Document:

EXECUTION COPY

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                            STOCK PURCHASE AGREEMENT

                                      among

                                RATHGIBSON, INC.,

                            THE SELLERS NAMED HEREIN,

                               RGCH HOLDINGS LLC,

                                       and

                        THE REPRESENTATIVE NAMED HEREIN

                                December 6, 2005

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                                TABLE OF CONTENTS

ARTICLE I PURCHASE AND SALE....................................................1
     1.01   Purchase and Sale and Cancellation of Equity Interests.............1
     1.02   The Closing........................................................4
     1.03   Contingent Payment.................................................5
     1.04   Second Contingent Payment..........................................6

ARTICLE II CONDITIONS TO CLOSING...............................................7
     2.01   Conditions to the Buyer's Obligations..............................7
     2.02   Conditions to the Sellers' Obligations.............................9

ARTICLE III REPRESENTATIONS AND WARRANTIES OF EACH SELLER......................9
     3.01   Execution, Delivery; Valid and Binding Agreements..................9
     3.02   Authority.........................................................10
     3.03   No Breach.........................................................10
     3.04   Ownership.........................................................10
     3.05   Litigation........................................................10
     3.06   Brokerage.........................................................10

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................11
     4.01   Organization and Power............................................11
     4.02   Subsidiaries......................................................11
     4.03   Authorization; No Breach..........................................11
     4.04   Capitalization....................................................11
     4.05   Financial Statements..............................................12
     4.06   Absence of Certain Developments...................................12
     4.07   Title to Properties...............................................13
     4.08   Tax Matters.......................................................15
     4.09   Material Contracts................................................16
     4.10   Intellectual Property.............................................17
     4.11   Litigation........................................................18
     4.12   Brokerage.........................................................18
     4.13   Governmental Consents, etc........................................18
     4.14   Employee Benefit Plans............................................18
     4.15   Compliance with Laws..............................................19
     4.16   Environmental Compliance..........................................20
     4.17   Undisclosed Liabilities...........................................20
     4.18   Labor and Employment Matters......................................21
     4.19   Suppliers and Customers...........................................21
     4.20   Inventory.........................................................21
     4.21   Transactions with Related Persons. Except as set forth on
            the Related Persons Schedule:.....................................21
     4.22   Sales Practices; Accounts Receivable..............................22
     4.23   Condition of Assets...............................................23

                                        i

     4.24   Insurance.........................................................23
     4.25   Foreign Corrupt Practices Act Compliance..........................24
     4.26   Indebtedness......................................................24

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER.........................24
     5.01   Organization and Corporate Power..................................24
     5.02   Authorization.....................................................24
     5.03   No Violation......................................................25
     5.04   Governmental Authorities; Consents................................25
     5.05   Litigation........................................................25
     5.06   Brokerage.........................................................25
     5.07   Investment Representation.........................................25
     5.08   Financing.........................................................25
     5.09   Solvency..........................................................26

ARTICLE VI COVENANTS OF THE COMPANY AND SELLERS...............................26
     6.01   Conduct of the Business...........................................26
     6.02   Transaction Proposal..............................................27
     6.03   Non-Competition; Non-Solicitation.................................28
     6.04   Access to Books and Records.......................................28
     6.05   Financing.........................................................28
     6.06   Notification......................................................29
     6.07   Regulatory Filings................................................30
     6.08   Conditions........................................................30
     6.09   Release...........................................................30
     6.10   Interim Periodic Financial Statements.............................30

ARTICLE VII COVENANTS OF THE BUYER............................................31
     7.01   Access to Books and Records.......................................31
     7.02   Notification......................................................31
     7.03   Director and Officer Liability and Indemnification................31
     7.04   Regulatory Filings................................................32
     7.05   Conditions........................................................32

ARTICLE VIII TERMINATION......................................................32
     8.01   Termination.......................................................32
     8.02   Effect of Termination.............................................33

ARTICLE IX REPRESENTATIVE.....................................................33
     9.01   Designation.......................................................33
     9.02   Authority.........................................................33
     9.03   No Fiduciary Relationship; Exculpation; Reliance..................33

ARTICLE X ADDITIONAL COVENANTS................................................34
     10.01  Survival..........................................................34
     10.02  Indemnification...................................................35
     10.03  Limitation of Recourse............................................38

                                       ii

     10.04  Disclosure Generally..............................................39
     10.05  No Additional Representations; Disclaimer.........................39
     10.06  Certain Tax Matters...............................................40
     10.07  Further Assurances................................................42

ARTICLE XI DEFINITIONS........................................................42

ARTICLE XII MISCELLANEOUS.....................................................52
     12.01  Press Releases and Communications.................................52
     12.02  Expenses..........................................................52
     12.03  Notices...........................................................52
     12.04  Assignment........................................................54
     12.05  Severability......................................................54
     12.06  No Strict Construction............................................55
     12.07  Amendment and Waiver..............................................55
     12.08  Complete Agreement................................................55
     12.09  Counterparts......................................................55
     12.10  No Third-Party Beneficiaries......................................55
     12.11  Governing Law; Jurisdiction.......................................55
     12.12  Waiver of Jury Trial..............................................55

                                       iii

                                    EXHIBITS
                                    --------

Exhibit A                   Company Certificate

Exhibit B                   Buyer Certificate

Exhibit C                   Form of Purchase Price Escrow Agreement

Exhibit D                   Form of Opinion of Counsel to the Company

Exhibit E                   Debt Commitment Letter and Equity Commitment Letter

                                       iv

                                    SCHEDULES

Schedule                                 Section Reference
---------                                ------------------

Equityholders                            (SS.SS. 1.01, 3.03, 4.04)

Indebtedness                             (SS. 1.02)

Third Party Consents                     (SS. 2.01)

Governmental Consents                    (SS.SS. 2.01, 2.02, 4.13)

Equityholders Authorization              (SS. 3.03)

Subsidiaries                             (SS. 4.02)

Company Authorization                    (SS. 4.03)

Capitalization                           (SS. 4.04)

Accounting                               (SS. 4.05)

Developments                             (SS. 4.06)

Leased Real Property                     (SS. 4.07)

Owned Real Property                      (SS. 4.07)

Taxes                                    (SS. 4.08)

Material Contracts                       (SS. 4.09)

Suppliers and Customers                  (SS. 4.19)

Inventory                                (SS. 4.20)

Indebtedness                             (SS. 4.26)

Product Warranty Schedule                (SS. 4.13)

Intellectual Property                    (SS. 4.10)

Litigation                               (SS. 4.11)

Employee Benefits                        (SS. 4.14)

Environmental Compliance                 (SS. 4.16)

                                        v

Related Persons                          (SS. 4.21)

Product Warranty                         (SS. 4.22)

Insurance                                (SS. 4.24)

Closing Costs                            (Article XI)

Targeted Working Capital                 (Article XI)

Transaction Tax Deduction Benefits       (Article XI)

                                       vi

                            STOCK PURCHASE AGREEMENT

            THIS AGREEMENT ("Agreement") is made as of December 6, 2005, by and
among RGCH Holdings LLC, a Delaware limited liability company (the "Buyer"),
RathGibson, Inc., a Delaware corporation (the "Company"), and the Persons listed
as "Sellers" on the signatures pages attached hereto (collectively referred to
herein as the "Sellers" and individually as a "Seller"). Unless otherwise
provided, capitalized terms used herein are defined in Article XI below.

            The Persons listed on the Equityholders Schedule attached hereto
(collectively referred to herein as the "Equityholders" and individually as an
"Equityholder") own (i) all of the issued and outstanding capital stock of the
Company, which as of the date hereof consists of 215,462.25 shares of common
stock ("Common Stock"), par value $0.01 per share (collectively, the "Shares"),
(ii) all of the granted and outstanding Stock Options, which consist of 256
Stock Options and (iii) all of the granted and outstanding Phantom Rights, which
consist of 9,375 Phantom Rights.

            Subject to the terms and conditions set forth herein, the Buyer
desires to acquire from the Sellers all of the Shares, and the Sellers desire to
sell to the Buyer all of such Shares owned by the Sellers as of the Closing
Date. In addition, subject to the terms and conditions set forth herein, the
Equityholders shall surrender all Stock Options and Phantom Rights for
cancellation on the Closing Date in accordance with the Stock Option Plan and
the Phantom Rights Plan.

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

                                    ARTICLE I

                                PURCHASE AND SALE

            1.01    Purchase and Sale and Cancellation of Equity Interests.

            (a)     Closing Transactions. At the Closing, upon the terms and
subject to the conditions set forth in this Agreement, (i) the Sellers shall
sell, assign, transfer and convey to the Buyer, and the Buyer shall purchase and
acquire from the Sellers, all of the Sellers' rights, title and interest in and
to the Shares, free and clear of all Liens and transfer restrictions (other than
restrictions under applicable federal and state securities laws) and (ii) the
Equityholders shall cancel and surrender all of the Equityholders' rights, title
and interest in and to their Stock Options and Phantom Rights, in the aggregate,
against payment by the Buyer of the Initial Purchase Price as determined
pursuant to Section 1.01(b) and Section 1.01(e) below.

            (b)     Initial Purchase Price. The "Initial Purchase Price" shall
be an amount equal to (i) $260,000,000, minus (ii) the Indebtedness repaid by
Buyer pursuant to Section 1.02(b)(iii) below, minus (iii) the Closing Costs paid
by Buyer pursuant to Section 1.02(b)(ii).

                                        1

The Initial Purchase Price shall be subject to adjustment as set forth in
Section 1.01(g) below, and as so adjusted shall be the "Final Purchase Price".

            (c)     Escrow Amount. At the Closing, the Buyer shall pay or cause
to be paid (by wire transfer of immediately available funds) $2,000,000 of the
Initial Purchase Price (the "Escrow Amount") into an escrow account as a source
for any payment by the Representative on behalf of the Equityholders to the
Buyer as required by Section 1.01(g). The Escrow Amount shall be held in escrow
and disbursed pursuant to the terms hereof and an escrow agreement between the
Buyer, the Representative and the Escrow Agent, dated as of the Closing Date
(the "Escrow Agreement"), in substantially the form attached hereto as Exhibit
C.

            (d)     Additional Escrow Amount. In the event that the Wisconsin
Tax Audit is not settled prior to the Closing in a manner reasonably
satisfactory to Buyer, at the Closing, the Buyer shall pay or cause to be paid
(by wire transfer of immediately available funds) $1,350,000 of the Initial
Purchase Price (the "Additional Escrow Amount") into an escrow account as a
source for any payment owing by the Company to the Wisconsin Department of
Revenue in respect of the Wisconsin Tax Audit. The Additional Escrow Amount
shall be held in escrow and disbursed pursuant to the terms of an escrow
agreement between the Buyer, the Representative and the Escrow Agent, dated as
of the Closing Date (the "Additional Escrow Agreement"), in form and substance
reasonably satisfactory to the Buyer and the Representative.

            (e)     Allocation of the Initial Purchase Price. At the Closing,
the remainder of the Initial Purchase Price shall be allocated and distributed
by the Representative among the Equityholders with respect to their Shares and
with respect to their Stock Options and Phantom Rights (as applicable) pursuant
to Section 1.02(b).

            (f)     Post-Closing Determination. The Final Purchase Price shall
be an amount (as finally determined pursuant to this Section l.0l(f)) equal to
the Initial Purchase Price, plus (or minus) (i) the amount by which the Closing
Working Capital exceeds (or is less than) the Target Working Capital, plus (ii)
the Cash and Cash Equivalents, minus (iii) any Indebtedness not repaid by the
Buyer pursuant to Section 1.02(b)(iii).

                    (i)     Following the Closing Date, the Buyer will conduct a
      review of the Company's Closing Working Capital, Target Working Capital,
      Indebtedness and Cash and Cash Equivalents, and within 90 days after the
      Closing Date, the Buyer will prepare and deliver to the Representative (A)
      a consolidated balance sheet of the Company and its Subsidiaries as of the
      close of business on the Closing Date, prepared in accordance with GAAP
      but without giving effect to the transactions contemplated hereby and the
      financing thereof (the "Draft Balance Sheet"), and (B) a computation of
      the Final Purchase Price based upon the Draft Balance Sheet. The Buyer
      will make available to the Representative all records and work papers used
      in preparing the Draft Balance Sheet.

                    (ii)    If the Representative approves in writing the
      Buyer's determination of the Final Purchase Price or if the Representative
      fails to deliver an Objection Notice as provided below, then the Buyer's
      determination of the Final Purchase Price shall be conclusive and binding
      on all parties to this Agreement. If the Representative disagrees with the
      computation of the Final Purchase Price reflected on the Draft Balance
      Sheet,

                                        2

      the Representative may, within 30 days after receipt of the Draft Balance
      Sheet, deliver a written notice (an "Objection Notice") to the Buyer
      setting forth the Representative's calculation of the Final Purchase Price
      and the basis, with reasonable specificity, for the differences identified
      by the Representative. The Representative and the Buyer shall use
      reasonable efforts to resolve any disagreements as to the computation of
      the Final Purchase Price, but if the parties do not obtain a final
      resolution within 45 days after the Representative has received the
      Objection Notice, the Representative and the Buyer will jointly retain
      Grant Thornton LLP (or its successor) (the "Firm") to resolve any
      remaining disagreements. The Buyer and the Representative will direct the
      Firm to render a determination within 30 days of its retention, and the
      Buyer, the Representative and their respective employees or agents will
      cooperate with, and provide reasonable access to all relevant records and
      work papers to, the Firm during its engagement. The Firm will consider
      only those items and amounts in the Draft Balance Sheet set forth in the
      Objection Notice which the Buyer and the Representative are unable to
      resolve. The Buyer and the Representative shall each submit a binder to
      the Firm promptly (and in any event within 15 days after the Firm's
      engagement), which binder shall contain such party's computation of
      Closing Working Capital, Target Working Capital, Indebtedness and Cash and
      Cash Equivalents and information, arguments and support for such party's
      position. The Firm shall review such binders and base its determination
      solely on such materials in accordance with GAAP and in accordance with
      the definitions and other terms and conditions set forth herein. In
      resolving any disputed item, the Firm may not assign a value to any item
      greater than the greatest value for such item claimed by either party or
      less than the smallest value for such item claimed by either party. The
      determination of the Firm will be conclusive and binding upon the Buyer,
      the Company, the Representative and the Equityholders. For purposes
      hereof, the "Closing Balance Sheet" shall mean the Draft Balance Sheet
      together with any revisions made thereto pursuant to this Section
      1.01(f)(ii).

                    (iii)   The cost of the resolution of the disputed items by
      the Firm shall be borne 50% by the Representative (on behalf of the
      Equityholders), on the one hand, and 50% by the Buyer, on the other hand.

            (g)     Post-Closing Adjustment. If Final Purchase Price is greater
than the Initial Purchase Price, the Buyer will, within five (5) business days
after the determination thereof, pay to the Representative (on behalf of the
Equityholders) an amount equal to the Final Purchase Price minus the Initial
Purchase Price. If the Initial Purchase Price exceeds the Final Purchase Price,
the Representative and the Buyer shall deliver joint written instructions to the
Escrow Agent to pay to the Buyer from the Escrow Amount an amount equal to the
Initial Purchase Price minus the Final Purchase Price. To the extent funds
available under the Escrow Agreement are insufficient to make such payment to
the Buyer in full, each Seller shall pay such deficiency (based on such Seller's
Indemnification Share) to the Buyer at the same time as payment is required to
be made from escrow under the Escrow Agreement. Payment of any such amounts
owing pursuant to this Section l.0l(g) shall be by wire transfer of immediately
available funds to the account specified by the payee and shall include simple
interest on such amount at a rate per annum equal to five percent (5%),
commencing on the Closing Date and continuing until the date of full payment.

                                        3

            (h)     Treatment of Stock Options and Phantom Rights. At the
Closing, each holder of outstanding options to acquire Shares and/or phantom
rights issued pursuant to the Stock Option Plan and Phantom Rights Plan,
respectively (each, a "Stock Option" or "Phantom Right," respectively), shall
surrender for cancellation all such Stock Options and Phantom Rights, whether or
not then exercisable, in exchange for a cash payment made by the Representative,
on behalf of the Company, pursuant to Section 1.02(b) (subject to any applicable
withholding tax).

            1.02    The Closing

            (a)     The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Schulte Roth &
Zabel LLP, 919 Third Avenue, New York, New York 10022, at 10:00 A.M. on the
third Business Day to occur following full satisfaction or due waiver of all of
the closing conditions set forth in Article II hereof (other than those required
to be satisfied, or only capable of being satisfied, at the Closing) or on such
other date as is mutually agreeable to the Buyer and the Representative. The
date and time of the Closing are herein referred to as the "Closing Date."

            (b)     Subject to the terms and conditions set forth in this
Agreement, the parties hereto shall consummate the following "Closing
Transactions" at the Closing:

                    (i)     the Representative (on behalf of the Equityholders)
      shall deliver to the Buyer certificates representing the Shares duly
      endorsed for transfer and instruments evidencing the cancellation and
      surrender of the Stock Options and Phantom Rights;

                    (ii)    the Buyer (on behalf of the Company and the
      Equityholders) shall pay the Closing Costs by wire transfer of immediately
      available funds to the account(s) designated by the Company prior to the
      Closing Date;

                    (iii)   the Buyer shall repay (on behalf of the Company) all
      amounts necessary to discharge fully the Indebtedness of the Company
      identified with an asterisk ("*") on the Indebtedness Schedule (including
      all principal, accrued interest, premiums and related fees and expenses)
      by wire transfer of immediately available funds to the accounts designated
      by the Company prior to the Closing Date, and the Company shall deliver to
      the Buyer all appropriate payoff letters, which shall include customary
      provisions regarding the releases of all Liens related to such
      Indebtedness, and shall make arrangements reasonably satisfactory to the
      Buyer for the holders of such Indebtedness to deliver Lien releases and
      cancelled notes, as appropriate at the Closing;

                    (iv)    the Buyer shall deliver the Escrow Amount and, if
      applicable, the Additional Escrow Amount to the Escrow Agent by wire
      transfer of immediately available funds to the account designated by the
      Escrow Agent prior to the Closing Date;

                    (v)     the Buyer shall deliver to the Representative (on
      behalf of the Equityholders) the amount of the Initial Purchase Price less
      the Escrow Amount and, if applicable, the Additional Escrow Amount by wire
      transfer of immediately available funds to the accounts designated by the
      Representative prior to the Closing Date;

                                        4

                    (vi)    the Representative shall deliver to each holder of
      Stock Options an amount equal to (A) the product of (1) the number of
      shares of Common Stock for which such Stock Option is exercisable
      immediately prior to the Closing, multiplied by (2) the excess (if any) of
      the Per Share Initial Purchase Price over the applicable per share
      exercise price for such Stock Option (less any withholding obligations
      described in Section 1.01(h)) minus (B) such Person's Pro Rata Share of
      the Escrow Amount and, if applicable, the Additional Escrow Amount by wire
      transfer of immediately available funds to the accounts designated by each
      holder of Stock Options prior to the Closing Date;

                    (vii)   the Representative shall deliver to each holder of
      Phantom Rights that has provided to the Representative a cancellation of
      such Phantom Right an amount equal to (A) the product of (1) the number of
      Phantom Rights held by such Person immediately prior to the Closing,
      multiplied by (2) the Per Share Initial Purchase Price (less any
      withholding obligations described in Section 1.01(h)), minus (B) such
      Person's Pro Rata Share of the Escrow Amount and, if applicable, the
      Additional Escrow Amount by wire transfer of immediately available funds
      to the accounts designated by each holder of Phantom Rights prior to the
      Closing Date;

                    (viii)  the Representative shall deliver to the each holder
      of Shares an amount equal to (A) the product of (1) the number of Shares
      held by such Person immediately prior to the Closing, multiplied by (2)
      the Per Share Initial Purchase Price minus (B) such Person's Pro Rata
      Share of the Escrow Amount and, if applicable, the Additional Escrow
      Amount by wire transfer of immediately available funds to the accounts
      designated by each such holder prior to the Closing Date; and

                    (ix)    the Buyer, the Company and the Representative (on
      behalf of the Equityholders) shall make such other deliveries as are
      required by and in accordance with Article II hereof.

            1.03    Contingent Payment.

            (a)     Calculation of Adjusted Consolidated EBITDA. Following the
completion of the Company's fiscal year ending January 31, 2007 (the "2007
Fiscal Year"), the Company shall cause to be calculated and delivered to the
Representative by the earlier of (i) 10 Business Days following the delivery by
the Company's auditors to the Company of the Company's consolidated audited
financial statements for the 2007 Fiscal Year prepared in accordance with GAAP
consistent with the Company's past practices (to the extent such past practices
are in accordance with GAAP) (the "2007 Audited Financial Statements") and (ii)
May 31, 2007, a statement of the Company's Adjusted Consolidated EBITDA for the
2007 Fiscal Year that shall set forth such Adjusted Consolidated EBITDA (such
calculation, the "2007 Adjusted Consolidated EBITDA Statement"), which shall be
derived from the 2007 Audited Financial Statements. The 2007 Adjusted
Consolidated EBITDA Statement will (i) present fairly, in all material respects,
the Adjusted Consolidated EBITDA of the Company and its Subsidiaries for the
2007 Fiscal Year and (ii) include the Buyer's good faith estimate of the
Contingent Amount together with a schedule setting forth in detail the
calculations supporting the computation thereof (the "Estimated Contingent
Amount"). If, within 15 days following its

                                        5

receipt of the 2007 Adjusted Consolidated EBITDA Statement, the Representative
does not dispute the Estimated Contingent Amount, the Estimated Contingent
Amount shall be deemed to be the Contingent Amount for all purposes of this
Agreement. In the event the Representative has any dispute with regard to the
calculation of the Estimated Contingent Amount, such dispute shall be resolved
in the same manner as any dispute regarding the Final Purchase Price in
accordance with the provisions of Section l.0l(f) hereof.

            (b)     Payment Procedures. Subject to Section 1.03(e) hereof, in
the event that (i) Adjusted Consolidated EBITDA of the Company for the 2007
Fiscal Year (as set forth in the 2007 Adjusted Consolidated EBITDA Statement)
exceeds forty-five million dollars ($45,000,000.00), and (ii) the Contingent
Payment shall be equal to a positive amount, the Buyer shall make the Contingent
Payment by causing the Contingent Payment to be paid in immediately available
funds to the Representative (to an account designated by the Representative to
the Company) within five (5) days following the final determination of the
Contingent Amount. The Representative shall promptly thereafter pay each
Equityholder their respective Pro Rata Share of the Contingent Payment.

            (c)     Contingent Payment Interest. Any portion of the Contingent
Payment or Second Contingent Payment that has not been paid in cash at such time
as each may be otherwise due and payable shall accrue interest at a rate of 10%
per annum, compounded annually.

            (d)     Continuing Obligations. The Company may take any actions
that it deems appropriate in its sole discretion with regard to the operation of
its business during the period from the Closing Date through the end of the 2007
Fiscal Year, provided that any such actions are not intentionally and primarily
for the purpose of reducing Adjusted Consolidated EBITDA during the 2007 Fiscal
Year.

            (e)     Reservation of Rights. Notwithstanding anything herein to
the contrary, the Buyer Indemnitees hereby reserve and shall be entitled to
exercise at their sole discretion any and all of their remedies against the
Equityholders with respect to any good faith indemnification claims pursuant to
Article X hereof, including, without limitation, any rights of offset against
amounts that would otherwise be payable as the Contingent Payment or Second
Contingent Payment hereunder.

            1.04    Second Contingent Payment.

            (a)     Subject to Section 1.03(e) hereof, in the event any good
faith claims are outstanding pursuant to Article X on the date the Contingent
Payment is to be made pursuant to Section 1.03 hereto, and such claims are
subsequently resolved, the Buyer shall make a second contingent payment (such
payment, the "Second Contingent Payment"), which shall be equal to the
difference of (i) the aggregate dollar value of any of the claims by the Buyer
Indemnitees that had not been fully resolved to satisfaction pursuant to Section
10.02 on the date the Contingent Payment was made minus (ii) the sum of all
indemnification claims pursuant to Article X that had been resolved since the
date the Contingent Payment was made.

            (b)     Payment Procedures. Subject to Section 1.03(e) hereof,
should there be a Second Contingent Payment, the Buyer shall cause the Second
Contingent Payment to be paid in

                                        6

immediately available funds to the Representative (to an account designated by
the Representative to the Company) as soon as reasonably practicable following
the resolution of all claims pursuant to Article X. The Representative shall
promptly thereafter pay each Equityholder their respective Pro Rata Share of the
Second Contingent Payment.

                                   ARTICLE II

                             CONDITIONS TO CLOSING

            2.01    Conditions to the Buyer's Obligations. The obligation of the
Buyer to consummate the transactions contemplated by this Agreement is subject
to the satisfaction or waiver of the following conditions as of the Closing:

            (a)     the representations and warranties set forth in Articles III
and IV hereof shall be true and correct in all material respects (without taking
into account any materiality or Material Adverse Effect qualifiers therein
(other than such qualifiers contained in the first sentence of Section 4.06)) at
and as of the Closing Date as though then made and as though the Closing Date
were substituted for the date of this Agreement throughout such representations
and warranties except to the extent such representations and warranties
expressly relate to an earlier date (in which case such representations and
warranties shall be true and correct in all material respects (without taking
into account any materiality or Material Adverse Effect qualifiers therein
(other than such qualifiers contained in the first sentence of Section 4.06) as
of such earlier date), in each case after giving effect to all disclosures on
the Updated Schedules delivered to the Buyer pursuant to Section 6.06 which have
not had or would not reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect;

            (b)     the Company and the Sellers shall have performed in all
material respects all of the covenants and agreements required to be performed
by them under this Agreement at or prior to the Closing;

            (c)     no judgment, decree or order of any court or government body
of competent jurisdiction shall have been issued which would, and no action or
proceeding before any court or government body of competent jurisdiction shall
be pending wherein an unfavorable judgment, decree or order would, in each case,
prevent or restrict the performance of this Agreement or the consummation of any
of the transactions contemplated hereby, declare unlawful the transactions
contemplated by this Agreement or cause such transactions to be rescinded;

            (d)     all consents that are set forth on the Third-Party Consents
Schedule attached hereto shall have been obtained;

            (e)     the applicable waiting periods, if any, under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act") shall have
expired or been terminated, and all other governmental filings, consents,
authorizations and approvals that are set forth on the Governmental Consents
Schedule attached hereto shall have been duly made and obtained; and

            (f)     the Company or the Representative (on behalf of the
Equityholders), as the case may be, shall have delivered to the Buyer each of
the following:

                                        7

                    (i)     a certificate of the Company in the form set forth
      in Exhibit A attached hereto, dated the Closing Date, stating that the
      preconditions specified in Sections 2.01 (a), (b) and (c) hereof
      have been satisfied;

                    (ii)    certified copies of the certificate of incorporation
      and bylaws of the Company and each of its Subsidiaries and the resolutions
      of the Company's board of directors approving this Agreement and the
      transactions contemplated hereby;

                    (iii)   an affidavit, under penalties of perjury, certifying
      that the Company is not and has not been a United States real property
      holding corporation, dated as of the Closing Date and in form and
      substance required under Treasury Regulation SS.1.1445-2(c)(3) and
      SS.1.897-2(h);

                    (iv)    copies of the third party and governmental consents
      required by subsections (d) and (e) above and the payoff letters,
      Lien releases and cancelled notes required pursuant to Section
      1.02(b)(iii) above;

                    (v)     the instruments representing the Shares duly
      endorsed for transfer;

                    (vi)    the instruments evidencing the cancellation and
      surrender of all Stock Options and Phantom Rights;

                    (vii)   resignations effective as of the Closing Date from
      all directors of the Company and its Subsidiaries;

                    (viii)  a certificate of good standing from the Secretary of
      State of Delaware evidencing the Company's good standing in such
      jurisdiction, and a copy of each Subsidiary's certificate of
      incorporation, certified by the Secretary of State of Delaware and a
      certificate of good standing from the Secretary of State of Delaware
      evidencing such Subsidiary's good standing in such jurisdiction; and

                    (ix)    the Escrow Agreement and, if applicable, the
      Additional Escrow Agreement executed by the Representative and the Escrow
      Agent.

            (g)     Buyer shall have obtained debt financing adequate to pay in
full, in cash, at Closing the Initial Purchase Price, all on terms substantially
consistent with the Debt Commitment Letter;

            (h)     There shall have been no Material Adverse Change since the
date of this Agreement;

            (i)     Buyer shall have received an opinion of Kirkland & Ellis
LLP, counsel to the Company, to the effect set forth in Exhibit D, which
opinions may be relied upon by the Buyer and the lenders providing the financing
for the Buyer to consummate the transactions contemplated hereby; and

                                        8

            (j)     The Company shall have delivered to Buyer payoff letters (in
a form reasonably satisfactory to Buyer) for each item of Indebtedness of the
Company and its Subsidiaries identified with an asterisk ("*") on the
Indebtedness Schedule.

            2.02    Conditions to the Sellers' Obligations. The obligations of
the Sellers to consummate the transactions contemplated by this Agreement are
subject to the satisfaction of the following conditions as of the Closing:

            (a)     the representations and warranties set forth in Article V
hereof shall be true and correct in all material respects at and as of the
Closing Date as though then made and as though the Closing Date were substituted
for the date of this Agreement throughout such representations and warranties,
except to the extent such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties shall be true
and correct in all material respects as of such earlier date);

            (b)     the Buyer shall have performed in all material respects all
the covenants and agreements required to be performed by it under this Agreement
at or prior to the Closing;

            (c)     no judgment, decree or order of any court or government body
of competent jurisdiction shall have been issued which would, and no action or
proceeding before any court or government body of competent jurisdiction shall
be pending wherein an unfavorable judgment, decree or order would, in each case,
prevent or restrict the performance of this Agreement or the consummation of any
of the transactions contemplated hereby, declare unlawful the transactions
contemplated by this Agreement or cause such transactions to be rescinded;

            (d)     the applicable waiting periods, if any, under the HSR Act
shall have expired or been terminated, and all other governmental filings,
consents, authorizations and approvals that are set forth on the Governmental
Consents Schedule attached hereto shall have been duly made and obtained; and

            (e)     the Buyer shall have delivered to the Representative (on
behalf of the Equityholders) (i) a certificate in the form set forth as Exhibit
B attached hereto, dated the Closing Date, stating that the preconditions
specified in subsections (a), (b) and (c) hereof have been satisfied and (ii)
certified copies of the certificate of formation of the Buyer and the
resolutions of the Buyer's managing member approving the transactions
contemplated hereby.

                                   ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF EACH SELLER

            Each Seller, solely for himself, herself or itself (on a several,
and not joint and several, basis), represents to the Buyer as follows:

            3.01    Execution, Delivery; Valid and Binding Agreements. This
Agreement has been duly executed and delivered by such Seller, and assuming that
this Agreement is the valid and binding agreement of the Buyer, this Agreement
constitutes the valid and binding obligation of such Seller, enforceable in
accordance with its terms (subject to the effects of bankruptcy,

                                        9

insolvency, reorganization, moratorium, fraudulent conveyance or other laws not
or hereafter in effect relating to creditors' rights generally and general
principles of equity).

            3.02    Authority. Such Seller has all requisite power and authority
and full legal capacity to execute and deliver this Agreement and to perform
his, her or its obligations hereunder (including, without limitation, all right,
power, capacity and authority to sell, transfer, convey and surrender the
Shares, Stock Options and Phantom Rights as provided by this Agreement, free and
clear of all Liens other than Liens imposed by applicable federal and state
securities law restrictions).

            3.03    No Breach. Except as set forth on the attached Equityholders
Authorization Schedule, the execution, delivery and performance of this
Agreement by each Seller and the consummation of the transactions contemplated
hereby do not conflict with or result in any breach of, constitute a default
under, result in a violation of, result in the creation of any Lien upon the
Shares held by such Seller, or require any authorization, consent, approval,
exemption or other action by or notice to any court or other governmental body,
under the provisions of such Seller's governing organizational documents (i.e.,
limited liability company operating agreement, certificate of incorporation,
bylaws), if applicable, or any indenture, mortgage, lease, loan agreement or
other agreement or instrument to which such Seller is bound, or any law,
statute, rule or regulation or order, judgment or decree to which such Seller is
subject.

            3.04    Ownership. Such Seller is the record owner of the number of
Shares, Stock Options and Phantom Rights as set forth opposite his, her or its
name on the attached Equityholders Schedule. On the Closing Date, such Seller
shall transfer to the Buyer good title to such Shares, free and clear of all
Liens, other than applicable federal and state securities law restrictions, and
surrender for cancellation the Stock Options and Phantom Rights in accordance
with the Stock Option Plan and Phantom Rights Plan, respectively.

            3.05    Litigation. Except as set forth on the attached
Equityholders Litigation Schedule, there are no actions, suits or proceedings
pending or, to such Sellers' knowledge, threatened against such Seller, at law
or in equity, or before or by any domestic or foreign, federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, and the Sellers are not subject to any outstanding judgment,
order or decree of any court or governmental body that would prevent or restrict
such Seller's performance of its obligations under this Agreement or the
consummation of the transactions contemplated hereby.

            3.06    Brokerage. There are no claims for brokerage commissions,
finders' fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of the Sellers, except for the fees and expenses of Harris Williams &
Co., which shall be paid by the Buyer (on behalf of the Company and the Sellers)
as a Closing Cost pursuant to Section 1.02(b)(ii).

                                       10

                                   ARTICLE IV

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

            The Company represents and warrants to the Buyer that:

            4.01    Organization and Power. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware, and the Company has all requisite corporate power and authority
necessary to own, lease, license and operate its properties and to carry on its
businesses as now conducted. The Company is qualified and licensed to do
business and is in good standing in each jurisdiction in which the failure to be
so qualified would reasonably be expected to have a Material Adverse Effect.

            4.02    Subsidiaries. Except as set forth on the attached
Subsidiaries Schedule, neither the Company nor any of its Subsidiaries owns or
holds the right to acquire any stock, equity interest, partnership interest or
joint venture interest or other equity ownership interest in any other
corporation, organization or entity. The Subsidiaries Schedule sets forth the
name of each Subsidiary, the jurisdiction of its incorporation or organization
and the Persons owning the outstanding capital stock of such Subsidiary. Each
Subsidiary is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, and each Subsidiary has all
requisite corporate power and authority necessary to own, lease, license and
operate its properties and to carry on its businesses as now conducted.

            4.03    Authorization. No Breach. Except as set forth on the
attached Company Authorization Schedule, the execution, delivery and performance
of this Agreement by the Company and the Sellers and the consummation of the
transactions contemplated hereby do not conflict with or (with or without due
notice or lapse of time or both) result in any material breach of, constitute a
material default under, result in a material violation of, give rise to any
right of termination, cancellation, payment or acceleration under, result in the
creation of any Lien, upon any material assets or properties of the Company or
any of its Subsidiaries, or require any material authorization, consent,
approval, exemption or other action by or notice to any court or other
governmental body, under the provisions of the Company's or any of its
Subsidiaries' governing organizational documents (i.e., limited liability
company operating agreement, certificate of incorporation, bylaws) or any
material Contract, Permit or Law to or by which the Company or any of its
Subsidiaries is subject or bound. Assuming that this Agreement is a valid and
binding obligation of the Buyer, this Agreement constitutes a valid and binding
obligation of the Company, enforceable in accordance with its terms (subject to
the effects of bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other laws not or hereafter in effect relating to creditors'
rights generally and general principles of equity).

            4.04    Capitalization. 215,462.25 Shares are issued and outstanding
and are owned of record by the Sellers in the amounts as set forth on the
Equityholders Schedule. All issued and outstanding shares of capital stock of
each of the Subsidiaries are owned of record and beneficially by the Company or
one of its Subsidiaries, in each case free and clear of all Liens, except as set
forth on the attached Capitalization Schedule. All of the Shares, and the
outstanding shares of capital stock of each of its Subsidiaries, have been duly
authorized and are validly issued, fully paid and nonassessable. Except as set
forth on the Capitalization Schedule,

                                       11

neither the Company nor any Subsidiary has any other capital stock, equity
securities or securities containing any equity features authorized, issued or
outstanding, and there are no agreements, options, warrants or other rights or
arrangements existing or outstanding which provide for the sale, grant or
issuance of any of the foregoing by the Company or any Subsidiary. Except as set
forth on the Capitalization Schedule, there are no rights, subscriptions,
warrants, options, conversion rights or agreements of any kind outstanding to
purchase or otherwise acquire any shares of capital stock or other equity
securities of the Company or any Subsidiary of any kind. Except as set forth on
the Capitalization Schedule, there are no agreements or other obligations
(contingent or otherwise) which require the Company or any Subsidiary to
repurchase or otherwise acquire any shares of the Company's capital stock or
other equity securities.

            4.05    Financial Statements. Attached to the Financial Statements
are true and correct copies of (i) the Company's unaudited consolidated balance
sheets as of April 30, 2005, July 31, 2005 (the "Latest Balance Sheet") and
October 31, 2005, and the related statements of income and cash flow for the
three-, six- and nine-month periods then ended (all of the foregoing statements
referred to herein as the "Unaudited Financial Statements") and (ii) the
Company's audited consolidated balance sheet and statements of income, cash flow
and shareholders' equity for the fiscal years ended January 31, 2003, January
31, 2004 and January 31, 2005 (collectively the "Audited Financial Statements"
and together with the Unaudited Financial Statements, collectively, the
"Financial Statements"). Except as set forth on the attached Accounting
Schedule, the Financial Statements have been based upon the information
contained in the Company's and its Subsidiaries' books and records, have been
prepared in accordance GAAP and present fairly in all material respects the
financial condition, cash flows and results of operations of the Company and its
Subsidiaries as of the times and for the periods referred to therein, subject in
the case of the Unaudited Financial Statements to the absence of footnote
disclosures and other presentation items and changes resulting from normal
year-end adjustments that will not be material in nature or amount.

            4.06    Absence of Certain Developments. Since January 31, 2005,
there has not been any Material Adverse Change. Except as set forth on the
attached Developments Schedule and except as expressly contemplated by this
Agreement, since the date of the Latest Balance Sheet, neither the Company nor
any Subsidiary has:

            (a)     borrowed any amount or incurred or become subject to any
material liabilities, except liabilities incurred in the ordinary course of
business, liabilities under contracts entered into in the ordinary course of
business and borrowings from banks (or similar financial institutions) necessary
to meet ordinary course working capital requirements;

            (b)     mortgaged, pledged or subjected to any Lien, any portion of
its assets, except Liens for current property taxes not yet due and payable;

            (c)     sold, assigned or transferred any portion of its tangible
assets, except in the ordinary course of business;

            (d)     sold, assigned or transferred any material patents,
trademarks, trade names, copyrights, trade secrets or other intangible assets;

                                       12

            (e)     suffered any extraordinary losses or waived any rights of
material value;

            (f)     issued, sold or transferred any of its equity interests or
other equity securities, securities convertible into its equity interests or
other equity securities or warrants, options or other rights to acquire its
equity interests or other equity securities, or any bonds or debt securities;

            (g)     declared or paid any dividends or made any distributions on
the Company's equity interests or other equity securities or redeemed or
purchased any of the Company's equity interests or other equity securities;

            (h)     made any capital expenditures or commitments exceeding
$100,000, individually or $500,000 in the aggregate, per expenditure or
commitment;

            (i)     acquired or agreed to acquire, by merging or consolidating
with, or by purchasing a substantial equity interest in, a substantial portion
of the assets of, or by any other manner, any business or any Person or
organization or division thereof;

            (j)     increased the compensation or benefits of any officer,
director, employee or independent contractor of the Company or any of its
Subsidiaries (except as required by any Employee Benefit Plan as in effect on
the date hereof) or amended any other terms of employment of such persons, in
each case, other than in the ordinary course of business;

            (k)     other than for payments that will constitute Management
Closing Costs hereunder entered into, terminated, amended or modified any
employment agreement, retention agreement, change in control agreement,
severance agreement, or other similar arrangement with or granted any severance
or termination pay to any current or former officer, director, employee or
independent contractor of the Company or any of its Subsidiaries;

            (l)     modified, amended or terminated any Material Contracts;

            (m)     engaged in any Related Party transactions; or

            (n)     entered into any other material transaction, except in the
ordinary course of business.

            4.07    Title to Properties.

            (a)     The real property demised by the leases described on the
attached Leased Real Property Schedule (the "Leases") constitutes all of the
real property leased by the Company and its Subsidiaries (the "Leased Real
Property").

            (b)     The Leases are in full force and effect, and the Company or
the Subsidiary indicated opposite such Lease on such schedule holds a valid and
existing leasehold interest under such Lease, subject only to Permitted
Encumbrances (as hereinafter defined), for the term set forth on the Leased Real
Property Schedule. The Company has made available to the Buyer complete and
accurate copies of each of the Leases, and none of the Leases has been modified,
amended or assigned in any material respect, except to the extent that such
modifications,

                                       13

amendments or assignments are listed on such schedule and copies thereof have
been made available to the Buyer. Neither the Company nor any Subsidiary nor, to
the Knowledge of the Company, any other party thereto, is in default (including
unmatured defaults) in any material respect under any of such Leases.

            (c)     Except as set forth on the attached Owned Real Property
Schedule, neither the Company nor any of its Subsidiaries owns any real
property. The real property described on the attached Owned Real Property
Schedule constitutes all of the real property owned by the Company or any of its
Subsidiaries (the "Owned Real Property"). The Owned Real Property Schedule and
the Leased Real Property Schedule are sometimes hereinafter referred to
collectively as the "Real Property Schedules", and the Owned Real Properties and
the Leased Real Properties are sometimes hereinafter referred to collectively as
the "Real Properties".

            (d)     Either the Company or the Subsidiary specified opposite each
Owned Real Property on the Owned Real Property Schedule owns good, marketable
and insurable title to such Owned Real Property, free and clear of all Liens and
other restrictions or matters affecting title ("Encumbrances"), other than (A)
real estate taxes and installments of special assessments not yet due and
payable, (B) easements, covenants and restrictions of record, (C) utility
easements, building restrictions, zoning restrictions and other easements and
restrictions which are not violated by existing usage of and improvements on
such property, (D) matters which would be disclosed by an accurate survey of
each parcel of real property, (E) public roads and highways, (F) mechanics and
similar statutory Liens arising or incurred in the ordinary course of business
and securing amounts which are not delinquent, or which are being contested in
good faith by appropriate proceedings described on such schedule and for which
adequate reserves are made in the Financial Statements in accordance with GAAP
have been made, and (G) other encumbrances and exceptions set forth on the Real
Property Schedule (the "Permitted Encumbrances").

            (e)     There are no leases, subleases, licenses, concessions or
other agreements granting to any third party or parties the right of use or
occupancy of any portion of any Real Property.

            (f)     There are no outstanding options or rights of first refusal
or first offer to purchase any Real Property, or any portion thereof or interest
therein.

            (g)     With respect to the Owned Real Property and, to the
Knowledge of the Company, with respect to the Leased Real Property, there is not
pending or threatened, any (i) zoning application or proceeding, (ii)
condemnation, eminent domain or taking proceeding, (iii) tax certiorari
proceeding or other tax contest or dispute, or (iv) other claim, action or
proceeding or other matter relating to the interest of the Company or any of its
Subsidiaries in any Real Property (or the interest of the landlord in any Leased
Real Property), or portion of either thereof or interest therein that would
materially adversely affect the ownership, use, occupancy or value thereof.

            (h)     The Company and its Subsidiaries have in full force and
effect all material consents, approvals, registrations, applications,
qualifications, authorizations, certificates (including certificates of
occupancy), filings, franchises, licenses, notices, permits (including

                                       14

zoning permits) and rights necessary for the current use and occupancy by the
Company and the Company Subsidiaries of their respective Real Property and the
conduct by them of the Business thereat, all of which are identified on the Real
Property Schedule (collectively, "Permits") and there has occurred no material
default under any Permit. No representation is given under this clause with
respect to Permits required by Environmental Laws.

            4.08    Tax Matters. Except as set forth on the attached Taxes
Schedule:

            (a)     The Company and each of its Subsidiaries and each affiliated
group (within the meaning of Section 1504 of the Code) or consolidated, combined
or unitary group (under state or local Tax law) of which the Company or any such
Subsidiary or any predecessor of the Company or any such Subsidiary is or has
been a member (each, an "Affiliated Group") have filed all Tax Returns which are
required to be filed by them, each such Tax Return is true, correct and complete
in all material respects and the Company and its Subsidiaries have paid all
Taxes shown as due on such Tax Returns. The Company, its Subsidiaries and each
Affiliated Group have paid all Taxes due from any of them and have withheld and
paid over to the appropriate taxing authority all Taxes that any of them is
required to withhold from amounts paid or owing to any employee, creditor or
other third party. Since the date of the Latest Balance Sheet, the Company has
not incurred any material liability for Taxes other than in the ordinary course
of business.

            (b)     Neither the Company, any Affiliated Group nor any Subsidiary
of the Company has waived any statute of limitations with respect to any Taxes
or agreed to any extension of time with respect to any Tax assessment or
deficiency.

            (c)     No audits or administrative or judicial proceedings are
pending or being conducted, or, to the Knowledge of the Company, are threatened
with respect to the Taxes of the Company, or any of its Subsidiaries or any
Affiliated Group.

            (d)     Neither the Company nor any of its Subsidiaries is liable
for the Taxes of another Person (i) under Section 1.1502-6 of the Treasury
Regulations (or any comparable provisions of state, local or foreign law), (ii)
as a transferee or successor, or (iii) by contract or indemnity. Neither the
Company nor any of its Subsidiaries is a party to any Tax sharing agreement.

            (e)     Neither the Company nor any of its Subsidiaries has made any
payments, and neither the Company nor any of its Subsidiaries is or will become
obligated to make any payments that will be nondeductible under Code Section
280G (or any corresponding provision of state or local income Tax law).

            (f)     No Tax Liens have been filed and no claims are being
asserted with respect to any Taxes of the Company, any Subsidiary or any
Affiliated Group.

            (g)     Neither the Company nor any of its Subsidiaries has been
included in any Affiliated Group other than the Affiliated Group for Federal
income tax purposes of which the Company is the common parent.

                                       15

            (h)     Neither the Company nor any Subsidiary is required to
include in income any adjustment pursuant to Section 481(a) of the Code.

            (i)     Neither the Company, any Affiliated Group nor any Subsidiary
has filed with respect to any item a disclosure statement pursuant to Section
6662 of the Code or any comparable disclosure with respect to foreign, state
and/or local Tax statutes.

            (j)     No Federal income tax audits or other judicial or
administrative proceedings relating to Federal income taxes of the Company, any
Subsidiary of the Company or any Affiliated Group have concluded within the past
three years.

            (k)     In the past five years, neither the Company nor any
Subsidiary has been a party to a transaction that was reported as a
reorganization within the meaning of Code Section 368 or has distributed stock
of a corporation (or has had its own stock distributed) in a transaction that
was reported to qualify under Code Section 355.

            4.09    Material Contracts.

            (a)     The Material Contracts Schedule lists or, if not in writing,
describes in reasonable detail, all Contracts not fully performed to which the
Company or any of its Subsidiaries is party or by which the assets or properties
of the Company or any of its Subsidiaries is bound (i) entered into in the
ordinary course of business and which may not be terminated by the Company or
any of its Subsidiaries with less than 90 days prior notice, (ii) for the
purchase by any of them of any materials, supplies, equipment or services for
more than $250,000 per year, (iii) for the sale of any product or service for
more than $250,000 per year, (iv) for the purchase or improvement of any fixed
or capital assets or any business for more than $250,000, (v) for the sale of
any fixed or capital assets or any business for more than $250,000 as to any
individual or series of related items; (vi) all agreements with current and
former employees, officers and directors for more than $75,000 per year, (vii)
all Contracts relating to any strategic alliance or similar arrangement, (viii)
all employment, management, consulting, independent contractor, subcontractor,
retainer or other similar type of Contract under which services are provided by
fees or fees are paid to any person and agreements or commitments to enter into
the same, (ix) all Contracts of which the benefits of which will be increased,
or the vesting of the benefits will be accelerated, by the occurrence of any
transactions contemplated by this Agreement other than those for which such
obligations will constitute Management Closing Costs hereunder, (x) any fidelity
or surety bond or completion bond, (xi) any Contract providing for
indemnification (other than ordinary course of business Contracts with
provisions for indemnification) or guaranty, (xii) any Contract containing any
covenant limiting the freedom of the Company or any Subsidiary (or any of their
current or future Affiliates) to solicit for employment or hire any Person for
employment by the Company or any of its Subsidiaries, (xiii) all mortgages,
indentures, loans or credit agreements, security agreements, guaranties or other
agreements or instruments relating to the borrowing of money or extension of
credit or to mortgaging, pledging or otherwise placing a Lien on any portion of
the Company's or any of its Subsidiaries' assets, and any other letters of
credit, financing, surety, bonding or similar arrangements pursuant to which the
Company or any of its Subsidiaries secures any of its obligations, including
insurance obligations, (xiv) all Contracts with Related Parties, (xv) all
Intellectual Property Contracts (other than for the use of computer software
which is generally

                                       16

commercially available "off the shelf"), (xvi) all Hedging Agreements, (xvii)
all distribution, joint marketing or development Contracts, (xviii) all
collective bargaining agreements or Contracts with any labor union; (xix) all
leases or Contracts under which the Company or any of its Subsidiaries is lessee
of, or holds or operates any personal property owned by any other party, for
which the annual rental exceeds $100,000, (xx) all Contracts with Equityholders
other than those for which the obligations thereunder would constitute
Management Closing Costs, and (xxi) all joint venture, partnership agreement,
limited liability company agreement and any other similar Contract involving a
sharing of profits or losses, costs or liabilities by the Company or any of its
Subsidiaries with any other Person. The Contracts required to be included on the
Contracts Schedule pursuant to clauses (i)-(xxi) above are collectively referred
to herein as the "Material Contracts."

            (b)     The Buyer either has been supplied with, or has been given
access to, a true and correct copy of all written contracts which are referred
to on the Contracts Schedule, together with all material amendments, waivers or
other changes thereto.

            (c)     Neither the Company nor any Subsidiary is in material breach
or default under any Material Contract and to the Knowledge of the Company, no
other party thereto is in material breach or default under any such Material
Contract.

            (d)     Each Material Contract is in full force and effect and
constitutes a legal, valid and binding obligation of the Company (subject to the
effects of bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other laws not or hereafter in effect relating to creditors'
rights generally and general principles of equity).

            (e)     No party to any Material Contract has given the Company or
any Subsidiary (and neither the Company nor any Subsidiary has given its
counter-party) written notice of its intention to cancel, terminate or fail to
renew any Material Contract.

            4.10    Intellectual Property. Except as set forth on the
Intellectual Property Schedule:

            (a)     the attached Intellectual Property Schedule sets forth all
Intellectual Property (other than Trade Secrets) which is owned by the Company
or any of its Subsidiaries and which is Registered or material to the Business.

            (b)     the Company and its Subsidiaries, as the case may be, own
and possess all right, title and interest in and to, or possess the right to
use, pursuant to a license, sublicense, agreement or permission, the
Intellectual Property used in the operation of the Business as presently
conducted;

            (c)     the Company or its Subsidiaries has good title to each item
of Intellectual Property owned by it, free and clear of any Lien other than
Permitted Encumbrances;

            (d)     there are no actions, suits or proceedings (collectively,
"Suits") pending or, to the Knowledge of the Company, threatened by or against
the Company or any of its Subsidiaries that involve claims concerning the
infringement or other violation, validity, enforceability, ownership or right to
use any Intellectual Property, and, to the Knowledge of the

                                       17

Company, neither the Company nor the Subsidiaries is currently infringing or
misappropriating the Intellectual Property of any other Person and no other
Person is currently infringing or misappropriating the Intellectual Property of
the Company or any of its Subsidiaries;

            (e)     the Company or a Subsidiary has timely made all filings,
payments and ownership recordations with the appropriate foreign and domestic
agencies required to maintain in subsistence all Registered Intellectual
Property owned by the Company or a Subsidiary, and, to the Knowledge of the
Company, all material Intellectual Property owned by the Company or any of its
Subsidiaries is valid and enforceable; and

            (f)     the Company and its Subsidiaries have taken reasonable
measures consistent with industry practice to protect the secrecy,
confidentiality and value of all Trade Secrets used in the Business
(collectively, "Business Trade Secrets"), and to the Knowledge of the Company,
no unauthorized disclosure of any Business Trade Secrets has been made.

            4.11    Litigation. Except as set forth on the attached Litigation
Schedule, (i) there are no actions, suits or proceedings pending or, to the
Knowledge of the Company, threatened against the Company or any Subsidiary, (ii)
there are no pending or threatened actions, suits or proceedings brought by the
Company or any of its Subsidiaries, in each case, at law or in equity, or before
or by any Governmental Authority and (iii) neither the Company nor any
Subsidiary is subject to any outstanding judgment, order or decree of any court
or Governmental Authority.

            4.12    Brokerage. There are no claims for brokerage commissions,
finders' fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of the Company, any Subsidiary or the Equityholders, except for the
fees and expenses of Harris Williams & Co., which shall be paid by the Buyer (on
behalf of the Company and the Equityholders) as a Closing Cost pursuant to
Section 1.02(b)(ii).

            4.13    Governmental Consents, etc. Except for the applicable
requirements of the HSR Act and except as set forth on the Governmental Consents
Schedule, no material permit, consent, approval or authorization of, or
declaration to or filing with, any governmental or regulatory authority is
required in connection with any of the execution, delivery or performance of
this Agreement by the Company or the Sellers or the consummation by the Company
or the Sellers of any other transaction contemplated hereby.

            4.14    Employee Benefit Plans. The attached Employee Benefits
Schedule contains a true and complete list of each employee benefit plan as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and each deferred compensation, stock option, restricted
stock, stock purchase, severance or termination pay, employment, consulting,
retention, change in control, bonus or incentive plan, program, agreement or
arrangement (other than those for which such obligations will constitute
Management Closing Costs hereunder) and each other material employee benefit
plan, program, agreement or arrangement, whether or not subject to ERISA and
whether or not written (including any funding mechanism therefor now in effect
or required in the future) that the Company or any of its Subsidiaries sponsors,
maintains, contributes to or is required to

                                       18

contribute to, or has any liability with respect to any current or former
employee, leased employee, director, officer, shareholder or independent
contractor of the Company or any of its Subsidiaries (the "Employee Benefit
Plans"). The Company has made available to Buyer true and complete copies of
each Employee Benefit Plan or written summaries of any unwritten material
Employee Benefit Plan and, to the extent applicable, (i) the summary plan
description; (ii) the most recent determination letter received from the
Internal Revenue Service; (iii) the most recent Form 5500 (including all
schedules); (iv) the two most recent audited financial statements and actuarial
valuation reports; and (v) any related trust agreement or other funding
instrument. Each Employee Benefit Plan has been maintained in all material
respects in compliance with its terms and with the requirements prescribed by
any and all laws applicable to such Plan, including the Code and ERISA. No
notice has been issued by any governmental authority questioning or challenging
such compliance. Each Employee Benefit Plan which is intended to be qualified
within the meaning of Section 401(a) of the Code has received a favorable
determination or opinion letter as to its qualification, and to the Knowledge of
the Company, nothing has occurred since the date of such determination, whether
by action or failure to act, that could reasonably be expected to cause the loss
of such qualification. None of the Employee Benefit Plans are subject to Title
IV of ERISA, and neither the Company nor any of its Subsidiaries has any
liability or obligation with respect to any employee benefit plan subject to
Title IV of ERISA. No event has occurred and no. condition exists that would
subject the Company or any of its Subsidiaries, by reason of its affiliation
with any member of its "Controlled Group" (defined as any organization which is
a member of a controlled group of organizations within the meaning of Sections 4
14(b), (c), (m) or (o) of the Code), to any Tax, fine, Lien or penalty imposed
by ERISA or the Code. Except as set forth on the Employee Benefits Schedule,
neither the Company nor any of its Subsidiaries has incurred any current or
projected liability in respect of post-employment or post-retirement health or
welfare benefits for current, former or retired employees of the Company or any
of its Subsidiaries, except as required to avoid an excise tax under Section
4980B of the Code. With respect to any Employee Benefit Plan, no actions, suits
or claims (other than routine claims for benefits in the ordinary course) are
pending or, to the Knowledge of the Company, threatened and no facts or
circumstances exist that could reasonably be expected to give rise to any such
actions, suits or claims. Except as set forth on the Employee Benefits Schedule,
the consummation of the transactions contemplated by this Agreement, either
alone or in combination with another event, will not increase any benefits or
result in the acceleration or creation of any rights of any person to benefits
under any Employee Benefit Plan (including but not limited to, the acceleration
of the vesting or exercisability of any stock options, the acceleration of the
accrual or vesting of any benefits under any Employee Benefit Plan, or the
acceleration or creation of any rights under any severance or change in control
agreement).

            4.15    Compliance with Laws. Since January 31, 2001, the Company
and each Subsidiary is and has been in compliance in all material respects with
all applicable laws, statutes, ordinances, codes, Permits, rules, regulations or
orders or decrees (collectively, "Laws") of any foreign, federal, state or local
government or governmental authority, agency, department, board, bureau,
commission or instrumentality or any political subdivision, domestic or foreign,
of any thereof, any entity exercising executive, legislative, judicial,
regulatory or administration functions of or pertaining to government, or any
court tribunal or arbitrator(s) of competent jurisdiction, and any governmental
or non-governmental self-regulatory organization, agency or authority,
(collectively, "Governmental Authorities"). This Section 4.15 does not relate to

                                       19

environmental matters, it being the intent of the parties hereto that
environmental matters are the subject of Section 4.16.

            4.16    Environmental Compliance. Except as set forth on the
Environmental Compliance Schedule:

            (a)     The operations of the Company and its Subsidiaries comply in
all material respects with all applicable Environmental Laws;

            (b)     The Company and its Subsidiaries have obtained and are in
compliance in all material respects with all necessary Permits that are required
under Environmental Laws to operate the Real Properties and business of the
Company and its Subsidiaries as operated on the Closing Date;

            (c)     There has been no Release of Hazardous Materials at any of
the Real Property owned or operated by the Company or any of its Subsidiaries
or, to the Knowledge of the Company, by a predecessor in interest, or to the
Knowledge of the Company, at any disposal or treatment facility which received
Hazardous Materials generated by the Company or its Subsidiaries or any
predecessor in interest, which, in each case, would reasonably be expected to
result in material Environmental Liabilities;

            (d)     No Environmental Claims are pending against the Company or
any of its Subsidiaries or, to the Knowledge of the Company, against any
predecessor in interest, nor to the Company's Knowledge, has any notice of any
threatened or pending Environmental Claim against the Company, any of its
Subsidiaries or any of their respective predecessors in interest been received
by the Company or any of its Subsidiaries;

            (e)     To the Knowledge of the Company, no Environmental Claims are
pending against any facilities that received Hazardous Materials generated by
the Company or any of its Subsidiaries or, to the Knowledge of the Company
facilities that received Hazardous Materials generated by any predecessor in
interest;

            (f)     The Company has made available to Buyer true and complete
copies of all environmental reports, studies, investigations or material
correspondence regarding any material Environmental Liabilities relating to the
Company or its Subsidiaries or "Recognized Environmental Conditions" as that
term is defined by ASTM E 1527-97, at any of the Real Properties, to the extent
the foregoing are in the possession, custody or reasonable control of the
Company or its Subsidiaries; and

            (g)     The representations and warranties contained in this Section
4.16 constitute the sole and exclusive representations and warranties of the
company in connection with environmental matters.

            4,17    Undisclosed Liabilities. Neither the Company nor any
Subsidiary has any liability or obligation (whether accrued, absolute,
contingent, unasserted or otherwise) of any nature, of a type required by GAAP
to be reflected on a consolidated balance sheet, including indebtedness for
borrowed money or guarantees, except for (a) liabilities set forth on the Latest
Balance Sheet, (b) liabilities incurred in the ordinary course of business since
the date of the

                                       20

Latest Balance Sheet that do not exceed $50,000 individually or $100,000 in the
aggregate, and (c) liabilities disclosed on the Developments Schedule.

            4.18    Labor and Employment Matters. Neither the Company nor any of
its Subsidiaries is a party to or bound by any collective bargaining agreement
or any other agreement with a labor union. No employees of the Company or any of
its Subsidiaries, in their capacity as such, are represented by any labor
organization; no labor organization or group of employees of the Company or any
of its Subsidiaries has made a pending demand in writing for recognition or
certification to the Company or any of its Subsidiaries and there are no
representation or certification proceedings or petitions presently pending or
threatened, to be brought or filed with the National Labor Relations Board or
any other labor relations tribunal or authority relating to the Company or any
of its Subsidiaries. To the Knowledge of the Company, there are no organizing
activities involving the Company or any of its Subsidiaries pending with any
labor organization or group of employees of the Company or any of its
Subsidiaries. There is no pending or, to the Knowledge of the Company,
threatened, labor dispute, strike, slowdown, work stoppage or lockout at the
Company or any of its Subsidiaries. No event giving rise to the requirement that
notice be given to any employee of the Company or any of its Subsidiaries under
the Worker Adjustment and Retraining Notification Act or under any similar state
or local Law has occurred or been announced during the 90-day period ending on
the date of this Agreement or any longer period required by any local Law.

