.01, shall be conclusive, PROVIDED that such determinations and allocations are
made on a reasonable basis. Each Lender or the Issuing Bank (as applicable)
demanding payment from the Borrowers pursuant to this SECTION 3.01 shall furnish
to the Borrowers at the time of such demand a statement showing the basis for
and the method of calculation of such demand.

         SECTION 3.02 LIMITATION ON TYPES OF LOANS. Anything herein to the
contrary notwithstanding, if

         (a) the Agent reasonably determines (which determination shall be
conclusive) that quotations of interest rates for the relevant deposits referred
to in the definition of "Eurodollar Rate" in SECTION 1.01 are not being provided
in the relevant amounts or for the relevant maturities

<PAGE>

for purposes of determining the rate of interest for any type of Eurodollar
Loans as provided in this Agreement; or

         (b) any Lender reasonably determines (which determination shall be
conclusive) and notifies the Agent that the relevant rates of interest referred
to in the definition of "Eurodollar Rate" in SECTION 1.01 upon the basis of
which the rate of interest for any type of Eurodollar Loans is to be determined
do not adequately cover the cost to such Lender of making or maintaining such
Loans;

then the Agent shall give the Borrowers' Agent and each Lender prompt notice
thereof and so long as such condition remains in effect, the Lenders shall be
under no obligation to make Loans of such type.

         SECTION 3.03 ILLEGALITY. Notwithstanding any other provision in this
Agreement, in the event that it becomes unlawful for any Lender or its Lending
Office to honor its obligation to make or maintain Eurodollar Loans hereunder,
then such Lender shall promptly notify the Borrowers' Agent thereof (with a copy
to the Agent) and such Lender's obligation to make or maintain Eurodollar Loans
hereunder shall be suspended until such time as such Lender may again make and
maintain such Affected Loans (in which case the provisions of SECTION 3.04 shall
be applicable).

         SECTION 3.04 CERTAIN BASE RATE LOANS PURSUANT TO SECTIONS 3.01 AND
3.03. If the obligations of any Lender to make Loans of a particular type (Loans
of such type being herein called "AFFECTED LOANS" and such type being herein
called the "AFFECTED TYPE") shall be suspended pursuant to SECTION 3.01 or
SECTION 3.03, all Loans which would otherwise be made by such Lender as Loans of
the Affected Type shall be made instead as Base Rate Loans and if an event
referred to in SECTION 3.01 or SECTION 3.03 has occurred and such Lender so
requests by notice to the Borrowers with a copy to the Agent, all Affected Loans
of such Lender then outstanding shall be automatically converted into Base Rate
Loans on the date specified by such Lender in such notice and, to the extent
that Affected Loans are so made as (or converted into) Base Rate Loans, all
payments of principal which would otherwise be applied to such Lender's Affected
Loans shall be applied instead to its Base Rate Loans.

         SECTION 3.05 CERTAIN COMPENSATION. The Borrowers shall pay to the Agent
for the account of each Lender, upon the request of such Lender through the
Agent, such amount or amounts as shall be sufficient (in the reasonable opinion
of such Lender) to compensate it for any loss, cost or expense which such Lender
determines is attributable to:

         (a) any payment or conversion of a Eurodollar Loan made by the
Borrowers on a date other than the last day of a Eurodollar Interest Period or
the Maturity Date, respectively, for such Loan (whether by reason of
acceleration or otherwise);

         (b) any failure by the Borrowers to borrow any Loan to be made by such
Lender on the date specified therefor in the relevant notice under SECTION 2.11
or to convert any Loan to a Eurodollar Loan or to continue a Eurodollar Loan on
the date specified therefor in the relevant notice under SECTION 2.11; or

<PAGE>

         (c) the failure to make any prepayment of any Eurodollar Loan on the
date specified therefor in the relevant notice under SECTION 2.11.

Without limiting the foregoing, such compensation shall include an amount equal
to the excess, if any, of (i) the amount of interest which otherwise would have
accrued on the principal amount so paid or converted (in the case of clause (a)
above) or not borrowed, converted or continued (in the case of clause (b) above)
or not prepaid (in the case of clause (c) above), for the period from and
including the date of such payment or failure but excluding the last day of the
Eurodollar Interest Period for such Loan (or, in the case of a failure to
borrow, convert, continue or prepay, to but excluding the last day of the
Eurodollar Interest Period for such Loan which would have commenced on the date
specified therefor in the relevant notice) at the applicable rate of interest
for such Loan provided for herein over (ii) the amount of interest (as
reasonably determined by such Lender) such Lender would have bid in the London
interbank market for Dollar deposits for amounts comparable to such principal
amount and maturities comparable to such period. A determination of any Lender
as to the amounts payable pursuant to this SECTION 3.05 shall be conclusive,
absent manifest error.

         SECTION 3.06 MITIGATION OBLIGATIONS. If any Lender requests
compensation under SECTION 3.01, then such Lender shall use reasonable efforts
to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if in the sole judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to SECTION 3.01 in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrowers hereby agree to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.

         SECTION 3.07 TAXES.

         (a) All payments with respect to the Loans to the Agent, the Issuing
Bank or any Lender shall be made free and clear of and without deduction for,
any Indemnified Taxes or Other Taxes; PROVIDED that if the Borrowers shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased by the amount necessary so that after
making all required deductions (including deductions applicable to additional
sums described in this paragraph) the Agent, the Issuing Bank or any Lender, as
the case may be, receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrowers shall make such deductions and
(iii) the Borrowers shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law. In addition, to the
extent not paid in accordance with the preceding sentence, the Borrowers shall
pay any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.

         (b) The Borrowers shall indemnify the Agent, the Issuing Bank and each
Lender for Indemnified Taxes and Other Taxes paid by such Person, PROVIDED,
HOWEVER, that the Borrowers shall not be obligated to make payment to the Agent,
the Issuing Bank or any Lender in respect of penalties, interest and other
similar liabilities attributable to such Indemnified Taxes or Other Taxes if
such penalties, interest or other similar liabilities are attributable to the
gross negligence or willful misconduct of the Person seeking indemnification.

<PAGE>

                                   ARTICLE 4

                              CONDITIONS PRECEDENT

         SECTION 4.01 CONDITIONS PRECEDENT TO THE INITIAL LOANS. The obligations
of the Lenders to make the Loans constituting the initial borrowings are subject
to the condition precedent that on or before the Effective Date each of the
following documents shall have been delivered to the Agent in form and substance
satisfactory to the Agent and its counsel, and each of the following actions
shall have been performed to the satisfaction of the Agent and its counsel:

         (a) The Agent shall have received the Facility Documents (including
this Agreement, the Notes and the Security Documents identified on SCHEDULE
4.01(A)) duly executed by each of the parties thereto and the Facility Documents
shall be in full force and effect.

         (b) The Agent shall have received good standing certificates for Hawk
and each of its Subsidiaries from the Secretary of State (or the equivalent
thereof) of its jurisdiction of organization and each other state in which it is
required to be qualified to transact business, each to be dated a recent date
prior to the Closing Date and a bring-down good standing certificate or
telephonic confirmation from the appropriate Secretary of State in each
jurisdiction of organization of Hawk and each of its Subsidiaries dated or
telephonically received on the Closing Date; PROVIDED, HOWEVER, that the
foregoing shall not be required with respect to Hawk Motors de Mexico, S. de
R.L. de C.V., Hawk Motors Monterrey, S.A. de C.V., Hawk Composites (Suzhou)
Company Limited or Hawk Mauritius Ltd.

         (c) The Agent shall have received a certificate of the Secretary or
Assistant Secretary (or equivalent thereof) of Hawk and each of its Domestic
Subsidiaries and dated the Closing Date certifying as to (i) a copy of its
certificate of incorporation, certificate of limited partnership or other
similar organizational document as amended, modified or supplemented prior to
the Closing Date (which copy shall be certified to be true, correct and complete
by the appropriate Secretary of State as of a recent date prior to the Closing
Date), (ii) the by-laws, limited partnership agreement or other similar
organizational document of such Person as in effect on the Closing Date, (iii)
the resolutions of such Person's Board of Directors (or other governing body, as
applicable) approving and authorizing the execution, delivery and performance of
all Facility Documents to which such Person is a party and each other document
to be executed or delivered by such Person pursuant to this Agreement and (iv)
the names and true signatures of the incumbent officers of such Person
authorized to sign the Facility Documents and the other documents to be executed
and delivered by such Person under this Agreement.

         (d) The Agent shall have received evidence satisfactory to it that the
Borrowers and the Guarantors shall have taken or caused to be taken all such
actions, executed and delivered or caused to be executed and delivered all such
agreements, documents and instruments, and made or caused to be made all such
filings and recordings that may be necessary or, in the opinion of the Agent,
desirable in order to create in favor of the Agent, for the benefit of the
Lenders, a valid and perfected First Priority security interest in the entire
Collateral. Such actions shall include, without limitation, the following:

<PAGE>

                  (i) delivery to the Lender of all the Security Documents, duly
         executed by the applicable Borrower or Guarantor, together with
         accurate and complete schedules to all such Security Documents;

                  (ii) delivery to the Agent of (A) certificates (which
         certificates shall be accompanied by irrevocable undated stock powers,
         duly endorsed in blank and otherwise satisfactory in form and substance
         to the Agent) representing all capital stock and other equity interests
         pledged pursuant to the Security Documents and (B) all promissory notes
         or other instruments (duly endorsed, where appropriate, in a manner
         satisfactory to the Agent) evidencing any Collateral;

                  (iii) delivery to the Agent of (A) the results of a recent
         search (or a recent bringdown search to prior lien searches), by one or
         more Persons satisfactory to the Agent, of all effective UCC financing
         statements and fixture filings and all judgment and tax lien filings
         which may have been made with respect to any Collateral, together with
         copies of all such filings disclosed by such search, (B) UCC
         termination statements duly executed by all applicable Persons for
         filing in all applicable jurisdictions as may be necessary to terminate
         any effective UCC financing statements, fixture filings or comparable
         filings disclosed in such search (other than any such financing
         statements or fixture filings in respect of Liens permitted to remain
         outstanding pursuant to the terms of this Agreement), and (C) UCC
         financing statements duly authorized and/or executed by each applicable
         Borrower and Guarantor with respect to all Collateral of such party,
         for filing in all jurisdictions as may be necessary or, in the opinion
         of the Agent, desirable to perfect the security interests created in
         such Collateral pursuant to the Security Documents;

                  (iv) delivery to the Agent of all cover sheets or other
         documents or instruments required to be filed in order to create or
         perfect Liens in respect of any IP Collateral; and

                  (v) if so requested by the Agent, delivery to the Agent of
         opinions of counsel (which counsel shall be reasonably satisfactory to
         the Agent and the Lenders) under the local laws of each jurisdiction
         where the Borrowers and the Guarantor is organized with respect to the
         creation and perfection of the security interests in favor of the Agent
         in the Collateral and such other matters governed by the laws of such
         jurisdiction regarding such security interests as the Agent may
         request, in each case in form and substance satisfactory to the Agent.

         (e) Hawk and its Subsidiaries shall have obtained all required
environmental permits, licenses, authorizations and consents that are necessary
in connection with the transactions contemplated by the Facility Documents from
the appropriate Governmental Authorities, and each of the foregoing permits,
licenses, authorizations and consents shall be in full force and effect. Hawk
and its Subsidiaries shall have also obtained all other permits, licenses,
authorizations and consents from all other Governmental Authorities and all
consents of other Persons with respect to Material Indebtedness, Liens and
agreements, in each case that are necessary or advisable in connection with the
transactions contemplated by the Facility Document, and each of the foregoing
shall be in full force and effect.

         (f) The Agent shall have received and shall be satisfied with (i) the
certified financial statements referred to in SECTION 5.05 hereof; including,
without limitation, the audited

<PAGE>

consolidated financial statements of Hawk and its Subsidiaries for the Fiscal
Years ended December 31, 1999, 2000 and 2001, (ii) the unaudited consolidated
financial statements of Hawk for the Fiscal Quarter ended March 31, 2002 and the
Fiscal Quarter ended June 30, 2002 and (iii) any and all written materials,
reports, and/or management letters prepared by Hawk's current independent
auditors. All such financial statements shall consist of at least a balance
sheet, income statement and statement of cash flows in accordance with GAAP.

         (g) The Agent and each Lender shall have received and shall be
satisfied with its review of (i) consolidated monthly balance sheet projections
and profit and loss statements and cash flow projections for Hawk and its
Subsidiaries, prepared in accordance with GAAP, for the 2002 Fiscal Year
(demonstrating projected financial results for the subsequent 12-month period),
(ii) consolidated quarterly balance sheet projections and profit and loss
statements and cash flow projections for Hawk and its Subsidiaries prepared in
accordance with GAAP, for the 2003 Fiscal Year (demonstrating projected
financial results for the subsequent 12-month period, and (iii) consolidated
annual balance sheet projections and profit and loss statements and cash flow
projections for Hawk and its Subsidiaries, prepared in accordance with GAAP, for
the Fiscal Year ended 2004 (demonstrating projected financial results for the
subsequent 12-month period), in each case, together with the written assumptions
on which such projections are based.

         (h) The Agent shall have received and be satisfied that the August 2002
and September 2002 EBITDA results are at least 95% of the projected EBITDA as
set forth in Hawk's August 31, 2002 projections.

         (i) The Agent shall have received a certificate of a duly authorized
officer of the Borrowers dated the Effective Date, stating that the
representations and warranties in ARTICLE 5 are true and correct on such date as
though made on and as of such date and that no event has occurred and is
continuing which constitutes a Default or Event of Default.

         (j) The Agent shall have received a favorable opinion of Kohrman,
Jackson & Krantz, counsel for the Borrowers, dated the Effective Date, and
covering such matters as the Agent or any Lender may reasonably request, and an
opinion of counsel with respect to the transactions contemplated by the Exchange
Notes addressed to the Agent and the Lenders, or a letter of reliance thereon
addressed to the Agent and the Lenders.

         (k) The Agent shall have received solvency certificates of duly
authorized officers of the Borrowers in the form of EXHIBIT C, certifying as to
the solvency of each of the Borrowers and their Subsidiaries after giving effect
to the funding of the initial Loans.

         (l) The Agent shall have received insurance certificates in form
satisfactory to the Agent evidencing casualty, all-risk, product liability,
business interruption and other insurance of Hawk, its Subsidiaries and their
properties and assets having coverage and issued by insurance companies
satisfactory to the Agent and naming the Agent as a lender's loss payee,
mortgagee and an additional insured, as appropriate.

         (m) The Agent shall have received an initial Borrowing Base
Certificate, remittance, debit and credit reports and a statement of the aging
of accounts in a form reasonably acceptable to the Agent with respect to Hawk
and its Subsidiaries and consistent with the requirements of SECTION 6.09
hereof; dated as of not more than thirty (30) days prior to the date of the
initial Loans.

<PAGE>

         (n) Hawk shall have delivered to the Agent evidence reasonably
satisfactory to the Agent that no material liability to Hawk or any of its
Subsidiaries under any Environmental Law exists with respect to the Leasehold
Properties or any owned Real Property.

         (o) The Agent shall be satisfied with its field examinations (including
the "take-down" field examinations) and due diligence review of Hawk and its
Subsidiaries, including, but not limited to, satisfactory review by the Agent of
the projections of Hawk and its Subsidiaries.

         (p) The Agent shall be satisfied with the cash management arrangements
(including domestic lock box arrangements) and management information systems in
place with respect to the Borrowers and their Subsidiaries and the Agent shall
have received counterparts of a Lockbox Agreement and Controlled Account
Agreement with respect to all lockboxes and accounts that receive the proceeds
of Collateral and of blocked account agreements with respect to the accounts
listed on SCHEDULE 4.01(e) hereto, duly executed by all parties thereto and such
Lockbox Agreements and Controlled Account Agreements and blocked account
agreements shall be in full force and effect and in form and substance
reasonably satisfactory to the Agent.

         (q) The Agent shall have received a duly executed release and
termination, together with proper UCC-3 termination statements in form and
substance satisfactory to the Agent, evidencing the termination of the
Indebtedness set forth on SCHEDULE 2.17 and the release of all Liens securing
such Indebtedness; and immediately following the funding of the initial loans
hereunder, the Borrowers shall have caused to be repaid in full all such
outstanding Indebtedness and shall have caused to be released all liens in favor
of the holders of such Indebtedness.

         (r) The Agent and the Lenders shall have received all fees and other
amounts due and payable to such Persons at or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all out-of-pocket
expenses required to be reimbursed or paid by the Borrowers hereunder; and

         (s) The Agent shall have received copies of all material contracts and
such other documents as the Agent shall have reasonably requested and the same
shall be reasonably satisfactory to each of them.

         (t) The Agent shall have received and be satisfied with an appraisal,
performed by a third party appraiser acceptable to the Agent, of Hawk's and its
Subsidiaries' inventory.

         (u) The Agent shall have received, reviewed and be satisfied with an
appraisal of Hawk's and its Subsidiaries' machinery, equipment and real
property, all prepared using valuation methodology acceptable to the Agent. To
the extent existing appraisals are deemed acceptable in form and content to the
Agent, Borrower will be required to direct such appraisers to recertify such
appraisals directly to the Agent.

         (v) The Agent shall have received and be satisfied with a Landlord's
Waiver and Consent, in the form of EXHIBIT D, with respect to each Leasehold
Property.

         (w) Hawk shall have completed its offer to exchange its Pre-Exchange
Notes for new senior notes (the "EXCHANGE NOTES"), with the Exchange Notes being
in an amount and having

<PAGE>

terms, conditions, covenants and a maturity date satisfactory to the Agent and
the Lenders in their sole discretion.

         (x) The Agent shall have received a certificate identifying any Phase I
or Phase II reports with respect to Hawk's and its Subsidiaries' Owned Property
and be satisfied in its sole discretion with the environmental reviews
performed.

         (y) The Borrowers' shall have a minimum Revolving Availability as of
the Effective Date (after giving effect to the funding of all Loans and the
issuance of all Letters of Credit to be funded or issued on the Effective Date)
of not less than $9,000,000.

         (z) The Agent shall have received ALTA loan title insurance policies,
title reports, flood zone certifications and such other insurance policies,
including title, flood and earthquake insurance policies, as the Agent may
reasonably request.

         SECTION 4.02 ADDITIONAL CONDITIONS PRECEDENT. The obligations of the
Lenders to make any Loans (including the initial Loans) and the obligation of
the Issuing Bank to issue, amend, renew or extend any Letter of Credit shall be
subject to the further conditions precedent that on the date of such Loan or
Letter of Credit:

         (a) The following statements shall be true:

                  (i) the representations and warranties contained in ARTICLE 5
         of this Agreement are true and correct (or, in the case of the making
         of any Loan after the initial Loan, true and correct in all material
         respects, except in the case of any representation or warranty
         containing a materiality qualifier, then in all respects) on and as of
         the date of such Loan or Letter of Credit as though made on and as of
         such date; and

                  (ii) no Default or Event of Default has occurred and is
         continuing, or would result from such Loan or Letter of Credit;

         (b) The Agent shall have received such approvals, certificates and
other documents as the Agent or any Lender may reasonably request;

         (c) At or before the time of making the first Revolving Credit Loan
hereunder and as of the date of each subsequent Revolving Credit Loan hereunder,
the Agent shall determine that the aggregate principal amount of all Revolving
Credit Loans (including the one requested) does not exceed the Borrowing Base;

         (d) At or before the time of making the first CapEx Loan hereunder and
as of the date of each subsequent CapEx Loan hereunder, the Agent shall
determine that the aggregate principal amount of all CapEx Loans (including the
one requested) does not exceed the aggregate CapEx Commitments; and

         (e) The Borrowers shall have paid to the Agent all accrued fees and
expenses payable to the Agent in connection with this Agreement, including all
reasonable fees and disbursements of legal counsel to the Agent.

