Document:

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                                                                   CONFIDENTIAL

                                EXHIBIT 10.12

                         VALUE ADDED RESELLER AGREEMENT

This Agreement is made as of the 14th day of April, 1998 (the "Effective Date")
by and between QAD INC., 6450 Via Real, Carpinteria, CA 93013 ("QAD") and
PARAGON MANAGEMENT SYSTEMS, INC., 5933 West Century Blvd., 12th Floor, Los
Angeles, CA 90045 ("Paragon").

Paragon Management Systems and QAD Inc. agree as follows:

ARTICLE 1 RIGHTS AND OBLIGATIONS

1.1  Paragon hereby grants to QAD, and QAD hereby accepts from Paragon, a
     non-exclusive, world-wide, transferable right to copy (when sublicensed to
     distributors), modify, market, use, license, sublicense and distribute
     Paragon Applications software in executable form as a QAD product to
     Licensee's of QAD MFG/PRO Software and On/Q Software.

1.2  Paragon shall provide QAD copies of the latest Paragon Applications
     software [*] throughout the term of this Agreement [*]. New releases of
     Paragon Applications shall be provided to QAD [*] including, but not
     limited to [*].

1.3  Paragon shall create/maintain an Application Program Interface ("API")
     between Paragon Applications and QAD MFG/PRO Software and On/Q Software
     required for integration of Paragon Applications to MFG/PRO Software and
     On/Q Software. New versions of Paragon's API shall be concurrent with new
     releases of MFG/PRO Software and On/Q Software.

1.4  The API between Paragon Applications and MFG/PRO Software and On/Q Software
     consists of Paragon owned ERP API and QAD owned MFG/PRO Software and On/Q
     Software specific interface program ("Specific Interface Program"). QAD
     shall own the Specific Interface Program.

1.5  During the term of this Agreement, Paragon shall provide QAD [*] advance
     written notice before entering into a business arrangement to license
     Paragon Applications to a QAD competitor, including, but not limited to
     [*]. QAD shall provide [*] advance written notice before entering into
     an agreement to provide a competitive application of Paragon
     Applications including, but not limited to, [*], etc.

1.6  QAD and Paragon agree to enter into a mutually acceptable contract
     modification or a separate agreement to cover development of the API
     between Paragon Applications and MFG/PRO Software and On/Q Software. QAD
     and Paragon shall endeavor to complete negotiation of this
     modification/separate agreement within forty-five (45) days of the date of
     execution of this Agreement. The terms of such agreement shall, include,
     but not be limited to technical details of the interface, development
     milestones, ownership, warranties, indemnities, support, quality, etc. In
     the event the parties are unable to reach agreement on this
     modification/separate agreement either party may terminate this
     Agreement without further liability.

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ARTICLE 2  PRICES, [*] AND PAYMENT TERMS

2.1  QAD shall pay Paragon a royalty calculated as a percentage of the [*]
     price received by QAD for Paragon Applications licensed by QAD and/or
     its distributors and partners. The royalty percentages are listed in the
     Royalty Schedule attached hereto as Schedule 1. During the [*] of this
     Agreement, QAD shall pay a royalty of [*] of the [*] price received by
     QAD for Paragon Applications subject to a minimum of [*] of the [*]
     price. During the [*] of this Agreement, QAD shall pay a royalty of [*]
     of the [*]price received by QAD for Paragon Applications subject to a
     minimum of [*]of the [*] price. Changes to the royalty schedule may be
     proposed by either party on a case by case basis or on presentation of a
     business case to justify such a change. Any changes to the royalty
     schedule shall be subject to the agreement of both parties.

2.2. QAD shall pay Paragon, a [*] consisting of the following: (1) [*]; and
     (2) [*]. The effective schedule of the payments are listed below:

     a.   [*]. These changes will include but are not limited to all references
          found in menus, help, documentation, training materials, marketing
          materials, etc. and shall be made within [*] of execution of this
          Agreement. All future releases to QAD shall follow this format.

     b.   [*]

     c.   [*]

     d.   [*]

          QAD and Paragon shall jointly define the specific vertical market
          requirements within [*] following execution of this Agreement.

          *This plan shall be submitted to QAD not later than [*] following
          execution of this Agreement.

2.3  [*] shall not affect outstanding offers by QAD or QAD distributors and

* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED WITH
  THE SECURITIES AND EXCHANGE COMMISSION.

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                                                                   CONFIDENTIAL

     partners which result in an order within [*] of the date of the original
     offer.

2.4  Payments to Paragon shall be made [*] and shall be [*] from the date
     following the [*] and such payments shall be for licenses granted in
     the previous [*].

ARTICLE 3  SALES, MARKETING AND ORDER ADMINISTRATION

3.1  Demonstration and evaluation licenses shall be available to QAD on an as
     required basis [*]; QAD distributors or partners and to prospective
     licensees of MFG/PRO Software or On/Q Software ("End Users"). For the
     purpose of this section a demonstration license shall be a standard license
     which may be limited in application or use; and an evaluation license shall
     be a standard license which has the same functionality as a regular copy of
     the software.

3.2  QAD may offer Paragon Applications to any End User or site to which QAD,
     a QAD distributor or partner has licensed MFG/PRO Software or On/Q
     Software. Paragon may license Paragon Applications [*]. On an annual
     basis, QAD and Paragon shall review the activity in QAD MFG/PRO and On/Q
     sites surrounding Paragon Applications. [*].

3.3  QAD may offer Paragon Applications to sites not currently using MFG/PRO
     Software or On/Q Software if such site has expressed a desire to
     purchase either MFG/PRO Software or On/Q Software. Such sites must
     intend to purchase MFG/PRO Software or On/Q Software within one (1) year
     of receipt of QAD's offer to purchase such software in conjunction with
     Paragon Applications.

3.4  Paragon reserves the right to license Paragon Applications [*].

3.5  Generally, QAD shall not utilize Paragon personnel in its selling cycle
     except in conjunction with the licensing of Paragon. In the event
     Paragon personnel are needed in the selling cycle, QAD shall pay
     reasonable time and expenses subject to approval by QAD's Director of
     Sales or his or her designee.

3.6  On a quarterly basis, QAD shall report the number of Paragon
     Applications licenses issued and detail the funnel for global sales
     activity related to Paragon Applications, including the company name,
     location and projected revenue. The funnel information shall be used by
     Paragon for planning purposes only.

3.7  Annually, QAD shall update the revenue plan for Paragon Applications
     based on QAD's current revenue projections through the end of the then
     current contract term. The revenue plan shall be determined by good
     faith negotiation of both parties at the beginning of each calendar year.

* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED WITH
  THE SECURITIES AND EXCHANGE COMMISSION.

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                                                                   CONFIDENTIAL

3.8  All license agreements with End Users shall be based upon QAD standard
     software license terms and conditions. Paragon shall have an opportunity
     to review QAD's form of license agreement and any changes made thereto
     by QAD during the term of this Agreement.

3.9  Any public announcements, media releases, or public disclosure for
     general distribution (including, but not limited to, promotional or
     marketing material) by either party, or by their employees or agents,
     relating to this Agreement or its subject matter shall be coordinated
     with and approved in writing by the other party prior to its release.

3.10 Paragon shall in electronic format make available to QAD, and QAD
     distributors and partners, advertising literature relating to Paragon
     Applications which Paragon has prepared or may in the future prepare,
     and marketing materials to be used by QAD in performing it rights under
     this Agreement. QAD shall have the right to determine the use of such
     literature as it deems appropriate. QAD may employ any marketing
     collateral provided by Paragon, and any portion thereof, in its
     marketing activity or material QAD chooses to develop, including any
     translation or modification of the Paragon marketing material.

ARTICLE 4  TRAINING AND SUPPORT

4.1  During the [*] of this Agreement, Paragon [*] to QAD to provide sales
     training to QAD personnel.

4.2  During the term of this Agreement, Paragon [*] the following personnel
     resources to support of QAD's licensing Paragon Applications: [*].
     QAD shall designate an Alliance Product Manager and shall provide
     sufficient resource to facilitate its obligations under this Agreement.

     4.3  Paragon shall offer training for the Paragon Applications in the
          form of [*] "Train the Trainer" [*] for QAD personnel at a
          QAD location, at a reasonable time as QAD may elect. QAD shall bear
          its own out of pocket expenses for travel, meals and lodging in
          attending such training session. Within [*] of each major release of
          Paragon Applications, Paragon shall offer to provide one (1) free
          training session to "Train the Trainer" for QAD personnel or its
          designated partner. Pricing for additional training sessions
          shall be [*].

4.4  QAD shall provide worldwide support to all QAD customers utilizing
     MFG/PRO Software or On/Q Software in conjunction with Paragon
     Applications. QAD shall provide level 1 and level 2 support; however,
     during the [*] of this Agreement, Paragon and QAD shall create a support
     plan utilizing QAD and Paragon support personnel. Following sufficient
     training from Paragon and the [*] of this Agreement, QAD shall support
     Paragon Applications for level 1 and level 2 and Paragon shall be
     responsible for level 3 support.

     a.   Level 1 support: receive and log support calls from partners and End
          Users.

* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED WITH
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                                                                   CONFIDENTIAL

     b.   Level 2 support: research the reported problem and provide an
          appropriate remedy for such problem if QAD is able to determine one.

     c.   Level 3 support: research problems with Paragon Applications which
          QAD is unable to remedy and provide an appropriate remedy to all
          reported errors in the Paragon Applications. Paragon shall have the
          following goals:

               Severity 1: [*] notify QAD of receipt of the error report,
               identify the nature of the problem and provide a commitment date
               by which the issue shall be remedied.

               Severity 2: [*] notify QAD of receipt of the error report,
               identify the nature of the problem and provide a commitment date
               by which the issue shall be remedied.

               Severity 3: [*] notify QAD of receipt of the error report,
               identify the nature of the problem and provide a commitment date
               by which the issue shall be remedied.

ARTICLE 5  TERM AND TERMINATION

5.1  This Agreement shall remain in force for [*] from the effective date unless
     terminated by either party in accordance with this Section 5. The parties
     shall have the option to extend the term of this Agreement at the end of
     [*] period for an additional [*] upon mutual agreement of both parties by
     providing written notice of such intention at least [*] prior to the
     expiration of the initial [*] term.

5.2  Either party may terminate this Agreement upon [*] notice in writing to the
     other party if the other party has breached a material provision of this
     Agreement. The party breaching a material provision of this Agreement shall
     have [*] to cure the breach, in which case the notifying party shall
     withdraw its notice of termination. In the event that the breach is not
     capable of being remedied within the [*] period to cure, the party in
     breach shall receive a reasonable extension of the cure period, not to
     exceed [*].

5.3  A party may terminate this Agreement immediately by written notice to
     the other party if the other party enters into liquidation, whether
     voluntary or compulsory, or enters into a settlement with its creditors
     or applies for suspension of payment or admits its inability to pay its
     debts when due or is declared bankrupt or takes or suffers any similar
     action in consequence of debt.

5.4  Either party may terminate the Agreement immediately by notice in
     writing in the event the other party sells or disposes of substantially
     all its assets or in the event that the control, management or ownership
     of the other party's business passes into other hands other than those
     now exercising or entitled to the same, either voluntarily or by law.

5.5  In the event of a pending acquisition of Paragon or investment into
     Paragon of more than [*] of Paragon's market value, Paragon shall
     immediately notify QAD. Paragon agrees to notify QAD of Paragon's
     intention to be acquired by a competitor of

* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED WITH
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                                                                   CONFIDENTIAL

     QAD [*] prior to such acquisition. QAD agrees to notify Paragon of QAD's
     intention to be acquired by a competitor of Paragon [*] prior to such
     acquisition. QAD agrees to notify Paragon of QAD's intention to acquire a
     competitor of Paragon [*] prior to such acquisition. If such acquisition
     occurs, Paragon may terminate this Agreement upon written notice to QAD.

5.6  Should controlling interest in Paragon be acquired by a third party
     during the term of this Agreement, QAD shall have the right to continue
     to license Paragon Applications and receive all new release of Paragon
     Applications for a period of [*] following termination of this Agreement.

ARTICLE 6  WARRANTIES, INDEMNITIES AND LIMITATION OF LIABILITY

6.1  Paragon shall defend, indemnify and hold harmless QAD against all costs
     (including reasonable attorneys fees arising from a claim that Paragon
     Applications furnished and used within the scope of this Agreement
     infringe a copyright or patent, trade secret, or other intellectual
     property right, provided that: (i) QAD notifies Paragon in writing
     within [*] of the claim; (ii) Paragon has control of the defense and all
     related settlement negotiations; and (iii) QAD provides Paragon with the
     assistance, information, and authority necessary to perform the above.
     Reasonable out-of-pocket expenses incurred by QAD in providing such
     assistance shall be reimbursed by Paragon.

     a.   Paragon shall have no liability for any claim of infringement based
          on: (i) use of a superseded or altered release of Paragon
          Applications if such infringement would have been avoided by the
          use of current unaltered release of Paragon Applications that
          Paragon provides to QAD; or (ii) the combination, operation, or use
          of Paragon Applications furnished under this Agreement with
          programs or data not furnished by Paragon if such infringement
          would have been avoided by the use of Paragon Applications without
          such programs or data.

     b.   In the event Paragon Applications is held or are believed by
          Paragon to infringe, Paragon shall have the option, at its expense,
          to: (i) modify Paragon Applications to be noninfringing; (ii) obtain
          for QAD a license to continue using Paragon Applications; or (iii)
          substitute Paragon Applications with other software reasonably
          suitable to QAD.

6.2  QAD warrants that, to the knowledge of QAD, it has the right to grant
     all the rights to Paragon as specified in the Agreement. [*].

6.3  THE ABOVE WARRANTY IS THE ONLY WARRANTY MADE BY QAD CONCERNING THE
     OBLIGATIONS OF QAD UNDER THIS AGREEMENT. TO THE MAXIMUM EXTENT PERMITTED
     BY APPLICABLE LAW, NO OTHER WARRANTY IS MADE HEREUNDER BY QAD AND ALL
     OTHER CONDITIONS, WARRANTIES, AND REPRESENTATIONS, EITHER EXPRESS OR
     IMPLIED, ARE EXCLUDED, INCLUDING, BUT NOT LIMITED TO, CONDITIONS OR

* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED WITH
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                                                             CONFIDENTIAL

     WARRANTIES RELATING TO THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
     PARTICULAR PURPOSE

6.4  Paragon warrants that Paragon Applications will be [*] for a period of [*]
     from the date of shipment of Paragon Applications to an End User.

6.5  Paragon warrants all media delivered to QAD to be [*]. Paragon warrants
     that its technical support, consulting, training and other services will
     be [*]. This warranty shall be valid for [*]. For any breach of the above
     warranty, Paragon shall: [*].

6.6  THE WARRANTIES ABOVE ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES,
     WHETHER EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF
     MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

6.7  IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR LOSS OF PROFITS, REVENUE OR
     PRODUCT USE, OR LOSS OR INACCURACY OF DATA, AND IN NO EVENT, SHALL EITHER
     PARTY BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL
     DAMAGES INCURRED BY EITHER PARTY OR ANY THIRD PARTY, EVEN IF THE OTHER
     PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

ARTICLE 7 CONFIDENTIALITY

7.1  It is recognized that each party under this Agreement, as well as the End
     Users, may make available to the other party confidential information.
     Confidential information may include in any form, but is not limited to,
     processes, formulae, specifications, programs, instructions, source code
     for operating system-dependent routines, technical know-how, methods and
     procedures of operation, benchmark test results, business or technical
     plans and proposals.

     It is agreed that confidential information received by a party under this
     Agreement shall:

     a.   be kept confidential by the receiving party;
     b.   be treated by the receiving party in the same way as it treats
          confidential information generated by itself;
     c.   not be used by the receiving party otherwise than in connection with
          the implementation of this Agreement; and
     d.   be divulged to the receiving party's personnel, or End User's
          personnel, only if they have to know and have undertaken to keep
          confidential information secret.

* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED WITH
  THE SECURITIES AND EXCHANGE COMMISSION.

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                                                                   CONFIDENTIAL

     Each party agrees to use all reasonable steps to ensure that confidential
     information received under this Agreement is not disclosed by its employees
     or agents in violation of this Article.

7.2  The commitments pursuant to provision 7.1 shall continue during the term of
     this Agreement and survive the termination of this Agreement for [*]. These
     commitments shall cease if, but only to the extent that, confidential
     information:

     a.   Is or becomes generally known or available to the public at large
          through no act or omission of the receiving party; or
     b.   Can be demonstrated to be available lawfully to the receiving party
          prior to the disclosure or has thereafter been furnished to the
          receiving party without restrictions as to disclosure or use; or
     c.   Can be demonstrated to be independently developed by the receiving
          party without use of any confidential information received under this
          Agreement.

     Each party may disclose confidential information to any of its associated
     companies on condition that such associated companies shall be bound by the
     same commitments undertaken under this Article 7.

7.3  QAD considers MFG/PRO Software and On/Q Software and the API to such
     software to be a trade secret. QAD does not disclose such information to
     QAD competitors or potential competitors. Paragon shall not use design,
     code or documentation gained by access to the MFG/PRO Software or On/Q
     Software for purposes other than those contemplated under this Agreement
     and without the prior written consent of QAD.

7.4  Paragon considers Paragon Applications and the API to such software to be a
     trade secret. Paragon does not disclose such information to Paragon
     competitors or potential competitors. QAD shall not use design, code or
     documentation gained by access to the Paragon Applications for purposes
     other than those contemplated under this Agreement and without the prior
     written consent of Paragon.