            4.19    Suppliers and Customers. Set forth on the Suppliers and
Customers Schedule is a true and correct list of the ten suppliers and the ten
customers that accounted for the largest dollar volume of purchases and sales,
respectively, by the Company and its Subsidiaries during each of (i) the twelve
month period immediately preceding the date hereof and (ii) the fiscal year
ending January 31, 2005 (the "Material Suppliers and Customers"). To the
Knowledge of the Company, none of the Material Suppliers and Customers has
cancelled or otherwise terminated, or threatened in writing to cancel or
otherwise terminate, its relationship with the Company or any of its
Subsidiaries during the past twelve months. Neither the Company nor any of its
Subsidiaries has received any written notice during the past twelve months that
any of the Material Suppliers and Customers intends to cancel or otherwise
materially adversely modify its relationship with the Company or any of its
Subsidiaries.

            4.20    Inventory. The aggregate value at which the inventory,
including the inventory reserves, is carried in the Financial Statements, and
will be carried in the Closing Balance Sheet and on the books of the Company as
of the Closing Date, reflects and will reflect the normal and consistent
inventory valuation method of the Company of valuing inventory at the lower of
cost or market, all in accordance with GAAP and includes appropriate allowances
for obsolescence.

            4.21    Transactions with Related Persons. Except as set forth on
the Related Persons Schedule:

            (a)     Except for Contracts by and between the Company and its
Subsidiaries or Contracts for which the obligations thereunder will constitute
Management Closing Costs, no Contract or transaction between the Company or any
of its Subsidiaries and (i) any director, officer, holder of equity interests
(including Phantom Rights) in the Company, its Subsidiaries or

                                       21

any of their respective Affiliates (such persons in (i) being referred to herein
as an "Insider"), or (ii) any relative or spouse (or relative of such spouse) of
any Insider (such persons in (ii) being referred to herein as a "Related Party")
has been entered into in the past three years;

            (b)     No Insider and, to the Knowledge of the Company, no Related
Party is a director or officer of, or has any direct or indirect interest in
(other than the ownership of not more than 5% of the publicly traded shares of),
any Person which is a supplier, vendor, landlord, sales agent or competitor of
the Company or any of its Subsidiaries;

            (c)     No Insider and, no Related Party owns or has any interest
in, directly or indirectly, in whole or in part, any tangible or intangible
property used in the conduct of the Business;

            (d)     Other than expense advance reimbursements not exceeding
$25,000 in the aggregate, no Insider and, to the Knowledge of the Company no
Related Party owes any money or other amounts to, nor is any Insider or, to the
Knowledge of the Company, any Related Party owed any money or other amounts
(other than obligations that would constitute Closing Costs) by, the Company or
any of its Subsidiaries;

            (e)     Neither the Company nor any of its Subsidiaries has,
directly or indirectly, guaranteed or assumed any Indebtedness for the benefit
of any Insider or, to the Knowledge of the Company, any Related Party; and

            (f)     Neither the Company nor any of its Subsidiaries has made any
loans, payments or transfers of the Company's or any of its Subsidiaries' assets
to any Insider or, to the Knowledge of the Company, to any Related Party.

            4.22    Sales Practices; Accounts Receivable.

            (a)     Since the date of the Latest Audited Financial Statement,
the Company and each of its Subsidiaries have operated in the Ordinary course of
business and have not adversely modified payment terms for accounts receivable
in such a manner as would reasonably be expected to result in an accounts
receivable portfolio that, in amount or character, is materially and adversely
different than that maintained by the Company and each of its Subsidiaries in
the ordinary course of business. All accounts, notes and other receivables
reflected in the Financial Statements have arisen in the ordinary course of
business consistent with past practice, arise out of bona fide sales, represent
valid obligations to the Company or any of its Subsidiaries.

            (b)     The Company has made available to the Buyer a true, correct
and complete copy of the Company's standard written warranty or warranties for
sales of any and all products distributed or sold by the Company or any of its
Subsidiaries (the "Products") and true and complete copies of the warranty
provisions of the purchase orders of the Company's top 10 customers and, except
as stated therein, as imposed by applicable Law or as set forth on the Product
Warranty Schedule, there are no warranties, Contractual commitments or
Contractual obligations with respect to the return, repair or replacement of
Products sold to the top 10 customers. Except as set forth on the Product
Warranty Schedule, to the Knowledge of the Company, there are no defects in
design, construction or manufacture of Products that would

                                       22

reasonably be expected to create an unusual risk of injury to persons or
property, and, to the Knowledge of the Company, no facts or conditions exist
that would reasonably be expected to result in a new Product recall requirement.

            (c)     Except as set forth on the Product Warranty Schedule, to the
Knowledge of the Company: (i) there is no action by or before any Governmental
Entity pending or, threatened against or involving the Company or any of its
Subsidiaries concerning any Product that is alleged to have been manufactured,
shipped, sold, marketed, distributed, processed or merchandised by the Company
or any of its Subsidiaries to have a material defect of any kind, in
manufacture, processing, design or otherwise, including without limitation any
failure to warn of the defect; and (ii) there has not been any Product recall or
post-sale warning by the Company or any of its Subsidiaries since January 31,
2001 concerning any Product that was manufactured, shipped, sold, marketed,
distributed, processed or merchandised by the Company or any of its
Subsidiaries.

            4.23    Condition of Assets. The machinery, equipment, personal
property and other tangible assets that the Company and its Subsidiaries own and
lease (including building structures) are in reasonable operating condition and
repair for the purposes for which they are used (in each case subject to normal
wear and tear) and are owned, leased or licensed by the Company or one of its
Subsidiaries free and clear of all Liens, other than Permitted Encumbrances.

            4.24    Insurance.

            (a)     The Insurance Schedule lists each insurance policy of the
Company or any of its Subsidiaries and each insurance policy acquired by or on
behalf of the Company or any of its Subsidiaries to which any of their
respective officers, directors or employees has been a party, a named insured,
or otherwise is the beneficiary of coverage at any time with respect to claims
that have occurred within the past two years (the "Insurance Policies"). All
such Insurance Policies are in full force and effect on the date hereof, and all
due premiums with respect thereto covering all periods up to and including the
date hereof have been timely paid in full and the Company and its Subsidiaries
are otherwise in material compliance with the terms and provisions thereof.

            (b)     As of the date hereof, neither the Company nor any of its
Subsidiaries has received either a written notice of cancellation or non-renewal
of any Insurance Policy, and, to the Knowledge of the Company, no basis exists
for early termination thereof on the part of the insurer. To the Knowledge of
the Company, neither the Company nor any of its Subsidiaries have failed to give
any notice or present any claim under any Insurance Policy in due and timely
fashion, and there are no outstanding unpaid claims under any Insurance Policy.
To the Knowledge of the Company, no facts or circumstances exist which would
relieve the insurer under any Insurance Policy of its obligation to satisfy in
full any valid claim of the Company or any of its Subsidiaries thereunder.
Neither the Company nor any of its Subsidiaries has received any notice of
cancellation or non-renewal of any Insurance Policy. To the Knowledge of the
Company, neither the Company nor any of its Subsidiaries has been refused any
insurance (including, without limitation, insurance against loss due to
terrorist acts) with respect to its assets, properties or businesses, nor has
any coverage been limited by an insurance carrier to

                                       23

which any of the Company or any of its Subsidiaries has applied for any such
insurance or with which the Company or any of its Subsidiaries have carried
insurance during the last three years.

            (c)     No claim is outstanding under any of the Insurance Policies,
and to the Knowledge of the Company, no claim is pending under any of the
Insurance Policies relating to the Company and its Subsidiaries for which
coverage has been questioned, denied or disputed by the underwriters under such
Insurance Policies.

            (d)     True, correct and complete copies of each Insurance Policy
have previously been delivered to the Buyer (including without limitation copies
of all written amendments, supplements and other modifications thereto or
waivers of rights thereunder).

            4.25    Foreign Corrupt Practices Act Compliance. Neither the
Company nor any of its Subsidiaries, nor any of their respective officers,
directors, employees, consultants or agents acting on their behalf has made,
directly or indirectly, any payment or promise to pay, or gift or promise to
give or authorized such a promise or gift, of any money or anything of value,
directly or indirectly, to: (i) any foreign official (as such term is defined in
the of 1977, as amended (the "FCPA")) for the purpose of influencing any
official act or decision of such official or inducing him or her to use his or
her influence to affect any act or decision of a foreign government, or any
agency or subdivision thereof; or (ii) any foreign political party or official
thereof or candidate for foreign political office for the purpose of influencing
any official act or decision of such party, official or candidate or inducing
such party, official or candidate to use his, her or its influence to affect any
act or decision of a foreign government or agency or subdivision thereof, in the
case of both (i) and (ii) above in order to assist the Company or any of its
Subsidiaries to obtain or retain business for or direct business to the Company
or any of its Subsidiaries and under circumstances which would subject the
Company or any of its Subsidiaries to liability under the FCPA.

            4.26    Indebtedness. Except as set forth in the Indebtedness
Schedule, neither the Company nor any of its Subsidiaries has any Indebtedness.

                                    ARTICLE V

                   REPRESENTATIONS AND WARRANTIES OF THE BUYER

            The Buyer represents and warrants to the Sellers and the Company
that:

            5.01    Organization and Corporate Power. The Buyer is a limited
liability company duly formed, validly existing and in good standing under the
laws of the State of Delaware, with full power and authority to enter into this
Agreement and perform its obligations hereunder.

            5.02    Authorization. The execution, delivery and performance of
this Agreement by the Buyer and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all requisite
action, and no other proceedings on its part are necessary to authorize the
execution, delivery or performance of this Agreement. Assuming that this
Agreement is a valid and binding obligation of the Sellers and the Company, this
Agreement constitutes a valid and binding obligation of the Buyer, enforceable
in accordance with its terms

                                       24

(subject to the effects of bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other laws not or hereafter in effect relating to
creditors' rights generally and general principles of equity).

            5.03    No Violation. The Buyer is not subject to or obligated under
its certificate of formation, any applicable Law or any material Contract or
instrument, or any Permit, or subject to any order, writ, injunction or decree,
which would be breached or violated in any material respect by the Buyer's
execution, delivery or performance of this Agreement.

            5.04    Governmental Authorities; Consents. Except for the
applicable requirements of the HSR Act, the Buyer is not required to submit any
notice, report or other filing with any Governmental Authority in connection
with the execution, delivery or performance by it of this Agreement or the
consummation of the transactions contemplated hereby. No consent, approval or
authorization of any Governmental Authority or any other party or Person is
required to be obtained by the Buyer in connection with its execution, delivery
and performance of this Agreement or the consummation of the transactions
contemplated hereby.

            5.05    Litigation. There are no actions, suits or proceedings
pending or, to the Buyer's knowledge, threatened against or affecting the Buyer
at law or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, which would materially and adversely affect the Buyer's
performance under this Agreement or the consummation of the transactions
contemplated hereby.

            5.06    Brokerage. There are no claims for brokerage commissions,
finders' fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of the Buyer for which the Sellers (in their capacity as such) will be
responsible.

            5.07    Investment Representation. The Buyer is purchasing the
Shares for its own account with the present intention of holding such securities
for investment purposes and not with a view to or for sale in connection with
any public distribution of such securities in violation of any federal or state
securities laws.

            5.08    Financing. The Buyer or an Affiliate of the Buyer has
received (i) an executed commitment letters from each of (i) Bear, Stearns & Co.
Inc. and Bear Steams Corporate Lending, Inc. and (ii) GE Commercial Finance,
committing, subject to the terms and conditions therein, to provide an aggregate
of up to $250 million of debt financing to the Buyer (collectively, the "Debt
Commitment Letter") and (ii) an executed commitment letter from Castle Harlan
Partners IV, L.P., committing, subject to the terms and conditions therein, to
provide equity financing of up to $67.5 million to the Buyer (the "Equity
Commitment Letter"). True and correct copies of the Debt Commitment Letter and
the Equity Commitment Letter are attached hereto as Exhibit E. Assuming the
financings contemplated by the Debt Commitment Letter and the Equity Commitment
Letter are consummated in accordance with their terms, the Buyer will have
sufficient funds to pay (i) the Initial Purchase Price, (ii) to repay the
Indebtedness and the Closing Costs of the Company on the Closing Date as
contemplated hereby, and (iii) to pay all of its related fees and expenses.

                                       25

            5.09    Solvency. Assuming the Company's representations and
warranties contained in Article IV are true and correct immediately after giving
effect to the transactions contemplated by this Agreement and the Company has
complied with its covenants hereunder, the Company and each of its Subsidiaries
shall be able to pay their respective debts as they become due and shall own
property which has a fair saleable value greater than the amounts required to
pay their respective debts (including a reasonable estimate of the amount of all
contingent liabilities). Assuming the Company's representations and warranties
contained in Article IV are true and correct immediately after giving effect to
the transactions contemplated by this Agreement and the Company has complied
with its covenants hereunder, the Company and each of its Subsidiaries shall
have adequate capital to carry on their respective businesses. No transfer of
property is being made and no obligation is being incurred in connection with
the transactions contemplated by this Agreement with the intent, to hinder,
delay or defraud either present or future creditors of the Company and its
Subsidiaries.

                                   ARTICLE VI

                      COVENANTS OF THE COMPANY AND SELLERS

            6.01    Conduct of the Business.

            (a)     From the date hereof until the Closing Date, the Company
shall carry on its and its Subsidiaries' respective businesses according to
their ordinary and usual course of business and substantially in the same manner
as heretofore conducted; provided that the Company may use all available cash to
repay any Indebtedness prior to the Closing.

            (b)     From the date hereof until the Closing Date, except as
otherwise provided for by this Agreement or consented to in writing by the
Buyer, the Company shall not and shall not permit any Subsidiary to (i) issue,
sell or deliver any of its capital stock or any of its Subsidiary's capital
stock or issue or sell any securities convertible into, or options with respect
to, or warrants to purchase or rights to subscribe for, any of its capital stock
or any of its Subsidiary's capital stock; (ii) effect any recapitalization,
reclassification, equity dividend, equity split or like change in its or any
Subsidiary's capitalization; (iii) amend its or any Subsidiary's governing
organizational documents; (iv) declare or pay any dividends or make any
distributions with respect to the Company's capital stock; (v) make any
redemption or purchase of any of the Company's capital stock; (vi) enter into
any Contract in excess of $250,000 or that has a term of, or requires the
performance of any obligations by the Company or its Subsidiaries over a period
in excess of, one year or that would otherwise constitute a Material Contract or
for which the obligations thereunder would constitute Management Closing Costs;
(vii) engage in any transactions with any Related Party that is not terminable
at will by the Company or its Subsidiaries, without notice, penalty or premium
or for which the obligations thereunder would constitute Management Closing
Costs; (viii) amend in any respect any Material Contract that would materially
and adversely affect the use and enjoyment of such Contract by the Buyer, or
terminate any of the Material Contracts (except with respect to purchase orders
or termination of Material Contracts caused by the termination or default of any
party to such Contracts other than the Company or its Subsidiaries), or waive,
settle, modify, compromise or cancel any debt or material right, claim or
privilege arising under any Material Contract; (ix) except in the ordinary
course of business consistent with past practice, or except as required by Law
or the terms of any

                                       26

existing Contract, increase the salary, wage, rate of compensation or benefits
of, any current or former employee, consultant or director of the Company or its
Subsidiaries or enter into any Contract or other binding commitment in respect
of any such increase, or amend, adopt or terminate any Plan covering current or
former employees, consultants or directors of the Company or its Subsidiaries or
enter into any negotiation in respect of or enter into any collective bargaining
agreement covering employees of the Company or its Subsidiaries or grant any
equity or equity based awards; provided, that with respect to any individual,
such ordinary course increases shall not exceed seven percent (7%) of such
individual's annual base salary; (x) hire, fire promote or otherwise change the
employment status of any employees with an annual base salary in 2005 equal to
or greater than $75,000, any officers or directors; (xi) incur by or on behalf
of the Company or any of its Subsidiaries of any material obligations or
material liabilities (including Indebtedness), whether absolute, accrued,
contingent or otherwise (including liabilities as a guarantor or otherwise with
respect to obligations of others), other than liabilities and obligations
incurred in the ordinary course of business consistent with past practice; (xii)
change any of its accounting methods, principles or practices, except as may be
required by GAAP, (xiii) make or change any Tax election, change any annual Tax
accounting period, adopt or change any method of Tax accounting, file any
amended Return, enter into any closing agreement, settle any tax claim or
assessment, surrender any right to claim a Tax refund, consent to any extension
or waiver of the limitation period applicable to any Tax claim or assessment, if
any such action could reasonably be expected to have the effect of materially
increasing the Tax liability of the Company, any Subsidiary of the Company, the
Buyer or any Affiliate of the Buyer in any Post-Closing Tax Period, (xiv) sell,
lease, transfer, distribute or otherwise dispose of or abandon any of its
material property or assets; (xv) enter into, modify or terminate, or commit any
act or permit or suffer to occur any circumstance which would constitute a
default under any material Permits or Material Contracts; (xvi) cause, permit,
allow or suffer any of the assets of the Company or any Subsidiary to violate
any Law or to become subjected to any Lien, other than permitted Encumbrances,
or (xvii) agree to take any of the foregoing actions. For the avoidance of
doubt, nothing herein shall limit or restrict the Company's ability to use cash
to pay down the balance of any Indebtedness prior to the Closing; provided that
any such paydown of Indebtedness shall not reduce the actual cash on the
Company's books below $100,000.

            6.02    Transaction Proposal. Until the Closing Date, the Company
and the Equityholders shall not, directly or indirectly, solicit or engage in
discussion with third parties, initiate, entertain or respond to offers,
inquiries, proposals or discussions, or enter into any agreement involving any
transaction that has as its purpose a business combination involving or
disposing of the whole or part of the Company or any of its Subsidiaries or any
other transaction that would make the transactions contemplated by this
Agreement infeasible or impractical (each a "Proposal") or provide any
information to any Person or any of such Person's advisors or prospective
lenders regarding the Company or its Subsidiaries in the context involving a
potential Proposal or the transactions contemplated thereby. For purposes of
this Agreement, non-solicitation shall include, but not be limited to, any
proposed or actual (a) sale, merger, consolidation or similar transaction
involving the Company or its Subsidiaries, (b) sale, lease or other disposition,
directly or indirectly, by merger, consolidation, share exchange or otherwise,
of any assets or properties of the Company or its Subsidiaries representing 10%
of the consolidated assets, revenues, earnings before interest, tax,
depreciation and amortization or profits of the Company or such Subsidiaries,
(c) issuance, sale or other disposition by the Company or any of its
Subsidiaries (including by way of merger, consolidation, share exchange

                                       27

or any similar transaction) of any interest or securities (or options, rights or
warrants to purchase, or securities convertible into, such securities)
representing 10% or more of the votes associated with the Shares, (d)
recapitalization, restructuring, liquidation, dissolution or other similar type
of transaction with respect to the Company or any Subsidiary involving a third
party or (e) transactions which are similar in form, substance or purpose to any
of the foregoing transactions. In the event the Sellers, the Company or any of
its Subsidiaries or any of their respective representatives receive any such
Proposal, such recipient will immediately inform the Buyer and provide the Buyer
with the details thereof, including a copy of any Proposal that is in writing.

            6.03    Non-Competition; Non-Solicitation. For a period of two (2)
years after the Closing Date, each of the Management Equityholders shall not
engage in any business that is competitive with the Business anywhere in the
world. For a period of two (2) years after the Closing Date, each of the Sellers
shall not, and shall cause his or its Affiliates not to, solicit for employment
or hire any of the employees of the Company or any of its Subsidiaries. Each of
the Sellers acknowledges that the Buyer will be irrevocably damaged if such
covenant is not specifically enforced. Accordingly, each Seller agrees that, in
addition to any other relief to which the Buyer may be entitled, the Buyer would
be entitled to seek and obtain injunctive relief (without the requirement of any
bond) from a court of competent jurisdiction for the purposes of restraining the
applicable Seller from any actual or threatened breach of such covenant.

            6.04    Access to Books and Records.

            From the date hereof until the Closing Date, the Company shall
provide the Buyer, the Buyer's lenders and their respective authorized
representatives. (the "Buyer's Representatives") with full access at all
reasonable times and upon reasonable notice to the offices, properties,
personnel, books and records of the Company and its Subsidiaries in order for
the Buyer to have the opportunity to make such investigation as it shall
reasonably desire to make of the affairs of the Company and its Subsidiaries,
including conducting Phase I environmental site assessments provided that any
such environmental site assessments shall be conducted under the supervision of
Company personnel and shall not unreasonably interfere with the operation of the
Company's business. The Buyer acknowledges that it shall be bound by the
Confidentiality Agreement, dated June 15, 2005, between the Company and Castle
Harlan IV, L.P. (the "Confidentiality Agreement") in accordance with the terms
thereof. Notwithstanding the foregoing, the Buyer, Bear Steams and any other
Person arranging the financing contemplated by the Debt Commitment Letter may
disclose any and all matters customarily disclosed in documents relating to the
financing of such acquisition, including any offering memorandum or prospectus
relating to the issuance of debt securities and/or any "bank book" related to
credit facilities.

            6.05    Financing.

            (a)     The Company shall take commercially reasonable action as
shall be reasonably requested by the Buyer or otherwise customary in order to
enable the Company, and, if applicable, one or more of its Affiliates as of the
Closing, to consummate, simultaneously with the Closing, an underwritten "high
yield" debt offering (the "Offering") to "qualified institutional buyers" within
the meaning of Rule 144A under the Securities Act. Without limiting the
foregoing, the Company shall (i) together with the Buyer, assist in the
preparation of an offering

                                       28

memorandum, including, without limitation, any pro forma financial statements
and the "Management's Discussion and Analysis of Financial Condition and Results
of Operations" section to be included therein (in accordance with the
requirements of Item 303 of Regulation S-K of the Securities Act), (ii) respond
in a reasonably prompt fashion to any diligence inquiries of the underwriters of
the Offering, (iii) make its officers and employees reasonably available to
participate in diligence sessions, drafting sessions and the road show for the
Offering and (iv) cause its independent auditors to issue a customary comfort
letter to the underwriters of the Offering. In addition to the foregoing, the
Company shall use commercially reasonable efforts to furnish the following
consolidated financial statements of the Company and its Subsidiaries, each in a
form meeting the requirements of GAAP and Regulation S-X of the Securities Act
of 1933, as amended ("Regulation S-X"): (i) the audited consolidated balance
sheets as of January 31, 2004 and January 31, 2005, together with the related
audited consolidated statements of income, cash flow and shareholders' equity
for the twelve-month periods ended January 31, 2003, January 31, 2004 and
January 31, 2005, together with unqualified reports thereon issued by
PricewaterhouseCoopers LLP (the "Company's Independent Auditors") (collectively,
"Historical Audited S-X Financial Statements"), (ii) the unaudited consolidated
balance sheets as of October 31, 2005 and as of October 31, 2004 together with
the related unaudited consolidated statements of income, cash flow and
shareholders' equity for each of the quarterly periods then ended, (iii) the
unaudited consolidated balance sheets as of July 31, 2005 and as of July 31,
2004 together with the related unaudited consolidated statements of income, cash
flow and shareholders' equity for each of the quarterly periods then ended and
(iv) the unaudited consolidated balance sheets as of April 30, 2005 and as of
April 30, 2004 together with the related unaudited consolidated statements of
income, cash flow and shareholders' equity for each of the quarterly periods
then ended (clauses (ii) through (iv), collectively, the "Historical Stub Period
Unaudited S-X Financial Statements", and together with the Historical Audited
S-X Financial Statements, the "Historical S-X Financial Statements").

            (b)     The Company shall take action as shall be reasonably
requested by the Buyer or otherwise customary in order to enable the Company,
and, if applicable, one or more of its Affiliates as of the Closing, to
consummate the debt financings (other than the Offering) contemplated in the
Debt Commitment Letter, including, without limitation, providing all necessary
information reasonably requested by the Buyer's lenders pursuant to Section 6.05
hereof.

            (c)     Unless the Buyer terminates this Agreement in accordance
with Section 8.01(b) hereof, the Buyer shall be responsible and pay for any and
all costs and expenses incurred by the Company and its Affiliates and
specifically requested by the Buyer, subject to the Buyer's receipt of
reasonable documentation of such costs and expenses, in connection with any
services or cooperation provided by the Company pursuant to this Section 6.05
which costs and expenses shall not be considered Closing Costs hereunder.

            6.06    Notification. From the date hereof until the Closing Date,
the Company and the Sellers shall disclose to the Buyer in writing any material
variances from the representations and warranties contained in Article III and
Article IV promptly upon discovery thereof, and, solely for purposes of Section
2.01(a), such disclosures shall amend and supplement the appropriate schedules
attached hereto in the form of the Updated Schedules delivered to the Buyer;
provided that such disclosures shall not amend and supplement the schedules
attached

                                       29

hereto for purposes of the indemnification obligations of the Sellers set forth
in Section 10.02. The Company shall give prompt notice in writing to the Buyer
upon discovery of : (a) the material failure of the Company or the Sellers to
comply or satisfy any covenant or condition herein; (b) any written notice of,
or any written communication relating to, a default or event which, with notice
or lapse of time or both, would reasonably be expected to become a material
default, received by the Company or any Subsidiary prior to the Closing Date,
under any Material Contract; (c) any notice or other communication from any
third party alleging that the consent of such third party is or may be required
in connection with the transactions contemplated by this Agreement; and (d) any
notice or other communication from any Governmental Authority or any other
Person in connection with the transactions contemplated hereby.

            6.07    Regulatory Filings. The Company and the Sellers shall make
or cause to be made all filings and submissions under the HSR Act and any other
laws or regulations applicable to the Sellers, the Company and its Subsidiaries
for the consummation of the transactions contemplated herein. The Company and
the Sellers shall coordinate and cooperate with the Buyer in exchanging such
information and assistance as the Buyer may reasonably request in connection
with all of the foregoing.

            6.08    Conditions. The Company and the Sellers shall use reasonable
efforts to cause the conditions set forth in Section 2.01 to be satisfied and to
consummate the transactions contemplated herein as soon as reasonably possible
after the satisfaction of the conditions set forth in Article II (other than
those required to be satisfied at the Closing) but in any event no later than
the third Business Day occurring after such date; provided that neither the
Company nor any Seller shall be required to expend any amount of funds (other
than reasonable administrative expenses) to obtain any third-party or
governmental consents required under Section 2.01(d) or (e).

            6.09    Release. Subject to the occurrence of the Closing and as of
the Closing Date, the Sellers release and forever discharge the Company and its
Subsidiaries from any and all actions, causes of action, suits, debts, claims
and demands (except for obligations arising under this Agreement and any other
document or instrument executed and delivered in connection with the
transactions contemplated by this Agreement) that arise out of acts, events,
conditions or omissions occurring or existing from the beginning of the world to
and including the Closing Date, including with respect to the Seller's ownership
of equity, equity-linked or debt securities of the Company or any of its
Subsidiaries, other than any such claims (i) related to directors and officers
insurance, (ii) arising under the Company's certificate of incorporation, bylaws
and amendment thereto and (iii) with respect to current employees of the
Company, related to their employment with the Company or any of its
Subsidiaries.

            6.10    Interim Periodic Financial Statements. As soon as
practicable, but in no case later than fifteen (15) Business Days after the end
of each monthly and quarterly accounting period between the date hereof and the
Closing Date, the Company shall deliver to the Buyer unaudited consolidated
balance sheets for the Company at the end of each period, and unaudited
consolidated statements of income, cash flows or stockholders' equity for the
Company as of each such month and quarter then ended (collectively, the "Interim
Periodic Financial Statements"). Such Interim Periodic Financial Statements,
when delivered, will present fairly in

                                       30

all material respects the financial condition of the Company as of their
respective dates, and the results of the operations and cash flow of the Company
for the periods indicated, in each case in accordance with GAAP subject to
normal year-end adjustments in accordance with past practices.

                                   ARTICLE VII

                             COVENANTS OF THE BUYER

            7.01    Access to Books and Records. From and after the Closing, the
Buyer shall, and shall cause the Company and its Subsidiaries, to provide the
Representative, the Sellers and their agents with reasonable access (for the
purpose of examining and copying), during normal business hours, to the books
and records of the Company and its Subsidiaries with respect to periods or
occurrences prior to the Closing Date in connection with any matter directly
relating to or arising out of this Agreement or the transactions contemplated
hereby. Unless otherwise consented to in writing by the Representative, neither
the Company nor its Subsidiaries shall, for a period of seven years following
the Closing Date, destroy, alter or otherwise dispose of any of the books and
records of the Company or its Subsidiaries for the period prior to the Closing
Date without first offering to surrender to the Representative such books and
records or any portion thereof which the Buyer, the Company or its Subsidiaries
may intend to destroy, alter or dispose of.

            7.02    Notification. Prior to the Closing, upon discovery the Buyer
shall promptly inform the Company and the Representative in writing of any
material variances from the Buyer's representations and warranties contained in
Article V, and the Buyer shall promptly notify the Representative if the Buyer
obtains actual knowledge that the representations and warranties of the Sellers
or the Company in this Agreement and the Schedules hereto are not true and
correct in all material respects, or if the Buyer obtains actual knowledge of
any material errors in, or omissions from, the Schedules to this Agreement.

            7.03    Director and Officer Liability and Indemnification.

            (a)     For a period of six years after the Closing, the Buyer shall
not, and shall not permit the Company or any of its Subsidiaries to amend,
repeal or modify any provision in the Company's or any of its Subsidiaries'
governing documents, including the Company's articles of incorporation and
bylaws, relating to the exculpation or indemnification of former officers and
directors (unless required by law), it being the intent of the parties that the
officers and directors of the Company and its Subsidiaries prior to the Closing
shall continue to be entitled to such exculpation and indemnification to the
fullest extent permitted under applicable law.

            (b)     For a period of six years after the Closing, the Buyer
shall, or shall cause the Company and its Subsidiaries to, maintain director and
officer liability insurance which insurance shall provide coverage for the
individuals who were officers and directors of the Company and its Subsidiaries
immediately prior to Closing comparable to the policy or policies maintained by
the Company or its Subsidiaries immediately prior to the Closing for the benefit
of such individuals; provided, however, that the Buyer's aggregate obligations
under this Section 7.03(b) shall be limited the payment of a single premium for
a "tail" policy in an amount not to

                                       31

exceed 150% of the annual premium for such insurance as in effect on the date
hereof, in an aggregate amount not to exceed $50,000.

            7.04    Regulatory Filings. The Buyer shall make or cause to be made
all filings and submissions under the HSR Act and any other laws or regulations
applicable to the Buyer as may be required of the Buyer for the consummation of
the transactions contemplated herein, and the Buyer shall be responsible for all
filing fees under the HSR Act. The Buyer shall coordinate and cooperate with the
Company in exchanging such information and assistance as the Company may
reasonably request in connection with all of the foregoing.

            7.05    Conditions. The Buyer shall use all reasonable best efforts
to cause the conditions set forth in Section 2.02 to be satisfied and to
consummate the transactions contemplated herein as soon reasonably possible
after the satisfaction of the conditions set forth in Article II (other than
those to be satisfied at the Closing) but in any event no later than the third
Business Day occurring after such date. The Buyer shall use commercially
reasonable efforts to cause the conditions in the Debt Commitment Letter and the
Equity Commitment Letter to be satisfied.

                                  ARTICLE VIII

                                   TERMINATION

            8.01    Termination. This Agreement may be terminated at any time
prior to the Closing:

            (a)     by the mutual consent of the Buyer and the Representative;

            (b)     by the Buyer, if there has been a material violation or
breach by the Company or the Sellers of any covenant, representation or warranty
contained in this Agreement or any event, circumstance or condition has occurred
which has prevented the satisfaction of any condition to the obligations of the
Buyer at the Closing and such violation or breach has not been waived by the
Buyer or, in the case of a covenant breach, cured by the Company or the Sellers
within ten days after receipt by the Representative of written notice thereof
from the Buyer;

            (c)     by the Buyer, if there has occurred prior to the Closing
Date a Material Adverse Change;

            (d)     by the Representative, if there has been a material
violation or breach by the Buyer of any covenant, representation or warranty
contained in this Agreement which has prevented the satisfaction of any
condition to the obligations of the Sellers at the Closing and such violation or
breach has not been waived by the Representative or, with respect to a covenant
breach, cured by the Buyer within ten days after written notice thereof by the
Representative; or

            (e)     by either the Buyer or the Representative if the
transactions contemplated hereby have not been consummated by the Final Date,
provided that neither the Buyer nor the Representative shall be entitled to
terminate this Agreement pursuant to this Section 8.01(e) if such Person's (or
the Company's or any Seller's, in the case of Representative) knowing or willful
breach of this Agreement has prevented the consummation of the transactions
contemplated

                                       32

hereby. The "Final Date" shall mean February 15, 2006, unless the Company
delivers to the Buyer the Company's Historical S-X Financial Statements on a
date that is after January 15, 2006, in which case the Final Date shall be the
date that is 30 days after the date on which the Company delivers to the Buyer
such Historical S-X Financial Statements; provided, however, that in no event
shall the Final Date be later than March 31, 2006. Notwithstanding the
foregoing, if the Company has not delivered the Historical S-X Financial
Statements to the Buyer on or before February 22, 2006, then the Buyer may
terminate this Agreement by providing written notice to the Representative on or
before the close of business on the third business day following February 22,
2006.

            8.02    Effect of Termination. In the event of a termination of this
Agreement by either the Buyer or the Representative in accordance with Section
8.01, the provisions of this Agreement shall immediately become void and of no
further force or effect (other than this Section 8.02 and Article XII hereof and
the Confidentiality Agreement which shall survive the termination of this
Agreement), and there shall be no liability on the part of the Buyer, the
Company or the Sellers to one another, except for knowing and willful breaches
of this Agreement prior to the time of such termination.

                                   ARTICLE IX

                                 REPRESENTATIVE

            9.01    Designation. Liberty Partners Holdings 10, L.L.C. (the
"Representative") is hereby designated by each of the Sellers to serve as the
representative of the Sellers with respect to the matters expressly set forth in
this Agreement to be performed by the Representative.

            9.02    Authority. Each of the Sellers, by the execution of this
Agreement, hereby irrevocably appoints the Representative as the agent, proxy
and attorney-in-fact for such Seller for all purposes of this Agreement and the
agreements contemplated hereby (including the full power and authority on such
Seller's behalf (a) to consummate the transactions contemplated herein; (b) to
pay such Seller's expenses incurred in connection with the negotiation and
performance of this Agreement (whether incurred on or after the date hereof);
(c) to disburse any funds received hereunder to such Seller and each other
Seller; (d) to execute and deliver any certificates representing the Shares and
execution of such further instruments of assignment as the Buyer shall
reasonably request; (e) to execute and deliver on behalf of such Seller any
amendment or waiver hereto; (f) to take all other actions to be taken by or on
behalf of such Seller in connection herewith; (g) to negotiate, settle,
compromise and otherwise handle the Working Capital adjustment and all claims
for indemnification made by the Buyer pursuant to Section 10.02 hereof; and (h)
to give and receive after the Closing all notices required to be given and to do
each and every act and exercise any and all rights which such Seller or the
Sellers collectively are permitted or required to do or exercise under this
Agreement). Each of the Sellers agrees that such agency and proxy are coupled
with an interest, are therefore irrevocable without the consent of the
Representative and shall survive the death, incapacity, bankruptcy, dissolution
or liquidation of any Seller.

            9.03    No Fiduciary Relationship; Exculpation; Reliance.

                                       33

            (a)     The Representative shall not have by reason of this
Agreement a fiduciary relationship in respect of any Seller, except in respect
of amounts received, if any, by the Representative on behalf of an Seller. The
Representative shall not be liable to any Seller for any action taken or omitted
by it or any agent employed by it under this Agreement or any other agreement
executed in connection herewith, except that the Representative shall not be
relieved of any liability imposed by law for gross negligence or willful
misconduct. The Representative shall not be liable to any Seller for any
apportionment or distribution of payments made by it in good faith, and, if any
such apportionment or distribution is subsequently determined to have been made
in error, the sole recourse of any Seller to whom payment was due, but not made,
shall be to recover from other Sellers (including the Representative in its
capacity as a Seller), any payment in excess of the amount to which they are
determined to have been entitled pursuant to this Agreement.

            (b)     Neither the Representative nor any agent employed by it
shall incur any liability to any Seller by virtue of the failure or refusal of
the Representative for any reason to consummate the transactions contemplated
hereby or relating to the performance of its other duties hereunder, except for
actions or omissions constituting fraud or bad faith.

            (c)     The Buyer and the Company shall be able to rely conclusively
on the actions, instructions and decisions of the Representative on behalf of
the Sellers as to the defense or settlement of any claims for indemnification by
Buyer and the Company and any other actions required to be taken by the
Representative hereunder.

                                    ARTICLE X

                              ADDITIONAL COVENANTS

            10.01   Survival. The representations and warranties of the Company,
Sellers and the Buyer contained in this Agreement shall survive, the Closing for
the applicable periods set forth in this Section 10.01. Any and all claims and
causes of action for indemnification under this Article X arising out of the
inaccuracy or breach of any representation or warranty of the Company, the
Sellers or the Buyer must be made prior to the termination of the applicable
survival period and in accordance with Section 10.02(d) below. All of the
representations and warranties of the Company, the Sellers and the Buyer
contained in this Agreement and any and all claims and causes of action for
indemnification under this Article X with respect thereto shall terminate on May
31, 2007; provided, however, that (i) the representations and warranties of the
Company contained in Section 4.14 (Employee Benefits) shall survive until the
third anniversary of the Closing Date and the representations and warranties of
the Company contained in Section 4.17 (Environmental Matters) shall survive
until the sixth anniversary of the Closing Date; (ii) the representations and
warranties of the Sellers or the Company, as applicable, contained in Sections
3.01 (Execution; Validity), 3.02 (Authority), 3.03 (No Breach), 3.04
(Ownership), 3.06 (Brokerage), the first sentence of 4.01 (Organization and
Power), 4.02 (Subsidiaries), 4.03 (Authorization; No Breach), 4.04
(Capitalization), 4.08 (Tax Matters) (but only to the extent that the
representations contained in Section 4.08 relate to Taxes based on or measured
by income ("Income Taxes") and 4.12 (Brokerage) shall survive until the
expiration of the applicable statute of limitations, and (iii) the
representations and warranties of the Buyer contained in Sections 5.01
(Organization and Corporate Power), (Authorization), 5.06 (Brokerage),
(Investment

                                       34

Representation) and 5.08 (Financing) shall survive until the expiration of the
applicable statute of limitations (the representations and warranties listed in
clauses (ii) and (iii) above, the "Fundamental Representations").

            10.02   Indemnification.

            (a)     Subject to the provisions of Section 10.02(d), Section 10.03
and the next sentence, each of the Buyer, each Affiliate of the Buyer (including
after the Closing Date, the Company and its Subsidiaries), and their respective
stockholders, officers, directors, agents, employees, successors and assigns
(collectively, the "Buyer Indemnities") shall be indemnified and held harmless
by the Sellers (On a several, and not a joint and several, basis according to
each Seller's Indemnification Share) against any actual loss, liability, damage
or expense (including reasonable legal fees and expenses, but excluding damages
set forth in the last sentence of Section 10.03(a)) (collectively, "Losses" and
individually, a "Loss") which any such Buyer Indemnitee suffers, sustains or
becomes subject to as a result of any breach of any covenant, representation or
warranty of the Company (on or prior to the Closing) expressly set forth herein
and in any certificate delivered pursuant hereto (without regard to materiality
or Material Adverse Effect qualifiers set forth in any such representation or
warranty except for any such qualifier(s) contained in the first sentence of
Section 4.06), in each case without taking into account any disclosures made in
the Updated Schedules pursuant to Section 6.06 hereof. Notwithstanding anything
herein to the contrary:

                    (i)     subject to Section 10.02(a)(iii), the Buyer
      Indemnitees shall not be entitled to seek indemnification with respect to
      any Loss unless and until the amount of such Loss suffered by Buyer as a
      result of such breach or series of breaches associated with related events
      or circumstances exceeds $25,000 (the "De Minimis Amount"), in which case
      all of such amount shall be deemed to be a Loss hereunder;

                    (ii)    subject to Section 10.02(a)(iii), the Buyer
      Indemnitees shall not be entitled to seek indemnification with respect to
      any Losses unless (A) each such Loss or series of related Losses is in
      excess of the De Minimis Amount and (B) until and only to the extent that
      the aggregate amount of all such Losses suffered by the Buyer as a result
      of such breach(es) exceeds in the aggregate $2,600,000 (the "Deductible
      Basket"), in which case the Buyer shall be entitled to indemnification
      only for such Losses in excess of $1,300,000; and

                    (iii)   the aggregate amount of all payments to which the
      Buyer shall be entitled in satisfaction of claims for indemnification
      pursuant to this Section 10.02(a) shall in no event exceed $15,000,000
      (the "Cap"); provided, however, that none of the Deductible Basket, the De
      Minimis Amount or the Cap shall apply with respect to any Losses resulting
      from or relating to (A) breaches of representations and warranties
      (without regard to materiality or Material Adverse Effect qualifiers set
      forth in any such representation or warranty except for any such
      qualifier(s) contained in the first sentence of Section 4.06) of the
      Sellers and/or the Company contained in any of the Fundamental
      Representations or (B) breaches of covenants by the Company or any of the
      Sellers; provided further that no Seller shall be liable under this
      Section 10.02(a) (together with any indemnification claim amounts owing by
      such Seller under Section 10.02(b) and

                                       35

      Section 10.06) for more than the portion of the Final Purchase Price and
      the portion of the Contingent Payment and Second Contingent Payment, if
      any, received by such Seller.

            (b)     Subject to the provisions of Section 10.02(d) and Section
10.03, each Seller shall solely for himself, herself or itself severally (not
jointly and severally) indemnify the Buyer and hold it harmless against any Loss
which the Buyer suffers, sustains or becomes subject to as a result of the
breach by such Seller of his, her or its covenants, or the representations and
warranties contained in Article III hereof; provided that no Seller shall be
liable under this Section 10.02(b) (together with any indemnification claim
amounts owing by such Seller under Section 10.02(a) and Section 10.06) for more
than the portion of the Final Purchase Price and the portion of the Contingent
Payment and Second Contingent Payment, if any, received by such Seller.

            (c)     Subject to the provisions of Section 10.02(d), Section 10.03
and the next sentence, the Buyer shall indemnify each Seller and hold him, her
or it harmless against any Loss which any such Seller suffers, sustains or
becomes subject to as a result of any breach by the Buyer of its covenants,
representations and warranties set forth herein (without regard to materiality
or Material Adverse Effect qualifiers set forth in any such representation or
warranty). Notwithstanding anything herein to the contrary, (A) the Sellers
shall not be entitled to seek indemnification with respect to any Loss unless,
until and only to the extent that the aggregate amount of all Losses suffered by
the Sellers as a result of such breach(es) exceeds the De Minimis Amount and the
Deductible Basket, in which case the Sellers shall be entitled to
indemnification only for such excess; and (B) the aggregate amount of all
payments to which the Sellers shall be entitled in satisfaction of claims for
indemnification pursuant to Section 10.02(c) shall in no event exceed the Cap;
provided, however, that neither the De Minimis Amount, the Deductible Basket nor
the Cap shall apply with respect to any Losses resulting from or relating to
breaches of representations and warranties contained in any of the Fundamental
Representations.

            (d)     No Person shall be liable for any claim for indemnification
under subsections (a), (b) or (c) above (but with respect to covenants, only
those that provide for performance prior to Closing) unless written notice
specifying in reasonable detail the nature of the claim for indemnification is
delivered by the Person seeking indemnification to the Person from whom
indemnification is sought (i) prior to the expiration of the applicable statute
of limitations with respect to claims for indemnification relating to breaches
of the representations and warranties of the Buyer, the Sellers or the Company,
as applicable, contained in any of the Fundamental Representations; and (ii)
prior to May 31, 2007 with respect to all other claims for indemnification under
subsections (a), (b) and (c) above; provided that in each case each such claim
shall survive until the resolution of such claim. Covenants that provide for
performance following Closing shall survive in accordance with their respective
terms.

            (e)     Promptly after the assertion by any third party of any claim
(a "Third Party Claim") against any Person entitled to indemnification under
this Section 10.02 (the "Indemnitee") that results or may result in the
incurrence by such Indemnitee of any Loss for which such Indemnitee would be
entitled to indemnification pursuant to this Agreement, and promptly after
obtaining knowledge of any other claim, such Indemnitee shall promptly (and, in
any event, within fifteen (15) Business Days after receiving notice of such
Third Party Claim)

                                       36

notify in writing the parties from whom such indemnification could be sought
(the "Indemnitors") and, if a Buyer Indemnitee is the Indemnitee, the
Representative of such Third Party Claim. The Representative shall act on behalf
of all Indemnitors in the case of all Third Party Claims with respect to which
any Buyer Indemnitee is seeking indemnification under subsection (a) above and
may, at its option, assume and conduct the defense of the Indemnitee against
such Third Party Claim (including the employment of counsel and the payment of
reasonable expenses) with counsel reasonably acceptable to the Buyer Indemnitee;
provided, however, in the event any Third Party Claim or series of related Third
Party Claims by or against a Material Customer or Material Supplier or the
Indemnified Party or its Subsidiaries or a Person with whom the Indemnified
Party otherwise has a material business relationship (in each case wherein an
adverse judgment would reasonably be expected to cause a Material Adverse
Effect), the Buyer Indemnitee shall have the right to control the defense of
such Third Party Claim (at the expense of the Indemnifying Party) and designate
counsel for such defense; provided, that the Indemnifying Party shall have the
right to consent to the choice of such counsel (such consent not to be
unreasonably withheld or delayed); provided further, that the Indemnitor shall
have the right to consult with the Indemnitee and such counsel in all material
decisions relating to such Third Party Claim or series of Third Party Claims. No
such Third Party Claim or series of related Third Party Claims may be settled or
compromised without the prior written consent of the Indemnitor (which consent
will not be unreasonably withheld or delayed). Any Indemnitee shall have the
right to employ separate counsel in any such Third Party Claim and to
participate in the defense thereof (to the extent such Indemnitee shall not
control the defense thereof), but the fees and expenses of such counsel shall
not be an expense of the Indemnitor unless (i) the Indemnitor shall have failed,
within a reasonable time after having been notified by the Indemnitee of the
existence of such Third Party Claim as provided in the preceding sentence, to
assume and conduct the defense of such Third Party Claim or (ii) the employment
of such counsel has been specifically authorized by the Indemnitor and/or the
Representative in the case of all Third Party Claims with respect to which any
Buyer Indemnitee is entitled to indemnification under subsection (a) above.

            (f)     The amount of any Loss subject to indemnification hereunder
or of any claim therefor shall be calculated net of (i) any refund of Taxes
received by Buyer or reduction in Taxes actually paid by the Buyer, the Company,
its Subsidiaries or any of their Affiliates on account of such Loss and (ii) any
insurance proceeds or other recoveries (net of collection expenses) actually
received by any Seller, the Buyer, the Company and its Subsidiaries on account
of such Loss (including, but not limited to, amounts actually received from any
third party for indemnification or contribution). If the Buyer, the Company, its
Subsidiaries or any of their Affiliates receives, a Tax benefit of the type
described in clause (i) above after an indemnification payment is made, the
Buyer shall promptly pay to the Representative (on behalf of the Sellers) the
value of such Tax benefit. The Buyer, the Company and its Subsidiaries shall
seek full recovery under all insurance policies covering any Loss to the same
extent as they would if such Loss were not subject to indemnification hereunder,
and the Buyer, the Company and its Subsidiaries shall not terminate or cancel
any insurance policies in effect for periods prior to the Closing. In the event
that an insurance recovery is made by the Buyer, the Company, its Subsidiaries
or any of their Affiliates with respect to any Loss for which any such Person
has been indemnified hereunder, then a refund equal to the aggregate amount of
the recovery (net of all direct collection expenses) shall be made promptly to
the Representative (on behalf of the Sellers). Each party hereby waives, to the
extent permitted under its applicable insurance

                                       37

policies, any subrogation rights that its insurer may have with respect to any
indemnifiable Losses.

            (g)     All indemnification payments made hereunder shall be treated
by all parties as an adjustment to the Purchase Price.

            (h)     Notwithstanding anything to the contrary contained in this
Section 10.02, there shall be no recovery for any Loss by any Buyer Indemnitee
under this Section 10.02, and the Loss shall not be included in meeting the
stated thresholds hereunder, to the extent such item has been included in the
calculation of the Final Purchase Price (with respect to the determination of
Working Capital) under Section 1.01(b) and Section 1.01(g) hereof.

            (i)     The Buyer agrees that in the event of any breach giving
rise to an indemnification obligation under Section 10.02(a), the Buyer shall
take and cause its Affiliates (including the Company and its Subsidiaries) to
take, or cooperate with the Representative, if so requested by the
Representative, in order to take, all commercially reasonable measures to
mitigate the consequences of the related breach (including taking steps to
prevent any contingent liability from becoming an actual liability).

            (j)     Upon payment in full of any Losses pursuant to Section 10.02
or the payment of any judgment or settlement with respect to a Third Party
Claim, the Indemnitor shall be subrogated to the extent of such payment to the
rights of the Indemnitee against any Person with respect to the subject matter
of such Loss or Third Party Claim. The Indemnitee shall assign or otherwise
cooperate with the Indemnitor, at the cost and expense of the Indemnitor, to
pursue any claims against, or otherwise recover amounts from, any Person liable
or responsible for any Losses for which indemnification has been received
pursuant to this Agreement. Notwithstanding the foregoing, no Indemnitor shall
be required or obligated to take any action that is in conflict with any
insurance policy or other agreement pursuant to which subrogation or assignment
would occur.

            10.03   Limitation of Recourse.

            (a)     Following the Closing, except with respect to claims based
upon fraud, the indemnification provided by Section 10.02(a) shall be the sole
and exclusive remedy for any Losses of any Person entitled to indemnification
hereunder with respect to any misrepresentation or inaccuracy in, or breach of,
any representations or warranties or any breach or failure in performance of any
covenants or agreements in this Agreement or in any exhibit or schedules hereto
or any certificate delivered hereunder. In no event shall any Person be entitled
to recover or make a claim for any amounts in respect of lost profits or
punitive damages and, in particular, no "multiple of profits" or "multiple of
cash flow" or similar valuation methodology shall be used in calculating the
amount of any Losses.

            (b)     Except as provided in Section l0.02(a) or Section 10.02(b),
no claim shall be brought or maintained by any Person entitled to
indemnification hereunder against any officer, director or employee (present or
former) of the Company or any of its Subsidiaries, the Representative or any
Seller, and no recourse shall be brought or granted against any of them, by
virtue of or based upon any alleged misrepresentation or inaccuracy in or breach
of any of the

                                       38

representations, warranties or covenants set forth or contained in this
Agreement or any exhibit or schedule hereto or any certificate delivered
hereunder, except to the extent that the same shall have been the result of
fraud by any such Person. The obligations of the Sellers for all purposes under
this Agreement are several and not joint and several (based on the Sellers'
Indemnification Share), and in no event shall any Seller, the Representative or
any present or former officer, director or employee of the Company or its
Subsidiaries have any shared or vicarious liability for the actions or omissions
of any other Person.

            (c)     The Buyer, the Company, its Subsidiaries and their
respective successors and permitted assigns, hereby waive any right to seek
contribution or other recovery from any Seller (or any of their respective
officers, directors or employees (present or former)) that any of them may now
or in the future have under any Environmental Laws (including the
Comprehensive Environmental Response, Compensation, and Liability Act, any
analogous state law, and any common law providing for any remedy or right of
recovery with respect to environmental matters). The Buyer, the Company, its
Subsidiaries and their respective successors and permitted assigns hereby
release all Sellers (or any of their respective officers, directors or employees
(present or former)) from any and all such claims, demands and causes of action
that any of them may now or in the future have under such Environmental Laws.
Nothing in this Section 10.03(c) shall limit in any way any rights to
indemnification that any Buyer Indemnitee may have pursuant to Section 10.02
above.

            (d)     The Buyer shall have no right to assert any claims with
respect to any Loss, cause of action or other claim to the extent it is a Loss,
cause of action or claim with respect to which the Buyer or any of its
Affiliates has taken action (or caused action to be taken) to accelerate the
time period in which such matter is asserted or payable.

            10.04   Disclosure Generally. If and to the extent any information
required to be furnished in any Schedule or Updated Schedule is contained in
this Agreement or in any Schedule or Updated Schedule attached hereto and such
information is reasonably apparent to be responsive to any other schedule or
Updated Schedule, such information shall be deemed to be included in all
Schedules in which the information is required to be included. The inclusion of
any information in any Schedule or Updated Schedule attached hereto shall not be
deemed to be an admission or acknowledgment by the Company, its Subsidiaries or
the Sellers, in and of itself, that such information is material to or outside
the ordinary course of the business of the Company or its Subsidiaries.

            10.05   No Additional Representations; Disclaimer.

            (a)     The Buyer acknowledges that neither the Representative,
Sellers, the Company nor any of its Subsidiaries, nor any other Person acting on
behalf of the Company or any of its Affiliates has made any representation or
warranty, express or implied, as to the accuracy or completeness of any
information regarding the Company or any of its Subsidiaries or their respective
businesses or assets, except as expressly set forth in this Agreement or as and
to the extent required by this Agreement to be set forth in the Schedules
hereto. The Buyer further agrees that none of the Sellers nor any other Person
shall have or be subject to any liability to the Buyer or any other Person
resulting from the distribution to the Buyer, or the Buyer's use of, any such
information, including the Confidential Information Memorandum prepared by
Harris

                                       39

Williams & Co. dated June 2005 and any information, document or material made
available to the Buyer or the Buyer's Representatives in certain "data rooms,"
management presentations or any other form in expectation of the transactions
contemplated by this Agreement.

            (b)     In connection with the Buyer's investigation of the Company
and its Subsidiaries, the Buyer or the Buyer's Representatives has received from
or on behalf of the Company certain projections, including projected statements
of operating revenues and income from operations of the Company and its
Subsidiaries for the fiscal year ending January 31, 2006 and for subsequent
fiscal years and certain business plan information for such fiscal year and
succeeding fiscal years. The Buyer acknowledges that there are uncertainties
inherent in attempting to make such estimates, projections and other forecasts
and plans, that the Buyer is familiar with such uncertainties, that the Buyer is
taking full responsibility for making its own evaluation of the adequacy and
accuracy of all estimates, projections and other forecasts and plans so
furnished to it (including the reasonableness of the assumptions underlying such
estimates, projections and forecasts), and that the Buyer shall have no claim
against the Sellers or any other Person with respect thereto. Accordingly,
neither the Company nor the Sellers make any representations or warranties
whatsoever with respect to such estimates, projections and other forecasts and
plans (including the reasonableness of the assumptions underlying such
estimates, projections and forecasts).

            (c)     The Buyer acknowledges that it has conducted to its
satisfaction, an independent investigation and verification of the financial
condition, results of operations, assets, liabilities, properties and projected
operations of the Company and its Subsidiaries and, in making its
determination to proceed with the transactions contemplated by this Agreement.
SUCH REPRESENTATIONS AND WARRANTIES BY THE COMPANY AND THE SELLERS CONSTITUTE
THE SOLE AND EXCLUSIVE REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
SELLERS TO BUYER IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY, AND
BUYER UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT ALL OTHER REPRESENTATIONS AND
WARRANTIES OF ANY KIND OR NATURE EXPRESSED OR IMPLIED (INCLUDING, BUT NOT
LIMITED TO, ANY RELATING TO THE FUTURE OR HISTORICAL FINANCIAL CONDITION,
RESULTS OF OPERATIONS, ASSETS OR LIABILITIES OF THE COMPANY AND ITS
SUBSIDIARIES) ARE SPECIFICALLY DISCLAIMED BY THE COMPANY AND THE SHAREHOLDERS.
Notwithstanding the foregoing, the parties hereto acknowledge and agree,
however, that, notwithstanding the Buyer's conduct of its due diligence and
independent investigation and verification of the financial condition, results
of operations, assets, liabilities, properties and projected operations of the
Company and its Subsidiaries, (i) the Buyer is entitled to rely on all of the
representations and warranties of the Company and the Sellers set forth herein
and all of the Schedules and Exhibits hereto, and (ii) nothing contained herein
shall limit, condition or otherwise restrict the Buyer's rights and remedies
hereunder associated with its reliance on the representations and warranties of
the Company and the Sellers expressly and specifically set forth in this
Agreement, including the Schedules and Updated Schedules attached hereto.

            10.06   Certain Tax Matters. The following provisions shall govern
the allocation of responsibility as between the Buyer and the Company on the one
hand and the Sellers and the Representative on the other hand for certain Tax
matters following the Closing:

                                       40

            (a)     The Buyer, the Company, the Sellers and the Representative
shall cooperate fully, as and to the extent reasonably requested by the other
party, in connection with the filing of any Tax Returns and any audit,
litigation or other proceeding with respect to Taxes. Such cooperation shall
include the retention and (upon the other party's reasonable request) making
available of records and information which are reasonably relevant to any such
audit, litigation or other proceeding and making employees available on a
mutually convenient basis to provide additional information and explanation of
any material provided hereunder. The Company shall retain all books and records
with respect to tax matters pertinent to the Company and its Subsidiaries
relating to any tax periods and shall abide by all record retention agreements
entered into with any taxing authority, and shall give the Representative
reasonable written notice prior to transferring, destroying or discarding any
such books and records prior to the expiration of the applicable statute of
limitations for that tax period, and if the Representative so requests, the
Company shall allow the Representative to take possession of such books and
records.

            (b)     All transfer, documentary, sales, use, stamp, registration
and other such Taxes and fees (including any penalties and interest) incurred in
connection with this Agreement shall be borne equally by the Buyer and the
Sellers when due, and the Buyer and the Sellers will, each at its own expense,
file all necessary Tax Returns and other documentation with respect to all such
transfer, documentary, sales, use, stamp, registration and other Taxes and fees,
and, if required by applicable law, each of the Buyer and the Sellers will join
in the execution of any such Tax Returns and other documentation.

            (c)     Buyer shall be entitled to any and all Income Tax refunds or
credits (including, without limitation, any and all Transaction Tax Deduction
Benefits) of the Company with respect to any losses or credits incurred for
periods ending on or prior to the Closing Date regardless of whether such
refunds or credits are realized or received with respect to the periods
occurring before or after the Closing Date. Buyer will pay any such amounts
(without duplication) to the Representative within 10 days of receipt of such
refund or realization of such credit.

            (d)     Tax Indemnification. The Sellers shall severally (based on
each Seller's Indemnification Share), and not jointly, indemnify the Buyer
Indemnitees and hold them harmless from and against any Loss attributable to (i)
all Income Taxes (or the non-payment thereof) of the Company and its
Subsidiaries for all Taxable periods ending on or before the Closing Date and
the portion through the end of the Closing Date for any Taxable period that
includes (but does not end on) the Closing Date ("Pre-Closing Tax Period"), (ii)
all Income Taxes of any member of an Affiliated Group of which the Company or
any Subsidiary (or any predecessor of the foregoing) is or was a member on or
prior to the Closing Date, including pursuant to Treasury Regulation SS.1.1502-6
(or any analogous or similar state, local, or foreign law or regulation), and
(iii) any and all Income Taxes of any Person imposed on the Company or any
Subsidiary as a transferee or successor, by contract or pursuant to any law,
rule, or regulation, which Taxes relate to an event or transaction occurring
before the Closing; provided that any such claims for indemnity pursuant to this
Section 10.06(d) shall not be subject to the DeMinimis Amount or the Deductible
Basket; and provided further that no Seller shall be liable under this Section
10.06(d) (together with any indemnification claim amounts owing by such Seller
under Section 10.02(a) and Section 10.02(b)) for more than the portion of the
Actual

                                       41

Purchase Price and the portion of the Contingent Payment and Second Contingent
Payment, if any, received by such Seller.

            (e)     Straddle Period. In the case of any Taxable period that
includes (but does not end on) the Closing Date (a "Straddle Period"), the
amount of any Income Taxes for the Pre-Closing Tax Period shall be determined
based on an interim closing of the books as of the close of business on the
Closing Date (and for such purpose, the Taxable period of any partnership or
other pass-through entity in which the Company or any Subsidiary holds a
beneficial interest shall be deemed to terminate at such time).

            (f)     Tax Return Filing. The Representative (on behalf of the
Sellers) shall prepare all of the Company's Tax Returns for the periods for
which the Sellers are liable under Section 10.06(d). All such Tax Returns shall
be prepared and filed in a manner consistent with prior practice, except as
required by a change in applicable law. Buyer shall have the right to review any
such Tax Returns prepared by the Representative (on behalf of the Sellers) at
least 15 days prior to when such tax Returns are due. Buyer shall cause the
Company and its Subsidiaries to file income Tax Returns or shall include the
Company and its Subsidiaries in its combined or consolidated income tax returns,
for all other periods.