<PAGE>

         SECTION 4.03 DEEMED REPRESENTATIONS. Each notice of a Loan and
acceptance by the Borrowers of the proceeds of such Loan and request and
acceptance of a Letter of Credit shall constitute a representation and warranty
that the conditions set forth in Subsection (a) of SECTION 4.02 are true and
correct as of the date of each such Loan or Letter of Credit. The Agent may from
time to time require certificate(s) of duly authorized officer(s) of the
Borrowers, stating that the representations and warranties in ARTICLE 5 are true
and correct in all material respects (except in the case of any representation
or warranty containing a materiality qualifier, then in all respects) on such
date as though made on and as of such date and that no event has occurred and is
continuing which constitutes a Default or an Event of Default.

                                   ARTICLE 5

                         REPRESENTATIONS AND WARRANTIES

         The Borrowers hereby jointly and severally represent and warrant, as of
the date hereof and as of the date of each Loan, that:

         SECTION 5.01 ORGANIZATION, GOOD STANDING AND DUE QUALIFICATION. Hawk
and each of its Subsidiaries is an entity which is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, has the corporate or other equivalent power and authority to own
its assets and to transact the business in which it is now engaged or proposed
to be engaged, and is duly qualified as a foreign corporation or limited
liability company or other entity and in good standing under the laws of each
other jurisdiction in which the nature of its business requires such
qualification except where the failure to so qualify could not reasonably be
expected to have a Material Adverse Effect.

         SECTION 5.02 POWER AND AUTHORITY; NO CONFLICTS. The execution, delivery
and performance of the Facility Documents: (a) have been duly authorized by all
necessary corporate or limited liability company action by the Borrowers and the
Guarantors party thereto and do not and will not require any consent or approval
of the equityholders of the Borrowers or the Guarantors or contravene their
charters or by-laws or other governance or organizational documents; (b) will
not violate any provision of, or require any filing, registration, consent or
approval under, any law, rule, regulation (including, without limitation,
Regulation T, Regulation U and Regulation X), order, writ, judgment, injunction,
decree, determination or award presently in effect having applicability to Hawk
or any of its Subsidiaries, except as could not reasonably be expected to have a
Material Adverse Effect; (c) will not result in a breach of or constitute a
default under or require any consent which has not been obtained under any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which Hawk or any of its Subsidiaries is a party or by which the
properties of Hawk or any of its Subsidiaries may be bound or affected; (d) will
not result in, or require, the creation or imposition of, any Lien upon or with
respect to any of the properties now owned or hereafter acquired Hawk or any of
its Subsidiaries, except as provided in the Security Documents; and (e) will not
cause Hawk or any of its Subsidiaries, as the case may be, to be in default
under any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or any such indenture, agreement, lease or instrument,
except as could not be reasonably expected to have a Material Adverse Effect.

         SECTION 5.03 LEGALLY ENFORCEABLE AGREEMENTS. Each Facility Document is
a legal, valid and binding obligation of each Borrower and each Guarantor party
thereto, enforceable

<PAGE>

against each Borrower and each Guarantor party thereto, in accordance with its
terms, except to the extent that enforceability may be subject to limitations
imposed by general principles of equity or applicable bankruptcy, insolvency and
other similar laws affecting creditors' rights generally.

         SECTION 5.04 LITIGATION. There are no actions, suits or proceedings
pending or, to the knowledge of the Borrowers, threatened, against or affecting
Hawk or any of its Subsidiaries before any court, governmental agency or
arbitrator, which could reasonably be expected to, in any one case or in the
aggregate, result in a Material Adverse Effect.

         SECTION 5.05 FINANCIAL STATEMENTS. (a) Hawk has heretofore delivered to
the Lenders the following financial statements:

                  (i) the consolidated balance sheets and statements of
         operations, shareholders' equity and cash flows of Hawk and its
         Subsidiaries, as of and for the fiscal years ended December 31, 1999,
         December 31, 2000, and December 31, 2001, audited and accompanied by an
         opinion of their independent public accountants;

                  (ii) the unaudited consolidated balance sheet and statement of
         operations of Hawk and its Subsidiaries, as of and for the Fiscal
         Quarter ended March 31, 2002 and the Fiscal Quarter ended June 30, 2002
         and as of and for the year-to-date period ended August 31, 2002, in
         each case certified by the principal financial officer of Hawk that
         such financial statements fairly present in all material respects the
         financial condition of Hawk and its Subsidiaries as of such dates and
         the results of the operations of Hawk and its Subsidiaries for the
         period ended on such dates and that all such financial statements,
         including the related schedules and notes thereto have been prepared in
         all material respects in accordance with GAAP (subject to normal
         year-end audit adjustments and the absence of footnotes) applied
         consistently throughout the periods involved;

                  (iii) consolidated monthly balance sheet projections and
         profit and loss statements and cash flow projections for Hawk and its
         Subsidiaries (including all Foreign Subsidiaries), prepared in
         accordance with GAAP (subject to normal year-end audit adjustments and
         the absence of footnotes), for the Fiscal Year ended 2002
         (demonstrating projected financial results for the subsequent 12-month
         period), in sufficient detail to determine fixed and variable costs and
         together with the written assumptions on which such projections are
         based;

                  (iv) consolidated quarterly pro-forma balance sheet
         projections and profit and loss statements and cash flow projections
         for Hawk and its Subsidiaries (including all Foreign Subsidiaries),
         prepared in accordance with GAAP (subject to normal year-end audit and
         adjustments and the absence of footnotes), for the Fiscal Year ended
         2003 (demonstrating projected financial results for the subsequent
         12-month period), in sufficient detail to determine fixed and variable
         costs and together with the written assumptions on which such
         projections are based; and

                  (v) consolidated annual balance sheet projections and profit
         and loss statements and cash flow projections for the Hawk and its
         Subsidiaries (including all Foreign Subsidiaries), prepared in
         accordance with GAAP (subject to normal year-end audit adjustments and
         the absence of footnotes), for the Fiscal Year ended 2004
         (demonstrating

<PAGE>

         projected financial results for the subsequent 12-month period), in
         sufficient detail to determine fixed and variable costs and together
         with the written assumptions on which such projections are based.

         Such financial statements (except for the projections) present fairly,
in all material respects, the respective consolidated financial position and
results of operations and cash flows of the respective entities as of such
respective dates and for such periods in accordance with GAAP, subject to
year-end audit adjustments and the absence of footnotes in the case of such
unaudited or pro forma statements. The projections were prepared by Hawk in good
faith after taking into account the existing and historical levels of business
activity of Hawk and its Subsidiaries, known trends, including general economic
trends, and all other information, assumptions and estimates considered by
management of Hawk and its Subsidiaries pertinent thereto. The projections were
considered by management of Hawk and its Subsidiaries to be realistically
achievable as of the date of preparation and were based on assumptions that were
reasonable when made.

         (b) Since December 31, 2001, there has been no material adverse change
in the business, assets, operations or condition, financial or otherwise, of
Hawk and its Subsidiaries, taken as a whole, from that set forth in the December
31, 2001 financial statements referred to in clause (i) of paragraph (a) above.

         (c) Neither Hawk nor any of its Subsidiaries has on the date hereof any
contingent liabilities, liabilities for taxes, forward or long-term commitments
(other than those entered into in the ordinary course of business) or unrealized
or anticipated losses from any unfavorable commitments in each case that are
material to Hawk and its Subsidiaries taken as a whole, except as referred to or
reflected or provided for in the balance sheets as of the end of their
respective fiscal years ended in 2001, referred to above, or as otherwise
permitted pursuant to this Agreement, or as referred to or reflected or provided
for in the financial statements described in this SECTION 5.05.

         SECTION 5.06 OWNERSHIP AND LIENS. Hawk and its Domestic Subsidiaries
have title to, or valid leasehold interests in, all of its properties and
assets, real and personal, including the properties and assets, and leasehold
interests reflected in the financial statements for the period ended June 30,
2002 referred to in SECTION 5.05 (other than any properties or assets disposed
of in the ordinary course of business) and none of the properties and assets
owned by Hawk or any of its Domestic Subsidiaries (excluding any of its
leasehold interests) is subject to any Lien, except as for Permitted Liens. The
Security Documents create, as security for the Obligations, valid and
enforceable Liens on all of the Collateral in favor of the Agent, subject to no
other Liens, except for Permitted Liens. Upon the satisfaction of the conditions
precedent set forth in SECTION 4.01, the filing of the Patent Security
Agreements and the Trademark Security Agreements in the U.S. Patent and
Trademark Office and the filing of the UCC financing statements in the filing
offices identified on Schedule 1(D) to the Security and Pledge Agreement, such
Liens on the Collateral shall be First-Priority Liens and no further recordings
or filings are or will be required in connection with the creation, perfection
or enforcement of such Liens.

         SECTION 5.07 EXISTING INDEBTEDNESS. Neither Hawk nor any of its
Subsidiaries owes Indebtedness as of the Effective Date for borrowed money or
under any title retention agreements (including conditional sale contracts and
Capitalized Leases) except as listed on SCHEDULE 5.07 hereto.

<PAGE>

         SECTION 5.08 TAXES. Hawk and its Subsidiaries have filed all tax
returns and other material reports (federal, state and local) required to be
filed and have paid all taxes, assessments and governmental charges and levies
imposed upon Hawk or any of its Subsidiaries or their respective properties
which are due and payable, including interest and penalties, except for such
taxes which are being contested by Hawk or any of its Subsidiaries in good faith
in appropriate proceedings and for which adequate reserves have been set aside
on the books of Hawk and its Subsidiaries in accordance with GAAP.

         SECTION 5.09 ERISA. Except as set forth on SCHEDULE 5.09 hereto, (i)
Hawk and its Domestic Subsidiaries are in compliance in all material respects
with all applicable provisions of ERISA; (ii) neither a Reportable Event nor a
Prohibited Transaction has occurred with respect to any Plan; (iii) no notice of
intent to terminate a Plan has been filed nor has any Plan been terminated; (iv)
no circumstance exists which constitutes grounds under Section 4042 of ERISA
entitling the PBGC to institute proceedings to terminate, or appoint a trustee
to administer, a Plan, nor has the PBGC instituted any such proceedings; (v)
none of Hawk, its Domestic Subsidiaries or any ERISA Affiliate has completely or
partially withdrawn under Sections 4201 or 4204 of ERISA from a Multiemployer
Plan; (vi) Hawk and each of its Domestic Subsidiaries and each of their ERISA
Affiliates have met all minimum funding requirements under ERISA with respect to
all of their Plans; and (vii) none of Hawk, its Domestic Subsidiaries or any
ERISA Affiliate has incurred any liability to the PBGC under ERISA in excess of
$1,000,000.

         SECTION 5.10 SUBSIDIARIES AND AFFILIATES. Set forth on SCHEDULE 5.10 is
a complete and correct list of all Subsidiaries of Hawk as of the date hereof
together with, for each such Subsidiary, (a) the jurisdiction of organization of
such Subsidiary, (b) each Person holding ownership interests in such Subsidiary
and (c) the nature of the ownership interests held by each such Person and the
percentage of ownership of such Subsidiary represented by such ownership
interests. Except as disclosed on SCHEDULE 5.10, (i) Hawk and its Subsidiaries
own, free and clear of Liens (other than Permitted Liens) and have the
unencumbered right to vote all outstanding ownership interests in each Person
shown to be held by it on SCHEDULE 5.10, (ii) all of the issued and outstanding
capital stock of each such Person organized as a corporation is validly issued,
fully paid and nonassessable and (iii) there are no outstanding Equity Rights
with respect to such Person. As of the Effective Date, the authorized, issued
and outstanding capital stock of Hawk and its Subsidiaries consists of the
capital stock described on SCHEDULE 5.10 all of which is duly and validly issued
and outstanding, fully paid and nonassessable.

         SECTION 5.11 OPERATION OF BUSINESS.

         (a) Hawk and each of its Subsidiaries possesses all licenses, permits,
franchises, Patents, Copyrights, Trademarks and trade names, or rights thereto,
necessary to conduct their business substantially as now conducted and as
presently proposed to be conducted and neither Hawk nor any of its Subsidiaries
is in violation of any rights of others with respect to any of the foregoing
except any such violation that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.

         (b) As of the date hereof, SCHEDULE 5.11 contains, with respect to Hawk
and its Domestic Subsidiaries, a true, accurate and complete list of (i) all
Real Property Assets, whether owned or leased and (ii) all leases, subleases or
assignments of leases (together with all amendments, modifications, supplements,
renewals or extensions of any thereof) affecting each

<PAGE>

Leasehold Property, regardless of whether Hawk or any of its Subsidiaries is the
landlord or tenant (whether directly or as an assignee or successor in interest)
under such lease, sublease or assignment. Each agreement listed in clause (ii)
of the immediately preceding sentence is in full force and effect and no default
has occurred and is continuing thereunder and each such agreement constitutes
the legal, valid and binding obligation of Hawk or its applicable Subsidiary,
enforceable against such Person in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors' rights generally or by
equitable principles.

         SECTION 5.12 NO DEFAULT ON OUTSTANDING JUDGMENTS OR ORDERS. Hawk and
each of its Subsidiaries have satisfied all judgments against them and neither
Hawk nor any of its Subsidiaries is in default with respect to any judgment,
writ, injunction, decree, rule or regulation of any court, arbitrator or
federal, state, municipal or other governmental authority, commission, board,
bureau, agency or instrumentality, domestic or foreign.

         SECTION 5.13 NO DEFAULTS ON OTHER AGREEMENTS. Neither Hawk nor any of
its Subsidiaries is a party to any indenture, loan or credit agreement or any
lease or other agreement or instrument or subject to any charter or corporate
restriction, the noncompliance with which could reasonably be expected to have a
Material Adverse Effect. Neither Hawk nor any of its Subsidiaries is in default
in any respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement or instrument
material to its business to which it is a party.

         SECTION 5.14 LABOR MATTERS.

         (a) Except as set forth on SCHEDULE 5.14, (i) no employee of Hawk or
any of its Subsidiaries is represented by a labor union, no labor union has been
certified or recognized as a representative of any such employee, and neither
Hawk nor any of its Subsidiaries has any obligation under any collective
bargaining agreement or other agreement with any labor union or any obligation
to recognize or deal with any labor union and there are no such contracts or
other agreements pertaining to or which determine the terms or conditions of
employment of any employee of Hawk or any of its Subsidiaries, (ii) there are no
pending or threatened representation campaigns, elections or proceedings, (iii)
neither Hawk nor any of its Subsidiaries has any knowledge of any strikes,
slowdowns or work stoppages of any kind, or threats thereof and no such
activities occurred during the 24-month period preceding the date hereof, (iv)
neither Hawk nor any of its Subsidiaries has engaged in, admitted committing or
been held to have committed any unfair labor practice, and (v) no claims have
been filed against Hawk or any of its Subsidiaries by any employees or
representatives thereof that could reasonably be expected to have a Material
Adverse Effect.

         (b) Except as set forth on SCHEDULE 5.14, Hawk and each of its
Subsidiaries have at all times complied in all material respects, and are in
material compliance with, all applicable laws, rules and regulations respecting
employment, wages, hours, compensation, benefits, and payment and withholding of
taxes in connection with employment.

         (c) Except as set forth on SCHEDULE 5.14, Hawk and each of its
Subsidiaries have at all times complied in all material respects, and are in
material compliance with, all applicable laws, rules and regulations respecting
occupational health and safety, whether now existing or

<PAGE>

subsequently amended or enacted, including, without limitation, the Occupational
Safety & Health Act of 1970, 29 U.S.C. Section 651 et seq. and the state
analogies thereto, all as amended or superseded from time to time, and any
common law doctrine relating to worker health and safety.

         SECTION 5.15 INVESTMENT COMPANY ACT; HOLDING COMPANY ACT. Neither Hawk
nor any of its Subsidiaries (a) is an "investment company" within the meaning
of, or subject to regulation under, the United States Investment Company Act of
1940, as amended or (b) is a "holding company" within the meaning of, or subject
to regulation under, the Public Utility Holding Company Act of 1935, as amended.

         SECTION 5.16 ENVIRONMENTAL MATTERS. Except as set forth on SCHEDULE
5.16, no real property currently or previously owned or leased by Hawk or any of
its Subsidiaries is in material violation of any Environmental Laws, and no
Hazardous Materials are present on said real property other than Hazardous
Materials used, generated, treated, stored, disposed of or otherwise introduced
in material compliance with all applicable Environmental Laws. Except as set
forth on SCHEDULE 5.16, neither Hawk nor any of its Subsidiaries has been
identified in any litigation, administrative proceedings or investigation as a
responsible party or potentially responsible party for any liability under any
Environmental Laws.

         SECTION 5.17 REGULATION U. Neither Hawk nor any of its Subsidiaries
owns, directly or indirectly any margin stock (as defined in Regulation U),
other than stock of Hawk held in treasury. The proceeds of the Loans are not
being used directly or indirectly for the purpose, whether immediate, incidental
or ultimate, of buying or carrying any margin stock, or to extend credit to
others for such purpose, in violation of Regulation T, Regulation U or
Regulation X.

         SECTION 5.18 NO GUARANTIES OR INDEMNITIES. Except as set forth on
SCHEDULE 5.07, neither Hawk nor any of its Subsidiaries is obligated on any
Guaranty or any indemnification of any kind for the debts, liabilities or
obligations of any Person, including without limitation any Affiliate.

         SECTION 5.19 BANK ACCOUNTS. SCHEDULE 5.19 lists all banks and other
financial institutions at which Hawk or any of its Domestic Subsidiaries
maintains deposits and/or other accounts as of the Closing Date and such
Schedule correctly identifies the name, address and telephone number of each
depository, the name in which the account is held, a description of the purpose
of the account and the complete account number.

         SECTION 5.20 TRADE RELATIONS. There exists no actual or, to the
knowledge of Hawk or any of its Subsidiaries, threatened termination,
cancellation or limitation of, or any modification or change in, the business
relationship between Hawk or any of its Subsidiaries and any customer or any
group of customers whose purchases of goods or services individually or in the
aggregate are material to the business of Hawk or any of its Subsidiaries, or
with any material supplier and, to the knowledge of Hawk or any of its
Subsidiaries, there exists no present condition or state of facts or
circumstances which would materially adversely affect Hawk or any of its
Subsidiaries or prevent Hawk or any of its Subsidiaries from conducting their
respective businesses after the consummation of the transactions contemplated by
this Agreement in substantially the same manner in which such businesses
heretofore have been conducted.