ARTICLE 8 GENERAL PROVISIONS

8.1  LAW. This Agreement shall be construed, interpreted, and applied in
     accordance with the laws of the State of California, USA, without regard to
     that body of law known as conflict of laws and without reference to the
     1980 United Nations Convention on Contracts for the Sale of Goods and any
     amendments thereto. Any dispute arising between the parties shall be
     settled by arbitration under the rules of the American Arbitration
     Association in the city of Los Angeles, CA before a single arbitrator
     selected under those rules.

8.2  FORCE MAJEURE. A party shall be excused for failures and delays in
     performance of its obligations under this Agreement caused by war, riots,
     or insurrections, laws and regulations, strikes, floods, fires, explosions
     or other catastrophes beyond the control of such party but excluding the
     financial well being of that party. Such party shall use commercial
     reasonable efforts to avoid or remove such cause and such party shall
     continue performance hereunder promptly whenever such causes are removed.
     The party

* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED WITH
  THE SECURITIES AND EXCHANGE COMMISSION.

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                                                                   CONFIDENTIAL

     claiming force majeure shall give prompt written notice thereof to the
     other party. This Paragraph shall not apply to any obligation to pay money.

8.3  TAXES. All payments under this Agreement (the "Payments") are [*] of
     all federal, state, provincial and local sales, use excise, import or
     export, value added and similar taxes or duties (the "Taxes"). Each party
     required to make any Payment [*]. Each party is responsible for payment of
     any net income taxes due on its own income resulting from Payments.

8.4  ASSIGNMENT. The Agreement may not be assigned by Paragon without the prior
     written consent of QAD.

8.5  ENFORCEMENT. The failure of either party to enforce any provision of the
     Agreement shall not be construed to be a waiver of such provision or such
     party's right to thereafter enforce the same, and no waiver of any breach
     shall be construed as an agreement by such party to waive any subsequent
     breach of the same or other provisions.

8.6  [*]

8.7  SURVIVAL. The provisions of Article 6 entitles "Warranties, Indemnities and
     Limitation of Liability", Article 7 entitled "Confidentiality" and Article
     8 entitled "General Provisions" shall survive the expiration or termination
     of this Agreement, as well as the termination or expiration of any license
     granted under this Agreement.

8.8  ENTIRE AGREEMENT. This Agreement, including any schedules attached hereto,
     contain the entire agreement between the parties hereto with respect to the
     subject matter hereof and shall supersede any and all prior communications,
     representations, agreements, and/or undertakings, whether verbal or
     written, between the parties hereto in respect to the said subject matter.
     Any amendment or other modification of any of the terms and provisions
     hereof must be in writing and signed by duly authorized representatives of
     the parties hereto.

The undersigned hereby agree that by causing their duly authorized
representatives to sign this document, they become parties to said Agreement and
agree to be bound by all terms, conditions and obligations contained therein
effective as of the 14th day of April, 1998.

QAD INC.                                    PARAGON MANAGEMENT SYSTEMS, INC.

/s/ VINCE NIEDZIELSKI                       /s/ STEPHANIE HAMILTON
---------------------------------------     ---------------------------------
Signature                                   Signature

Vince Niedzielski                           Stephanie Hamilton
---------------------------------------     ---------------------------------
Name                                        Name

Executive V.P. of Production                Chief Financial Officer
---------------------------------------     ---------------------------------
Title                                       Title

* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED WITH
  THE SECURITIES AND EXCHANGE COMMISSION.

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                                                             CONFIDENTIAL

          April 17, 1998                              4/14/98
---------------------------------------     ---------------------------------
Date                                        Date

* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED WITH
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                                                                   CONFIDENTIAL

                                   SCHEDULE 1
                                ROYALTY SCHEDULE

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
            COLUMN A                          COLUMN B                     COLUMN C
-----------------------------------------------------------------------------------------
<S>                                 <C>                            <C>
ROYALTY PAYABLE TO PARAGON AS A     MINIMUM ROYALTY PAYABLE TO
    PERCENTAGE OF [*] PRICE          PARAGON AS A PERCENTAGE       PERCENT OF MAINTENANCE
       RECEIVED BY QAD;                  [*] LIST PRICE
 SUBJECT TO COLUMN B CONDITIONS
-----------------------------------------------------------------------------------------
              [*]                              [*]                          [*]
-----------------------------------------------------------------------------------------
              [*]                              [*]                          [*]
-----------------------------------------------------------------------------------------
</TABLE>

* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED WITH
  THE SECURITIES AND EXCHANGE COMMISSION.

                                    PAGE 11<PAGE>

                                                                   Exhibit 10.1

                                                                      EXECUTION

                           WAIVER AND AMENDMENT NO. 3

              This WAIVER AND AMENDMENT NO. 3 (this "AMENDMENT") is made as
of December 8, 2000 by and among PRECISION PARTNERS, INC., a Delaware
corporation, PRECISION PARTNERS HOLDING COMPANY, a Delaware corporation, MID
STATE MACHINE PRODUCTS, a Maine corporation, GALAXY INDUSTRIES CORPORATION, a
Michigan corporation, CERTIFIED FABRICATORS, INC., a California corporation,
GENERAL AUTOMATION, INC., an Illinois corporation, NATIONWIDE PRECISION
PRODUCTS CORP., a New York corporation, GILLETTE MACHINE & TOOL CO., INC., a
New York corporation, the Lenders listed on the signature pages hereof and
CITICORP USA, INC., as Administrative Agent for the Lenders.

                                 R E C I T A L S

              A. The parties hereto are parties to that certain Credit
Agreement dated as of March 19, 1999, by and among the Borrower, the
Guarantors, the Administrative Agent, Bank of America, N.A. (successor to
NationsBank, N.A.), as Syndication Agent, SunTrust Bank, Atlanta, as
Documentation Agent, and the Lenders (as amended, the "CREDIT AGREEMENT").
All capitalized terms used herein and not otherwise defined shall have the
meanings assigned to such terms in the Credit Agreement.

              B. The Loan Parties have requested that the Lenders waive and
amend certain provisions of the Credit Agreement.

              C. The Lenders are willing to agree to such requests, but only
on the terms and conditions set forth herein.

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

              SECTION 1. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement
is, effective as of the date hereof, hereby amended as follows:

              (a)    the following definitions are added in correct
alphabetical order:

                     "'bps': basis points; each basis point is equal to one
              one-hundredth of a percent.

                     "'Business Plan': the updated financial forecast for
              Precision Partners, Inc. dated December 2000.

                     "'Certified Fabricators Restructuring': (i) the sale of
              certain excess equipment by Certified Fabricators and (ii) the

<PAGE>

              consolidation and restructuring of Certified Fabricators'
              remaining business.

                     "'Consolidated EBITDAR': for any Person for any period,
              Consolidated EBITDA of such Person for such period plus without
              duplication and to the extent reflected as a charge in the
              statement of such Person's Consolidated Net Income for such
              period, Consolidated Rental Expense of such Person for such
              period.

                     "'Consolidated GAAP EBITDA': for any Person for any period,
              Consolidated Net Income for such period plus, without duplication
              and to the extent reflected as a charge in the statement of such
              Consolidated Net Income for such period, the sum of (a) income tax
              expense, (b) interest expense, amortization or write-off of debt
              discount and debt issuance costs and commissions, discounts and
              other fees and charges associated with Indebtedness (including the
              Loans and any Subordinated Indebtedness), (c) depreciation and
              amortization expense, (d) amortization of intangibles (including,
              but not limited to, goodwill) and organization costs, (e) a
              management fee in an amount not greater than $400,000 accrued for
              Saunders, Karp & Megrue, L.P. or an affiliate designated by it, on
              account of the fiscal year ending December 31, 2001, (f) for the
              fiscal year ending December 31, 2001, accrued relocation expenses
              not to exceed $75,000, (g) in the aggregate, over the fiscal years
              ending December 31, 2000 and December 31, 2001, fees and deferred
              financing costs charged off in an amount not to exceed $400,000,
              (h) for the purposes of Sections 7.1(e), (f) and (g), fees and
              charges incurred in connection with the Galaxy Restructuring not
              to exceed $1,700,000 in the aggregate and (i) for the purposes of
              determining compliance with Sections 7.1(e), (f) and (g), for any
              period referred to therein, an amount equal to the Net Cash
              Proceeds, not to exceed $200,000, of any Capital Stock issued or
              sold by Holdco or the Borrower, or equity otherwise contributed to
              the capital of Holdco or the Borrower, PROVIDED, HOWEVER, that (I)
              such Net Cash Proceeds are received no later than 15 days
              following the day on which the certificate required by Section
              6.2(b) is delivered for such period, (II) the amount of such Net
              Cash Proceeds shall be disregarded for the purpose

<PAGE>

              of determining the cumulative Consolidated GAAP EBITDA for any
              other period and (III) no such Net Cash Proceeds received prior
              to December 31, 2000 may be added.

                     "'Consolidated Rental Expense': for any Person for any
              period, on a consolidated basis, the aggregate base rental
              payments, other than Consolidated Lease Expenses, to lessors or
              their assignees by such Persons for such period under agreements
              to rent or lease any real or personal property as recorded in
              accordance with GAAP.