            (g)     Wisconsin Tax Audit. If the Wisconsin Tax Audit has not
been settled prior to the Closing in a manner reasonably satisfactory to Buyer
(and only in such event), the Sellers shall severally (based on each Seller's
Indemnification Share), and not jointly, indemnify the Buyer Indemnitees and
hold them harmless from and against any Loss attributable to the Wisconsin Tax
Audit. Any indemnity payment in respect of the Wisconsin Tax Audit shall be made
first from the escrow account created pursuant to the Additional Escrow
Agreement and shall thereafter be made by the Sellers directly. In addition, the
Sellers shall severally (based on each Seller's Indemnification Share) and not
jointly indemnify the Buyer Indemnitees and hold them harmless from and against
any Loss attributable to the Wisconsin Later Years Tax Audit; provided that
notwithstanding anything else contained in this Agreement to the contrary, the
maximum amount of any such Losses for which the Buyer Indemnitees may assert
claims in respect of the Wisconsin Later Years Tax Audit hereunder shall be
$2,000,000.

            10.07   Further Assurances. From time to time, as and when
reasonably requested by any party hereto and at such party's expense, any other
party shall execute and deliver, or cause to be executed and delivered, all such
documents and instruments and shall take, or cause to be taken, all such further
or other actions as such other party may reasonably deem necessary or desirable
to evidence and effectuate the transactions contemplated by this Agreement.

                                   ARTICLE XI

                                   DEFINITIONS

            "2007 Adjusted Consolidated EBITDA Statement" has the meaning set
forth in Section 1.03(a).

            "2007 Audited Financial Statements" has the meaning set forth in
Section 1.03(a).

            "2007 Fiscal Year" has the meaning set forth in Section 1.03(a).

                                       42

            "Additional Escrow Amount" has the meaning set forth in Section
1.01(d).

            "Adjusted Consolidated EBITDA" means (for the relevant period) (i)
the consolidated net income of Company and its Subsidiaries plus (ii) to the
extent deducted in determining consolidated net income: (A) interest expense
(including amortization of deferred loan costs); (B) federal, state and local
income taxes; (C) depreciation of tangible assets; and (D) amortization of
intangible assets, as adjusted for the following items (to the extent that they
are reflected in net income or net loss):

            (i)     elimination of: (A) all extraordinary gains and losses
determined in accordance with GAAP and (B) gains and losses from sales,
impairments or dispositions of property and equipment or other fixed assets;

            (ii)    add-back for all (i) management fees paid to the Equity
Sponsor or its Affiliates, (ii) director fees paid to any member of the Board of
Directors of the Company or any of its Subsidiaries, (iii) any stock option
compensation expenses, and (iv) any fees and expenses incurred by the Company in
connection with the consummation of the transactions contemplated hereby and the
financing thereof;

            (iii)   add-back for all consulting fees paid to consultants
providing strategic advice to the Company or its Subsidiaries; and

            (iv)    add-back of the amount of one-time costs associated with the
Company's compliance with Sarbanes/Oxley in excess of $250,000.

            "Affiliated Group" has the meaning set forth in Section 4.08(a).

            "Affiliates" of any particular Person means any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the ownership of
voting securities, contract or otherwise.

            "Aggregate Option/Phantom Right Amount" has the meaning set forth in
Section 1.01(h).

            "Audited Financial Statements" has the meaning set forth in Section
4.05(ii).

            "Business" means the manufacturing and sales of premium stainless
steel and specialty alloy welded tubular products for established and developing
end-markets, including oil & gas exploration and production, food & beverage
processing and dispensing, power generation, chemical/petrochemical processing,
biotechnology, the pharmaceutical and semiconductor industries, by the Company
and its Subsidiaries, and any business operations related thereto and in each
case as conducted as of the date hereof.

            "Business Trade Secrets" has the meaning set forth in Section
4.16(f).

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

                                       43

            "Buyer Indemnitees" has the meaning set forth in Section 10.02(a).

            "Buyer's Representatives" has the meaning set forth in Section 6.03.

            "Business Day" means any day other than a Saturday, a Sunday or a
day on which banks in New York City are authorized or obligated by Law or
executive order to close.

            "Cash and Cash Equivalents" means those items of the Company and its
Subsidiaries as of the close of business on the Closing Date which are required
by GAAP to be included as "cash" or "cash equivalents" on the Closing Balance
Sheet, but excluding (x) outstanding checks (to the extent such outstanding
checks reduce accounts payable), (y) any restricted cash balances, and (z) in
each case, any effects of the consummation of the transactions contemplated by
this Agreement and the financing thereof.

            "Closing" has the meaning set forth in Section 1.02(a).

            "Closing Balance Sheet" has the meaning set forth in Section
1.0l(f)(ii).

            "Closing Costs" means all of the fees, expenses and other payments
(including Management Closing Costs) incurred by the Company in connection with
the transactions contemplated by this Agreement (on its own behalf and on behalf
of the Equityholders, individually or as a group) that remain unpaid as of the
Closing and, subject to Closing, are to be paid by the Buyer at the Closing
pursuant to Section 1.02(b), including, without limitation, any fees and
expenses owing to Kirkland & Ellis LLP, Harris Williams & Co.,
PricewaterhouseCoopers LLP and such other parties as are set forth on the
Closing Costs Schedule attached hereto.

            "Closing Date" has the meaning set forth in Section 1.02(a).

            "Closing Transactions" has the meaning set forth in Section 1.02(b).

            "Closing Working Capital" means the Working Capital as of the close
of business on the Closing Date without taking into account the effects of the
consummation of the transactions contemplated by this Agreement and the
Financing thereof.

            "Code" means the Internal Revenue Code of 1986, as amended.

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

            "Confidentiality Agreement" has the meaning set forth in Section
6.02.

            "Contingent Amount" means the lesser of (i) $30,000,000, and (ii)
the product of (A) 3.0 times (B) the Adjusted Consolidated EBITDA for the 2007
Fiscal Year (as set forth in the 2007 Adjusted Consolidated EBITDA Statement)
minus $45,000,000.

            "Contingent Payment" means the Contingent Amount, minus the
aggregate dollar value of any of the good faith indemnification claims by the
Buyer Indemnitees that have not

                                       44

been fully resolved pursuant to Section 10.02 on the date the Contingent Payment
is to be made pursuant to Section 1.03.

            "Contract" means, whether oral or written, any agreement, contract,
lease, license, franchise, note, bond, mortgage, indenture, guarantee, purchase
or sale order or other instrument or obligation, arrangement or commitment,
including all amendments thereto.

            "Controlled Group" has the meaning set forth in Section 4.20.

            "De Minimis Amount" has the meaning set forth in Section 10.02(a).

            "Debt Commitment Letter" has the meaning set forth in Section 5.08.

            "Deductible Basket" has the meaning set forth in Section 10.02(a).

            "Draft Balance Sheet" has the meaning set forth in Section
1.01(f)(i).

            "Employee Benefit Plan" has the meaning set forth in Section 4.20.

            "Encumbrances" has the meaning set forth in Section 4.07(d).

            "Environmental Claims" means any written complaint, summons,
citation, notice, directive, order, claim, litigation, investigation, notice of
violation, judicial or administrative proceeding, judgment, letter or other
communication from any governmental authority, or any third party alleging
violations of Environmental Laws or alleging Releases of Hazardous Materials
from (i) any assets, properties or businesses of the Company or its subsidiaries
or any predecessor in interest; (ii) from adjoining properties or businesses; or
(iii) from or onto any facilities that received Hazardous Materials generated by
the Company or its subsidiaries or any predecessor in interest.

            "Environmental Laws" means all Federal, state and local laws,
statutes, ordinances, rules and regulations in each case, and all final court
orders, decrees and legally-binding arbitration awards which are in existence on
the Closing Date, imposing liability or establishing standards of conduct for
protection of the environment, including the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. 9601 et seq., as
amended; the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. 6901 et
seq., as amended; and the Clean Air Act ("CAA"), 42 U.S.C. 7401 et seq., as
amended; the Clean Water Act ("CWA"), 33 U.S.C. 1251 et seq., as amended.

            "Environmental Liabilities" means all liabilities, monetary
obligations, remedial actions, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts and consultants and costs of
investigations and feasibility studies), fines, penalties, sanctions and
interest incurred as a result of any claim or demand by any governmental
authority or any third party, and which relate to any environmental condition at
or a Release of Hazardous Materials from or onto (i) any property presently or
formerly owned by the Company or any of its Subsidiaries or (ii) any facility
that received Hazardous Materials generated by the Company or any of its
Subsidiaries.

                                       45

            "Environmental Permits" means licenses, permits, registrations,
governmental approvals, and consents that are required under or are issued
pursuant to Environmental Laws.

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

            "Equity Commitment Letter" has the meaning set forth in Section
5.08.

            "ERISA" has the meaning set forth in Section 4.14.

            "Escrow Agent" means Wells Fargo Bank, N.A.

            "Escrow Agreement" has the meaning set forth in Section 1.01(c).

            "Escrow Amount" has the meaning set forth in Section 1.01(c).

            "Estimated Contingent Amount" has the meaning set forth in Section
1.03(a).

            "Equity Commitment Letter" has the meaning set forth in Section
5.08.

            "FCPA" has the meaning set forth in Section 4.25.

            "Final Purchase Price" has the meaning set forth in Section
1.01(f)(ii).

            "Financial Statements" has the meaning set forth in Section 4.05.

            "Firm" has the meaning set forth in Section 1.01(f)(ii).

            "GAAP" means the United States generally accepted accounting
principles, applied on a basis consistent with the Audited Financial Statements.

            "Governmental Authorities" has the meaning set forth in Section
4.15.

            "Hazardous Materials" shall mean, without regard to amount and/or
concentration but excluding naturally occurring concentrations (a) any element,
compound, or chemical that is defined, listed or otherwise classified as a
contaminant, pollutant, toxic pollutant, toxic or hazardous substances,
extremely hazardous substance or chemical, hazardous waste, medical waste,
biohazardous or infectious waste under Environmental Laws; (b) petroleum,
petroleum-based or petroleum-derived products; (c) polychlorinated biphenyls;
(d) any substance exhibiting a hazardous waste characteristic including but not
limited to corrosivity, ignitibility, toxicity or reactivity as well as any
radioactive or explosive materials; and (e) asbestos.

            "Hedging Agreement" means any interest rate, foreign. currency,
commodity or equity swap, collar, cap, floor or forward rate agreement, or other
agreement or arrangement designed to protect against fluctuations in interest
rates or currency, commodity or equity values (including, without limitation,
any option with respect to any of the foregoing and any combination of the
foregoing agreements or arrangements), and any confirmation executed in
connection with any such agreement or arrangement, all as amended or otherwise
modified from time to time.

                                       46

            "HSR Act" has the meaning set forth in Section 2.01(e).

            "Income Taxes" has the meaning set forth in Section 10.01(a).

            "Indebtedness" means, as applied to the Company and its
Subsidiaries, all indebtedness of the Company or any of its Subsidiaries for
borrowed money as of the close of business on the Closing Date (determined
without giving effect to the consummation of the transactions contemplated by
this Agreement or the financing hereof), whether current or funded, or secured
or unsecured, including, without limitation, (a) all indebtedness of any such
Person for the deferred purchase price of property or services, excluding trade
accounts payable and excluding any installment obligations with respect to the
acquisition of capital equipment in the ordinary course of business, (b) all
indebtedness of any such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (c) all indebtedness of any such Person secured by a purchase money
mortgage or other Lien to secure all or part of the purchase price of the
property subject to such mortgage or Lien, (d) all obligations under leases
which shall have been or are required to be, in accordance with GAAP, recorded
as capital leases in respect of which such Person is liable as a lessee, (e) all
interest, fees, penalties (including prepayment penalties but only with respect
to indebtedness to be repaid at the Closing) and other expenses owed with
respect to the indebtedness referred to above, and (f) all indebtedness
referred to above which is directly or indirectly guaranteed by such Person or
which such Person has agreed (contingently or otherwise) to purchase or
otherwise acquire or in respect of which it has otherwise assured a creditor
against loss. Notwithstanding the foregoing, "Indebtedness" shall not include
indebtedness owing by the Company to any of its Subsidiaries, or by any
Subsidiary of the Company to the Company or any other Subsidiary of the Company.

            "Indemnification Share" means the Indemnification Share of each
Equityholder as set forth on the Equityholders Schedule.

            "Indemnitee" has the meaning set forth in Section 10.02(d).

            "Indemnified Party" has the meaning set forth in Section 10.02(f).

            "Indemnitors" has the meaning set forth in Section 10.02(d).

            "Initial Purchase Price" has the meaning set forth in Section
1.01(b).

            "Insider" has the meaning set forth in Section 4.21(a).

            "Insurance Policies" has the meaning set forth in Section 4.24.

            "Intellectual Property" means all foreign and domestic (i)
trademarks, service marks, brand names, certification marks, collective marks,
d/b/a's, Internet domain names, logos, symbols, trade dress, assumed names,
fictitious names, trade names, and other indicia of origin, all applications and
registrations for all of the foregoing, and all goodwill associated therewith
and symbolized thereby, including without limitation all extensions,
modifications and renewals of same (collectively, "Trademarks") (ii) inventions,
discoveries and ideas, whether patentable

                                       47

or not, and all patents and patent applications (including without limitation
reissues, reexaminations, divisionals, renewals, extensions, provisionals,
continuations, continuations-in-part, patent disclosures, mask works and
integrated circuit topographies) and equivalents thereof (collectively,
"Patents"); (iii) confidential and proprietary information, trade secrets and
know-how, including without limitation processes, schematics, databases,
formulae, drawings, prototypes, models, designs and customer lists
(collectively, "Trade Secrets"); (iv) published and unpublished works of
authorship, whether copyrightable or not (including without limitation computer
software), copyrights therein and thereto, and registrations and applications
therefor, and all renewals, extensions, restorations and reversions thereof
(collectively, "Copyrights"); (v) electronic data processing, information,
recordkeeping, communications, telecommunications, account management, inventory
management and other computer systems (including all computer programs,
software, databases, firmware, hardware and related documentation) and Internet
websites and related content (collectively, "IT Systems"); and (vi) all other
intellectual property or proprietary rights and claims or causes of action
arising out of or related to any infringement, misappropriation or other
violation of any of the foregoing, including without limitation rights to
recover for past, present and future violations thereof (collectively, "Other
Proprietary Rights").

            "Interim Periodic Financial Statements" has the meaning as set forth
in Section 6.10.

            "IRS" as the meaning set forth in Section 4.14.

            "Knowledge" means, with respect to the representations and
warranties of the Company set forth herein which are made subject to the
qualification "to the Knowledge of the Company," or other qualification of
similar import, as of the date hereof or the Closing Date, the knowledge, after
due inquiry, of Harley Kaplan, William S. Anacker, C. Michel Griffith, David
Pudelsky, Nick Cray, Tony Massini, Glenn Skola, David O'Donnell, John Fan or
Bruce Radcliff of any matter, fact, or thing. For the purposes of this
definition, the term "knowledge, after due inquiry" shall mean knowledge that
such person could reasonably be expected to obtain upon a review of the books
and records of the Company.

            "Laws" has the meaning set forth in Section 4.21.

            "Leased Real Property" has the meaning set forth in Section 4.07(a).

            "Leases" has the meaning set forth in Section 4.07(a).

            "Law" or "Laws" means any Federal, provincial, state, local,
municipal, international or foreign law, statute, ordinance, code, rule,
regulation, judgment, order or decree.

            "Liens" means all liens, claims, encumbrances, mortgages, pledges,
easements, charges, security interests, options, proxies, voting trusts or other
agreements and other restrictions and limitations (statutory or otherwise).

            "Loss" has the meaning set forth in Section 10.02(a).

                                       48

            "Management Closing Costs" means any compensatory, bonus,
change-in-control, or similar payments (other than payments made in respect of
the Stock Options and Phantom Rights) in an amount not to exceed $5,000,000
incurred by the Company or any of its Subsidiaries in connection with the
transactions contemplated hereby and paid at Closing and for which no further
obligation of any kind shall continue following the Closing.

            "Management Equityholder" means each of Harley Kaplan, William S.
Anacker and C. Michel Griffith.

            "Material Adverse Change" means a change, event, circumstance or
series of changes, events or circumstances that, has had or gives rise to a
Material Adverse Effect.

            "Material Adverse Effect" means any effect or change that would,
individually or in the aggregate, be materially adverse to (i) the financial
condition, assets, properties or operating results of the Company and its
Subsidiaries, taken as a whole or (ii) the ability of the Company or the Sellers
to timely consummate the transactions contemplated hereby, provided, however,
that the following shall in no event be deemed to be a Material Adverse Effect
hereunder: (i) any effect or change (including any change in the laws, rules,
regulations, orders, or other binding directives issued by any governmental or
regulatory authority) which affects generally the United States economy or the
Company's industry as a whole except for those effects or changes that
disproportionately affect the Company and its Subsidiaries, taken as a whole;
(ii) any national or international political or social conditions, including the
engagement by the United States in hostilities, whether or not pursuant to the
declaration of a national emergency or war, or the occurrence of any military or
terrorist attack upon the United States, or any of its territories, possessions,
or diplomatic or consular offices or upon any military installation, equipment
or personnel of the United States except for those effects or changes that
disproportionately affect the Company and its Subsidiaries, taken as a whole; or
(iii) any adverse change, effect, event, occurrence, state of facts or
development arising from or relating to financial, banking, or securities
markets (including any disruption thereof or any decline in the price of
securities generally or any market or index).

            "Material Contracts" has the meaning set forth in Section 4.09(a).

            "Material Suppliers and Customers" has the meaning set forth in
Section 4.19.

            "Objection Notice" has the meaning set forth in Section 1.01(f)(ii).

            "Offering" has the meaning set forth in Section 6.05.

            "Owned Real Property" has the meaning set forth in Section 4.07(d).

            "Per Share Initial Purchase Price" means an amount equal to (A) the
sum of the Initial Purchase Price plus the aggregate exercise price of all Stock
Options divided by (B) the sum of (i) the number of Shares outstanding
immediately prior to the Closing plus (ii) the number of Phantom Rights
outstanding immediately prior to the Closing, plus (iii) the aggregate number of
shares of Common Stock issuable upon exercise of the outstanding Stock Options.

            "Permits" has the meaning set forth in Section 4.07(f).

                                       49

            "Permitted Encumbrances" has the meaning set forth in Section
4.07(d).

            "Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.

            "Phantom Rights" has the meaning set forth in Section 1.01(h).

            "Phantom Rights Agreements" means those certain Phantom Rights
Agreements, each dated as of September 26, 2005, by and between the Company and
each of William S. Anacker, C. Michel Griffith, Frank R. Fenton and Joseph
Zielinskie.

            "Phantom Rights Plan" means the RathGibson, Inc. 2005 Phantom Rights
Plan.

            "Plans" has the meaning set forth in Section 4.14.

            "Pre-Closing Tax Period" means any Tax period ending on or before
the Closing Date or, in the case of any Straddle Period, the portion of such
Straddle Period up to and including the Closing Date.

            "Pro Rata Share" means the Pro Rata Share of each Equityholder as
set forth on the Equityholders Schedule.

            "Products" has the meaning set forth in Section 4.22(a).

            "Proposal" has the meaning set forth in Section 6.02.

            "Real Properties" has the meaning set forth in Section 4.07.

            "Registered" means issued, registered, renewed or the subject of a
pending application.

            "Related Party" has the meaning set forth in Section 4.21(a).

            "Release" has the meaning set forth in the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq.

            "Representative" has the meaning set forth in Section 9.01.

            "Securities Act" means the United States Securities Act of 1933, as
amended.

            "Second Contingent Payment" has the meaning set forth in Section
1.04(a).

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

            "Stock Option Agreement" means that certain Stock Option Agreement,
dated as of September 26, 2005, by and between the Company and Frank R. Fenton.

                                       50

            "Stock Option Plan" means the RathGibson, Inc. 2005 Stock Option
Plan.

            "Stock Options" has the meaning set forth in Section 1.01(h).

            "Straddle Period" means any Tax period that includes but does not
end on the Closing Date.

            "Subsidiary" means, with respect to any Person, any corporation,
association, partnership, limited liability company, trust or other entity of
which more than 50% of the total voting power, whether by way of contract or
otherwise, of shares of capital stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person.

            "Suits" has the meaning set forth in Section 4.10(d).

            "Target Working Capital" means an amount equal to (i) the average of
the Company's Working Capital as of the last day of each of the twelve months
immediately preceding the month in which the Closing occurs as calculated in
accordance with the Working Capital Schedule attached hereto plus (ii)
$5,000,000.

            "Tax" or "Taxes" means any federal, state, local or foreign gross or
net income, gross or net receipts, capital stock, franchise, profits,
withholding, social security, unemployment, disability, real property, ad
valorem/personal property, stamp, excise, occupation, sales, use, transfer,
value added, alternative minimum, estimated or other tax, duty, fee or other
governmental charge of any kind, including any interest, penalty or addition
thereto, whether disputed or not.

            "Tax Returns" means any return, report, information return or other
document (including schedules or any related or supporting information) filed or
required to be filed with any governmental entity or other authority in
connection with the determination, assessment or collection of any Tax or the
administration of any laws, regulations or administrative requirements relating
to any Tax.

            "Third Party Claim" has the meaning set forth in Section 10.02(d).

            "Transaction Tax Deduction Benefits" means any Tax refunds and/or
reductions in Taxes payable by the Company or the Sellers attributable to
deductions arising from expenditures by or on behalf of the Company in respect
of the items set forth on the Transaction Tax Deduction Benefits Schedule.

            "Unaudited Financial Statements" has the meaning set forth in
Section 4.05(i).

            "Wisconsin Later Years Tax Audit" means any claim by the Wisconsin
Department of Revenue with respect to the interest deductions taken by the
Company with respect to any taxable years after the taxable year ended January
31, 2000, on any loans between the Company and the State Board of Florida.

                                       51

            "Wisconsin Tax Audit" means any claim by the Wisconsin Department of
Revenue with respect to the interest expense deductions taken by the Company for
taxable years 1995 through the year ended January 31, 2000, on any loans between
the Company and the State Board of Florida.

            "Working Capital" means the excess of (i) the sum of the Company's
and its Subsidiaries' current assets on a consolidated basis (including accounts
receivable, other receivables, inventory, prepaid expenses and other current
assets, but excluding Cash and Cash Equivalents, Income Taxes recoverable and
deferred Income Tax balances) over (ii) the sum of the Company's and its
Subsidiaries' current liabilities on a consolidated basis (including accounts
payable, other accounts payable, and salaries and wages payable and other
current liabilities but excluding any Income Taxes payable, deferred Income Tax
Balances and any amounts that relate to Indebtedness of the Company). The
foregoing shall be determined on a consolidated basis for the Company and its
Subsidiaries and in accordance with GAAP (except as otherwise provided in the
immediately preceding sentence) as set forth on the Schedule of Working Capital
attached hereto.

                                   ARTICLE XII

                                  MISCELLANEOUS

            12.01   Press Releases and Communications. No press release or
public announcement related to this Agreement or the transactions contemplated
herein shall be issued or made without the joint approval of the Buyer and the
Representative (which approval shall not be unreasonably withheld or delayed)
unless required by law (in the reasonable opinion of counsel) in which case the
Buyer and the Representative shall have the right to review such press release
or announcement prior to publication.

            12.02   Expenses. Except as otherwise expressly provided herein, the
Sellers and the Buyer shall pay all of their own expenses (including attorneys'
and accountants' fees and expenses) in connection with the negotiation of this
Agreement, the performance of their respective obligations hereunder and the
consummation of the transactions contemplated by this Agreement (whether
consummated or not); provided that if the Closing occurs, the Buyer shall fund
the payment of all pre-Closing fees and expenses of the Sellers, the Company
and its Subsidiaries (including, without limitation, fees and expenses payable
to legal counsel and independent accountants) as part of the Closing Costs.

            12.03   Notices. Any notice provided for in this Agreement shall be
in writing and shall be either personally delivered, or received by certified
mail, return receipt requested, or sent by reputable overnight courier service
(charges prepaid) or telecopy to the Company at the address set forth below and
to any other recipient at the address indicated in this Agreement and to any
subsequent holder of Shares at such address as indicated by the Company's
records or at such address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
Notices will be deemed to have been given hereunder (i) when delivered
personally to the recipient, (ii) one Business Day after being sent to the
recipient by reputable overnight courier service (charges prepaid), (iii) upon
machine-generated acknowledgment of receipt after transmittal by facsimile if so
acknowledged to have been

                                       52

received before 5:00 p.m. on a Business Day at the location of receipt and
otherwise on the next following Business Day, provided that such notice, demand
or other communication is also deposited within 24 hours thereafter with a
reputable overnight courier service (charges prepaid) for delivery to the same
Person, or (iv) five days after being mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid.

            Notices to the Buyer and to the Company after the Closing:

            Castle Harlan, Inc.
            150 E. 58th Street--38th Floor
            New York, New York 10155
            Telecopy: 212.207.8042
            Attn: William M. Pruellage

            with a copy to:

            Schulte Roth & Zabel LLP
            919 Third Avenue
            New York, New York 10022
            Telecopy: 212.593.5955
            Attn: Robert Goldstein

            Notices to the Representative:

            Liberty Partners Holdings 10, L.L.C.
            1370 Avenue of the Americas
            34th Floor
            New York, New York 10019
            Telecopy: 212.649.6076
            Attention: Paul J. Huston

            with a copy to (which shall not constitute notice):

            Kirkland & Ellis LLP
            200 East Randolph Drive
            Chicago, Illinois 60601
            Telecopy: (312) 861-2200
            Attention: Edward T. Swan, P.C.

                                       53

            Notices to the Company prior to Closing:

            Liberty Partners Holdings 10, L.L.C.
            1370 Avenue of the Americas
            34th Floor
            New York, New York 10019
            Attention: Paul J. Huston
            Telecopy: 212.649.6076

            And

            RathGibson, Inc.
            2505 Foster Avenue
            Janesville, Wisconsin 53547
            Attention: Harley Kaplan
            Telecopy: 608.754.0605

            With a copy to (which shall not constitute notice):

            Kirkland & Ellis LLP
            200 East Randolph Drive
            Chicago, Illinois 60601
            Telecopy: (312) 861-2200
            Attention: Edward T. Swan, P.C.

            12.04   Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, except that neither this Agreement
nor any of the rights, interests or obligations hereunder may be assigned or
delegated by the Buyer without the prior written consent of the Representative.
Notwithstanding anything to the contrary in this Section 12.05, the Buyer may
assign, without the prior written consent of any other parties hereto, (i) any
of its rights, benefits or obligations hereunder to an Affiliate, and (ii) any
rights under this Agreement to the Buyer's financing institutions and following
Closing subsequent purchasers of the Buyer, the Company or any of its
Subsidiaries, provided, that in each case, no such assignment shall relieve the
Buyer of obligations under this Agreement that have not been performed timely by
any such Affiliate assignee.

            12.05   Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable Law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Agreement.

                                       54

            12.06   No Strict Construction. The language used in this Agreement
shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
Person.

            12.07   Amendment and Waiver. Any provision of this Agreement or the
Schedules or Exhibits hereto may be amended or waived only in writing signed by
the Buyer, the Company and the Representative. No waiver of any provision
hereunder or any breach or default thereof shall extend to or affect in any way
any other provision or prior or subsequent breach or default. In addition, the
Buyer and certain Management Equityholders may enter into agreements between the
date hereof and the Closing Date whereby all or a portion of such Management
Equityholders Shares (which would otherwise be sold to Buyer pursuant to this
Agreement) may be contributed by such Management Equityholders to the capital or
exchanged for capital stock or options to acquire equity interests of the Buyer
(or the parent of the Buyer). In such event, the Buyer, Company and the
Representative agree to amend this Agreement as reasonably necessary in order to
accommodate the execution of such agreements and the transactions contemplated
thereby; provided, however, that no such modification shall result in any
additional liability to the Representative, or any other non-participating
Seller.

            12.08   Complete Agreement. This Agreement and the documents
referred to herein (including the Confidentiality Agreement and the Escrow
Agreement) contain the complete agreement between the parties hereto and
supersede any prior understandings, agreements or representations by or between
the parties, written or oral, which may have related to the subject matter
hereof in any way.

            12.09   Counterparts. This Agreement may be executed in multiple
counterparts, any one of which need not contain the signatures of more than one
party, but all such counterparts taken together shall constitute one and the
same instrument.

            12.10   No Third-Party Beneficiaries. This Agreement is for the sole
benefit of the parties hereto and their permitted assigns, and except for
Section 7.03 and Article X, nothing herein expressed or implied shall give or be
construed to give any Person (other than the parties hereto and such assigns)
any legal or equitable rights hereunder.

            12.11   Governing Law. Jurisdiction. All matters relating to the
interpretation, construction, validity and enforcement of this Agreement shall
be governed by and construed in accordance with the domestic laws of the State
of New York without giving effect to any choice or conflict of law provision or
rule (whether of the State of Illinois or any other jurisdiction) that would
cause the application of laws of any jurisdiction other than the State of New
York. The parties hereto irrevocably and unconditionally submit to the exclusive
jurisdiction of any state or federal court sitting in New York, New York over
any suit, action or proceeding brought pursuant to the terms of this Agreement.

            12.12   Waiver of Jury Trial. The parties to this Agreement each
hereby waives, to the fullest extent permitted by law, any right to trial of any
claim, demand, action, or cause of action (i) arising under, this Agreement or
(ii) in any way connected with or related or incidental to the dealings of the
parties hereto in respect of this Agreement or any of the transactions related
hereto, in each case whether now existing or hereafter arising, and whether in
contract, tort,

                                       55

equity, or otherwise. The parties to this Agreement each hereby agree and
consents that any such claim, demand, action, cause of action shall be decided
by court trial without a jury and that the parties to this Agreement may file an
original counterpart of a copy of this Agreement with any court as written
evidence of the consent of the parties hereto to the waiver of their right to
trial by jury.

            12.13   Buyer Obligations. With respect to any post-Closing
obligations of the Buyer, the Buyer may cause the Company and/or any of its
Subsidiaries to satisfy any such obligations directly or on Buyer's behalf.

                              *    *    *    *    *

                                       56

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

                                          BUYER:

                                          RGCH HOLDINGS LLC

                                          By:  /s/ William M. Pruellage
                                               _________________________________
                                          Its: President
                                               _________________________________

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

                                          BUYER:

                                          RGCH HOLDINGS LLC

                                          By:  _________________________________

                                          Its: _________________________________

                                          COMPANY:

                                          RATHGIBSON, INC.

                                          By:  /s/ Harley B. Kaplan
                                               _________________________________
                                          Its: President & CEO
                                               _________________________________

                                          REPRESENTATIVE:

                                          LIBERTY PARTNERS HOLDINGS 10, L.L.C.

                                          By:  Liberty Partners, L.P.
                                          Its: Manager

                                          By:  PEB Associates, Inc.
                                          Its: General Partner

                                          By:  _________________________________

                                          Its: _________________________________

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

                                          BUYER:

                                          RGCH HOLDINGS LLC

                                          By:  _________________________________

                                          Its: _________________________________

                                          COMPANY:

                                          RATHGIBSON, INC.

                                          By:  _________________________________

                                          Its: _________________________________

                                          REPRESENTATIVE:

                                          LIBERTY PARTNERS HOLDINGS 10, L.L.C.

                                          By:  Liberty Partners, L.P.
                                          Its: Manager

                                          By:  PEB Associates, Inc.
                                          Its: General Partner

                                          By:  /s/ Paul J. Huston
                                               _________________________________
                                          Its: Managing Director

                                          SELLERS:

                                          LIBERTY PARTNERS HOLDINGS 10, L.L.C.

                                          By:  Liberty Partners, L.P.
                                          Its: Manager

                                          By:  PEB Associates, Inc.
                                          Its: General Partner

                                          By:  /s/ Paul J. Huston
                                               _________________________________
                                          Its: Managing Director

                                          ______________________________________
                                          Harley Kaplan

                                          ______________________________________
                                          William S. Anacker

                                          ______________________________________
                                          C. Michel Griffith

                                          ______________________________________
                                          Frank R. Fenton

                                          SELLERS:

                                          LIBERTY PARTNERS HOLDINGS 10, L.L.C.

                                          By:  Liberty Partners, L.P.
                                          Its: Manager

                                          By:  PEB Associates, Inc.
                                          Its: General Partner

                                          By:  _________________________________

                                          Its: _________________________________

                                          /s/ Harley B. Kaplan
                                          ______________________________________
                                          Harley Kaplan

                                          ______________________________________
                                          William S. Anacker

                                          ______________________________________
                                          C. Michel Griffith

                                          ______________________________________
                                          Frank R. Fenton

                                          SELLERS:

                                          LIBERTY PARTNERS HOLDINGS 10, L.L.C.

                                          By:  Liberty Partners, L.P.
                                          Its: Manager

                                          By:  PEB Associates, Inc.
                                          Its: General Partner

                                          By:  _________________________________

                                          Its: _________________________________

                                          ______________________________________
                                          Harley Kaplan

                                          /s/ William S. Anacker
                                          ______________________________________
                                          William S. Anacker

                                          ______________________________________
                                          C. Michel Griffith

                                          ______________________________________
                                          Frank R. Fenton

                                          SELLERS:

                                          LIBERTY PARTNERS HOLDINGS 10, L.L.C.

                                          By:  Liberty Partners, L.P.
                                          Its: Manager

                                          By:  PEB Associates, Inc.
                                          Its: General Partner

                                          By:  _________________________________

                                          Its: _________________________________

                                          ______________________________________
                                          Harley Kaplan

                                          ______________________________________
                                          William S. Anacker

                                          /s/ C. Michel Griffith
                                          ______________________________________
                                          C. Michel Griffith

                                          ______________________________________
                                          Frank R. Fenton

                                          SELLERS:

                                          LIBERTY PARTNERS HOLDINGS 10, L.L.C.

                                          By:  Liberty Partners, L.P.
                                          Its: Manager

                                          By:  PEB Associates, Inc.
                                          Its: General Partner

                                          By:  _________________________________

                                          Its: _________________________________

                                          ______________________________________
                                          Harley Kaplan

                                          ______________________________________
                                          William S. Anacker

                                          ______________________________________
                                          C. Michel Griffith

                                          /s/ Frank R Fenton
                                          ______________________________________
                                          Frank R. Fenton

                                                        EQUITYHOLDERS SCHEDULE

---------------------------------------------------------------------------------------------------------------------------
            Equityholder
          Name and Address                Shares    Stock Options   Phantom Rights   Pro Rata Share   Indemnification Share
---------------------------------------------------------------------------------------------------------------------------

Liberty Partners Holdings 10, L.L.C.    197,883          N/A             N/A            87.91%               90.52%
c/o Liberty Capital Partners, Inc.
1370 Avenue of the Americas
34th Floor
New York, New York 10019
Attention: Paul J. Huston
---------------------------------------------------------------------------------------------------------------------------
Harley Kaplan                           10,385           N/A             N/A             4.61%                4.75%
1310 Fiore Drive
Lake Forest, Illinois 60045
---------------------------------------------------------------------------------------------------------------------------
William S. Anacker                      1,357.25         N/A            1,554            1.29%                1.33%
118 Winesap Drive
Janesville, Wisconsin 53548
---------------------------------------------------------------------------------------------------------------------------
C. Michel Griffith                      4,143            N/A            1,036            2.30%                2.37%
90 Shadowwood Court
Janesville, Wisconsin 53548
---------------------------------------------------------------------------------------------------------------------------
Frank R. Fenton                         1,694            256             311             1.00%                1.03%
2251 Morgan Lane
Ingleside, Texas 78362
---------------------------------------------------------------------------------------------------------------------------
Joseph Zielinskie                       N/A              N/A            6,474            2.88%                  --
4 Meadowbrook Club Way
Farhills, NJ 07931
---------------------------------------------------------------------------------------------------------------------------
TOTAL:                                  215,462.25       256            9,375             100%                 100%
---------------------------------------------------------------------------------------------------------------------------EXECUTION COPY

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

                                CREDIT AGREEMENT

                          DATED AS OF FEBRUARY 7, 2006

                                  by and among

                                RATHGIBSON, INC.

                                   as Borrower

                                       and

                     THE OTHER PERSONS PARTY HERETO THAT ARE

                          DESIGNATED AS CREDIT PARTIES

                                       and

                      GENERAL ELECTRIC CAPITAL CORPORATION

                        as Agent, L/C Issuer and a Lender

                                       and

                  THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO

                                   as Lenders

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

                                TABLE OF CONTENTS

                                                                            PAGE

SECTION 1. AMOUNTS AND TERMS OF LOANS..........................................1

        1.1    Loans...........................................................1
        1.2    Interest and Applicable Margins.................................6
        1.3    Fees............................................................8
        1.4    Payments.......................................................10
        1.5    Prepayments....................................................10
        1.6    Maturity.......................................................11
        1.7    Eligible Accounts..............................................12
        1.8    Eligible Inventory.............................................14

1.8A           Eligible M&E...................................................15

1.8B           Eligible Real Estate...........................................16

        1.9    Loan Accounts..................................................17
        1.10   Yield Protection; Illegality...................................18
        1.11   Taxes..........................................................18

SECTION 2. AFFIRMATIVE COVENANTS..............................................20

        2.1    Compliance with Laws and Contractual Obligations...............20
        2.2    Insurance; Damage to or Destruction of Collateral..............20
        2.3    Inspection; Lender Meeting.....................................21
        2.4    Organizational Existence.......................................21
        2.5    Environmental Matters..........................................22
        2.6    Landlords' Agreements, Mortgagee Agreements, Bailee
               Letters and Real Estate Purchases..............................22
        2.7    Conduct of Business............................................22
        2.8    Further Assurances.............................................23
        2.9    Omitted........................................................24
        2.10   Cash Management Systems........................................24
        2.11   Consents.......................................................24
        2.12   Supplemental Disclosure........................................24

SECTION 3. NEGATIVE COVENANTS.................................................25

        3.1    Indebtedness...................................................25
        3.2    Liens and Related Matters......................................29
        3.3    [Intentionally Omitted]........................................31
        3.4    [Intentionally Omitted]........................................31
        3.5    Restricted Payments............................................31
        3.6    Restriction on Fundamental Changes.............................34
        3.7    Disposal of Assets or Subsidiary Stock.........................36
        3.8    Transactions with Affiliates...................................37
        3.9    Conduct of Business............................................38
        3.10   Changes Relating to Indebtedness...............................38
        3.11   Fiscal Year....................................................39
        3.12   Press Release; Public Offering Materials.......................39

                                       -i-

        3.13   Subsidiaries...................................................39
        3.14   Bank Accounts..................................................39
        3.15   Hazardous Materials............................................39
        3.16   ERISA..........................................................39
        3.17   Sale Leasebacks................................................39
        3.18   Prepayments of Other Indebtedness..............................40

SECTION 4. FINANCIAL COVENANTS/REPORTING......................................40

        4.1    Omitted........................................................40
        4.2    Omitted........................................................40
        4.3    Omitted........................................................40
        4.4    Omitted........................................................40
        4.5    Omitted........................................................40
        4.6    Omitted........................................................40
        4.7    Omitted........................................................40
        4.8    Omitted........................................................40
        4.9    Financial Statements and Other Reports.........................41
        4.10   Accounting Terms; Utilization of GAAP for Purposes of
               Calculations Under Agreement...................................45

SECTION 5. REPRESENTATIONS AND WARRANTIES.....................................45

        5.1    Disclosure.....................................................45
        5.2    No Material Adverse Effect.....................................45
        5.3    No Conflict....................................................45
        5.4    Organization, Powers, Capitalization and Good Standing.........46
        5.5    Financial Statements and Projections...........................46
        5.6    Intellectual Property..........................................47
        5.7    Investigations, Audits, Etc....................................47
        5.8    Employee Matters...............................................47
        5.9    Solvency.......................................................47
        5.10   Litigation; Adverse Facts......................................48
        5.11   Use of Proceeds; Margin Regulations............................48
        5.12   Ownership of Property; Liens...................................48
        5.13   Environmental Matters..........................................48
        5.14   ERISA..........................................................49
        5.15   Brokers........................................................50
        5.16   Deposit and Disbursement Accounts..............................50
        5.17   Agreements and Other Documents.................................50
        5.18   Insurance......................................................50
        5.19   OFAC...........................................................50
        5.20   Patriot Act and Foreign Corrupt Practices Act..................51
        5.21   Taxes..........................................................51

SECTION 6. DEFAULT, RIGHTS AND REMEDIES.......................................51

        6.1    Event of Default...............................................51
        6.2    Suspension or Termination of Commitments.......................53
        6.3    Acceleration and Other Remedies................................53
        6.4    Performance by Agent...........................................54
        6.5    Application of Proceeds........................................54

                                      -ii-

SECTION 7. CONDITIONS TO LOANS................................................54

        7.1    Conditions to Initial Loans....................................55
        7.2    Conditions to All Loans........................................55

SECTION 8. ASSIGNMENT AND PARTICIPATION.......................................55

        8.1    Assignment and Participations..................................55
        8.2    Agent..........................................................57
        8.3    Set Off and Sharing of Payments................................61
        8.4    Disbursement of Funds..........................................61
        8.5    Disbursements of Advances; Payment.............................62
        8.6    Actions in Concert.............................................63

SECTION 9. MISCELLANEOUS......................................................64

        9.1    Indemnities....................................................64
        9.2    Amendments and Waivers.........................................64
        9.3    Notices........................................................65
        9.4    Failure or Indulgence Not Waiver; Remedies Cumulative..........66
        9.5    Marshaling; Payments Set Aside.................................66
        9.6    Severability...................................................67
        9.7    Lenders' Obligations Several; Independent Nature of
               Lenders' Rights................................................67
        9.8    Headings.......................................................67
        9.9    Applicable Law.................................................67
        9.10   Successors and Assigns.........................................67
        9.11   No Fiduciary Relationship; Limited Liability...................67
        9.12   Construction...................................................67
        9.13   Confidentiality................................................67
        9.14   CONSENT TO JURISDICTION........................................68
        9.15   WAIVER OF JURY TRIAL...........................................68
        9.16   Survival of Warranties and Certain Agreements..................68
        9.17   Entire Agreement...............................................68
        9.18   Counterparts; Effectiveness....................................68
        9.19   Replacement of Lenders.........................................69
        9.20   Delivery of Termination Statements and Mortgage Releases.......70
        9.21   Subordination of Intercompany Debt.............................70

                                      -iii-

                               INDEX OF APPENDICES

Annexes
--------

Annex A               -        Definitions
Annex B               -        Pro Rata Shares and Commitment Amounts
Annex C               -        Closing Checklist
Annex D               -        Pro Forma
Annex E               -        Lenders' Bank Accounts

Exhibits
--------

Exhibit 1.1(a)(i)     -        Revolving Note
Exhibit 1.1(a)(ii)    -        Notice of Revolving Credit Advance
Exhibit 1.1(c)        -        Swing Line Note
Exhibit 1.2(e)        -        Notice of Continuation/Conversion
Exhibit 4.9(d)        -        Borrowing Base Certificate
Exhibit 4.9(k)        -        Compliance Certificate
Exhibit 8.1           -        Assignment Agreement
Exhibit A-1           -        Fixed Charge Coverage Ratio
Exhibit B             -        Form of Copyright Security Agreement
Exhibit C             -        Form of Patent Security Agreement

Schedules
---------

Schedule 2.7          -        Corporate and Trade Names
Schedule 3.1          -        Indebtedness
Schedule 3.3          -        Investments
Schedule 3.4          -        Contingent Obligations
Schedule 3.8          -        Affiliate Transactions
Schedule 5.4(a)       -        Jurisdictions of Organization and Qualifications
Schedule 5.4(b)       -        Capitalization
Schedule 5.6          -        Intellectual Property
Schedule 5.7          -        Investigations and Audits
Schedule 5.8          -        Employee Matters
Schedule 5.10         -        Litigation
Schedule 5.12         -        Real Estate
Schedule 5.13         -        Environmental Matters
Schedule 5.14         -        ERISA
Schedule 5.16         -        Deposit and Disbursement Accounts
Schedule 5.17         -        Agreements and Other Documents
Schedule 5.18         -        Insurance

                                      -iv-

                                CREDIT AGREEMENT

        This CREDIT AGREEMENT is dated as of February 7, 2006 and entered into
by and among RATHGIBSON, INC., a Delaware corporation ("RathGibson" or the
"Borrower"), the other persons designated as "Credit Parties" on the signature
pages hereof, the financial institutions who are or hereafter become parties to
this Agreement as Lenders, and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation (in its individual capacity "GE Capital"), as the initial L/C Issuer
and as Agent.

                                R E C I T A L S:

        WHEREAS, Borrower desires that Lenders extend a revolving credit
facility to Borrower to refinance existing Indebtedness (as hereinafter defined)
of Borrower and to provide working capital for Borrower; and

        WHEREAS, pursuant to the Acquisition Agreement (as hereinafter defined),
RGCH Holdings Corp., a Delaware corporation ("Holdings") intends to acquire all
the Stock of Borrower contemporaneously with the Closing Date (the
"Acquisition"); and

        WHEREAS, Borrower desires to secure all of its Obligations (as
hereinafter defined) under the Loan Documents (as hereinafter defined) by
granting to Agent, for the benefit of Agent and Lenders, a security interest in
and lien upon substantially all of its personal and real property; and

        WHEREAS, after giving effect to the Acquisition, Holdings will own all
of the Stock of Borrower and is willing to guaranty the Obligations and to
pledge to Agent, for the benefit of Agent and Lenders, all of the Stock of
Borrower to secure the Obligations; and

        WHEREAS, all capitalized terms herein shall have the meanings ascribed
thereto in Annex A hereto which is incorporated herein by reference.

        NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrower, Credit Parties, Lenders and
Agent agree as follows:

                                   SECTION 1.
                           AMOUNTS AND TERMS OF LOANS

        1.1     Loans. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of Borrower and the other
Credit Parties contained herein:

                (a)     Revolving Loans.

                        (i)     Each Revolving Lender agrees, severally and not
jointly, to make available to Borrower from time to time until the Commitment
Termination Date its Pro Rata Share of advances (each a "Revolving Credit
Advance") requested by Borrower hereunder. The Pro Rata Share of the Revolving
Loan of any Revolving Lender (including, without duplication, Swing Line Loans)
shall not at any time exceed its separate Revolving Loan Commitment. Revolving
Credit Advances may be repaid and reborrowed; provided, that the amount of any
Revolving Credit Advance to be made at any time shall not exceed Borrowing
Availability. Borrowing Availability may be further reduced by Reserves imposed
by Agent in its reasonable credit judgment. All Revolving Loans shall be repaid
in full on the Commitment Termination Date. Borrower shall execute and deliver
to each Revolving Lender a note to evidence the Revolving Loan Commitment of
that Revolving Lender. Each note shall be in the principal amount of the
Revolving Loan Commitment of the applicable Revolving Lender, dated the

Closing Date and substantially in the form of Exhibit 1.1(a)(i) (as amended,
restated, renewed, replaced modified or supplemented from time to time, each a
"Revolving Note" and, collectively, the "Revolving Notes"). Other than pursuant
to Section 1.1(a)(ii), if at any time the outstanding Revolving Loans (including
the Swing Line Loans) exceed the Borrowing Base (any such excess Revolving Loans
are herein referred to as "Overadvances"), Lenders shall not be obligated to
make Revolving Credit Advances, no additional Letters of Credit shall be issued
and, except as provided in Section 1.1(a)(ii) below, Revolving Loans must be
repaid within one (1) Business Day and Letters of Credit cash collateralized in
an amount sufficient to eliminate any Overadvances. All Overadvances shall
constitute Index Rate Loans and shall bear interest at the Default Rate.
Revolving Loans which are Index Rate Loans may be requested in any amount with
one (1) Business Day prior written notice required for funding requests equal to
or greater than $5,000,000. For funding requests for such Loans less than
$5,000,000, written notice must be provided by 1:00 p.m. (New York time) on the
Business Day on which the Loan is to be made. All LIBOR Loans require three (3)
Business Days prior written notice. Written notices for funding requests shall
be in the form attached as Exhibit 1.1(a)(ii) ("Notice of Revolving Credit
Advance").

                        (ii)    If Borrower requests that Revolving Lenders
make, or permit to remain outstanding any Overadvances, Agent may, in its sole
discretion, elect to make, or permit to remain outstanding such Overadvances;
provided, however, that Agent may not cause Revolving Lenders to make, or permit
to remain outstanding, aggregate Revolving Loans (including, without
duplication, Swing Line Loans) in excess of the Maximum Amount. If an
Overadvance is made, or permitted to remain outstanding, pursuant to the
preceding sentence, then all Revolving Lenders shall be bound to make, or permit
to remain outstanding such Overadvance based upon their Pro Rata Shares of the
Revolving Loan Commitments in accordance with the terms of this Agreement. If an
Overadvance remains outstanding for more than ninety (90) days during any one
hundred eighty (180) day period, Revolving Loans must be repaid immediately in
an amount sufficient to eliminate all of such Overadvances. Furthermore, holders
of a majority of the Revolving Loan Commitment may prospectively revoke Agent's
ability to make or permit Overadvances by written notice to Agent. Any
Overadvance may be made as a Swing Line Advance.

                (b)     Omitted.

                (c)     Swing Line Facility.

                        (i)     Agent shall notify the Swing Line Lender upon
Agent's receipt of any Notice of Revolving Credit Advance. Subject to the terms
and conditions hereof, the Swing Line Lender may, in its discretion, make
available from time to time until the Commitment Termination Date advances
(each, a "Swing Line Advance") in accordance with any such notice. The
provisions of this Section 1.1(c) shall not relieve Revolving Lenders of their
obligations to make Revolving Credit Advances under Section 1.1(a); provided
that if the Swing Line Lender makes a Swing Line Advance pursuant to any such
notice, such Swing Line Advance shall be in lieu of any Revolving Credit Advance
that otherwise may be made by Revolving Lenders pursuant to such notice. Except
as provided in Section 1.1(a)(ii) above, the aggregate amount of Swing Line
Advances outstanding shall not exceed at any time the lesser of (A) the Swing
Line Commitment and (B) Borrowing Availability ("Swing Line Availability").
Until the Commitment Termination Date, Borrower may from time to time borrow,
repay and reborrow under this Section 1.1(c). Each Swing Line Advance shall be
made pursuant to a Notice of Revolving Credit Advance delivered by Borrower to
Agent in accordance with Section 1.1(a). Unless the Swing Line Lender has
received at least one (1) Business Day's prior written notice from Requisite
Lenders instructing it not to make a Swing Line Advance, the Swing Line Lender
shall, notwithstanding the failure of any condition precedent set forth in
Section 7.2, be entitled to fund that Swing Line Advance, and to have each
Revolving Lender make Revolving Credit Advances in accordance with

                                        2

Section 1.1(c)(iii) or purchase participating interests in accordance with
Section 1.1(c)(iv). Notwithstanding any other provision of this Agreement or the
other Loan Documents, the Swing Line Loan shall constitute an Index Rate Loan.
The aggregate outstanding principal amount of the Swing Line Loan shall be
repaid with the proceeds of Revolving Credit Advances made hereunder from time
to time in accordance with Section 1.1(c)(iii). The entire unpaid balance of the
Swing Line Loan and all other noncontingent Obligations shall be immediately due
and payable in full in immediately available funds on the Commitment Termination
Date if not sooner paid in full.

                        (ii)    Borrower shall execute and deliver to the Swing
Line Lender a promissory note to evidence the Swing Line Commitment. Each note
shall be in the principal amount of the Swing Line Commitment of the Swing Line
Lender, dated the Closing Date and substantially in the form of Exhibit 1.1(c)
(as amended, restated, renewed, replaced, modified or supplemented from time to
time, each a "Swing Line Note" and, collectively the "Swing Line Notes"). Each
Swing Line Note shall represent the obligation of Borrower to pay the amount of
the Swing Line Commitment or, if less, the aggregate unpaid principal amount of
all Swing Line Advances made to Borrower together with interest thereon as
prescribed in Section 1.2.

                        (iii)   The Swing Line Lender, at any time and from time
to time in its sole and absolute discretion, may on behalf of Borrower (and
Borrower hereby irrevocably authorizes the Swing Line Lender to so act on its
behalf) request each Revolving Lender (including the Swing Line Lender) to make
a Revolving Credit Advance to Borrower (which shall be an Index Rate Loan) in an
amount equal to that Revolving Lender's Pro Rata Share of the principal amount
of Borrower's Swing Line Loan (the "Refunded Swing Line Loan") outstanding on
the date such notice is given. Unless any of the events described in Sections
6.1(f) and 6.1(g) has occurred (in which event the procedures of Section
1.1(c)(iv) shall apply) and regardless of whether the conditions precedent set
forth in this Agreement to the making of a Revolving Credit Advance are then
satisfied, each Revolving Lender shall disburse directly to Agent, its Pro Rata
Share of a Revolving Credit Advance on behalf of the Swing Line Lender, prior to
3:00 p.m. (New York time), in immediately available funds on the Business Day
next succeeding the date that notice is given. The proceeds of those Revolving
Credit Advances shall be immediately paid to the Swing Line Lender and applied
to repay the Refunded Swing Line Loan.

                        (iv)    If, prior to refunding a Swing Line Loan with a
Revolving Credit Advance pursuant to Section 1.1(c)(iii), one of the events
described in Sections 6.1(f) or 6.1(g) has occurred, then, subject to the
provisions of Section 1.1(c)(v) below, each Revolving Lender shall, on the date
such Revolving Credit Advance was to have been made, purchase from the Swing
Line Lender an undivided participation interest in the Swing Line Loan to
Borrower in an amount equal to its Pro Rata Share (determined with respect to
Revolving Loans) of such Swing Line Loan. Upon request, each Revolving Lender
shall promptly transfer to the Swing Line Lender, in immediately available
funds, the amount of its participation interest.

                        (v)     Each Revolving Lender's obligation to make
Revolving Credit Advances in accordance with Section 1.1(c)(iii) and to purchase
participation interests in accordance with Section 1.1(c)(iv) shall be absolute
and unconditional and shall not be affected by any circumstance, including (A)
any setoff, counterclaim, recoupment, defense or other right that such Revolving
Lender may have against the Swing Line Lender, Borrower or any other Person for
any reason whatsoever; (B) the occurrence or continuance of any Default or Event
of Default; (C) any inability of Borrower to satisfy the conditions precedent to
borrowing set forth in this Agreement at any time or (D) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
Swing Line Lender shall be entitled to recover, on demand, from each Revolving
Lender the amounts required pursuant to Sections 1.1.(c)(iii) or 1.1(c)(iv), as
the case may be. If any Revolving Lender does not make available such amounts to
Agent or the Swing Line Lender, as applicable, the Swing Line Lender shall be

                                        3

entitled to recover, on demand, such amount on demand from such Revolving
Lender, together with interest thereon for each day from the date of non payment
until such amount is paid in full at the Federal Funds Rate for the first two
Business Days and at the Index Rate thereafter.

                (d)     Letters of Credit. The Revolving Loan Commitment may,
   in addition to advances under the Revolving Loan, be utilized, upon the
   request of Borrower, for the issuance of Letters of Credit; provided, that no
   Letter of Credit shall be issued in excess of Borrowing Availability.
   Immediately upon the issuance by an L/C Issuer of a Letter of Credit, and
   without further action on the part of Agent or any of the Lenders, each
   Revolving Lender shall be deemed to have purchased from such L/C Issuer a
   participation in such Letter of Credit (or in its obligation under a risk
   participation agreement with respect thereto) equal to such Revolving
   Lender's Pro Rata Share of the aggregate amount available to be drawn under
   such Letter of Credit.

                        (i)     Maximum Amount. The aggregate amount of Letter
of Credit Obligations with respect to all Letters of Credit outstanding at any
time shall not exceed $2,000,000 ("L/C Sublimit").

                        (ii)    Reimbursement. Borrower shall be irrevocably and
unconditionally obligated forthwith without presentment, demand, protest or
other formalities of any kind, to reimburse any L/C Issuer on demand in
immediately available funds for any amounts paid by such L/C Issuer with respect
to a Letter of Credit, including all reimbursement payments, Fees, Charges,
costs and expenses paid by such L/C Issuer. Borrower hereby authorizes and
directs Agent, except as provided below, to debit Borrower's account (by
increasing the outstanding principal balance of the Revolving Credit Advances)
in the amount of any payment made by an L/C Issuer with respect to any Letter of
Credit; provided, however, that Agent, in its discretion, may elect not to debit
Borrower's account for such amount if it would result in an Overadvance or if
the conditions precedent set forth in this Agreement to the making of a
Revolving Credit Advance are not satisfied. All amounts paid by an L/C Issuer
with respect to any Letter of Credit that are not immediately repaid by Borrower
with the proceeds of a Revolving Credit Advance shall bear interest at the
interest rate applicable to Revolving Loans which are Index Rate Loans plus, at
the election of Agent or Requisite Lenders, an additional two percent (2.00%)
per annum. In the event Agent elects not to debit Borrower's account for the
reimbursement of any amounts paid by an L/C Issuer with respect to any Letter of
Credit, such reimbursement shall be made within one (1) Business Day of the date
that such L/C Issuer made such payment and until paid shall bear interest at the
interest rate applicable to Revolving Loans which are Index Rate Loans plus, at
the election of Agent or Requisite Lenders, an additional two percent (2.00%)
per annum. Each Revolving Lender agrees to fund its Pro Rata Share of any
Revolving Loan made pursuant to this Section 1.1(d)(ii). In the event Agent
elects not to debit Borrower's account as provided above and Borrower fails to
reimburse the L/C Issuer in full on the date of any payment in respect of a
Letter of Credit, Agent shall promptly notify each Revolving Lender of the
amount of such unreimbursed payment and the accrued interest thereon and each
Revolving Lender, on the next Business Day prior to 3:00 p.m. (New York time),
shall deliver to Agent an amount equal to its Pro Rata Share thereof in same day
funds. Each Revolving Lender hereby absolutely and unconditionally agrees to pay
to the L/C Issuer upon demand by the L/C Issuer such Revolving Lender's Pro Rata
Share of each payment made by the L/C Issuer in respect of a Letter of Credit
and not immediately reimbursed by Borrower or satisfied through a debit of
Borrower's account. Each Revolving Lender acknowledges and agrees that its
obligations pursuant to this subsection in respect of Letters of Credit are
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including setoff, counterclaim, the occurrence and continuance of a
Default or an Event of Default or any failure by Borrower to satisfy any of the
conditions set forth in Section 7.2. If any Revolving Lender fails to make
available to the L/C Issuer the amount of such Revolving Lender's Pro Rata Share
of any payments made by the L/C Issuer in respect of a Letter of Credit as
provided in this

                                        4

Section 1.1(d)(ii), the L/C Issuer shall be entitled to recover such amount on
demand from such Revolving Lender together with interest at the Index Rate.

                        (iii)   Request for Letters of Credit. Borrower shall
give Agent at least three (3) Business Days prior written notice specifying the
date a Letter of Credit is requested to be issued, the amount and the name and
address of the beneficiary and a description of the transactions proposed to be
supported thereby. If Agent informs Borrower that the L/C Issuer cannot issue
the requested Letter of Credit directly, Borrower may request that L/C Issuer
arrange for the issuance of the requested Letter of Credit under a risk
participation agreement with another financial institution reasonably acceptable
to Agent, L/C Issuer and Borrower. The issuance of any Letter of Credit under
this Agreement shall be subject to the conditions that the Letter of Credit (i)
supports a transaction entered into in the ordinary course of business of
Borrower and (ii) is in a form and contains such terms and conditions as are
reasonably satisfactory to the L/C Issuer and, in the case of standby letters of
credit, Agent. The initial notice requesting the issuance of a Letter of Credit
shall be accompanied by the form of the Letter of Credit and the Master Standby
Agreement or Master Documentary Agreement, as applicable, and an application for
a letter of credit, if any, then required by the L/C Issuer completed in a
manner satisfactory to such L/C Issuer. If any provision of any application or
reimbursement agreement is inconsistent with the terms of this Agreement, then
the provisions of this Agreement, to the extent of such inconsistency, shall
control. A request to amend an outstanding Letter of Credit to increase the
maximum amount thereof or to extend the expiration date of an outstanding Letter
of Credit shall be deemed to be a request to issue a Letter of Credit hereunder.

                        (iv)    Expiration Dates of Letters of Credit. The
expiration date of each Letter of Credit shall be on a date which is not later
than the earlier of (a) one year from its date of issuance or (b) the date set
forth in clause (a) of the definition of the term Commitment Termination Date.
Notwithstanding the foregoing, a Letter of Credit may provide for automatic
extensions of its expiration date for one (1) or more successive one (1) year
periods provided that the L/C Issuer has the right to terminate such Letter of
Credit on each such annual expiration date and no renewal term may extend the
term of the Letter of Credit to a date that is later than the date set forth in
clause (a) of the definition of the term Commitment Termination Date. The L/C
Issuer may elect not to renew any such Letter of Credit and, upon direction by
Agent or Requisite Lenders, shall not renew any such Letter of Credit at any
time during the continuance of an Event of Default, provided that, in the case
of a direction by Agent or Requisite Lenders, the L/C Issuer receives such
directions prior to the date notice of non-renewal is required to be given by
the L/C Issuer and the L/C Issuer has had a reasonable period of time to act on
such notice.