<PAGE>

         SECTION 5.21 TRUE AND COMPLETE DISCLOSURE. All factual information
furnished by or on behalf of Hawk and its Subsidiaries to the Agent or any
Lender on or prior to the Effective Date, for purposes of or in connection with
this Agreement or any of the transactions contemplated hereby is, and all other
such factual information hereafter furnished by or on behalf of Hawk and its
Subsidiaries to the Agent or any Lender will be, true and accurate in all
material respects on the date as of which such information is dated or furnished
and not incomplete by omitting to state any fact necessary to make such
information not misleading at such time (other than the projections described in
SECTION 5.05(a)(iv), as to which no representation is made other than as
provided in such section).

                                   ARTICLE 6

                              AFFIRMATIVE COVENANTS

         So long as any of the Loans or Letters of Credit remain outstanding or
any Lender shall have any Commitment under this Agreement, Hawk shall and shall
cause each of its Subsidiaries to:

         SECTION 6.01 MAINTENANCE OF EXISTENCE. Except as permitted by SECTION
7.03, preserve and maintain its legal existence and good standing in the
jurisdiction of its organization and qualify and remain qualified as a foreign
organization in each jurisdiction in which the nature of its business requires
such qualification.

         SECTION 6.02 CONDUCT OF BUSINESS. Continue to engage in an efficient
and commercially reasonable manner in a business of the same general type as
conducted by it on the date of this Agreement.

         SECTION 6.03 MAINTENANCE OF PROPERTIES. Except as permitted by SECTION
7.01, maintain, keep and preserve all of its properties (tangible and
intangible) necessary or useful in the conduct of its business in good working
order and condition, ordinary wear and tear excepted.

         SECTION 6.04 MAINTENANCE OF RECORDS; FISCAL YEAR. Keep adequate records
and books of account, in which complete entries will be made in accordance with
GAAP, reflecting all financial transactions of Hawk and its Subsidiaries. To
enable the ready and consistent determination of compliance with the covenants
set forth in ARTICLE 8 of this Agreement, Hawk shall maintain, and shall cause
each of its Subsidiaries (including each Foreign Subsidiary) to maintain,
December 31 of each year as the end of its Fiscal Year.

         SECTION 6.05 MAINTENANCE OF INSURANCE. Without limiting the
requirements of the Security and Pledge Agreement or any requirement in the
Mortgages, maintain insurance with financially sound and reputable insurance
companies or associations in such amounts and covering such risks as the Agent
deems reasonably appropriate. The Agent will be named lender's loss payee,
mortgagee and/or additional named insured, as appropriate, on all such insurance
policies maintained by Hawk and its Domestic Subsidiaries.

         SECTION 6.06 COMPLIANCE WITH LAWS; PAYMENT OF TAXES.

<PAGE>

         (a) Comply in all material respects with all applicable laws, rules,
regulations and orders (including ERISA and Environmental Laws).

         (b) Pay all taxes, assessments and governmental charges imposed upon it
or upon its property before the same become delinquent, except for such taxes,
assessments, and governmental charges that are being contested by Hawk or any of
its Subsidiaries in appropriate proceedings and for which adequate reserves have
been set aside on the books of Hawk and its Subsidiaries in accordance with
GAAP.

         SECTION 6.07 RIGHT OF INSPECTION. From time to time during regular
business hours and upon reasonable prior notice to the president or chief or
principal financial officer of Hawk (except that no such prior notice shall be
required after the occurrence and during the continuance of any Default or Event
of Default), permit the Agent or any agent or representative thereof, to examine
and make copies and abstracts from the records and books of account of, and
visit the properties of, Hawk and any of its Subsidiaries and Hawk hereby gives
to the Agent and to any of its agents or representatives its irrevocable
permission to discuss to the extent necessary the affairs, finances and accounts
of Hawk and any of its Subsidiaries with their respective officers and directors
and their independent accountants.

         SECTION 6.08 REPORTING REQUIREMENTS. Furnish to the Agent (which shall
in turn furnish to each of the Lenders):

         (a) As soon as available and in any event within ninety (90) days after
the end of each Fiscal Year, consolidated and consolidating balance sheets of
Hawk and its Subsidiaries as of the end of such Fiscal Year and consolidated and
consolidating statements of income, cash flows and stockholders' equity of Hawk
and its Subsidiaries for such Fiscal Year, all in reasonable detail and all
prepared in accordance with GAAP, and as to the consolidated statements,
accompanied by an opinion thereon by independent accountants of national
standing selected by Hawk and reasonably acceptable to Agent, which opinion
shall not be qualified by reason of audit limitations imposed by Hawk or its
Subsidiaries;

         (b) As soon as available and in any event within forty-five (45) days
after the end of each of the first three Fiscal Quarters of each Fiscal Year,
consolidated and consolidating balance sheets of Hawk and its Subsidiaries as of
the end of such Fiscal Quarter and consolidated and consolidating statements of
income and cash flows of Hawk and its Subsidiaries for the period commencing at
the end of the previous Fiscal Year and ending with the end of such Fiscal
Quarter, all in reasonable detail and stating in comparative form the respective
consolidated figures for the corresponding date in the current Fiscal Quarter
and all prepared in accordance with GAAP and certified by the principal
financial officer of Hawk (subject to normal year-end adjustments);

         (c) As soon as available and in any event within fifteen (15) Banking
Days after the end of each Fiscal Month, consolidated and consolidating balance
sheets of Hawk and its Subsidiaries as of the end of such Fiscal Month and
consolidated and consolidating statements of income, capital expenditures,
depreciation and amortization of Hawk and its Subsidiaries for the period
commencing at the end of the previous Fiscal Year and ending with the end of
such Fiscal Month, all in reasonable detail and stating in comparative form the
respective consolidated figures for the corresponding date in the current Fiscal
Year and all prepared in accordance with GAAP

<PAGE>

and certified by the principal financial officer of Hawk (subject to year-end
adjustments and the absence of footnotes);

         (d) Simultaneously with the delivery of the financial statements
referred to above for each Fiscal Year, each Fiscal Quarter and each Fiscal
Month, a certificate of the principal financial officer of Hawk in substantially
the form of EXHIBIT E (a "COMPLIANCE CERTIFICATE") (i) certifying that no
Default or Event of Default has occurred and is continuing or, if a Default or
Event of Default has occurred and is continuing, a statement as to the nature
thereof and the action which is proposed to be taken with respect thereto, (ii)
with computations set forth in reasonable detail satisfactory to the Lenders
which demonstrate compliance with the covenants contained in ARTICLE 8, (iii)
with a schedule listing all Liens on the assets of the Borrowers and their
Subsidiaries which are in addition to those in favor of the Agent and Lenders or
those listed on SCHEDULE 7.05 hereto and (iv) listing all capital assets
acquired by Hawk and its Subsidiaries since the date of the last such Compliance
Certificate with the proceeds of asset sales permitted by SECTION 7.01(C) and
SECTION 7.01(D) and constituting reinvestments as contemplated by SECTION
2.04(E), together with a certification pursuant to Section 302 of the
Sarbanes-Oxley Act (whether or not such certification is required by such act)
with each Compliance Certificate relating to a Fiscal Year or a Fiscal Quarter;

         (e) (i) Promptly after the commencement thereof, written notice of all
actions, suits, and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
against Hawk or any of its Subsidiaries and (ii) promptly, written notice of any
material development in any action, suit or proceeding previously disclosed
pursuant to clause (i) above or in SCHEDULE 5.04;

         (f) As soon as possible and in any event within three (3) days after
becoming aware of the occurrence of each Default or Event of Default, a written
notice setting forth the details of such Default or Event of Default and the
action which is proposed to be taken with respect thereto;

         (g) Promptly after the receiving thereof, copies of all reports and
notices which Hawk or any of its Subsidiaries receives from the PBGC or the U.S.
Department of Labor under ERISA and as soon as possible and in any event within
ten (10) days after Hawk or any of its Subsidiaries knows or has reason to know
that any Reportable Event or Prohibited Transaction has occurred with respect to
any Plan or that the PBGC or Hawk or any of its Subsidiaries have instituted or
will institute proceedings under Title IV of ERISA to terminate any Plan, Hawk
will deliver to each of the Lenders a certificate of the principal financial
officer of Hawk setting forth details as to such Reportable Event or Prohibited
Transaction or Plan termination and the action Hawk proposes to be taken with
respect thereto;

         (h) As soon as available, but no later than the end of each Fiscal
Year, a draft of a forecast of the balance sheet, income statement and statement
of cash flows for the subsequent Fiscal Year of Hawk and its Subsidiaries in a
form reasonably acceptable to the Agent and prepared on a monthly basis by
management in accordance with GAAP, and as soon as available, but no later than
thirty (30) days after the end of each Fiscal Year, the final forecast of the
same;

         (i) Contemporaneously with the filing, copies of all materials and
reports filed with the Securities and Exchange Commission; and

<PAGE>

         (j) Such other information respecting the condition or operations,
financial or otherwise, of Hawk or any of its Subsidiaries as the Agent or any
Lender may from time to time reasonably request.

         SECTION 6.09 SPECIAL PERIODIC REPORTS. Execute and deliver to the
Agent, the following documents compiled as of the last day of the applicable
fiscal period (and the Borrowers acknowledge that the Agent and the Lenders will
rely on such documents in making Loans hereunder):

         (a) Monthly (or with such greater frequency as the Agent may reasonably
request), by the fifteenth (15th) Banking Day of the following month (or by such
other date as the Agent may reasonably specify in the event the Agent requests
that such information be provided more frequently):

                  (i) a declaration or statement of (A) the aging of Accounts,
         (B) inventory (identifying Eligible Inventory and ineligible
         inventory), and (C) of the aging of the accounts payable, all as of the
         prior month end and certified by the principal financial officer of
         Hawk and in form reasonably acceptable to the Agent; and

                  (ii) a Borrowing Base Certificate in substantially the form of
         EXHIBIT F;

         (b) Weekly, on Wednesday of each week (as of the immediately preceding
Saturday), a Weekly Collateral Certificate, certified by the principal financial
officer of Hawk;

         (c) Promptly upon the request of the Agent from time to time, a list of
all current customers and their respective addresses;

         (d) Promptly upon the Agent's request, and in any event within five (5)
days of any such request, (i) certified true copies of customers' invoices, or
the equivalent, for all services rendered and goods provided and (ii) a
declaration or statement of the order backlog; and

         (e) Promptly upon the Agent's request, and in any event within five (5)
days of such request, certified true copies of all contracts, security
agreements, mortgages and other documents executed by the customers in
connection with all services rendered and any other information, reports,
reconciliations, Account Debtors' addresses or documents the Agent may call upon
Hawk and its Subsidiaries to submit from time to time.

The failure by the Agent or the Lenders to request any or all of the foregoing
or the failure of the Borrowers to perform the same shall not affect the
security interest of the Agent or the Lenders in or rights to any of the
Collateral.

         SECTION 6.10 FIELD AUDITS; INVENTORY APPRAISALS. Permit the Agent to
conduct field audit examinations of, among other things, Hawk's and its
Subsidiaries' assets, liabilities, books, records, billing and collection
processes and management information systems at least twice each Fiscal Year and
inventory appraisals annually (or, in each case, with such greater frequency as
the Agent may reasonably require); PROVIDED FURTHER that Hawk will permit, and
cause its Subsidiaries to permit, the Agent to conduct such examinations and
appraisal at any time and from time to time upon the occurrence and during the
continuance of a Default. The Lenders will have the right

<PAGE>

to participate, on an alternating basis, in field audit examinations and
inventory appraisals, PROVIDED that such right shall be limited to every other
field audit examination or inventory appraisal (as applicable) performed by the
Agent. Hawk will reimburse the Agent for the expense of each field audit
examination and inventory appraisal at the Agent's standard per diem rate per
person, plus actual out-of-pocket expenses. In connection with such field
audits, Hawk will permit the Agent to make test verifications of the Accounts
with Hawk's and its Subsidiaries' customers.

         SECTION 6.11 COOPERATION AND FURTHER ASSURANCE. Cooperate with the
Agent and the Lenders to effectuate the intent and purposes of the Facility
Documents. Without limiting the foregoing, Hawk agrees to execute and deliver
any financing statements or other instruments and do such other acts and things
as Agent may deem necessary, appropriate or advisable to effectuate the intent
and purposes of this Agreement and shall cause its Subsidiaries to do likewise.

         SECTION 6.12 DEPOSITS INTO COLLATERAL ACCOUNT. (i) Remit to the Agent
promptly following receipt, and hold in trust for the Agent and the Lenders
until so remitted, any and all moneys received from any source for deposit into
the Collateral Account, including without limitation any proceeds from any
equity investment or extraordinary transaction and (ii) direct all financial
institutions at which any Controlled Accounts are maintained to remit to the
Agent on a daily basis (or at such other frequency as the Agent, in its
discretion shall specify to the Borrowers) all collected funds in such
Controlled Accounts. At all times from and after the date hereof, Hawk shall,
and shall cause its Subsidiaries to, take all actions necessary to maintain,
preserve and protect the rights and interests of the Agent with respect to all
cash deposits of Hawk and its Subsidiaries and all other proceeds of Collateral
and Hawk and its Subsidiaries shall not, without the Agent's prior written
consent, open any new or additional deposit or other bank accounts.

         SECTION 6.13 LOCK BOX OPERATION. At all times direct their Account
Debtors to make all payments directly to Lock Boxes on Controlled Accounts under
the control of the Agent or under the control of another financial institution
reasonably acceptable to the Agent that has entered into a Controlled Account
Agreement with the Agent.

         SECTION 6.14 LANDLORDS WAIVERS. With respect to any Leasehold Property
acquired after the Closing Date, deliver to the Agent a Landlord's Waiver and
Consent with respect thereto together with a copy of all related leases, in each
case, prior to or concurrent with acquiring such Leasehold Property.

         SECTION 6.15 REAL PROPERTY FINANCING. Concurrently with the
consummation of any non-recourse mortgage financing permitted by SECTION
7.11(G), if requested by the Agent, deliver fixture filings, duly authorized
and/or executed by each applicable Borrower and Guarantor with respect to all
Collateral constituting fixtures, for filing in all jurisdictions as may be
necessary or, in the opinion of the Agent, desirable to perfect the security
interests created in such Collateral pursuant to the Security Documents.

         SECTION 6.16 EXISTING LEASES. Deliver to the Agent copies of all leases
between Hawk or any of its Subsidiaries and any landlord relating to any
Leasehold Property of Hawk or any of its Subsidiaries.

<PAGE>

         SECTION 6.17 ADDITIONAL BORROWERS AND GUARANTORS. (a) In the event that
at any time after the Closing Date Hawk has any Subsidiary which is not a party
hereto, Hawk shall notify the Agent in writing of such event, identifying the
Subsidiary in question and referring specifically to the rights of the Agent and
the Lenders under this SECTION 6.17. Hawk shall, within five (5) days after so
notifying the Agent and the Lenders, cause such Subsidiary to (w) execute and
deliver to the Agent a counterpart to this Agreement (x) as a Borrower, in the
case of a Domestic Subsidiary other than a Non-Material Subsidiary, or (y) as a
Guarantor otherwise, and a counterpart to the Security and Pledge Agreement and
such other documentation in such form as the Lenders may reasonably require, (x)
in the case of a Domestic Subsidiary, take such other action as shall be
necessary to create and perfect valid and enforceable First Priority Liens in
favor of the Agent on all or substantially all of the assets of such Subsidiary
consistent with the provisions of the applicable Security Documents, (y) deliver
proof of corporate action, incumbency of officers and other documents and
opinions as is consistent with those delivered by Hawk and its Subsidiaries
pursuant to SECTION 4.01 as of the Effective Date and (z) execute and deliver to
the Agent such amendments to the Security and Pledge Agreement, or such new
pledge agreements and take such other actions (including delivering the
certificates representing such shares of stock or other equity interests to the
Agent) as shall be necessary to create and perfect valid and enforceable First
Priority Liens in favor of the Agent on all of the issued and outstanding stock
or other equity interests of such Subsidiary, all of the foregoing to be in form
and substance reasonably satisfactory to the Agent.

         (b) Notwithstanding the foregoing provisions of this SECTION 6.17, Hawk
shall not, unless an Event of Default shall have occurred and be continuing, be
required to (i) cause a Foreign Subsidiary to become a party hereto as a
Guarantor, or (ii) be required to pledge more than sixty-six percent (66%) of
the stock of any Foreign Subsidiary if to do so would subject Hawk to liability
for additional United States income taxes by virtue of section 956 of the
Internal Revenue Code in a material amount, and (y) Hawk provides the Agent,
within the five (5) day period referred to in SECTION 6.17(A), with
documentation, including computations prepared by Hawk's internal tax officer,
its independent accountants or tax counsel, acceptable to the Required Lenders,
in support thereof.

         SECTION 6.18 PRE-EXCHANGE NOTES. If any Pre-Exchange Notes remain
outstanding after the Closing Date, submit to the Lenders, upon the request of
any one or more Lenders, a written plan describing Hawk's intended plan to
refinance the outstanding Pre-Exchange Notes, which plan shall include, among
other things, the proposed execution timetable for the refinancing. At any time
on or after June 1, 2003, the Agent or any of the Lenders may require in a
notice to Hawk that Hawk fully repay or refinance all Pre-Exchange Notes then
outstanding and Hawk shall comply with such requirement within sixty (60) days
following the date of such Notice.

         SECTION 6.19 RANK; MOST FAVORED COVENANT STATUS; GUARANTIES. Cause the
Indebtedness of Hawk and its Subsidiaries incurred pursuant to this Agreement
and the Facility Documents to at all times be senior to any other Indebtedness
of the Company and its Subsidiaries. No indenture, guaranty or other similar
instrument evidencing Indebtedness with an initial principal amount in excess of
$10,000,000 entered into after the date hereof shall include any affirmative or
negative business or financial covenants (or any events of default or other type
of restriction which would have the practical effect of any affirmative or
negative business or financial covenant, including, without limitation, any
'put' or mandatory prepayment of such

<PAGE>

Indebtedness upon the occurrence of a 'change of control') applicable to Hawk or
any of its Subsidiaries which are more restrictive than those set forth herein
or in any of the other Facility Documents. To the extent any amendment,
extension, renewal or refinancing of any Indebtedness with an initial principal
amount in excess of $10,000,000 which amendment is entered into after the date
hereof (whether or not such Indebtedness is outstanding on the date hereof)
includes affirmative or negative business or financial covenants (or any events
of default or other type of restriction which would have the practical effect of
any affirmative or negative business or financial covenant, including, without
limitation, any `put' or mandatory prepayment of such Indebtedness upon the
occurrence of a 'change of control') applicable to Hawk or any of its
Subsidiaries which are more restrictive than those set forth herein or in any of
the other Facility Documents, Hawk shall promptly so notify the Agent and, if
the Agent shall so request by written notice to Hawk, Hawk and its Subsidiaries
shall promptly amend this Agreement to incorporate some or all of such
provisions, in the discretion of the Agent, into this Agreement and, to the
extent necessary and reasonably desirable to the Agent, into any of the other
Facility Documents, all at the election of the Agent. After the date hereof, if
and for so long as any Subsidiary or Affiliate of Hawk directly or indirectly
enters into any guaranty of any Indebtedness of Hawk or any of its Subsidiaries,
Hawk shall cause such Subsidiary or such Affiliate to, and such Subsidiary or
such Affiliate shall, execute and deliver a counterpart to this Agreement as a
Guarantor, or, in the case of a Domestic Subsidiary other than a Non-Material
Subsidiary, as a Borrower, together with such opinions, amendments to the
Facility Documents, and other documents that the Agent shall request.