                     "'Galaxy Restructuring': (i) the transfer of responsibility
              and ultimate sale or contribution to Nationwide Precision Products
              Corp. of certain equipment of, and the assumption of certain trade
              payables, accruals and other liabilities incurred in the ordinary
              course of business directly related to the production of engine
              blocks for Caterpillar by, Galaxy and (ii) the transfer to
              Gillette Machine & Tool Co., Inc., a New York corporation, of
              responsibility for the management of Galaxy's remaining assets and
              liabilities.

                     "'Maintenance Capital Expenditures': for any Person for any
              period, the Capital Expenditures of such Person on a consolidated
              basis, incurred to repair or maintain the current working
              condition of existing equipment and facilities in the ordinary
              course of business; provided, however, that in no event shall
              Maintenance Capital Expenditures include growth Capital
              Expenditures or cost improvement Capital Expenditures.

                     "'Master Lease Agreement': that certain Master Lease
              Agreement dated as of March 31, 2000 and as amended from time to
              time, between General Electric Capital Corporation, for itself and
              as agent for certain participants, as lessor, and Galaxy, Mid
              State, Nationwide Precision Products Corp. and General Automation,
              Inc., as lessees.

                     "'Specified Equipment Finance

<PAGE>

              Facilities': (i) the lease facilities made available pursuant
              to the Master Lease Agreement, (ii) the equipment purchase
              facilities made available pursuant to that certain Loan,
              Security and Guaranty Agreement dated as of December 8, 2000
              and as amended from time to time, between General Electric
              Capital Corporation, for itself and as agent for certain
              participants, as lender, and Galaxy, Mid State, Nationwide
              Precision Products Corp. and General Automation, Inc., as
              borrowers, (iii) any other facilities designated as "Specified
              Equipment Finance Facilities" by the Borrower and approved by
              the Required Lenders in their sole and absolute discretion, and
              (iv) any facilities refinancing or replacing the facilities
              referred to in clauses (i), (ii) and (iii) of this definition on
              terms which are not materially less favorable to the Loan
              Parties.";

       (b)    the definition of Applicable Margin is amended by replacing
"225 bps" with "400 bps" and "200 bps" with "300 bps" and by replacing "is
three months after the Closing Date" with "the financial statements have been
delivered in accordance with Section 6.1 for the period ending December 31,
2000";

       (c)    the definition of Asset Sale is amended by replacing
"$1,000,000" in the fifth line thereof with "$250,000" and "Holdco" in the
sixth line thereof with "the Borrower";

       (d)    the definition of Consolidated Fixed Charge Coverage Ratio is
amended by replacing "Consolidated EBITDA" with "Consolidated EBITDAR" and
inserting after "such period" in clause (a) "minus the amount of Maintenance
Capital Expenditures for such period";

       (e)    the definition of Consolidated Fixed Charges is amended by
replacing clause (c) thereof with "(c) Consolidated Rental Expense of such
Person for such period and" and deleting "and (e) Capital Expenditures for
such period";

       (f)    the definition of Consolidated Senior Leverage Ratio is amended
by inserting after "Consolidated EBITDA" "plus rent incurred under the Master
Lease Agreement";

       (g)    the definition of Consolidated Total Senior Debt is amended by
inserting after "Subordinated Indebtedness" ", plus the aggregate unpaid
balance of the capitalized lessor's cost outstanding under the Master Lease
Agreement";

       (h)    the definition of Permitted Acquisitions is amended by
replacing clause (v) with "(v) the Required Lenders shall have consented, in
their sole and absolute discretion, to such acquisition and";

<PAGE>

       (i)    the definition of Reinvestment Deferred Amount is amended by
replacing "Section 2.7(c)" with "Section 2.7(b)";

       (j)    the definition of Reinvestment Prepayment Amount is amended by
inserting before the period at the end thereof "or, as the case may be, to
perform a restoration";

       (k)    Sections 2.2(c) and (d) are added as follows:

                     "(c) The Administrative Agent may (i) establish and
              increase or decrease reserves against Eligible Receivables and
              Eligible Inventory, (ii) reduce the advance rates against Eligible
              Receivables and Eligible Inventory, or restore such advance rates
              to any level equal to or below the advance rates in effect on the
              Closing Date, or apply different advance rates to different
              Precision Group Members or to different product lines of the
              Precision Group Members, (iii) impose additional restrictions (or
              eliminate the same) to the standards of eligibility set forth in
              the definitions of Eligible Receivables and Eligible Inventory and
              (iv) delete Persons from, or restore such Persons to, the
              definition of Eligible Account Debtor, provided that such actions
              shall only be taken by the Administrative Agent acting reasonably
              to meet specific concerns regarding certain Eligible Receivables,
              Eligible Inventory, Precision Group Members, product lines,
              Eligible Account Debtors or categories of Accounts or Inventory.

                     "(d) If on any date the Total Revolving Extensions of
              Credit as of such date exceed the difference between the Total
              Revolving Commitments then in effect and $3,000,000.00, then,
              without notice or demand, the Borrower shall, on such date, prepay
              the Revolving Loans and, if necessary, cash collateralize the
              Letters of Credit by depositing an amount equal to such excess in
              a cash collateral account established with the Administrative
              Agent for the benefit of the Lenders on terms and conditions
              satisfactory to the Administrative Agent.";

<PAGE>

       (l)    Section 2.7(a) is amended and restated as follows:

                     "(a) Unless the Required Prepayment Lenders shall otherwise
              agree, if any Capital Stock shall be issued or sold by Holdco or
              the Borrower, or if any equity is otherwise contributed to the
              capital of Holdco or any Precision Group Member, or if any
              Indebtedness shall be incurred by any Precision Group Member
              (excluding any Indebtedness incurred in accordance with Section
              7.2), an amount equal to 100% of the Net Cash Proceeds thereof
              shall be applied on the date of such issuance, receipt or
              incurrence first towards the prepayment of the Term Loans and then
              towards the payment of the Revolving Loans and the reduction of
              the Revolving Commitments as set forth in Section 2.7(d);
              provided, that no such prepayment will be required with respect to
              capital contributions made by any Sponsor or Precision Partners,
              L.L.C. directly or indirectly to Holdco (and contributed as common
              equity to the Borrower) to support the working capital needs of
              the Precision Group Members or for the purpose of funding a
              particular Capital Expenditure or Permitted Acquisition if such
              proceeds are used for such working capital needs, Capital
              Expenditure or Permitted Acquisition substantially concurrently
              with the making of such capital contribution, as the case may be."

       (m)    Section 2.7(b) is amended by inserting after "then towards" "the
payment of the Revolving Loans and", replacing "and" at the end of clause (i) of
the proviso thereto with a comma and inserting before the period at the end
thereof:

              "and (iii) prior to the delivery of the financial statements and
              certificates required by Sections 6.1(a), 6.2(a) and 6.2(b) for
              the period ending December 31, 2001, unless the Required
              Prepayment Lenders shall otherwise agree in their sole and
              absolute discretion, no Reinvestment Notice shall be delivered in
              respect of Net Cash Proceeds of any Assets Sales other than one or
              more Reinvestment Notices in an aggregate amount not to exceed
              $1,250,000 with respect to 50% of the Net Cash Proceeds of Assets
              Sales contemplated in the Business Plan which occur in connection
              with the Certified Fabricators Restructuring or the Galaxy
              Restructuring";

<PAGE>

       (n)    Section 2.7(c) is amended by inserting after "then towards" in
the fourth line thereof "the payment of the Revolving Loans and" and
replacing "final" in the ninth line thereof with "fiscal";

       (o)    Section 2.7(d) is amended by replacing the first three
sentences thereof with the following:

              "Amounts to be applied in connection with prepayments and
              Commitment reductions made pursuant to Section 2.7 shall be
              applied, first to prepay the Term Loans and, second, to the
              payment of the Revolving Loans and the permanent reduction of the
              Revolving Commitments. Amounts applied to prepay Term Loans shall
              reduce future amortization payments in inverse order of their
              maturity. In the event that following any such payment of the
              Revolving Loans and permanent reduction of the Revolving
              Commitments, the Total Revolving Extensions of Credit exceed the
              amount of the Total Revolving Commitments as so reduced because
              L/C Obligations constitute a portion thereof, the Borrower shall,
              to the extent of the balance of such excess, replace outstanding
              Letters of Credit and/or deposit an amount in cash in a cash
              collateral account established with the Administrative Agent for
              the benefit of the Lenders on terms and conditions satisfactory to
              the Administrative Agent.";

       (p)    Section 3.5 is amended by replacing "Section 2.11(b)" with
"Section 2.10(b)" and by replacing "Section 2.11(c)" with "Section 2.10(c)";

       (q)    Section 3.6(c) is amended by replacing "Credit Parties" with "Loan
Parties";

       (r)    Sections 6.1(a), (b) and (c) are amended by inserting after "for
the previous year", "and from the Business Plan";

       (s)    Section 6.2(b) is amended by inserting in line two after
"Responsible Officer", "(x)", replacing in line five "and" with "(y)" and
inserting in line 6 after "certificate" the following:

       "and (z) a narrative discussion of the results then reported, including
       an analysis of the Loan Parties' liquidity, Capital Expenditures and any
       material

<PAGE>

       variances from the results of the prior year or the Business
       Plan as well as anticipated changes to the Business Plan";

       (t)    Section 6.2(e) is amended by inserting after "month," "(i)" and
adding before the semicolon at the end thereof:

                     "and (ii) a rolling six month report on each Precision
              Group Member's order backlog";

       (u)    Section 6.6 is amended and restated as follows:

                     "6.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS;
              DISCUSSIONS. (a) Keep proper books of records and accounts in
              which full, true and correct entries in conformity with GAAP and
              all Requirements of Law shall be made of all dealings and
              transactions in relation to its business and activities and (b)
              provide the Administrative Agent or any Lender and their agents
              access to the premises of each Loan Party and Precision Group
              Member at any time and from time to time, during normal business
              hours and upon reasonable notice under the circumstances, and at
              any time after the occurrence and during the continuance of a
              Default or Event of Default, for the purposes of (A) inspecting
              and verifying the Collateral and the Borrowing Base, (B)
              inspecting and copying (at the Loan Parties' expense) any and all
              records pertaining thereto, and (C) discussing the affairs,
              finances and business of any Loan Party and Precision Group Member
              with any officer, employee or director of any Loan Party or
              Precision Group Member or with the certified public accountants
              which reported on or have been engaged to report on any financial
              statements delivered or to be delivered pursuant to Section 6.1(a)
              (the "Auditors"), all of whom are hereby authorized to disclose to
              the Administrative Agent, the Lenders and their agents all
              financial statements, work papers, and other information relating
              to such affairs, finances or business. Without limiting the
              obligations of Holdco and the Borrower under Section 10.5, the
              Loan Parties shall reimburse the Administrative Agent and the
              Lenders for the reasonable travel and related expenses of the
              Administrative Agent's and the Lenders' employees or, at the
              Administrative Agent's discretion, reasonably exercised, of such
              outside accountants or examiners as may be retained by the
              Administrative Agent to verify or inspect

<PAGE>

              Collateral, records or documents of a Loan Party or Precision
              Group Member on a regular basis or for a special inspection if
              the Administrative Agent deems the same appropriate. If the
              Administrative Agent's or Lenders' own employees are used, the
              Borrower shall also pay such reasonable per diem allowance as
              the Administrative Agent or the Lenders may from time to time
              establish, or, if outside examiners or accountants are used,
              the Loan Parties shall also pay the Administrative Agent and
              the Lenders such sum as the Administrative Agent and the
              Lenders may be obligated to pay as fees therefor.
              Notwithstanding the foregoing, prior to the occurrence of a
              Default or Event of Default, the Loan Parties shall not be
              required to reimburse the Administrative Agent and the Lenders
              for audits and inspections which occur more than one time
              during any three-month period."

       (v)    Section 6.9(c)(iii)(A) is amended by inserting after
"Administrative Agent", "a guaranty substantially in the form of Exhibit A-2
and";

       (w)    Sections 7.1(a), (b) and (c) are amended and restated as follows:

                     "(a) CONSOLIDATED LEVERAGE RATIO. Permit the Consolidated
              Leverage Ratio of the Borrower as at the last day of any period of
              four consecutive fiscal quarters ending during any period set
              forth below to exceed the ratio set forth below in the column
              opposite such period:

<TABLE>
<CAPTION>
                                                            Consolidated
                                                              Leverage
                Period                                          Ratio
--------------------------------------------------------------------------------
<S>                                                          <C>
      October 1, 2000 - March 31, 2001                       7.12 to 1.0
--------------------------------------------------------------------------------
      April 1, 2001 - June 30, 2001                          6.46 to 1.0
--------------------------------------------------------------------------------
      July 1, 2001 - September 30, 2001                      5.55 to 1.0
--------------------------------------------------------------------------------
      October 1, 2001 - December 31, 2001                    4.51 to 1.0
--------------------------------------------------------------------------------
      January 1, 2002 and thereafter                         4.50 to 1.0
--------------------------------------------------------------------------------
</TABLE>

                     "(b) CONSOLIDATED INTEREST COVERAGE RATIO. Permit the
              Consolidated Interest

<PAGE>

              Coverage Ratio of the Borrower for any period of four
              consecutive fiscal quarters ending during any period set forth
              below to be less than the ratio set forth below in the column
              opposite such period:

<TABLE>
<CAPTION>
              Period                                        Consolidated Interest
                                                               Coverage Ratio
--------------------------------------------------------------------------------
<S>                                                         <C>
   October 1, 2000 - December 31, 2000                           1.30 to 1.0
--------------------------------------------------------------------------------
   January 1, 2001 - March 31, 2001                              1.29 to 1.0
--------------------------------------------------------------------------------
   April 1, 2001 - June 30, 2001                                 1.34 to 1.0
--------------------------------------------------------------------------------
   July 1, 2001 - September 30, 2001                             1.49 to 1.0
--------------------------------------------------------------------------------
   October 1, 2001 - December 31, 2001                           1.67 to 1.0
--------------------------------------------------------------------------------
   January 1, 2002 and thereafter                                2.00 to 1.0
--------------------------------------------------------------------------------
</TABLE>

                     "(c) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Permit the
              Consolidated Fixed Charge Coverage Ratio of the Borrower for any
              period of four consecutive fiscal quarters ending during any
              period set forth below to be less than the ratio set forth below
              in the column opposite such period:

<TABLE>
<CAPTION>
                                                             Consolidated Fixed
                 Period                                    Charge Coverage Ratio
--------------------------------------------------------------------------------
<S>                                                        <C>
    October 1, 2000 - December 31, 2000                            0.96 to 1.0
--------------------------------------------------------------------------------
    January 1, 2001 - March 31, 2001                               0.85 to 1.0
--------------------------------------------------------------------------------
    April 1, 2001 - June 30, 2001                                  0.84 to 1.0
--------------------------------------------------------------------------------
    July 1, 2001 - September 30, 2001                              0.92 to 1.0
--------------------------------------------------------------------------------
    October 1, 2001 and thereafter                                1.00 to 1.0"
--------------------------------------------------------------------------------
</TABLE>

       (x)    Section 7.1(d) is amended by replacing "$10,500,000" opposite
"January 1, 2000 - December 31, 2000" with "$33,500,000";

       (y)    Sections 7.1(e), (f), (g) and (h) are added as follows:

                     "(e) MINIMUM QUARTERLY CONSOLIDATED GAAP EBITDA. Permit the
              Consolidated GAAP EBITDA for any fiscal quarter ending during any
              period set forth below to be less than the amount set forth below
              in the column opposite such period:

<TABLE>
<CAPTION>
                                                          Quarterly Consolidated
                                  Period                         GAAP EBITDA
--------------------------------------------------------------------------------
<S>                                                       <C>
    October 1, 2000 - December 31, 2000                           $5,468,050.00
--------------------------------------------------------------------------------
    January 1, 2001 - March 31, 2001                              $6,250,500.00
--------------------------------------------------------------------------------
    April 1, 2001 - June 30, 2001                                 $5,677,100.00
--------------------------------------------------------------------------------
    July 1, 2001 - September 30, 2001                             $6,242,600.00
--------------------------------------------------------------------------------
    October 1, 2001 - December 31, 2001                           $7,515,950.00
--------------------------------------------------------------------------------
</TABLE>

                     "(f) MINIMUM CUMULATIVE CONSOLIDATED GAAP EBITDA. Permit
              the cumulative Consolidated GAAP EBITDA for each period set

<PAGE>

              forth below to be less than the amount set forth below in the
              column opposite such period:

<TABLE>
<CAPTION>
                                                       Cumulative Consolidated
                                 Period                       GAAP EBITDA
--------------------------------------------------------------------------------
<S>                                                    <C>
  January 1, 2001 - June 30, 2001                            $14,507,800.00
--------------------------------------------------------------------------------
  January 1, 2001 - September 30, 2001                       $22,671,200.00
--------------------------------------------------------------------------------
  January 1, 2001 - December 31, 2001                        $32,499,750.00
--------------------------------------------------------------------------------
</TABLE>

                     "(g) MINIMUM ALTERNATE CONSOLIDATED GAAP EBITDA. Permit the
              Consolidated GAAP EBITDA for any fiscal quarter set forth below to
              be less than the amount set forth in column A opposite such fiscal
              quarter unless the cumulative Consolidated GAAP EBITDA for the
              period beginning on January 1, 2001 and ending on the last day of
              such fiscal quarter is greater than the amount set forth in column
              B opposite such fiscal quarter:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                               Consolidated GAAP EBITDA
--------------------------------------------------------------------------------
               Quarter Ending                  A                        B
--------------------------------------------------------------------------------
<S>                                      <C>                     <C>
    June 30, 2001                        $6,550,500.00           $15,361,200.00
--------------------------------------------------------------------------------
    September 30, 2001                   $7,203,000.00           $24,004,800.00
--------------------------------------------------------------------------------
    December 31, 2001                    $8,672,250.00           $34,411,500.00
--------------------------------------------------------------------------------
</TABLE>