                        (v)     Obligations Absolute. The obligation of Borrower
to reimburse the L/C Issuer, Agent and Lenders for payments made in respect of
Letters of Credit issued by the L/C Issuer shall be unconditional and
irrevocable and shall be paid under all circumstances strictly in accordance
with the terms of this Agreement, including the following circumstances: (a) any
lack of validity or enforceability of any Letter of Credit; (b) any amendment or
waiver of or any consent or departure from all or any of the provisions of any
Letter of Credit or any Loan Document; (c) the existence of any claim, set-off,
defense or other right which Borrower, any of its Subsidiaries or Affiliates or
any other Person may at any time have against any beneficiary of any Letter of
Credit, Agent, any L/C Issuer, any Lender or any other Person, whether in
connection with this Agreement, any other Loan Document or any other related or
unrelated agreements or transactions; (d) any draft or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect; (e) payment under any Letter of Credit against presentation of a
draft or other document that does not substantially comply with the terms of
such Letter of Credit; or (f) any other act or omission to act or delay of any
kind of any L/C Issuer, Agent, any Lender or any other

                                        5

Person or any other event or circumstance whatsoever that might, but for the
provisions of this Section 1.1(d)(v), constitute a legal or equitable discharge
of Borrower's obligations hereunder.

                        (vi)    Obligations of L/C Issuers. Each L/C Issuer
(other than GE Capital) hereby agrees that it will not issue a Letter of Credit
hereunder until it has provided Agent with written notice specifying the amount
and intended issuance date of such Letter of Credit and Agent has returned a
written acknowledgment of such notice to L/C Issuer. Each L/C Issuer (other than
GE Capital) further agrees to provide to Agent: (a) a copy of each Letter of
Credit issued by such L/C Issuer promptly after its issuance; (b) a weekly
report summarizing available amounts under Letters of Credit issued by such L/C
Issuer, the dates and amounts of any draws under such Letters of Credit, the
effective date of any increase or decrease in the face amount of any Letters of
Credit during such week and the amount of any unreimbursed draws under such
Letters of Credit; and (c) such additional information reasonably requested by
Agent from time to time with respect to the Letters of Credit issued by such L/C
Issuer. Without limiting the generality of the foregoing, it is expressly
understood and agreed by Borrower that the absolute and unconditional obligation
of Borrower to Agent and Lenders hereunder to reimburse payments made under a
Letter of Credit will not be excused by the gross negligence or willful
misconduct of the L/C Issuer. However, the foregoing shall not be construed to
excuse an L/C Issuer from liability to Borrower to the extent of any direct
damages (as opposed to consequential damages, with Borrower hereby waiving all
claims for any consequential damages to the extent permitted by Applicable Law)
suffered by Borrower that are subject to indemnification under the Master
Standby Agreement or the Master Documentary Agreement.

                (e)     Funding Authorization. The proceeds of all Loans made
   pursuant to this Agreement subsequent to the Closing Date are to be funded by
   Agent by wire transfer to the account designated by Borrower below (the
   "Disbursement Account"):

                Bank: Wells Fargo Bank N.A.
                ABA: 121000248
                Bank Address: 420 Montgomery
                              MAC A0101-101
                              San Francisco, CA 94104-1207
                Account No: 0040000531
                Reference: CFN6801

Borrower shall provide Agent with written notice of any change in the foregoing
instructions at least three (3) Business Days before the desired effective date
of such change.

        1.2     Interest and Applicable Margins.

                (a)     Borrower shall pay interest to Agent, for the ratable
   benefit of Lenders, in accordance with the various Loans being made by each
   Lender, in arrears on each applicable Interest Payment Date, at the following
   rates: (i) with respect to the Revolving Credit Advances which are designated
   as Index Rate Loans (and for all other Obligations not otherwise set forth
   below), the Index Rate plus the Applicable Revolver Index Margin per annum
   or, with respect to Revolving Credit Advances which are designated as LIBOR
   Loans, at the election of Borrower, the applicable LIBOR Rate plus the
   Applicable Revolver LIBOR Margin per annum; and (ii) with respect to the
   Swing Line Loan, the Index Rate plus the Applicable Revolver Index Margin per
   annum.

        The Applicable Margins are as follows:

                                        6

        Applicable Revolver Index Margin                                  1.00%

        Applicable Revolver LIBOR Margin                                  2.00%

        Applicable L/C Margin                                             2.00%

                (b)     If any payment on any Loan becomes due and payable on a
   day other than a Business Day, the maturity thereof will be extended to the
   next succeeding Business Day (except as set forth in the definition of LIBOR
   Period) and, with respect to payments of principal, interest thereon shall be
   payable at the then applicable rate during such extension

                (c)     All computations of Fees calculated on a per annum
   basis and interest (other than on Loans which are designated as Index Rate
   Loans) shall be made by Agent on the basis of a 360-day year, and in the case
   of Loans which are designated as Index Rate Loans all computations of
   interest shall be made by Agent on the basis of a 365/366-day year, in each
   case for the actual number of days occurring in the period for which such
   Fees and interest are payable. The Index Rate is a floating rate determined
   for each day. Each determination by Agent of an interest rate and Fees
   hereunder shall be presumptive evidence, absent manifest error.

                (d)     So long as an Event of Default has occurred and is
   continuing under Section 6.1(a), (f) or (g) and without notice of any kind,
   or so long as any other Event of Default has occurred and is continuing and
   at the election of Agent (or upon the written request of Requisite Lenders)
   confirmed by written notice from Agent to Borrower, the interest rates
   applicable to the Loans and the Letter of Credit Fee shall be increased by
   two percentage points (2%) per annum above the rates of interest or the rate
   of such Fee otherwise applicable hereunder ("Default Rate"), and all
   outstanding Obligations shall bear interest at the Default Rate applicable to
   such Obligations. Interest and Letter of Credit Fees at the Default Rate
   shall accrue, in the case of an Event of Default that has occurred and is
   continuing under Section 6.1(a), (f) or (g), from the initial date of such
   Event of Default until that Event of Default is cured or waived and in the
   case of any other Event of Default, from the date Agent provides written
   notice to Borrower of the election of the Default Rate until that Event of
   Default is cured or waived, and in each case shall be payable upon demand,
   but in any event, shall be payable on the next regularly scheduled payment
   date sate forth herein for such Obligation.

                (e)     Borrower shall have the option to (i) request that any
   Revolving Credit Advance be made as a LIBOR Loan, (ii) convert at any time
   all or any part of outstanding Loans (other than the Swing Line Loan) from
   Index Rate Loans to LIBOR Loans, (iii) convert any LIBOR Loan to an Index
   Rate Loan, subject to payment of the LIBOR Breakage Fee in accordance with
   Section 1.3(e) if such conversion is made prior to the expiration of the
   LIBOR Period applicable thereto, or (iv) continue all or any portion of any
   Loan (other than the Swing Line Loan) as a LIBOR Loan upon the expiration of
   the applicable LIBOR Period and the succeeding LIBOR Period of that continued
   Loan shall commence on the first day after the last day of the LIBOR Period
   of the Loan to be continued. Any Loan or group of Loans having the same
   proposed LIBOR Period to be made or continued as, or converted into, a LIBOR
   Loan must be in a minimum amount of $2,000,000 and integral multiples of
   $500,000 in excess of such amount. Any such election must be made by 1:00
   p.m. (New York time) on the 3rd Business Day prior to (1) the date of any
   proposed Revolving Credit Advance which is to bear interest at the LIBOR
   Rate, (2) the end of each LIBOR Period with respect to any LIBOR Loans to be
   continued as such, or (3) the date on which Borrower wishes to convert any
   Index Rate Loan to a

                                        7

   LIBOR Loan for a LIBOR Period designated by Borrower in such election. If no
   election is received with respect to a LIBOR Loan by 1:00 p.m. (New York
   time) on the 3rd Business Day prior to the end of the LIBOR Period with
   respect thereto, that LIBOR Loan shall be converted to an Index Rate Loan at
   the end of its LIBOR Period. Borrower must make such election by notice to
   Agent in writing, by fax or overnight courier. In the case of any conversion
   or continuation, such election must be made pursuant to a written notice (a
   "Notice of Conversion/Continuation") in the form of Exhibit 1.2(e). No Loan
   shall be made, converted into or continued as a LIBOR Loan, if an Event of
   Default has occurred and is continuing and Agent or Requisite Lenders have
   determined not to make or continue any Loan as a LIBOR Loan as a result
   thereof.

                (f)     Notwithstanding anything to the contrary set forth in
   this Section 1.2, if a court of competent jurisdiction determines in a final
   order that the rate of interest payable hereunder exceeds the highest rate of
   interest permissible under law (the "Maximum Lawful Rate"), then so long as
   the Maximum Lawful Rate would be so exceeded, the rate of interest payable
   hereunder shall be equal to the Maximum Lawful Rate; provided, however, that
   if at any time thereafter the rate of interest payable hereunder is less than
   the Maximum Lawful Rate, Borrower shall continue to pay interest hereunder at
   the Maximum Lawful Rate until such time as the total interest received by
   Agent, on behalf of Lenders, is equal to the total interest that would have
   been received had the interest rate payable hereunder been (but for the
   operation of this paragraph) the interest rate payable since the Closing Date
   as otherwise provided in this Agreement. Thereafter, interest hereunder shall
   be paid at the rate(s) of interest and in the manner provided in Sections
   1.2(a) through (e), unless and until the rate of interest again exceeds the
   Maximum Lawful Rate, and at that time this paragraph shall again apply. In no
   event shall the total interest received by any Lender pursuant to the terms
   hereof exceed the amount that such Lender could lawfully have received had
   the interest due hereunder been calculated for the full term hereof at the
   Maximum Lawful Rate. If the Maximum Lawful Rate is calculated pursuant to
   this paragraph, such interest shall be calculated at a daily rate equal to
   the Maximum Lawful Rate divided by the number of days in the year in which
   such calculation is made. If, notwithstanding the provisions of this Section
   1.2(f), a court of competent jurisdiction shall determine by a final,
   non-appealable order that a Lender has received interest hereunder in excess
   of the Maximum Lawful Rate, Agent shall, to the extent permitted by
   Applicable Law, promptly apply such excess as specified in Section 1.5(e) and
   thereafter shall refund any excess to Borrower or as such court of competent
   jurisdiction may otherwise order.

        1.3     Fees.

                (a)     Fee Letter. Borrower shall pay to GE Capital,
   individually, the Fees specified in that certain fee letter dated as of
   February 7, 2006 between Borrower and GE Capital (the "GE Capital Fee
   Letter"), at the times specified for payment therein.

                (b)     Unused Line Fee. As additional compensation for the
   Revolving Lenders, Borrower shall pay to Agent, for the ratable benefit of
   such Revolving Lenders, in arrears, on the last day of each calendar quarter
   prior to the Commitment Termination Date and on the Commitment Termination
   Date, a fee for Borrower's non use of available funds on the actual daily
   amount by which Revolving Loan Commitments exceeds the sum of (i) the
   aggregate outstanding principal amount of Revolving Credit Advances, (ii) the
   aggregate outstanding principal amount of Swing Line Loans and (iii) the
   outstanding amount of the Letter of Credit Obligations for all Letters of
   Credit and (the "Unused Commitment Fee") from the date hereof through the
   Commitment Termination Date at a rate of (i) in the event that for the
   calendar quarter (or portion thereof in the case of the fee payable on the
   Commitment Termination Date) ending on the date on which payment of the
   Unused Commitment Fee is due, the average daily outstanding amount of
   Revolving Loan (including Swing Line Advances) are not more than 50% of the
   average daily amount of the Revolving Loan Commitments during such

                                        8

   period, 0.50% per annum or (b) in the event that for the calendar quarter (or
   portion thereof in the case of the fee payable on the Commitment Date) ending
   on the date on which payment of the Unused Commitment Fee is due the average
   daily outstanding amount of the Revolving Loan is equal to or more than 50%
   of the average daily amount of the Revolving Loan Commitments during such
   period, 0.375% per annum.

                (c)     Omitted.

                (d)     Letter of Credit Fee. Borrower agrees to pay to Agent
   for the benefit of Revolving Lenders, as compensation to such Revolving
   Lenders for Letter of Credit Obligations incurred hereunder, (i) all
   reasonable costs and expenses incurred by Agent or any Lender on account of
   such Letter of Credit Obligations, and (ii) for each calendar quarter during
   which any Letter of Credit Obligation shall remain outstanding, a fee (the
   "Letter of Credit Fee") in an amount equal to the Applicable L/C Margin per
   annum from time to time in effect multiplied by the daily undrawn face amount
   of all Letters of Credit issued hereunder. Such fee shall be paid to Agent
   for the benefit of the Revolving Lenders in arrears, on the first Business
   Day of each calendar quarter and on the Commitment Termination Date. In
   addition, Borrower shall pay (i) to any L/C Issuer, within five (5) days
   following demand, such fees (including all per annum fees), charges and
   expenses of such L/C Issuer in respect of the issuance, negotiation,
   acceptance, amendment, transfer and payment of such Letter of Credit or
   otherwise payable pursuant to the application and related documentation under
   which such Letter of Credit is issued and (ii) to Agent, any bank fees or
   charges incurred by Agent to any L/C Issuer.

                (e)     LIBOR Breakage Fee. Upon (i) any default by Borrower in
   making any borrowing of, conversion into or continuation of any LIBOR Loan
   following Borrower's delivery to Agent of any LIBOR Loan request in respect
   thereof or (ii) any payment of a LIBOR Loan on any day that is not the last
   day of the LIBOR Period applicable thereto (regardless of the source of such
   prepayment and whether voluntary, by acceleration or otherwise), Borrower
   shall pay Agent, for the benefit of all Lenders that funded or were prepared
   to fund any such LIBOR Loan, the LIBOR Breakage Fee.

                (f)     Omitted.

                (g)     Expenses and Attorneys' Fees. Borrower agrees to
   promptly pay all reasonable out-of-pocket fees, charges, costs and expenses
   (including reasonable attorneys' fees and expenses of outside counsel, but
   excluding the fees and expenses of internal legal staff) incurred by Agent in
   connection with any matters contemplated by or arising out of the Loan
   Documents, in connection with the examination, review, due diligence
   investigation, documentation, negotiation, closing and syndication of the
   transactions contemplated herein and in connection with the continued
   administration of the Loan Documents including any amendments, modifications,
   consents and waivers. Borrower agrees to reimburse Agent for all due and
   payable out of pocket costs (including reasonable fees and expenses) as
   incurred by Agent to third party appraisers and auditors, and a fee of $800
   per audit day per in-house auditor, plus reasonable out-of-pocket expenses
   incurred by any such appraisers and auditors. Borrower agrees to promptly pay
   all reasonable out-of-pocket fees, charges, costs and expenses (including
   fees, charges, costs and expenses of attorneys, auditors (whether internal or
   external), appraisers, consultants and advisors) incurred by Agent in
   connection with any Event of Default, work-out or action to enforce any Loan
   Document or to collect any payments due from Borrower or any other Credit
   Party. In addition, in connection with any action to enforce any Loan
   Document or to collect any payments due from Borrower or any other Credit
   Party, Borrower agrees to promptly pay all out-of-pocket fees, charges, costs
   and expenses incurred by Lenders for one (1) counsel acting for all Lenders
   other than Agent. All fees, charges, costs and expenses for which

                                        9

   Borrower is responsible under this Section 1.3(g) shall be deemed part of the
   Obligations when incurred, payable within five (5) Business Days of demand or
   in accordance with the final sentence of Section 1.4 and secured by the
   Collateral.

        1.4     Payments. All payments by Borrower of the Obligations shall be
without deduction, defense, setoff or counterclaim and shall be made in same day
funds and delivered to Agent, for the benefit of Agent and Lenders, as
applicable, by wire transfer to the following account or such other place as
Agent may from time to time designate in writing.

                    ABA No. 021001033
                    Account Number 502 328 54
                    Deutsche Bank Trust Company Americas
                    Jersey City, New Jersey
                    ACCOUNT NAME: GECC/CAF DEPOSITORY
                    Reference: GE Capital re RathGibson, Inc.  CFN 6801

Borrower shall receive credit on the day of receipt for funds received by Agent
by 2:00 p.m. (New York time). In the absence of timely receipt, such funds shall
be deemed to have been paid on the next Business Day. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a Business Day,
the payment may be made on the next succeeding Business Day and such extension
of time shall be included in the computation of the amount of interest and Fees
due hereunder.

        Borrower hereby authorize Lenders to make Revolving Credit Advances or
Swing Line Advances, on the basis of their Pro Rata Shares, for the payment of
interest, Fees and expenses, Letter of Credit reimbursement obligations and any
amounts required to be deposited with respect to outstanding Letter of Credit
Obligations pursuant to Sections 1.5(g) or 6.3.

        1.5     Prepayments.

                (a)     Voluntary Prepayments of Loans. At any time, Borrower
   may prepay the Loans, in whole or in part, subject to the payment of LIBOR
   Breakage Fees, if applicable, and may terminate in whole or reduce in part
   the Revolving Loan Commitment, without premium, fees or penalty.

                (b)     Excess Borrowings. Except as provided in Section
   1.1(a)(ii), Borrower shall immediately repay the Revolving Loan to the extent
   that the outstanding principal balance of the Revolving Loan exceeds the
   lesser of the Borrowing Base and the Maximum Amount. The prepayments shall be
   applied in accordance with Section 1.5(e).

                (c)     Prepayments from Asset Dispositions. Within five (5)
   Business Days of receipt of any Net Proceeds of an Asset Disposition in
   excess of $250,000 during any Fiscal Year, to the extent not reinvested (or
   committed to be reinvested) pursuant to the following sentence, Borrower
   shall prepay the Revolving Credit Advances (without a reduction of the
   Revolving Loan Commitment, except to the extent that the Net Proceeds of
   Asset Dispositions since the Closing Date exceed $10,000,000 in the
   aggregate) by an amount equal to the amount of such Net Proceeds. Borrower or
   its Subsidiaries may reinvest any Net Proceeds of such Asset Disposition
   within two hundred seventy days from the date of receipt thereof (or enter
   into binding commitments to reinvest and reinvest such Net Proceeds within
   365 days from the receipt of such Net Proceeds), in productive replacement
   assets of a kind then used or usable in the business of Borrower, and
   Borrower shall not be required to apply such Net Proceeds to repayment of
   Revolving Credit Advances pending such reinvestment. If Borrower does not
   intend to so reinvest such Net Proceeds or if the 270 day period set forth in
   the immediately

                                       10

   preceding sentence expires without Borrower having reinvested (or having
   entered into binding commitments to reinvest) or if Borrower shall have
   entered into binding commitments within such 270 day period and shall not
   have reinvested such Net Proceeds within such 365 days period, Borrower shall
   prepay the Obligations in an amount equal to such remaining Net Proceeds of
   such Asset Disposition. The prepayments shall be applied in accordance with
   Section 1.5(e).

                (d)     Prepayments from Issuance of Securities. Immediately
   upon the receipt by Holdings or any of its Subsidiaries of the Net Proceeds
   of Equity Issuances by Holdings or any of its Subsidiaries (other than (i)
   Net Proceeds from Equity Issuances to members of the management of Holdings
   or any of its Subsidiaries or used to repurchase, redeem or prepay Senior
   Note in accordance with the Senior Notes Documents and Section 3.18, and (ii)
   Net Proceeds from Equity Issuances that are applied to repay any Interim
   Financing and interest thereon and fees payable in connection therewith)
   Borrower shall prepay the Obligations in an amount equal to such Net
   Proceeds. The prepayments shall be applied in accordance with Section 1.5(e).

                (e)     Application of Proceeds. With respect to any prepayments
   made by Borrower pursuant to Sections 1.5(c) and 1.5(d), such prepayments
   shall be applied as follows: first, to reduce the outstanding principal
   balance of the Swing Line Loan until the same has been repaid in full; and
   second, to the Revolving Credit Advances outstanding to that Borrower until
   the same has been repaid in full but not (except, in the case of Section
   1.5(c) where prepayments are made with the Net Proceeds of Asset
   Dispositions, to the extent that the aggregate Net Proceeds from Asset
   Dispositions after the Closing Date exceed $10,000,000) as a permanent
   reduction of the Revolving Loan Commitment. Any excess of Net Proceeds
   referred to in Section 1.5(c) or Section 1.5(d) remaining after such
   applications may be applied by Borrower to repay any Interim Financing, and
   interest and fees payable in connection therewith or for general corporate
   purposes. Considering each type of Loan being prepaid separately, any such
   prepayment shall be applied first to Index Rate Loans of the type required to
   be prepaid before application to LIBOR Loans of the type required to be
   prepaid, in each case in a manner which minimizes any resulting LIBOR
   Breakage Fee.

                (f)     Omitted.

                (g)     Letter of Credit Obligations. In the event any Letters
   of Credit are outstanding at the time that the Revolving Loan Commitment is
   terminated, Borrower shall (1) deposit with Agent for the benefit of all
   Revolving Lenders cash or, with the approval of Agent in each instance, back
   to back letters of credit in form and issued by a Person acceptable to Agent
   and L/C Issuer, in each case in an amount equal to 105% of the aggregate
   outstanding Letter of Credit Obligations to be available to Agent to
   reimburse payments of drafts drawn under such Letters of Credit and pay any
   Fees and expenses related thereto and (2) prepay the fee payable under
   Section 1.3(d) with respect to such Letters of Credit for the full remaining
   terms of such Letters of Credit (assuming no renewal thereof beyond the then
   current term). Upon termination of any such Letter of Credit, the unearned
   portion of such prepaid fee attributable to such Letter of Credit shall be
   refunded to Borrower.

        1.6     Maturity. All of the Obligations shall become due and payable as
otherwise set forth herein, but in any event all of the remaining Obligations
(other than Contingent Indemnification Obligations) shall become due and payable
upon termination of this Agreement. Until all Obligations have been fully paid
and satisfied (other than Contingent Indemnification Obligations to the extent
no unsatisfied claim has been asserted), the Revolving Loan Commitment has been
terminated and all Letters of Credit have been terminated or otherwise secured
as provided in Section 1.5(g), Agent shall be entitled to retain the security
interests in the Collateral granted under the Collateral Documents and the
ability to exercise all rights and remedies available to them under the Loan
Documents and Applicable Laws.

                                       11

Notwithstanding anything contained in this Agreement to the contrary, upon any
termination of the Revolving Loan Commitment, all of the Obligations (other than
Contingent Indemnification Obligations) shall be due and payable.

        1.7     Eligible Accounts. All of the Accounts owned by each Credit
Party and reflected in the most recent Borrowing Base Certificate delivered by
Borrower to Agent shall be "Eligible Accounts" for purposes of this Agreement,
except any Account to which any of the exclusionary criteria set forth below
applies. Agent shall have the right to establish, modify or eliminate Reserves
against Eligible Accounts from time to time in its reasonable credit judgment
upon not less than five (5) Business Days' prior notice. In addition, Agent
reserves the right, at any time and from time to time after the Closing Date, to
adjust any of the criteria set forth below, to establish new criteria and to
adjust advance rates with respect to Eligible Accounts, in its reasonable credit
judgment upon not less than five (5) Business Days' prior notice, subject to the
approval of Supermajority Revolving Lenders in the case of adjustments, new
criteria or changes in advance rates which have the effect of making more credit
available; provided, that notwithstanding the foregoing, the consent of Agent
shall be sufficient for any such adjustment, adoption of new criteria or change
in advance rates that does not result in the criteria or advance rates being
more favorable to the Borrower than those in effect on the Closing Date.
Eligible Accounts shall not include any Account of any Credit Party:

                (a)     that does not arise from the sale of goods or the
   performance of services by such Credit Party in the ordinary course of its
   business;

                (b)     (i) upon which such Credit Party's right to receive
   payment is not absolute or is contingent upon the fulfillment of any
   condition whatsoever or (ii) as to which such Credit Party is not able to
   bring suit or otherwise enforce its remedies against the Account Debtor
   through judicial process, or (iii) if the Account represents a progress
   billing consisting of an invoice for goods sold or used or services rendered
   pursuant to a contract under which the Account Debtor's obligation to pay
   that invoice is subject to such Credit Party's completion of further
   performance under such contract or is subject to the equitable lien of a
   surety bond issuer;

                (c)     to the extent of any defense, counterclaim, setoff or
   dispute asserted as to such Account;

                (d)     that is not a true and correct statement of bona fide
   obligations incurred in the amount of the Account for merchandise sold to or
   services rendered and accepted by the applicable Account Debtor;

                (e)     with respect to which an invoice, reasonably acceptable
   to Agent in form and substance, has not been sent to the applicable Account
   Debtor;

                (f)     that (i) is not owned by such Credit Party or (ii) is
   subject to any right, claim, security interest or other interest of any other
   Person, other than Liens in favor of Agent, on behalf of itself and Lenders
   and Permitted Encumbrances of the types described in clauses (vii) and
   (xviii) of the definition of Permitted Encumbrance;

                (g)     that arises from a sale to any director, officer, other
   employee or Affiliate of any Credit Party, or to any entity that has any
   common officer or director with any Credit Party; provided that arm's length
   sales to Sponsor Portfolio Companies not in excess of $250,000 in the
   aggregate at any time outstanding shall not be ineligible under this
   paragraph (g);

                                       12

                (h)     that is the obligation of an Account Debtor that is the
   United States government or a political subdivision thereof, or any state,
   county or municipality or department, agency or instrumentality thereof
   unless Agent, in its sole discretion, has agreed to the contrary in writing
   and Borrower, if necessary or desirable, has complied with respect to such
   obligation with the Federal Assignment of Claims Act of 1940, or any
   applicable state, county or municipal law restricting the assignment thereof
   with respect to such obligation;

                (i)     that is the obligation of an Account Debtor located in
   a foreign country other than Canada unless payment thereof is assured by
   credit insurance (reasonably satisfactory to Agent as to insurer, amount and
   form) or a letter of credit assigned and delivered to Agent (and of which
   Agent has "control" under Article 9 of the Code), reasonably satisfactory to
   Agent as to form, amount and issuer;

                (j)     to the extent such Credit Party is liable for goods sold
   or services rendered by the applicable Account Debtor to such Credit Party
   but only to the extent of the potential offset;

                (k)     that arises with respect to goods that are delivered on
   a bill and hold, cash on delivery basis or placed on consignment, guaranteed
   sale or other terms by reason of which the payment by the Account Debtor is
   or may be conditional;

                (l)     the Account is not paid within the earlier of: 60 days
   following its due date or 90 days following its original invoice date;

                (m)     the Account Debtor obligated upon such Account suspends
   business, makes a general assignment for the benefit of creditors or fails to
   pay its debts generally as they come due; or

                (n)     a petition is filed by or against any Account Debtor
   obligated upon such Account under any bankruptcy law or any other federal,
   state or foreign (including any provincial) receivership, insolvency relief
   or other law or laws for the relief of debtors;

                (o)     that is the obligation of an Account Debtor if 50% or
   more of the Dollar amount of all Accounts owing by that Account Debtor are
   ineligible under the criteria set forth in Section 1.7(l);

                (p)     as to which Agent, on behalf of itself and Lenders, does
   not have a first priority perfected Lien;

                (q)     as to which any of the representations or warranties in
   the Loan Documents are untrue;

                (r)     to the extent such Account is evidenced by a judgment,
   Instrument or Chattel Paper;

                (s)     to the extent that such Account, together with all other
   Accounts owing to such Account Debtor and its Affiliates as of any date of
   determination exceed 20% of all Eligible Accounts of Credit Parties; or

                (t)     that is payable in any currency other than Dollars.

                                       13

        1.8     Eligible Inventory. All of the Inventory owned by each Credit
Party and reflected in the most recent Borrowing Base Certificate delivered by
Borrower to Agent shall be "Eligible Inventory" for purposes of this Agreement,
except any Inventory to which any of the exclusionary criteria set forth below
applies. Agent shall have the right to establish, modify, or eliminate Reserves
against Eligible Inventory from time to time in its reasonable credit judgment
upon not less than five (5) Business Days' prior notice. In addition, Agent
reserves the right, at any time and from time to time after the Closing Date, to
adjust any of the criteria set forth below, to establish new criteria and to
adjust advance rates with respect to Eligible Inventory in its reasonable credit
judgment upon not less than five (5) Business Days' prior notice, subject to the
approval of Supermajority Revolving Lenders in the case of adjustments, new
criteria or changes in advance rates which have the effect of making more credit
available; provided, that notwithstanding the foregoing, the consent of Agent
shall be sufficient for any such adjustment, adoption of new criteria or change
in advance rates that does not result in the criteria or advance rates being
more favorable to the Borrower than those in effect on the Closing Date.
Eligible Inventory shall not include any Inventory of such Credit Party that:

                (a)     is not owned by such Credit Party free and clear of all
   Liens and rights of any other Person (including the rights of a purchaser
   that has made progress payments and the rights of a surety that has issued a
   bond to assure such Credit Party's performance with respect to that
   Inventory), except the Liens in favor of Agent, on behalf of itself and
   Lenders and Permitted Encumbrances of the types described in clauses (viii)
   and (xviii) and to the extent (1) waived or subordinated in a manner
   acceptable to Agent, (2) Reserves in respect thereof have been imposed by
   Agent or (3) approved by Agent without imposition of a Reserve, clause (viii)
   of the definition of Permitted Encumbrance;

                (b)     (i) is not located on premises owned, leased or rented
   by such Credit Party and set forth in Disclosure Schedule 5.12 or (ii) is
   stored at a leased location unless (x) a reasonably satisfactory landlord
   waiver has been delivered to Agent (if requested by the Agent), or (y) if a
   landlord waiver has been requested by the Agent and no such landlord waiver
   has been obtained, Reserves equal to three months rent (based upon base rent
   and such Credit Party's pro rata share of operating costs, utilities and
   taxes payable by such Credit Party under the lease, but excluding any
   supplemental rent or other costs, expenses or amounts or any indemnities
   payable thereunder, upon default or otherwise) (without duplication of any
   Reserves for rent established in respect of M&E at such location) reasonably
   satisfactory to Agent have been established with respect thereto, (iii) is
   stored with a bailee, converter, processor or warehouseman unless either a
   reasonably satisfactory, acknowledged bailee letter has been received by
   Agent (if requested by the Agent) or Reserves reasonably satisfactory to
   Agent have been established with respect thereto, or (iv) is located at an
   owned location subject to a mortgage in favor of a lender other than Agent,
   unless, if requested by Agent, a reasonably satisfactory mortgagee waiver has
   been delivered to Agent, or (v) is located at any site if the aggregate book
   value of Inventory at any such location is less than $100,000;

                (c)     is placed on consignment or similar arrangement, unless
   (A) as to each consignee (it being understood that for the purposes of this
   paragraph (c), the term consignee shall include any Person to whom such
   Credit Party has provided possession of Inventory prior to the consummation
   of an irrevocable sale of such Inventory to such Person), such Credit Party
   has, at such Credit Party's cost and expense (i) conducted Code, tax lien and
   judgment searches against such consignee, (ii) filed UCC-1 financing
   statements against each consignee naming such Credit Party as secured party
   and Agent as assignee of secured party, (iii) provided to each secured party
   of record that has filed a financing statement against such consignee
   (whether or not such Inventory is Inventory in the hands of such consignee) a
   notice, in form and substance reasonably satisfactory to Agent, pursuant to
   Section 9-324 of the Code of such Credit Party's intent to provide purchase
   money financing to such consignee and (iv) obtained from such consignee a
   letter agreement, in form and substance reasonably satisfactory to Agent, in
   which such consignee acknowledges the Lien of Agent and agrees that to the

                                       14

   extent that such consignee has not paid the purchase price of any item of
   Inventory, Agent can take possession of and remove such item of Inventory
   upon an Event of Default and (B) such Credit Party holds a perfected first
   priority security interest against such consignee, such security interest
   having been assigned of record to Agent;

                (d)     is in transit, except for Inventory in transit between
   locations set forth on Schedule 5.12 as to which Agent's Liens on behalf of
   itself and Lenders have been perfected at origin and destination;

                (e)     is covered by a negotiable document of title, unless
   such document has been delivered to Agent with all necessary endorsements,
   free and clear of all Liens except those in favor of Agent and Lenders;

                (f)     is excess, obsolete, unsaleable, shopworn, seconds,
   damaged or unfit for sale to the extent in excess of its Scrap Value;

                (g)     consists of display items or packing or shipping
   materials, manufacturing supplies, work in process Inventory (to the extent
   in excess of its Scrap Value) or replacement parts;

                (h)     consists of goods which have been returned as defective
   by the buyer to the extent in excess of its Scrap Value;

                (i)     is not of a type held for sale in the ordinary course of
   such Credit Party's business;

                (j)     is not subject to a first priority perfected Lien in
   favor of Agent on behalf of itself and Lenders;

                (k)     breaches any of the representations or warranties
   pertaining to Inventory set forth in the Loan Documents;

                (l)     consists of any costs associated with "freight in"
   charges;

                (m)     consists of Hazardous Materials or goods that can be
   transported or sold only with licenses that are not readily available; or

                (n)     is not covered by casualty insurance reasonably
   acceptable to Agent.

        1.8A    Eligible M&E. All of the M&E owned by each Credit Party and
reflected in the most recent Borrowing Base Certificate delivered by Borrower to
Agent shall be "Eligible M&E" for purposes of this Agreement, except any M&E to
which any of the exclusionary criteria set forth below applies. Agent shall have
the right to establish, modify or eliminate Reserves against Eligible M&E from
time to time in its reasonable credit judgment upon not less than five (5)
Business Days' prior notice. In addition, Agent reserves the right, at any time
and from time to time after the Closing Date, to adjust any of the criteria set
forth below, to establish new criteria and to adjust advance rates with respect
to Eligible M&E in its reasonable credit judgment upon not less than five (5)
Business Days' prior notice, subject to the approval of Supermajority Revolving
Lenders in the case of adjustments, new criteria or changes in advance rates
which have the effect of making more credit available; provided, that
notwithstanding the foregoing, the consent of Agent shall be sufficient for any
such adjustment, adoption of new criteria or change in advance rates that does
not result in the criteria or advance rates being more favorable to the

                                       15

Borrower than those in effect on the Closing Date. Eligible M&E shall not
include any M&E of any Credit Party that:

                (a)     is not owned by such Credit Party free and clear of all
   Liens, except the Liens in favor of Agent, on behalf of itself and Lenders
   and Permitted Encumbrances of the types described in clauses (vii) and
   (xviii) and to the extent (1) waived or subordinated in a manner acceptable
   to Agent, (2) Reserves in respect thereof have been imposed by Agent or (3)
   approved by Agent without imposition of a Reserve, clause (viii) of the
   definition of Permitted Encumbrance;

                (b)     is not located on premises owned, leased or rented by
   such Credit Party and set forth in Schedule 5.12;

                (c)     is located on premises leased or rented by such Credit
   Party, (x) unless a reasonably satisfactory landlord's waiver has been
   delivered to Agent in accordance herewith, or (y) Reserves equal to three
   months' rent (based upon base rent and such Credit Party's pro rata share of
   operating costs, utilities and taxes payable by such Credit Party under the
   lease, but excluding any supplemental rent or other costs, expenses or
   amounts or any indemnities payable thereunder, upon default or otherwise),
   without duplication of Reserves for rent established in respect of Inventory
   at such location, have been established with respect thereto;

                (d)     is located at an owned location subject to a mortgage in
   favor of a Person other than Agent, unless a reasonably satisfactory
   mortgagee waiver has been delivered to Agent;

                (e)     is located at any site if the aggregate book value of
   M&E, of such Credit Party,  at any such location is less than $100,000;

                (f)     that is covered by a certificate of title unless the
   interest of Agent has been noted on such certificate of title, free and clear
   of all Liens except those in favor of Agent and Lenders and Permitted
   Encumbrances of the types described in clauses (vii) and (xviii) and to the
   extent (1) waived or subordinated in a manner acceptable to Agent, (2)
   Reserves in respect thereof have been imposed by Agent or (3) approved by
   Agent without imposition of a Reserve, clause (viii) of the definition of
   Permitted Encumbrance;

                (g)     is obsolete;

                (h)     is not subject to a first priority perfected Lien in
   favor of Agent on behalf of itself and Lenders;

                (i)     breaches any of the representations or warranties
   pertaining to M&E or Equipment set forth in the Loan Documents;

                (j)     consists of Hazardous Materials or goods that can be
   transported or sold only with licenses that are not readily available; or

                (k)     is not covered by casualty insurance reasonably
   acceptable to Agent.

        1.8B    Eligible Real Estate. All of the Real Estate owned by each
Credit Party and reflected in the most recent Borrowing Base Certificate
delivered by Borrower to Agent shall be "Eligible Real Estate" for purposes of
this Agreement, except any Real Estate to which any of the exclusionary criteria
set forth below applies. Agent shall have the right to establish, modify or
eliminate Reserves against Eligible Real Estate from time to time in its
reasonable credit judgment upon not less than five (5)

                                       16

Business Days' prior notice. In addition, Agent reserves the right, at any time
and from time to time after the Closing Date, to adjust any of the criteria set
forth below, to establish new criteria and to adjust advance rates with respect
to Eligible Real Estate in its reasonable credit judgment upon not less than
five (5) Business Days' prior notice, subject to the approval of Supermajority
Revolving Lenders in the case of adjustments, new criteria or changes in advance
rates which have the effect of making more credit available; provided, that
notwithstanding the foregoing, the consent of Agent shall be sufficient for any
such adjustment, adoption of new criteria or change in advance rates that does
not result in the criteria or advance rates being more favorable to the Borrower
than those in effect on the Closing Date. Eligible Real Estate shall not include
any Real Estate of any Credit Party that:

                (a)     is not owned in fee by such Credit Party free and clear
   of all Liens and rights of any other Person, except the Liens in favor of
   Agent, on behalf of itself and Lenders and Permitted Encumbrances of the
   types described in clauses (vi), (vii), (ix), (xi), (xv) and (xviii) and to
   the extent (1) waived or subordinated in a manner acceptable to Agent, (2)
   Reserves in respect thereof have been imposed by Agent or (3) approved by
   Agent without imposition of a Reserve, clause (viii) of the definition of
   Permitted Encumbrance;

                (b)     as to which Agent has not received a loan policy of
   title insurance in favor of Agent and in form and amount, and issued by a
   title insurance company, reasonably satisfactory to Agent, in its reasonable
   credit judgment, together with such endorsements thereto as Agent shall
   require, in its reasonable credit judgment (provided such endorsements are
   available in the jurisdiction where such Real Estate is located);

                (c)     as to which Agent has not received an environmental
   report reasonably satisfactory to Agent;

                (d)     is not subject to a first priority perfected Lien in
   favor of Agent on behalf of itself and Lenders;

                (e)     breaches any of the representations or warranties
   pertaining to Real Estate set forth in the Loan Documents; or

                (f)     is not covered by casualty insurance that is reasonably
   acceptable to Agent.

        1.9     Loan Accounts. Agent shall maintain a loan account (the "Loan
Account") on its books to record: all Advances, all payments made by Borrower,
and all other debits and credits as provided in this Agreement with respect to
the Loans or any other Obligations. All entries in the Loan Account shall be
made in accordance with Agent's customary accounting practices as in effect from
time to time. The balance in the Loan Account, as recorded on Agent's most
recent printout or other written statement, shall, absent manifest error, be
presumptive evidence of the amounts due and owing to Agent and Lenders by
Borrower; provided that any failure to so record or any error in so recording
shall not limit or otherwise affect Borrower's duty to pay the Obligations.
Agent shall render to Borrower a monthly accounting of transactions with respect
to the Loans setting forth the balance of the Loan Account as to Borrower for
the immediately preceding month. Unless Borrower notifies Agent in writing of
any objection to any such accounting (specifically describing the basis for such
objection), within thirty (30) days after the date thereof, each and every such
accounting shall, absent manifest error, be deemed final, binding and conclusive
on Borrower in all respects as to all matters reflected therein. Only those
items expressly objected to in such notice shall be deemed to be disputed by
Borrower. Notwithstanding any provision herein contained to the contrary, any
Lender may elect (which election may be revoked) to dispense with the issuance
of Notes to that Lender and may rely on the Loan Account as evidence of the
amount of Obligations from time to time owing to it.

                                       17

        1.10    Yield Protection; Illegality.

                (a)     Capital Adequacy and Other Adjustments. In the event
   that any Lender shall have determined in good faith that the adoption after
   the date hereof of any law, treaty, governmental (or quasi-governmental)
   rule, regulation, guideline or order regarding capital adequacy, reserve
   requirements or similar requirements or compliance by any Lender or any
   corporation controlling such Lender with any request or directive regarding
   capital adequacy or similar requirements (whether or not having the force of
   law and whether or not failure to comply therewith would be unlawful) from
   any central bank or governmental agency or body having jurisdiction does or
   shall have the effect of increasing the amount of capital or other funds
   required to be maintained by such Lender or any corporation controlling such
   Lender and thereby reducing the rate of return on such Lender's or such
   corporation's capital as a consequence of its obligations hereunder, then
   Borrower shall from time to time within fifteen (15) days after notice and
   demand from such Lender (together with the certificate referred to in the
   next sentence and with a copy to Agent) pay to Agent, for the account of such
   Lender, additional amounts sufficient to compensate such Lender for such
   reduction. A certificate as to the amount of such cost and showing the basis
   of the computation of such cost submitted by such Lender to Borrower and
   Agent shall, absent manifest error, be presumptive evidence for all purposes.

                (b)     Increased LIBOR Funding Costs; Illegality.
   Notwithstanding anything to the contrary contained herein, if, after the date
   hereof, the introduction of or any change in any law, rule, regulation,
   treaty or directive (or any change in the interpretation thereof) shall make
   it unlawful, or any central bank or other Governmental Authority shall assert
   that it is unlawful, for any Lender to agree to make or to make or to
   continue to fund or maintain any LIBOR Loan, then, unless that Lender is able
   to make or to continue to fund or to maintain such LIBOR Loan at another
   branch or office of that Lender without, in that Lender's opinion, adversely
   affecting it or its Loans or the income obtained therefrom, on notice thereof
   and demand therefor by such Lender to Borrower through Agent, (i) the
   obligation of such Lender to agree to make or to continue to fund or maintain
   LIBOR Loans shall terminate and (ii) Borrower shall forthwith prepay in full
   all outstanding LIBOR Loans owing by Borrower to such Lender, together with
   interest accrued thereon, unless Borrower, within five (5) Business Days
   after the delivery of such notice and demand, converts all LIBOR Loans into
   Index Rate Loans; provided that no such conversion shall be required as to
   any LIBOR Loan prior to the end of its then LIBOR Period to the extent it is
   not illegal for such Lender to maintain such LIBOR Loan until such time. If,
   after the date hereof, the introduction of, change in or interpretation of
   any law, rule, regulation, treaty or directive would impose or increase
   reserve requirements (other than as taken into account in the definition of
   LIBOR Rate) or otherwise increase the cost to any Lender of making or
   maintaining a LIBOR Loan, then Borrower shall from time to time within
   fifteen (15) days after notice and demand from Agent to Borrower (together
   with the certificate referred to in the next sentence) pay to Agent, for the
   account of all such affected Lenders, additional amounts sufficient to
   compensate such Lenders for such increased cost. A certificate as to the
   amount of such cost and showing the basis of the computation of such cost
   submitted by Agent on behalf of all such affected Lenders to Borrower shall,
   absent manifest error, be presumptive evidence for all purposes.

        1.11    Taxes.

                (a)     No Deductions. Except as otherwise provided in this
Section 1.11, any and all payments or reimbursements made hereunder or under any
other Loan Document shall be made free and clear of and without deduction for
any and all present or future, taxes, levies, imposts, deductions or
withholdings, and all liabilities with respect thereto (including any interest,
additions to tax or penalties applicable thereto) of any nature whatsoever
imposed by any Governmental Authority ("Taxes"), excluding (a) such Taxes to the
extent imposed on or measured by Agent's or a Lender's net income or capital
(and franchise taxes, branch profits taxes, taxes on doing business or other
taxes imposed in lieu

                                       18

thereof) as a result of a connection between such Agent or Lender and the
jurisdiction of the Governmental Authority imposing such Tax or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising from such Agent or Lender having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Document), (b) any U.S. federal withholding tax that
is imposed on amounts payable to a Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement, except to the extent that such Foreign
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to this Section 1.11(a), (c) any U.S. federal withholding tax that
would not have been imposed but for such Foreign Lender's failure (other than as
a result of a change in law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority) to comply with Section 1.11(d), or (d) any U.S. federal withholding
tax that would not have been imposed but for a change by such Foreign Lender in
the jurisdiction of its applicable lending office (other than a change in
lending office made at the request of the Borrower) (collectively, "Excluded
Taxes," and all such non-Excluded Taxes being referred to herein as
"Non-Excluded Taxes").

                (b)     Additional Payments. If Borrower shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder or under
any other Loan Document to any Lender or Agent, then (i) in the case of
Non-Excluded Taxes, the sum payable hereunder shall be increased as may be
necessary so that, after making all required deductions (including deductions
applicable to additional sums payable pursuant to this Section 1.11), such
Lender or Agent receives, on an after-Tax basis, an amount equal to the sum it
would have received had no such deductions been made; and (ii) all required
deductions shall be withheld and timely paid over to the relevant Governmental
Authority in accordance with Applicable Law.

                (c)     Other Taxes. In addition, Borrower agrees to timely pay
to the relevant Governmental Authority in accordance with Applicable Law any
present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made hereunder or
under any other Loan Document or from the execution, delivery, enforcement or
registration of, or otherwise with respect to, this Agreement or any other Loan
Document ("Other Taxes").

                (d)     Tax Forms.

                        (i)     Prior to becoming a Lender under this Agreement
and within fifteen (15) days after a reasonable written request of Borrower or
Agent from time to time thereafter, each such Person or Lender that is not in
each case a "United States person" (as such term is defined in IRC Section
7701(a)(30)) for U.S. federal income tax purposes (a "Foreign Lender") shall
provide to Borrower and Agent, if it is legally entitled to, two properly
completed and executed IRS Forms W-8BEN or Forms W-8ECI or other applicable
forms, certificates or documents prescribed by the IRS, certifying as to such
Foreign Lender's entitlement to an exemption from, or reduction in, U.S.
withholding tax with respect to payments to be made to such Foreign Lender under
this Agreement and under the Notes.

                        (ii)    Prior to becoming a Lender under this Agreement
and within fifteen (15) days after a reasonable written request of Borrower or
Agent from time to time thereafter, each such Person or Lender that is in each
case a "United States person" (as such term is defined in IRC Section
7701(a)(30)) for U.S. federal income tax purposes provide to Borrower and Agent,
if it is legally entitled to, two properly completed and executed IRS Forms W-9,
certifying as to such Lender's entitlement to an exemption from U.S. backup
withholding tax, or any successor form.

                (e)     Indemnification. Borrower will indemnify each Lender and
Agent for the full amount of Non-Excluded Taxes and Other Taxes (including any
Non-Excluded Taxes and Other Taxes

                                       19

imposed by any jurisdiction on amounts payable under this Section 1.11) paid by
such Lender or Agent, as the case may be, and any liability (including
penalties, interest and expenses, including reasonable attorney's fees and
expenses) arising therefrom or with respect thereto, whether or not such
Non-Excluded Taxes or Other Taxes were correctly or legally asserted by the
relevant Governmental Authority. A certificate as to the amount of such payments
or liabilities submitted by Lender or Agent to Borrower (with a copy to Agent if
applicable) shall be presumptive evidence of the amount due. Borrower shall pay
Agent or such Lender, as the case may be, the amount shown as due on any such
certificate within ten (10) days after the receipt thereof.

                (f)     Evidence of Payments. As soon as practicable after any
payment of Taxes or Other Taxes by the Borrower to a Governmental Authority, the
Borrower shall deliver to the Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Agent.

                                   SECTION 2.
                              AFFIRMATIVE COVENANTS

        Each Credit Party executing this Agreement jointly and severally agrees
as to all Credit Parties that from and after the date hereof and until the
Termination Date:

        2.1     Compliance with Laws and Contractual Obligations. Each Credit
Party will (a) comply with and shall cause each of its Subsidiaries to comply
with (i) the requirements of all Applicable Laws, rules, regulations and orders
of any Governmental Authority (including, without limitation, laws, rules,
regulations and orders relating to taxes, employer and employee contributions,
securities, employee retirement and welfare benefits, environmental protection
matters and employee health and safety) as now in effect and which may be
imposed in the future in all jurisdictions in which any Credit Party or any of
its Subsidiaries is now doing business or may hereafter be doing business and
(ii) the obligations, covenants and conditions contained in all Contractual
Obligations of such Credit Party or any of its Subsidiaries other than those
laws, rules, regulations, orders and provisions of such Contractual Obligations
the noncompliance with which could not be reasonably expected to have, either
individually or in the aggregate, a Material Adverse Effect, and (b) maintain or
obtain and shall cause each of its Subsidiaries to maintain or obtain all
licenses, qualifications and permits now held or hereafter required to be held
by such Credit Party or any of its Subsidiaries, for which the loss, suspension,
revocation or failure to obtain or renew, could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect. This Section
2.1 shall not preclude any Credit Party or its Subsidiaries from contesting any
taxes or other payments, if they are being diligently contested in good faith in
a manner which stays enforcement thereof and if appropriate expense provisions
have been recorded in conformity with GAAP, subject to Section 3.2.

        2.2     Insurance; Damage to or Destruction of Collateral.

                (a)     The Credit Parties shall, at their sole cost and
   expense, maintain and provide Agent with policies or binders for property,
   casualty, liability, business interruption and other insurance described on
   Schedule 5.18 as in effect on the date hereof or otherwise as in effect on
   the date hereof or in form and amounts and with insurers customary for their
   industry or otherwise reasonably acceptable to Agent. Such policies of
   insurance (or the loss payable, assignment, mortgage and additional insured,
   as appropriate, endorsements delivered to Agent) shall contain provisions
   pursuant to which the insurer agrees to provide 30 days prior written notice
   to Agent in the event of any non-renewal, cancellation or amendment of any
   such insurance policy. If any Credit Party at any time or times hereafter
   shall fail to obtain or maintain any of the policies of insurance required
   above or to pay all premiums relating

                                       20

   thereto, Agent may at any time or times thereafter obtain and maintain such
   policies of insurance and pay such premiums and take any other action with
   respect thereto that Agent deems advisable and Agent will use reasonable
   efforts to provide prior written notice to the applicable Credit Party of any
   such action. Agent shall have no obligation to obtain insurance for any
   Credit Party or pay any premiums therefor. By doing so, Agent shall not be
   deemed to have waived any Default or Event of Default arising from any Credit
   Party's failure to maintain such insurance or pay any premiums therefor. All
   sums so disbursed, including reasonable attorneys' fees, court costs and
   other charges related thereto, shall be payable on demand by Borrower to
   Agent and shall be additional Obligations hereunder secured by the
   Collateral.

                (b)     Agent reserves the right at any time upon any materially
   adverse change in any Credit Party's risk profile (including any materially
   adverse change in the product mix maintained by any Credit Party or any laws
   affecting the potential liability of such Credit Party) to require additional
   forms and limits of insurance to, in Agent's reasonable opinion, adequately
   protect both Agent's and Lenders' interests in all or any portion of the
   Collateral and to ensure that each Credit Party is protected by insurance in
   amounts and with coverage customary for its industry. If reasonably requested
   by Agent, each Credit Party shall deliver to Agent from time to time a report
   of a reputable insurance broker, reasonably satisfactory to Agent, with
   respect to its insurance policies.

                (c)     On or prior to the date that is thirty (30) days
   following the Closing Date, each Credit Party shall deliver to Agent, in form
   and substance reasonably satisfactory to Agent, (i) endorsements to "All
   Risk" insurance naming Agent, on behalf of itself and Lenders and (ii)
   endorsements to all general liability and other liability policies naming
   Agent, on behalf of itself and Lenders, as additional insured. Each Credit
   Party irrevocably makes, constitutes and appoints Agent (and all officers,
   employees or agents designated by Agent), so long as any Event of Default has
   occurred and is continuing or the anticipated insurance proceeds exceed
   $5,000,000, as each Credit Party's true and lawful agent and attorney in fact
   for the purpose of making, settling and adjusting claims under such "All
   Risk" policies of insurance, endorsing the name of each Credit Party on any
   check or other item of payment for the proceeds of such "All Risk" policies
   of insurance and for making all determinations and decisions with respect to
   such "All Risk" policies of insurance. Agent shall have no duty to exercise
   any rights or powers granted to it pursuant to the foregoing
   power-of-attorney. Borrower shall promptly notify Agent of any loss, damage,
   or destruction to the Collateral in the amount of $750,000 or more, whether
   or not covered by insurance. Net Proceeds of casualty insurance shall be used
   to prepay obligations or for reinvestment as provided in Section 1.5(c).

        2.3     Inspection; Lender Meeting.No more than three (3) times per
Fiscal Year, each Credit Party shall permit any authorized representatives of
Agent to visit, audit and inspect any of the properties of such Credit Party and
its Subsidiaries, including its and their financial and accounting records, and
to make copies and take extracts therefrom, and to discuss its and their
affairs, finances and business with its and their officers and certified public
accountants, at such reasonable times during normal business hours and as often
as may be reasonably requested. Representatives of each Lender will be permitted
to accompany representatives of Agent during each visit, inspection and
discussion referred to in the immediately preceding sentence as often as may be
reasonably requested so as not to materially interfere with the normal business
operations of the Borrower; provided, that while an Event of Default is
continuing the three times per Fiscal Year limit shall not apply. Without in any
way limiting the foregoing, each Credit Party will participate and will cause
key management personnel of each Credit Party and its Subsidiaries to
participate in a meeting with Agent and Lenders at least once during each year,
which meeting shall be held at such time and such place as may be reasonably
requested by Agent.

        2.4     Organizational Existence. Except as otherwise permitted by
Section 3.6, each Credit Party will and will cause its Subsidiaries to at all
times preserve and keep in full force and effect its

                                       21

organizational existence and, except as would not reasonably be expected to
result in a Material Adverse Effect, all rights and franchises material to its
business.

        2.5     Environmental Matters. Each Credit Party shall and shall cause
each Person within its control to: (a) conduct its operations and keep and
maintain its Real Estate in compliance with all Environmental Laws and
Environmental Permits other than noncompliance that could not reasonably be
expected to have a Material Adverse Effect; (b) implement any and all
investigation, remediation, removal and response actions that are appropriate or
necessary to maintain the value and marketability of the Real Estate which are
required by Environmental Laws and Environmental Permits pertaining to the
presence, generation, treatment, storage, use, disposal, transportation or
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of its Real Estate; (c) notify Agent promptly after such Credit Party
becomes aware of any violation of Environmental Laws or Environmental Permits or
any Release on, at, in, under, above, to, from or about any Real Estate that is
reasonably likely to result in Environmental Liabilities to a Credit Party or
its Subsidiaries in excess of $250,000; and (d) promptly forward to Agent a copy
of any written order, notice, request for information or any communication or
report received by such Credit Party in connection with any such violation or
Release or any other matter relating to any Environmental Laws or Environmental
Permits that could reasonably be expected to result in Environmental Liabilities
in excess of $300,000, in each case whether or not the Environmental Protection
Agency or any Governmental Authority has taken or threatened any action in
writing in connection with any such violation, Release or other matter. If Agent
at any time while an Event of Default is continuing has a reasonable basis to
believe that there may be a violation of any Environmental Laws or Environmental
Permits by any Credit Party or any Person under its control or any Environmental
Liability arising thereunder, or a Release of Hazardous Materials on, at, in,
under, above, to, from or about any of its Real Estate, that, in each case,
could reasonably be expected to have a Material Adverse Effect, then each Credit
Party and its Subsidiaries shall, upon Agent's written request (i) cause the
performance of such environmental audits including subsurface sampling of soil
and groundwater, and preparation of such environmental reports, at Borrower's
expense, as Agent may from time to time reasonably request, but no more than one
time per year, with respect to such violation, Environmental Liability or
Release, which shall be conducted by reputable environmental consulting firms
reasonably acceptable to Agent and shall be in form and substance reasonably
acceptable to Agent, and (ii) permit Agent or its representatives to have access
to all Real Estate for the purpose of conducting such environmental audits and
testing as Agent deems appropriate, including subsurface sampling of soil and
groundwater. Borrower shall reimburse Agent for the costs of such audits and
tests and the same will constitute a part of the Obligations secured hereunder.

        2.6     Landlords' Agreements, Mortgagee Agreements, Bailee Letters and
Real Estate Purchases. Each Credit Party shall notify Agent promptly upon
becoming a party to any lease for real property or warehouse space or any
arrangement whereby Inventory shall be shipped to a processor or converter after
the Closing Date, and upon request of the Agent, such Credit Party shall use
commercially reasonable efforts to obtain a landlord's agreement, mortgagee
agreement or bailee letter, as applicable, from the lessor of each leased
property, mortgagee of owned property or bailee with respect to any warehouse,
processor or converter facility or other location where Collateral is stored or
located, which agreement or letter shall contain a waiver or subordination of
all Liens or claims that the landlord, mortgagee or bailee may assert against
the Collateral at that location, and shall otherwise be reasonably satisfactory
in form and substance to Agent. Each Credit Party shall timely and fully pay and
perform in all material respects their obligations under all leases and other
agreements with respect to each leased location or public warehouse where any
Collateral is or may be located.

        2.7     Conduct of Business. Except as could not reasonably be expected
to have a Material Adverse Effect, each Credit Party shall at all times
maintain, preserve and protect all of its assets and properties used or useful
in the conduct of its business, and keep the same in good repair, working order

                                       22

and condition in all material respects (taking into consideration ordinary wear
and tear and loss from casualty or condemnation) and from time to time make, or
cause to be made, all necessary or appropriate repairs, replacements and
improvements thereto consistent with industry practices; and transact business
only in such corporate and trade names as are set forth in Schedule 2.7.

        2.8     Further Assurances.

                (a)     Each Credit Party shall, from time to time, execute such
   guaranties, financing statements, documents, security agreements and reports
   as Agent or Requisite Lenders at any time may reasonably request to evidence,
   perfect or otherwise implement the guaranties and security for repayment of
   the Obligations contemplated by the Loan Documents.

                (b)     In the event that after the Closing Date any Credit
   Party acquires directly or by means of a Permitted Acquisition (i) a fee
   interest in real property having a fair market value in excess of $1,000,000
   (unless such real property is acquired with the proceeds of Indebtedness
   permitted under Section 3.1(b)(v)) or (ii) a leasehold interest in real
   property upon which is located (or such Credit Party intends to locate) a
   manufacturing facility, such Credit Party shall deliver to Agent a fully
   executed mortgage or deed of trust over such real property in form and
   substance reasonably satisfactory to Agent, together with such title
   insurance policies, surveys, appraisals, evidence of insurance, legal
   opinions, environmental assessments (which in any event shall disclose no
   potential Environmental Liability in excess of $1,000,000 with respect to
   such real property) and other documents and certificates as shall be
   reasonably required by Agent.

                (c)     Each Credit Party shall (i) cause each Person, upon its
   becoming a Domestic Subsidiary of such Credit Party (provided that this shall
   not be construed to constitute consent by any of the Lenders to any
   transaction referred to above which is not expressly permitted by the terms
   of this Agreement), promptly to become a party to this Agreement, to guaranty
   the Obligations and to grant to Agent, for the benefit of Agent and Lenders,
   a security interest in the real, personal and mixed property of such Person
   to secure the Obligations, (ii) pledge, or cause to be pledged, to Agent, for
   the benefit of Agent and Lenders, all, or in the case of a Foreign Subsidiary
   directly owned by Holdings or a Domestic Subsidiary thereof, 65%, of the
   Stock of such Subsidiary to secure the Obligations and (iii) not issue any
   additional Stock unless concurrently therewith (A) the Person obtaining
   ownership of any such additional Stock pledges to Agent all of such
   additional Stock and becomes a party to the Pledge Agreement by executing a
   counterpart of the Pledge Agreement and delivering such counterpart to Agent
   or (B) if the Person obtaining ownership of any such additional Stock is a
   pledgor under the Pledge Agreement, such pledgor pledges all such additional
   Stock to Agent in accordance with the provisions of Section 6(d) of the
   Pledge Agreement. The documentation for such guaranty, security and pledge
   shall be substantially similar to the Loan Documents executed concurrently
   herewith with such modifications as are reasonably requested by Agent.

                (d)     With respect to each Person holding any Credit Party's
   Inventory on consignment or under purchase money financing or similar
   arrangements in an amount in excess of $250,000, Borrower will, at the
   request of Agent, and at such Credit Party's cost and expense (i) conduct
   Code, tax lien and judgment searches against all Persons who hold Borrower's
   Inventory on consignment or under purchase money financing or similar
   arrangements, (ii) file UCC-1 financing statements against each such Person
   naming Borrower as secured party and Agent as assignee of secured party,
   (iii) provide to each secured party of record that has filed a financing
   statement against each such Person covering such Inventory (whether or not
   such Inventory is Inventory in the hands of such Person) a notice, in form
   and substance reasonably satisfactory to Agent, pursuant to Section 9-324 of
   the Code of such Credit Party's intent to provide purchase money financing to
   such Person and (iv) use reasonable efforts to obtain from such Person a
   letter agreement, in form and substance

                                       23

   reasonably satisfactory to Agent, in which such Person acknowledges the Lien
   of Agent and agrees that to the extent that such Person has not paid the
   purchase price of such Inventory, Agent can take possession of and remove
   such Inventory upon an Event of Default. Each Credit Party shall, promptly
   following entry into any consignment or under purchase money financing or
   similar arrangement after the Closing Date, provide notice thereof to Agent,
   together with copies of all documents evidencing or governing such
   arrangement and sufficient details regarding the consignee such that Code,
   tax lien and judgment searches can be conducted.