                                   ARTICLE 7

                               NEGATIVE COVENANTS

         So long as any of the Loans or Letters of Credit shall remain
outstanding or any Lender shall have any Commitment under this Agreement, Hawk
covenants and agrees that it shall not, and shall not permit any of its
Subsidiaries to (unless waived in accordance with the provisions of SECTION
12.01):

         SECTION 7.01 SALE OF ASSETS. Sell, lease, assign, transfer or otherwise
dispose of any of its now owned or hereafter acquired assets (including, without
limitation, shares of stock and indebtedness of any Subsidiary, receivables and
leasehold interests), except (a) for inventory disposed of, or other assets
consumed, in the ordinary course of business; (b) any sale, lease, assignment or
other transfer by any Borrower of its assets to any other Borrower or to any
Foreign Subsidiary in a Permitted Foreign Asset Transfer, provided that the
aggregate amount of all such Permitted Foreign Asset Transfers in any Fiscal
Year shall not exceed $1,000,000; (c) any sale or other disposition of assets no
longer used or useful in the conduct of its business; and (d) any other sale,
lease, assignment, or other transfer of assets (other than Accounts and
inventory) by Hawk or any of its Subsidiaries, PROVIDED that (i) after giving
effect to any sale, lease, assignment or other transfer pursuant to CLAUSE (D)
above, Hawk and its Subsidiaries are in compliance with the covenants set forth
in ARTICLE 8, (ii) the consideration for such transaction represents fair value,
and at least 75% of such consideration consists of cash; (iii) 100% of the Net
Cash Payments received from dispositions under CLAUSE (C) OR CLAUSE (D) above
shall be applied to prepay the Loans in accordance with SECTION 2.04(D), and
(iv) after giving effect to any sale, lease, assignment or other transfer
pursuant to CLAUSE (D) above, the aggregate fair market value of all

<PAGE>

assets sold, leased, assigned or otherwise transferred pursuant to CLAUSE (D)
above during the same Fiscal Year does not exceed $500,000.

         SECTION 7.02 STOCK OF SUBSIDIARIES, ETC. Sell or otherwise dispose of
any shares of capital stock or other equity interest of any Subsidiary, except
in connection with a transaction permitted under SECTION 7.03, or permit any
Subsidiary to issue any additional shares of its capital stock or other equity
interests, except (a) directors' qualifying shares and (b) the issuance of
shares by any Subsidiary to any Borrower, PROVIDED that such Borrower shall
forthwith deliver to the Agent pursuant to the applicable Security Documents the
certificates evidencing such shares of stock or other equity interests,
accompanied by undated stock powers executed in blank and shall take such other
action as the Agent shall request to create a valid and enforceable First
Priority Lien on such shares pursuant to such Security Documents.

         SECTION 7.03 MERGERS, ETC. Merge or consolidate with, or sell, assign,
lease or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to any Person, except that (a) any Wholly-Owned Subsidiary
(other than a Foreign Subsidiary) and any Borrower (other than Hawk) or
Guarantor may merge into any Borrower (so long as such Borrower or a Borrower is
the surviving corporation) and (b) any Borrower may transfer assets to any other
Borrower.

         SECTION 7.04 DIVIDENDS AND STOCK REPURCHASES; MANAGEMENT FEES. Declare
or pay any dividends, purchase, redeem, retire or otherwise acquire for value
any of its capital stock or other equity interests now or hereafter outstanding,
or make any distribution of assets to its equityholders as such whether in cash,
assets or in obligations of Hawk or its Subsidiaries, or allocate or otherwise
set apart any sum for the payment of any dividend or distribution on, or for the
purchase, redemption or retirement of any shares of its capital stock or other
equity interests or any warrants, options or other rights to acquire such, or
make any other distribution by reduction of capital or otherwise in respect of
any shares of its capital stock or other equity interests or permit any
Subsidiary to purchase or otherwise acquire for value any stock of Hawk or
another Subsidiary, or pay any management fees or any other fees or expenses
pursuant to any management, consulting or other services arrangement to any of
the equityholders of Hawk or any of its Subsidiaries or other Affiliates (other
than those set forth on SCHEDULE 7.06), except that Hawk may declare and deliver
dividends and make distributions payable solely in common stock of Hawk.

         SECTION 7.05 LIENS. Create, incur, assume or suffer to exist, any Lien,
upon or with respect to any of its properties, now owned or hereafter acquired,
except (the following being called "PERMITTED LIENS"):

         (a) Liens in favor of the Agent on behalf of the Lenders securing the
Loans hereunder;

         (b) Liens for taxes or assessments or other government charges or
levies if not yet due and payable or, if due and payable, if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves in accordance with GAAP are maintained;

         (c) Liens imposed by law, such as mechanic's, materialmen's,
landlord's, warehousemen's and carrier's Liens, and other similar Liens arising
in the ordinary course of business, securing obligations (other than debt for
borrowed money) incurred in the ordinary

<PAGE>

course of business which are not past due for more than thirty (30) days, or
which are being contested in good faith by appropriate proceedings and for which
appropriate reserves in accordance with GAAP have been established;

         (d) Liens under workmen's compensation, unemployment insurance, social
security or similar legislation (other than ERISA);

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

         (f) Judgment and other similar Liens arising in connection with court
proceedings; PROVIDED that the execution or other enforcement of such Liens is
effectively stayed and the claims secured thereby are being actively contested
in good faith and by appropriate proceedings and for which appropriate reserves
have been established on the books of Hawk and its Subsidiaries in accordance
with GAAP;

         (g) Easements, rights-of-way, restrictions and other similar
encumbrances that do not secure obligations for the payment of money and which,
in the aggregate, do not materially interfere with the occupation, use and
enjoyment by Hawk or any of its Subsidiaries of the property or assets
encumbered thereby in the normal course of its business or materially impair the
value of the property subject thereto;

         (h) Liens in existence on the Effective Date and listed on SCHEDULE
7.05;

         (i) Liens on the assets of Foreign Subsidiaries existing on the Closing
Date or securing Indebtedness permitted to be incurred pursuant to SECTION
7.11(G); or

         (j) Liens on fixed or capital assets (other than real property),
acquired, constructed or improved by Hawk or any of its Subsidiaries, PROVIDED
that (A) such Liens secure Indebtedness (including Capitalized Leases) permitted
by SECTION 7.11(B), (B) such Liens and the Indebtedness secured thereby are
incurred prior to or within ninety (90) days after such acquisition or the
completion of such construction or improvement or were in effect at the time
Hawk or its Subsidiaries acquired the assets or stock, (C) the Indebtedness
secured thereby does not exceed the cost of acquiring, constructing or improving
such fixed or capital assets, (D) such security interests shall not apply to any
other property or assets of Hawk or any of its Subsidiaries, and (E) Hawk and
its Subsidiaries shall be in compliance with ARTICLE 8 of this Agreement after
giving effect to such transactions.

         SECTION 7.06 TRANSACTIONS WITH AFFILIATES. Except as expressly
permitted by this Agreement, take any of the following actions: (a) make any
loan, advance or investment in an Affiliate; (b) transfer, sell, lease, assign
on otherwise dispose of any property to an Affiliate; (c) merge into or
consolidate with an Affiliate or purchase or acquire property from an Affiliate;
or (d) enter into any other transaction directly or indirectly with or for the
benefit of an Affiliate (including, without limitation, guarantees and
assumptions of obligations of an Affiliate); PROVIDED that Hawk and its
Subsidiaries may engage in and continue the transactions with or for the benefit
of Affiliates which are described on SCHEDULE 7.06 so long as the terms of such
transactions are

<PAGE>

not less favorable to Hawk and its Subsidiaries than the terms of a commercially
reasonable, arms length transaction between non-affiliated parties.

         SECTION 7.07 HAZARDOUS MATERIALS; INDEMNIFICATION. Use, generate,
treat, store, dispose of or otherwise introduce any Hazardous Materials into or
on any real property owned or leased by any of them and will not cause, suffer,
allow or permit anyone else to do so, except in material compliance with all
applicable Environmental Laws.

         SECTION 7.08 ACQUISITIONS. Make or otherwise effect any Acquisition.

         SECTION 7.09 SUBSIDIARIES. Create any Subsidiary after the date hereof
unless Hawk complies with the requirements of SECTION 6.17.

         SECTION 7.10 CERTAIN INVESTMENTS. Make after the date of this Agreement
or permit to remain outstanding any loans, advances or investments of any kind
in, or make any distributions of, cash or other assets of any kind
(collectively, "INVESTMENTS") (other than as expressly permitted by SECTION
7.04) to any other Person, except:

         (a) any Borrower may make Investments in any other Borrower;

         (b) Hawk and its Subsidiaries may hold Investments consisting of
promissory notes or evidences of indebtedness received by them in connection
with any sale otherwise permitted (PROVIDED THAT such Investments are delivered
to the Agent to be held as Collateral pursuant to the terms of the Security
Agreement);

         (c) Hawk and its Subsidiaries may continue to maintain Investments in
its Subsidiaries existing as of the date of this Agreement;

         (d) Hawk and its Domestic Subsidiaries may make Investments in Foreign
Subsidiaries PROVIDED that all such Investments permitted by this clause (d)
shall not exceed, subject to the provisions of clause (b) of SECTION 7.01, (i)
for the period commencing the Closing Date through December 31, 2003,
$4,800,000; (ii) for the period commencing January 1, 2004 through December 31,
2004, $4,400,000; and (iii) for the period commencing January 1, 2005 and
thereafter, $3,500,000; and PROVIDED FURTHER that it is expressly understood
that any and all increases in trade balances by Hawk or any of its Domestic
Subsidiaries with any Foreign Subsidiary in excess of the amount of such trade
balances as of the Closing Date shall constitute Investments for the purposes of
this clause (d);

         (e) the Foreign Subsidiaries may make Investments; and

         (f) Hawk and its Domestic Subsidiaries may make acquisitions of assets
used or useful in the business of Hawk and its Subsidiaries, so long as (i) such
assets are owned by any Borrower or any Guarantor, and (ii) immediately prior to
such acquisition and after giving effect hereto, no Default or Event of Default
shall have occurred and be continuing.

         SECTION 7.11 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness, except:

         (a) Indebtedness of the Borrowers under this Agreement or the Notes;

<PAGE>

         (b) Other Indebtedness of Hawk and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP) consisting of
Capitalized Leases and/or secured by Liens permitted under SECTION 7.05(i), in
an aggregate principal amount not in excess of $5,000,000 at any one time
outstanding, PROVIDED that Hawk and its Subsidiaries shall be in compliance with
ARTICLE 8 of this Agreement after giving effect to such transactions;

         (c) The Pre-Exchange Notes, the Exchange Notes and the PIK Notes,
PROVIDED that the aggregate amount of all such Indebtedness in this clause (c)
shall not exceed $66,700,000 at any time outstanding (exclusive of the
Indebtedness under the PIK Notes);

         (d) Trade debt incurred in the ordinary course of business;

         (e) Indebtedness existing on the date hereof which is set forth on
SCHEDULE 7.11 annexed hereto and has been designated on such schedule as
Indebtedness that will remain outstanding following the funding of the initial
Loans;

         (f) Indebtedness in respect of Foreign Exchange Obligations and
Interest Rate Protection Obligations owing to the Agent or any of the Lenders;
and

         (g) Indebtedness of Hawk's Foreign Subsidiaries from financial
institutions domiciled in the same country as such Foreign Subsidiary PROVIDED
that, in the case of Indebtedness incurred in Italy, the proceeds of such
Indebtedness shall be used first to repay any outstanding loans made by Hawk or
any of its Domestic Subsidiaries to such Foreign Subsidiary, and PROVIDED
FURTHER that neither Hawk nor any of its Domestic Subsidiaries shall become
obligated with respect to any Guaranty of such Indebtedness.

         SECTION 7.12 GUARANTIES, ETC. Except as expressly permitted by SECTION
7.06, assume, enter into or otherwise be or become directly or contingently
responsible or liable under, any Guaranty, except (a) Guaranties by endorsement
of negotiable instruments for deposit or collection or similar transactions in
the ordinary course of business and (b) Guaranties by any Subsidiary of
Indebtedness of the Borrowers permitted hereunder.

         SECTION 7.13 OTHER INDEBTEDNESS. Purchase, redeem, retire or otherwise
acquire for value, or set apart any money for a sinking, defeasance or other
analogous fund for the purchase, redemption, retirement or other acquisition of,
or make, in respect of any voluntary payment or prepayment of the principal of
or interest on, or other amount owing in respect of, any Indebtedness other than
the Obligations.

         SECTION 7.14 RESTRICTIVE AGREEMENTS. Enter into, incur or permit to
exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of Hawk or any of its Subsidiaries to create,
incur or permit to exist any Lien upon any of its property or assets in favor of
the Agent or the Lenders (other than the restrictions contained in the indenture
governing the Exchange Notes dated as of October __, 2002, as in effect on the
date hereof) or (b) the ability of any Subsidiary to pay dividends or other
distributions with respect to any shares of its capital stock or to make or
repay loans or advances to the Borrowers or the ability of the Guarantors to
guarantee Indebtedness of the Borrowers, PROVIDED that the foregoing shall not
apply to restrictions and conditions imposed by law or by this Agreement.

<PAGE>

                                   ARTICLE 8

                               FINANCIAL COVENANTS

         So long as any of the Loans or Letters of Credit shall remain
outstanding or any Lender shall have any Commitment under this Agreement:

         SECTION 8.01 MINIMUM FIXED CHARGE COVERAGE RATIO. Hawk shall not permit
the Fixed Charge Coverage Ratio to be less than (a) 1.05 to 1.00 as of the end
of any Fiscal Quarter for the Fiscal Quarters ending March 31, 2003 through and
including June 30, 2004 and (b) 1.10 to 1.00 as of the end of the Fiscal Quarter
ending September 30, 2004 and each Fiscal Quarter thereafter.

         SECTION 8.02 MINIMUM EBITDA. Hawk shall not permit EBITDA for Fiscal
Year ended December 31, 2002 to be less than 95% of the projected EBITDA as set
forth in Hawk's August 31, 2002 projections.

         SECTION 8.03 MAXIMUM LEVERAGE RATIO. Hawk shall not permit the Leverage
Ratio at any time to exceed the ratio set forth below for the periods set forth
below:

<TABLE>
<CAPTION>
----------------------------------------------------------------------- ------------------------------------------------
                                PERIOD                                                       RATIO
----------------------------------------------------------------------- ------------------------------------------------
<S>                                                                                      <C>
On the Closing Date and for the Fiscal Quarter ending December 31,                       4.85 to 1.00
2002
----------------------------------------------------------------------- ------------------------------------------------
For the Fiscal Quarters ending March 31, 2003 and June 30, 2003                          4.25 to 1.00
----------------------------------------------------------------------- ------------------------------------------------
For the Fiscal Quarters ending September 30, 2003 and December 31,                       4.00 to 1.00
2003
----------------------------------------------------------------------- ------------------------------------------------
For the Fiscal Quarters ending March 31, 2004, June 30, 2004 and                         3.75 to 1.00
September 30, 2004
----------------------------------------------------------------------- ------------------------------------------------
For the Fiscal quarter ending December 31, 2004 and thereafter                           3.00 to 1.00
----------------------------------------------------------------------- ------------------------------------------------
</TABLE>

         SECTION 8.04 MAXIMUM CAPITAL EXPENDITURES. Hawk shall not permit
Capital Expenditures of Hawk and its Subsidiaries to be in excess of $13,000,000
for the Fiscal Year ending December 31, 2002.

                                   ARTICLE 9

                                EVENTS OF DEFAULT

         SECTION 9.01 EVENTS OF DEFAULT. The occurrence of any of the following
events shall be an "EVENT OF Default":

<PAGE>

         (a) Any Borrower shall fail to pay any principal of or interest on the
Loans or any Reimbursement Obligation or any fee or other amount due hereunder
when the same shall become due and payable, whether at the due date thereof or
at a date fixed for prepayment thereof by acceleration of such due or prepayment
date, or otherwise;

         (b) Any representation or warranty made or deemed made by Hawk or any
of its Subsidiaries in this Agreement or in any other Facility Document or which
is contained in any certificate, document, opinion, financial or other statement
furnished at any time under or in connection with any Facility Document shall
prove to have been incorrect in any material respect on or as of the date made
or deemed made;

         (c) Hawk or any of its Subsidiaries shall fail to perform or observe
(i) any of the covenants set forth in SECTIONS 6.01, 6.05 6.07 through 6.10,
6.12, 6.13, 6.17, 6.18 or 6.19 in ARTICLES 7 or 8 or (ii) any term, covenant or
agreement contained in this Agreement (other than those referred to elsewhere in
this SECTION 9.01) or fail to perform or observe any term, covenant or agreement
on its part to be performed or observed in any other Facility Document and, in
the case of this clause (ii), such failure shall continue for thirty (30)
consecutive days;

         (d) Hawk or any of its Subsidiaries shall: (i) fail to make any payment
(whether of principal or interest and regardless of amount) in respect of any
Material Indebtedness of Hawk or any such Subsidiary when due (whether by
scheduled maturity, required prepayment, demand or otherwise) or (ii) fail to
perform or observe any term, covenant or condition on its part to be performed
or observed under any agreement or instrument relating to any such Material
Indebtedness, when required to be performed or observed, if the effect of such
failure to pay, perform or observe is to accelerate the maturity of such
Material Indebtedness (or, after the giving of applicable notice or passage of
time, or both, to permit the acceleration of the maturity of such Material
Indebtedness) or any such Material Indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;

         (e) Hawk or any of its Subsidiaries (i) shall generally not, or be
unable to, or shall admit in writing its inability to, pay its debts as such
debts become due; (ii) shall make an assignment for the benefit of creditors,
petition or apply to any tribunal for the appointment of a custodian, receiver
or trustee for it or a substantial part of its assets; (iii) shall commence any
proceeding under any bankruptcy, reorganization, arrangement, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction, whether now
or hereafter in effect; (iv) shall have had any such petition or application
filed or any such proceeding shall have been commenced, against it, in which an
adjudication or appointment is made or order for relief is entered, or which
petition, application or proceeding remains undismissed for a period of sixty
(60) days or more; (v) by any act or omission shall indicate its consent to,
approval of or acquiescence in any such petition, application or proceeding or
order for relief or the appointment of a custodian, receiver or trustee for all
or any substantial part of its property; or (vi) shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for a period
of sixty (60) days or more;

         (f) One or more judgments, decrees or orders for the payment of money
in excess of $500,000 in the aggregate shall be rendered against Hawk or any of
its Subsidiaries and such judgments, decrees or orders shall continue
unsatisfied and in effect for a period of sixty (60) consecutive days without
being vacated, discharged, satisfied or stayed or bonded pending appeal;

<PAGE>

         (g) Any of the following events shall occur or exist with respect to
Hawk or any of its Subsidiaries or any ERISA Affiliate: (i) any Prohibited
Transaction involving any Plan; (ii) any Reportable Event shall occur with
respect to any Plan; (iii) the filing under Section 4041 of ERISA of a notice of
intent to terminate any Plan or the termination of any Plan; (iv) any event or
circumstance exists which constitutes grounds entitling the PBGC to institute
proceedings under Section 4042 of ERISA for the termination of or for the
appointment of a trustee to administer, any Plan, or the institution by the PBGC
of any such proceedings; or (v) complete or partial withdrawal under Section
4201 or 4204 of ERISA from a Multiemployer Plan or the reorganization,
insolvency, or termination of any Multiemployer Plan and in each case above,
such event or condition, together with all other events or conditions, if any,
could subject Hawk or any of its Subsidiaries to any tax, penalty, or other
liability to a Plan, Multiemployer Plan, the PBGC, or otherwise (or any
combination thereof) which in the aggregate exceed or may exceed $500,000;

         (h) A Change of Control shall occur;

         (i) The Security Documents shall at any time or for any reason cease:
(i) to create a valid and perfected security interest or Lien in and to the
property purported to be subject to the same with the priority contemplated
thereby; or (ii) to be in full force and effect or shall be declared null and
void, or the validity or enforceability thereof shall be contested by any party
thereto or any party thereto shall deny it has any further liability or
obligations to the secured parties thereunder;

         (j) Any Facility Document shall at any time or for any reason cease to
be in full force and effect or shall be declared null and void, or the validity
or enforceability thereof shall be contested by Hawk or any of its Subsidiaries
or Hawk or any of its Subsidiaries shall deny it has any further liability or
obligations thereunder;

         (k) The Agent shall have reasonably determined that an event or
condition has occurred which has had, or which could reasonably be expected to
have, a Material Adverse Effect; or

         (l) Any Borrower or Subsidiary shall (i) withdraw or attempt to
withdraw any funds or other items on deposit in any Lock Box or any Controlled
Account; (ii) direct or attempt to direct any bank at which any Lock Box or
Controlled Account is maintained not to make, or to cease making, transfers of
any funds or other items (x) from a Lock Box to a Controlled Account or (y) from
a Controlled Account to the Agent or at the direction of the Agent; or (iii)
direct any Account Debtor not to make payments to a Lock Box.