                     "(h) CONSOLIDATED SENIOR LEVERAGE RATIO. Permit the
              Consolidated Senior Leverage Ratio of the Borrower as at the last
              day of any period of four consecutive fiscal quarters ending
              during any period set forth below to exceed the ratio set forth
              below in the column opposite such period:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                                               Consolidated
                                    Period                 Senior Leverage Ratio
--------------------------------------------------------------------------------
<S>                                                        <C>
      October 1, 2000 - March 31, 2001                           2.93 to 1.0
--------------------------------------------------------------------------------
      April 1, 2001 - June 30, 2001                              2.51 to 1.0
--------------------------------------------------------------------------------
      July 1, 2001 - September 30, 2001                          2.19 to 1.0
--------------------------------------------------------------------------------
      October 1, 2001 and thereafter                             2.00 to 1.0"
--------------------------------------------------------------------------------
</TABLE>

       (z)    Section 7.2(d) is amended by inserting before the semicolon at
the end thereof ", provided that no Indebtedness listed in Schedule 5.1(e)
may be refinanced, refunded, renewed, replaced or extended without the
consent of the Required Lenders in their sole and absolute discretion";

       (aa)   Section 7.2(e) is amended by inserting at the beginning
thereof, "after delivery of the financial statements and certificates
required by Sections 6.1(a), 6.2(a) and 6.2(b) for

<PAGE>

the period ending December 31, 2001, if no Default or Event of Default shall
have occurred and be continuing,";

       (ab)   Section 7.2(l) is amended by replacing "$1,000,000" with
"$500,000" and inserting before the semicolon at the end thereof "provided
that trade letters of credit may not be outstanding at any one time in excess
of $250,000";

       (ac)   the "and" at the end of Section 7.2(l) is deleted, the period
at the end of Section 7.2(m) is replaced with "; and" and Section 7.2(n) is
added as follows:

                     "(n) Indebtedness arising under Specified Equipment Finance
              Facilities and Indebtedness arising under any Guaranty Obligations
              in respect thereof; PROVIDED, HOWEVER, that on or after December
              8, 2000, no Indebtedness may be incurred under any Specified
              Equipment Finance Facility for any equipment to be acquired,
              leased or used by Certified Fabricators or Galaxy and PROVIDED
              FURTHER, HOWEVER that on or after December 1, 2000, no increase
              may be made to the principal outstanding balance or unpaid balance
              of the capitalized lessor's cost outstanding thereunder without
              the consent of the Required Lenders in their sole and absolute
              discretion."

       (ad)   after Section 7.2(n) a paragraph is added as follows:

                     "Notwithstanding anything in this Section, the sum, without
              duplication, of (i) the amount of all Indebtedness outstanding
              under Sections 7.2(c), (f), (l) and (m) and (ii) the net amount,
              if any, that any Precision Group Member would be required to pay
              in connection with the termination of any Hedging Agreements
              permitted under Section 7.2(i) may not exceed at any one time, the
              amount of $5,000,000";

       (ae)   Section 7.3(i) is replaced with "Omitted.";

       (af)   Section 7.3(l) is amended by replacing "$1,500,000" with
"$1,000,000";

       (ag)   the "and" at the end of Section 7.3(q) is deleted, the period at
the end of Section 7.3(r) is replaced with "; and" and Section 7.3(s) is added
as follows:

                     "(s) Liens arising under or otherwise securing Specified
              Equipment Finance Facilities and any Liens arising in respect of
              deposits made with sellers of equipment to be financed
              thereunder.";

<PAGE>

       (ah)   Section 7.4(b) is amended by inserting before the period at the
end thereof "and the Certified Fabricators Restructuring and the Galaxy
Restructuring may proceed in accordance with the Business Plan";

       (ai)   the "and" at the end of Section 7.5(g) is deleted, the period
at the end of Section 7.5(h) is replaced with "; and" and Section 7.5(i) is
added as follows:

                     "(i) any other Disposition consented to by the Required
              Lenders in their sole and absolute discretion.";

       (aj)   Section 7.6 is amended by inserting after "scheduled repayment"
in the second line thereof ", scheduled rental payment", by inserting after
"Indebtedness" in the third line thereof "or lease obligation", by inserting
after "Precision Group Member in the sixth line thereof "or Holdco" and by
replacing clause (y) thereof with "(y) the Borrower may make payments to
Holdco to pay management, advisory and acquisition transaction fees of
Saunders Group, Carlisle Group and Harvey Group permitted under Section 7.9.";

       (ak)   Section 7.8 is amended by inserting after "any of the terms of
" ", the Specified Equipment Finance Facilities";

       (al)   Section 7.9 is amended by inserting before the period at the
end thereof:

                     "; PROVIDED, HOWEVER, from November 1, 2000 through
              December 31, 2001, in no event shall any management, advisory or
              acquisition transaction fees be incurred or paid by any Loan Party
              or Precision Group Member, except that Holdco may, after April 1,
              2002, pay to Saunders, Karp & Megrue, L.P. or an affiliate
              designated by it, on account of the fiscal year ending December
              31, 2001, a management fee in an amount not greater than $400,000
              if (y) no Default or Event of Default shall have occurred and be
              continuing and (z) after giving effect to the payment thereof, the
              lesser of (A) the Total Revolving Commitments minus $3,000,000 or
              (B) the Borrowing Base is at least $600,000 in excess of the Total
              Revolving Extensions of Credit then outstanding, as certified by a
              Responsible Officer and PROVIDED, FURTHER HOWEVER, that
              notwithstanding anything contained in this

<PAGE>

              Section, the Certified Fabricators Restructuring and the Galaxy
              Restructuring may proceed in accordance with the Business Plan";

       (am)   Section 7.10 is amended by replacing "Enter" at the beginning
thereof with "Except for the Specified Equipment Finance Facilities, enter";

       (an)   Section 7.12 is amended by inserting in the beginning of clause
(b) thereof "the Specified Equipment Finance Facilities and";

       (ao)   Section 7.18 is added as follows:

                     "7.18 LEASES. Enter into or become liable with respect to
              any leases other than (a) leases entered into under the Specified
              Equipment Finance Facilities, excluding any leases of equipment to
              be acquired, leased or used by Certified Fabricators or Galaxy,
              (b) operating leases of personal property entered into in the
              ordinary course of business or operating leases of personal
              property which are not material on-going obligations, (c)
              extensions of leased facilities in line with business expansion
              pursuant to the Business Plan at market rates and on market terms
              not to exceed $100,000 in the aggregate in any one fiscal year of
              the Precision Group Members on a consolidated basis or (d)
              existing leases, renewals or replacements thereof.";

       (ap)   Section 8(h) is amended by replacing "$1,500,000" with
"$1,000,000";

       (aq)   Section 8(l) is amended by adding to the end thereof "or" and
Sections 8(m) is added as follows:

                     "(m) any default shall occur under any agreement referred
              to in clauses (i) or (ii) of the definition of Specified Equipment
              Finance Facility or the Borrower shall make any payment under any
              guarantee given by the Borrower for the obligations of any
              Precision Group Member under any Specified Equipment Finance
              Facility;"; and

       (ar)   Annex A, Exhibit B-2 and Schedules 1.1B, 4.4, 4.15, 4.19(a),
4.19(b), 4.19(c), 7.2(d) and 7.3(f) are replaced with Annex A, Exhibit B-2
and Schedules 1.1B, 4.4, 4.15, 4.19(a), 4.19(b), 4.19(c), 7.2(d) and 7.3(f)
attached hereto as Exhibit I.

       SECTION 2. AMENDMENTS TO THE SECURITY AGREEMENT. The

<PAGE>

Security Agreement is, effective as of the date hereof, hereby amended as
follows:

       (a)    Section 1(d) is amended by inserting after "furniture," in the
third line thereof "fixtures,";

       (b)    Section 1(h) is amended by inserting after "each Person" in the
first line thereof "owned by Pledgor, including the shares of capital stock
of each Person";

       (c)    Section 1(j) is amended by inserting after "each Person" in the
first line thereof "owned by Pledgor, including the membership interests
and/or partnership interests, as applicable, of each Person";

       (d)    Section 1(l) is amended by inserting after "intercompany notes"
in the first line thereof ", including all intercompany notes";

       (e) Section 6(l) is added as follows:

                     "(l) INVENTORY LOCATIONS. Substantially contemporaneously
              with, but in no event later than 30 days after, the delivery of
              Inventory to any Person for storage or processing which has an
              aggregate value, when added to the value of all other Inventory
              held by such Person, in excess of $50,000, the Pledgors shall
              deliver to the Administrative Agent an agreement, satisfactory in
              form and substance to the Administrative Agent, providing for the
              waiver or subordination of any applicable Lien on the part of such
              Person with respect to such Inventory and providing the
              Administrative Agent with the right to repossess such Inventory
              upon the occurrence and during the continuance of an Event of
              Default.";

       (f)    Section 7(b)(ii)(A) is amended by replacing "without any action
or the giving of any notice" with "upon written notice sent by the
Administrative Agent"; and

       (g)    Schedules 1-A, IV, V and VII and Annexes A, B and C are
replaced with Schedules 1-A, IV, V and VII and Annexes A, B and C attached
hereto as Exhibit II.