                (e)     On or prior to the date that is forty-five (45) days
   following the Closing Date, Borrower shall deliver to Agent (i) a
   Subordination, Nondisturbance and Attornment Agreement with respect to the
   North Branch, New Jersey property, duly executed by the Borrower and Wachovia
   Bank, National Association and in form and substance satisfactory to Agent;
   (ii) a Leasehold Mortgage with respect to the North Branch, New Jersey
   property, in form and substance satisfactory to Agent and duly executed by
   the Borrower and recorded with the Somerset County Recorder.

                (f)     On or prior to the date that is five (5) days following
   the Closing Date, Borrower shall deliver to Agent certificates from the
   appropriate Governmental Authorities of the State of New Jersey and the State
   of Wisconsin indicating that Borrower is qualified in such states as a
   foreign corporation.

        2.9     Omitted.

        2.10    Cash Management Systems. Borrower shall, and shall cause each
other Credit Party to, enter into Control Agreements with respect to each
deposit account maintained by Borrower or such Credit Party (other than any
payroll account or controlled disbursement account so long as such account is a
zero balance account) as of or after the Closing Date. Each such Control
Agreement shall be in form and substance reasonably satisfactory to Agent. The
Borrower and each other Credit Party shall enter into and maintain with one or
more banks and pursuant to agreements in form and substance reasonably
satisfactory to Agent, lockbox arrangements, it being understood that unless an
Event of Default shall be continuing and notice has been given by Agent in
accordance with the applicable Control Agreement, amounts credited to any
deposit account will not be transferred on a daily basis to the Agent's account
and shall be available to Borrower and each such Credit Party.

        2.11    Consents. Holdings shall concurrently upon the issuance of any
Stock of Holdings to a Person who does not hold Stock in Holdings as of the
Closing Date, deliver to the Agent an agreement, in form and substance
reasonably satisfactory to the Agent, from such Person, pursuant to which such
Person, as a Stockholder of Holdings, consents to the Related Transactions and
the Related Transactions Documents.

        2.12    Supplemental Disclosure. From time to time as may be requested
by Agent (which request will not be made more frequently than once each year
absent the occurrence and continuance of a Default or an Event of Default) and
from time to time with the approval of Agent (such approval not to be
unreasonably withheld, provided that no such supplement shall be permitted for
Schedules 3.2 through Schedule 3.8, inclusive), the Credit Parties shall
supplement each Disclosure Schedule hereto, or any representation herein or in
any other Loan Document, with respect to any matter hereafter arising which, if
existing or occurring at the date of this Agreement, would have been required to
be set forth or described in such Disclosure Schedule or as an exception to such
representation or which is necessary to correct any information in such
Disclosure Schedule or representation which has been rendered inaccurate thereby
(and, in the case of any supplements to any Disclosure Schedule, such Disclosure
Schedule shall be appropriately marked to show the changes made therein);
provided that (a) no such supplement to any such Disclosure Schedule or
representation shall be or be deemed a waiver of any Default or Event of

                                       24

Default resulting from the matters disclosed therein, except as consented to by
Agent and Requisite Lenders in writing; and (b) no supplement shall be required
as to representations and warranties that relate solely to the Closing Date.

                                   SECTION 3.
                               NEGATIVE COVENANTS

        Each Credit Party executing this Agreement jointly and severally agrees
as to all Credit Parties that from and after the date hereof until the
Termination Date:

        3.1     Indebtedness.

                (a)     The Credit Parties shall not and shall not cause or
   permit their Subsidiaries directly or indirectly, to create, incur, issue,
   assume, guarantee or otherwise become or, solely with respect to Indebtedness
   incurred, issued, assumed or guaranteed in reliance on Section 3.1(b), remain
   directly or indirectly liable, contingently or otherwise, with respect to any
   Indebtedness (including Acquired Debt), and Holdings will not issue any
   Disqualified Stock and will not permit any of its Subsidiaries to issue any
   shares of preferred stock; provided, however, that Holdings may incur
   Indebtedness (including Acquired Debt) or issue Disqualified Stock and its
   Subsidiaries may incur Indebtedness (including Acquired Debt) or issue
   preferred stock, if the Interest Coverage Ratio for Borrower's most recently
   ended four full Fiscal Quarters for which internal financial statements are
   available immediately preceding the date on which such additional
   Indebtedness is incurred or such Disqualified Stock or such preferred stock
   is issued, as the case may be, would have been at least 2.25 to 1.0,
   determined on a pro forma basis (including a pro forma application of the net
   proceeds therefrom), as if the additional Indebtedness had been incurred or
   the Disqualified Stock or the preferred stock had been issued, as the case
   may be, at the beginning of such four-quarter period;

                (b)     Notwithstanding the foregoing, Section 3.1(a) shall not
   prohibit the incurrence, issuance, guarantee, or other becoming or remaining
   liable, contingently or otherwise:

                        (i)     by Borrower (and the Guaranty thereof by any
Guarantor) with respect to the Obligations;

                        (ii)    by Borrower and its Subsidiaries with respect to
existing Indebtedness listed on Schedule 3.1;

                        (iii)   by Borrower and its Subsidiaries with respect to
Indebtedness represented by the Senior Notes, not in excess of $200,000,000 in
aggregate principal amount less repayments of principal thereof and repurchases
and redemptions thereof;

                        (iv)    by Borrower or any of its Subsidiaries with
respect to Attributable Debt in connection with a sale and leaseback of the
facility located in Janesville, Wisconsin and owned by Borrower on the date
hereof, in an aggregate principal amount for all Attributable Debt, including
all Permitted Refinancing Indebtedness incurred to renew, refund, refinance,
replace, defease or discharge any Attributable Debt incurred pursuant to this
clause (iv), not to exceed $5,000,000 at any time outstanding;

                        (v)     by Borrower or any of its Subsidiaries with
respect to Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case, incurred for the purpose
of financing all or any part of the purchase price or cost of design,
development, construction, installation or improvement of property, plant or
equipment used in the

                                       25

business of Borrower or any of its Subsidiaries (whether through the direct
acquisition or otherwise of such Equity Interests of any Person owning such
assets), in an aggregate principal amount for all such Indebtedness, including
all Permitted Refinancing Indebtedness incurred to renew, refund, refinance,
replace, defease or discharge any Indebtedness incurred pursuant to this clause
(v), not to exceed $5,000,000 at any time outstanding;

                        (vi)    by Holdings or any of its Subsidiaries with
respect to Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to renew, refund, refinance, replace, defease or
discharge any Indebtedness (other than intercompany Indebtedness) that was
permitted by this Agreement to be incurred under Section 3.1(a) or clauses (ii),
(iii), (iv), (v), (vi), (xii), (xv) or (xviii) of this Section 3.1(b);

                        (vii)   by Holdings or any of its Subsidiaries with
respect to intercompany Indebtedness between or among Holdings and any of its
Subsidiaries; provided, however, that:

                                (a)     if Borrower or any Guarantor is the
        obligor on such Indebtedness and the payee is not Borrower or a
        Guarantor, such Indebtedness must be expressly subordinated to the prior
        payment in full in cash of all Obligations;

                                (b)     any subsequent issuance or transfer of
        Equity Interests that results in any such Indebtedness being held by a
        Person other than Holdings or a Subsidiary and (ii) any sale or other
        transfer of any such Indebtedness (other than solely as a result of the
        creation of a Permitted Encumbrance upon such intercompany Indebtedness)
        to a Person that is not either Holdings or a Subsidiary will be deemed,
        in each case, to constitute an incurrence of such Indebtedness by
        Holdings or such Subsidiary, as the case may be, that was not permitted
        by this clause (vii);

                                (c)     at the time that such intercompany
        Indebtedness is incurred and after giving effect thereto, the obligor
        and the obligee of such intercompany Indebtedness shall be Solvent, in
        each case, on a consolidated basis;

                                (d)     omitted;

                                (e)     any intercompany Indebtedness made by
        Credit Parties to Subsidiaries of Holdings that are not Credit Parties
        shall not, together with Permitted Investments described in clause
        (i)(y) of the definition of such term, Permitted Acquisitions of the
        type described in Section 3.6(ii)(G) and the outstanding guarantees by
        Credit Parties of Indebtedness or other obligations of Subsidiaries of
        Holdings that are not Credit Parties under Section 3.1(b)(x), exceed
        $5,000,000 in the aggregate at any time outstanding; and

                                (f)     (1) Borrower shall have executed and
        delivered to each such other Credit Party, and each such other Credit
        Party shall have executed and delivered to Borrower, on the Closing Date
        or on the later of the date of first advance of such intercompany loan
        or advance, a demand note (collectively, the "Intercompany Notes") to
        evidence any such intercompany Indebtedness owing at any time by
        Borrower to such other Credit Party or by such other Credit Party to
        Borrower, which Intercompany Notes shall be in form and substance
        reasonably satisfactory to Agent and shall be pledged and delivered to
        Agent pursuant to the applicable Pledge Agreement or Security Agreement
        as additional collateral security for the Obligations; (2) Borrower
        shall record all intercompany transactions on its books and records in a
        manner reasonably satisfactory to Agent; and (3) the obligations of each
        Credit Party under any such Intercompany Notes shall be subordinated to
        the Obligations of such Credit Party hereunder pursuant to Section 9.21
        or otherwise in a manner reasonably satisfactory to Agent;

                        (viii)  by any of Borrower's Subsidiaries with respect
to the issuance thereby to Borrower or to any of its Subsidiaries of shares of
preferred stock; provided, however, that (a) any subsequent issuance or transfer
of Equity Interests that results in any such preferred stock being held by a

                                       26

Person other than Borrower or a Subsidiary; and (b) any sale or other transfer
of any such preferred stock (other than solely as a result of the creation of a
Permitted Encumbrance upon such Equity Interests) to a Person that is not either
Borrower or a Subsidiary, will be deemed, in each case, to constitute an
issuance of such preferred stock by such Subsidiary that was not permitted by
this clause (viii);

                        (ix)    by Holdings or any of its Subsidiaries with
respect to Indebtedness arising in connection with Hedge Agreements entered into
in the ordinary course of business;

                        (x)     by Holdings or any of its Subsidiaries with
respect to the guarantee of Indebtedness of Holdings or a Subsidiary of Holdings
that was permitted to be incurred by Section 3.1 or with respect to Guaranteed
Indebtedness of obligations (other than Indebtedness) of which Holdings or a
Subsidiary of Holdings is the primary obligor; provided that if the Indebtedness
being guaranteed is subordinated to or pari passu with the Obligations, then the
Guarantee shall be subordinated or pari passu, as applicable, to the same extent
as the Indebtedness guaranteed; provided, further, that guarantees by Credit
Parties of Indebtedness or such other obligations of Subsidiaries of Holdings
are not Credit Parties shall not, together with intercompany Indebtedness then
outstanding under Section 3.1(b)(vii)(e), Permitted Investments described in
clause (i)(y) of the definition of such term and Permitted Acquisitions
described in Section 3.6(ii)(G), exceed $5,000,000 in the aggregate outstanding
at any time; provided, further, that in no event shall Holdings be permitted to
guarantee Indebtedness under the Senior Notes;

                        (xi)    by Holdings or any of its Subsidiaries with
respect to obligations in respect of workers' compensation claims,
self-insurance obligations, bankers' acceptances, performance, completion and
surety bonds, completion guarantees and similar obligations in the ordinary
course of business;

                        (xii)   by Holdings or any of its Subsidiaries with
respect to Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently drawn against
insufficient funds, so long as such Indebtedness is covered within five Business
Days;

                        (xiii)  by Holdings or a Subsidiary with respect to
Indebtedness arising from agreements of Holdings or such Subsidiary providing
for indemnification, adjustment of purchase price or similar obligations, in
each case, incurred or assumed in connection with the sale or other disposition
of any business, assets or Capital Stock of Holdings or any Subsidiary, other
than guarantees of Indebtedness incurred by any Person acquiring all or any
portion of such business, assets or Capital Stock; provided that (A) the maximum
aggregate liability in respect of all such Indebtedness shall at no time exceed
the gross proceeds, whether or not cash, actually received by Holdings and its
Subsidiaries in connection with such disposition and (B) such Indebtedness is
not reflected in the balance sheet of Holdings or any Subsidiary (contingent
obligations referred to in a footnote to financial statements and not otherwise
reflected on the balance sheet will not be deemed to be reflected on such
balance sheet for purposes of this clause (B));

                        (xiv)   by Holdings or any of its Subsidiaries with
respect to contingent liabilities arising out of endorsements of checks and
other negotiable instruments for deposit or collection in the ordinary course of
business;

                        (xv)    by a Foreign Subsidiary with respect to
additional Indebtedness in an aggregate principal amount, including all
Permitted Refinancing Indebtedness incurred to renew, refund, refinance,
replace, defease or discharge any Indebtedness incurred pursuant to this clause
(xv), not to exceed $5,000,000 at any time outstanding;

                                       27

                        (xvi)   by Holdings or any of its Subsidiaries with
respect to earn-outs and similar obligations incurred in connection with the
Acquisition or Permitted Acquisitions; and

                        (xvii)  by Holdings or any of its Subsidiaries of with
respect to additional Indebtedness in an aggregate principal amount at any time
outstanding, including all Permitted Refinancing Indebtedness incurred to renew,
refund, refinance, replace, defease or discharge any Indebtedness incurred
pursuant to this clause (xvii), not to exceed $10,000,000 in the aggregate.

                (c)     For purposes of determining compliance with this Section
   3.1, in the event that an item of proposed Indebtedness meets the criteria of
   more than one of the categories of Indebtedness described in subsection (b)
   above, or is entitled to be incurred pursuant to subsection (a) of this
   Section 3.1, Borrower (in its sole discretion) will be permitted to divide
   and classify such item of Indebtedness on the date of its incurrence, or
   later reclassify all or a portion of such item of Indebtedness, in any manner
   that complies with this Section 3.1. The accrual of interest, the accretion
   or amortization of original issue discount, the payment of interest on any
   Indebtedness in the form of additional Indebtedness with the same terms, the
   reclassification of preferred stock as Indebtedness due to a change in
   accounting principles, and the payment of dividends on Disqualified Stock or
   preferred stock in the form of additional shares of the same class of
   Disqualified Stock or preferred stock will not be deemed to be an incurrence
   of Indebtedness or an issuance of Disqualified Stock or preferred stock for
   purposes of this covenant; provided, in each such case, that the amount of
   any such accrual, accretion or payment is included in Interest Charges and
   interest expense of Borrower as accrued. Notwithstanding any other provision
   of this covenant, the maximum amount of Indebtedness that Borrower or any
   Subsidiary may incur pursuant to this covenant shall not be deemed to be
   exceeded solely as a result of fluctuations in exchange rates or currency
   values.

                (d)     The amount of any Indebtedness outstanding as of any
   date will be:

                        (i)     subject to clauses (ii), (iii) and (iv) below,
the principal amount of the Indebtedness;

                        (ii)    in respect of Indebtedness of another Person
secured by a Lien on the assets of the specified Person (as to which the
specified Person has no liability in excess of the assets subject to such Lien),
the lesser of: (A) the fair market value of such assets at the date of
determination; and (B) the amount of the Indebtedness subject to such Lien of
the other Person;

                        (iii)   with respect to Indebtedness of others supported
by a guarantee of Holdings or a Subsidiary, the lesser of the amount of the
primary Indebtedness and any stated limit on recourse under the guarantee; and

                        (iv)    the accreted value of such Indebtedness, in the
case of any such Indebtedness issued with original issue discount which provides
by its express terms that the holders thereof are not entitled to receive upon
acceleration or redemption more than the accreted value at such time;

                (e)     the amount of the Indebtedness in respect of any Hedge
   Agreement at any time shall be equal to the amount payable as a result of the
   termination of such Hedge Agreement at such time.

                                       28

        3.2     Liens and Related Matters.

                (a)     No Liens. The Credit Parties shall not and shall not
   cause or permit their Subsidiaries to directly or indirectly create, incur,
   assume or permit to exist any Lien on or with respect to any property or
   asset of such Credit Party or any such Subsidiary, whether now owned or
   hereafter acquired, or any income or profits therefrom, except Permitted
   Encumbrances (including, without limitation, those Liens constituting
   Permitted Encumbrances existing on the date hereof and renewals and
   extensions thereof, as set forth on Schedule 3.2).

                (b)     No Negative Pledges. The Credit Parties shall not and
   shall not cause or permit their Subsidiaries to directly or indirectly enter
   into or assume any agreement (other than the Loan Documents) prohibiting the
   creation or assumption of any Lien upon its properties or assets, whether now
   owned or hereafter acquired, except (i) in connection with any document or
   instrument governing Indebtedness permitted (A) under Section 3.1(b)(iii) or
   (B) so long as such prohibition applies only to the assets securing such
   Indebtedness, Section 3.1(b)(ii), (b)(v) or (b)(xv), or (C) so long as such
   prohibition is not materially more restrictive, taken as a whole, than the
   prohibitions in this Agreement, under Section 3.1(b)(xvii), or (D) under
   Section 3.1(b)(vi), with respect to any Indebtedness described in subclauses
   (A), (B) or (C) above, so long as the prohibition is not materially more
   restrictive taken as a whole, than the prohibition in the Indebtedness that
   was renewed, refunded, refinanced, replaced, defeased or discharged, and (ii)
   licenses and contracts which by their terms prohibit the assignment of such
   agreements (to the extent such prohibition is enforceable at law) or the
   granting of Liens on the rights contained therein.

                (c)     No Restrictions on Subsidiary Distributions to Borrower.
   Except as provided herein, the Credit Parties shall not and shall not cause
   or permit their Subsidiaries to directly or indirectly create or otherwise
   cause or suffer to exist or become effective any consensual encumbrance or
   restriction of any kind on the ability of any such Subsidiary to: (1) pay
   dividends or make any other distribution on any of such Subsidiary's Stock
   owned by Borrower or any other Subsidiary; (2) pay any Indebtedness owed to
   Borrower or any other Subsidiary; (3) make loans or advances to Borrower or
   any other Subsidiary; or (4) transfer any of its property or assets to
   Borrower or any other Subsidiary, except:

                        (i)     agreements governing Indebtedness described in
Section 3.1(b)(ii) as in effect on the date of this Agreement and any
amendments, restatements, modifications, renewals, increases, supplements,
refundings, replacements or refinancings of those agreements; provided that the
amendments, restatements, modifications, renewals, increases, supplements,
refundings, replacements or refinancings are not materially more restrictive,
taken as a whole, with respect to such dividend and other payment restrictions
than those contained in those agreements on the date of this Agreement;

                        (ii)    the Senior Notes Documents;

                        (iii)   applicable law, rule, regulation or order;

                        (iv)    any instrument governing Indebtedness or Capital
Stock of a Person acquired by Holdings or any of its Subsidiaries as in effect
at the time of such acquisition (except to the extent such Indebtedness or
Capital Stock was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired; provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this Agreement to
be incurred;

                                       29

                        (v)     customary non-assignment provisions in contracts
and licenses entered into in the ordinary course of business;

                        (vi)    purchase money obligations for property acquired
in the ordinary course of business and Capital Lease Obligations that impose
restrictions on the property purchased or leased of the nature described in
clause (4) of Section 3.2(c);

                        (vii)   any agreement for the sale or other disposition
of all or substantially all of the Capital Stock or assets of a Subsidiary or an
agreement entered into for the sale by such Subsidiary of assets that restricts
distributions by that Subsidiary pending such sale or other disposition;

                        (viii)  Permitted Refinancing Indebtedness; provided
that the restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken as a whole,
than those contained in the agreements governing the Indebtedness being
refinanced;

                        (ix)    Permitted Encumbrances that limit the right of
the debtor to dispose of the assets subject to such Liens;

                        (x)     provisions limiting the disposition or
distribution of assets or property in joint venture agreements (by such joint
venture to the extent that it is not a Credit Party), limited liability company
operating agreements (by such limited liability company to the extent that it is
not a Credit Party), partnership agreements (by such partnership to the extent
that it is not a Credit Party), asset sale agreements, sale-leaseback
agreements, options, stock sale agreements, lease agreements, licenses and other
similar agreements entered into with the approval of Borrower's Board of
Directors, which limitation is applicable only to the assets that are the
subject of such agreements;

                        (xi)    provisions in agreements or instruments that
prohibit the payment of dividends or the making of other distributions with
respect to any Capital Stock of a Person on other than a pro rata basis;

                        (xii)   any encumbrance or restriction contained in any
Indebtedness incurred by a Foreign Subsidiary pursuant to Section 3.1(b)(xv)
that applies only to such Foreign Subsidiary; and

                        (xiii)  in the case of clause (4) of Section 3.2(c) of
this covenant:

                                (A)     that restrict in a customary manner the
                                subletting, assignment or transfer of any
                                property or asset that is a lease, license,
                                conveyance or contract or similar property or
                                asset, or

                                (B)     existing by virtue of any transfer of,
                                agreement to transfer, option or right with
                                respect to, or Lien on, any property or assets
                                of Holdings or any of its Subsidiaries not
                                otherwise prohibited by this Agreement;

                        (xiv)   any encumbrances or restrictions imposed by any
amendments, modifications restatements, renewals, increases, supplements,
refundings, replacements or refinancings of the contracts, instruments or
obligations referred to in clauses (i) through (xiii) above; provided that the
encumbrances or restrictions in such amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings are
not materially more restrictive, taken as a whole, in the good faith judgment of
the Board of Directors of Borrower than the encumbrances or restrictions prior
to such

                                       30

amendment, modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing.

        3.3     [Intentionally Omitted].

        3.4     [Intentionally Omitted].

        3.5     Restricted Payments.

                (a)     The Credit Parties shall not and shall not cause or
   permit their Subsidiaries to directly or indirectly declare, order, pay, make
   or set apart any sum for any Restricted Payment, unless, at the time of and
   after giving effect to such Restricted Payment:

                        (i)     no Default or Event of Default has occurred and
is continuing or would occur as a consequence of such Restricted Payment;

                        (ii)    Borrower would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such Restricted Payment
had been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to Section
3.1(a); and

                        (iii)   such Restricted Payment, together with the
aggregate amount of all other Restricted Payments made by Borrower and its
Subsidiaries since the Closing Date (excluding Restricted Payments permitted by
clauses (ii), (iii), (iv), (v), (vi), (vii), (viii), (ix), (xiii), (xiv) and
(xv) of Section 3.5(b)), is less than the sum, without duplication, of:

                        (1)     50% of the  Consolidated Net Income of Borrower
for the period (taken as one accounting period) from the beginning of the first
Fiscal Quarter commencing after the date of this Agreement to the end of
Borrower's most recently ended Fiscal Quarter for which financial statements
have been delivered hereunder to Agent at the time of such Restricted Payment
(or, if such Consolidated Net Income for such period is a deficit, less 100% of
such deficit); plus

                        (2)     100% of the aggregate Qualified Proceeds
received by Borrower since the Closing Date as a contribution to its common
equity capital or from the issue or sale of Equity Interests of Borrower (other
than Disqualified Stock) or from the issue or sale of convertible or
exchangeable Disqualified Stock or convertible or exchangeable debt securities
of Borrower that have been converted into or exchanged for such Equity Interests
(other than Equity Interests (or Disqualified Stock or debt securities) sold to
a Subsidiary of Borrower), together with the aggregate cash and Cash Equivalents
received by Borrower or any of its Subsidiaries at the time of such conversion
or exchange

                        (3)     to the extent that any Restricted Investment
that was made after the Closing Date is sold for cash or is otherwise disposed
of or is repurchased, redeemed, liquidated or repaid for cash, the amount of
cash so received (less the cost of disposition, if any, and less any amount
included in clause (1) of this Section 3.5(a)(iii) in respect of such
transaction); and

                        (iv)    after giving effect to such Restricted Payment
(x) Borrowing Availability shall be not less than $15,000,000 and (y) on a pro
forma basis for the period of four Fiscal Quarters for which financial
statements have been delivered to the Agent hereunder ending on or most recently
prior to such Restricted Payment, as though such Restricted Payment was made on
the first day of such period, the Fixed Charge Coverage Ratio shall be at least
1.0:1.0.

                                       31

                (b)     The preceding subsection (a) shall not prohibit:

                        (i)     the payment of any dividend or the consummation
of any irrevocable redemption within 60 days after the date of declaration of
the dividend or giving of the redemption notice, as the case may be, if at the
date of declaration or notice, the dividend or redemption payment would have
complied with the provisions of this Agreement;

                        (ii)    the making of any Restricted Payment or a
purchase, redemption, defeasance or prepayment of Senior Notes contemplated by
Section 3.18, in exchange for, or out of the Net Proceeds of the substantially
concurrent sale (other than to a Subsidiary of Holdings) of, Equity Interests of
Holdings or Borrower (other than Disqualified Stock) or from the substantially
concurrent contribution of common equity capital to Holdings or Borrower;
provided that the amount of any such Net Proceeds that are utilized for any such
Restricted Payment will be excluded from Section 3.5(a)(iii)(2);

                        (iii)   the repurchase, redemption, defeasance or other
acquisition or retirement for value of Indebtedness of Borrower or any Guarantor
that is contractually subordinated to the Obligations with the Net Proceeds from
a substantially concurrent incurrence of Permitted Refinancing Indebtedness;

                        (iv)    the payment of any dividend (or, in the case of
any partnership or limited liability company, any similar distribution) by a
Subsidiary of Borrower to the holders of its Equity Interests on a pro rata
basis;

                        (v)     so long as no Default has occurred and is
continuing or would be caused thereby, and after giving effect thereto, the
repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of Borrower or any Subsidiary of Borrower and any distribution,
dividend, loan or advance to Holdings or any direct or indirect parent of
Holdings for the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of Holdings or any direct or indirect parent of
Holdings, in each case, held by any current or former officer, director, or
employee of Borrower or any of its Subsidiaries or, in each case to the extent
applicable, their respective estates, spouses, former spouses or family members,
in each case, pursuant to any equity subscription agreement, stock option
agreement, shareholders' agreement or similar agreement or benefit plan of any
kind; provided that the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests may not exceed $1,500,000 in any Fiscal
Year or $5,000,000 in the aggregate from and after the Closing Date; provided
further that if after giving effect to any such repurchase, redemption,
acquisition or other retirement for value, (x) Borrowing Availability shall be
equal to or greater than $10,000,000 and (y) on a pro forma basis for the period
of four Fiscal Quarters for which financial statements have been delivered
hereunder to the Agent ending on or most recently prior to such repurchase,
redemption or other acquisition or retirement for value, as though such
repurchase, redemption or other acquisition or retirement for value occurred on
the first day of such period, the Fixed Charge Coverage Ratio shall be at least
1.0:1.0, Borrower may (X) carry over and (so long as no Default has occurred and
is continuing or would be caused thereby) make in subsequent Fiscal Years, in
addition to the amounts permitted for such Fiscal Year, the amount of such
repurchases, redemptions or other acquisitions or retirements for value,
distributions, loans or advances permitted to have been made but not made in any
preceding Fiscal Year up to a maximum of $3,000,000 in any Fiscal Year and (Y)
(so long as no Default has occurred and is continuing or would be caused
thereby) make such repurchases, redemptions or other acquisitions or retirements
for value in excess of an aggregate of $5,000,000, but not in excess of an
aggregate of $7,500,000; provided further that such amount in any Fiscal Year
may be increased by an amount not to exceed the Net Proceeds from the sale of
Equity Interests (other than Disqualified Stock) of Borrower (or any direct or
indirect parent of Borrower to the extent such Net Proceeds are contributed to
the common

                                       32

equity of Borrower) to employees, officers, directors or consultants of Borrower
and its Subsidiaries that occurs after the date of this Agreement (to the extent
the cash proceeds from the sale of such Equity Interests have not otherwise been
applied to the payment of Restricted Payments (including pursuant to Section
3.5(a)(iii)(2) above)) less any amounts previously applied to the payment of
Restricted Payments pursuant to this clause (v); provided further that the Net
Proceeds from such sales of Equity Interests described in this clause (v) shall
be excluded from Section 3.5(a)(iii)(2) above to the extent such proceeds have
been or are applied to the payment of Restricted Payments pursuant to this
clause (v);

                        (vi)    the repurchase of Equity Interests deemed to
occur upon the exercise of stock options or warrants to the extent such Equity
Interests represent a portion of the exercise price of those stock options or
warrants;

                        (vii)   so long as no Default has occurred and is
continuing or would be caused thereby and after giving effect thereto, the
declaration and payment of regularly scheduled or accrued dividends to holders
of any class or series of Disqualified Stock issued on or after the Closing Date
in accordance with the Interest Coverage Ratio set forth in Section 3.1(a);

                        (viii)  (x) so long as no Event of Default has occurred
and is continuing or would be caused thereby and after giving effect thereto
payments in connection with or as a result of the Acquisition (including,
without limitation, payment of the "Contingent Payment" or "Second Contingent
Payment" under and as such terms are defined in the Acquisition Agreement) and
(y) so long as no Event of Default has occurred and is continuing or would be
caused thereby and after giving effect thereto, on a pro forma basis for the
period of four Fiscal Quarters for which financial statements have been
delivered hereunder to the Agent ending on or most recently prior to such
payment, as though such payment occurred on the first day of such period, the
Fixed Charge Coverage Ratio shall be at least 1.0:1.0, payments in respect of
earnout obligations that have become due and payable in respect of Permitted
Acquisitions that are consummated after the Closing Date;

                        (ix)    Permitted Payments to Parent;

                        (x)     the redemption, repurchase or other acquisition
for value of any common Equity Interests of any Foreign Subsidiary of Holdings
that are held by a Person that is not an Affiliate of Holdings to the extent
required to satisfy applicable laws, rules or regulations in an aggregate amount
since the date of this Agreement not to exceed $1,000,000; provided that the
consideration for such redemption, repurchase or other acquisition is not in
excess of an amount equal to the lesser of (x) the fair market value of such
common Equity Interests or (y) such amount required by applicable laws, rules or
regulations;

                        (xi)    so long as no Default has occurred and is
continuing or would be caused thereby, payments not to exceed $100,000 in the
aggregate since Closing Date to enable Holdings to make payments to holders of
its Capital Stock in lieu of issuance of fractional shares of its Capital Stock;

                        (xii)   so long as no Default has occurred and is
continuing or would be caused thereby, the payment of intercompany Indebtedness
that is expressly subordinated to the Obligations, the incurrence of which is
permitted under Section 3.1(b)(vii);

                        (xiii)  so long as no Default has occurred and is
continuing or would be caused thereby, and (x) after giving effect thereto,
Borrowing Availability shall be equal to or greater than $10,000,000 and (y) on
a pro forma basis for the period of four Fiscal Quarters for which financial
statements have been delivered hereunder to the Agent ending on or most recently
prior to such Restricted Payment, as though such Restricted Payment occurred on
the first day of such period, the Fixed Charge

                                       33

Coverage Ratio shall be at least 1.0:1.0, other Restricted Payments in an
aggregate amount not to exceed $7,500,000 since the Closing Date;

                        (xiv)   Permitted Acquisitions; and

                        (xv)    so long as no Event of Default has occurred and
is continuing or would be caused thereby, and after giving effect thereto,
Restricted Payments constituting the payment of fees and reimbursement of
expenses not in excess of the amounts specified in, or determined pursuant to,
the Management Agreement as in effect on the Closing Date.

                (c)     The amount of all Restricted Payments (other than cash)
   will be the fair market value on the date of the Restricted Payment of the
   asset(s) or securities proposed to be transferred or issued by a Credit Party
   or its Subsidiary, as the case may be, pursuant to the Restricted Payment.
   The fair market value of any assets or securities that are required to be
   valued by this covenant will be determined by the Board of Directors of
   Borrower whose resolution with respect thereto will be delivered to the
   Agent. The Board of Directors' determination must be based upon an opinion or
   appraisal issued by an accounting, appraisal or investment banking firm of
   national standing if the fair market value exceeds $10,000,000.

        3.6     Restriction on Fundamental Changes. The Credit Parties shall not
and shall not cause or permit their Subsidiaries to directly or indirectly: (a)
amend, modify or waive in any manner adverse to any Lender any term or provision
of its organizational documents, including its articles of incorporation,
certificates of designations pertaining to preferred stock, by laws, partnership
agreement or operating agreement unless required by law; (b) enter into any
transaction of merger or consolidation; (c) liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution); or (d) acquire by purchase or
otherwise all or a substantial part of the business or assets of any other
Person, except that:

                        (i)     on the Closing Date, Rath Manufacturing Co.,
Inc. may merge with and into the Borrower with the Borrower as the surviving
Person,

                        (ii)    Borrower may acquire all or substantially all of
the assets or all of the Stock of any Person (the "Target") (in each case, a
"Permitted Acquisition") subject to the satisfaction of each of the following
conditions:

                (A) Agent shall receive at least 30 Business Days' prior written
                notice of such proposed Permitted Acquisition, which notice
                shall include a reasonably detailed description of such proposed
                Permitted Acquisition;

                (B) such Permitted Acquisition shall be consensual and shall
                have been approved by the Target's board of directors;

                (C) the Stock, business and/or assets acquired in such Permitted
                Acquisition shall be free and clear of all Liens (other than
                Permitted Encumbrances);

                (D) at or prior to the closing of any Permitted Acquisition, the
                Borrower shall have complied with Section 2.8 in respect of the
                Target and acquired assets;

                (E) concurrently with delivery of the notice referred to in
                clause (i) above, Borrower shall have delivered to Agent, in
                form and substance reasonably satisfactory to Agent, a pro forma
                consolidated balance sheet, income statement and cash flow
                statement of

                                       34

                Borrower and its Subsidiaries (the "Acquisition Pro Forma"),
                based on recent financial statements, which shall be complete
                and shall fairly present in all material respects the assets,
                liabilities, financial condition and results of operations of
                Borrower and its Subsidiaries in accordance with GAAP
                consistently applied, but taking into account such Permitted
                Acquisition and the funding of all Loans in connection
                therewith, and such Acquisition Pro Forma shall reflect that (x)
                average daily Borrowing Availability for the 90-day period
                preceding the consummation of such Permitted Acquisition would
                have exceeded $10,000,000 on a pro forma basis (after giving
                effect to such Permitted Acquisition and all Loans funded in
                connection therewith as if made on the first day of such period)
                and the Acquisition Projections (as hereinafter defined) shall
                reflect that such Borrowing Availability of $10,000,000 shall
                continue for at least 90 days after the consummation of such
                Permitted Acquisition and (y) on a pro forma basis, no Event of
                Default has occurred and is continuing or would result after
                giving effect to such Permitted Acquisition. The "Acquisition
                Projections" shall be the updated versions of the most recently
                delivered Projections covering the three-year period commencing
                on the date of such Permitted Acquisition and otherwise prepared
                in accordance with the Projections, based upon historical
                financial data of a recent date reasonably satisfactory to
                Agent, taking into account such Permitted Acquisitions;

                (F) on or prior to the date of such Permitted Acquisition, Agent
                shall have received, in form and substance reasonably
                satisfactory to Agent, copies of the acquisition agreement and
                related agreements and instruments, and all opinions,
                certificates, lien search results and other documents reasonably
                requested by Agent;

                (G) in the event that such Permitted Acquisition constitutes the
                acquisition of Stock in a Target that will become upon
                consummation thereof a Foreign Subsidiary or an entity that is
                not and is not required to be a Credit Party, the total
                consideration paid for such Target and all prior Targets that
                are Foreign Subsidiaries and are not and are not required to be
                Credit Parties (including any Acquired Debt and, without
                duplication, the fair market value of any property of the Target
                subject to Liens described in clause (iii) of the definition of
                Permitted Encumbrance and the amount of any earn-out or similar
                obligations incurred with respect to such Permitted
                Acquisition), shall not exceed, together with outstanding
                guarantees and Guaranteed Indebtedness described in Section
                3.1(b)(x), outstanding intercompany Indebtedness described in
                Section 3.1(b)(vii)(e) and other Pemitted Investments of the
                type described in clause (i)(y) of such term, $5,000,000; and

                (H) at the time of such Permitted Acquisition and after giving
                effect thereto, no Default or Event of Default has occurred and
                is continuing.

                Notwithstanding the foregoing, the Accounts, Inventory, M&E and
                Real Estate of the Target shall not be included in Eligible
                Accounts, Eligible Inventory, Eligible M&E or Eligible Real
                Estate without the prior written consent of Agent and Requisite
                Lenders (it being understood that Agent will in the ordinary
                course of business undertake its customary efforts to assess the
                value of such Collateral for the purposes of determining its
                eligibility (or lack of eligibility) in the Borrowing Base).

                        (iii)   any Wholly-Owned Subsidiary of the Borrower may
be merged or consolidated with or into the Borrower (provided that the Borrower
shall be the continuing or surviving

                                       35

Person) or with or into any Subsidiary Guarantor (provided that the Subsidiary
Guarantor shall be the continuing or surviving Person);

                        (iv)    any Wholly-Owned Subsidiary may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or any other Wholly-Owned Subsidiary;
(provided that if the transferor in such a transaction is a Subsidiary
Guarantor, then the transferee must either be the Borrower or a Subsidiary
Guarantor);

                        (v)     any Wholly-Owned Subsidiary of the Borrower may
merge into the Person such Wholly-Owned Subsidiary was formed to acquire in
connection with a Permitted Acquisition;

                        (vi)    any Subsidiary of the Borrower may wind-up into
the Borrower or any Subsidiary of the Borrower; provided that if the Subsidiary
being wound up is a Guarantor, it may be wound up into the Borrower or any
Subsidiary that is, or will become concurrently with the transaction, a
Guarantor; and

                        (vii)   Holdings may merge with or into or consolidate
with, or wind-up or liquidate into or otherwise transfer all of its assets to, a
parent of Holdings or a Subsidiary of a parent of Holdings, so long as (i) the
Person surviving such transaction, if not Holdings, shall become a Guarantor and
assume all of Holdings' covenants and obligations hereunder pursuant to a
joinder agreement in form and substance reasonably satisfactory to the Agent
(and each reference to Holdings in this Agreement or any Loan Document shall
thereafter be deemed to refer and apply to such surviving person), (ii) after
giving effect to such transactions, Holdings and its Subsidiaries shall be in
compliance with the covenants set forth in Sections 2, 3 and 4 hereto (iii) the
representations and warranties contained in Section 5 that are subject to
materiality or Material Adverse Effect qualifications shall be true, correct and
complete in all respects and all representations and warranties that are not
subject to materiality or Material Adverse Effect qualification are true,
correct and complete in all material respects, after giving effect to such
transaction, (iv) no Change of Control shall have occurred as a result of such
transaction, (v) on or prior to the date of such transaction, Agent shall have
received all amendments, certificates and filings necessary or desirable in the
Agent's sole discretion to continue the Lien on all of Borrower's stock and
other "Pledged Collateral" under the Pledge Agreement and such surviving Person
shall have joined the Pledge Agreement as a pledgor in a manner acceptable to
Agent (vi) on or prior to the date of such transaction, Agent shall have
received such legal opinions as it may reasonably request; provided that for the
purposes of sub-clauses (ii) and (iii) of this Section 3.6 and any test related
thereto, any reference to Holdings shall be deemed to refer to the Person
surviving such transaction, if not Holdings.

        3.7     Disposal of Assets or Subsidiary Stock. The Credit Parties shall
not and shall not cause or permit their Subsidiaries to directly or indirectly
convey, sell, lease, sublease, transfer or otherwise dispose of, or grant any
Person an option to acquire, in one transaction or a series of related
transactions, any of its property, business or assets, whether now owned or
hereafter acquired, except for:

                (a)     sales of inventory to customers in the ordinary course
   of business;

                (b)     transfers of cash and Cash Equivalents otherwise
   permitted by the terms of this Agreement;

                (c)     dispositions of obsolete or surplus assets not used or
   useful in the business, the consideration for which shall not exceed $500,000
   in any Fiscal Year;

                                       36

                (d)     (i) the transfer of assets to the Borrower, (ii) the
   transfer of assets by any Guarantor, to any other Guarantor, and (iii) the
   transfer of assets by any Subsidiary that is not a Guarantor, to any
   Subsidiary, each in accordance with any applicable provision of Section 3.6;

                (e)     (A) Asset Dispositions by Borrowers and their
   Subsidiaries (excluding sales of Accounts) if all of the following conditions
   are met: (i) the fair market value of assets sold or otherwise disposed of in
   any single transaction or series of related transactions does not exceed
   $500,000 and the aggregate market value of assets sold or otherwise disposed
   of in any Fiscal Year does not exceed $1,000,000; (ii) the consideration
   received is at least equal to the fair market value of such assets; (iii) 75%
   of the consideration received is cash; (iv) the Net Proceeds of such Asset
   Disposition are applied as required by Section 1.5(c); and (v) no Event of
   Default then exists or would result from such disposition and (B) the Asset
   Disposition consisting of the sale of the Borrower's facility located in
   Janesville, Wisconsin as part of a sale and leaseback so long as (i) the Net
   Proceeds of such Asset Disposition are applied as required by Section 1.5(c)
   and (ii) no Event of Default then exists or would result from such Asset
   Disposition;

                (f)     while no Event of Default has occurred and is
   continuing, the sale or discount without recourse of accounts receivable
   arising in the ordinary course of business in connection with the compromise
   or collection thereof;

                (g)     transfers of assets pursuant to Investments permitted by
   Section 3.5 or that are Permitted Investments;

                (h)     qualifying exchanges for solely like kind, owned Real
   Estate with a value at least equal to the fair market value of Real Estate
   exchanged therefor, pursuant to Section 1031 of the IRC, evidenced by an
   opinion of counsel, together with an appraisal report in form and substance
   and from an appraiser reasonably satisfactory to Agent, unless Agent in its
   discretion elects to exclude such Real Estate from the Borrowing Base of
   Eligible Real Estate; provided that to the extent the property to be
   exchanged is subject to a Mortgage, the newly-acquired Real Estate shall also
   be subject to a Mortgage and the Borrower shall comply with Section 2.8(a);
   and

                (i)     sales of Capital Stock to Credit Parties that are
   Domestic  Subsidiaries  of Holdings; and

                (j)     non-exclusive licenses of Intellectual Property granted
   in the ordinary course of business.

        3.8     Transactions with Affiliates. The Credit Parties shall not and
shall not cause or permit their Subsidiaries to directly or indirectly enter
into or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any management, consulting,
investment banking, advisory or other similar services) with any Affiliate
(other than between Credit Parties) or with any director, officer or employee of
any Credit Party, except on terms that are no less favorable to such Credit
Party or the relevant Subsidiary than those that would be obtained in a
comparable transaction by such Credit Party or such Subsidiary with an unrelated
Person. The following transaction shall not be subject to the prohibition in the
preceding sentence:

                (a)     any employment agreement or arrangement, incentive
   compensation plan, stock option or stock ownership plan, employee benefit
   plan, severance arrangements, officer or director indemnification agreement
   or any similar arrangement entered into by Borrower or any of its
   Subsidiaries in the ordinary course of business and payments pursuant
   thereto;

                                       37

                (b)     transactions between or among the Credit Parties and/or
   their Subsidiaries;

                (c)     payment of reasonable directors fees to directors of
   Borrower, Holdings, or any direct or indirect parent or any Subsidiary of
   Borrower or Holdings and the provision of customary indemnification to
   directors, officers and employees of Borrower or Holdings or direct or
   indirect parent or any Subsidiary of Borrower or Holdings;

                (d)     any issuance of Equity Interests (other than
   Disqualified Stock) of Holdings to Affiliates of Holdings or any contribution
   to the capital of Holdings (other than as Disqualified Stock);

                (e)     Restricted Payments that do not violate Section 3.5;

                (f)     omitted;

                (g)     transaction with any joint venture in which a Credit
   Party is an investor and which is controlled by a Person that is not an
   Affiliate;

                (h)     any agreement or arrangements as in effect on the
   Closing Date and described on Schedule 3.8 and any renewals, extensions or
   replacements of any such agreement or arrangements (so long as such renewals,
   extensions or replacements are not less favorable to the Lenders as
   determined by the Board of Directors in its reasonable good faith judgment)
   and the transactions contemplated thereby;

                (i)     loans or advances to employees in the ordinary course of
   business not to exceed $1,000,000 in the aggregate at any one time
   outstanding and expense reimbursements to employees in the ordinary course of
   business; and

                (j)     repurchases of Senior Notes in accordance with Section
   3.18 if repurchased on the same terms as offered to Persons that are not
   Affiliates of the Credit Parties.

        3.9     Conduct of Business. The Credit Parties will not and will not
permit their Subsidiaries to directly or indirectly engage in any business other
than (i) the businesses engaged in by such Credit Party on the Closing Date and
businesses that are reasonably similar, ancillary, complementary, or related to,
or a reasonable extension, development or expansion of the businesses engaged in
on the Closing Date and (ii) such other lines of business as may be consented to
by Requisite Lenders. Holdings will not engage in any type of business activity
other than the ownership of Stock of Borrower and performance of its obligations
under the Related Transaction Documents to which it is a party and activities
incidental thereto.

        3.10    Changes Relating to Indebtedness. The Credit Parties shall not
and shall not cause or permit their Subsidiaries to directly or indirectly
change or amend the terms of any of its Indebtedness permitted by Section
3.1(b)(iii) if the effect of such amendment is to: (a) increase the interest
rate on such Indebtedness; (b) accelerate the dates upon which payments of
principal or interest are due on such Indebtedness; (c) add or make more
restrictive any event of default or covenant with respect to such Indebtedness;
(d) change in any manner adverse to any Lender or to any Credit Party the
redemption or prepayment provisions of such Indebtedness; (e) change or amend
any other term if such change or amendment would materially increase the
obligations of the obligor or confer additional material rights on the holder of
such Indebtedness in a manner materially adverse to any Credit Party or Lenders;
or (f) increase the portion of interest payable in cash with respect to any
Indebtedness for which interest is payable by the issuance of payment-in-kind
notes or is permitted to accrue;.

                                       38

        3.11    Fiscal Year. No Credit Party shall change its Fiscal Year or
permit any of its  Subsidiaries  to change their respective fiscal years without
the consent of Agent.

        3.12    Press Release; Public Offering Materials. Each Credit Party
executing this Agreement agrees that neither it nor its Affiliates will in the
future issue any press releases or other public disclosure, including any
prospectus, proxy statement or other materials filed with any Governmental
Authority relating to a public offering of the Stock of any Credit Party, using
the name of GE Capital or its affiliates or referring to this Agreement, the
other Loan Documents or the Related Transactions Documents without at least two
(2) Business Days' prior notice to GE Capital and without the prior written
consent of GE Capital unless (and only to the extent that) such Credit Party or
Affiliate is required to do so under law and then, in any event, such Credit
Party or Affiliate will consult with GE Capital before issuing such press
release or other public disclosure. Each Credit Party consents to the
publication by Agent or any Lender of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement.
Agent or such Lender shall provide a draft of any such tombstone or similar
advertising material to each Credit Party for review and comment prior to the
publication thereof. Agent reserves the right to provide to industry trade
organizations information necessary and customary for inclusion in league table
measurements.

        3.13    Subsidiaries. The Credit Parties shall not and shall not cause
or permit their Subsidiaries to directly or indirectly establish, create or
acquire any new Subsidiary unless it has complied, and caused such new
Subsidiary to comply, with Section 2.8(c) in connection with establishing,
creating or acquiring such new Subsidiary.

        3.14    Bank Accounts. The Credit Parties shall not and shall not cause
or permit their Subsidiaries to establish any new deposit accounts without prior
written notice to Agent and unless the account to be opened is subject to a
Control Agreement, in form and substance reasonably satisfactory to Agent.

        3.15    Hazardous Materials. The Credit Parties shall not and shall not
cause or permit their Subsidiaries to cause or permit a Release of any Hazardous
Material on, at, in, under, above, to, from or about any of the Real Estate
where such Release would (a) violate or form the basis for any Environmental
Liabilities by the Credit Parties or any of their Subsidiaries under, any
Environmental Laws or Environmental Permits or (b) otherwise adversely impact
the value or marketability of any of the Real Estate or any of the Collateral,
other than such violations, Environmental Liabilities or adverse impacts that
could not reasonably be expected to have a Material Adverse Effect.

        3.16    ERISA. The Credit Parties shall not and shall not cause or
permit any ERISA Affiliate to, cause or permit to occur an ERISA Event to the
extent such ERISA Event could reasonably be expected to have a Material Adverse
Effect.

        3.17    Sale Leasebacks. The Credit Parties shall not, and shall not
permit any of their Subsidiaries to, enter into any sale and leaseback
transaction, except if:

                (a)     Borrower could have incurred (i) Indebtedness in an
   amount equal to the Attributable Debt relating to such sale and leaseback
   transaction under the Interest Coverage Ratio test in Section 3.1(a) or
   pursuant to Section 3.1(b)(iv) or 3.1(b)(v) and (ii) a Lien to secure such
   Indebtedness pursuant to Section 3.2;

                (b)     the gross cash proceeds of such sale and leaseback
   transaction are at least equal to the fair market value, as determined in
   good faith by the Board of Directors of the Borrower

                                       39

   and set forth in an officers' certificate delivered to the Agent, of the
   property that is the subject of that sale and leaseback transaction; and

                (c)     Borrower applies the proceeds of such transaction in
   compliance with Section 1.5(c).

        3.18    Prepayments of Other Indebtedness. The Credit Parties shall not,
directly or indirectly, voluntarily purchase, redeem, defease or prepay any
principal of, premium, if any, interest or other amount payable in respect of
any Indebtedness, other than (i) the Obligations; (ii) Indebtedness secured by a
Permitted Encumbrance if the asset securing such Indebtedness has been sold or
otherwise disposed of in accordance with Section 3.7(b); (iii) intercompany
Indebtedness reflecting amounts owing to Borrower or any Credit Party, subject
to any subordination restrictions to which such Indebtedness is subject; (iv)
prepayments of any portion of Interim Financing with the (x) Net Proceeds of any
Asset Disposition remaining after any prepayment of Obligations required by
Section 1.5(c) or of any issuance of Stock described in Section 1.5(d)(2) or (y)
proceeds of a Permitted Refinancing; (v) in connection with (and in an amount
not exceeding the Net Proceeds of) a Permitted Refinancing; and (vi) with the
proceeds of Equity Issuances not required to be applied to Interim Financing or
the Obligations in accordance with the terms hereof, (vii) as otherwise
permitted by Section 3.5, or (viii) provided that after giving effect to such
purchase, redemption, defeasance or prepayment, (x) Borrowing Availability shall
be equal to or greater than $12,500,000 and (y) on a pro forma basis for the
period of four Fiscal Quarters for which financial statements have been
delivered hereunder to the Agent ending on or most recently prior to such
redemption or deposit as though such purchase, redemption, defeasance or
prepayment occurred on the first day of such period, the Fixed Charge Coverage
Ratio shall be at least 1.0:1.0, the purchase, redemption, defeasance or
prepayment after the date of this Agreement of the Senior Notes, in the
aggregate cumulative amount not to exceed the sum of (1) $25,000,000 and (2) Net
Proceeds of Stock issued by Holdings and applied to such purchase, redemption,
defeasance or prepayment in accordance with the Senior Notes Documents as in
effect on the Closing Date.

                                   SECTION 4.
                          FINANCIAL COVENANTS/REPORTING

        Borrower covenants and agrees that from and after the date hereof until
the Termination Date, Borrower shall perform and comply with, and shall cause
each of the other Credit Parties to perform and comply with, all covenants in
this Section 4 applicable to such Person.

        4.1     Omitted.

        4.2     Omitted.

        4.3     Omitted.

        4.4     Omitted.

        4.5     Omitted.

        4.6     Omitted.

        4.7     Omitted.

        4.8     Omitted.

                                       40

        4.9     Financial Statements and Other Reports. Holdings will maintain,
and cause each of its Subsidiaries to maintain, a system of accounting
established and administered in accordance with sound business practices to
permit preparation of Financial Statements in conformity with GAAP (it being
understood that monthly Financial Statements are not required to have footnote
disclosures). Borrower will deliver each of the Financial Statements and other
reports described below to Agent.

                (a)     Monthly Financials. As soon as available and in any
   event within thirty (30) days after the end of each month (including the last
   month Borrower's Fiscal Year), Borrower will deliver (1) the consolidated and
   consolidating balance sheets of Holdings and its Subsidiaries, as at the end
   of such month, and the related consolidated and consolidating statements of
   income, stockholders' equity and cash flow for such month and for the period
   from the beginning of the then current Fiscal Year of Holdings to the end of
   such month, (2) a report setting forth in comparative form the corresponding
   figures for the corresponding periods of the previous Fiscal Year and the
   corresponding figures from the most recent Projections for the current Fiscal
   Year delivered pursuant to Section 4.9(F), (3) a schedule of the outstanding
   Indebtedness for borrowed money of Holdings and its Subsidiaries describing
   in reasonable detail each such debt issue or loan outstanding and the
   principal amount and amount of accrued and unpaid interest with respect to
   each such debt issue or loan, and (4) a schedule of Hedge Agreements to which
   Holdings or any of its Subsidiaries is then a party, describing each such
   Hedge Agreement in reasonable detail.

                (b)     Year-End Financials. As soon as available and in any
   event within ninety (90) days after the end of each Fiscal Year (or 120 days
   in the case of the Fiscal Year ended January 31, 2006), Borrower will deliver
   (1) the consolidated and consolidating balance sheets of Holdings and its
   Subsidiaries, as at the end of such year, and the related consolidated and
   consolidating statements of income, stockholders' equity and cash flow for
   such Fiscal Year, (2) a schedule of the outstanding Indebtedness for borrowed
   money of Holdings and its Subsidiaries describing in reasonable detail each
   such debt issue or loan outstanding and the principal amount and amount of
   accrued and unpaid interest with respect to each such debt issue or loan and
   (3) a report with respect to the consolidated Financial Statements from a
   firm of Certified Public Accountants selected by Borrower and reasonably
   acceptable to Agent, which report shall be prepared in accordance with
   Statement of Auditing Standards No. 58 (the "Statement") "Reports on Audited
   Financial Statements" and such report shall be "Unqualified" (as such term is
   defined in such Statement).

                (c)     Accountants' Reports. Promptly upon receipt thereof,
   Borrower will deliver copies of all significant reports submitted by
   Borrower's firm of certified public accountants in connection with each
   annual, interim or special audit or review of any type of the Financial
   Statements or related internal control systems of Holdings or its
   Subsidiaries made by such accountants, including any comment letter submitted
   by such accountants to management in connection with their services.

                (d)     Additional Deliveries.

                        (i)     To Agent, on or prior to noon New York time on
the date that is ten (10) Business Days after the end of each Fiscal Month
(together with a copy of any of the following reports requested by any Lender in
writing after the Closing Date), and, while any Event of Default is continuing,
upon request of Agent, each of the following reports, each of which shall be
prepared by Borrower as of the last day of the immediately preceding Fiscal
Month or the date 2 days prior to the date of any such request:

        (1)     a Borrowing Base Certificate with respect to the Credit Parties,
                accompanied by such supporting detail and documentation as shall
                be requested by Agent in its reasonable

                                       41

                credit judgment (each in substantially the same form as Exhibit
                4.9(D) (a "Borrowing Base Certificate"));

        (2)     with respect to the Credit Parties, a summary of Inventory by
                location and type with, to the extent requested by Agent, a
                supporting perpetual Inventory report, and a summary of M&E by
                location and type in each case accompanied by such supporting
                detail and documentation as shall be requested by Agent in its
                reasonable credit judgment; and

        (3)     with respect to the Credit Parties, a monthly trial balance
                showing Accounts outstanding aged from invoice date as follows:
                1 to 30 days, 31 to 60 days, 61 to 90 days and 91 days or more,
                accompanied by such supporting detail and documentation as shall
                be requested by Agent in its reasonable credit judgment.

                        (ii)    To Agent, if (i) Borrowing  Availability is less
than $5,000,000 or (ii) an Event of Default shall have occurred and be
continuing, and upon Agent's request (together with a copy of all or any part of
such delivery requested by any Lender in writing after the Closing Date),
collateral reports with respect to the Credit Parties, including all additions
and reductions (cash and non-cash) with respect to Accounts of the Credit
Parties, in each case accompanied by such supporting detail and documentation as
shall be requested by Agent in its reasonable credit judgment each of which
shall be prepared by Borrower as of the last day of the immediately preceding
week;

                        (iii)   To Agent, at the time of delivery of each of
the monthly Financial Statements delivered pursuant to this Section 4.9:

        (1)     a reconciliation of the most recent Borrowing Base, general
                ledger and month-end Inventory reports of the Credit Parties to
                the Credit Parties' general ledger and monthly Financial
                Statements delivered pursuant to this Section 4.9, in each case
                accompanied by such supporting detail and documentation as shall
                be requested by Agent in its reasonable credit judgment;

        (2)     a reconciliation of the summary of Inventory by location and
                type to the most recent Borrowing Base Certificate, general
                ledger and monthly Financial Statements delivered pursuant to
                this Section 4.9, in each case accompanied by such supporting
                detail and documentation as shall be requested by Agent in its
                reasonable credit judgment;

        (3)     an aging of accounts payable and a reconciliation of that
                accounts payable aging to Borrower's general ledger and monthly
                Financial Statements delivered pursuant to this Section 4.9, in
                each case accompanied by such supporting detail and
                documentation as shall be requested by Agent in its reasonable
                credit judgment; and

        (4)     a reconciliation of the outstanding Loans as set forth in the
                monthly Loan Account statement provided by Agent to the Credit
                Parties' general ledger and monthly Financial Statements
                delivered pursuant to this Section 4.9, in each case accompanied
                by such supporting detail and documentation as shall be
                requested by Agent in its reasonable credit judgment.

                        (iv)    To Agent, at the time of delivery of each of the
annual Financial Statements delivered pursuant to Section 4.9, (i) a listing of
government contracts of Borrower subject to the Federal Assignment of Claims Act
of 1940; and (ii) a list of any applications for the registration of any Patent,
Trademark or Copyright filed by any Credit Party with the United States Patent
and

                                       42

Trademark Office, the United States Copyright Office or any similar office or
agency in the prior Fiscal Year;

                (e)     Appraisals; Inspections.

                        (i)     On or prior to the date that is forty-five (45)
days following the Closing Date, Borrower shall, at Borrower's expense, (x)
obtain appraisal reports in form and substance and from appraisers reasonably
satisfactory to Agent stating the then current fair market values or Net Orderly
Liquidation Value, as applicable, of all or any portion of the Real Estate, M&E
and Inventory owned by the Credit Parties, as applicable; (y) obtain from FIRREA
certified appraisers, appraisals, in form and substance reasonably satisfactory
to Agent and in compliance with FIRREA, of the fair market value of the owned
Real Estate of the Credit Parties and (z) permit Agent to conduct a field
examination performed by Agent or its representatives of the business,
operations, financial condition and assets of the Credit Parties.

                        (ii)    From time to time, if Agent or any Lender
determines that obtaining appraisals is necessary in order for Agent or such
Lender to comply with Applicable Laws or regulations, Agent will, at Borrower's
expense, obtain appraisal reports in form and substance and from appraisers
reasonably satisfactory to Agent stating the then current fair market values of
all or any portion of the Real Estate owned by Credit Parties. In addition to
the foregoing, at Borrower's expense, at any time while and so long as an Event
of Default shall have occurred and be continuing, and in the absence of an Event
of Default not more than once during each calendar year (or, the case of
Inventory, twice during any calendar year in which Borrowing Availability is
less than $3,000,000 at any time), Agent may obtain appraisal reports in form
and substance and from appraisers reasonably satisfactory to Agent stating the
then current Net Orderly Liquidation Value or fair market value, as applicable,
of all or any portion of the Real Estate, M&E or Inventory owned by any of the
Credit Parties, as applicable.

                        (iii)   Borrower, at its own expense, shall deliver to
Agent at the end of each Fiscal Year of Borrower or more frequently upon Agent's
request, the results of each physical verification, if any, that Borrower or any
of its Subsidiaries may in their discretion have made, or caused any other
Person to have made on their behalf, of all or any portion of their Inventory
(and, if an Event of Default has occurred and is continuing, Borrower shall,
upon the request of Agent, conduct, and deliver the results of, such physical
verifications as Agent may require).

                (f)     Projections. As soon as available and in any event no
   later than thirty (30) days after the first day of each of Borrower's Fiscal
   Years, Borrower will deliver Projections of Holdings and its Subsidiaries for
   the forthcoming three (3) Fiscal Years and each Fiscal Month of the
   forthcoming Fiscal Year.