         SECTION 9.02 REMEDIES. If any Event of Default shall occur and be
continuing, the Agent may, and shall upon request of the Required Lenders, by a
written notice to the Borrowers: (a) declare the Commitments to be terminated,
whereupon the same shall forthwith terminate and (b) declare the outstanding
principal of the Loans, all interest thereon and all other amounts payable under
this Agreement and the other Facility Documents and the Loans to be forthwith
due and payable, whereupon the Loans, all such interest and all such amounts
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Borrowers; PROVIDED that, in the case of an Event of Default referred to
in SECTION 9.01(E) above, the Commitments shall be automatically and immediately
terminated without further action of any Person, and the Loans, all interest
thereon

<PAGE>

and all other amounts payable under this Agreement and the Notes shall be
automatically and immediately due and payable without notice, presentment,
demand, protest or other formalities of any kind, all of which are hereby
expressly waived by the Borrowers. Further, upon the occurrence and during the
continuance of an Event of Default, the Agent, acting on behalf of and at the
direction of the Required Lenders, may then exercise any and all rights and
remedies available under the Facility Documents or at law or in equity.

                                   ARTICLE 10

                                    GUARANTY

         SECTION 10.01 THE GUARANTEE. Each Person who may from time to time
become a Guarantor hereunder, hereby jointly and severally guarantees to each
Lender and the Agent and its respective successors and assigns the prompt
payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the principal of and interest (including, without limitation, all
interest that accrues after the commencement of any case, proceeding or other
action relating to bankruptcy, insolvency or reorganization of Hawk or any of
its Subsidiaries) on the Loans made by the Lenders to the Borrowers, all fees
and other amounts from time to time owing from the Borrowers to the Lenders
hereunder, all other Obligations of the Borrower and each of their Subsidiaries
under the Facility Documents and all costs and expenses incurred by the Agent or
the Lenders in the protection or enforcement of any right or remedies under the
guarantee provided in this ARTICLE 10 (such obligations being herein
collectively called the "GUARANTEED OBLIGATIONS"). Each Guarantor hereby further
agrees that if any Obligations shall be due and payable (whether at stated
maturity, by acceleration or otherwise) on any of the Guaranteed Obligations,
such Guarantor shall promptly pay the same upon demand therefor by the Agent or
the Lenders, without any further demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, by acceleration or otherwise) in accordance with the terms of
such extension or renewal. This guarantee is a guarantee of payment and not
collection and each Guarantor hereby waives, to the extent permitted by law, any
right to require that any action in respect of any Guaranteed Obligations be
brought against any Borrower or any other Person or that resort be had to any
direct or indirect security for the Guaranteed Obligations or any other remedy.

         SECTION 10.02 OBLIGATIONS UNCONDITIONAL. The obligations of each
Guarantor under SECTION 10.01 are absolute and unconditional irrespective of the
value, genuineness, validity, regularity or enforceability of this Agreement,
the other Facility Documents or any other agreement or instrument referred to
herein or therein, or any substitution, release or exchange of any other
guarantee of or security for any of the Guaranteed Obligations, and, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
SECTION 10.02 that the obligations of each Guarantor hereunder shall be absolute
and unconditional under any and all circumstances. Without limiting the
generality of the foregoing, it is agreed that the occurrence of any one or more
of the following shall not, to the extent permitted by applicable law, alter or
impair the liability of each Guarantor and each other Guarantor under this
ARTICLE 10 which shall remain absolute and unconditional as described above:

<PAGE>

         (a) at any time or from time to time, without notice to such Guarantor,
the time for any performance of or compliance with any of the Guaranteed
Obligations shall be extended, or such performance or compliance shall be
waived;

         (b) any of the acts mentioned in any of the provisions hereof or of the
other Facility Documents or any other agreement or instrument referred to herein
or therein shall be done or omitted;

         (c) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right hereunder or under the
other Facility Documents or any other agreement or instrument referred to herein
or therein shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in whole or
in part or otherwise dealt with; or

         (d) any lien or security interest granted to, or in favor of, the Agent
or the Lenders as security for any of the Guaranteed Obligations shall fail to
be perfected.

Each Guarantor hereby expressly waives, to the extent permitted by applicable
law, diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or the Lenders exhaust any right,
power or remedy or proceed against the Borrowers hereunder or under the other
Facility Documents or any other agreement or instrument referred to herein or
therein, or against any other Person under other guarantee of, or security for,
any of the Guaranteed Obligations.

         SECTION 10.03 REINSTATEMENT. The obligations of each Guarantor under
this ARTICLE 10 shall be automatically reinstated if and to the extent that for
any reason any payment in respect of the Guaranteed Obligations is rescinded or
must be otherwise restored by any holder of any of the Guaranteed Obligations,
whether as a result of any proceedings in bankruptcy or reorganization or
otherwise and each Guarantor agrees that it will indemnify the Agent and each
Lender on demand for all reasonable costs and expenses (including reasonable
fees and expenses of counsel) incurred by the Agent or any Lender in connection
with such rescission or restoration, including any such costs and expenses
incurred in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.

         SECTION 10.04 SUBROGATION; SUBORDINATION. Unless and until all of the
Loans have been repaid in full and the Commitments have been irrevocably
terminated, (i) no Guarantor shall have any rights of subrogation, whether
arising by contract or operation of law (including, without limitation, any such
right arising under the Federal Bankruptcy Code of 1978, as amended) or
otherwise by reason of any payment by it pursuant to the provisions of this
ARTICLE 10; (ii) no Guarantor will claim any setoff, recoupment or counterclaim
against any Borrower or other Guarantor in respect of any liability of such
Person to such Guarantor; and (iii) each Guarantor subordinates the payment of
any amounts due with respect to any indebtedness of any Borrower or other
Guarantor now or hereafter owed to such Guarantor in right of payment and
exercise of remedies the prior payment in full of all of the Obligations.

<PAGE>

         SECTION 10.05 REMEDIES. Each Guarantor agrees that, as between such
Guarantor and the Lenders, the obligations of the Borrowers hereunder may be
declared to be forthwith due and payable as provided in SECTION 9.01 hereof (and
shall be deemed to have become automatically due and payable in the
circumstances provided in SECTION 9.01) for purposes of SECTION 10.01
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against the Borrowers and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Borrowers) shall forthwith
become due and payable by such Guarantor for purposes of SECTION 10.01.

         SECTION 10.06 INSTRUMENT FOR THE PAYMENT OF MONEY. Each Guarantor
hereby acknowledges that the guarantee in this ARTICLE 10 constitutes an
instrument for the payment of money and consents and agrees that the Agent and
the Lenders, in the event of a dispute by any Guarantor in the payment of any
monies due hereunder, shall have the right to summary judgment or such other
expedited procedure as may be available for a suit on a note or other instrument
for the payment of money.

         SECTION 10.07 CONTINUING GUARANTEE. The guarantee in this ARTICLE 10 is
a continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.

         SECTION 10.08 GENERAL LIMITATION ON GUARANTEE OBLIGATIONS. In any
action or proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Guarantor under SECTION 10.01
would otherwise, taking into account the provisions of this SECTION 10.08, be
held or determined to be void, invalid or unenforceable, or subordinated to the
claims of any other creditors, on account of the amount of its liability under
SECTION 10.01, then, notwithstanding any other provision hereof to the contrary,
the amount of such liability shall, without any further action by any Guarantor,
any Lender, the Agent or any other Person, be automatically limited and reduced
to the highest amount that is valid and enforceable and not subordinated to the
claims of other creditors as determined in such action or proceeding.

                                   ARTICLE 11

                        RELATIONS AMONG AGENT AND LENDERS

SECTION 11.01 APPOINTMENT, POWERS AND IMMUNITIES OF AGENT. Each Lender hereby
irrevocably (but subject to removal by the Required Lenders pursuant to SECTION
11.09) appoints and authorizes the Agent to act as its agent hereunder and under
any other Facility Document with such powers as are specifically delegated to
the Agent by the terms of this Agreement and any other Facility Document,
together with such other powers as are reasonably incidental thereto. The Agent
shall have no duties or responsibilities except those expressly set forth in
this Agreement and any other Facility Document and shall not by reason of this
Agreement be a trustee or fiduciary for any Lender. The Agent shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties made by the Borrowers or any officer or official of the Borrowers or
any other Person contained in this Agreement or any other Facility Document or
in any certificate or other document or instrument referred to or provided for
in, or received by any of them under or in connection with, this Agreement or
any other Facility Document or for the value, legality, validity, effectiveness,
genuineness, enforceability or sufficiency of this

<PAGE>

Agreement or any other Facility Document or any other document or instrument
referred to or provided for herein or therein, for the perfection or priority of
any collateral security for the Loans, or for any failure by the Borrowers to
perform any of their obligations hereunder or thereunder. The Agent may employ
agents and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. Neither the Agent nor any of its directors, officers, employees
or agents shall be liable or responsible for any action taken or omitted to be
taken by it or them hereunder or under any other Facility Document or in
connection herewith or therewith, except for its or their own gross negligence
or willful misconduct. Any Lender identified herein as a Documentation Agent or
any other title, other than "Agent," "Administrative Agent" and "Collateral
Agent," shall have no right, power, obligation, liability, responsibility or
duty under this Agreement or any other Facility Document except those applicable
to all Lenders as such and except as specifically provided herein. Each Lender
acknowledges that it has not relied, and will not rely, on any Lender so
identified in deciding to enter into this Agreement or in taking or not taking
any action hereunder.

         SECTION 11.02 RELIANCE BY AGENT. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telex, telegram, telecopier or cable) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper Person
or Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent. The Agent may deem and
treat each Lender as the holder of the Loans made by it for all purposes hereof
unless and until a notice of the assignment or transfer thereof satisfactory to
the Agent signed by such Lender shall have been furnished to the Agent but the
Agent shall not be required to deal with any Person who has acquired a
participation in any Loan from a Lender. As to any matters not expressly
provided for by this Agreement or any other Facility Document, the Agent shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder in accordance with instructions signed by the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in SECTION 12.01) and such instructions of the
Required Lenders (or such other percentage) and any action taken or failure to
act pursuant thereto shall be binding on all of the Lenders and any other holder
of all or any portion of any Loan.

         SECTION 11.03 DEFAULTS. The Agent shall not be deemed to have knowledge
of the occurrence of a Default or an Event of Default (other than the
non-payment of principal of or interest on the Loans to the extent the same is
required to be paid to the Agent for the account of the Lenders) unless the
Agent has received notice from a Lender or the Borrowers specifying such Default
or Event of Default and stating that such notice is a "Notice of Default." In
the event that the Agent receives such a notice of the occurrence of a Default
or Event of Default, the Agent shall give prompt notice thereof to the Lenders
(and shall give each Lender prompt notice of each such non-payment). The Agent
shall (subject to SECTION 11.08) take such action with respect to such Default
or Event of Default which is continuing as shall be directed by the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in SECTION 12.01) PROVIDED that, unless and
until the Agent shall have received such directions, the Agent may take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interest of the Lenders
and PROVIDED, FURTHER, that the Agent shall not be required to take any such
action which it determines to be contrary to law.

<PAGE>

         SECTION 11.04 RIGHTS OF AGENT AS A LENDER. With respect to any
Commitments and the Loans made by them, the Agent in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting as the Agent, and the
term "Lenders" shall, unless the context otherwise indicates, include the Agent
in its capacity as a Lender. The Agent and its Affiliates may (without having to
account therefor to any Lender) accept deposits from, lend money to (on a
secured or unsecured basis), and generally engage in any kind of banking, trust
or other business with, the Borrowers (and any of their Affiliates) as if it
were not acting as the Agent and the Agent may accept fees and other
consideration from the Borrowers for services in connection with this Agreement
or otherwise without having to account for the same to the Lenders. Although the
Agent and its Affiliates may in the course of such relationships and
relationships with other Persons acquire information about the Borrowers, their
Affiliates and such other Persons, the Agent shall have no duty to disclose such
information to the Lenders.

         SECTION 11.05 INDEMNIFICATION OF AGENT. The Lenders agree to indemnify
the Agent (to the extent not reimbursed under SECTION 12.03 or under the
applicable provisions of any other Facility Document, but without limiting the
obligations of the Borrower under SECTION 12.03 or such provisions), ratably in
accordance with the aggregate unpaid principal amount of the Loans made by the
Lenders (without giving effect to any participations, in all or any portion of
such Loans, sold by them to any other Person) (or, if no Loans are at the time
outstanding, ratably in accordance with their respective Commitments), for any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of this Agreement, any other Facility
Document or any other documents contemplated by or referred to herein or the
transactions contemplated hereby or thereby (including, without limitation, the
costs and expenses which the Borrowers are obligated to pay under SECTION 12.03
or under the applicable provisions of any other Facility Document but excluding,
unless a Default or Event of Default has occurred, normal administrative costs
and expenses incident to the performance of its agency duties hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other documents
or instruments; PROVIDED that no Lender shall be liable for any of the foregoing
to the extent they arise from the gross negligence or willful misconduct of the
Agent.

         SECTION 11.06 DOCUMENTS. The Agent will forward to each Lender,
promptly after the Agent's receipt thereof, a copy of each report, notice or
other document required by this Agreement or any other Facility Document to be
delivered to the Agent for such Lender.

         SECTION 11.07 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender
agrees that it has, independently and without reliance on the Agent or any other
Lender and based on such documents and information as it has deemed appropriate,
made its own credit analysis of Hawk and its Subsidiaries and its own decision
to enter into this Agreement and that it will, independently and without
reliance upon the Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or
any other Facility Document. The Agent shall not be required to keep itself
informed as to the performance or observance by the Borrowers of this Agreement
or any other Facility Document or any other document referred to or provided for
herein or therein or to inspect the properties or books of

<PAGE>

Hawk or any of its Subsidiaries. Except for notices, reports and other documents
and information expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition or business of Hawk or any of its Subsidiaries which may come into the
possession of the Agent or any of its Affiliates. The Agent shall not be
required to file this Agreement, any other Facility Document or any document or
instrument referred to herein or therein, for record or give notice of this
Agreement, any other Facility Document or any document or instrument referred to
herein or therein to anyone.

         SECTION 11.08 FAILURE OF AGENT TO ACT. Except for action expressly
required of the Agent hereunder, the Agent shall in all cases be fully justified
in failing or refusing to act hereunder unless it shall have received further
assurances (which may include cash collateral) of the indemnification
obligations of the Lenders under SECTION 11.05 in respect of any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.

         SECTION 11.09 RESIGNATION OR REMOVAL OF AGENT. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrowers and the Agent may be removed at any time with cause by the Required
Lenders; PROVIDED that the Borrowers and the other Lenders shall be promptly
notified thereof. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Agent's giving of notice
of resignation or the Required Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be a bank which has an office in the United States. The Required Lenders
or the retiring Agent, as the case may be, shall upon the appointment of a
successor Agent promptly so notify the Borrower and the other Lenders. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this ARTICLE 11 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Agent.

         SECTION 11.10 AMENDMENTS CONCERNING AGENCY FUNCTION. The Agent shall
not be bound by any waiver, amendment, supplement or modification of this
Agreement or any other Facility Document which affects its duties hereunder or
thereunder unless it shall have given its prior consent thereto.

         SECTION 11.11 LIABILITY OF AGENT. The Agent shall not have any
liabilities or responsibilities to Hawk or any of its Subsidiaries on account of
the failure of any Lender to perform its obligations hereunder or to any Lender
on account of the failure of Hawk or any of its Subsidiaries to perform their
respective obligations hereunder or under any other Facility Document. The Agent
shall have no liability to Hawk or any of its Subsidiaries or to any Lender by
reason of any error in the computation of the Borrowing Base.

<PAGE>

         SECTION 11.12 TRANSFER OF AGENCY FUNCTION. Without the consent of the
Borrowers or any Lender, the Agent may at any time or from time to time transfer
its functions as Agent hereunder to any of its offices wherever located,
PROVIDED that the Agent shall promptly notify the Borrowers and the Lenders
thereof.