       SECTION 3. AMENDMENTS TO SECURITIES PLEDGE AGREEMENT. The Securities
Pledge Agreement is, effective as of the date hereof, hereby amended as
follows:

       (a)    Section 1(a) is amended by inserting after "each Person" in the
first line thereof "owned by Pledgor, including the shares of capital stock
of each Person";

       (b)    Section 1(c) is amended by inserting after "each

<PAGE>

Person" in the first line thereof "owned by Pledgor, including the membership
interests and/or partnership interests, as applicable, of each Person";

       (c)    Section 6(b)(ii)(A) is amended by replacing "without any action
or the giving of any notice" with "upon written notice sent by the
Administrative Agent"; and

       (d)    Annex A is replaced with Annex A attached hereto as Exhibit III.

       SECTION 4. WAIVERS. Effective as of the date hereof, the Lenders and
the Administrative Agent waive:

       (a)    the right to require application, in accordance with Section
2.7(a) of the Credit Agreement, of the capital contribution being made to
Holdco or the Borrower pursuant to Section 5(b) of this Amendment; and

       (b)    their rights and remedies arising by reason of:

              (i)    any default under Section 8(b) of the Credit Agreement,
but only with respect to any representation which was not true when made by
reason of any failure or default referred to in Sections 1.1 through 1.5 of
the Waiver made as of November 14, 2000 or the Waiver made as of November 30,
2000 (collectively, the "WAIVERS") by and among the Loan Parties, the Lenders
listed on the signature pages thereof and the Administrative Agent; and

              (ii)   any default under Section 8(c) or Section 8(d) of the
Credit Agreement, but only with respect to any default thereunder by reason
of any failure referred to in Section 1.1, 1.2, 1.3 or 1.5 of the Waivers.

       SECTION 5. CONDITIONS OF EFFECTIVENESS. This Amendment shall become
effective when, and only when, the following conditions precedent shall have
been satisfied, in each case as determined by the Administrative Agent in its
sole discretion:

       (a)    the Administrative Agent shall have received (i) this
Amendment, executed and delivered by the Administrative Agent, the Lenders
and each Loan Party, (ii) the Intercreditor Agreement dated as of the date
hereof executed and delivered by the Administrative Agent and General
Electric Capital Corporation, (iii) the Security Agreement dated as of the
date hereof executed and delivered by the Administrative Agent as agent for
General Electric Capital Corporation and each of the Grantors named therein
and (iv) the Security Agreement dated as of the date hereof executed and
delivered by General Electric Capital

<PAGE>

Corporation as agent for the Administrative Agent and each of the Grantors named
therein.

       (b)    Holdco shall have received a cash capital contribution to its
common equity of not less than $6,000,000 from Precision Partners, L.L.C.,
contributed the proceeds thereof to the common equity of the Borrower and the
Borrower shall have applied the proceeds thereof to the reduction of the
Revolving Loans; and the Administrative Agent shall have received from Bank of
America, N.A., reasonably satisfactory evidence that the sources of the cash
capital contribution made by Precision Partners, L.L.C. are $5,000,000
transferred by Saunders, Karp and Megrue and $1,000,000 transferred by John G.
Raos to the account of the Borrower with Bank of America, N.A.;

       (c)    (i) the Administrative Agent shall have received certified copies
of (A) the Master Lease Agreement dated as of March 31, 2000 between General
Electric Capital Corporation, for itself and as agent for certain participants
("GE CAPITAL"), as lessor, and Galaxy, Mid State, Nationwide Precision Products
Corp. and General Automation, Inc., as lessees, together with all of the
documents executed and delivered in connection therewith and any supplements,
modifications and amendments thereto (the "LEASE AGREEMENT") and (B) the Amended
and Restated Master Lease Agreement dated as of the date hereof between GE
Capital, as lessor, and Galaxy, Mid State, Nationwide Precision Products Corp.
and General Automation, Inc., as lessees (the "LEASE AGREEMENT AMENDMENT"),
together with all of the documents executed and delivered in connection
therewith and (ii) all conditions precedent to the effectiveness of the Lease
Agreement Amendment shall have been satisfied or waived;

       (d)    (i) the Administrative Agent shall have received certified copies
of the Loan, Security and Guaranty Agreement dated as of the date hereof between
GE Capital, as lender, and Galaxy, MidState, Nationwide Precision Products Corp.
and General Automation, Inc., as borrowers (the "EQUIPMENT FINANCE AGREEMENT"),
together with all of the documents executed and delivered in connection
therewith, (ii) all conditions precedent to the effectiveness of the Equipment
Finance Agreement shall have been satisfied or waived, (iii) GE Capital shall
have advanced no less than $9,000,000 thereunder for the purchase of "New
Equipment" as defined in the Equipment Finance Agreement and (iv) the
Administrative Agent shall have received a certificate setting forth the receipt
and disbursement of all amounts advanced under the Equipment Finance Agreement;

       (e)    the Administrative Agent shall have received a certified copy of
the Business Plan, accompanied by a certificate of a Responsible Officer
certifying to the Administrative Agent and the Lenders that the Business Plan
has been prepared in good faith based upon the assumptions contained therein and
all information available to the Loan Parties at the time of preparation thereof
and, as of the date of such certificate, such Responsible Officer is not aware
of any information contained in the Business Plan which is false or misleading
in any material

<PAGE>

respect or of any omission of information which causes the Business Plan to be
false or misleading in any material respect;

       (f)    the Administrative Agent shall have received the results of
Requests for Information (Form UCC-11), tax lien, judgment lien and pending
lawsuit searches or equivalent reports or lien search reports, each of a recent
date listing all effective financing statements, lien notices or comparable
documents that name any Loan Party as debtor in each of the jurisdictions where
assets of the Loan Parties are located and each such Loan Party's principal
place of business is located, and such search shall reveal no liens on any of
the assets of the Loan Parties except for Permitted Liens;

       (g)    the Administrative Agent shall have received, with a counterpart
for each Lender, a certificate of each Loan Party, substantially in the form of
Exhibit A hereto;

       (h)    the Administrative Agent shall have received for the account of
the Lenders which sign this Amendment an amendment fee in the amount of
$200,000.00 to be shared pro rata among such Lenders;

       (i)    the Administrative Agent and each Lender shall have received
reimbursement for all reasonable costs, fees and expenses, including legal fees,
incurred in connection with the development, negotiation, preparation and
execution of this Amendment and the other documents being executed and delivered
herewith and all due diligence in connection therewith;

       (j)    the Administrative Agent shall have received the legal opinion of
Jones, Day, Reavis & Pogue, counsel to the Precision Group Members and Holdco,
substantially in the form of Exhibit B hereto and opinions of counsel regarding
Maine and Michigan law, from counsel and in form and substance satisfactory to
the Administrative Agent;

       (k)    the Administrative Agent shall have received insurance
certificates satisfying the requirements of the Security Documents.

       SECTION 6. REPRESENTATIONS AND WARRANTIES. To induce the Administrative
Agent and the Lenders to enter into this Amendment, the Loan Parties hereby
jointly and severally represent and warrant to the Administrative Agent and each
Lender that:

       (a)    The financial statements for the Loan Parties delivered to the
Lenders for the year ended December 31, 1999 in accordance with Section 6.1(a)
of the Credit Agreement and for the quarter ended September 30, 2000 in
accordance with Section 6.1(b) of the Credit Agreement present fairly in all
material respects the consolidated financial condition of the Loan Parties as at
such dates, and the consolidated results of their operations and their
consolidated retained earnings, stockholders' equity and cash flows for the
respective periods then ended. Since September 30,

<PAGE>

2000, there has been no development or event that has had or could reasonably be
expected to have a Material Adverse Effect.

       (b)    Each Loan Party (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation 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 except as, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.

       (c)    Each Loan Party has the corporate power and authority, and the
legal right, to make, deliver and perform this Amendment and the other documents
to be executed and delivered by it in connection herewith. Each Loan Party has
taken all necessary corporate action to authorize the execution, delivery and
performance of this Amendment and the other documents to be executed and
delivered by it in connection herewith. No consent or authorization of, filing
with, notice to or other act by or in respect of, any Governmental Authority or
any other Person is required in connection with the execution, delivery,
performance, validity or enforceability of this Amendment and the other
documents to be executed and delivered by it in connection herewith. This
Amendment and each other document to be executed and delivered in connection
herewith has been duly executed and delivered on behalf of each Loan Party party
thereto. This Amendment constitutes, and each other document to be executed and
delivered in connection herewith upon execution will constitute, a legal, valid
and binding obligation of each Loan Party party thereto, enforceable against
each such Loan Party in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).