                (g)     SEC Filings and Press Releases. Promptly upon their
   becoming available, Borrower will deliver copies of (1) all Financial
   Statements, reports, notices and proxy statements sent or made available by
   Holdings or any of its Subsidiaries to their Stockholders generally in their
   capacity as such, (2) all regular and periodic reports and all registration
   statements and prospectuses, if any, filed by Holdings or any of its
   Subsidiaries with any securities exchange or with the Securities and Exchange
   Commission, any Governmental Authority or any private securities regulatory
   authority, and (3) all press releases and other written statements made
   available by Holdings or any of its Subsidiaries to the public concerning
   developments in the business of any such Person.

                (h)     Events of Default, Etc. Promptly upon any officer of any
   Credit Party obtaining knowledge of any of the following events or
   conditions, Borrower shall deliver copies of all notices given or received by
   Holdings or any of its Subsidiaries with respect to any such event or

                                       43

   condition and a certificate of Borrower's chief executive officer specifying
   the nature and period of existence of such event or condition and what action
   Holdings or any of its Subsidiaries has taken, is taking and proposes to take
   with respect thereto: (1) any condition or event that constitutes an Event of
   Default; (2) any notice that any Person has given to Borrower or any of their
   Subsidiaries or any other action taken with respect to a claimed default or
   event or condition of the type referred to in Section 6.1(B); or (3) any
   event or condition that could reasonably be expected to result in any
   Material Adverse Effect.

                (i)     Litigation. Promptly upon any officer of any Credit
   Party obtaining knowledge of (1) the institution of any action, charge,
   claim, demand, suit, proceeding, petition, governmental investigation, tax
   audit or arbitration now pending or, to the knowledge of such Credit Party,
   threatened in writing against or affecting any Credit Party or any of its
   Subsidiaries or any property of any Credit Party or any of its Subsidiaries
   ("litigation") not previously disclosed by Borrower to Agent or (2) any
   material development in any previously disclosed Litigation or Litigation
   that was required to be disclosed which, in each case, could reasonably be
   expected to have a Material Adverse Effect, Borrower will promptly give
   notice thereof to Agent and provide such other information reasonably
   requested by Agent as may be reasonably available to Borrower to enable Agent
   and its counsel to evaluate such matter.

                (j)     Notice of Corporate and other Changes. Borrower shall
   provide prompt written notice of (1) all jurisdictions in which a Credit
   Party becomes qualified after the Closing Date to transact business, (2) any
   change after the Closing Date in the jurisdiction of incorporation, federal
   employer identification number, state corporate identification or
   registration number or authorized and issued Stock of any Credit Party or any
   Subsidiary of any Credit Party or any amendment to their articles or
   certificate of incorporation, by laws, partnership agreement or other
   organizational documents, (3) any Subsidiary created or acquired by any
   Credit Party or any of its Subsidiaries after the Closing Date, such notice
   to identify the jurisdictions of organization and qualification of such
   Subsidiary and a description of the terms of, and complete list of holders
   of, such Subsidiary's authorized and issued Stock, and (4) any other event
   that occurs after the Closing Date which would cause any of the
   representations and warranties in Section 5 of this Agreement or in any other
   Loan Document to be untrue or misleading in any material respect. The
   foregoing notice requirement shall not be construed to constitute consent by
   any of the Lenders to any transaction or change referred to above which is
   not expressly permitted by the terms of this Agreement.

                (k)     Compliance Certificate. Together with each delivery of
   Financial Statements of Holdings and its Subsidiaries pursuant to SectionS
   4.9(a) AND (b), Borrower will deliver a fully and properly completed
   Compliance Certificate (in substantially the same form as Exhibit 4.9(k) (the
   "Compliance Certificate") signed by Borrower's chief executive officer or
   chief financial officer.

                (l)     Omitted.

                (m)     Other Information. With reasonable promptness, Borrower
   will deliver such other information and data with respect to any Credit Party
   or any Subsidiary of any Credit Party as from time to time may be reasonably
   requested by Agent.

                (n)     Taxes. Borrower shall provide prompt written notice of
   (i) the execution or filing with the IRS or any other Governmental Authority
   of any agreement or other document extending, or having the effect of
   extending, the period for assessment or collection of any Charges by any
   Credit Party or any of its Subsidiaries and (ii) any agreement by any Credit
   Party or any of its Subsidiaries or request directed to any Credit Party or
   any of its Subsidiaries to make any adjustment

                                       44

   under IRC Section 481(a), by reason of a change in accounting method or
   otherwise, which could reasonably be expected to have a Material Adverse
   Effect.

        4.10    Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement. For purposes of this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to such
terms in conformity with GAAP. Financial statements and other information
furnished to Agent pursuant to Section 4.9 or any other Section (unless
specifically indicated otherwise) shall be prepared in accordance with GAAP as
in effect at the time of such preparation; provided that no Accounting Change
after the Closing Date shall affect financial covenants, standards or terms in
this Agreement; provided further that Borrower shall prepare footnotes to the
Financial Statements required to be delivered hereunder that show the
differences between the Financial Statements delivered (which reflect such
Accounting Changes) and the basis for calculating financial covenant compliance
(without reflecting such Accounting Changes).

                                   SECTION 5.
                         REPRESENTATIONS AND WARRANTIES

        To induce Agent and Lenders to enter into the Loan Documents, to make
Loans and to issue or cause to be issued Letters of Credit, Borrower and the
other Credit Parties executing this Agreement, jointly and severally, represent,
warrant and covenant to Agent and each Lender that the following statements are
and, after giving effect to the Related Transactions, will remain true, correct
and complete until the Termination Date with respect to all Credit Parties:

        5.1     Disclosure. No representation or warranty of any Credit Party
contained in this Agreement, the Financial Statements referred to in Section 5.5
or any other document, certificate or written statement prepared by or on behalf
of any Credit Party and furnished to Agent or any Lender by or on behalf of any
such Person for use in connection with the Loan Documents contains any untrue
statement of a material fact or omitted, omits or will omit to state a material
fact necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made.

        5.2     No Material Adverse Effect. Since January 31, 2005, there have
been no events or changes in facts or circumstances affecting any Credit Party
or any of its Subsidiaries which individually or in the aggregate have had or
could reasonably be expected to have a Material Adverse Effect and that have not
been disclosed herein or in the attached Disclosure Schedules.

        5.3     No Conflict. (a) The consummation of the Related Transactions
does not and will not violate or conflict with any laws, rules, regulations or
orders of any Governmental Authority or violate, conflict with, result in a
breach of, or constitute a default (with due notice or lapse of time or both)
under any Contractual Obligation or organizational documents of any Credit Party
or any of its Subsidiaries except if such violations, conflicts, breaches or
defaults could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect. None of the Credit Parties is an
"investment company" within the meaning of the Investment Company Act of 1940.

                (b)     Each Credit Party (i) is in compliance and each of its
   Subsidiaries is in compliance with the requirements of all Applicable Laws,
   rules, regulations and orders of any Governmental Authority and the
   obligations, covenants and conditions contained in all Contractual
   Obligations other than those laws, rules, regulations, orders and provisions
   of such Contractual Obligations, in each case, the noncompliance with which
   could not be reasonably expected to have,

                                       45

   either individually or in the aggregate, a Material Adverse Effect, and (ii)
   maintains and each of its Subsidiaries maintains all licenses, qualifications
   and permits referred to in Section 2.1.

        5.4     Organization, Powers, Capitalization and Good Standing.

                (a)     Organization and Powers. Each of the Credit Parties and
   each of their Subsidiaries is duly organized, validly existing and in good
   standing under the laws of its jurisdiction of organization and qualified to
   do business in all states where such qualification is required except where
   failure to be so qualified could not reasonably be expected to have a
   Material Adverse Effect. The jurisdiction of organization and all
   jurisdictions in which each Credit Party is qualified to do business are set
   forth on Schedule 5.4(a). Each of the Credit Parties and each of their
   Subsidiaries has all requisite organizational power and authority to own and
   operate its properties, to carry on its business as now conducted and
   proposed to be conducted, to enter into each Related Transactions Document to
   which it is a party and to incur the Obligations, grant liens and security
   interests in the Collateral and carry out the Related Transactions.

                (b)     Capitalization. As of the Closing Date: (i) the
   authorized Stock of each of the Credit Parties and each of their Subsidiaries
   is as set forth on SCHEDULE 5.4(b); (ii) all issued and outstanding Stock of
   each of the Credit Parties and each of their Subsidiaries is duly authorized
   and validly issued, fully paid, nonassessable, free and clear of all Liens
   other than those in favor of Agent for the benefit of Agent and Lenders and
   Permitted Encumbrances, and such Stock was issued in compliance with all
   applicable state, federal and foreign laws concerning the issuance of
   securities; (iii) the identity of the holders of the Stock of each of the
   Credit Parties and each of their Subsidiaries and the percentage of their
   fully diluted ownership of the Stock of each of the Credit Parties and each
   of their Subsidiaries is set forth on Schedule 5.4(b); and (iv) no Stock of
   any Credit Party or any of their Subsidiaries, other than those described
   above, are issued and outstanding. Except as provided in Schedule 5.4(b), as
   of the Closing Date, there are no preemptive or other outstanding rights,
   options, warrants, conversion rights or similar agreements or understandings
   for the purchase or acquisition from any Credit Party or any of their
   Subsidiaries of any Stock of any such entity.

                (c)     Binding Obligation. This Agreement is, and the other
Related Transactions Documents when executed and delivered will be, the legally
valid and binding obligations of the applicable parties thereto, each
enforceable against each of such parties, as applicable, in accordance with
their respective terms subject to bankruptcy, insolvency and similar laws
affecting creditors' rights generally.

        5.5     Financial Statements and Projections. All Financial Statements
concerning Holdings and its Subsidiaries which have been or will hereafter be
furnished to Agent pursuant to this Agreement, including those listed below,
have been or will be prepared in accordance with GAAP consistently applied
(except as disclosed therein) and do or will present fairly the financial
condition of the entities covered thereby as at the dates thereof and the
results of their operations for the periods then ended, subject to, in the case
of unaudited Financial Statements, the absence of footnotes and normal year end
adjustments.

                (a)     The restated consolidated balance sheets at January 31,
   2005 and the related statement of income of Holdings and its Subsidiaries,
   for the Fiscal Year then ended, audited by Pricewaterhouse Coopers LLP.

                (b)     The consolidated balance sheet at November 30, 2005 and
   the related statement of income of Holdings and its Subsidiaries for the ten
   (10) months then ended.

                                       46

The Projections delivered on or prior to the Closing Date and the updated
Projections delivered pursuant to Section 4.9(f) represent and will represent as
of the date thereof the good faith estimate of Borrower and its senior
management of the financial condition and operations of Borrower and its
Subsidiaries for the periods covered thereby, it being recognized that actual
results may differ from the projected results by a material amount.

        5.6     Intellectual Property. Each of the Credit Parties and its
Subsidiaries owns, is licensed to use or otherwise has the right to use, all
Intellectual Property used in or necessary for the conduct of its business as
currently conducted and as proposed to be conducted that is material to the
condition (financial or other), business or operations of such Credit Party and
its Subsidiaries. All such Intellectual Property is identified on Schedule 5.6
and all such Intellectual Property owned by a Credit Party is properly
registered, filed or issued in the appropriate office and jurisdictions for such
registrations, filings or issuances. Except as disclosed in Schedule 5.6, to the
best knowledge of the Credit Parties (a) the conduct and operations of the
businesses of the Credit Parties and its Subsidiaries does not infringe,
misappropriate, dilute, violate, or otherwise impair any Intellectual Property
owned by any other Person in any material respect and (b) except as disclosed on
Schedule 5.6, no other Person has contested any right, title, or interest of any
of the Credit Parties and its Subsidiaries in, or relating to, any Intellectual
Property, other than, in each case, as cannot reasonably be expected to
materially adversely affect the Loan Documents and the transactions contemplated
therein and would no, in the aggregate, reasonably be expected to have a
Material Adverse Effect. In addition, except as disclosed in Schedule 5.6, (x)
there are no pending (or, to the knowledge of any of the Credit Parties and its
Subsidiaries, threatened) actions, investigations, suits, proceedings, audits,
claims, demands, orders, or disputes affecting any of the Credit Parties and its
Subsidiaries with respect to (y) no judgment or order regarding any such claim
has been rendered by any competent Governmental Authority, no settlement
agreement or similar Contractual Obligation has been entered into by any of the
Credit Parties and its Subsidiaries, with respect to and (z) none of the Credit
Parties and its Subsidiaries knows or has any reason to know of any valid basis
for any claim based on, any such infringement, misappropriation, dilution,
violation, or impairment or contest, other than, in each case, as cannot
reasonably be expected to materially adversely affect the Loan Documents and the
transactions contemplated therein and would not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.

        5.7     Investigations, Audits, Etc. As of the Closing Date, except as
set forth on Schedule 5.7, no Credit Party or any of their Subsidiaries is the
subject of any review or audit by the IRS or any governmental investigation
concerning the violation or possible violation of any law.

        5.8     Employee Matters. Except as set forth on Schedule 5.8, (a) no
Credit Party or Subsidiary of a Credit Party nor any of their respective
employees is subject to any collective bargaining agreement, (b) no petition for
certification or union election is pending with respect to the employees of any
Credit Party or any of their Subsidiaries and since February 7, 2003 no union or
collective bargaining unit has sought such certification or recognition with
respect to the employees of any Credit Party or any of their Subsidiaries, (c)
there are no strikes, slowdowns, work stoppages or controversies pending or, to
the best knowledge of any Credit Party after due inquiry, threatened between any
Credit Party or any of their Subsidiaries and its respective employees, other
than employee grievances arising in the ordinary course of business which could
not reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect and (d) hours worked by and payment made to employees of
each Credit Party and each of their Subsidiaries comply in all material respects
with the Fair Labor Standards Act and each other federal, state, local or
foreign law applicable to such matters. Except as set forth on Schedule 5.8,
neither Borrower nor any of its Subsidiaries is party to a written employment
contract.

        5.9     Solvency. Each of the Credit Parties and its Subsidiaries is
Solvent.

                                       47

        5.10    Litigation; Adverse Facts. Except as set forth on Schedule 5.10,
there are no judgments outstanding against any Credit Party or any of its
Subsidiaries or affecting any property of any Credit Party or any of its
Subsidiaries, nor is there any Litigation pending, or to the best knowledge of
any Credit Party threatened in writing, against any Credit Party or any of its
Subsidiaries which, in each case, could reasonably be expected to result in any
Material Adverse Effect.

        5.11    Use of Proceeds; Margin Regulations. (a) No part of the proceeds
of any Loan will be used for "buying" or "carrying" "margin stock" within the
respective meanings of such terms under Regulation U of the Board of Governors
of the Federal Reserve System as now and from time to time hereafter in effect
or for any other purpose that violates the provisions of the regulations of the
Board of Governors of the Federal Reserve System. If requested by Agent, each
Credit Party will furnish to Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form G 3 or FR Form U-1, as
applicable, referred to in Regulation U.

                (b)     Borrower shall utilize the proceeds of the Loans solely
   for the Refinancing (and to pay any related transaction expenses), and for
   the financing of Borrower's ordinary working capital and general corporate
   needs and shall provide Agent on or prior to the Closing Date with a
   description of Borrower's sources and uses of funds as of the Closing Date,
   including Loans and Letter of Credit Obligations to be made or incurred on
   that date, and a funds flow memorandum detailing how funds from each source
   are to be transferred for particular uses.

        5.12    Ownership of Property; Liens. As of the Closing Date, the real
estate ("Real Estate") listed in Schedule 5.12 constitutes all of the real
property owned, leased, subleased, or used by any Credit Party or any of its
Subsidiaries. Each of the Credit Parties and each of its Subsidiaries owns good
and marketable fee simple title to all of its owned Real Estate, and valid and
marketable leasehold interests in all of its leased Real Estate, all as
described on Schedule 5.12, and copies of all such leases or a summary of terms
thereof reasonably satisfactory to Agent have been delivered to Agent. Schedule
5.12 further describes any Real Estate with respect to which any Credit Party or
any of its Subsidiaries is a lessor, sublessor or assignor as of the Closing
Date. Each of the Credit Parties and each of its Subsidiaries also has good and
marketable title to, or valid leasehold interests in, all of its personal
property and assets. As of the Closing Date, and after giving effect to the
Related Transactions, none of the properties and assets of any Credit Party or
any of its Subsidiaries are subject to any Liens other than Permitted
Encumbrances, and there are no facts, circumstances or conditions known to any
Credit Party that may result in any Liens (including Liens arising under
Environmental Laws) other than Permitted Encumbrances against the properties or
assets of any Credit Party or any of its Subsidiaries. Each of the Credit
Parties and each of its Subsidiaries has received all deeds, assignments,
waivers, consents, nondisturbance and attornment or similar agreements, bills of
sale and other documents, and has duly effected all recordings, filings and
other actions necessary to establish, protect and perfect such Credit Party's or
Subsidiary's right, title and interest in and to all such Real Estate and other
properties and assets. Schedule 5.12 also describes any purchase options, rights
of first refusal or other similar contractual rights pertaining to any Real
Estate. As of the Closing Date, no portion of any Credit Party's or any of its
Subsidiaries' Real Estate has suffered any material damage by fire or other
casualty loss that has not heretofore been repaired and restored in all material
respects to its original condition or otherwise remedied. As of the Closing
Date, all material permits required to have been issued to enable the Real
Estate to be lawfully occupied and used for all of the purposes for which it is
currently occupied and used have been lawfully issued and are in full force and
effect.

        5.13    Environmental Matters.

                (a)     Except as set forth in SCHEDULE 5.13, as of the Closing
   Date: (i) the Real Estate is free of contamination from any Hazardous
   Material except for such contamination that could not

                                       48

   reasonably be expected to have a Material Adverse Effect on the value or
   marketability of such Real Estate; (ii) no Credit Party and no Subsidiary of
   a Credit Party has caused or suffered to occur any Release of Hazardous
   Materials on, at, in, under, above, to, from or about any of their Real
   Estate that could reasonably be expected to result in a Material Adverse
   Effect; (iii) the Credit Parties and their Subsidiaries are and have been in
   compliance with all Environmental Laws, except for such noncompliance that
   could not reasonably be expected to result in a Material Adverse Effect; (iv)
   the Credit Parties and their Subsidiaries have obtained, and are in
   compliance with, all Environmental Permits required by Environmental Laws for
   the operations of their respective businesses as presently conducted or as
   proposed to be conducted, except where the failure to so obtain or comply
   with such Environmental Permits could not reasonably be expected to result in
   a Material Adverse Effect, and all such Environmental Permits are valid,
   uncontested and in good standing; (v) no Credit Party and no Subsidiary of a
   Credit Party is involved in operations or knows of any facts, circumstances
   or conditions, including any Releases of Hazardous Materials, that are likely
   to result in any Environmental Liabilities of such Credit Party or Subsidiary
   which could reasonably be expected to result in a Material Adverse Effect,
   and no Credit Party or Subsidiary of a Credit Party has permitted any current
   or former tenant or occupant of the Real Estate to engage in any such
   operations; (vi) there is no Litigation arising under or related to any
   Environmental Laws, Environmental Permits or Hazardous Material that seeks
   damages, penalties, fines, costs or expenses or injunctive relief against, or
   that alleges criminal misconduct by any Credit Party or any Subsidiary of a
   Credit Party that could reasonably be expected to result in a Material
   Adverse Effect; (vii) no notice has been received by any Credit Party or any
   Subsidiary of a Credit Party identifying any of them as a "potentially
   responsible party" or requesting information under CERCLA or analogous state
   statutes, and to the knowledge of the Credit Parties, there are no facts,
   circumstances or conditions that may result in any of the Credit Parties or
   their Subsidiaries being identified as a "potentially responsible party"
   under CERCLA or analogous state statutes; and (viii) the Credit Parties have
   provided to Agent copies of all existing environmental reports, reviews and
   audits and all written information pertaining to actual or potential
   Environmental Liabilities, in each case relating to any of the Credit Parties
   or their Subsidiaries.

                (b)     Each Credit Party hereby acknowledges and agrees that
   Agent (i) is not now, and has not ever been, in control of any of the Real
   Estate or affairs of such Credit Party or its Subsidiaries, and (ii) does not
   have the capacity through the provisions of the Loan Documents or otherwise
   to influence any Credit Party's or its Subsidiaries' conduct with respect to
   the ownership, operation or management of any of their Real Estate or
   compliance with Environmental Laws or Environmental Permits.

        5.14    ERISA.

                (a)     Schedule 5.14 lists all Plans and separately identifies
   all Pension Plans, including Title IV Plans, Multiemployer Plans and ESOPs,
   including all Retiree Welfare Plans. Except with respect to Multiemployer
   Plans, each Qualified Plan has been determined by the IRS to qualify under
   Section 401 of the IRC, the trusts created thereunder have been determined to
   be exempt from tax under the provisions of Section 501 of the IRC, and
   nothing has occurred that would cause the loss of such qualification or tax
   exempt status. Each Plan is in material compliance with its terms and the
   applicable provisions of ERISA and the IRC, including the timely filing of
   all reports required under the IRC or ERISA, including the statement required
   by 29 CFR Section 2520.104 23. Neither any Credit Party nor ERISA Affiliate
   has engaged in a nonexempt "prohibited transaction," as defined in Section
   406 of ERISA and Section 4975 of the IRC, in connection with any Plan, that
   would subject any Credit Party to a material tax on prohibited transactions
   imposed by Section 502(i) of ERISA or Section 4975 of the IRC.

                (b)     Except as set forth in Schedule 5.14: (i) no Title IV
   Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event
   described in Section 4062(e) of ERISA with respect to

                                       49

   any Title IV Plan has occurred or is reasonably expected to occur; (iii)
   there are no pending, or to the knowledge of Borrower, threatened in writing
   claims (other than claims for benefits in the normal course), sanctions,
   actions or lawsuits, asserted or instituted against any Plan or any Person as
   fiduciary or sponsor of any Plan; (iv) no Credit Party or ERISA Affiliate has
   incurred or reasonably expects to incur any liability as a result of a
   complete or partial withdrawal from a Multiemployer Plan; and (v) within the
   last five years no Title IV Plan of any Credit Party or ERISA Affiliate has
   been terminated, whether or not in a "standard termination" as that term is
   used in Section 404(b)(1) of ERISA, nor has any Title IV Plan of any Credit
   Party or ERISA Affiliate (determined at any time within the past five years)
   with Unfunded Pension Liabilities been transferred outside of the "controlled
   group" (within the meaning of Section 4001(a)(14) of ERISA) of any Credit
   Party or ERISA Affiliate.

        5.15    Brokers. No broker or finder acting on behalf of any Credit
Party or Affiliate thereof brought about the obtaining, making or closing of the
Loans or the Related Transactions, and no Credit Party or Affiliate thereof has
any obligation to any Person in respect of any finder's or brokerage fees in
connection therewith.

        5.16    Deposit and Disbursement Accounts. Schedule 5.16 lists all banks
and other financial institutions at which any Credit Party maintains deposit or
securities or commodities accounts as of the Closing Date, including any
Disbursement Accounts, and such Schedule correctly identifies the name, address
and telephone number of each depository, the name in which the account is held,
a description of the purpose of the account, and the complete account number
therefor.

        5.17    Agreements and Other Documents. As of the Closing Date, each
Credit Party has provided to Agent or its counsel, on behalf of Lenders,
accurate and complete copies (or summaries) of all of the following agreements
or documents to which it is subject and each of which is listed in SCHEDULE
5.17: supply agreements and purchase agreements not terminable by such Credit
Party within sixty (60) days following written notice issued by such Credit
Party and involving transactions in excess of $1,000,000 per annum; leases of
Equipment having a remaining term of one year or longer and requiring aggregate
rental and other payments in excess of $500,000 per annum; licenses and permits
held by the Credit Parties, the absence of which could reasonably be expected to
have a Material Adverse Effect; instruments and documents evidencing any
Indebtedness or Guaranteed Indebtedness of such Credit Party and any Lien
granted by such Credit Party with respect thereto (other than the Loan
Documents); and instruments and agreements evidencing the issuance of any equity
securities, warrants, rights or options to purchase equity securities of such
Credit Party.

        5.18    Insurance. Schedule 5.18 lists all insurance policies of any
nature maintained, as of the Closing Date, for current occurrences by each
Credit Party, as well as a summary of the key business terms of each such policy
such as deductibles, coverage limits and term of policy.

        5.19    OFAC. No Credit Party (a) is a person whose property or interest
in property is blocked or subject to blocking pursuant to any of the embargoes
or trade sanctions administered by the U.S. Department of Treasury, Office of
Foreign Assets Control, contained in 31 C.F.R. Chapter V (the "OFAC
Regulations"); (b) engages in any dealings or transactions prohibited by the
OFAC Regulations or is otherwise associated with any such person in any manner
violative of such regulations; or (c) is a person on the Specially Designated
Nationals and Blocked Persons List contained in Appendix A to the OFAC
Regulations (31 C.F.R. Chapter V, App. A), or (d) is otherwise in violation of
the limitations or prohibitions contained in the OFAC Regulations or any related
Executive Order. Each Credit Party is in compliance, in all material respects,
with the Trading With the Enemy Act, as amended, and each of the foreign assets
control regulations contained in the OFAC Regulations and any other applicable
enabling legislation or executive order relating thereto.

                                       50

        5.20    Patriot Act and Foreign Corrupt Practices Act. Each Credit Party
is in compliance, in all material respects, with the applicable provisions of
the Uniting And Strengthening America By Providing Appropriate Tools Required To
Intercept And Obstruct Terrorism (USA Patriot Act 2001). No part of the proceeds
of the Revolving Loans will be used, directly or indirectly, for any payments to
any governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain any improper
advantage, in violation of the United States Foreign Corrupt Practices Act of
1977, as amended.

        5.21    Taxes. All federal and material state, local and foreign income
and franchise and other tax returns, reports and statements (collectively, the
Tax Returns") required to be filed by any Credit Party have been filed with the
appropriate Governmental Authorities in all jurisdictions in which such Tax
Returns are required to be filed. All such Tax Returns are true and correct in
all material respects. All Taxes, Charges and other impositions that are
reflected on such Tax Returns, or that are otherwise due and payable, have been
paid prior to the date on which any liability may be added thereto for
non-payment thereof except for amounts contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves are maintained
on the books of the appropriate Credit Party in accordance with GAAP. No Tax
Return is under audit or examination by any Governmental Authority and no
written notice of such an audit or examination or any assertion of any claim for
material Taxes has been given or made by any Governmental Authority, other than
those being contested in good faith by appropriate proceedings diligently
conducted and for which adequate reserves are maintained on the books of the
appropriate Credit Party in accordance with GAAP. Proper and accurate amounts
have been withheld by each Credit Party from their respective employees for all
periods in compliance in all material respects with the tax, social security and
unemployment withholding provisions of Applicable Law and such withholdings have
been timely paid to the respective Governmental Authorities. Except as would not
have a Material Adverse Effect, no Credit Party has participated in a
"reportable transaction" within the meaning of Treasury Regulation Section
1.6011-4(b). Except as would not have a Material Adverse Effect, no Credit Party
has been a member of an affiliated, combined or unitary group other than the
group of which a Tax Affiliate is the common parent.

                                   SECTION 6.
                          DEFAULT, RIGHTS AND REMEDIES

        6.1     Event of Default. "Event of Default" shall mean the occurrence
or existence of any one or more of the following:

                (a)     Payment. (1) Failure to pay any installment or other
   payment of principal of any Loan when due, or to repay Revolving Loans to
   reduce their balance to the maximum amount of Revolving Loans then permitted
   to be outstanding or to reimburse any L/C Issuer for any payment made by such
   L/C Issuer under or in respect of any Letter of Credit when due or (2)
   failure to pay, within three (3) days after the due date, any interest on any
   Loan or any other amount due under this Agreement or any of the other Loan
   Documents;

                (b)     Default in Other Agreements. (1) Any Credit Party or any
   of its Subsidiaries fails to pay when due or within any applicable grace
   period any principal or interest on Indebtedness (other than the Loans) or
   any Contingent Obligations or (2) breach or default of any Credit Party or
   any of its Subsidiaries, or the occurrence of any condition or event, with
   respect to any Indebtedness (other than the Loans) or any Contingent
   Obligations, if the effect of such breach, default or occurrence is to cause
   or to permit the holder or holders then to cause, Indebtedness and/or
   Contingent Obligations

                                       51

   having an individual principal amount in excess of $2,000,000 or having an
   aggregate principal amount in excess of $2,000,000 to become or be declared
   due prior to their stated maturity;

                (c)     Breach of Certain Provisions; Breach of Warranty.
   Failure of any Credit Party to perform or comply with any term or condition
   contained in that portion of Section 2.2 relating to the Credit Parties'
   obligation to maintain insurance, Section 2.3, Section 3 or Section 4 and,
   solely with respect to the financial statements and reports required to be
   delivered by paragraphs (a), (b), (d)(iii), (d)(iv), (e), (f) or (g) of
   Section 4.9, such default is not cured within five (5) Business Days;

                (d)     Borrowing Base Certificate; Breach of Warranty. Any
   information contained in any Borrowing Base Certificate is untrue or
   incorrect in any respect (other than inadvertent, immaterial errors not
   exceeding $100,000 in the aggregate in any Borrowing Base Certificate), or
   any representation or warranty herein or in any Loan Document or in any
   written statement, report, financial statement or certificate (other than a
   Borrowing Base Certificate) made or delivered to Agent or any Lender by any
   Credit Party is untrue or incorrect in any material respect (without
   duplication of materiality qualifiers contained therein) as of the date when
   made or deemed made;

                (e)     Other Defaults Under Loan Documents. Any Credit Party
   defaults in the performance of or compliance with any term contained in this
   Agreement or the other Loan Documents (other than occurrences described in
   other provisions of this Section 6.1 for which a different grace or cure
   period is specified, or for which no cure period is specified and which
   constitute immediate Events of Default) and such default is not remedied or
   waived within thirty (30) days after the earlier of (1) receipt by Borrower
   of notice from Agent or Requisite Lenders of such default or (2) actual
   knowledge of Borrower or any other Credit Party of such default;

                (f)     Involuntary Bankruptcy; Appointment of Receiver, Etc.
   (1) A court enters a decree or order for relief with respect to any Credit
   Party in an involuntary case under the Bankruptcy Code, which decree or order
   is not stayed or other similar relief is not granted under any applicable
   federal or state law; or (2) the continuance of any of the following events
   for forty-five (45) days unless dismissed, bonded or discharged: (a) an
   involuntary case is commenced against any Credit Party, under any applicable
   bankruptcy, insolvency or other similar law now or hereafter in effect; or
   (b) a decree or order of a court for the appointment of a receiver,
   liquidator, sequestrator, trustee, custodian or other officer having similar
   powers over any Credit Party, or over all or a substantial part of its
   property, is entered; or (c) a receiver, trustee or other custodian is
   appointed without the consent of a Credit Party, for all or a substantial
   part of the property of the Credit Party;

                (g)     Voluntary Bankruptcy; Appointment of Receiver, Etc. (1)
   any Credit Party commences a voluntary case under the Bankruptcy Code, or
   consents to the entry of an order for relief in an involuntary case or to the
   conversion of an involuntary case to a voluntary case under any such law or
   consents to the appointment of or taking possession by a receiver, trustee or
   other custodian for all or a substantial part of its property; or (2) any
   Credit Party makes any general assignment for the benefit of creditors; or
   (3) the Board of Directors of any Credit Party adopts any resolution or
   otherwise authorizes action to approve any of the actions referred to in this
   Section 6.1(G);

                (h)     Judgment and Attachments. Any money judgment, writ or
   warrant of attachment, or similar process (other than those described
   elsewhere in this Section 6.1) involving (1) an amount in any individual case
   in excess of $2,000,000 or (2) an amount in the aggregate at any time in
   excess of $2,000,000 (in either case to the extent not adequately covered by
   insurance in Agent's sole discretion as to which the insurance company has
   acknowledged coverage) is entered or filed against one or more of the Credit
   Parties or any of their respective assets and remains undischarged,

                                       52

   unvacated, unbonded or unstayed for a period of thirty (30) days or in any
   event later than five (5) Business Days prior to the date of any proposed
   sale thereunder;

                     (i) Dissolution. Any order, judgment or decree is entered
   against any Credit Party decreeing the dissolution or split up of such Credit
   Party and such order remains undischarged or unstayed for a period in excess
   of fifteen (15) days;

                     (j) Insolvency. Any Credit Party ceases to be Solvent,
   fails to pay its debts as they become due or admits in writing its present or
   prospective inability to pay its debts as they become due;

                     (k) Invalidity of Loan Documents. Any of the Loan Documents
   for any reason, other than a partial or full release in accordance with the
   terms thereof, ceases to be in full force and effect or is declared to be
   null and void, or any Credit Party denies that it has any further liability
   under any Loan Documents to which it is party, or gives notice to such
   effect;

                     (l) Damage; Casualty. Any event occurs, whether or not
   insured or insurable, as a result of which revenue-producing activities cease
   or are substantially curtailed at any facility of any Credit Party generating
   more than 20% of the consolidated revenues of Holdings and its Subsidiaries
   for the Fiscal Year preceding such event and such cessation or curtailment
   continues for more than thirty (30) days following the last day for which a
   Credit Party has a claim under its business interruption insurance policy in
   respect of such event;

                (m)     Omitted.

                (n)     Change of Control. A Change of Control occurs; or

                (o)     Subordinated Indebtedness. The failure of any Credit
   Party or any creditor of Borrower or any of its Subsidiaries to comply with
   the terms of any subordination or intercreditor agreement or any
   subordination provisions of any note or other document running to the benefit
   of Agent or Lenders, or if any such document becomes null and void or any
   party denies further liability under any such document or provides notice to
   that effect.

        6.2     Suspension or Termination of Commitments. Upon the occurrence
and during the continuance of any Event of Default, Agent may, and at the
request of Requisite Lenders Agent shall, without notice or demand, immediately
suspend or terminate all or any portion of Lenders' obligations to make
additional Loans or issue or cause to be issued Letters of Credit under the
Revolving Loan Commitment.

        6.3     Acceleration and Other Remedies. Upon the occurrence of any
Event of Default described in Sections 6.1(f) or 6.1(g), the Commitments shall
be immediately terminated and all of the Obligations, including the Revolving
Loans, shall automatically become immediately due and payable, without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other requirements of any kind, all of which are hereby
expressly waived (including for purposes of Section 10) by Borrower, and the
Commitments shall thereupon terminate. Upon the occurrence and during the
continuance of any other Event of Default, Agent may, and at the request of the
Requisite Lenders, Agent shall, by written notice to Borrower (a) reduce the
aggregate amount of the Commitments from time to time, (b) declare all or any
portion of the Loans and all or any portion of the other Obligations to be, and
the same shall forthwith become, immediately due and payable together with
accrued interest thereon, (c) terminate all or any portion of the obligations of
Agent, L/C Issuers and Lenders to make Revolving Credit Advances and issue
Letters of Credit, (d) demand that Borrower immediately deliver cash (or, with

                                       53

the consent of Agent in each instance, back to back letters of credit in form
and issued by a Person acceptable to Agent) to Agent for the benefit of L/C
Issuers (and Borrower shall then immediately so deliver) in an amount equal to
105% of the aggregate outstanding Letter of Credit Obligations and (e) exercise
any other remedies which may be available under the Loan Documents or Applicable
Law. Borrower hereby grants to Agent, for the benefit of L/C Issuers and each
Lender with a participation in any Letters of Credit then outstanding, a
security interest in such cash collateral to secure all of the Letter of Credit
Obligations. Any such cash collateral shall be made available by Agent to L/C
Issuers to reimburse L/C Issuers for payments of drafts drawn under such Letters
of Credit and any Fees, Charges and expenses of L/C Issuers with respect to such
Letters of Credit and the unused portion thereof, after all such Letters of
Credit shall have expired or been fully drawn upon, shall be applied to repay
any other Obligations. After all such Letters of Credit shall have expired or
been fully drawn upon and all Obligations shall have been satisfied and paid in
full, the balance, if any, of such cash collateral shall be returned to
Borrower. Borrower shall from time to time execute and deliver to Agent such
further documents and instruments as Agent may request with respect to such cash
collateral.

        6.4     Performance by Agent. If any Credit Party shall fail to perform
any covenant, duty or agreement contained in any of the Loan Documents, upon
five (5) days prior written notice to Borrowers (except that no such notice
shall be required for the purchase of insurance permitted by Section 2.2(a)),
Agent may perform or attempt to perform such covenant, duty or agreement on
behalf of such Credit Party after the expiration of any cure or grace periods
set forth herein, and Agent will use reasonable efforts to provide written
notice to the applicable Credit Party of any such action taken. In such event,
such Credit Party shall, at the request of Agent, promptly pay any amount
reasonably expended by Agent in such performance or attempted performance to
Agent, together with interest thereon at the highest rate of interest in effect
upon the occurrence of an Event of Default as specified in Section 1.2(d) from
the date of such expenditure until paid. Notwithstanding the foregoing, it is
expressly agreed that Agent shall not have any liability or responsibility for
the performance of any obligation of any Credit Party under this Agreement or
any other Loan Document.

        6.5     Application of Proceeds. Notwithstanding anything to the
contrary contained in this Agreement, upon the occurrence and during the
continuance of an Event of Default, (a) Borrower irrevocably waives the right to
direct the application of any and all payments at any time or times thereafter
received by Agent from or on behalf of Borrower, and Agent shall have the
continuing and exclusive right to apply and to reapply any and all payments
received at any time or times after the occurrence and during the continuance of
an Event of Default against the Obligations in such manner as Agent may deem
advisable notwithstanding any previous application by Agent and (b) in the
absence of a specific determination by Agent with respect thereto, the proceeds
of any sale of, or other realization upon, all or any part of the Collateral
shall be applied: first, to all Fees, costs and expenses incurred by or owing to
Agent and any Lender with respect to this Agreement, the other Loan Documents or
the Collateral; second, to accrued and unpaid interest on the Obligations
(including any interest which but for the provisions of the Bankruptcy Code,
would have accrued on such amounts); third, to the principal amount of the
Obligations outstanding (other than Obligations owed to any Lender under an
Interest Rate Agreement); and fourth to any other obligations of Borrower owing
to Agent or any Lender under the Loan Documents or any Interest Rate Agreement.
Any balance remaining shall be delivered to Borrower or to whomever may be
lawfully entitled to receive such balance or as a court of competent
jurisdiction may direct.

                                   SECTION 7.
                               CONDITIONS TO LOANS

        The obligations of Lenders and L/C Issuers to make Loans and to issue or
cause to be issued Letters of Credit are subject to satisfaction or waiver of
all of the applicable conditions set forth below.

                                       54

        7.1     Conditions to Initial Loans. The obligations of Lenders and L/C
Issuers to make the initial Loans and to issue or cause to be issued Letters of
Credit on the Closing Date are, in addition to the conditions precedent
specified in Section 7.2, subject to the delivery of all documents listed on,
the taking of all actions set forth on and the satisfaction of all other
conditions precedent listed in the Closing Checklist attached hereto as annex C,
all in form and substance, or in a manner, reasonably satisfactory to Agent and
Lenders.

        7.2     Conditions to All Loans. Except as otherwise expressly provided
herein, no Lender or L/C Issuer shall be obligated to fund any Advance or incur
any Letter of Credit Obligation, if, as of the date thereof (the "Funding
Date"):

                (a)     any representation or warranty by any Credit Party
   contained herein or in any other Loan Document is untrue or incorrect in any
   material respect (without duplication of any materiality qualifier contained
   therein) as of such date, except to the extent that such representation or
   warranty expressly relates to an earlier date, and Agent or Requisite Lenders
   have determined not to make such Advance or incur such Letter of Credit
   Obligation as a result of the fact that such warranty or representation is
   untrue or incorrect;

                (b)     any Default or Event of Default has occurred and is
   continuing or would result after giving effect to any Advance (or the
   incurrence of any Letter of Credit Obligation), and Agent or Requisite
   Lenders shall have determined not to make any Advance or incur any Letter of
   Credit Obligation as a result of that Default or Event of Default; or

                (c)     after giving effect to any Advance (or the incurrence
   of any Letter of Credit Obligations), the outstanding amount of the aggregate
   Revolving Loan would exceed remaining Borrowing Availability (except as
   provided in Section 1.1(a)(ii)).

The request and acceptance by Borrower of the proceeds of any Advance, the
incurrence of any Letter of Credit Obligations or the conversion or continuation
of any Loan into, or as, a LIBOR Loan shall be deemed to constitute, as of the
date thereof, a representation and warranty by Borrower that the conditions in
this Section 7.2 have been satisfied.

                                   SECTION 8.
                          ASSIGNMENT AND PARTICIPATION

        8.1     Assignment and Participations.

                (a)     Subject to the terms of this Section 8.1, any Lender may
    make an assignment to a Qualified Assignee of, or sale of participations in,
   at any time or times, the Loan Documents, Loans, Letter of Credit Obligations
   and any Commitment or any portion thereof or interest therein, including any
   Lender's rights, title, interests, remedies, powers or duties thereunder. Any
   assignment by a Lender shall: (i) require the consent of Agent (which consent
   shall not be unreasonably withheld or delayed with respect to a Qualified
   Assignee) and the execution of an assignment agreement (an "Assignment
   Agreement" substantially in the form attached hereto as Exhibit 8.1 and
   otherwise in form and substance reasonably satisfactory to, and acknowledged
   by, Agent); (ii) be conditioned on such assignee Lender representing to the
   assigning Lender and Agent that it is purchasing the applicable Loans to be
   assigned to it for its own account, for investment purposes and not with a
   view to the distribution thereof; (iii) except as otherwise agreed by
   Borrower (which agreement shall not be required while an Event of Default is
   continuing) and Agent after giving effect to any such partial assignment, the
   assignee Lender shall have Commitments in an amount at least equal to
   $5,000,000 and the assigning Lender shall have retained Commitments in an
   amount at least equal to $5,000,000 ; (iv)

                                       55

   require a payment to Agent of an assignment fee of $3,500 and (v) so long as
   no Event of Default has occurred and is continuing, require the consent of
   Borrower, which shall not be unreasonably withheld or delayed.
   Notwithstanding the above, Agent may in its sole and absolute discretion
   permit any assignment by a Lender to a Person or Persons that are not
   Qualified Assignees but such assignment shall nonetheless require the consent
   of Borrower to the extent required above. In the case of an assignment by a
   Lender under this Section 8.1, the assignee shall have, to the extent of such
   assignment, the same rights, benefits and obligations as all other Lenders
   hereunder. The assigning Lender shall be relieved of its obligations
   hereunder with respect to its Commitments or assigned portion thereof from
   and after the date of such assignment. Borrower hereby acknowledges and
   agrees that any assignment shall give rise to a direct obligation of Borrower
   to the assignee and that the assignee shall be considered to be a "Lender."
   In all instances, each Lender's liability to make Loans hereunder shall be
   several and not joint and shall be limited to such Lender's Pro Rata Share of
   the applicable Commitment. In the event Agent or any Lender assigns or
   otherwise transfers all or any part of the Obligations, Agent or any such
   Lender shall so notify Borrower and Borrower shall, upon the request of Agent
   or such Lender, execute new Notes in exchange for the Notes, if any, being
   assigned. Notwithstanding the foregoing provisions of this Section 8.1(a),
   (a) any Lender may at any time pledge the Obligations held by it and such
   Lender's rights under this Agreement and the other Loan Documents to a
   Federal Reserve Bank, (b) any Lender that is an investment fund may assign
   the Obligations held by it and such Lender's rights under this Agreement and
   the other Loan Documents to another investment fund managed by the same
   investment advisor or pledge such Obligations and rights to trustee for the
   benefit of its investors and (c) any Lender may assign the Obligations to an
   Affiliate of such Lender or to a Person that is a Lender prior to the date of
   such assignment.

                (b)     Any participation by a Lender of all or any part of its
   Commitments shall be made with the understanding that all amounts payable by
   Borrower hereunder shall be determined as if that Lender had not sold such
   participation, and that the holder of any such participation shall not be
   entitled to require such Lender to take or omit to take any action hereunder
   except actions directly affecting (i) any reduction in the principal amount
   of, or interest rate or Fees payable with respect to, any Loan in which such
   holder participates, (ii) any extension of the scheduled amortization of the
   principal amount of any Loan in which such holder participates or the final
   maturity date thereof, and (iii) any release of all or substantially all of
   the Collateral (other than in accordance with the terms of this Agreement,
   the Collateral Documents or the other Loan Documents). Solely for purposes of
   Sections 1.10, 1.11, 8.3 and 9.1, Borrower acknowledges and agrees that a
   participation shall give rise to a direct obligation of Borrower to the
   participant and the participant shall be considered to be a "Lender." Except
   as set forth in the preceding sentence no Borrower or any other Credit Party
   shall have any obligation or duty to any participant. Neither Agent nor any
   Lender (other than the Lender selling a participation) shall have any duty to
   any participant and may continue to deal solely with the Lender selling a
   participation as if no such sale had occurred. A participant shall not be
   entitled to receive any greater payment under Sections 1.10, 1.11 and 9.1
   than the applicable Lender would have been entitled to receive with respect
   to the participation sold to such participant, unless the sale of the
   participation to such participant is made with the Borrower's prior written
   consent or while an Event of Default is continuing.

                (c)     Except as expressly provided in this Section 8.1, no
   Lender shall, as between Borrower and that Lender, or Agent and that Lender,
   be relieved of any of its obligations hereunder as a result of any sale,
   assignment, transfer or negotiation of, or granting of participation in, all
   or any part of the Loans, the Notes or other Obligations owed to such Lender.

                (d)     Each Credit Party shall assist each Lender permitted to
   sell assignments or participations under this Section 8.1 as required to
   enable the assigning or selling Lender to effect any such assignment or
   participation, including the execution and delivery of any and all
   agreements, notes

                                       56

   and other documents and instruments as shall be requested and the prompt
   preparation of informational materials for, and the participation of
   management in meetings with, potential assignees or participants, all on a
   timetable established by Agent. Each Credit Party executing this Agreement
   shall certify the correctness, completeness and accuracy of all descriptions
   of the Credit Parties and their respective affairs contained in any selling
   materials provided by it and all other information provided by it and
   included in such materials, except that any Projections delivered by Borrower
   shall only be certified by Borrower as having been prepared by Borrower in
   compliance with the representations contained in Section 5.5.

                (e)     A Lender may furnish any information concerning Credit
   Parties in the possession of such Lender from time to time to assignees and
   participants (including prospective assignees and participants); provided
   that such Lender shall obtain from assignees or participants confidentiality
   covenants substantially equivalent to those contained in Section 9.13.

                (f)     Registration. The Agent shall, on behalf of and acting
   solely for this purpose as the agent of the Borrower, maintain, or cause to
   be maintained a copy of each Assignment Agreement delivered to and accepted
   by it and a register (the "Register") for the recordation of the names and
   addresses of the Lenders and the principal amount of the Loans (and stated
   interest thereon) (the "Registered Loans"). The entries in the Register shall
   be conclusive and binding for all purposes, absent manifest error. The
   Borrower, the Agent and the Lenders shall treat each Person whose name is
   recorded in the Register as a Lender hereunder for all purposes of this
   Agreement, including, without limitation, the right to receive payments of
   principal and interest hereunder, notwithstanding notice to the contrary.
   Copies of the Register shall be available for inspection by the Borrower at
   any reasonable time and from time to time upon reasonable prior notice. Upon
   its receipt of an Assignment Agreement executed by an assigning Lender and an
   assignee, together with any Note subject to such assignment, the Agent shall,
   if the Agent and the Borrower consent to such assignment, (i) accept such
   Assignment Agreement, (ii) record the information contained therein in the
   Register and (iii) issue one or more new Notes in the same aggregate
   principal amount as the principal amount of the surrendered Note.

        8.2     Agent.

                (a)     Appointment. Each Lender hereby designates and appoints
   GE Capital as its Agent under this Agreement and the other Loan Documents,
   and each Lender hereby irrevocably authorizes Agent to execute and deliver
   the Collateral Documents and to take such action or to refrain from taking
   such action on its behalf under the provisions of this Agreement and the
   other Loan Documents and to exercise such powers as are set forth herein or
   therein, together with such other powers as are reasonably incidental
   thereto. Agent is authorized and empowered to amend, modify, or waive any
   provisions of this Agreement or the other Loan Documents on behalf of Lenders
   subject to the requirement that certain of Lenders' consent be obtained in
   certain instances as provided in this Section 8.2 and Section 9.2. The
   provisions of this Section 8.2 are solely for the benefit of Agent and
   Lenders and neither Borrower nor any other Credit Party shall have any rights
   as a third party beneficiary of any of the provisions hereof. In performing
   its functions and duties under this Agreement, Agent shall act solely as
   agent of Lenders and does not assume and shall not be deemed to have assumed
   any obligation toward or relationship of agency or trust with or for Borrower
   or any other Credit Party. Agent may perform any of its duties hereunder, or
   under the Loan Documents, by or through its agents or employees.

                (b)     Nature of Duties. The duties of Agent shall be
   mechanical and administrative in nature. Agent shall not have by reason of
   this Agreement a fiduciary relationship in respect of any Lender. Nothing in
   this Agreement or any of the Loan Documents, express or implied, is intended
   to or shall be construed to impose upon Agent any obligations in respect of
   this Agreement or any of the

                                       57

   Loan Documents except as expressly set forth herein or therein. Each Lender
   shall make its own independent investigation of the financial condition and
   affairs of each Credit Party in connection with the extension of credit
   hereunder and shall make its own appraisal of the creditworthiness of each
   Credit Party, and Agent shall have no duty or responsibility, either
   initially or on a continuing basis, to provide any Lender with any credit or
   other information with respect thereto (other than as expressly required
   herein). If Agent seeks the consent or approval of any Lenders to the taking
   or refraining from taking any action hereunder, then Agent shall send notice
   thereof to each Lender. Agent shall promptly notify each Lender any time that
   the Requisite Lenders or Supermajority Revolving Lenders have instructed
   Agent to act or refrain from acting pursuant hereto.

                (c)     Rights, Exculpation, Etc. Neither Agent nor any of its
   officers, directors, employees or agents shall be liable to any Lender for
   any action taken or omitted by them hereunder or under any of the Loan
   Documents, or in connection herewith or therewith, except that Agent shall be
   liable to the extent of its own gross negligence or willful misconduct as
   determined by a final non-appealable order by a court of competent
   jurisdiction. Agent shall not be liable for any apportionment or distribution
   of payments made by it in good faith and if any such apportionment or
   distribution is subsequently determined to have been made in error the sole
   recourse of any Lender to whom payment was due but not made, shall be to
   recover from other Lenders any payment in excess of the amount to which they
   are determined to be entitled (and such other Lenders hereby agree to return
   to such Lender any such erroneous payments received by them). In no event
   shall Agent be liable for punitive, special, consequential, incidental,
   exemplary or other similar damages. In performing its functions and duties
   hereunder, Agent shall exercise the same care which it would in dealing with
   loans for its own account, but neither Agent nor any of its agents or
   representatives shall be responsible to any Lender for any recitals,
   statements, representations or warranties herein or for the execution,
   effectiveness, genuineness, validity, enforceability, collectibility, or
   sufficiency of this Agreement or any of the Loan Documents or the
   transactions contemplated thereby, or for the financial condition of any
   Credit Party. Agent shall not be required to make any inquiry concerning
   either the performance or observance of any of the terms, provisions or
   conditions of this Agreement or any of the Loan Documents or the financial
   condition of any Credit Party, or the existence or possible existence of any
   Default or Event of Default. Agent may at any time request instructions from
   Requisite Lenders, Supermajority Revolving Lenders or all affected Lenders
   with respect to any actions or approvals which by the terms of this Agreement
   or of any of the Loan Documents Agent is permitted or required to take or to
   grant. If such instructions are promptly requested, Agent shall be absolutely
   entitled to refrain from taking any action or to withhold any approval and
   shall not be under any liability whatsoever to any Person for refraining from
   any action or withholding any approval under any of the Loan Documents until
   it shall have received such instructions from the Requisite Lenders,
   Supermajority Revolving Lenders or such other portion of the Lenders as shall
   be prescribed by this Agreement. Without limiting the foregoing, no Lender
   shall have any right of action whatsoever against Agent as a result of Agent
   acting or refraining from acting under this Agreement or any of the other
   Loan Documents in accordance with the instructions of Requisite Lenders,
   Supermajority Revolving Lenders or all affected Lenders, as applicable; and,
   notwithstanding the instructions of Requisite Lenders, Supermajority
   Revolving Lenders or all affected Lenders, as applicable, Agent shall have no
   obligation to take any action if it believes, in good faith, that such action
   is deemed to be illegal by Agent or exposes Agent to any liability for which
   it has not received satisfactory indemnification in accordance with Section
   8.2(e).

                (d)     Reliance. Agent shall be entitled to rely, and shall be
   fully protected in relying, upon any written or oral notices, statements,
   certificates, orders or other documents or any telephone message or other
   communication (including any writing, telex, fax or telegram) believed by it
   in good faith to be genuine and correct and to have been signed, sent or made
   by the proper Person, and with respect to all matters pertaining to this
   Agreement or any of the Loan Documents and its

                                       58

   duties hereunder or thereunder. Agent shall be entitled to rely upon the
   advice of legal counsel, independent accountants, and other experts selected
   by Agent in its sole discretion.

                (e)     Indemnification. Lenders will reimburse and indemnify
   Agent for and against any and all liabilities, obligations, losses, damages,
   penalties, actions, judgments, suits, costs, expenses (including, without
   limitation, attorneys' fees and expenses), advances or disbursements of any
   kind or nature whatsoever which may be imposed on, incurred by, or asserted
   against Agent in any way relating to or arising out of this Agreement or any
   of the Loan Documents or any action taken or omitted by Agent under this
   Agreement or any of the Loan Documents, in proportion to each Lender's Pro
   Rata Share, but only to the extent that any of the foregoing is not
   reimbursed by Borrower; provided, however, that no Lender shall be liable for
   any portion of such liabilities, obligations, losses, damages, penalties,
   actions, judgments, suits, costs, expenses, advances or disbursements to the
   extent resulting from Agent's gross negligence or willful misconduct as
   determined by a final non-appealable order by a court of competent
   jurisdiction. If any indemnity furnished to Agent for any purpose shall, in
   the opinion of Agent, be insufficient or become impaired, Agent may call for
   additional indemnity and cease, or not commence, to do the acts indemnified
   against even if so directed by the Requisite Lenders, Supermajority Revolving
   Lenders or such other portion of the Lenders as shall be prescribed by this
   Agreement until such additional indemnity is furnished. The obligations of
   Lenders under this Section 8.2(e) shall survive the payment in full of the
   Obligations and the termination of this Agreement.

                (f)     GE Capital Individually. With respect to its Commitments
   hereunder, GE Capital shall have and may exercise the same rights and powers
   hereunder and is subject to the same obligations and liabilities as and to
   the extent set forth herein for any other Lender. The terms "Lenders",
   "Requisite Lenders", "Supermajority Revolving Lenders" or any similar terms
   shall, unless the context clearly otherwise indicates, include GE Capital in
   its individual capacity as a Lender or one of the Requisite Lenders or
   Supermajority Revolving Lenders. GE Capital, either directly or through
   strategic affiliations, may lend money to, acquire equity or other ownership
   interests in, provide advisory services to and generally engage in any kind
   of banking, trust or other business with any Credit Party as if it were not
   acting as Agent pursuant hereto and without any duty to account therefor to
   Lenders. GE Capital, either directly or through strategic affiliations, may
   accept fees and other consideration from any Credit Party for services in
   connection with this Agreement or otherwise without having to account for the
   same to Lenders.

                (g)     Successor Agent.

                        (i)     Resignation. Agent may resign from the
performance of all its agency functions and duties hereunder at any time by
giving at least thirty (30) Business Days' prior written notice to Borrower and
Lenders. Such resignation shall take effect upon the acceptance by a successor
Agent of appointment pursuant to clause (ii) below or as otherwise provided in
clause (ii) below.

                        (ii)    Appointment of Successor. Upon any such notice
of resignation pursuant to clause (i) above, Requisite Lenders shall appoint a
successor Agent which, unless an Event of Default has occurred and is
continuing, shall be reasonably acceptable to Borrower. If a successor Agent
shall not have been so appointed within the thirty (30) Business Day period
referred to in clause (i) above, the retiring Agent, upon notice to Borrower,
shall then appoint a successor Agent who shall serve as Agent until such time,
if any, as Requisite Lenders appoint a successor Agent as provided above.

                        (iii)   Successor Agent. Upon the acceptance of any
appointment as Agent under the Loan Documents by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring

                                       59

Agent shall be discharged from its duties and obligations under the Loan
Documents. After any retiring Agent's resignation as Agent, the provisions of
this Section 8.2 shall continue to inure to its benefit as to any actions taken
or omitted to be taken by it in its capacity as Agent.

                (h)     Collateral Matters.

                        (i)     Release of Collateral. Lenders hereby
irrevocably authorize Agent, at its option and in its discretion, to release any
Lien granted to or held by Agent upon any Collateral (x) upon termination of the
Commitments and payment and satisfaction of all Obligations (other than
Contingent Indemnification Obligations to the extent no claims giving rise
thereto have been asserted) or (y) constituting property being sold or disposed
of if Borrower certifies to Agent that the sale or disposition is made in
compliance with the provisions of this Agreement (and Agent may rely in good
faith conclusively on any such certificate, without further inquiry).

                        (ii)    Confirmation of Authority; Execution of
Releases. Without in any manner limiting Agent's authority to act without any
specific or further authorization or consent by Lenders (as set forth in Section
8.2(h)(i)), each Lender agrees to confirm in writing, upon request by Agent or
Borrower, the authority to release any Collateral conferred upon Agent under
clauses (x) and (y) of Section 8.2(h)(i). Upon receipt by Agent of any required
confirmation from the Requisite Lenders of its authority to release any
particular item or types of Collateral, and upon at least ten (10) Business
Days' prior written request by Borrower, Agent shall (and is hereby irrevocably
authorized by Lenders to) execute such documents as may be necessary to evidence
the release of the Liens granted to Agent upon such Collateral; provided,
however, that (x) Agent shall not be required to execute any such document on
terms which, in Agent's reasonable opinion, would expose Agent to liability or
create any obligation or entail any consequence other than the release of such
Liens without recourse or warranty, and (y) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations of
any Credit Party, in respect of), all interests retained by any Credit Party,
including the proceeds of any sale, all of which shall continue to constitute
part of the Collateral.

                        (iii)   Absence of Duty. Agent shall have no obligation
whatsoever to any Lender or any other Person to assure that the property covered
by the Collateral Documents exists or is owned by Borrower or any other Credit
Party or is cared for, protected or insured or has been encumbered or that the
Liens granted to Agent have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to Agent in this Section 8.2(h) or
in any of the Loan Documents, it being understood and agreed that in respect of
the property covered by the Collateral Documents or any act, omission or event
related thereto, Agent may act in any manner it may deem appropriate, in its
discretion, given Agent's own interest in property covered by the Collateral
Documents as one of the Lenders and that Agent shall have no duty or liability
whatsoever to any of the other Lenders, provided that Agent shall exercise the
same care which it would in dealing with loans for its own account.

                (i)     Agency for Perfection. Agent and each Lender hereby
   appoint each other Lender as agent for the purpose of perfecting Agent's
   security interest in assets which, in accordance with the Code in any
   applicable jurisdiction, can be perfected by possession or control. Should
   any Lender (other than Agent) obtain possession or control of any such
   assets, such Lender shall notify Agent thereof, and, promptly upon Agent's
   request therefor, shall deliver such assets to Agent or in accordance with
   Agent's instructions or transfer control to Agent in accordance with Agent's
   instructions. Each Lender agrees that it will not have any right individually
   to enforce or seek to enforce any Collateral Document or to realize upon any
   collateral security for the Loans unless

                                       60

   instructed to do so by Agent in writing, it being understood and agreed that
   such rights and remedies may be exercised only by Agent.

                (j)     Notice of Default. Agent shall not be deemed to have
   knowledge or notice of the occurrence of any Default or Event of Default
   except with respect to defaults in the payment of principal, interest and
   Fees required to be paid to Agent for the account of Lenders, unless Agent
   shall have received written notice from a Lender or Borrower referring to
   this Agreement, describing such Default or Event of Default and stating that
   such notice is a "notice of default". Agent will use reasonable efforts to
   notify each Lender of its receipt of any such notice, unless such notice is
   with respect to defaults in the payment of principal, interest and fees, in
   which case Agent will notify each Lender of its receipt of such notice. Agent
   shall take such action with respect to such Default or Event of Default as
   may be requested by Requisite Lenders in accordance with Section 6. Unless
   and until Agent has received any such request, Agent may (but shall not be
   obligated to) take such action, or refrain from taking such action, with
   respect to such Default or Event of Default as it shall deem advisable or in
   the best interests of Lenders.

                (k)     Lender Actions Against Collateral. Each Lender agrees
   that it will not take any action, nor institute any actions or proceedings,
   with respect to the Loans, against Borrower or any Credit Party hereunder or
   under the other Loan Documents or against any of the Real Estate encumbered
   by Mortgages without the consent of the Requisite Lenders. With respect to
   any action by Agent to enforce the rights and remedies of Agent and the
   Lenders under this Agreement and the other Loan Documents, each Lender hereby
   consents to the jurisdiction of the court in which such action is maintained,
   and agrees to deliver its Notes to Agent to the extent necessary to enforce
   the rights and remedies of Agent for the benefit of the Lenders under the
   Mortgages in accordance with the provisions hereof.