         SECTION 11.13 NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Agent shall
have been notified by a Lender or the Borrowers' Agent (any such party as
appropriate being the "PAYOR") prior to the date on which such Lender is to make
payment hereunder to the Agent of the proceeds of a Loan or the Borrowers are to
make payment to the Agent, as the case may be (either such payment being a
"REQUIRED PAYMENT"), which notice shall be effective upon receipt, that the
Payor does not intend to make the Required Payment to the Agent, the Agent may
assume that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available to
the intended recipient on such date and if the Payor has not in fact made the
Required Payment to the Agent, the recipient of such payment (and if such
recipients are the Borrowers and the Payor Lender fails to pay the amount
thereof to the Agent upon demand, the Borrowers) shall, on demand, repay to the
Agent the amount made available to the Borrowers together with interest thereon
for the period from the date such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate per annum equal to the
Adjusted Base Rate for such period; PROVIDED that as used in this SECTION 11.13,
"Required Payment" does not include any amounts due from a Lender to the Agent
which are to be settled on the next Settlement Date pursuant to SECTION 2.14,
but "Required Payment" shall include as of each Settlement Date any amounts due
from a Lender to the Agent as part of the Settlement Amount to be paid on such
Settlement Date pursuant to SECTION 2.14.

         SECTION 11.14 WITHHOLDING TAXES. Each Lender represents that it is
entitled to receive any payments to be made to it hereunder without the
withholding of any tax and will furnish to the Agent such forms, certifications,
statements and other documents as the Agent may request from time to time to
evidence such Lender's exemption from the withholding of any tax imposed by any
jurisdiction or to enable the Agent to comply with any applicable laws or
regulations relating thereto. Without limiting the effect of the foregoing, if
any Lender is not created or organized under the laws of the United States of
America or any state thereof, in the event that the payment of interest by the
Borrowers is treated for U.S. income tax purposes as derived in whole or in part
from sources from within the U.S., such Lender will furnish to the Agent Form
4224 or Form 1001 of the Internal Revenue Service or such other forms,
certifications, statements or documents, duly executed and completed by such
Lender as evidence of such Lender's exemption from the withholding of U.S. tax
with respect thereto. The Agent shall not be obligated to make any payments
hereunder to such Lender in respect of any Loan or such Lender's Revolving
Credit Commitment until such Lender shall have furnished to the Agent the
requested form, certification, statement or document.

         SECTION 11.15 SEVERAL OBLIGATIONS AND RIGHTS OF LENDERS. The failure of
any Lender to make any Loan to be made by it on the date specified therefor
shall not relieve any other Lender of its obligation to make its Loan on such
date, but no Lender shall be responsible for the failure of any other Lender to
make a Loan to be made by such other Lender. The amounts payable at any time
hereunder to each Lender shall be a separate and independent debt and each
Lender shall be entitled to, subject to SECTION 11.18, protect and enforce its
rights arising out of this Agreement

<PAGE>

and it shall not be necessary for any other Lender to be joined as an additional
party in any proceeding for such purpose.

         SECTION 11.16 PRO RATA TREATMENT OF LOANS, ETC.

         (a) Each Lender shall at all times maintain a uniform, and not a
varying, undivided percentage of all rights and obligations under and in respect
of the Commitments and Loans.

         (b) Except to the extent otherwise provided, (i) each borrowing under
SECTION 2.02 shall be made from the Lenders and each payment of commitment fees
accruing under SECTION 2.15 shall be made for the account of the Lenders, pro
rata according to the relative amounts of the Commitments of each Lender and
(ii) each prepayment and payment of principal of or interest on Loans shall be
made for the account of the Lenders, pro rata according to each Lender's
proportionate share of the principal amount of all Loans then outstanding.

         (c) If the Agent receives funds for application to the Obligations
under the Facility Documents under circumstances for which the Facility
Documents do not specify the Loans or other Obligations to which, or the manner
in which, such funds are to be applied, the Agent may, but shall not be
obligated to, elect to distribute such funds to each Lender ratably in
accordance with such Lender's Revolving Credit Commitment Percentage in
repayment or prepayment of such of the outstanding Loans or other Obligations
owed to such Lender and for application to such principal installments as the
Agent shall direct.

         SECTION 11.17 SHARING OF PAYMENTS AMONG LENDERS. If a Lender shall
obtain payment of any principal of or interest on any Loan made by it through
the exercise of any right of setoff, banker's lien, counterclaim or by any other
means (including any receipt of proceeds from the Collateral Account), it shall
promptly purchase from the other Lenders participations in (or, if and to the
extent specified by such Lender, direct interests in) the Loans made by the
other Lenders in such amounts, and make such other adjustments from time to time
as shall be equitable to the end that all the Lenders shall share the benefit of
such payment (net of any expenses which may be incurred by such Lender in
obtaining or preserving such benefit) pro rata in accordance with the unpaid
principal and interest on the Loans held by each of them. To such end, the
Lenders shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored. The Borrowers agree that any Lender so purchasing a participation
(or direct interest) in the Loans made by other Lenders may exercise all rights
of setoff, banker's lien, counterclaim or similar rights with respect to such
participation (or direct interest). Nothing contained herein shall require any
Lender to exercise any such right or shall affect the right of any Lender to
exercise, and retain the benefits of exercising, any such right with respect to
any other Indebtedness of the Borrowers.

         SECTION 11.18 ENFORCEMENT OF FACILITY DOCUMENTS. After the Agent has
received written notice from any Lender that an Event of Default has occurred
and is continuing, the Agent shall, subject to the other provisions of this
ARTICLE 11 and to the terms of the Facility Documents (and subject to the
rights, if any, of other persons holding liens on, security interests in or
claims to the Collateral which are prior to those of the Security and Pledge
Agreement), take such steps toward collection or enforcement of any Facility
Document and the Collateral (or any portion thereof), including without
limitation an action to enforce the Security Documents, as may be instructed in
writing by the Required Lenders, PROVIDED, HOWEVER, that in no event shall the
Agent be required,

<PAGE>

and in all cases it shall be fully justified in failing or refusing, to take any
action under or pursuant to this Agreement (including without limitation this
SECTION 11.18) which, in the reasonable opinion of the Agent, would be contrary
to law or to the terms of this Agreement or any Facility Document or would
subject it or its officers, employees or directors to liability, unless and
until the Agent shall be indemnified or tendered security to its satisfaction by
the Lenders, ratably as provided in SECTION 11.05, against any and all loss,
cost, expense or liability in connection therewith, anything herein or elsewhere
contained to the contrary notwithstanding. Except as expressly provided in this
SECTION 11.18, the Agent shall not be required to take steps toward the
collection of any amounts becoming payable upon any Collateral, or to take any
action towards enforcing any Facility Document or to institute, appear in or
defend any action, suit or other proceeding in connection therewith. The
foregoing provisions of this paragraph shall not be construed to limit the power
of the Agent to take any action permitted under any Facility Document to be
taken by the Agent, and the Agent may, in accordance with this Agreement, take
any aforesaid action without the receipt of indemnity or security or any request
therefor and the taking of any such action shall not be construed as a waiver of
any provision of this Agreement. Each Lender agrees with the other Lenders and
the Agent that (i) such Lender will not take any action whatsoever to enforce
any term or provision of any Facility Document or otherwise to realize the
benefits of the Collateral, except through the Agent in accordance with this
Agreement and (ii) if the Required Lenders shall instruct the Agent pursuant to
this SECTION 11.18 to commence action to enforce any Facility Document, such
Lender (a) shall not thereafter commence any proceeding of its own seeking
payment of the Loans and/or any other Obligation held by such Lender so long as
such enforcement action is ongoing and (b) if such a proceeding shall be pending
at the time such instructions are given to the Agent, shall promptly (but in no
event later than the commencement of such enforcement action) cause such
proceeding to be discontinued, PROVIDED that if such Lender shall fail to
discontinue such proceeding, the Agent is hereby authorized and directed by such
Lender and the other Lenders to commence and maintain such foreclosure action on
behalf of such other Lenders (excluding such Lender) and any distribution of
amounts required by this Agreement or the Facility Documents shall be made only
to such other Lenders and/or the Agent as provided therein and, notwithstanding
anything herein or in any Security Document to the contrary, such Lender shall
not be entitled to share therein.

         SECTION 11.19 BORROWING BASE STATEMENTS, ETC. The Agent shall provide
to the Lenders and the Borrowers' Agent, promptly, but in any event within five
(5) Banking Days after receipt of the reports required under SECTION 6.09, a
copy of the computations of the Borrowing Base made by the Agent on the basis of
such reports in substantially the same format which has been furnished to the
Lenders as of the date of this Agreement; PROVIDED, HOWEVER, that the Agent
shall not be liable to the Lenders for the accuracy of any information contained
in such statements. The Agent shall provide to the Lenders each Borrowing Base
Certificate promptly after receipt thereof from the Borrowers.

         SECTION 11.20 FIELD AUDITS AND INVENTORY APPRAISALS. The Required
Lenders may, by written notice to the Agent, accelerate the timing of any
scheduled field audit examination or inventory appraisal to be conducted by the
Agent and require the Agent to conduct such field audit examination or inventory
appraisal before the next scheduled date of performance.

<PAGE>

                                   ARTICLE 12

                                  MISCELLANEOUS

         SECTION 12.01 AMENDMENTS AND WAIVERS. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement or any of the other
Facility Documents may be amended or modified only by an instrument in writing
signed by the Borrowers, the Agent and the Required Lenders, or by the Borrowers
and the Agent acting with the consent of the Required Lenders and any provision
of this Agreement or the other Facility Documents for the benefit of the
Required Lenders or the Agent may be waived by the Required Lenders or by the
Agent acting with the consent of the Required Lenders; PROVIDED that no
amendment, modification or waiver shall:

         (a) increase the Commitments of any Lender without the written consent
of such Lender and the Agent;

         (b) reduce the principal amount of any Loan or Reimbursement Obligation
or reduce the rate of interest thereon (other than the decision not to charge,
or to cease to charge, interest at the Default Rate), or reduce any fees payable
hereunder, without the written consent of each Lender directly affected thereby;

         (c) except as provided in SECTION 2.18, postpone the scheduled date of
payment of the principal amount of any Loan or Reimbursement Obligation other
than mandatory prepayments of the Loans required under SECTION 2.04, or any
interest thereon, or any fees payable hereunder, or reduce the amount of any
such payment, change the maturity date of any Loan, or postpone the scheduled
date of expiration of any Commitment, or extend the ultimate expiration date of
any Letter of Credit beyond the Termination Date, without the written consent of
each Lender directly affected thereby;

         (d) change any of the provisions of this SECTION 12.01, the provisions
of SECTION 6.18 or the definition of "Required Lenders," or any other provision
hereof specifying the number or percentage of Lenders required to waive, amend
or modify any rights hereunder or under any other Facility Document or make any
determination or grant any consent hereunder or thereunder, without the written
consent of each Lender;

         (e) release any Guarantor from its obligations in respect of its
guarantee under ARTICLE 10 or release all or substantially all of the Collateral
(or terminate all or substantially all of the Liens in favor of the Agent on the
Collateral), except as expressly permitted in this Agreement, without the
written consent of each Lender; or

         (f) (i) modify the Borrowing Base to increase the advance rate
percentages applicable to any category of Collateral included therein, to add
new categories of eligible Collateral or to make less restrictive the
eligibility criteria applicable to any category of Collateral (other than the
adjustment or elimination of reserves in the Agent's reasonable discretion), or
(ii) increase or modify the Fixed Asset Availability, in the case of (i) or
(ii), without the written consent of each Lender and the Agent;

<PAGE>

         (g) PROVIDED FURTHER, that any amendment of ARTICLE 11 hereof or any
amendment which increases the obligations of the Agent hereunder shall require
the consent of the Agent. No failure by any party (Agent, any Lender or the
Borrowers) to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof or preclude any other or further exercise thereof or
the exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.

         SECTION 12.02 USURY. It is not the intention of the parties to this
Agreement to make an agreement violative of the laws of any applicable
jurisdiction relating to usury. Regardless of any provision in this Agreement or
any Note, the Lenders shall never be entitled to receive, collect or apply, as
interest under this Agreement or the Notes, any amount in excess of the maximum
amount permitted under applicable law. If any Lender ever receives, collects or
applies, as interest, any such excess, such amount which would be excessive
interest shall be deemed a partial repayment of principal and treated hereunder
as such and if principal is paid in full, any remaining excess shall be promptly
paid to the Borrowers. In determining whether or not the interest paid or
payable, under any specific contingency, exceeds the maximum amount permitted
under applicable law, the Borrowers and the Lenders shall, to the maximum extent
permitted under applicable laws, (i) characterize any non-principal payment as
an expense, fee or premium rather than as interest, (ii) exclude voluntary
prepayments and the effect thereof, and (iii) amortize, prorate, allocate and
spread in equal parts, the total amount of interest throughout the entire
contemplated term of this Agreement so that the interest rate is uniform
throughout the entire term of this Agreement; PROVIDED that if this Agreement is
paid and performed in full prior to the end of the full contemplated term
hereof, and if the interest received for the actual period of existence thereof
exceeds the maximum amount permitted under applicable law, the Lenders shall
refund to the Borrowers the amount of such excess or credit the amount of such
excess against the total principal amount owing, and, in such event, the Lenders
shall not be subject to any penalties provided by any laws for contracting for,
charging or receiving interest in excess of the maximum amount permitted under
applicable law. This SECTION 12.02 shall control every other inconsistent
provision of all agreements among the parties pertaining to the transactions
contemplated by or contained in this Agreement, the Notes and any other Facility
Document.

         SECTION 12.03 EXPENSES; INDEMNIFICATION. The Borrowers and the
Guarantors jointly and severally agree to pay, or to reimburse the Agent or the
Lenders, as applicable, for paying: (a) all reasonable out-of-pocket expenses
incurred by the Agent and its Affiliates, including the reasonable fees, charges
and disbursements of counsel to the Agent, in connection with the preparation
and administration of this Agreement and the other Facility Documents or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (b) all reasonable out-of-pocket expenses incurred by the Agent in
connection with the issuance, amendment, renewal or extension of any Letter of
Credit or any demand for payment thereunder, (c) all out-of-pocket costs and
expenses incurred by the Agent or any Lender, including the reasonable fees,
charges and disbursements of any counsel for the Agent or any Lender, in
connection with the investigation, enforcement or protection of its rights in
connection with this Agreement and the other Facility Documents, including its
rights under this SECTION 12.03, or in connection with the Loans made or Letters
of Credit issued hereunder following a Default or Event of Default, including in
connection with any workout, restructuring or negotiations in respect thereof;
(d) all actual out-of-pocket costs and reasonable expenses and advances incurred
by the Agent in the

<PAGE>

protection of its security interests (including but not limited to reasonable
fees and out-of-pocket expenses incurred in perfection of or checking the status
of such security interests and examinations to determine the value of Accounts);
(e) all present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies arising from any payment made
hereunder or from the execution, delivery or enforcement of or otherwise with
respect to this Agreement and the other Facility Documents, all costs, expenses,
taxes, assessments and other charges incurred in connection with any filing,
registration, recording, perfection or termination of any security interest
contemplated hereby or by any other Facility Document or any other document
referred to therein; and (f) the amount of any and all out-of-pocket expenses
which Agent may incur in connection with the collection of any item deposited in
any Controlled Disbursement Account or received by Agent in connection with any
Collateral, together with interest on any of the above from the date of such
expenditure to the date of repayment in full to Agent at the Adjusted Base Rate.
The Borrowers agree, jointly and severally, to indemnify, reimburse, defend and
hold harmless the Agent (including in its capacity as Issuing Bank) and each
Lender and their respective directors, officers, employees and agents (each, an
"INDEMNIFIED PARTY") from and against, any and all losses, liabilities, claims,
damages or expenses (including reasonable attorneys' fees and fees and expenses
incurred in enforcing this indemnity) asserted against, imposed on or incurred
by any of them arising out of or by reason of (i) the execution or delivery of
this Agreement or any agreement or instrument contemplated hereby, the
performance by the parties hereto of their respective obligations hereunder or
the consummation of any of the transactions contemplated hereby, (ii) any actual
or proposed use by the Borrowers or any of their Subsidiaries of the proceeds of
any Loan, (iii) the application of any Environmental Law to acts or omissions
occurring at any time on or in connection with any real estate owned or leased
by the Borrowers or any Subsidiary or any business conducted thereon and (iv)
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnified Party is a party thereto; but
excluding any such losses, liabilities, claims, damages or expenses incurred by
reason of the gross negligence or willful misconduct of any Indemnified Party.
At its option, Agent may charge such costs, expenses and amounts as a Loan
pursuant to this Agreement.

         SECTION 12.04 SURVIVAL. The obligations of the Borrowers under SECTION
12.03 shall survive the repayment of the Loans and the termination of the
Commitments.

         SECTION 12.05 ASSIGNMENT; PARTICIPATIONS.

         (a) Each Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or an undivided portion of all of its Commitments, Loans, and
all Notes held by it); PROVIDED, HOWEVER, that (i) each such assignment shall be
of a uniform, and not a varying, undivided percentage of all rights and
obligations under and in respect of the Commitments and Loans; (ii) except in
the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender or an assignment of all of a Lender's rights and
obligations under this Agreement, the amount of the Commitment of the assigning
Lender being assigned pursuant to each such assignment (determined as of the
date of the Assignment and Acceptance with respect to such assignment) shall in
no event be less than $5,000,000; (iii) each such assignment shall be to an
Eligible Assignee; (iv) no such assignments shall be permitted without the
consent of the Agent (such consent not to be unreasonably withheld or delayed);
and (v) the parties to each such assignment

<PAGE>

shall execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, substantially in the form of EXHIBIT G,
together with any Note or Notes subject to such assignment and a processing and
recordation fee of $3,500.

         (b) Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (i) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (ii) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).

         (c) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes 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
any other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien
or security interest created or purported to be created under or in connection
with, this Agreement or any other loan document or any other instrument or
document furnished pursuant hereto or thereto; (ii) such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrowers or any of their Subsidiaries or the
performance or observance by the Borrowers or their Subsidiaries of any of their
obligations under any Facility Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in SECTION 6.08 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Lender or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
the Facility Documents as are delegated to the Agent by the terms hereof
together with such powers and discretion as are reasonably incidental thereto;
and (vii) such assignee agrees that 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 Agent shall maintain at its JPMorgan Chase Office a copy of
each Assignment and Acceptance delivered to and accepted by it and a register
for the recordation of the names and addresses of the Lenders and the Commitment
and principal amount of the Loans owing to each Lender from time to time (the
"REGISTER"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrowers, the Agent and the Lenders
may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of

<PAGE>

this Agreement. The Register shall be available for inspection by the Borrowers
or any Lender at any reasonable time and from time to time upon reasonable prior
notice.

         (e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any Note or Notes subject to
such assignment, the Agent shall, if such Assignment and Acceptance has been
completed, (i) accept such Assignment and Acceptance; (ii) record the
information contained therein in the Register; and (iii) give prompt notice
thereof to the Borrowers. In the case of any assignment by a Lender, within five
(5) Banking Days after its receipt of such notice, the Borrowers, at their own
expense, shall execute and deliver to the Agent in exchange for the surrendered
Notes, new Notes to the order of such Eligible Assignee in amounts equal to the
Commitment assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Commitment hereunder, new Notes to the order of
the assigning Lender in amounts equal to the Commitment retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of EXHIBIT A or EXHIBIT B as applicable.