       (d)    The execution, delivery and performance of this Amendment and the
other documents to be executed and delivered in connection herewith will not
violate any Requirement of Law or any material Contractual Obligation of Holdco
or any Precision Group Member which could reasonably be expected to have a
Material Adverse Effect and will not result in, or require, the creation or
imposition of any Lien on any of their respective

<PAGE>

properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation. No Requirement of Law or Contractual Obligation
applicable to Holdco or any Precision Group Member could reasonably be
expected to have a Material Adverse Effect.

       (e)    Schedule 1 hereto sets forth the name and jurisdiction of
incorporation of each Subsidiary of Holdco and the Borrower and, as to each such
Subsidiary, the percentage of each class of Capital Stock owned by Holdco or any
Precision Group Member.

       (f)    Each Loan Party is, and after giving effect to this Amendment, the
Lease Agreement Amendment and the Equipment Finance Agreement and the incurrence
of all Indebtedness and obligations being incurred in connection herewith and
therewith will be and will continue to be, Solvent.

       (g)    The Business Plan was prepared in good faith on the basis of
assumptions which were fair in light of the conditions existing at the time of
delivery thereof, and represents the Loan Parties' best estimate of their future
financial performance.

       (h)    Except as amended hereby, each Exhibit, Schedule and Annex to each
Security Document remains true, accurate and complete in all material respects.

       (i)    After giving effect to this Amendment no violation of the terms of
the Credit Agreement exists in any material respect and all representations and
warranties contained in the Credit Agreement are true, correct and complete in
all material respects on and as of the date hereof except to the extent such
representations and warranties specifically relate to an earlier date in which
case they were true, correct and complete in all material respects on and as of
such earlier date.

       (j)    No Loan Party has any right of setoff, recoupment, counterclaim or
defense of any nature whatsoever to the Obligations.

       (k)    All of the proceeds of the Equipment Finance Agreement have been
or will be used to pay for Capital Expenditures being made substantially
contemporaneously with the closing thereof or to pay Revolving Loans, the
proceeds of which were used to pay for Capital Expenditures.

       (l)    On or about July 7, 1999, Calbrit Design, Inc. merged into
Certified Fabricators which was the surviving corporation of the merger.

       SECTION 7. RELEASE.

       The Loan Parties on their own behalf, and on behalf of their successors
and assigns, hereby release, waive and forever discharge the Agents, the
Lenders, their respective affiliates and all of their officers, directors,
employees, attorneys, consultants and agents from any and all actions, causes of

<PAGE>

action, debts, dues, claims, demands, liabilities and obligations of every kind
and nature, both in law and equity, known or unknown, whether matured or
unmatured, absolute or contingent arising from the beginning of the world
through the date hereof with respect to the Credit Agreement, the Loan Documents
and the transactions contemplated thereby. The release, waiver and discharge in
this Section shall be effective regardless of whether the conditions to this
Amendment are satisfied.

       SECTION 8. AUTHORIZATION OF AGENT. The Lenders authorize and direct the
Administrative Agent to execute and deliver each of the documents to be executed
and delivered by it hereunder. The Lenders and the Loan Parties acknowledge and
agree that, in acting as "Agent" for General Electric Capital Corporation under
the Security Agreement, dated as of the date hereof, made by the Grantors named
therein, Citicorp USA, Inc. shall be entitled to the benefit of Sections 9.2
through 9.8 of the Credit Agreement.

       SECTION 9. ACKNOWLEDGMENT AND CONSENT OF LOAN PARTIES . Each of the Loan
Parties acknowledges and consents to the terms of the Intercreditor Agreement
dated as of the date hereof between the Administrative Agent and General
Electric Capital Corporation. Each of the Loan Parties also acknowledges and
agrees that the Liens granted to the Administrative Agent have been duly
perfected and have attached to the rights of the lessees under the Master Lease
Agreement and all proceeds thereof.

       SECTION 10. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS .

       (a)    Upon the effectiveness hereof, each reference in the Credit
Agreement, the Security Agreement or the Securities Pledge Agreement to "this
Agreement," "hereunder," "hereof" or words of like import referring to the
Credit Agreement, the Security Agreement or the Securities Pledge Agreement, as
the case may be, and each reference in the Loan Documents to the Credit
Agreement, the Security Agreement or the Securities Pledge Agreement to
"thereunder," "thereof" or words of like import referring to the Credit
Agreement, the Security Agreement or the Securities Pledge Agreement, as the
case may be, shall mean and be a reference to the Credit Agreement, the Security
Agreement or the Securities Pledge Agreement, as the case may be, as amended
hereby.

       (b)    Except as specifically provided herein, the Credit Agreement and
the other Loan Documents are and shall continue to be in full force and effect
and are hereby in all respects ratified and confirmed.

       (c)    The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of the Administrative Agent or any Lender under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.

       (d)    This Amendment shall constitute a Loan Document.

<PAGE>

       (e)    THIS AMENDMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS, REPRESENTS
THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS.

       (f)    THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

       SECTION 11. GOVERNING LAW. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.

       SECTION 12. WAIVERS OF JURY TRIAL. EACH OF THE LOAN PARTIES, THE AGENTS
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AMENDMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

       SECTION 13. EXECUTION IN COUNTERPARTS, ETC. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement. Delivery of an executed counterpart of a signature
page to this Amendment by telecopier shall be effective as delivery of a
manually executed counterpart of this Amendment.

        {The remainder of this page intentionally left blank.}

<PAGE>

       IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

                                     PRECISION PARTNERS, INC.
                                     PRECISION PARTNERS HOLDING COMPANY

                                     By:   /s/  Frank Reilly
                                        -------------------------------------
                                          Name: Frank Reilly
                                          Title: Executive Vice President
                                                 and Cheif Financial Officer

                                     MID STATE MACHINE PRODUCTS
                                     GALAXY INDUSTRIES CORPORATION
                                     CERTIFIED FABRICATORS, INC.
                                     NATIONWIDE PRECISION PRODUCTS CORP.
                                     GENERAL AUTOMATION, INC.
                                     GILLETTE MACHINE & TOOL CO., INC.

                                     By:   /s/  Frank Reilly
                                        -------------------------------------
                                          Name: Frank Reilly
                                          Title: Vice President

                                     CITICORP USA, INC.,
                                     as Administrative Agent

                                     By:   /s/  Michael Becker
                                        -------------------------------------
                                          Name: Michael Becker
                                          Title:

<PAGE>

                                     CITICORP USA, INC.,
                                     as a Lender

                                     By:   /s/  Michael Becker
                                        -------------------------------------
                                          Name: Michael Becker
                                          Title: Vice President

                                     BANK OF AMERICA, N.A. (successor to
                                     NationsBank, N.A.), as a Lender

                                     By:   /s/  John J. O'Neill
                                        -------------------------------------
                                          Name: John J. O'Neill
                                          Title: Managing Director

                                     SUNTRUST BANK, ATLANTA,
                                     as a Lender

                                     By:   /s/  Michael F. Lapnriesi
                                        -------------------------------------
                                          Name: Micheal F. Lapnriesi
                                          Title: Director

<PAGE>

                                                                         Annex A

                                                   PRICING GRID
<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------
   Consolidated Leverage        Applicable            Applicable
        Ratio                   Margin for            Margin for         CommitmentF
                                Eurodollar            Base Rate            ee Rate
                                  Loans                Loans
---------------------------------------------------------------------------------------
<S>                             <C>                     <C>               <C>
Greater than or equal to         400 bps                 300 bps           50 bps
4.25 to 1.0
---------------------------------------------------------------------------------------
Greater than or equal to         350 bps                 250 bps           50 bps
4.00 to 1.0 and less
than 4.25 to 1.0
---------------------------------------------------------------------------------------
Less than 4.00 to 1.0            300 bps                 200 bps           50 bps
---------------------------------------------------------------------------------------

</TABLE>

Changes in the Applicable Margin resulting from changes in the Consolidated
Leverage Ratio shall become effective on the date (the "ADJUSTMENT DATE") on
which financial statements are delivered to the Lenders pursuant to Section 6.1
(but in any event not later than the 45th day after the end of each of the
first three quarterly periods of each fiscal year or the 90th day after the
end of each fiscal year, as the case may be) and shall remain in effect until
the next change to be effected pursuant to this paragraph. If any financial
statements referred to above are not delivered within the time periods
specified above, then, until such financial statements are delivered, the
Consolidated Leverage Ratio of the Borrower as at the end of the fiscal
period that would have been covered thereby shall for the purposes of this
definition be deemed to be greater than 4.25 to 1.0. In addition, at all
times while an Event of Default shall have occurred and be continuing, the
Consolidated Leverage Ratio of the Borrower shall for the purposes of this
definition be deemed to be greater than 4.25 to 1.0. Each determination of
the Consolidated Leverage Ratio pursuant to this pricing grid shall be made
with respect to (or, in the case of Consolidated Total Debt, as at the end
of) the period of four consecutive fiscal quarters of the Borrower ending at
the end of the period covered by the relevant financial statements.

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