        8.3     Set Off and Sharing of Payments. In addition to any rights now
or hereafter granted under Applicable Law and not by way of limitation of any
such rights, during the continuance of any Event of Default, each Lender is
hereby authorized by Borrower at any time or from time to time, with reasonably
prompt subsequent notice to Borrower (any prior or contemporaneous notice being
hereby expressly waived) to set off and to appropriate and to apply any and all
(A) balances held by such Lender at any of its offices for the account of
Borrower or any of its Subsidiaries (regardless of whether such balances are
then due to Borrower or its Subsidiaries) (other than with respect to tax
withholding accounts, payroll accounts or employee benefit accounts, provided
that such accounts are used solely for the purpose of holding tax withholdings,
payroll funds and employee benefit funds, respectively, and such payroll
accounts are zero balance accounts), and (B) other property at any time held or
owing by such Lender to or for the credit or for the account of Borrower or any
of its Subsidiaries, against and on account of any of the Obligations; except
that no Lender shall exercise any such right without the prior written consent
of Agent. Any Lender exercising a right to set off shall purchase for cash (and
the other Lenders shall sell) interests in each of such other Lender's Pro Rata
Share of the Obligations as would be necessary to cause all Lenders to share the
amount so set off with each other Lender in accordance with their respective Pro
Rata Shares. Borrower agrees, to the fullest extent permitted by law, that any
Lender may exercise its right to set off with respect to amounts in excess of
its Pro Rata Share of the Obligations and upon doing so shall deliver such
amount so set off to the Agent for the benefit of all Lenders in accordance with
their Pro Rata Shares.

        8.4     Disbursement of Funds. Agent may, on behalf of Lenders, disburse
funds to Borrower for Loans requested. Each Lender shall reimburse Agent on
demand for all funds disbursed on its behalf by Agent, or if Agent so requests,
each Lender will remit to Agent its Pro Rata Share of any Loan before Agent
disburses same to Borrower. If Agent elects to require that each Lender make
funds available to Agent prior to a disbursement by Agent to Borrower, Agent
shall advise each Lender by telephone or fax

                                       61

of the amount of such Lender's Pro Rata Share of the Loan requested by Borrower
no later than 1:00 p.m. (New York time) on the Funding Date applicable thereto,
and each such Lender shall pay Agent such Lender's Pro Rata Share of such
requested Loan, in same day funds, by wire transfer to Agent's account on such
Funding Date. If any Lender fails to pay the amount of its Pro Rata Share within
one (1) Business Day after Agent's demand, Agent shall promptly notify Borrower,
and Borrower shall immediately repay such amount to Agent. Any repayment
required pursuant to this Section 8.4 shall be without premium or penalty.
Nothing in this Section 8.4 or elsewhere in this Agreement or the other Loan
Documents, including the provisions of Section 8.5, shall be deemed to require
Agent to advance funds on behalf of any Lender or to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights that
Agent or Borrower may have against any Lender as a result of any default by such
Lender hereunder.

        8.5     Disbursements of Advances; Payment.

                (a)     Advances; Payments.

                        (i)     Revolving Lenders shall refund or participate in
the Swing Line Loan in accordance with clauses (iii) and (iv) of Section 1.1(c).
If the Swing Line Lender declines to make a Swing Line Loan or if Swing Line
Availability is zero, Agent shall notify Revolving Lenders, promptly after
receipt of a Notice of Revolving Credit Advance and in any event prior to 1:00
p.m. (New York time) on the date such Notice of a Revolving Credit Advance is
received, by fax, telephone or other similar form of transmission. Each
Revolving Lender shall make the amount of such Lender's Pro Rata Share of such
Revolving Credit Advance available to Agent in same day funds by wire transfer
to Agent's account as set forth in Section 1.1(e) not later than 3:00 p.m. (New
York time) on the requested Funding Date in the case of an Index Rate Loans and
not later than 11:00 a.m. (New York time) on the requested Funding Date in the
case of a LIBOR Loan. After receipt of such wire transfers (or, in the Agent's
sole discretion, before receipt of such wire transfers), subject to the terms
hereof, Agent shall make the requested Revolving Credit Advance to Borrower as
designated by Borrower in the Notice of Revolving Credit Advance. All payments
by each Revolving Lender shall be made without setoff, counterclaim or deduction
of any kind.

                        (ii)    At least once each calendar week or more
frequently at Agent's election (each, a "Settlement Date"), Agent shall advise
each Lender by telephone or fax of the amount of such Lender's Pro Rata Share of
principal, interest and Fees paid for the benefit of Lenders with respect to
each applicable Loan. Provided that each Lender has funded all payments and
Advances required to be made by it and purchased all participations required to
be purchased by it under this Agreement and the other Loan Documents as of such
Settlement Date, Agent shall pay to each Lender such Lender's Pro Rata Share of
principal, interest and Fees paid by Borrower since the previous Settlement Date
for the benefit of such Lender on the Loans held by it. Such payments shall be
made by wire transfer to such Lender's account (as specified by such Lender in
Annex E or the applicable Assignment Agreement) not later than 2:00 p.m. (New
York time) on the next Business Day following each Settlement Date. To the
extent that any Lender (a "Non Funding Lender") has failed to fund all such
payments and Advances or failed to fund the purchase of all such participations,
Agent shall be entitled to set off the funding shortfall against that Non
Funding Lender's Pro Rata Share of all payments received from Borrower.

                (b)     Availability of Lender's Pro Rata Share. Agent may
assume that each Revolving Lender will make its Pro Rata Share of each Revolving
Credit Advance available to Agent on each Funding Date. If such Pro Rata Share
is not, in fact, paid to Agent by such Revolving Lender when due, Agent will be
entitled to recover such amount on demand from such Revolving Lender without
setoff, counterclaim or deduction of any kind. If any Revolving Lender fails to
pay the amount of its Pro Rata Share forthwith upon Agent's demand, Agent shall
promptly notify Borrower and

                                       62

   Borrower shall immediately repay such amount to Agent. Nothing in this
   Section 8.5(B) or elsewhere in this Agreement or the other Loan Documents
   shall be deemed to require Agent to advance funds on behalf of any Revolving
   Lender or to relieve any Revolving Lender from its obligation to fulfill its
   Commitments hereunder or to prejudice any rights that Borrower may have
   against any Revolving Lender as a result of any default by such Revolving
   Lender hereunder. To the extent that Agent advances funds to Borrower on
   behalf of any Revolving Lender and is not reimbursed therefor on the same
   Business Day as such Advance is made, Agent shall be entitled to retain for
   its account all interest accrued on such Advance until reimbursed by the
   applicable Revolving Lender.

                (c)     Return of Payments.

                        (i)     If Agent pays an amount to a Lender under this
Agreement in the belief or expectation that a related payment has been or will
be received by Agent from Borrower and such related payment is not received by
Agent, then Agent will be entitled to recover such amount from such Lender on
demand without setoff, counterclaim or deduction of any kind.

                        (ii)    If Agent determines at any time that any amount
received by Agent under this Agreement must be returned to Borrower or paid to
any other Person pursuant to any insolvency law or otherwise, then,
notwithstanding any other term or condition of this Agreement or any other Loan
Document, Agent will not be required to distribute any portion thereof to any
Lender. In addition, each Lender will repay to Agent on demand any portion of
such amount that Agent has distributed to such Lender, together with interest at
such rate, if any, as Agent is required to pay to Borrower or such other Person,
without setoff, counterclaim or deduction of any kind.

                (d)     Non-Funding Lenders. The failure of any Non Funding
   Lender to make any Revolving Credit Advance or any payment required by it
   hereunder, or to purchase any participation in any Swing Line Loan to be made
   or purchased by it on the date specified therefor shall not relieve any other
   Lender (each such other Revolving Lender, an "Other Lender") of its
   obligations to make such Advance or purchase such participation on such date,
   but neither any Other Lender nor Agent shall be responsible for the failure
   of any Non-Funding Lender to make an Advance, purchase a participation or
   make any other payment required hereunder. Notwithstanding anything set forth
   herein to the contrary, a Non-Funding Lender shall not have any voting or
   consent rights under or with respect to any Loan Document or constitute a
   "Lender" or a "Revolving Lender" (or be included in the calculation of
   "Requisite Lenders" or "Supermajority Revolving Lenders" hereunder) for any
   voting or consent rights under or with respect to any Loan Document.

        (e)     Dissemination of Information. Agent shall use reasonable efforts
to provide Lenders with any notice of Default or Event of Default received by
Agent from, or delivered by Agent to, any Credit Party, with notice of any Event
of Default of which Agent has actually become aware and with notice of any
action taken by Agent following any Event of Default; provided, that Agent shall
not be liable to any Lender for any failure to do so.

        8.6     Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including exercising any rights of setoff) without first
obtaining the prior written consent of Agent and Requisite Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under this
Agreement and the Notes shall be taken in concert and at the direction or with
the consent of Agent or Requisite Lenders. Agent is authorized to issue all
notices to be issued by or on behalf of the Lenders with respect to any
Subordinated Indebtedness.

                                       63

                                   SECTION 9.
                                  MISCELLANEOUS

        9.1     Indemnities. Borrower agrees to indemnify, pay, and hold Agent,
each Lender, each L/C Issuer and their respective officers, directors,
employees, agents, and attorneys (the "Indemnitees") harmless from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs and expenses (including all reasonable fees and
expenses of counsel to such Indemnitees) of any kind or nature whatsoever that
may be imposed on, incurred by, or asserted against the Indemnitee as a result
of such Indemnitees being a party to this Agreement or the transactions
consummated pursuant to this Agreement or otherwise relating to any of the
Related Transactions; provided, that Borrower shall have no obligation to an
Indemnitee hereunder with respect to liabilities to the extent resulting from
the gross negligence or willful misconduct of that Indemnitee as determined by a
court of competent jurisdiction. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, Borrower agree to make the
maximum contribution to the payment and satisfaction thereof which is
permissible under Applicable Law. Notwithstanding anything to the contrary
contained in this Section 9.1, it is agreed that any indemnity by the Borrower
in respect of Taxes shall be limited to the indemnity set forth in Section
1.11(e), without duplication of amounts payable under Section 1.11 and shall
exclude Excluded Taxes.

        9.2     Amendments and Waivers.

                (a)     Except for actions expressly permitted to be taken by
   Agent, no amendment, modification, termination or waiver of any provision of
   this Agreement or any other Loan Document, or any consent to any departure by
   any Credit Party therefrom, shall in any event be effective unless the same
   shall be in writing and signed by Borrower, and by Requisite Lenders,
   Supermajority Revolving Lenders or all affected Lenders, as applicable. All
   such amendments, modifications, terminations or waivers requiring the consent
   of any Lenders shall require the written consent of Requisite Lenders and the
   written consents set forth in clauses (b) and (c) below as applicable.

                (b)     No amendment, modification, termination or waiver of or
   consent with respect to any provision of this Agreement that increases the
   percentage advance rates set forth in the definition of the Borrowing Base,
   or that makes less restrictive the nondiscretionary criteria for exclusion
   from Eligible Accounts, Eligible Inventory, Eligible M&E or Eligible Real
   Estate set forth in Exhibit 4.9(d), shall be effective unless the same shall
   be in writing and signed by Agent, Supermajority Revolving Lenders and
   Borrower. No amendment, modification, termination or waiver of or consent
   with respect to any provision of this Agreement that waives compliance with
   the conditions precedent set forth in Section 7.2 to the making of any Loan
   or the incurrence of any Letter of Credit Obligations shall be effective
   unless the same shall be in writing and signed by Agent, Requisite Lenders
   and Borrower. Notwithstanding anything contained in this Agreement to the
   contrary, no waiver or consent with respect to any Default or any Event of
   Default shall be effective for purposes of the conditions precedent to the
   making of Loans or the incurrence of Letter of Credit Obligations set forth
   in Section 7.2 unless the same shall be in writing and signed by Agent,
   Requisite Lenders and Borrower.

                (c)     No amendment, modification, termination or waiver shall,
   unless in writing and signed by Agent and each Lender directly affected
   thereby: (i) increase the principal amount of any Lender's Revolving Loan
   Commitment (which action shall be deemed to directly affect any Lender whose
   Revolving Loan Commitment is increased); (ii) reduce the principal of, rate
   of interest on or Fees payable with respect to any Loan or Letter of Credit
   Obligations of any affected Lender; (iii) extend any scheduled payment date
   or final maturity date of the principal amount of any Loan of any affected
   Lender; (iv) waive, forgive, defer, extend or postpone any payment of
   interest or Fees as to any affected Lender (which action shall be deemed only
   to affect those Lenders to whom such

                                       64

   payments are made); (v) release any Guaranty or, except as otherwise
   permitted in Section 3.7, release Collateral with a book value exceeding 10%
   of the book value of all assets in the aggregate in any one (1) year (which
   action shall be deemed to directly affect all Lenders); (vi) change the
   percentage of the Commitments or of the aggregate unpaid principal amount of
   the Loans that shall be required for Lenders or any of them to take any
   action hereunder; and (vii) amend or waive this Section 9.2 or the
   definitions of the terms "Requisite Lenders" or "Supermajority Revolving
   Lenders" insofar as such definitions affect the substance of this Section
   9.2. Furthermore, no amendment, modification, termination or waiver affecting
   the rights or duties of Agent or L/C Issuers under this Agreement or any
   other Loan Document shall be effective unless in writing and signed by Agent
   or L/C Issuers, as the case may be, in addition to Lenders required
   hereinabove to take such action. Each amendment, modification, termination or
   waiver shall be effective only in the specific instance and for the specific
   purpose for which it was given. No amendment, modification, termination or
   waiver shall be required for Agent to take additional Collateral pursuant to
   any Loan Document. No amendment, modification, termination or waiver of any
   provision of any Note shall be effective without the written concurrence of
   the holder of that Note. No notice to or demand on any Credit Party in any
   case shall entitle such Credit Party or any other Credit Party to any other
   or further notice or demand in similar or other circumstances. Any amendment,
   modification, termination, waiver or consent effected in accordance with this
   Section 9.2 shall be binding upon each holder of the Notes at the time
   outstanding and each future holder of the Notes.

        9.3     Notices. Any notice or other communication required shall be in
writing addressed to the respective party as set forth below and may be
personally served, telecopied, sent by overnight courier service or U.S. mail
and shall be deemed to have been given: (a) if delivered in person, when
delivered; (b) if delivered by fax, on the date of transmission if transmitted
on a Business Day before 4:00 p.m. New York Time; (c) if delivered by overnight
courier, one (1) Business Day after delivery to the courier properly addressed;
or (d) if delivered by U.S. mail, four (4) Business Days after deposit with
postage prepaid and properly addressed.

        Notices shall be addressed as follows:

        If to Holdings:         RGCH Holdings Corp.
                                c/o Castle Harlan, Inc.
                                150 East 58th Street
                                New York, NY 10155
                                ATTN: William Pruellage
                                Telephone No.: (212) 644-8600
                                Fax No.: (212) 207-8042.

        If to Borrower:         RathGibson, Inc.
                                100 Aspen Hill Road
                                P.O. Box 5399
                                North Branch, New Jersey 08876
                                ATTN: President
                                Fax No.: (908) 218-0008

With copies, in the case of     c/o Castle Harlan, Inc.
notices to either Borrower, to: 150 East 58th Street
                                New York, NY 10155
                                ATTN: William Pruellage
                                Telephone No.: (212) 644-8600
                                Fax No.: (212) 207-8042

                                       65

                                Schulte Roth & Zabel, LLP
                                919 Third Avenue
                                New York, New York 10022
                                ATTN:  Ronald B. Risdon, Esq.
                                Fax No.: (212) 593-5955]

If to Agent or GE Capital:      GENERAL ELECTRIC CORPORATION
                                299 Park Avenue
                                New York, New York 10171
                                ATTN: RathGibson, Inc. Account Officer
                                Fax No.: (646) 428-7398

With a copy to:                 GENERAL ELECTRIC CAPITAL CORPORATION
                                201 Merritt #7
                                P.O. Box 5201
                                Norwalk, Connecticut 06856-5201
                                ATTN: Global Sponsor Finance General Counsel
                                Fax No.: (203) 956-4216

and                             GENERAL ELECTRIC CAPITAL CORPORATION
                                500 West Monroe Street
                                Chicago, Illinois 60661
                                ATTN: Global Sponsor Finance Corporate Counsel
                                Fax No.: (312) 441-6876

and                             King & Spalding LLP
                                1185 Avenue of the Americas
                                New York, New York 10036
                                ATTN: Robert S. Finley, Esq.
                                Telephone No: (212) 556-2142
                                Fax No: (212) 556-2222

If to a Lender:                 To the address set forth on the signature  page
                                hereto or in the applicable Assignment Agreement

        9.4     Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of Agent or any Lender to exercise, nor any partial
exercise of, any power, right or privilege hereunder or under any other Loan
Documents shall impair such power, right, or privilege or be construed to be a
waiver of any Default or Event of Default. All rights and remedies existing
hereunder or under any other Loan Document are cumulative to and not exclusive
of any rights or remedies otherwise available.

        9.5     Marshaling; Payments Set Aside. Neither Agent nor any Lender
shall be under any obligation to marshal any assets in payment of any or all of
the Obligations. To the extent that Borrower make payment(s) or Agent enforces
its Liens or Agent or any Lender exercises its right of set-off, and such
payment(s) or the proceeds of such enforcement or set-off is subsequently
invalidated, declared to be fraudulent or preferential, set aside, or required
to be repaid by anyone, then to the extent of such recovery, the Obligations or
part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor, shall be revived and continued in full force and effect as if
such payment had not been made or such enforcement or set off had not occurred.

                                       66

        9.6     Severability. The invalidity, illegality, or unenforceability in
any jurisdiction of any provision under the Loan Documents shall not affect or
impair the remaining provisions in the Loan Documents.

        9.7     Lenders' Obligations Several; Independent Nature of Lenders'
Rights. The obligation of each Lender hereunder is several and not joint and no
Lender shall be responsible for the obligation or commitment of any other Lender
hereunder. In the event that any Lender at any time should fail to make a Loan
as herein provided, the Lenders, or any of them, at their sole option, may make
the Loan that was to have been made by the Lender so failing to make such Loan.
Nothing contained in any Loan Document and no action taken by Agent or any
Lender pursuant hereto or thereto shall be deemed to constitute Lenders to be a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt.

        9.8     Headings. Section and subsection headings are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purposes or be given substantive effect.

        9.9     Applicable Law. THIS AGREEMENT AND EACH OF THE OTHER LOAN
DOCUMENTS WHICH DOES NOT EXPRESSLY SET FORTH APPLICABLE LAW SHALL BE GOVERNED BY
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.

        9.10    Successors and Assigns. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of their respective successors and permitted assigns except that
Borrower may not assign its rights or obligations hereunder without the written
consent of all Lenders.

        9.11    No Fiduciary Relationship; Limited Liability. No provision in
the Loan Documents and no course of dealing between the parties shall be deemed
to create any fiduciary duty owing to Borrower by Agent or any Lender. Borrower
agrees that neither Agent nor any Lender shall have liability to Borrower
(whether sounding in tort, contract or otherwise) for losses suffered by
Borrower in connection with, arising out of, or in any way related to the
transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless and to the extent that it is determined that such losses resulted from
the gross negligence or willful misconduct of the party from which recovery is
sought as determined by a final non-appealable order by a court of competent
jurisdiction. Neither Agent nor any Lender shall have any liability with respect
to, and Borrower hereby waives, releases and agree not to sue for, any special,
indirect or consequential damages suffered by Borrower in connection with,
arising out of, or in any way related to the Loan Documents or the transactions
contemplated thereby.

        9.12    Construction. Agent, each Lender, Borrower and each other Credit
Party acknowledge that each of them has had the benefit of legal counsel of its
own choice and has been afforded an opportunity to review the Loan Documents
with its legal counsel and that the Loan Documents shall be construed as if
jointly drafted by Agent, each Lender, Borrower and each other Credit Party.

        9.13    Confidentiality. Agent and each Lender agree to exercise their
best efforts, to keep confidential any non-public information delivered pursuant
to the Loan Documents and identified as such by Borrower and not to disclose
such information to Persons other than to potential assignees or participants or
to Persons employed by or engaged by Agent a Lender or a Lender's assignees or

                                       67

participants including attorneys, auditors, professional consultants, rating
agencies, insurance industry associations and portfolio management services. The
confidentiality provisions contained in this Section 9.13 shall not apply to
disclosures (i) required to be made by Agent or any Lender to any regulatory or
governmental agency or pursuant to legal process or (ii) consisting of general
portfolio information that does not identify Borrower. The obligations of Agent
and Lenders under this Section 9.13 shall supersede and replace the obligations
of Agent and Lenders under any confidentiality agreement in respect of this
financing executed and delivered by Agent or any Lender prior to the date
hereof.

        9.14    CONSENT TO JURISDICTION. EACH PARTY HERETO HEREBY CONSENTS TO
THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN NEW YORK COUNTY,
STATE OF NEW YORK AND IRREVOCABLY AGREES THAT, ALL ACTIONS OR PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL
BE LITIGATED IN SUCH COURTS. EACH PARTY HERETO EXPRESSLY SUBMITS AND CONSENTS TO
THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS. EACH PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH PERSON
BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO SUCH
PERSON, AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE
COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.

        9.15    WAIVER OF JURY TRIAL. BORROWER, CREDIT PARTIES, AGENT AND EACH
LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS. BORROWER, CREDIT PARTIES, AGENT AND EACH LENDER ACKNOWLEDGE THAT THIS
WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH
HAS RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. BORROWER, CREDIT PARTIES, AGENT AND EACH LENDER WARRANT AND
REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH
LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS.

        9.16    Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement, the making of the Loans, issuances of Letters of
Credit and the execution and delivery of the Notes. Notwithstanding anything in
this Agreement or implied by law to the contrary, the agreements of Borrower set
forth in Sections 1.3(g), 1.10, 1.11 and 9.1 shall survive the repayment of the
Obligations and the termination of this Agreement.

        9.17    Entire Agreement. This Agreement, the Notes and the other Loan
Documents embody the entire agreement among the parties hereto and supersede all
prior commitments, agreements, representations, and understandings, whether oral
or written, relating to the subject matter hereof, and may not be contradicted
or varied by evidence of prior, contemporaneous, or subsequent oral agreements
or discussions of the parties hereto. All Exhibits, Schedules and Annexes
referred to herein are incorporated in this Agreement by reference and
constitute a part of this Agreement.

        9.18    Counterparts; Effectiveness. This Agreement and any amendments,
waivers, consents or supplements may be executed in any number of counterparts
and by different parties hereto in separate

                                       68

counterparts, each of which when so executed and delivered shall be deemed an
original, but all of which counterparts together shall constitute but one in the
same instrument. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto.

        9.19    Replacement of Lenders.

                (a)     Within fifteen (15) days after receipt by Borrower of
   written notice and demand from any Lender for payment pursuant to Section
   1.10 or 1.11 or, in the case of refusal by any Lender to consent to a
   modification, termination or waiver with respect to this Agreement that has
   been approved by Requisite Lenders, Supermajority Revolving Lenders or all
   affected Lenders, as applicable (any such Lender demanding such payment or
   refusing to so consent being referred to herein as an "Affected Lender"),
   Borrower may, at its option, notify Agent and such Affected Lender of its
   intention to do one of the following:

                        (i)     Borrower may obtain, at Borrower's expense, a
replacement Lender ("Replacement Lender") for such Affected Lender, which
Replacement Lender shall be reasonably satisfactory to Agent. In the event
Borrower obtains a Replacement Lender that will purchase all outstanding
Obligations owed to such Affected Lender and assume its Commitments hereunder
within ninety (90) days following notice of Borrower's intention to do so, the
Affected Lender shall sell and assign all of its rights and delegate all of its
obligations under this Agreement to such Replacement Lender in accordance with
the provisions of Section 8.1, provided that Borrower has reimbursed such
Affected Lender for any administrative fee payable pursuant to Section 8.1 and,
in any case where such replacement occurs as the result of a demand for payment
pursuant to Section 1.10 or 1.11, paid all amounts required to be paid to such
Affected Lender pursuant to Section 1.10 or 1.11 through the date of such sale
and assignment; or

                        (ii)    Borrower may, with Agent's consent, prepay in
full all outstanding Obligations owed to such Affected Lender and terminate such
Affected Lender's Pro Rata Share of the Revolving Loan Commitment, in which case
the Revolving Loan Commitment will be reduced by the amount of such Pro Rata
Share. Borrower shall, within ninety (90) days following notice of its intention
to do so, prepay in full all outstanding Obligations owed to such Affected
Lender (including, in any case where such prepayment occurs as the result of a
demand for payment for increased costs, such Affected Lender's increased costs
for which it is entitled to reimbursement under this Agreement through the date
of such prepayment), and terminate such Affected Lender's obligations under the
Revolving Loan Commitment.

                (b)     In the case of a Non-Funding Lender pursuant to Section
   8.5(a), at Borrower's request, Agent or a Person acceptable to Agent shall
   have the right with Agent's consent and in Agent's sole discretion (but shall
   have no obligation) to purchase from any Non-Funding Lender, and each
   Non-Funding Lender agrees that it shall, at Agent's request, sell and assign
   to Agent or such Person, all of the Loans and Commitments of that Non-Funding
   Lender for an amount equal to the principal balance of all Loans held by such
   Non-Funding Lender and all accrued interest and Fees with respect thereto
   through the date of sale, such purchase and sale to be consummated pursuant
   to an executed Assignment Agreement.

                (c)     If, in connection with any proposed amendment,
   modification, waiver or termination pursuant to Section 9.2 (a "Proposed
   Change"):

                        (i)     requiring the consent of all affected Lenders,
the consent of Requisite Lenders is obtained, but the consent of other Lenders
whose consent is required is not obtained (any such

                                       69

Lender whose consent is not obtained as described in this clause (i) and in
clause (ii) below being referred to as a "Non-Consenting Lender"), or

                        (ii)    requiring the consent of Supermajority Revolving
Lenders, the consent of Requisite Lenders is obtained, but the consent of
Supermajority Revolving Lenders is not obtained, or

then at Borrower's request, so long as Agent is not a Non-Consenting Lender,
Agent, or a Person reasonably acceptable to Agent, shall have the right with
Agent's consent and in Agent's sole discretion (but shall have no obligation) to
purchase from such Non-Consenting Lenders, and such Non-Consenting Lenders agree
that they shall, upon Agent's request, sell and assign to Agent or such Person,
all of the Loans and Commitments of such Non-Consenting Lenders for an amount
equal to the principal balance of all Loans held by the Non-Consenting Lenders
and all accrued interest and Fees with respect thereto through the date of sale,
such purchase and sale to be consummated pursuant to an executed Assignment
Agreement.

        9.20    Delivery of Termination Statements and Mortgage Releases. Upon
payment in full in cash and performance of all of the Obligations (other than
Contingent Indemnification Obligations for which no claim has been asserted),
termination of the Commitments and a release of all claims against Agent and
Lenders, Agent shall deliver to Borrower termination statements, mortgage
releases and other documents necessary or appropriate to evidence the
termination of the Liens securing payment of the Obligations.

        9.21    Subordination of Intercompany Debt.

                (a)     Each Credit Party hereby agrees that any intercompany
   Indebtedness or other intercompany payables or receivables, or intercompany
   advances directly or indirectly owed to such Credit Party by any other Credit
   Party (collectively, "Intercompany Debt"), of whatever nature at any time
   outstanding shall be subordinate and subject in right of payment to the prior
   payment in full in cash of the Obligations to the extent set forth in this
   Section 9.21. Each Credit Party hereby agrees that, while any Event of
   Default is continuing, to the extent so directed in writing by Agent, such
   Credit Party will not accept any payment, including by offset, on any
   Intercompany Debt until the Termination Date. Except during the continuation
   of an Event of Default, each Credit Party shall be permitted to make and
   accept payments of intercompany debt.

                (b)     In the event that any payment on any Intercompany Debt
   shall be received by a Credit Party other than as permitted by this Section
   9.21 before the Termination Date, such Credit Party shall receive such
   payments and hold the same in trust for, segregate the same from its own
   assets and shall immediately pay over to, the Agent for the benefit of the
   Agent and Lenders all such sums to the extent necessary so that Agent and the
   Lenders shall have been paid in full, in cash, all Obligations owed or which
   may become owing.

                (c)     Upon any payment or distribution of any assets of any
   Credit Party of any kind or character, whether in cash, property or
   securities by set-off, recoupment or otherwise, to creditors in any
   liquidation or other winding-up of such Credit Party or in the event of any
   bankruptcy or similar proceeding, Agent and Lenders shall first be entitled
   to receive payment in full in cash, in accordance with the terms of the
   Obligations and of this Agreement, of all amounts payable under or in respect
   of such Obligations, before any payment or distribution is made on, or in
   respect of, any Intercompany Debt, in any such proceeding, and in furtherance
   thereof, any distribution or payment, to which any Credit Party would be
   entitled except for the provisions hereof shall be paid by such Credit Party
   or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
   other person making such payment or distribution directly to Agent (for the
   benefit of Agent and the Lenders) to the extent necessary to pay

                                       70

   all such Obligations in full in cash, after giving effect to any concurrent
   payment or distribution to Agent and Lenders (or to Agent for the benefit of
   Agent and Lenders).

      [remainder of page intentionally left blank; signature pages follow]

                                       71

        Witness the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.

                                     RATHGIBSON, INC.

                                     By:   /s/ Harley B. Kaplan
                                           _____________________________________
                                     Name:  Harley B. Kaplan
                                           _____________________________________
                                     Title: President & CEO

                                     RGCH HOLDINGS CORP.

                                     By:   /s/ William Pruellage
                                           _____________________________________
                                     Name:  William Pruellage
                                           _____________________________________
                                     Title: President

                                Credit Agreement

                                     GENERAL ELECTRIC CAPITAL CORPORATION,

                                     AS AGENT, AN L/C ISSUER AND A LENDER

                                     By: /s/ Ryan Cascade
                                         ---------------------------------------
                                     Its Duly Authorized Signatory

                                Credit Agreement

                                     ANNEX A

                                       TO

                                CREDIT AGREEMENT

                                   DEFINITIONS

            Capitalized terms used in the Loan Documents shall have (unless
otherwise provided elsewhere in the Loan Documents) the following respective
meanings and all references to Sections, Exhibits, Schedules or Annexes in the
following definitions shall refer to Sections, Exhibits, Schedules or Annexes of
or to the Agreement:

            "Account Debtor" means any Person who may become obligated to any
Credit Party under, with respect to, or on account of, an Account, Chattel Paper
or General Intangibles (including a payment intangible).

            "Accounting Changes" means: (a) changes in accounting principles
required by GAAP and implemented by Holdings or any of its Subsidiaries; (b)
changes in accounting principles recommended by Borrower's certified public
accountants and implemented by Borrower; and (c) changes in carrying value of
Borrower's or any of its Subsidiaries' assets, liabilities or equity accounts
resulting from (i) the application of purchase accounting principles (A.P.B. 16
and/or 17, FASB 141 and EITF 88 16 and FASB 109) to the Related Transactions or
(ii) as the result of any other adjustments that, in each case, were applicable
to, but not included in, the Pro Forma.

            "Accounts" means all "accounts," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, including (a) all
accounts receivable, other receivables, book debts and other forms of
obligations (other than forms of obligations evidenced by Chattel Paper or
Instruments), (including any such obligations that may be characterized as an
account or contract right under the Code), (b) all of each Credit Party's rights
in, to and under all purchase orders or receipts for goods or services, (c) all
of each Credit Party's rights to any goods represented by any of the foregoing
(including unpaid sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all rights to payment due to any Credit Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Credit Party or in connection with
any other transaction (whether or not yet earned by performance on the part of
such Credit Party), (e) all healthcare insurance receivables, and (f) all
collateral security of any kind, now or hereafter in existence, given by any
Account Debtor or other Person with respect to any of the foregoing.

            "Acquired Debt" means, with respect to any specified Person: (1)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, whether or
not such Indebtedness is incurred in connection with, or in contemplation of,
such other Person merging with or into, or becoming a Subsidiary of, such
specified Person; and (2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.

            "Acquisition" has the meaning ascribed to it in the recitals to the
Agreement.

            "Acquisition Agreement" means the Stock Purchase Agreement, dated as
of December 6, 2005, by and among the Borrower, the Persons listed as "Sellers"
on the on the signature pages attached thereto and RGCH Holdings LLC, a Delaware
limited liability company.

            "Acquisition Documents" means the Acquisition Agreement and all
documents, certificates, instruments, agreements and other writings executed or
delivered in connection therewith.

            "Advances" means any Revolving Credit Advance or Swing Line Advance,
as the context may require.

            "Affected Lender" has the meaning ascribed to it in Section 9.19(a).

            "Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, 10% or more of the Stock having ordinary voting
power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person, (c) each
of such Person's officers, directors, joint venturers and partners and (d) in
the case of Borrower, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of Borrower. For the purposes of
this definition, "control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that the term "Affiliate" shall specifically
exclude Agent and each Lender.

            "Agent" means GE Capital in its capacity as Agent for Lenders or its
successor appointed pursuant to Section 8.2.

            "Agreement" means this Credit Agreement (including all schedules,
subschedules, annexes and exhibits hereto), as the same may be amended,
supplemented, restated or otherwise modified from time to time.

            "Applicable Law" means all applicable provisions of constitutions,
laws, statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities and
all orders and decrees of all courts and arbitrators.

            "Applicable L/C Margin" means the per annum fee, from time to time
in effect, payable with respect to outstanding Letter of Credit Obligations as
determined by reference to Section 1.2(a).

            "Applicable Margins" means collectively the Applicable L/C Margin,
the Applicable Revolver Index Margin and the Applicable Revolver LIBOR Margin.

            "Applicable Revolver Index Margin" means the per annum interest rate
margin from time to time in effect and payable in addition to the Index Rate
applicable to the Revolving Loan, as determined by reference to Section 1.2(a).

            "Applicable Revolver LIBOR Margin" means the per annum interest rate
from time to time in effect and payable in addition to the LIBOR Rate applicable
to the Revolving Loan, as determined by reference to Section 1.2(a).

            "Appraisal Date" means the date that Borrower has satisfied the
requirements of Section 4.9(e)(i) (within the time period required by such
Section).

                                       A-2

            "Asset Acquisition" means, with respect to any Person, (1) an
Investment by such Person or any Subsidiary of such Person in any third Person
pursuant to which such third Person shall become a Subsidiary of such Person or
any Subsidiary of such Person, or shall be merged with or into such Person or
any Subsidiary of such Person, or (2) the acquisition by such Person or any
Subsidiary of such Person of the assets of any third Person (other than a
Subsidiary of such Person) which constitutes all or substantially all of the
assets of such third Person or comprises any division or line of business of
such third Person or any other properties or assets of such third Person other
than in the ordinary course of business.

            "Asset Disposition" means the disposition whether by sale, lease,
transfer, loss, damage, destruction, casualty, condemnation or otherwise of any
of the following (a) any of the Stock or other equity or ownership interest of
any of Borrower's Subsidiaries or (b) any or all of the assets of Borrower or
any of its Subsidiaries other than sales and dispositions permitted by Section
3.7(a) through (d) and (f) through (j).

            "Assignment Agreement" has the meaning ascribed to it in Section
8.1(a).

            "Attributable Debt" in respect of a sale and leaseback transaction
means, as at the time of determination, the present value of the total
obligations of the lessee for net rental payments during the remaining term of
the lease included in such sale and leaseback transaction including any period
for which such lease has been extended or may, at the option of the lessor, be
extended. Such present value shall be calculated using a discount rate equal to
the rate of interest implicit in such transaction, determined in accordance with
GAAP; provided, however, that if such sale and leaseback transaction results in
a Capital Lease Obligation, the amount of Indebtedness represented thereby will
be determined in accordance with the definition of "Capital Lease Obligation".

            "Bankruptcy Code" means the provisions of Title 11 of the United
States Code, 11 U.S.C. ss.ss. 101 et seq. or other applicable bankruptcy,
insolvency or similar laws.

            "Beneficial Owner" has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in Section
13(d)(3) of the Exchange Act), such "person" will be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only after the passage of time. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning

            "Board of Directors" means (1) with respect to a corporation, the
board of directors of the corporation or any committee thereof duly authorized
to act on behalf of such board; (2) with respect to a partnership, the Board of
Directors of the general partner of the partnership; (3) with respect to a
limited liability company, the managing member or members or any controlling
committee or Board of Directors of such company or of the sole member or of the
managing member thereof; and (4) with respect to any other Person, the board or
committee of such Person serving a similar function.

            "Borrower" has the meaning ascribed to it in the preamble to the
Agreement.

            "Borrowing Availability" means as of any date of determination the
lesser of (i) the Maximum Amount and (ii) the Borrowing Base, in each case, less
the sum of the Revolving Loan then outstanding (including, without duplication,
the outstanding balance of Letter of Credit Obligations and the Swing Line Loan
then outstanding).

            "Borrowing Base" means:

                                       A-3

            (1)   as of any date of determination by Agent prior to the
Appraisal Date, an amount equal to the sum at such time of:

                  (a)   85% of the book value of Eligible Accounts at such time;
            plus

                  (b)   the lesser of (i) 55% of the book value of Eligible
            Inventory valued at the lower of cost (determined on a first in,
            first out basis) or market and (ii) 85% of the Net Orderly
            Liquidation Value of Eligible Inventory, at such time; plus

                  (c)   85% of the Net Orderly Liquidation Value of Eligible
            M&E; plus

                  (d)   50% of the Fair Market Value of Eligible Real Estate;
            less

                  (e)   $10,000,000; less

                  (f)   such Reserves as Agent shall have imposed in its
            reasonable credit judgment, and

            (2)   as of any date of determination by Agent from and after the
Appraisal Date, an amount equal to:

                  (a)   85% of the book value of Eligible Accounts at such time;
            plus

                  (b)   the lesser of (i) 55% of the book value of Eligible
            Inventory valued at the lower of cost (determined on a first in,
            first out basis) or market and (ii) 85% of the Net Orderly
            Liquidation Value of Eligible Inventory, at such time; plus

                  (c)   85% of the Net Orderly Liquidation Value of Eligible
            M&E; plus

                  (d)   50% of the Fair Market Value of Eligible Real Estate;
            less

                  (e)   in the event that Borrower shall not have a Fixed Charge
            Coverage Ratio, as of the end of the most recent Fiscal Quarter for
            which a Compliance Certificate has been delivered pursuant to
            Section 4.9(k), of at least the minimum amount for such Fiscal
            Quarter set forth on Schedule A-1 hereto, $5,000,000; less

                  (f)   such Reserves as Agent shall have imposed in its
            reasonable credit judgment.

            "Borrowing Base Certificate" has the meaning ascribed to it in
Section 4.9(d).

            "Business Day" means any day that is not a Saturday, a Sunday or a
day on which banks are required or permitted to be closed in the State of New
York, New Jersey or Wisconsin and in reference to LIBOR Loans shall mean any
such day that is also a LIBOR Business Day.

            "Capital Expenditures" has the meaning ascribed to it in Schedule 5
to Exhibit 4.9(k).

            "Capital Lease" means, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.

                                       A-4

            "Capital Lease Obligation" means, with respect to any Capital Lease
of any Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.

            "Capital Stock" means (a) in the case of a corporation, capital
stock, (b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (c) in the case of a partnership, partnership interests (whether
general or limited), (d) in the case of a limited liability company, membership
interests and (e) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person (other than earnouts or similar consideration
payable in connection with a Permitted Acquisition).

            "Cash Equivalents" means: (i) marketable securities (A) issued or
directly and unconditionally guaranteed as to interest and principal by the
United States government or (B) issued by any agency of the United States
government the obligations of which are backed by the full faith and credit of
the United States, in each case maturing within one (1) year after acquisition
thereof; (ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after acquisition
thereof and having, at the time of acquisition, a rating of at least A-1 from
S&P or at least P 1 from Moody's; (iii) commercial paper maturing no more than
one year from the date of acquisition and, at the time of acquisition, having a
rating of at least A 1 from S&P or at least P 1 from Moody's; (iv) certificates
of deposit or bankers' acceptances issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that is at least (A) "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (B) has Tier 1 capital (as defined in such regulations) of not
less than $250,000,000, in each case maturing within one year after issuance or
acceptance thereof; (v) shares of any money market mutual or similar funds that
(A) has substantially all of its assets invested continuously in the types of
investments referred to in clauses (i) through (iv) above, (B) has net assets of
not less than $500,000,000 and (C) has the highest rating obtainable from either
S&P or Moody's; and (vi) repurchase agreements secured by any one or more of the
investments described in clauses (i), (ii), (iii) or (iv).

            "Change of Control" means the occurrence of any of the following:

                (i)     the direct or indirect sale, lease, transfer, conveyance
or other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the properties or
assets of Borrower and its Subsidiaries taken as a whole to any "person" (as
that term is used in Section 13(d) of the Exchange Act) other than a Principal
or a Related Party of a Principal;

                (ii)    the adoption of a plan relating to the liquidation or
dissolution of Borrower; or

                (iii)   the consummation of any transaction (including, without
limitation, any merger or consolidation), the result of which is prior to the
consummation of an initial public offering of Capital Stock of Holdings that
Principals and Related Parties of Principals cease to own and control more than
fifty percent (50%) of each class of the Capital Stock of Holdings or from and
after the consummation of an initial public offering of Stock of Holdings, at
least thirty-five per cent (35%) of each class of Capital Stock of Holdings; or

                                       A-5

                (iv)    the first day on which a majority of the members of the
Board of Directors of the Borrower are not Continuing Directors.

            "Charges" means all federal, state, county, city, municipal, local,
foreign or other governmental taxes, levies, assessments, charges, liens, claims
or encumbrances upon or relating to (a) the Collateral, (b) the Obligations, (c)
the employees, payroll, income or gross receipts of any Credit Party, (d) any
Credit Party's ownership or use of any properties or other assets, or (e) any
other aspect of any Credit Party's business.

            "Chattel Paper" means any "chattel paper," as such term is defined
in the Code, including electronic chattel paper, now owned or hereafter acquired
by any Credit Party, wherever located.

            "Closing Checklist" means the schedule, including all appendices,
exhibits or schedules thereto, listing certain documents and information to be
delivered in connection with the Agreement, the other Loan Documents and the
transactions contemplated thereunder, substantially in the form attached hereto
as Annex C.

            "Closing Date" means February 7, 2006.

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

            "Collateral" means the property covered by the Security Agreement,
the Mortgages and the other Collateral Documents and any other property, real or
personal, tangible or intangible, now existing or hereafter acquired, that may
at any time be or become subject to a security interest or Lien in favor of
Agent, on behalf of itself and Lenders, to secure the Obligations or any portion
thereof.

            "Collateral Documents" means the Security Agreement, the Pledge
Agreements, the Guaranties, the Intercreditor Agreement, the Mortgages, the
Patent Security Agreements, the Trademark Security Agreements, the Copyright
Security Agreements and all similar agreements entered into guaranteeing payment
of, or granting a Lien upon property as security for payment of, the Obligations
or any portion thereof and the Subordination Agreements.

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

            "Commitment Termination Date" means the earliest of (a) February 7,
2011, (b) the date of termination of Lenders' obligations to make Advances and
to incur Letter of Credit Obligations or permit existing Loans to remain
outstanding pursuant to Section 6.3, and (c) the date of (i) payment in full by
Borrower of the Loans, (ii) the cancellation and return (or stand-by guarantee)
of all Letters of Credit or the provision of cash collateral (or to the extent
permitted hereby back to back letters of credit) for all Letter of Credit
Obligations pursuant to Section 1.5(g), and (iii) the permanent reduction of the
Commitments to zero dollars ($0).

                                       A-6

            "Compliance Certificate" has the meaning ascribed to it in Section
4.9(k).

            "Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus,
without duplication:

            (a)   an amount equal to any extraordinary loss plus any net loss
   realized by such Person or any of its Subsidiaries in connection with an
   Asset Disposition, to the extent such losses were deducted in computing such
   Consolidated Net Income; plus

            (b)   provision for taxes based on income or profits of such Person
   and its Subsidiaries for such period, to the extent that such provision for
   taxes was deducted in computing such Consolidated Net Income; plus

            (c)   the Interest Charges of such Person and its Subsidiaries for
   such period, to the extent that such Interest Charges were deducted in
   computing such Consolidated Net Income; plus

            (d)   an amount equal to imputed principal with respect to
   Attributable Debt paid during such period, to the extent that such imputed
   principal was deducted in computing such Consolidated Net Income; plus

            (e)   depreciation, amortization (including amortization of
   intangibles but excluding amortization of prepaid cash expenses that were
   paid in a prior period) and other non-cash expenses (excluding any such
   non-cash expense to the extent that it represents an accrual of or reserve
   for cash expenses in any future period or amortization of a prepaid cash
   expense that was paid in a prior period) of such Person and its Subsidiaries
   for such period to the extent that such depreciation, amortization and other
   non-cash expenses were deducted in computing such Consolidated Net Income;
   plus

            (f)   any management fees paid or accrued by Borrower to the Sponsor
   or any of its respective Affiliates in such period pursuant to the terms of
   the Management Agreement as in effect on the date hereof, or to Liberty
   Partners or any of its Affiliates pursuant to the management services
   agreement as in effect prior to Closing Date, to the extent that any such
   management fees were deducted in computing such Consolidated Net Income; plus

            (g)   cash restructuring and/or nonrecurring charges not to exceed
   $2,000,000 in any Fiscal Year and not to exceed $4,000,000 in the aggregate;
   plus

            (h)   all transaction and restructuring costs incurred during such
   period in connection with any Asset Acquisition in an aggregate amount not to
   exceed five percent of the total enterprise value of such Asset Acquisition;
   plus

            (i)   any severance payments made in cash to former employees not to
   exceed $2,000,000 in the aggregate; minus

            (j)   non-cash items increasing such Consolidated Net Income for
   such period, excluding any such items to the extent they represent (a) the
   reversal in such period of an accrual of, or cash reserve for, cash expenses
   in a prior period, to the extent such accrual or reserve did not increase
   Consolidated Cash Flow in a prior period, (b) the amortization of income that
   was paid in a prior period (c) the accrual of revenue or income consistent
   with past practice or (d) extraordinary gains; minus

            (k)   gain from extraordinary items (net of loss from extraordinary
   items) realized by such Person or any of its Subsidiaries in connection with
   an Asset Disposition, to the extent such gains were included in computing
   Consolidated Net Income,

                                       A-7

            in each case, on a consolidated basis and determined in accordance
with GAAP.

            "Consolidated Net Income" means, with respect to any specified
Person for any period, the aggregate of the Net Income of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:

            (a)   the Net Income of any Person that is not a Subsidiary or that
   is accounted for by the equity method of accounting will be included only to
   the extent of the amount of dividends or similar distributions paid in cash
   to the specified Person or a Subsidiary of the Person;

            (b)   solely for the purposes of calculating Consolidated Net Income
   to determine the amount of Restricted Payments permitted under Section 3.5,
   the Net Income of any Subsidiary (other than a Guarantor) will be excluded to
   the extent that the declaration or payment of dividends or similar
   distributions by that Subsidiary of that Net Income is not at the date of
   determination permitted without any prior governmental approval (that has not
   been obtained) or, directly or indirectly, by operation of the terms of its
   charter or any agreement, instrument, judgment, decree, order, statute, rule
   or governmental regulation applicable to that Subsidiary or its Stockholders;

            (c)   the cumulative effect of a change in accounting principles
   will be excluded;

            (d)   all goodwill impairment charges will be excluded;

            (e)   non-cash charges relating to employee benefit or other
   management compensation plans of any direct or indirect parent of Borrower
   (to the extent such non-cash charges relate to plans of any direct or
   indirect parent of Borrower for the benefit of members of the Board of
   Directors of Borrower (in their capacity as such) or employees of Borrower
   and its Subsidiaries), Borrower or any of its Subsidiaries or any non-cash
   compensation charge arising from any grant of stock, stock options or other
   equity-based awards of any direct or indirect parent of Borrower (to the
   extent such non-cash charges relate to plans of any direct or indirect parent
   of Borrower for the benefit of members of the Board of Directors of Borrower
   (in their capacity as such) or employees of Borrower and its Subsidiaries),
   Borrower or any of its Subsidiaries (excluding in each case any non-cash
   charge to the extent that it represents an accrual of or reserve for cash
   expenses in any future period or amortization of a prepaid cash expense
   incurred in a prior period) in each case will be excluded;

            (f)   any non-cash charges from the application of the purchase
   method of accounting in connection with the Acquisition or any future
   acquisition will be excluded;

            (g)   transaction costs and restructuring charges incurred in
   connection with the Acquisition will be excluded; and

            (h)   the amortization of the consideration for any non-competition
   agreements entered into the connection with the Acquisition shall be
   excluded.

            "Contingent Indemnification Obligation" means at any time
obligations in respect of indemnities provided under the Loan Documents to the
extent that no claim for or notice of a claim for any such indemnity has been
made or given as of such time.

            "Contingent Obligation" means, as applied to any Person, any direct
or indirect liability of that Person: (i) with respect to Guaranteed
Indebtedness; (ii) with respect to any letter of credit issued for the account
of that Person or as to which that Person is otherwise liable for reimbursement
of drawings; (iii) under any Hedge Agreement,or (iv) to make take-or-pay or
similar payments if required regardless of nonperformance by any other party or
parties to an agreement. The amount of any

                                       A-8

Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if not a fixed and determined amount, the
maximum amount so guaranteed.

            "Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of Borrower who: (1) was a member of such Board
of Directors on the Closing Date; or (2) was nominated for election or elected
to such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board of Directors at the time of such
nomination or election.

            "Contractual Obligations" means, as applied to any Person, any
indenture, mortgage, deed of trust, contract, undertaking, agreement or other
instrument to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject including
the Related Transactions Documents.

            "Control Agreements" means tri-party deposit account, securities
account or commodities account control agreements by and among the applicable
Credit Party, Agent and the depository, securities intermediary or commodities
intermediary, and each in form and substance reasonably satisfactory in all
respects to Agent and in any event providing to Agent control of such deposit
account, securities account or commodities account within the meaning of
Articles 8 and 9 of the Code.

            "Copyright License" means any and all rights now owned or hereafter
acquired by any Credit Party under any written agreement granting any right to
use any Copyright or Copyright registration.

            "Copyright Security Agreements" means the Copyright Security
Agreements made in favor of Agent, on behalf of itself and Lenders, by each
applicable Credit Party, as amended, restated, modified or supplemented from
time to time, in the form attached hereto as Exhibit B.

            "Copyrights" means all of the following now owned or hereafter
created, adopted or acquired by any Credit Party: (a) all copyrights, mask
works, databases, design rights and General Intangibles of like nature (whether
or not registered or published), all registrations and recordations thereof, and
all applications in connection therewith, including all registrations,
recordations and applications in the United States Copyright Office or in any
similar office or agency of the United States, any state or territory thereof,
or any other country or any political subdivision thereof; and (b) all reissues,
extensions or renewals thereof.

            "Credit Parties" means Holdings, Borrower, each Guarantor and each
other Person who executes this Agreement as a "Credit Party" or a Guaranty or
who grants a Lien on all or part of its assets to secure all of part of the
Obligations.

            "Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement, each of which is for the purpose of hedging
the foreign currency risk associated with Holdings' and its Subsidiaries'
operations and not for speculative purposes.

            "Default" means any event that, with the passage of time or notice
or both, would, unless cured or waived, become an Event of Default.

            "Default Rate" has the meaning ascribed to it in Section 1.2(d).

            "Disbursement Account" has the meaning ascribed to it in Section
1.1(e).

                                       A-9

            "Disqualified Stock" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible, or for which it is
exchangeable, in each case, at the option of the holder of the Capital Stock),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the option
of the holder of the Capital Stock, in whole or in part, on or prior to May 8,
2011. Notwithstanding the preceding sentence, any Capital Stock that would
constitute Disqualified Stock solely because the holders of the Capital Stock
have the right to require Borrower to repurchase such Capital Stock upon the
occurrence of a change of control or an asset sale will not constitute
Disqualified Stock if the terms of such Capital Stock provide that Borrower may
not repurchase or redeem any such Capital Stock pursuant to such provisions
unless the Termination Date has occurred. The amount of Disqualified Stock
deemed to be outstanding at any time for purposes hereof will be the maximum
amount that Borrower and its Subsidiaries may become obligated to pay upon the
maturity of, or pursuant to any mandatory redemption provisions of, such
Disqualified Stock, exclusive of accrued dividends.

            "Disclosure Schedules" means the Schedules prepared by Borrower and
denominated as Schedules 2.7 through 5.18 in the index to the Agreement.

            "Documents" means any "document," as such term is defined in the
Code, including electronic documents, now owned or hereafter acquired by any
Credit Party, wherever located.

            "Dollars" or "$" means lawful currency of the United States of
America.

            "Domestic Subsidiary" means any Subsidiary of any Person organized
under the laws of any state of the United States of America or the District of
Columbia.

            "EBITDA" has the meaning ascribed to it in Schedule 4 to Exhibit
4.9(k).

            "Eligible Accounts" has the meaning ascribed to it in Schedule 1 to
Exhibit 4.9(d).

            "Eligible Inventory" has the meaning ascribed to it in Schedule 1 to
Exhibit 4.9(d).

            "Eligible M&E" has the meaning ascribed to it in Schedule 1 to
Exhibit 4.9(d).

            "Eligible Real Estate" has the meaning ascribed to it in Schedule 1
to Exhibit 4.9(d).

            "Environmental Laws" means all applicable federal, state, local and
foreign laws, statutes, ordinances, codes, rules, legally binding standards and
regulations, now or hereafter in effect, and any applicable judicial or
administrative interpretation thereof, including any applicable judicial or
administrative order, consent decree, order or judgment, imposing liability or
standards of conduct for or relating to the regulation and protection of human
health, safety, the environment and natural resources (including ambient air,
surface water, groundwater, wetlands, land surface or subsurface strata,
wildlife, aquatic species and vegetation). Environmental Laws include the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980
(42 U.S.C. ss.ss. 9601 et seq.) ("CERCLA"); the Hazardous Materials
Transportation Authorization Act of 1994 (49 U.S.C. ss.ss. 5101 et seq.); the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. ss.ss. 136 et
seq.); the Solid Waste Disposal Act (42 U.S.C. ss.ss. 6901 et seq.); the Toxic
Substance Control Act (15 U.S.C. ss.ss. 2601 et seq.); the Clean Air Act (42
U.S.C. ss.ss. 7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C.
ss.ss. 1251 et seq.); the Occupational Safety and Health Act (29 U.S.C. ss.ss.
651 et seq.); and the Safe Drinking Water Act (42 U.S.C. ss.ss. 300(f) et seq.),
and any and all regulations promulgated thereunder, and all analogous state,
local and foreign counterparts or equivalents and any transfer of ownership
notification or approval statutes.

                                      A-10

            "Environmental Liabilities" means, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.

            "Environmental Permits" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.

            "Equipment" means all "equipment," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located and,
in any event, including all such Credit Party's machinery and equipment,
including processing equipment, conveyors, machine tools, data processing and
computer equipment, including embedded software and peripheral equipment and all
engineering, processing and manufacturing equipment, office machinery,
furniture, materials handling equipment, tools, attachments, accessories,
automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor
vehicles, rolling stock and other equipment of every kind and nature, trade
fixtures and fixtures not forming a part of real property, together with all
additions and accessions thereto, replacements therefor, all parts therefor, all
substitutes for any of the foregoing, fuel therefor, and all manuals, drawings,
instructions, warranties and rights with respect thereto, and all products and
proceeds thereof and condemnation awards and insurance proceeds with respect
thereto.

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

            "Equity Issuance" means any issuance by Holdings or any Subsidiary
to any Person which is not a Credit Party of (a) shares of its Capital Stock,
(b) any shares of its Capital Stock pursuant to the exercise of options or
warrants or (c) any shares of its Capital Stock pursuant to the conversion of
any debt securities to equity. The term "Equity Issuance" shall not include (i)
any Asset Disposition or (ii) any debt issuance.

            "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any regulations promulgated thereunder.

            "ERISA Affiliate" means, with respect to any Credit Party, any trade
or business (whether or not incorporated) that, together with such Credit Party,
are treated as a single employer within the meaning of Sections 414(b), (c), (m)
or (o) of the IRC.

            "ERISA Event" means, with respect to any Credit Party or any ERISA
Affiliate, (a) a "reportable event" described in Section 4043(c) of ERISA with
respect to a Title IV Plan for which the notice requirement has not been waived;
(b) the withdrawal of any Credit Party or ERISA Affiliate from a Title IV Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the
complete or partial withdrawal of any Credit Party or any ERISA Affiliate from
any Multiemployer Plan; (d) the filing of a notice of intent to terminate a
Title IV Plan or the treatment of a plan amendment as a termination under
Section 4041 of ERISA; (e) the institution of proceedings to terminate a Title
IV Plan or Multiemployer Plan by the PBGC; (f) the failure

                                      A-11

by any Credit Party or ERISA Affiliate to make when due required contributions
to a Multiemployer Plan or Title IV Plan unless such failure is cured within 30
days; (g) any other event or condition that might reasonably be expected to
constitute grounds for the termination of, or the appointment of a trustee to
administer, any Title IV Plan or Multiemployer Plan under Section 4042 of ERISA
or for the imposition of liability under Section 4069 or 4212(c) of ERISA; (h)
the termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245
of ERISA; or (i) the loss of a Qualified Plan's qualification or tax exempt
status; or (j) the termination of a Plan described in Section 4064 of ERISA.

            "ESOP" means a Plan that is intended to satisfy the requirements of
Section 4975(e)(7) of the IRC.

            "Exchange Act" means the Securities Exchange Act of 1934, as amended
or supplemented, or any successor statute, the rules and regulations promulgated
thereunder, as the same shall be in effect from time to time.

            "Excluded Taxes" has the meaning ascribed to it in Section 1.11(a).

            "Event of Default" has the meaning ascribed to it in Section 6.1.

            "Fair Labor Standards Act" means the Fair Labor Standards Act, 29
U.S.C. ss.201 et seq.

            "Fair Market Value" means, at any time, as to any Eligible Real
Estate, the fair market value as determined by the most recent appraisal thereof
obtained and approved by the Agent as of such time.

            "Federal Funds Rate" means, for any day, a floating rate equal to
the weighted average of the rates on overnight federal funds transactions among
members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).

            "Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.

            "Fees" means any and all fees payable to Agent or any Lender
pursuant to the Agreement or any of the other Loan Documents.

            "Financial Statements" means the consolidated and consolidating
income statements, statements of cash flows and balance sheets of Holdings and
its Subsidiaries delivered in accordance with Section 4.9.

            "FIRREA" means the Financial Institutions Reform, Recovery and
Enforcement Act, and all regulations promulgated thereunder, in each case as
amended.

            "Fiscal Month" means any of the monthly accounting periods of
Borrower.

            "Fiscal Quarter" means any of the quarterly accounting periods of
Borrower, ending on January 31, April 30, July 31 and October 31 of each year.

            "Fiscal Year" means any of the annual accounting periods of Borrower
ending on January 31 of each year.

                                      A-12

            "Fixed Charges" has the meaning ascribed to it in Section 4.4 of
Schedule 1 to Exhibit 4.9(k).

            "Fixed Charge Coverage Ratio" has the meaning ascribed to it in
Section 4.4 of Schedule 1 to Exhibit 4.9(k).

            "Fixtures" means all "fixtures" as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party.

            "Foreign Lender" has the meaning ascribed to it in Section 1.11(d).

            "Foreign Subsidiary" means a Subsidiary of any Person that is not
organized under the laws any state of the United States of America or the
District of Columbia.

            "Funded Debt" means, with respect to any Person, without
duplication, all Indebtedness for borrowed money evidenced by notes, bonds,
debentures, or similar evidences of Indebtedness and that by its terms matures
more than one year from, or is directly or indirectly renewable or extendible at
such Person's option under a revolving credit or similar agreement obligating
the lender or lenders to extend credit over a period of more than one year from
the date of creation thereof, and specifically including Capital Lease
Obligations, current maturities of long term debt, revolving credit and short
term debt extendible beyond one year at the option of the debtor, and also
including, in the case of Borrower, the Obligations (including Letter of Credit
Obligations) and, without duplication, Guaranteed Indebtedness consisting of
guaranties of Funded Debt of other Persons.

            "Funding Date" has the meaning ascribed to it in Section 7.2.

            "GAAP" means generally accepted accounting principles in the United
States of America, consistently applied.

            "GE Capital" has the meaning ascribed to it in the Preamble.

            "GE Capital Fee Letter" has the meaning ascribed to it in Section
1.3(a).

            "GE Credit Agreement" means the Credit Agreement, dated as of
September 14, 2004, as amended by Waiver & Amendment No. 1, dated as of January
19, 2005 and by Consent, Waiver & Amendment No. 2, dated as of September 21,
2005, among the Borrower, the other Credit Parties identified therein and GE
Capital as Agent, L/C Issuer and a Lender.