         (f) Each Lender may sell participations to one or more Persons (other
than the Borrowers or any of their Affiliates) in or to all or any portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of its Commitments or Loans and any Note or Notes held by it);
PROVIDED, HOWEVER, that (i) such Lender's obligations under this Agreement
(including, without limitation, its Commitment) shall remain unchanged; (ii)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations; (iii) such Lender shall remain the holder of
any such Note for all purposes of this Agreement; (iv) the Borrowers, the Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement; (v) no participant under any such participation shall have any right
to approve any amendment or waiver of any provision of any Facility Document, or
any consent to any departure by the Borrowers or any of their Subsidiaries
therefrom, except to the extent that such amendment, waiver or consent would
reduce the principal of, or interest on, the Notes or any fees or other amounts
payable hereunder, in each case to the extent subject to such participation,
postpone any date fixed for any payment of principal of, or interest on, the
Notes or any fees or other amounts payable hereunder, in each case to the extent
subject to such participation, or release all or substantially all of the
Collateral; and (vi) the identity of the participant shall have been approved by
the Agent in writing to such Lender.

         (g) Subject to the provisions of SECTION 12.06, any Lender may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this SECTION 12.05, disclose to the assignee or
participant or proposed assignee or participant, any information relating to the
Borrowers furnished to such Lender by or on behalf of the Borrowers.

         (h) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Loans owing
to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A.

<PAGE>

         SECTION 12.06 NOTICES. All notices and other communications provided
for herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made in writing and,
telecopied, mailed or delivered or electronically mailed to the intended
recipient at the "Address for Notices" specified below its name on the signature
page hereof or, as to any party, at such other address as shall be designated by
such party in a notice to each other party. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been duly given when
transmitted by telecopier, personally delivered or, in the case of a mailed
notice, upon receipt, or in the case of electronic mail, upon confirmation of
receipt via return electronic mail or telephonically confirmed, in each case
given or addressed as aforesaid.

         SECTION 12.07 CONFIDENTIALITY. Each of the Agent and each Lender agrees
to maintain the confidentiality of all information provided to it by the
Borrowers relating to the Borrowers or their business in accordance with its
customary procedure for handling confidential information of this nature and in
accordance with safe and sound banking practices; except that the Agent and each
Lender may disclose such information (a) to its and its Affiliates' directors,
officers, employees and agents, including accountants, legal counsel and other
advisors; (b) to any assignee of or participant in, or any prospective assignee
of or participant in, any of its rights or obligations under this Agreement that
has agreed to maintain the confidentiality of such information on terms
described in this SECTION 12.07 and any such assignee, participant, potential
assignee or potential participant may disclose such information to its
directors, officers, employees and agents, including accountants, legal counsel
and other advisors; (c) to the extent required or requested by any Governmental
Authority; (d) to the extent required by applicable laws or regulations or by
any subpoena, court decree or similar legal process; (e) in connection with the
exercise of any right or remedy under the Facility Documents or at law or equity
or in connection with any litigation to which the Agent or such Lender is a
party; (f) to any other party to this Agreement; (g) with the consent of the
Borrowers' Agent; (h) to the extent such information (i) becomes publicly
available other than as a result of a breach of this SECTION 12.07 or (ii)
becomes available to the Agent or any Lender on a non-confidential basis from a
source other than the Borrowers. Any Person required to maintain the
confidentiality of information as provided in this SECTION 12.07 shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
information as such Person would accord to its own confidential information.

         SECTION 12.08 TABLE OF CONTENTS; HEADINGS. Any table of contents and
the headings and captions hereunder are for convenience only and shall not
affect the interpretation or construction of this Agreement.

         SECTION 12.09 SEVERABILITY. The provisions of this Agreement are
intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.

         SECTION 12.10 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any party hereto may execute this Agreement by signing any
such counterpart. Delivery of an

<PAGE>

executed counterpart of a signature page to this Agreement by telecopier shall
be effective as delivery of a manually executed counterpart of this Agreement.

         SECTION 12.11 GOVERNING LAW. Pursuant to Section 5-1401 of the New York
General Obligations Law, the whole of this Agreement and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
in accordance with, the laws of the State of New York without regard to any
conflicts-of-laws rules which would require the application of the laws of any
other jurisdiction.

         SECTION 12.12 INCORPORATION BY REFERENCE; CONFLICTS. The rights and
remedies of Agent and the Lenders under the other Facility Documents are
incorporated herein by reference and the rights and remedies of the Agent and
the Lenders under this Agreement and all of the terms of this Agreement, are
likewise incorporated in the other Facility Documents by reference. In the case
of any conflict between the terms of this Agreement and the terms of any other
Facility Document, the terms of this Agreement shall govern.

         SECTION 12.13 JURISDICTION, VENUE AND SERVICE. For purposes of this
Agreement, each of the Borrowers hereby irrevocably consents and submits to the
nonexclusive jurisdiction and venue of all federal and state courts located in
the County of New York, State of New York and consents that any order, process,
notice of motion or other application to or by any of said courts or a judge
thereof may be served within or without such court's jurisdiction by registered
mail or by personal service, PROVIDED a reasonable time for appearance is
allowed, in connection with any action or proceeding arising out of; under or
relating to this Agreement or the Facility Documents. At the option of the
Agent, upon the instructions of the Required Lenders, the Borrowers may be
joined in any action or proceeding commenced by the Agent or the Lenders against
any Borrower or Guarantor in connection with or based on the Security Documents,
and recovery may be had against the Borrowers in such action or proceeding or in
any independent action or proceeding against the Borrowers, without any
requirement that the Agent or the Lenders first assert, prosecute or exhaust any
remedy or claim against any Borrower or Guarantor. Each of the Borrowers hereby
irrevocably waives (to the fullest extent permitted by applicable law) any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of; under or relating to this Agreement or any
Facility Document brought in any federal or state court located in the County of
New York, State of New York, and hereby further irrevocably waives (to the
fullest extent permitted by applicable law) any claim that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum.

         SECTION 12.14 WAIVER OF JURY TRIAL. EACH OF THE AGENT, THE
DOCUMENTATION AGENTS, THE LENDERS, THE GUARANTORS AND THE BORROWERS HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE
ARISING UNDER OR RELATING TO THIS AGREEMENT OR ANY FACILITY DOCUMENT, AND AGREES
THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY. IN
ADDITION, EACH OF THE AGENT, THE LENDERS, THE GUARANTORS AND THE BORROWERS
WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE BASED UPON ANY STATUTE OF LIMITATIONS
OR ANY CLAIM OF LACHES AND ANY SET-OFF OR COUNTER CLAIM OF ANY NATURE OR
DESCRIPTION. EACH OF THE AGENT, THE DOCUMENTATION AGENTS, THE LENDERS, THE
GUARANTORS AND THE

<PAGE>

BORROWERS ACKNOWLEDGE THAT THE FOREGOING WAIVERS ARE FREELY MADE.

                            (SIGNATURE PAGES FOLLOW)

<PAGE>

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

                                       BORROWERS:

                                       HAWK CORPORATION
                                       ALLEGHENY CLEARFIELD, INC.
                                       FRICTION PRODUCTS CO.
                                       HAWK MOTORS, INC.
                                       HELSEL, INC.
                                       LOGAN METAL STAMPINGS, INC.
                                       NET SHAPE TECHNOLOGIES LLC
                                       QUARTER MASTER INDUSTRIES, INC.
                                       S.K. WELLMAN CORP.
                                       SINTERLOY CORPORATION
                                       TEX RACING ENTERPRISES, INC.

                                       By: /s/ Thomas A. Gilbride
                                          --------------------------------------
                                           Thomas A. Gilbride
                                           Vice President - Finance & Treasurer

                                             Address for Notices:
                                             200 Public Square
                                             Suite 30-5000
                                             Cleveland, Ohio  44114
                                             Attention:  Vice President-Finance
                                             Facsimile:  (216) 861-4546

<PAGE>

                                       GUARANTORS:

                                       S.K. WELLMAN HOLDINGS, INC.
                                       HAWK PRECISION COMPONENTS GROUP, INC.
                                       HAWK MIM, INC.

                                       By: /s/ Thomas A. Gilbride
                                          --------------------------------------
                                          Thomas A. Gilbride
                                          Vice President - Finance & Treasurer

                                            Address for Notices:
                                            200 Public Square
                                            Suite 30-5000
                                            Cleveland, Ohio  44114
                                            Attention:  Vice President-Finance
                                            Facsimile:  (216) 861-4546

<PAGE>

                                       AGENT:

                                       JPMORGAN CHASE BANK, as Administrative
                                       and Collateral Agent, Issuing Bank and
                                       Arranger

                                       By: /s/ Dale A. Pensgen
                                          --------------------------------------
                                          Dale A. Pensgen
                                          Vice President

                                            Address for Notices:
                                            One Chase Square, CS-5
                                            Rochester, New York  14643
                                            Attention:  Dale A. Pensgen
                                            Facsimile:  (585) 258-7440

<PAGE>

                                       LENDERS:
                                       JPMORGAN CHASE BANK

                                       By: /s/ Dale A. Pensgen
                                          --------------------------------------
                                          Dale A. Pensgen
                                          Vice President

                                            Address for Notices:
                                            One Chase Square, CS-5
                                            Rochester, New York  14643
                                            Attention:  Dale A. Pensgen
                                            Facsimile:  (585) 258-7440

<PAGE>

                                       PNC BANK, NATIONAL ASSOCIATION

                                       By: /s/ James V. Cannella
                                           -------------------------------------
                                           James V. Cannella
                                           -------------------------------------
                                           Vice President
                                           -------------------------------------

                                           Address for Notices:
                                           One PNC Plaza
                                           249 Fifth Ave.
                                           Pittsburgh, PA  15222
                                           Attention:  Mark D. Hefferan
                                           Facsimile:  (412) 768-4369
<PAGE>

                                       FLEET CAPITAL CORP.

                                       By: /s/ Michael P. Shiplett
                                           -------------------------------------
                                           Michael P. Shiplett
                                           -------------------------------------
                                           Vice President
                                           -------------------------------------

                                           Address for Notices:
                                           One South Wacker Street
                                           Suite 1400
                                           Chicago, IL  60606
                                           Attention:  Dave Lehner
                                           Fax:  (312) 332-6537

<PAGE>

                                       J.P. MORGAN BUSINESS CREDIT CORP., as
                                       Advisor

                                       By: /s/ Kenneth A. Horner
                                          --------------------------------------
                                          Kenneth A. Horner
                                          Director

                                               Address for Notices:
                                               250 West Huron Road, Suite 520
                                               Cleveland, Ohio  44113
                                               Attention:  Kenneth A. Horner
                                               Facsimile:  (216) 479-2732

<PAGE>

                                  SCHEDULE 2.01

                             LENDERS AND COMMITMENTS
                             -----------------------

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
      NAME OF LENDER         REVOLVING CREDIT   REVOLVING CREDIT        CAPEX      CAPEX COMMITMENT             LENDING OFFICE
                                COMMITMENT         COMMITMENT        COMMITMENT       PERCENTAGE
                                  AMOUNT           PERCENTAGE          AMOUNT
------------------------------------------------------------------------------------------------------------------------------------
<S>                           <C>                    <C>            <C>                 <C>          <C>
    JPMorgan Chase Bank       18,867,924.52          37.736%        1,132,075.48        37.736%      One Chase Square, CS-5
                                                                                                     Rochester, New York  14643
                                                                                                     Contact:  Dale A. Pensgen
                                                                                                     Phone:  (585) 258-6194
                                                                                                     Facsimile:  (585) 258-7440
------------------------------------------------------------------------------------------------------------------------------------
 PNC Bank, National Assoc.    15,566,037.74          31.132%         933,962.26         31.132%      2 Tower Center; 8th Floor
                                                                                                     East Brunswick, NJ  08816
                                                                                                     Attn: Pat Loprete
                                                                                                     Phone:  (732) 220-4368
                                                                                                     Facsimile:  (732) 220-4399
------------------------------------------------------------------------------------------------------------------------------------
    Fleet Capital Corp.       15,566,037.74          31.132%         933,962.26         31.132%      20800 Swenson Drive
                                                                                                     Suite 350
                                                                                                     Waukesha, WI  53186
                                                                                                     Attn:  Ann Dempsey
                                                                                                     Phone:  262-798-4816
                                                                                                     Fax:  262-798-4883
------------------------------------------------------------------------------------------------------------------------------------
           Total               $50,000,000        100.0000000%       $3,000,000      100.0000000%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       94
<PAGE>

                                SCHEDULE 4.01(a)

                               SECURITY DOCUMENTS
                               ------------------

Executed copies of the following documents shall be delivered at the Closing:

1.       Security and Pledge Agreement by Hawk Corporation and its Domestic
         Subsidiaries
2.       Patent Security Agreements by each of the following:
         a.       Hawk Corporation; and
         b.       S.K. Wellman Corp.
3.       Trademark Security Agreements by each of the following:
         a.       Hawk Corporation;
         b.       Quarter Master Industries, Inc.;
         c.       Tex Racing Enterprises, Inc.;
         d.       S.K. Wellman Corp.;
         e.       Hawk Precision Components Group, Inc.; and
         f.       Hawk Motors, Inc.
4.       Mortgages on the following locations:
         a.       Campbellsburg, Washington County, Indiana;
         b.       Jefferson County, Pennsylvania;
         c.       Brook Park, Cuyahoga County, Ohio;
         d.       City of Medina, County of Medina, Ohio;
         e.       City of Akron, Summit County, Ohio;
         f.       City of Alton, Madison County, Illinois;
         g.       Lawrence Township, Clearfield County, Pennsylvania

                                       95
<PAGE>

                                                                       EXHIBIT A

                                     FORM OF
                              REVOLVING CREDIT NOTE

$[__________]                                                   [Date]

         Hawk Corporation, a Delaware corporation ("HAWK") and the Domestic
Subsidiaries of Hawk party to the Credit Agreement referred to below as
Borrowers (collectively with Hawk, the "BORROWERS"), for value received, hereby
jointly and severally promise to pay to the order of [NAME OF LENDER] (the
"LENDER") at the office of the Agent at [ADDRESS], for the account of the
Lender, the principal sum of

   [________________________________] MILLION AND 00/100 DOLLARS ($_________)

or, if less, the amount of Revolving Credit Loans loaned by the Lender to the
Borrowers pursuant to the Credit Agreement referred to below, in lawful money of
the United States of America and in immediately available funds, on the date(s)
and in the manner provided in said Credit Agreement. The Borrowers also jointly
and severally promise to pay interest on the unpaid principal balance hereof,
for the period such balance is outstanding, at said principal office for the
account of the Lender, in like money, at the rates of interest as provided in
the Credit Agreement described below, on the date(s) and in the manner provided
in such Credit Agreement.

         This is one of the Notes referred to in, and is entitled to the
benefits of, that certain Credit Agreement dated as of October 18, 2002 among
the Borrowers, certain Subsidiaries of Hawk, as Guarantors, the lenders party
thereto (including the Lender), JPMorgan Chase Bank, as Administrative and
Collateral Agent, Issuing Bank and Arranger, J.P. Morgan Business Credit Corp.,
as Advisor, PNC Bank, National Association, as a Documentation Agent, and Fleet
Capital Corp., as a Documentation Agent (as amended, restated, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT"), and evidences the
Revolving Credit Loans made by the Lender to the Borrowers thereunder. All terms
not defined herein shall have the meanings given to them in the Credit
Agreement.

         The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence and during the continuance of certain Events of
Default and for prepayments on the terms and conditions specified herein.

         The Borrowers waive presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note.

         In any action or proceeding involving any state corporate law, or any
state or Federal bankruptcy, insolvency, reorganization or other law affecting
the rights of creditors generally, if the obligations of any Borrower would
otherwise be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its joint and several liability hereunder, then, notwithstanding any other
provision hereof to the contrary, the amount of such liability shall, without
any further action by any Borrower or Lender or any other Person, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.

                  (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

                                       96
<PAGE>

         Pursuant to Section 5-1401 of the New York General Obligations law,
this Note, including the validity hereof and the rights of the Lender and
obligations of the Borrowers hereunder, shall be governed by, and interpreted
and construed in accordance with, the laws of the State of New York.

                                       BORROWERS:

                                       HAWK CORPORATION
                                       ALLEGHENY CLEARFIELD, INC.
                                       FRICTION PRODUCTS CO.
                                       HAWK MOTORS, INC.
                                       HELSEL, INC.
                                       LOGAN METAL STAMPINGS, INC.
                                       NET SHAPE TECHNOLOGIES LLC
                                       QUARTER MASTER INDUSTRIES, INC.
                                       S.K. WELLMAN CORP.
                                       SINTERLOY CORPORATION
                                       TEX RACING ENTERPRISES, INC.

                                       By:
                                          --------------------------------------
                                          Thomas A. Gilbride
                                          Vice President - Finance & Treasurer

                                       97
<PAGE>

                                                                       EXHIBIT B

                               FORM OF CAPEX NOTE

$[__________]                                                    [Date]

         Hawk Corporation, a Delaware corporation ("HAWK") and the Domestic
Subsidiaries of Hawk party to the Credit Agreement referred to below as
Borrowers (collectively with Hawk, the "BORROWERS"), for value received, hereby
jointly and severally promise to pay to the order of [NAME OF LENDER] (the
"LENDER") at the office of the Agent at [ADDRESS], for the account of the
Lender, the principal sum of

   [________________________________] MILLION AND 00/100 DOLLARS ($_________)

or, if less, the amount of CapEx Loans loaned by the Lender to the Borrowers
pursuant to the Credit Agreement referred to below, in lawful money of the
United States of America and in immediately available funds, on the date(s) and
in the manner provided in said Credit Agreement. The Borrowers also jointly and
severally promise to pay interest on the unpaid principal balance hereof, for
the period such balance is outstanding, at said principal office for the account
of the Lender, in like money, at the rates of interest as provided in the Credit
Agreement described below, on the date(s) and in the manner provided in such
Credit Agreement.

         This is one of the Notes referred to in, and is entitled to the
benefits of, that certain Credit Agreement dated as of October 18, 2002 among
the Borrowers, certain Subsidiaries of Hawk, as Guarantors, the lenders party
thereto (including the Lender), JPMorgan Chase Bank, as Administrative and
Collateral Agent, Issuing Bank and Arranger, J.P. Morgan Business Credit Corp.,
as Advisor, PNC Bank, National Association, as a Documentation Agent, and Fleet
Capital Corp., as a Documentation Agent (as amended, restated, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT"), and evidences the
CapEx Loans made by the Lender to the Borrowers thereunder. All terms not
defined herein shall have the meanings given to them in the Credit Agreement.

         The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence and during the continuance of certain Events of
Default and for prepayments on the terms and conditions specified herein.

         The Borrowers waive presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note.

         In any action or proceeding involving any state corporate law, or any
state or Federal bankruptcy, insolvency, reorganization or other law affecting
the rights of creditors generally, if the obligations of any Borrower would
otherwise be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its joint and several liability hereunder, then, notwithstanding any other
provision hereof to the contrary, the amount of such liability shall, without
any further action by any Borrower or Lender or any other Person, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.

                                       98
<PAGE>

                  (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

                                       99
<PAGE>

         Pursuant to Section 5-1401 of the New York General Obligations law,
this Note, including the validity hereof and the rights of the Lender and
obligations of the Borrowers hereunder, shall be governed by, and interpreted
and construed in accordance with, the laws of the State of New York.

                                       BORROWERS:

                                       HAWK CORPORATION
                                       ALLEGHENY CLEARFIELD, INC.
                                       FRICTION PRODUCTS CO.
                                       HAWK MOTORS, INC.
                                       HELSEL, INC.
                                       LOGAN METAL STAMPINGS, INC.
                                       NET SHAPE TECHNOLOGIES LLC
                                       QUARTER MASTER INDUSTRIES, INC.
                                       S.K. WELLMAN CORP.
                                       SINTERLOY CORPORATION
                                       TEX RACING ENTERPRISES, INC.

                                       By:
                                          --------------------------------------
                                          Thomas A. Gilbride
                                          Vice President - Finance & Treasurer

                                      100
<PAGE>

                                                                       EXHIBIT C

                          FORM OF SOLVENCY CERTIFICATE

                                      101
<PAGE>

                                                                       EXHIBIT D

                      FORM OF LANDLORD'S WAIVER AND CONSENT

                                      102
<PAGE>

                                                                       EXHIBIT E

                         FORM OF COMPLIANCE CERTIFICATE

                                      103
<PAGE>

                                                                       EXHIBIT F

                         FORM OF MONTHLY BORROWING BASE
                                   CERTIFICATE

                                      104
<PAGE>

                                                                       EXHIBIT G

                                     FORM OF
                            ASSIGNMENT AND ACCEPTANCE

         Reference is made to the Credit Agreement dated as of October 18, 2002
(as amended, restated, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"; the terms defined therein being used herein as therein
defined) among Hawk Corporation, a Delaware corporation ("HAWK") and the
Domestic Subsidiaries of Hawk party to the Credit Agreement as Borrowers
(collectively with Hawk, the "BORROWERS"), the Lenders from time to time party
thereto, JPMorgan Chase Bank, as Administrative and Collateral Agent, Issuing
Bank and Arranger, J.P. Morgan Business Credit Corp., as Advisor, PNC Bank,
National Association, as a Documentation Agent, and Fleet Capital Corp., as a
Documentation Agent.

         The "Assignor" and the "Assignee" referred to on SCHEDULE 1 hereto
agree as follows:

         1._______The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, an interest in and to
the Assignor's rights and obligations under the Credit Agreement as of the date
hereof equal to the percentage interests specified on SCHEDULE 1 hereto of all
outstanding rights and obligations under the Credit Agreement in respect of the
Loans, as specified on SCHEDULE 1 hereto. After giving effect to such sale and
assignment, the Assignee's Commitment, the amount of the Loans owing to the
Assignee will be as set forth on SCHEDULE 1 hereto.

         2._______The Assignor (i) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Facility Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien
or security interest created or purported to be created under or in connection
with, the Facility Documents or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrowers or the
Guarantors or the performance or observance by the Borrowers or the Guarantors
of any of their obligations under any Facility Document or any other instrument
or document furnished pursuant thereto; and (iv) attaches the Notes held by the
Assignor and requests that the Agent exchange such Notes for new Notes payable
to the order of the Assignee in amounts equal to the Commitments, assumed by the
Assignee pursuant hereto and, to the extent the Assignor has retained any
Commitment, to the order of the Assignor in amounts equal to the Commitment,
respectively, retained by the Assignor under the Credit Agreement as specified
on SCHEDULE 1 hereto.

         3._______The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
therein and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without reliance upon
the Agent, the Assignor or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement;
(iii) confirms that it is an Eligible Assignee;

                                      105
<PAGE>

(iv) appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers and discretion under the Facility Documents
as are delegated to the Agent by the terms thereof, together with such powers
and discretion as are reasonably incidental thereto; (v) agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of the Credit Agreement are required to be performed by it as a Lender; (vi)
represents that it is entitled to receive any payments to be made to it under
the Credit Agreement without the withholding of any tax and will furnish to the
Agent such forms, certifications, statements and other documents as the Agent
may request from time to time to evidence such Lender's exemption from the
withholding of any tax imposed by any jurisdiction or to enable the Agent to
comply with any applicable laws or regulations relating thereto; and (vii)
attaches any U.S. Internal Revenue Service forms or other forms required under
the Credit Agreement.

         4._______Following the execution of this Assignment and Acceptance, it
will be delivered to the Agent for approval by the Agent and acceptance and
recording by the Agent. The effective date for this Assignment and Acceptance
(the "EFFECTIVE DATE") shall be the date of acceptance hereof by the Agent,
unless otherwise specified on SCHEDULE 1 hereto.

         5._______Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.

         6._______Upon such acceptance and recording by the Agent, from and
after the Effective Date, the Agent shall make all payments under the Credit
Agreement and the Notes in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and commitment fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the Notes for
periods prior to the Effective Date directly between themselves.

         7._______This Assignment and Acceptance may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of SCHEDULE 1 to this Assignment and Acceptance by
telecopier shall be effective as delivery of a manually executed counterpart of
this Assignment and Acceptance.

         8._______This Assignment and Acceptance shall be governed and construed
by the laws of the State of New York.

                                      106
<PAGE>

         IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified on SCHEDULE 1 annexed hereto.

[Assignor]                               [Assignee]

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

                                         Acknowledged and Approved:

                                         JPMORGAN CHASE BANK,
                                         as Agent

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

                                      107
<PAGE>

                                   SCHEDULE I

                          TO ASSIGNMENT AND ACCEPTANCE
           RELATING TO CREDIT AGREEMENT, DATED AS OF OCTOBER 18, 2002,
                             AMONG HAWK CORPORATION,
    CERTAIN OF ITS DIRECT AND INDIRECT DOMESTIC SUBSIDIARIES AS CO-BORROWERS,
           THE LENDERS PARTY THERETO AND JPMORGAN CHASE BANK, AS AGENT

Name of Assignor:
Name of Assignee:
Effective Date of Assignment:

<TABLE>
<CAPTION>
Principal Amount of Revolving  Principal Amount of Revolving       Principal Amount of  Principal Amount of     Percent of
 Credit Commitment Assigned     Credit Commitment Retained          CapEx Commitment      CapEx Commitment    Facility Assigned
 --------------------------     --------------------------             Assigned               Retained        -----------------
                                                                       --------               --------
<S>           <C>                            <C>                          <C>                     <C>                 <C>
              $                              $                            $                       $                   %
</TABLE>

                                      108
<PAGE>

                                                                       EXHIBIT H

                          FORM OF AUTHORIZATION LETTER

                                      109
<PAGE>

                                                                       EXHIBIT I

                                  PRICING GRID

<TABLE>
<CAPTION>
------------- -------------------- ------------------ ------------------- ------------------ ------------------- ------------------
    Level       Leverage Ratio        Eurodollar          Eurodollar       Base Rate Margin   Base Rate Margin       Applicable
                                    Margin- Letters         Margin -         - Revolving        - Revolving       Commitment Fee
                                     of Credit and      Revolving Credit     Credit Loans     Credit Loans that        Rate
                                    Revolving Credit     Loans that are     other than the     are part of the
                                    Loans other than   part of the Fixed     Fixed Asset        Fixed Asset
                                    the Fixed Asset      Asset Advance         Advance          Advance and
                                       Advance          and CapEx Loans                         CapEx Loans
------------- -------------------- ------------------ ------------------- ------------------ ------------------- ------------------
<S>             <C>                       <C>                 <C>               <C>                <C>                 <C>
      1         4.75 to 1.00 or           325                 375               50 bps             100 bps             50 bps
                   higher
------------- -------------------- ------------------ ------------------- ------------------ ------------------- ------------------

      2         4.00 to 1.00 or           275                 325               25 bps              75 bps            37.5 bps
               greater and less
               than 4.75 to 1.00
------------- -------------------- ------------------ ------------------- ------------------ ------------------- ------------------

      3         3.00 to 1.00 or           250                 300               0 bps               50 bps            37.5 bps
               greater and less
               than 4.00 to 1.00
------------- -------------------- ------------------ ------------------- ------------------ ------------------- ------------------

      4           Below 3.00 to           225                 275               0 bps               50 bps             25 bps
                     1.00
------------- -------------------- ------------------ ------------------- ------------------ ------------------- ------------------
</TABLE>

                                      110
<PAGE>

                                                                       EXHIBIT J
                      FORM OF SECURITY AND PLEDGE AGREEMENT

                                      111
<PAGE>

                                                                       EXHIBIT K
                            FORM OF WEEKLY COLLATERAL
                                   CERTIFICATE

                                      112
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                 PAGE
                                                                                                                 ----

<S>      <C>          <C>                                                                                         <C>
ARTICLE 1             DEFINITIONS; ACCOUNTING TERMS................................................................1

         Section 1.01          Definitions.........................................................................1

         Section 1.02          Accounting Principles..............................................................26

         Section 1.03          Directly or Indirectly.............................................................26

         Section 1.04          Construction.......................................................................26

         Section 1.05          Joint and Several Obligations; Borrowers' Agent....................................27

         Section 1.06          Times of Day.......................................................................27

ARTICLE 2             THE CREDIT..................................................................................27

         Section 2.01          Loans and Letters of Credit........................................................27

         Section 2.02          Funding of Loans...................................................................28

         Section 2.03          Principal Repayment of Loans.......................................................29

         Section 2.04          Mandatory Prepayments..............................................................30

         Section 2.05          Interest...........................................................................32

         Section 2.06          Eurodollar Interest Periods........................................................33

         Section 2.07          Conversions........................................................................33

         Section 2.08          Voluntary Prepayments..............................................................34

         Section 2.09          Uncollected Funds Compensation.....................................................34

         Section 2.10          Voluntary Termination of Commitments...............................................34

         Section 2.11          Certain Notices....................................................................35

         Section 2.12          Calculation of Borrowing Base......................................................35

         Section 2.13          Letters of Credit..................................................................35

         Section 2.14          Settlement Between Agent and Lenders...............................................36

         Section 2.15          Fees...............................................................................37

         Section 2.16          Payments Generally.................................................................38

         Section 2.17          Purpose............................................................................38

         Section 2.18          Extension of the Scheduled Maturity Date...........................................39

ARTICLE 3             YIELD PROTECTION; ILLEGALITY; ETC...........................................................41

         Section 3.01          Additional Costs...................................................................41

         Section 3.02          Limitation on Types of Loans.......................................................42

         Section 3.03          Illegality.........................................................................43
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         Section 3.04          Certain Base Rate Loans pursuant to Sections 3.01 and 3.03.........................43

         Section 3.05          Certain Compensation...............................................................43

         Section 3.06          Mitigation Obligations.............................................................44

         Section 3.07          Taxes..............................................................................44

ARTICLE 4             CONDITIONS PRECEDENT........................................................................45

         Section 4.01          Conditions Precedent to the Initial Loans..........................................45

         Section 4.02          Additional Conditions Precedent....................................................49

         Section 4.03          Deemed Representations.............................................................50

ARTICLE 5             REPRESENTATIONS AND WARRANTIES..............................................................50

         Section 5.01          Organization, Good Standing and Due Qualification..................................50

         Section 5.02          Power and Authority; No Conflicts..................................................50

         Section 5.03          Legally Enforceable Agreements.....................................................50

         Section 5.04          Litigation.........................................................................51

         Section 5.05          Financial Statements...............................................................51

         Section 5.06          Ownership and Liens................................................................52

         Section 5.07          Existing Indebtedness..............................................................52

         Section 5.08          Taxes..............................................................................53

         Section 5.09          ERISA..............................................................................53

         Section 5.10          Subsidiaries and Affiliates........................................................53

         Section 5.11          Operation of Business..............................................................53

         Section 5.12          No Default on Outstanding Judgments or Orders......................................54

         Section 5.13          No Defaults on Other Agreements....................................................54

         Section 5.14          Labor Matters......................................................................54

         Section 5.15          Investment Company Act; Holding Company Act........................................55

         Section 5.16          Environmental Matters..............................................................55

         Section 5.17          Regulation U.......................................................................55

         Section 5.18          No Guaranties or Indemnities.......................................................55

         Section 5.19          Bank Accounts......................................................................55

         Section 5.20          Trade Relations....................................................................55

         Section 5.21          True and Complete Disclosure.......................................................56

ARTICLE 6             AFFIRMATIVE COVENANTS.......................................................................56

         Section 6.01          Maintenance of Existence...........................................................56
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         Section 6.02          Conduct of Business................................................................56

         Section 6.03          Maintenance of Properties..........................................................56

         Section 6.04          Maintenance of Records; Fiscal Year................................................56

         Section 6.05          Maintenance of Insurance...........................................................56

         Section 6.06          Compliance with Laws; Payment of Taxes.............................................56

         Section 6.07          Right of Inspection................................................................57

         Section 6.08          Reporting Requirements.............................................................57

         Section 6.09          Special Periodic Reports...........................................................59

         Section 6.10          Field Audits; Inventory Appraisals.................................................59

         Section 6.11          Cooperation and Further Assurance..................................................60

         Section 6.12          Deposits Into Collateral Account...................................................60

         Section 6.13          Lock Box Operation.................................................................60

         Section 6.14          Landlords Waivers..................................................................60

         Section 6.15          Real Property Financing............................................................60

         Section 6.16          Existing Leases....................................................................60

         Section 6.17          Additional Borrowers and Guarantors................................................61

         Section 6.18          Pre-Exchange Notes.................................................................61

         Section 6.19          Rank; Most Favored Covenant Status; Guaranties.....................................61

ARTICLE 7             NEGATIVE COVENANTS..........................................................................62

         Section 7.01          Sale of Assets.....................................................................62

         Section 7.02          Stock of Subsidiaries, Etc.........................................................63

         Section 7.03          Mergers, Etc.......................................................................63

         Section 7.04          Dividends and Stock Repurchases; Management Fees...................................63

         Section 7.05          Liens..............................................................................63

         Section 7.06          Transactions with Affiliates.......................................................64

         Section 7.07          Hazardous Materials; Indemnification...............................................65

         Section 7.08          Acquisitions.......................................................................65

         Section 7.09          Subsidiaries.......................................................................65

         Section 7.10          Certain Investments................................................................65

         Section 7.11          Indebtedness.......................................................................65

         Section 7.12          Guaranties, Etc....................................................................66

         Section 7.13          Other Indebtedness.................................................................66
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         Section 7.14          Restrictive Agreements.............................................................66

ARTICLE 8             FINANCIAL COVENANTS.........................................................................67

         Section 8.01          Minimum Fixed Charge Coverage Ratio................................................67

         Section 8.02          Minimum EBITDA.....................................................................67

         Section 8.03          Maximum Leverage Ratio.............................................................67

         Section 8.04          Maximum Capital Expenditures.......................................................67

ARTICLE 9             EVENTS OF DEFAULT...........................................................................67

         Section 9.01          Events of Default..................................................................67

         Section 9.02          Remedies...........................................................................69

ARTICLE 10            GUARANTY....................................................................................70

         Section 10.01         The Guarantee......................................................................70

         Section 10.02         Obligations Unconditional..........................................................70

         Section 10.03         Reinstatement......................................................................71

         Section 10.04         Subrogation; Subordination.........................................................71

         Section 10.05         Remedies...........................................................................72

         Section 10.06         Instrument for the Payment of Money................................................72

         Section 10.07         Continuing Guarantee...............................................................72

         Section 10.08         General Limitation on Guarantee Obligations........................................72

ARTICLE 11            RELATIONS AMONG AGENT AND LENDERS...........................................................72

         Section 11.01         Appointment, Powers and Immunities of Agent........................................72

         Section 11.02         Reliance by Agent..................................................................73

         Section 11.03         Defaults...........................................................................73

         Section 11.04         Rights of Agent as a Lender........................................................74

         Section 11.05         Indemnification of Agent...........................................................74

         Section 11.06         Documents..........................................................................74

         Section 11.07         Non-Reliance on Agent and Other Lenders............................................74

         Section 11.08         Failure of Agent to Act............................................................75

         Section 11.09         Resignation or Removal of Agent....................................................75

         Section 11.10         Amendments Concerning Agency Function..............................................75

         Section 11.11         Liability of Agent.................................................................75

         Section 11.12         Transfer of Agency Function........................................................76

         Section 11.13         Non-Receipt of Funds by the Agent..................................................76
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         Section 11.14         Withholding Taxes..................................................................76

         Section 11.15         Several Obligations and Rights of Lenders..........................................76

         Section 11.16         Pro Rata Treatment of Loans, Etc...................................................77

         Section 11.17         Sharing of Payments Among Lenders..................................................77

         Section 11.18         Enforcement of Facility Documents..................................................77

         Section 11.19         Borrowing Base Statements, Etc.....................................................78

         Section 11.20         Field Audits and Inventory Appraisals..............................................78

ARTICLE 12            MISCELLANEOUS...............................................................................79

         Section 12.01         Amendments and Waivers.............................................................79

         Section 12.02         Usury..............................................................................80

         Section 12.03         Expenses; Indemnification..........................................................80

         Section 12.04         Survival...........................................................................81

         Section 12.05         Assignment; Participations.........................................................81

         Section 12.06         Notices............................................................................84

         Section 12.07         Confidentiality....................................................................84

         Section 12.08         Table of Contents; Headings........................................................84

         Section 12.09         Severability.......................................................................84

         Section 12.10         Counterparts.......................................................................84

         Section 12.11         Governing Law......................................................................85

         Section 12.12         Incorporation By Reference; Conflicts..............................................85

         Section 12.13         Jurisdiction, Venue and Service....................................................85

         Section 12.14         Waiver of Jury Trial...............................................................85
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                             EXHIBITS AND SCHEDULES

Exhibit A                -   Form of Revolving Credit Note
Exhibit B                -  Form of CapEx Note
Exhibit C                -  Form of Solvency Certificate
Exhibit D                -  Form of Landlord's Waiver and Consent
Exhibit E                -  Form of Compliance Certificate
Exhibit F                -  Form of Borrowing Base Certificate
Exhibit G                -  Form of Assignment and Acceptance
Exhibit H                -  Form of Authorization Letter
Exhibit I                -   Pricing Grid
Exhibit J                -   Form of Security and Pledge Agreement
Exhibit K                -   Form of Weekly Collateral Certificate

Schedule 2.01            -  Lenders and Commitments
Schedule 2.17            -  Indebtedness to be Refinanced
Schedule 4.01(a)         -  Security Documents
Schedule 4.01(b)         -  Foreign Jurisdictions
Schedule 5.04            -  Litigation
Schedule 5.07            -  Existing Indebtedness
Schedule 5.09            -  Pension Plans
Schedule 5.10            -  Subsidiaries and Affiliates; Capitalization
Schedule 5.11            -  Properties
Schedule 5.14            -  Labor and Employment Matters
Schedule 5.16            -  Environmental Matters
Schedule 5.19            -  Bank Accounts
Schedule 6.15(a)         -  Landlord Waivers
Schedule 7.05            -  Existing Liens
Schedule 7.06            -  Transactions with Affiliates
Schedule 7.11            -  Certain Indebtedness Permitted to Remain Outstanding

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