            "General Intangibles" means "general intangibles," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contractual Obligation, all payment intangibles,
customer lists, Intellectual Property, Licenses, Copyrights, Trademarks,
Patents, and all applications therefor and reissues, extensions or renewals
thereof, rights in Intellectual Property, interests in partnerships, joint
ventures and other business associations, licenses, permits, copyrights, trade
secrets, proprietary or confidential information, inventions (whether or not
patented or patentable), technical information, procedures, designs, knowledge,
know how, software, data bases, data, skill, expertise, experience, processes,
models, drawings, materials and records, goodwill (including the goodwill
associated with any Trademark or Trademark License), all rights and claims in or
under insurance policies (including insurance for fire, damage, loss and
casualty, whether covering personal property, real property, tangible rights or
intangible rights, all liability, life, key man and business interruption
insurance, and all unearned premiums), uncertificated securities, choses in
action, deposit, checking and

                                      A-13

other bank accounts, rights to receive tax refunds and other payments, rights to
receive dividends, distributions, cash, Instruments and other property in
respect of or in exchange for pledged Stock and Investment Property, rights of
indemnification, all books and records, correspondence, credit files, invoices
and other papers, including all tapes, cards, computer runs and other papers and
documents in the possession or under the control of such Credit Party or any
computer bureau or service company from time to time acting for such Credit
Party.

            "Goods" means any "goods," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located, including
embedded software to the extent included in "goods" as defined in the Code,
manufactured homes, standing timber that is cut and removed for sale and unborn
young of animals.

            "Governmental Authority" means any nation or government, any state
or other political subdivision thereof, and any agency, department or other
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

            "Guaranteed Indebtedness" means, as to any Person, any obligation of
such Person guaranteeing, providing comfort or otherwise supporting any
Indebtedness, lease, dividend, or other obligation ("primary obligation") of any
other Person (the "primary obligor") in any manner, including any obligation or
arrangement of such Person to (a) purchase or repurchase any such primary
obligation, (b) advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet condition of the primary obligor, (c) purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, (d) protect the beneficiary of such arrangement from
loss (other than product warranties given in the ordinary course of business) or
(e) indemnify the owner of such primary obligation against loss in respect
thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed
to be an amount equal to the lesser at such time of (x) the stated or
determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect thereof.

            "Guaranties" means, collectively, the Guaranty of even date herewith
executed by Holdings and any other guaranty executed by any Guarantor in favor
of Agent and Lenders in respect of the Obligations, in each case, as amended,
restated, modified or supplemented from time to time.

            "Guarantors" means Holdings, each Subsidiary of Borrower, and each
other Person, if any, in each case, that executes a guaranty or other similar
agreement in favor of Agent, for itself and the ratable benefit of Lenders, in
connection with the transactions contemplated by the Agreement and the other
Loan Documents.

            "Hazardous Material" means any substance, material or waste that is
regulated by, or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance that is (a) defined as a
"solid waste," "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "pollutant,"
"contaminant," "hazardous constituent," "special waste," "toxic substance" or
other similar term or phrase under any Environmental Laws, or (b) petroleum or
any fraction or by product thereof, asbestos, polychlorinated biphenyls (PCB's),
or any radioactive substance.

                                      A-14

            "Hedge Agreement" means an Interest Rate Agreement or a Currency
Agreement entered into with a Lender.

            "Holdings" has the meaning ascribed thereto in the recitals to the
Agreement.

            "Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and trade payables),
whether or not contingent: (1) in respect of borrowed money; (2) evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) (other than letters of credit
issued in respect of trade payables entered into in the ordinary course, to the
extent such obligations are cash collateralized or such letters of credit secure
obligations entered into in the normal course of business of such Person and
such letters of credit are not drawn upon or, if drawn upon, to the extent any
such drawing is reimbursed no later than three business days following receipt
by such Person of a demand for reimbursement); (3) in respect of banker's
acceptances; (4) representing Capital Lease Obligations or Attributable Debt;
(5) representing the balance deferred and unpaid of the purchase price of any
property or services due more than six months after such property is acquired or
such services are completed; (6) representing any Hedge Agreement, if and to the
extent any of the preceding items (other than letters of credit, Attributable
Debt and Hedge Agreement) would appear as a liability upon a balance sheet of
the specified Person prepared in accordance with GAAP; or (7) in respect of
earnouts and similar payment obligations. In addition, the term "Indebtedness"
includes all indebtedness of others secured by a Lien on any asset of the
specified Person (whether or not such indebtedness is assumed by the specified
Person) and, to the extent not otherwise included, Guaranteed Indebtedness of
the specified Person.

            Notwithstanding the foregoing, in connection with the purchase by
Borrower or any Subsidiary of any business, the term "Indebtedness" will exclude
post-closing payment adjustments to which the seller may become entitled to the
extent such payment is determined by a final closing balance sheet or such
payment depends on the performance of such business after the closing; provided,
however, that at the time of closing, the amount of any such payment is not
determinable and, to the extent such payment thereafter becomes fixed,
determined and undisputed the amount is paid within 60 days thereafter.

            "Indemnitees" has the meaning ascribed to it in Section 9.1.

            "Index Rate" means, for any day, a floating rate equal to the higher
of (i) the rate publicly quoted from time to time by The Wall Street Journal as
the "base rate on corporate loans posted by at least 75% of the nation's 30
largest banks" (or, if The Wall Street Journal ceases quoting a base rate of the
type described, the highest per annum rate of interest published by the Federal
Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected Interest Rates" as the Bank prime loan rate or its equivalent), and
(ii) the Federal Funds Rate plus 50 basis points per annum. Each change in any
interest rate provided for in the Agreement based upon the Index Rate shall take
effect at the time of such change in the Index Rate.

            "Index Rate Loan" means a Loan or portion thereof bearing interest
by reference to the Index Rate.

            "Instruments" means all "instruments," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, wherever located,
and, in any event, including transferable certificates of deposit, and all
promissory notes and other evidences of indebtedness, other than instruments
that constitute, or are a part of a group of writings that constitute, Chattel
Paper.

            "Intellectual Property" means all rights, title, and interests in or
relating to intellectual property, including, as applicable, (a) all United
States and foreign counterparts to, and all divisionals,

                                      A-15

reversions, continuations, continuations-in-part, reissues, reexaminations,
renewals and extensions of such intellectual property and all income, royalties,
proceeds and liabilities at any time due or payable or asserted under or with
respect to any of the foregoing or otherwise with respect to such intellectual
property, including all rights to sue or recover at law or in equity for any
past, present, or future infringement, misappropriation, dilution, violation, or
other impairment thereof, arising under all Software, Licenses, Patents,
Copyrights, Trademarks, and the goodwill associated with such Trademarks, (b)
all information, without regard to form, including, but not limited to,
technical or nontechnical data, a formula, a pattern, a compilation, a program,
a device, a method, a technique, a drawing, a process, product plans, or a list
of actual or potential customers or suppliers which is not commonly known by or
available to the public and which information: (A) derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other Persons who can obtain economic value
from its disclosure or use; and (B) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy; and (c) all other
unregistered intellectual property rights, including know-how, confidential
information, customer lists, technical documentation, technical information,
data, technology, research records, plans, drawings, schematics, compilations,
devices, formulas, designs, prototypes, methods, techniques, processes,
procedures, programs, or codes, whether tangible or intangible.

            "Intercompany Debt" has the meaning ascribed to it in Section 9.21.

            "Intercompany Notes" has the meaning ascribed to it in Section 3.1.

            "Intercreditor Agreement" means any intercreditor agreement entered
into as contemplated by clause (l) of the definition of Permitted Encumbrance.

            "Interest Charges" means, with respect to any specified Person for
any period, the sum, without duplication, of:

            (a)   the consolidated interest expense of such Person and its
   Subsidiaries for such period, whether paid or accrued, including, without
   limitation, amortization of debt issuance costs and original issue discount,
   non-cash interest payments, the interest component of any deferred payment
   obligations, the interest component of all payments associated with Capital
   Lease Obligations, imputed interest with respect to Attributable Debt,
   commissions, discounts and other fees and charges incurred in respect of
   letter of credit or bankers' acceptance financings, and net of the effect of
   all payments made or received pursuant to Hedge Agreement (but, in
   calculating Interest Charges for the purposes of determining the denominator
   of Interest Coverage Ratio only, excluding any one-time non-cash charges or
   expenses associated with the write off of deferred debt issuance costs
   relating to (A) Indebtedness that is retired with the proceeds of the Senior
   Notes issued on the Closing Date or (B) the repayment or retirement of the
   Obligations or the Senior Notes); plus

            (b)   the consolidated interest expense of such Person and its
   Subsidiaries that was capitalized during such period; plus

            (c)   any interest on Indebtedness of another Person that is
   guaranteed by such Person or one of its Subsidiaries or secured by a Lien on
   assets of such Person or one of its Subsidiaries, whether or not such
   Guarantee or Lien is called upon; plus

            (d)   the product of (a) all dividends, whether paid or accrued and
   whether or not in cash, on any series of preferred stock or Disqualified
   Stock of such Person or any preferred stock of any of its Subsidiaries, other
   than dividends on Equity Interests payable solely in Equity Interests of
   Borrower (other than Disqualified Stock) or to Borrower or a Subsidiary of
   Borrower, times (b) a

                                      A-16

   fraction, the numerator of which is one and the denominator of which is one
   minus the then current combined federal, state and local statutory tax rate
   of such Person, expressed as a decimal,

            in each case, determined on a consolidated basis in accordance with
GAAP.

            "Interest Coverage Ratio" means with respect to any specified Person
for any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Interest Charges of such Person for such period. In the event that
the specified Person or any of its Subsidiaries incurs, assumes, guarantees,
repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness
(other than ordinary working capital borrowings) or issues, repurchases or
redeems preferred stock subsequent to the commencement of the period for which
the Interest Coverage Ratio is being calculated and on or prior to the date on
which the event for which the calculation of the Interest Coverage Ratio is made
(the "Calculation Date"), then the Interest Coverage Ratio will be calculated
giving pro forma effect to such incurrence, assumption, guarantee, repayment,
repurchase, redemption, defeasance or other discharge of Indebtedness, or such
issuance, repurchase or redemption of preferred stock, and the use of the
proceeds therefrom, as if the same had occurred at the beginning of the
applicable four-quarter reference period.

            In addition, for purposes of calculating the Interest Coverage
Ratio:

            (a)   the Acquisition, future acquisitions, dispositions, mergers,
   consolidations and discontinued operations that have been made by the
   specified Person or any of its Subsidiaries, including through mergers or
   consolidations, or any Person or any of its Subsidiaries acquired by the
   specified Person or any of its Subsidiaries, and including any related
   financing transactions and including increases in ownership of Subsidiaries,
   during the four-quarter reference period or subsequent to such reference
   period and on or prior to the Calculation Date will be given pro forma effect
   (in accordance with Regulation S-X under the Securities Act), including Pro
   Forma Cost Savings, whether or not such Pro Forma Cost Savings complies with
   Regulation S-X, as if they had occurred on the first day of the four-quarter
   reference period;

            (b)   the Consolidated Cash Flow attributable to discontinued
   operations, as determined in accordance with GAAP, and operations or
   businesses (and ownership interests therein) disposed of prior to the
   Calculation Date, will be excluded (including by adding back the amount of
   any attributable Consolidated Cash Flow that was negative);

            (c)   the Interest Charges attributable to discontinued operations,
   as determined in accordance with GAAP, and operations or businesses (and
   ownership interests therein) disposed of prior to the Calculation Date, will
   be excluded, but only to the extent that the obligations giving rise to such
   Interest Charges will not be obligations of the specified Person or any of
   its Subsidiaries following the Calculation Date;

            (d)   any Person that is a Subsidiary on the Calculation Date will
   be deemed to have been a Subsidiary at all times during such four-quarter
   period;

            (e)   any Person that is not a Subsidiary on the Calculation Date
   will be deemed not to have been a Subsidiary at any time during such
   four-quarter period; and

            (f)   if any Indebtedness bears a floating rate of interest, the
   interest expense on such Indebtedness will be calculated as if the rate in
   effect on the Calculation Date had been the applicable rate for the entire
   period (taking into account any obligation under any Hedge Agreement
   applicable to such Indebtedness if such obligation has a remaining term as at
   the Calculation Date in excess of 12 months).

                                      A-17

            "Interest Payment Date" means (a) as to any Index Rate Loan, the
last day of each Fiscal Quarter while such Loan is outstanding, and (b) as to
any LIBOR Loan, the last day of the applicable LIBOR Period; provided, that in
the case of any LIBOR Period greater than three months in duration, interest
shall be payable at three month intervals and on the last day of such LIBOR
Period; and provided further that, in addition to the foregoing, each of (x) the
date upon which all of the Commitments have been terminated and the Loans have
been paid in full and (y) the Commitment Termination Date shall be deemed to be
an "Interest Payment Date" with respect to any interest that has then accrued
under the Agreement.

            "Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or similar agreement
or arrangement designed to protect Borrower against fluctuations in interest
rates entered into by Borrower and any Lender.

            "Interim Financing" means a financing, in lieu of the issuance of
Senior Notes, to finance the Acquisition, on terms and conditions reasonably
acceptable to Agent, including any bridge loans and any exchange notes issued in
order to retire such bridge loans.

            "Inventory" means any "inventory," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located,
including inventory, merchandise, goods and other personal property that are
held by or on behalf of any Credit Party for sale or lease or are furnished or
are to be furnished under a contract of service, or that constitute raw
materials, work in process, finished goods, returned goods, supplies or
materials of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party's business or in the processing, production,
packaging, promotion, delivery or shipping of the same.

            "Investment" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of loans (including Guaranteed Indebtedness or other obligations),
advances or capital contributions (excluding (i) commission, travel and similar
advances to officers and employees made in the ordinary course of business and
(ii) extensions of credit to customers or advances, deposits or payments to or
with suppliers, lessors or utilities or for workers' compensation, in each case,
that are incurred in the ordinary course of business and recorded as accounts
receivable, prepaid expenses or deposits on the balance sheet of such Person
prepared in accordance with GAAP), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP. If Holdings or any Subsidiary of Holdings
sells or otherwise disposes of any Equity Interests of any direct or indirect
Subsidiary of Holdings such that, after giving effect to any such sale or
disposition, such Person is no longer a Subsidiary of Holdings, Holdings or such
Subsidiary, as applicable, will be deemed to have made an Investment on the date
of any such sale or disposition equal to the fair market value of Holdings' or
such Subsidiary's Investments in such Subsidiary that were not sold or disposed
of in an amount determined as provided in Section 3.5(c). Except as otherwise
provided in the indenture, the amount of an Investment will be determined at the
time the Investment is made and without giving effect to subsequent changes in
value.

            "Investment Property" means all "investment property," as such term
is defined in the Code, now owned or hereafter acquired by any Credit Party,
wherever located, including: (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies (that constitute securities under Article 8 of the Code), partnership
interests (that constitute securities under Article 8 of the Code), treasuries
and mutual fund shares; (ii) all securities entitlements of any Credit Party,
including the rights of such Credit Party to any securities account and the
financial assets held by a securities intermediary in such securities account
and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts of any

                                      A-18

Credit Party; (iv) all commodity contracts of any Credit Party; and (v) all
commodity accounts held by any Credit Party.

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

            "IRS" means the Internal Revenue Service.

            "L/C Issuer" means GE Capital or a Subsidiary thereof or a bank or
other legally authorized Person selected by or acceptable to Agent in its sole
discretion, in such Person's capacity as an issuer of Letters of Credit
hereunder.

            "L/C Sublimit" has the meaning ascribed to it in Section 1.1(d).

            "Lenders" means GE Capital, the other Lenders named on the signature
pages of the Agreement, and, if any such Lender shall decide to assign all or
any portion of the Obligations, such term shall include any permitted assignee
of such Lender.

            "Letters of Credit" means documentary or standby letters of credit
issued for the account of Borrower by L/C Issuers, and bankers' acceptances
issued by Borrower, for which Agent and Lenders have incurred Letter of Credit
Obligations.

            "Letter of Credit Fee" has the meaning ascribed to it in Section
1.3(d).

            "Letter of Credit Obligations" means all outstanding obligations
incurred by Agent and Lenders at the request of Borrower, whether direct or
indirect, contingent or otherwise, due or not due, in connection with the
issuance of Letters of Credit by L/C Issuers or the purchase of a participation
as set forth in Section 1.1(d) with respect to any Letter of Credit. The amount
of such Letter of Credit Obligations shall equal the maximum amount that may be
payable by Agent and Lenders thereupon or pursuant thereto.

            "Liberty Loan Agreement" means the Loan Agreement dated as of
November 1, 1999 among Liberty Partners Lenders 10, LLC, Liberty Holdings 10,
LLC, and Gibson Tube, Inc., as amended by First Amendment of Loan Agreement,
dated as of February 3, 2000, Second Amendment of Loan Agreement, dated as of
March 15, 2002 and Third Amendment to Loan Agreement and Term Note, dated as of
September 14, 2004, and as further amended, modified, restated, refinanced,
replaced, supplemented or otherwise modified from time to time.

            "LIBOR Breakage Fee" means an amount equal to the amount of any
losses, expenses, liabilities (including, without limitation, any loss
(including interest paid) in connection with the re-employment of such funds)
that any Lender may sustain as a result of (i) any default by Borrower in making
any borrowing of, conversion into or continuation of any LIBOR Loan following
Borrower's delivery to Agent of any LIBOR Loan request in respect thereof or
(ii) any payment of a LIBOR Loan on any day that is not the last day of the
LIBOR Period applicable thereto (regardless of the source of such prepayment and
whether voluntary, by acceleration or otherwise). For purposes of calculating
amounts payable to a Lender under Section 1.3(e), each Lender shall be deemed to
have actually funded its relevant LIBOR Loan through the purchase of a deposit
bearing interest at the LIBOR Rate in an amount equal to the amount of that
LIBOR Loan and having a maturity and repricing characteristics comparable to the
relevant LIBOR Period; provided, however, that each Lender may fund each of its
LIBOR Loans in any manner it sees fit, and the foregoing assumption shall be
utilized only for the calculation of amounts payable under Section 1.3(e).

                                      A-19

            "LIBOR Business Day" means a Business Day on which banks in the City
of London are generally open for interbank or foreign exchange transactions.

            "LIBOR Loans" means a Loan or any portion thereof bearing interest
by reference to the LIBOR Rate.

            "LIBOR Period" means, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day selected by Borrower pursuant to the
Agreement and ending one, two, three or six months thereafter, as selected by
Borrower's irrevocable notice to Agent as set forth in Section 1.2(e); provided,
that the foregoing provision relating to LIBOR Periods is subject to the
following:

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

            (b)   any LIBOR Period that would otherwise extend beyond the date
      set forth in clause (a) of the definition of "Commitment Termination Date"
      shall end two (2) LIBOR Business Days prior to such date;

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

            (d)   Borrower shall select LIBOR Periods so as not to require a
      payment or prepayment of any LIBOR Loan during a LIBOR Period for such
      Loan; and

            (e)   Borrower shall select LIBOR Periods so that there shall be no
      more than 10 separate LIBOR Loans in existence at any one time.

            "LIBOR Rate" means for each LIBOR Period, a rate of interest
determined by Agent equal to:

            (a)   the offered rate for deposits in United States Dollars for the
      applicable LIBOR Period that is published by the British Bankers'
      Association and currently appears on Telerate Page 3750 as of 11:00 a.m.
      (London time), on the second full LIBOR Business Day next preceding the
      first day of such LIBOR Period (unless such date is not a Business Day, in
      which event the next succeeding Business Day will be used); divided by

            (b)   a number equal to 1.0 minus the aggregate (but without
      duplication) of the rates (expressed as a decimal fraction) of reserve
      requirements in effect on the day that is two (2) LIBOR Business Days
      prior to the beginning of such LIBOR Period (including basic,
      supplemental, marginal and emergency reserves under any regulations of the
      Federal Reserve Board or other Governmental Authority having jurisdiction
      with respect thereto, as now and from time to time in effect) for
      Eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
      in Regulation D of the Federal Reserve Board that are required to be
      maintained by a member bank of the Federal Reserve System.

            If such interest rates shall cease to be available from Telerate
News Service, the LIBOR Rate shall be determined from such financial reporting
service or other information as shall be available to Agent.

                                      A-20

            "License" means any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by any Credit Party.

            "Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, security interest, easement or
encumbrance, or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever, in each case for the purpose of
securing payment or performance (including any title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement
perfecting a security interest under the Code or comparable law of any
jurisdiction, but excluding any financing statement filed for precautionary
purposes in connection with an operating lease).

            "Litigation" has the meaning ascribed to it in Section 4.9(i).

            "Loan Account" as the meaning ascribed to it in Section 1.9.

            "Loan Documents" means the Agreement, the Notes, the Collateral
Documents, the GE Capital Fee Letter and all other agreements, instruments,
documents and certificates identified in the Closing Checklist or hereafter
executed by or on behalf of any Credit Party, or any employee of any Credit
Party, and delivered to Agent or any Lender in connection with the Agreement or
the transactions contemplated thereby. Any reference in the Agreement or any
other Loan Document to a Loan Document shall include all appendices, exhibits or
schedules thereto, and all amendments, restatements, supplements or other
modifications thereto, and shall refer to the Agreement or such Loan Document as
the same may be in effect at any and all times such reference becomes operative.

            "Loans" means the Revolving Loan and the Swing Line Loan.

            "Management Agreement" means that certain Management Agreement dated
as of February 7, 2006, by and among Castle Harlan, Inc., Holdings, Borrower and
RGCH Holdings LLC, as in existence as of the Closing Date.

            "Master Documentary Agreement" means the Master Agreement for
Documentary Letters of Credit, dated as of the Closing Date, among the Borrower,
as applicant, and GE Capital, as L/C Issuer, as amended, restated, modified or
supplemented from time to time.

            "Master Standby Agreement" means the Master Agreement for Standby
Letters of Credit, dated as of the Closing Date, among the Borrower, as
applicant, and GE Capital, as L/C Issuer, as amended, restated, modified or
supplemented from time to time.

            "Material Adverse Effect" means a material adverse effect on (a) the
financial condition, assets, properties or operating results of the Credit
Parties considered as a whole, (b) the Borrower's ability to pay any of the
Loans or any of the other Obligations in accordance with the terms of the
Agreement, (c) the Collateral or Agent's Liens, on behalf of itself and Lenders,
on the Collateral or the priority of such Liens, or (d) Agent's or any Lender's
rights and remedies under the Agreement and the other Loan Documents; provided,
however, that the following shall in no event be deemed to be a Material Adverse
Effect: (i) any effect or change (including any change in the laws, rules,
regulations, orders, or other binding directives issued by any governmental or
regulatory authority) which effects generally the United States economy or the
Borrower's industry as a whole except for those effects or changes that
disproportionately affect the Borrower and its Subsidiaries, taken as a whole;
(ii) any national or international political or social conditions, including the
engagement by the United States in hostilities, whether or not pursuant to the
declaration of a national emergency of war, or the occurrence of

                                      A-21

any military or terrorist attack upon the United States, or any of its
territories, possessions, or diplomatic or consular offices or upon any military
installation, equipment or personnel of the United States except for those
effects or changes that disproportionately affect the Borrower and its
Subsidiaries, taken as a whole; or (iii) any adverse change, effect, event,
occurrence, state of facts or development arising from or relating to financial,
banking, or securities markets (including any disruption thereof or any decline
in the price of securities generally or any market or index).

            "Maximum Amount" means, as of any date of determination, an amount
equal to the Revolving Loan Commitment of all Lenders as of that date.

            "Maximum Lawful Rate" has the meaning ascribed to it in
Section 1.2(f).

            "Moody's" means Moody's Investor's Services, Inc.

            "Mortgages" means each of the mortgages, deeds of trust, collateral
assignments of leases or other real estate security documents delivered by any
Credit Party to Agent on behalf of itself and Lenders with respect to the Real
Estate.

            "Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate is
making, is obligated to make, contributions on behalf of participants who are or
were employed by any of them.

            "Net Income" means, with respect to any specified Person, the net
income (or loss) of such Person, determined in accordance with GAAP and before
any reduction in respect of preferred stock dividends, excluding, however: (1)
any gain (or loss), together with any related provision for taxes on such gain
(or loss), realized in connection with: (a) any Asset Sale (as such term is
defined as of the Closing Date in the Senior Notes Documents and without giving
effect to the $2,000,000 threshold provided in such definition of "Asset Sale"),
or abandonment and reserves relating thereto; or (b) the disposition of any
securities by such Person or any of its Subsidiaries or the extinguishment of
any Indebtedness of such Person or any of its Subsidiaries; (2) any
extraordinary gain (or loss), together with any related provision for taxes on
such extraordinary gain (or loss); and (3) any unrealized non-cash gains or
losses in respect of Hedge Agreement (including those resulting from the
application of FAS 133), to the extent that such gains or losses are deducted in
computing Net Income.

            "Net Orderly Liquidation Value" means, as to any asset at any time,
the net orderly liquidation value of such asset based on the most recent
appraisal prepared for Agent as to such asset as of such time.

            "Net Proceeds" means (a) with respect to Asset Dispositions, the
aggregate cash proceeds received by Borrower or any of its Subsidiaries in
respect of any Asset Disposition (including, without limitation, any cash
received upon the sale or other disposition of any non-cash consideration), net
of the direct costs relating to such Asset Disposition, including, without
limitation, legal, accounting and investment banking fees, appraisal and
insurance adjuster fees and sales commissions, and any relocation expenses
incurred as a result of the Asset Disposition, taxes paid or payable as a result
of the Asset Disposition, in each case, after taking into account without
duplication, (1) any amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the assets that were the subject of such Asset
Disposition, (2) any reserve or payment with respect to liabilities associated
with such asset or assets and retained by Borrower or a Subsidiary after such
sale or other disposition thereof, including, without limitation, severance
costs, pension and other post-employment benefit liabilities and liabilities
related to environmental matters or against any indemnification obligations
associated with such transaction, (3) any reserves for adjustment in respect of
the sale price of such asset, and (4) any cash

                                      A-22

escrows in connection with purchase price adjustments, reserves or indemnities
(until released) and (b) with respect to any sale or issuance of Stock, the cash
proceeds received from any sale or issuance of Stock, in each case, net of
brokers', advisors' and investment banking fees and other out-of-pocket
underwriting discounts, commissions and other out-of-pocket cash costs, fees and
expenses, in each case, incurred in connection with such transaction.

            "Non-Consenting Lender" has the meaning ascribed to it in Section
9.19(c).

            "Non-Excluded Taxes" has the meaning ascribed to it in Section
1.11(a).

            "Non-Funding Lender" has the meaning ascribed to it in Section
8.5(a).

            "Notes" means, collectively, the Revolving Notes and the Swing Line
Note.

            "Notice of Conversion/Continuation" has the meaning ascribed to it
in Section 1.2(e).

            "Notice of Revolving Credit Advance" has the meaning ascribed to it
in Section 1.1(a).

            "Obligations" means all loans, advances, debts, liabilities and
obligations, for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable), including
obligations pursuant to Interest Rate Agreements and Letter of Credit
Obligations, owing by any Credit Party to Agent or any Lender, and all covenants
and duties regarding such amounts, of any kind or nature, present or future,
whether or not evidenced by any note, agreement or other instrument, arising
under the Agreement or any of the other Loan Documents. This term includes all
principal, interest (including all interest that accrues after the commencement
of any case or proceeding by or against any Credit Party in bankruptcy, whether
or not allowed in such case or proceeding), Fees, Charges, expenses, attorneys'
fees and any other sum chargeable to any Credit Party under the Agreement or any
of the other Loan Documents.

            "Other Lender" has the meaning ascribed to it in Section 8.5(d).

            "Other Taxes" has the meaning ascribed to it in Section 1.11(c).

            "Overadvance" has the meaning ascribed to it in Section 1.1(a).

            "Patent License" means rights under any written agreement now owned
or hereafter acquired by any Credit Party granting any right with respect to any
invention on which a Patent is in existence.

            "Patent Security Agreements" means the Patent Security Agreements
made in favor of Agent, on behalf of itself and Lenders, by each applicable
Credit Party, as amended, restated, modified or supplemented from time to time,
in the form of Exhibit C.

            "Patents" means all of the following in which any Credit Party now
holds or hereafter creates or acquires any interest in: (a) inventions and
discoveries that may be patentable, (b) all letters patent of the United States
or any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or of any other country,
including registrations, recordations and applications in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any State or any other country, and (c) all reissues, divisions,
continuations, continuations-in-part or extensions thereof.

                                      A-23

            "PBGC" means the Pension Benefit Guaranty Corporation.

            "Pension Plan" means a Plan described in Section 3(2) of ERISA.

            "Permitted Acquisition" has the meaning ascribed to it in Section
3.6.

            "Permitted Encumbrances" means the following encumbrances:

                  (i)     Liens on assets of the applicable Foreign Subsidiary
securing Indebtedness (including Capital Lease Obligations) or Attributable Debt
and other obligations in respect thereof in an amount when incurred, together
with the aggregate amount of all other Indebtedness and other obligations at
that time outstanding secured by a Lien pursuant to this clause (i), not to
exceed the aggregate amount of Indebtedness and Attributable Debt that has been
incurred and such additional debt as would be permitted to be incurred at such
time under Section 3.1(b)(xv) and/or securing Hedge Agreement of such Foreign
Subsidiary related thereto;

                  (ii)    Liens in favor of Borrower or the Guarantors;

                  (iii)   Liens on property of a Person existing at the time
such Person is merged with or into or consolidated with Borrower or any
Subsidiary of Borrower; provided that such Liens were in existence prior to and
were not incurred in connection with or in the contemplation of such merger or
consolidation and do not extend to any assets other than those of the Person
merged into or consolidated with Borrower or the Subsidiary;

                  (iv)    Liens on property (including Capital Stock) existing
at the time of acquisition of the property by Holdings or any Subsidiary of
Holdings; provided that such Liens were in existence prior to, such acquisition,
and not incurred in contemplation of, such acquisition;

                  (v)     Liens to secure the performance of tenders, completion
guarantees, statutory obligations, surety or appeal bonds, bids, leases
performance bonds or other obligations of a like nature incurred in the ordinary
course of business in an amount not to exceed $1,000,000 in the aggregate
outstanding at any time;

                  (vi)    Liens existing on the date hereof and listed on
Schedule 3.2;

                  (vii)   Liens for taxes, assessments or governmental charges
or claims that (x) are not yet delinquent or that are being contested in good
faith by appropriate proceedings promptly instituted and diligently concluded
and (y) in the case of Liens in respect of federal or state income taxes, do not
have priority in any respect over the Lien of the Agent securing the
Obligations; provided that any reserve or other appropriate provision as is
required in conformity with GAAP has been made therefor;

                  (viii)  Liens imposed by law, such as carriers'
warehousemen's, landlords', mechanics', suppliers, materialmen's and repairmen's
Liens, or in favor of customs or revenue authorities or freight forwarders or
handlers to secure payment of custom duties, in each case, incurred in the
ordinary course of business;

                  (ix)    survey exceptions, easements or reservations of, or
rights of others for or pursuant to any leases, licenses, rights-of-way, or
other similar agreements or arrangements, development, air or water rights,
sewers, electric lines, telegraph and telephone lines and other utility lines,
pipelines, service lines, railroad lines, improvements and structures located
on, over or under any property, drains, drainage ditches, culverts, electric
power or gas generating or co-generation, storage and transmission

                                      A-24

facilities and other similar purposes, or zoning or other restrictions as to the
use of real property which were not incurred to secure the payment of
Indebtedness and that do not in the aggregate materially adversely affect the
value of said properties or materially impair their use in the operation of the
business of such Person;

                  (x)     Liens created for the benefit of (or to secure) the

Obligations;

                  (xi)    Liens to secure any Permitted Refinancing Indebtedness
permitted to be incurred hereunder; provided, however, that the new Lien shall
be limited to all or part of the same property and assets that secured or, under
the written agreements pursuant to which the Indebtedness being refinanced
arose, could secure the original Lien (plus improvements and accessions to, such
property or proceeds or distributions thereof) and shall be subject to any
intercreditor agreement to which such prior Lien was subject;

                  (xii)   Liens upon specific items of inventory or other goods
and proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other goods;

                  (xiii)  judgment and attachment Liens not giving rise to an
Event of Default and notices of lis pendens and associated rights related to
litigation being contested in good faith by appropriate proceedings and for
which adequate reserves have been made in conformity with GAAP;

                  (xiv)   Liens securing Indebtedness arising in connection with
Hedge Agreements incurred pursuant to Section 3.1(b)(ix);

                  (xv)    any extension, renewal or replacement, in whole or in
part, of any Lien described in clauses (vi), (vii), (xvi), or (xvii) of this
definition of Permitted Encumbrances; provided that any such extension, renewal
or replacement is no more restrictive in any material respect than the Lien so
extended, renewed or replaced and does not extend to any additional property or
assets, in conformity with GAAP and shall be subject to any intercreditor
agreement to which such prior Lien was subject;

                  (xvi)   any interest or title of a lessor, licensor or
sublicense under any operating lease, license or sublicense, as applicable;

                  (xvii)  Liens in favor of collecting or payor banks having a
right of setoff, revocation, refund or chargeback with respect to money or
instruments of Borrower or any Subsidiary thereof on deposit with or in
possession of such bank;

                  (xviii) Liens securing other Indebtedness incurred in
accordance with the terms of this Agreement so long as the holders of such
Indebtedness and the holders of such Liens have entered into intercreditor
agreements in form and substance satisfactory in all respects to the Agent; and

                  (xix)   Liens incurred or pledges or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security and employee health
and disability benefits, or casualty or liability insurance or self insurance.

            "Permitted Holders" means (1) Castle Harlan Partners IV, L.P. and
any Person controlling, controlled by, or under common control with, and any
account controlled or managed by or under common control or management with
Castle Harlan Partners IV, L.P. or (2) Castle Harlan Inc. and employees,
management and directors of (including any of their heirs), and Persons owning
accounts managed or advised by or controlled by, any of the foregoing and their
respective Affiliates.

                                      A-25

            "Permitted Investments" means any:

                  (i)     Investment in (x) Borrower or in a Subsidiary of
Borrower that is a Credit Party or (y) in a Foreign Subsidiary or a Person that
is not and is not required to be a Credit Party so long as the total amount of
Investments under this clause (y) shall not exceed, together with other
Investments under this clause (y), the then outstanding amount of intercompany
Indebtedness under Section 3.1(b)(vii)(e), the then outstanding guarantees and
Guaranteed Indebtedness under Section 3.1(b)(x), and the total consideration in
respect of Permitted Acquisitions described in Section 3.6(ii)(G), $5,000,000;

                  (i)     any Investment in Cash Equivalents;

                  (ii)    Permitted Acquisitions;

                  (iii)   any Investment made as a result of the receipt of
non-cash consideration from (a) an Asset Disposition that was made pursuant to
and in compliance with Section 3.7 or (b) a sale or other disposition of assets
not constituting an Asset Disposition;

                  (iv)    omitted.

                  (v)     any acquisition of assets or Capital Stock solely in
exchange for the issuance of Equity Interests (other than Disqualified Stock) of
Borrower, Holdings, or a direct or indirect parent of Holdings;

                  (vi)    any Investment acquired by Holdings or any of its
Subsidiaries (i) in exchange for any other Investment or accounts receivable
held by Holdings or any such Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of a Person or the good
faith settlement of delinquent obligations of a Person or of a litigation
arbitration or other dispute, or (ii) result of a foreclosure by Holdings or any
of its Subsidiaries with respect to any secured Investment or other transfer of
title with respect to any secured Investment in default;

                  (vii)   Investments represented by Hedge Agreements;

                  (viii)  loans or advances to employees made in the ordinary
course of business of Holdings or any Subsidiary of Borrower in an aggregate
principal amount not to exceed $1,000,000 at any one time outstanding;

                  (ix)    repurchases of the Senior Notes in accordance with
Section 3.18(viii);

                  (x)     any Investment of Holdings or any of its Subsidiaries
existing on the Closing Date and any extension, modification or renewal of such
existing Investments, to the extent not involving any additional Investment
other than as the result of the accrual or accretion of interest or original
issue discount or the issuance of pay-in-kind securities, in each case pursuant
to the terms of such Investments as in effect on the date of the indenture;

                  (xi)    guarantees otherwise permitted by Section 3.1;

                  (xii)   Investments resulting from the acquisition of a
Person, otherwise permitted by this Agreement, which Investments at the time of
such acquisition were held by the acquired Person and were not acquired in
contemplation of the acquisition of such Person;

                                      A-26

                  (xiii)  other Investments not exceeding $10,000,000 in the
aggregate so long as no Event of Default has occurred and is continuing or would
be caused thereby and after giving effect thereto (1) Borrowing Availability
shall be at least $10,000,000 and (2), on a pro forma basis for the period of
four Fiscal Quarters for which financial statements have been delivered
hereunder to the Agent ending on or most recently prior to such payment, as
though such payment occurred on the first day of such period, the Fixed Charge
Coverage Ratio shall be at least 1.0:1.0; and

                  (xiv)   Investments consisting of the licensing or
contribution of intellectual property pursuant to joint marketing arrangements
with other Persons.

            "Permitted Payments to Parent" means, without duplication as to
amounts:

            (a)   payments to Holdings or any other direct or indirect parent of
   Borrower to permit such direct or indirect parent to pay reasonable
   accounting, legal and administrative expenses of such Person when due, in an
   aggregate amount not to exceed $500,000 per annum (or $1,000,000 per annum
   following the completion of an underwritten public offering of common stock
   of any such direct or indirect parent holding company); and

            (b)   for so long as Borrower is a member of a group filing a
   consolidated or combined tax return with Holdings or any other direct or
   indirect parent of Borrower, payments to such direct or indirect parent in
   respect of an allocable portion of the federal and state taxes then due and
   owing by such group that are attributable to Borrower and its Subsidiaries
   ("Tax Payments") and to pay franchise or similar taxes and fees of such
   direct or indirect parent required to maintain such direct or indirect
   parent's corporate existence. The Tax Payments shall not exceed the lesser of
   (i) the amount of the relevant tax (including any penalties and interest)
   that Borrower would owe if Borrower were filing a separate tax return (or a
   separate consolidated or combined return with its Subsidiaries that are
   members of the consolidated or combined group), taking into account any
   carryovers and carrybacks of tax attributes (such as net operating losses) of
   Borrower and such Subsidiaries from other taxable years and (ii) the net
   amount of the relevant tax that Holdings or such other direct or indirect
   parent actually owes to the appropriate taxing authority. Any Tax Payments
   received from Borrower shall be paid over to the appropriate taxing authority
   within fifteen (15) days of direct or indirect parent's receipt of such Tax
   Payments or refunded to Borrower.

            "Permitted Refinancing Indebtedness" means any Indebtedness of
Holdings or any of its Subsidiaries issued in exchange for, or the net proceeds
of which are used to renew, refund, refinance, replace, defease or discharge
other Indebtedness of Holdings or any of its Subsidiaries (other than
intercompany Indebtedness); provided that:

                  (i)     the principal amount (or accreted value, if
applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount (or accreted value, if applicable) of the Indebtedness renewed,
refunded, refinanced, replaced, defeased or discharged (plus all accrued
interest on the Indebtedness and the amount of all fees and expenses, including
the amount of any reasonably determined premium and defeasance costs, incurred
in connection therewith and other amounts necessary to accomplish such
refinancing);

                  (ii)    such Permitted Refinancing Indebtedness has a final
maturity date equal to or later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being renewed, refunded, refinanced,
replaced, defeased or discharged;

                                      A-27

                  (iii)   if the Indebtedness being renewed, refunded,
refinanced, replaced, defeased or discharged is subordinated in right of payment
to the notes, such Permitted Refinancing Indebtedness is subordinated in right
of payment to, the notes on terms, taken as a whole, at least as favorable to
the holders of notes as those contained in the documentation governing the
Indebtedness being renewed, refunded, refinanced, replaced, defeased or
discharged; and

                  (iv)    such Indebtedness is incurred either by Holdings or by
the Subsidiary who is the obligor on the Indebtedness being renewed, refunded,
refinanced, replaced, defeased or discharged and by no other obligor and is on
terms no less favorable to Holdings or such Subsidiary than those of the
Indebtedness being renewed, refunded, refinanced, replaced, defeased or
discharged.

            "Person" means any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, public benefit corporation, other entity
or government (whether federal, state, county, city, municipal, local, foreign,
or otherwise, including any instrumentality, division, agency, body or
department thereof).

            "Plan" means, an "employee benefit plan," as defined in Section 3(3)
of ERISA, that any Credit Party maintains, contributes to or has an obligation
to contribute to on behalf of participants who are or were employed by any
Credit Party.

            "Pledge Agreements" means, the Pledge Agreement of even date
herewith executed by Holdings in favor of Agent, on behalf of itself and
Lenders, pledging all Stock of its Domestic Subsidiaries and 65% of the voting
Stock and 100% of the non-voting Stock of Foreign Subsidiaries owned directly by
Holdings or any Domestic Subsidiary of Holdings, if any, and all Intercompany
Notes owing to or held by them and any other pledge agreement entered into after
the Closing Date by any Credit Party, in each case, as amended, restated,
modified or supplemented from time to time.

            "Principals" means (i) Castle Harlan Partners IV, L.P., a Delaware
limited partnership or any Affiliate thereof or any fund or account controlled
or managed by or under common control with Castle Harlan Partners IV, L.P. or
any Affiliate thereof, (ii) Castle Harlan, Inc. and its employees, management
and directors, (iii) Harley Kaplan, (iv) William Anacker, and (v) C. Michael
Griffith, Jr.

            "Prior Lenders" means GE Capital, the State Board Administration of
Florida and Liberty Partners Lenders 10, LLC.

            "Prior Lender Obligations" means the obligations, liabilities and
indebtedness of RathGibson, Inc. arising under the GE Credit Agreement, the
Liberty Loan Agreement and the State Board Subordinated Loan Agreement.

            "Pro Forma" means the unaudited consolidated and consolidating
balance sheets of Holdings and its Subsidiaries prepared in accordance with GAAP
as of October 31, 2005, after giving effect to the Related Transactions. The Pro
Forma is annexed hereto as Annex D.

            "Pro Forma Cost Savings" means, with respect to any period, the
reduction in net costs and related adjustments that (i) were directly
attributable to an acquisition that occurred during the four quarter period or
after the end of the four quarter period and on or prior to the Calculation Date
and calculated on a basis that is consistent with Regulation S-X under the
Securities Act as in effect and applied as of the date of the indenture, (ii)
were actually implemented by the business that was the subject of any such
acquisition within six months after the date of the acquisition and prior to the
Calculation Date that are supportable and quantifiable by the underlying
accounting records of such business or (iii) relate to the business that is the
subject of any such acquisition and that Borrower reasonably determines

                                      A-28

are probable based upon specifically identifiable actions to be taken within six
months of the date of the acquisition and, in the case of each of (i), (ii) and
(iii), are described, as provided below, in an certificate, as if all such
reductions in costs had been effected as of the beginning of such period. Pro
Forma Cost Savings described above, shall have been (in the case of clause (iii)
only) approved by the Agent, shall be accompanied by a certificate delivered to
the Agent from Borrower's chief financial officer that outlines the specific
actions taken or to be taken, the net cost savings achieved or to be achieved
from each such action and that, in the case of clause (iii) above, such savings
have been determined to be probable.

            "Pro Rata Share" means with respect to all matters relating to any
Lender (a) with respect to the Revolving Loan, the percentage obtained by
dividing (i) the Revolving Loan Commitment of that Lender by (ii) the aggregate
Revolving Loan Commitments of all Lenders, and (b) with respect to all Loans on
and after the Commitment Termination Date, the percentage obtained by dividing
(i) the aggregate outstanding principal balance of the Loans held by that
Lender, by (ii) the outstanding principal balance of the Loans held by all
Lenders, as such percentages may be adjusted by assignments pursuant to Section
8.1.

            "Projections" means Holdings' forecasted consolidated and
consolidating: (a) balance sheets; (b) profit and loss statements; (c) cash flow
statements; and (d) capitalization statements, and consistent with the
historical Financial Statements of Holdings, together with appropriate
supporting details and a statement of underlying assumptions.

            "Proposed Change" has the meaning ascribed to it in Section 9.19(c).

            "Qualified Assignee" means (a) any Lender, any Affiliate of any
Lender and, with respect to any Lender that is an investment fund that invests
in commercial loans, any other investment fund that invests in commercial loans
and that is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor, and (b) any commercial bank, savings
and loan association or savings bank or any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act) which extends
credit or buys loans as one of its businesses, including insurance companies,
mutual funds, lease financing companies and commercial finance companies, in
each case, which has a rating of BBB or higher from S&P and a rating of Baa2 or
higher from Moody's at the date that it becomes a Lender and which, through its
applicable lending office, is capable of lending to Borrower without the
imposition of any withholding or similar taxes; provided that no Person
determined by Agent to be acting in the capacity of a vulture fund or distressed
debt purchaser shall be a Qualified Assignee and no Person or Affiliate of such
Person (other than a Person that is already a Lender) holding Subordinated Debt
or Stock issued by any Credit Party shall be a Qualified Assignee.

            "Qualified Plan" means a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.

            "Qualified Proceeds" means any of the following or any combination
of the following:

            (a)   Cash Equivalents; and

            (b)   the fair market value of assets that are used or useful in a
line of business permitted by Section 3.9; and

            (c)   the fair market value of the Capital Stock of any Person
engaged primarily in a line of business permitted by Section 3.9 if, in
connection with the receipt by Holdings or any of its Subsidiaries of such
Capital Stock, such Person becomes a Subsidiary or such Person is merged or
consolidated into Holdings or any Subsidiary.

                                      A-29

            The fair market value of any assets or Capital Stock that are
required to be valued by this definition will be determined by the Board of
Directors of Borrower whose resolution with respect thereto will be delivered to
the Agent. The Board of Directors' determination must be based upon an opinion
or appraisal issued by an accounting, appraisal or investment banking firm of
national standing if the fair market value exceeds $1,000,000.

            "Real Estate" has the meaning ascribed to it in Section 5.12.

            "Refinancing" means the repayment in full by Borrower of the Prior
Lender Obligations on the Closing Date.

            "Refunded Swing Line Loan" has the meaning ascribed to it in Section
1.1(c)(iii).

            "Related Party" means: (1) any controlling Stockholder, partners,
member, 80% (or more) owned Subsidiary, or immediate family member (in the case
of an individual) of any Principal; or (2) any trust, corporation, partnership,
limited liability company or other entity, the beneficiaries, Stockholders,
partners, members, owners or Persons beneficially holding an 80% or more
controlling interest of which consist of any one or more Principals and/or such
other Persons referred to in the immediately preceding clause (1).

            "Related Transactions" means the initial borrowing under the
Revolving Loan on the Closing Date, the Refinancing, the Acquisition, the
payment of all Fees, costs and expenses associated with all of the foregoing and
the execution and delivery of all of the Related Transactions Documents.

            "Related Transactions Documents" means the Loan Documents and the
Senior Notes Documents, the Acquisition Documents and all other agreements or
instruments executed in connection with the Related Transactions.

            "Release" means any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape, injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment, including the movement of
Hazardous Material through or in the air, soil, surface water, ground water or
property.

            "Replacement Lender" has the meaning ascribed to it in Section
9.19(a).

            "Requisite Lenders" means Lenders having (a) more than 50% of the
Revolving Loan Commitments of all Lenders, or (b) if the Revolving Loan
Commitments have been terminated, more than 50% of the aggregate outstanding
amount of the Loans.

            "Reserves" means, with respect to the Borrowing Base (a) reserves
established by Agent from time to time in its reasonable credit judgment against
Eligible Accounts, Eligible Inventory, Eligible M&E and Eligible Real Estate
pursuant to Exhibit 4.9(d) and (b) such other reserves against Eligible
Accounts, Eligible Inventory or Borrowing Availability that Agent may, in its
reasonable credit judgment, establish from time to time. Without limiting the
generality of the foregoing, Reserves established to ensure the payment of
accrued interest expenses or Indebtedness shall be deemed to be within Agent's
reasonable credit judgment.

            "Restricted Investment" means an Investment other than a Permitted
Investment.

            "Restricted Payment" means, with respect to any Credit Party (1)
declare or pay any dividend or make any other payment or distribution on account
of such Credit Party's or any of its

                                      A-30

Subsidiaries' Equity Interests (including, without limitation, any payment in
connection with any merger or consolidation involving Holdings or any of its
Subsidiaries) or to the direct or indirect holders of Holdings' or any of its
Subsidiaries' Equity Interests in their capacity as such (other than dividends
or distributions payable in Equity Interests (other than Disqualified Stock) of
Holdings and other than dividends or distributions payable to Holdings or a
Subsidiary of Holdings); (2) purchase, redeem or otherwise acquire or retire for
value (including, without limitation, in connection with any merger or
consolidation involving Borrower) any Equity Interests of Borrower, Holdings, or
any other direct or indirect parent of Borrower; (3) make any payment on or with
respect to, or purchase, redeem, defease or otherwise acquire or retire for
value any Indebtedness of Holdings or any Guarantor that is contractually
subordinated to the Obligations (excluding any intercompany Indebtedness between
or among Holdings and any of its Subsidiaries), except (a) a payment of interest
or principal at the stated maturity thereof or (b) the purchase, repurchase or
other acquisition of any such Indebtedness in anticipation of satisfying a
sinking fund obligation, principal installment or final maturity, in each case,
due within one year of the date of such purchase, repurchase or other
acquisition; (4) make any Restricted Investment. (5) make or pay any earn out or
similar obligation in connection with any Permitted Acquisition (other than the
Acquisition) or (6) make or payment any management (or similar) fee or expense
reimbursement under the Management Agreement or any similar agreement.

            "Retiree Welfare Plan" means, at any time, a Welfare Plan that
provides for continuing coverage or benefits for any participant or any
beneficiary of a participant after such participant's termination of employment,
other than continuation coverage provided pursuant to Section 4980B of the IRC
and at the sole expense of the participant or the beneficiary of the
participant.

            "Revolving Credit Advance" has the meaning ascribed to it in Section
1.1(a).

            "Revolving Lenders" means those Lenders having a Revolving Loan
Commitment.

            "Revolving Loan(s)" means, at any time, the sum of (i) the aggregate
amount of Revolving Credit Advances outstanding to Borrower (including Swing
Line Advances) plus (ii) the aggregate Letter of Credit Obligations incurred on
behalf of Borrower. Unless the context otherwise requires, references to the
outstanding principal balance of the Revolving Loan shall include the
outstanding balance of Letter of Credit Obligations.

            "Revolving Loan Commitment" means (a) as to any Lender, the
commitment of such Lender to make its Pro Rata Share of Revolving Credit
Advances (including, in the case of the Swing Line Lender, its commitment to
make Swing Line Advances as a portion of its Revolving Loan Commitment) or incur
its Pro Rata Share of Letter of Credit Obligations as set forth on Annex B or in
the most recent Assignment Agreement, if any, executed by such Lender and (b) as
to all Lenders, the aggregate commitment of all Lenders to make the Revolving
Credit Advances (including, in the case of the Swing Line Lender, Swing Line
Advances) or incur Letter of Credit Obligations, which aggregate commitment
shall be Fifty Million Dollars ($50,000,000) on the Closing Date, as such amount
may be adjusted, if at all, from time to time in accordance with the Agreement.

            "Revolving Notes" has the meaning ascribed to it in Section 1.1(a).

            "S&P" means Standard & Poor's Ratings Services, a division of the
McGraw-Hill Companies, Inc.

            "Scrap Value" means at any time for any metal, the price obtained by
Borrower most recently prior to and within one month of such time for scrap
metal of that type or, if neither Borrower

                                      A-31

has consummated a sale for scrap metal of that type within one month of the date
of determination, a price reasonably determined by Agent in consultation with
Borrower.

            "Securities Act" means the Securities Act of 1933, as amended or
supplemented, or any successor statute, the rules and regulations promulgated
thereunder, as the same shall be in effect from time to time.

            "Security Agreement" means the Security Agreement of even date
herewith entered into by and among Agent, on behalf of itself and Lenders, and
the Credit Parties, and any other security agreement entered into after the
Closing Date by any Credit Party, in each case, as amended, restated, modified
or supplemented from time to time.

            "Sellers" means Liberty Partners Holdings 10, L.L.C., Harley Kaplan,
William S. Anacker, C. Michael Griffith, and Frank R. Fenton.

            "Senior Loan Agreement Consolidated Net Income" has the meaning
ascribed to it in Schedule 4 to Exhibit 4.9(k).

            "Senior Notes" means Borrower's 11.25% Senior Notes due 2014 issued
pursuant to the Senior Notes Documents and any registered notes issued by
Borrower in exchange for, and as contemplated by, such notes.

            "Senior Notes Documents" means the Senior Notes, the indenture and
purchase agreement pursuant to which the Senior Notes are issued and originally
sold, the guarantees of the Senior Notes by Borrower's current and future
Domestic Subsidiaries, and all other documents executed and delivered pursuant
to or in connection with the Senior Notes and the other Senior Notes Documents.

            "Settlement Date" has the meaning ascribed to it in Section
8.5(a)(ii).

            "Software" means all "software" as such term is defined in the Code,
now owned or hereafter created or acquired by any Credit Party, other than
software embedded in any category of Goods, including (a) computer software in
both source code and object code; (b) any and all software implementations of
algorithms, models and methodologies, whether in source code or object code, (c)
databases and compilations, including any and all data and collections of data,
whether machine readable or otherwise, (d) descriptions, flow-charts and other
work product used to design, plan, organize and develop any of the foregoing,
(e) the technology supporting any Internet site(s), and (f) all documentation,
including system documentation, user manuals and training materials, relating to
any of the foregoing.

            "Solvent" means, with respect to any Person on a particular date,
that on such date (a) the fair value of the property of such Person is greater
than the total amount of liabilities, including subordinated and contingent
liabilities, of such Person; (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts and liabilities, including
subordinated and contingent liabilities as they become absolute and matured; (c)
such Person does not intend to, and does not believe that it will, incur debts
or liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (d) such Person is not engaged in a business or transaction, and is
not about to engage in a business or transaction, for which such Person's
property would constitute an unreasonably small capital. The amount of
contingent liabilities (such as Litigation, guaranties and pension plan
liabilities) at any time shall be computed as the amount that, in light of all
the facts and circumstances existing at the time, represents the amount that can
be reasonably be expected to become an actual or matured liability.

                                      A-32

            "Sponsor" means Castle Harlan, Inc.

            "Sponsor Portfolio Company" means any Person that is owned and
controlled by any investment fund that is managed by the Sponsor or an Affiliate
of the Sponsor.

            "State Board Subordinated Loan Agreement" means that certain
Subordinated Loan Agreement, dated as of April 3, 1995, between the State Board
Administration of Florida and Rath Manufacturing Co., Inc., as amended by First
Amendment to Subordination Agreement and Second Amendment to Subordinated Loan
Document, dated as of October 15, 1997, Consent, Waiver and Third Amendment to
Subordinated Loan Agreement, dated as of October 30, 1998, Consent, Waiver and
Fourth Amendment to Subordinated Loan Agreement, dated as of February 3, 2000,
Fourth Amendment to Subordinated Loan Agreement, dated as of October 31, 2000,
Consent, Waiver and Sixth Amendment to Subordinated Loan Agreement, dated as of
March 15, 2002 and Consent and Seventh Amendment to Subordinated Loan Agreement,
dated as of September 14, 2004, and as further amended, restated, supplemented
or otherwise modified from time to time.

            "Statement" has the meaning ascribed to it in Section 4.9(b).

            "Stock" means all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other "equity security" (as such term is defined in Rule
3a11 1 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Exchange Act).

            "Stockholder" means, with respect to any Person, each holder of
Stock of such Person.

            "Subordinated Indebtedness" means the collective reference to any
Indebtedness of Holdings or any Subsidiary subordinated in right and time of
payment to the Obligations and containing such other terms and conditions, in
each case as are reasonably satisfactory to the Requisite Lenders.

            "Subsidiary" means, with respect to any Person, (a) any corporation
of which an aggregate of more than 50% of the outstanding Stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the exclusive right to vote
or designate the vote of 50% or more of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any partnership or limited liability
company in which such Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person is
a general partner or may exercise the powers of a general partner. Unless the
context otherwise requires, each reference to a Subsidiary shall be a reference
to a Subsidiary of Borrower.

            "Subsidiary Guarantors" means each direct or indirect Subsidiary of
the Borrower in existence on the Closing Date or which becomes a Credit Party
and guarantees the Obligations of the Borrower pursuant to Section 2.8(c).

            "Supermajority Revolving Lenders" means Lenders having (a) 66 2/3%
or more of the Revolving Loan Commitments of all Lenders, or (b) if the
Revolving Loan Commitments have been

                                      A-33

terminated, 66 2/3% or more of the aggregate outstanding amount of the Revolving
Loan (with the Swing Line Loan being attributed to the Lender making such Loan).

            "Swing Line Advance" has the meaning ascribed to it in Section
1.1(c).

            "Swing Line Availability" has the meaning ascribed to it in Section
1.1(c).

            "Swing Line Commitment" means the commitment of the Swing Line
Lender to make Swing Line Advances as set forth on Annex B to the Agreement,
which commitment constitutes a subfacility of the Revolving Loan Commitment of
the Swing Line Lender.

            "Swing Line Lender" means GE Capital.

            "Swing Line Loan" means at any time, the aggregate amount of Swing
Line Advances outstanding to Borrower.

            "Swing Line Note" has the meaning ascribed to it in Section 1.1(c).

            "Taxes" has the meaning ascribed to it in Section 1.11(a).

            "Tax Return" has the meaning ascribed to it in Section 5.21.

            "Termination Date" means the date on which (a) the Loans have been
indefeasibly repaid in full, (b) all other Obligations (other than Contingent
Indemnification Obligations) under the Agreement and the other Loan Documents
have been completely discharged, (c) all Letter of Credit Obligations have been
cash collateralized in the amount set forth in Section 1.5(g), cancelled or,
with the consent of Agent in each instance, backed by standby letters of credit
in form and issued by a Person acceptable to Agent and (d) no Borrower shall
have any further right to borrow any monies under the Agreement.

            "Title IV Plan" means a Pension Plan (other than a Multiemployer
Plan), that is covered by Title IV of ERISA, and that any Credit Party or ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any of them.

            "Trademark Security Agreements" means the Trademark Security
Agreements made in favor of Agent, on behalf of itself and Lenders, by each
applicable Credit Party, as amended, restated, modified or supplemented from
time to time.

            "Trademark License" means rights under any written agreement now
owned or hereafter acquired by any Credit Party granting any right to use any
Trademark.

            "Trademarks" means all of the following now owned or hereafter
adopted or acquired by any Credit Party: (a) all trademarks, trade names, trade
dress, corporate names, business names, trade styles, service marks, logos,
internet domain names, internet domain name registrations, other source or
business identifiers, prints and labels on which any of the foregoing have
appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered, including common-law marks), all registrations and
recordations thereof, and all applications in connection therewith, including
registrations, recordations and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
state or territory thereof, or any other region, country or any political
subdivision thereof; and (b) all goodwill associated with or symbolized by any
of the foregoing.

                                      A-34

            "Unfunded Pension Liability" means, at any time, the aggregate
amount, if any, of the sum of (a) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions for funding purposes in effect
under such Title IV Plan, and (b) for a period of 5 years following a
transaction which might reasonably be expected to be covered by Section 4069 of
ERISA, the liabilities (whether or not accrued) that could be avoided by any
Credit Party or any ERISA Affiliate as a result of such transaction.

            "Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing: (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect of the Indebtedness,
by (b) the number of years (calculated to the nearest one-twelfth) that will
elapse between such date and the making of such payment; by (2) the then
outstanding principal amount of such Indebtedness.

            "Welfare Plan" means a Plan described in Section 3(1) of ERISA.

            "Wholly-Owned" means, with respect to a Subsidiary, that all of the
shares of Capital Stock of such Subsidiary are, directly or indirectly, owned or
controlled by Borrower and/or one or more of its Wholly-Owned Subsidiaries
(except in the case of Foreign Subsidiaries for directors' qualifying shares or
other shares required by Applicable Law to be owned by a Person other than the
Borrower).

            Rules of construction with respect to accounting terms used in the
Agreement or the other Loan Documents shall be as set forth or referred to in
this Annex A. All other undefined terms contained in any of the Loan Documents
shall, unless the context indicates otherwise, have the meanings provided for by
the Code to the extent the same are used or defined therein; in the event that
any term is defined differently in different Articles or Divisions of the Code,
the definition contained in Article or Division 9 shall control. Unless
otherwise specified, references in the Agreement or any of the Appendices to a
Section, subsection or clause refer to such Section, subsection or clause as
contained in the Agreement. The words "herein," "hereof" and "hereunder" and
other words of similar import refer to the Agreement as a whole, including all
Annexes, Exhibits and Schedules, as the same may from time to time be amended,
restated, modified or supplemented, and not to any particular section,
subsection or clause contained in the Agreement or any such Annex, Exhibit or
Schedule.

            Wherever from the context it appears appropriate, each term stated
in either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations. Whenever any provision in any Loan Document refers to
the knowledge (or an analogous phrase) of any Credit Party, such words are
intended to signify that such Credit Party has actual knowledge or awareness of
a particular fact or circumstance.

                                      A-35

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